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Something in the air: Jet fuel demand ready for takeoff

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Having lagged a recovery in demand to pre-pandemic levels enjoyed by other fuels, jet fuel appears set finally to take off as more governments make air travel easier.

Global jet fuel demand is languishing 15-20% below 2019 levels, according to analysts, but confidence generated by rising vaccination levels has led to increased passenger flight bookings in recent weeks.

“The vaccination rate continues to increase. So, I don’t see the reason why aviation demand won’t pick up,” a Singapore-based jet fuel trader said.

“I think airlines would definitely like to capture the year-end festive travel demand with the blessings from their governments. Logistics, however, can be a challenge, especially setting up VTL (vaccinated travel lane) flights.”

Within Europe, air travel has risen in recent months, and as COVID restrictions are relaxed further an increasing number of Europeans are booking flights beyond their continent.

Starting Nov. 8, the United States will admit fully vaccinated foreign air travelers from the 26 so-called Schengen countries in Europe, including France, Germany, Italy, Spain, Switzerland and Greece, as well as Britain, Ireland, China, India, South Africa, Iran and Brazil.

Aside from the United States, other countries that have announced plans to lift extraordinary restrictions on international flights include major tourist destination Thailand, Asian travel hub Singapore, and Israel.

European jet fuel demand is at nearly 72% of pre-COVID levels, having grown for a third consecutive week, when in pre-COVID times it would normally experience a seasonal decline, according to data from Rystad Energy.

Northwest European spot cargo jet fuel prices have risen by about 30% since mid-August and were trading at $734.50 a tonne on Nov. 4, according to Reuters assessments. Crack spreads <JET-C-NWE, BFO> have more than doubled to around $12.7 a barrel over the same period.

Profit margins for processing jet fuel in Europe rose to a 2021 high of $13.50 a barrel in mid-October. That margin, also known as a crack spread, was trading at about $12 a barrel on Nov. 3, a four-fold increase from the same time period last year – but it is still below where the crack spread was in 2019.

Looking for signals that demand is truly taking off, traders say they were watching how fast airlines fill seats and add additional flights on international routes.

“Right now there’s still only one non-stop flight from Houston to London … we aren’t currently planning for a huge spike in jet demand yet,” said a senior U.S. refined products trader.

In the United States, consumers are taking more domestic flights, and bookings have increased as the vaccine rollout begins for children aged from 5-11.

At the end of October, consumer spending on U.S. airline carriers exceeded levels reached two years ago for the first time since July, according to Bank of America, which said it could “reflect parents getting more comfortable about traveling during the upcoming holiday season as kids get vaccinated.”

U.S. gasoline and diesel demand is at 99% and 93% of 2019 levels, respectively, according to TPH analysts, while jet fuel is at 80%.

“A combination of increasing vaccinations, reduced travel restrictions and pent-up consumer savings should help jet narrow this gap in the coming quarters,” said TPH analyst Matthew Blair.

U.S. spot jet fuel prices are currently trading at $2.26 per gallon, up 69% from the same time a year ago.

Scheduled global airline seat capacity is 27% below where it was for the same week two years ago and is expected to continue to rise through March, according to aviation data firm OAG.

Lufthansa said new bookings are currently at 80% of 2019 levels, prompted by recovering business bookings and rising demand for long-haul flights, especially to the United States, the German airline’s most important and profitable market.

Despite the rebound in Europe and re-opening in the United States, a majority of international flights in Asia remain grounded. Several East Asian countries still require even vaccinated international travelers to quarantine at their destinations, limiting trips.

Spot jet fuel prices in Singapore, which have gained 21% over the last three months, were at $93.05 per barrel on Wednesday, while the Asian jet fuel crack spreads have risen more than 80% over the same period to almost $13 a barrel.

Tight supplies were also supporting those crack spreads, the Singapore-base trader said.

But, lockdowns have tightened in China, the world’s second-largest economy, where authorities have taken a zero-tolerance approach to COVID-19 despite relatively few cases. Beijing authorities have told residents to refrain from leaving the city, postpone weddings, and cut back non-essential gatherings.

Of the flights scheduled on Wednesday at Beijing Daxing Airport, 60% were canceled as of the morning, and half of the flights at Beijing Capital International Airport were canceled.

(Reporting by Laura Sanicola, Ahmad Ghaddar and Koustav Samanta; Editing by David Gaffen, Simon Cameron-Moore and Daniel Wallis)

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Bad traffic, changed plans: Toronto braces for uncertainty of its Taylor Swift Era

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TORONTO – Will Taylor Swift bring chaos or do we all need to calm down?

It’s a question many Torontonians are asking this week as the city braces for the arrival of Swifties, the massive fan base of one of the world’s biggest pop stars.

Hundreds of thousands are expected to descend on the downtown core for the singer’s six concerts which kick off Thursday at the Rogers Centre and run until Nov. 23.

And while their arrival will be a boon to tourism dollars — the city estimates more than $282 million in economic impact — some worry it could worsen Toronto’s gridlock by clogging streets that already come to a standstill during rush hour.

Swift’s shows are set to collide with sports events at the nearby Scotiabank Arena, including a Raptors game on Friday and a Leafs game on Saturday.

Some residents and local businesses have already adjusted their plans to avoid the area and its planned road closures.

Aahil Dayani says he and some friends intended to throw a birthday bash for one of their pals until they realized it would overlap with the concerts.

“Something as simple as getting together and having dinner is now thrown out the window,” he said.

Dayani says the group rescheduled the gathering for after Swift leaves town. In the meantime, he plans to hunker down at his Toronto residence.

“Her coming into town has kind of changed up my social life,” he added.

“We’re pretty much just not doing anything.”

