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)
EDMONTON – RCMP say a second suspect has been arrested in the killing of an Alberta county worker.
Mounties say 28-year-old Elijah Strawberry was taken into custody Friday at a house on O’Chiese First Nation.
Colin Hough, a worker with Rocky View County, was shot and killed while on the job on a rural road east of Calgary on Aug. 6.
Another man who worked for Fortis Alberta was shot and wounded, and RCMP said the suspects fled in a Rocky View County work truck.
Police later arrested Arthur Wayne Penner, 35, and charged him with first-degree murder and attempted murder, and a warrant was issued for Strawberry’s arrest.
RCMP also said there was a $10,000 reward for information leading to the arrest of Strawberry, describing him as armed and dangerous.
Chief Supt. Roberta McKale, told a news conference in Edmonton that officers had received tips and information over the last few weeks.
“I don’t know of many members that when were stopped, fuelling up our vehicles, we weren’t keeping an eye out, looking for him,” she said.
But officers had been investigating other cases when they found Strawberry.
“Our investigators were in O’Chiese First Nation at a residence on another matter and the major crimes unit was there working another file and ended up locating him hiding in the residence,” McKale said.
While an investigation is still underway, RCMP say they’re confident both suspects in the case are in police custody.
This report by The Canadian Press was first published Sept. 13, 2024.
RICHMOND, B.C. – The Integrated Homicide Investigation Team says