Max Sinclair, chief executive and founder of A.I. technology firm Ecomtent, suggested his employees avoid the company’s downtown offices on concert days, saying he doesn’t see the point in forcing people to endure potential traffic jams.

“It’s going to be less productive for us, and it’s going to be just a pain for everyone, so it’s easier to avoid it,” Sinclair said.

“We’re a hybrid company, so we can be flexible. It just makes sense.”

Swift’s concerts are the latest pop culture moment to draw attention to Toronto’s notoriously disastrous daily commute.

In June, One Direction singer Niall Horan uploaded a social media video of himself walking through traffic to reach the venue for his concert.

“Traffic’s too bad in Toronto, so we’re walking to the venue,” he wrote in the post.

Toronto Transit Commission spokesperson Stuart Green says the public agency has been working for more than a year on plans to ease the pressure of so many Swifties in one confined area.

“We are preparing for something that would be akin to maybe the Beatles coming in the ‘60s,” he said.

Dozens of buses and streetcars have been added to transit routes around the stadium, and the TTC has consulted the city on potential emergency scenarios.

Green will be part of a command centre operated by the City of Toronto and staffed by Toronto police leaders, emergency services and others who have handled massive gatherings including the Raptors’ NBA championship parade in 2019.

“There may be some who will say we’re over-preparing, and that’s fair,” Green said.

“But we know based on what’s happened in other places, better to be over-prepared than under-prepared.”

Metrolinx, the agency for Ontario’s GO Transit system, has also added extra trips and extended hours in some regions to accommodate fans looking to travel home.

A day before Swift’s first performance, the city began clearing out tents belonging to homeless people near the venue. The city said two people were offered space in a shelter.

“As the area around Rogers Centre is expected to receive a high volume of foot traffic in the coming days, this area has been prioritized for outreach work to ensure the safety of individuals in encampments, other residents, businesses and visitors — as is standard for large-scale events,” city spokesperson Russell Baker said in a statement.

Homeless advocate Diana Chan McNally questioned whether money and optics were behind the measure.

“People (in the area) are already in close proximity to concerts, sports games, and other events that generate massive amounts of traffic — that’s nothing new,” she said in a statement.

“If people were offered and willingly accepted a shelter space, free of coercion, I support that fully — that’s how it should happen.”

This report by The Canadian Press was first published Nov. 13, 2024.



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‘It’s literally incredible’: Swifties line up for merch ahead of Toronto concerts

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TORONTO – Hundreds of Taylor Swift fans lined up outside the gates of Toronto’s Rogers Centre Wednesday, with hopes of snagging some of the pop star’s merchandise on the eve of the first of her six sold-out shows in the city.

Swift is slated to perform at the venue from Thursday to Saturday, and the following week from Nov. 21 to Nov. 23, with concert merchandise available for sale on some non-show days.

Swifties were all smiles as they left the merch shop, their arms full of sweaters and posters bearing pictures of the star and her Eras Tour logo.

Among them was Zoe Haronitis, 22, who said she waited in line for about two hours to get $300 worth of merchandise, including some apparel for her friends.

Haronitis endured the autumn cold and the hefty price tag even though she hasn’t secured a concert ticket. She said she’s hunting down a resale ticket and plans to spend up to $600.

“I haven’t really budgeted anything,” Haronitis said. “I don’t care how much money I spent. That was kind of my mindset.”

The megastar’s merchandise costs up to $115 for a sweater, and $30 for tote bags and other accessories.

Rachel Renwick, 28, also waited a couple of hours in line for merchandise, but only spent about $70 after learning that a coveted blue sweater and a crewneck had been snatched up by other eager fans before she got to the shop. She had been prepared to spend much more, she said.

“The two prized items sold out. I think a lot more damage would have been done,” Renwick said, adding she’s still determined to buy a sweater at a later date.

Renwick estimated she’s spent about $500 in total on “all-things Eras Tour,” including her concert outfit and merchandise.

The long queue for Swift merch is just a snapshot of what the city will see in the coming days. It’s estimated that up to 500,000 visitors from outside Toronto will be in town during the concert period.

Tens of thousands more are also expected to attend Taylgate’24, an unofficial Swiftie fan event scheduled to be held at the nearby Metro Toronto Convention Centre.

Meanwhile, Destination Toronto has said it anticipates the economic impact of the Eras Tour could grow to $282 million as the money continues to circulate.

But for fans like Haronitis, the experience in Toronto comes down to the Swiftie community. Knowing that Swift is going to be in the city for six shows and seeing hundreds gather just for merchandise is “awesome,” she said.

Even though Haronitis hasn’t officially bought her ticket yet, she said she’s excited to see the megastar.

“It’s literally incredible.”

This report by The Canadian Press was first published Nov. 13, 2024.

The Canadian Press. All rights reserved.



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Via Rail seeks judicial review on CN’s speed restrictions

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OTTAWA – Via Rail is asking for a judicial review on the reasons why Canadian National Railway Co. has imposed speed restrictions on its new passenger trains.

The Crown corporation says it is seeking the review from the Federal Court after many attempts at dialogue with the company did not yield valid reasoning for the change.

It says the restrictions imposed last month are causing daily delays on Via Rail’s Québec City-Windsor corridor, affecting thousands of passengers and damaging Via Rail’s reputation with travellers.

CN says in a statement that it imposed the restrictions at rail crossings given the industry’s experience and known risks associated with similar trains.

The company says Via has asked the courts to weigh in even though Via has agreed to buy the equipment needed to permanently fix the issues.

Via said in October that no incidents at level crossings have been reported in the two years since it put 16 Siemens Venture trains into operation.

This report by The Canadian Press was first published Nov. 13, 2024.

Companies in this story: (TSX:CN)

The Canadian Press. All rights reserved.



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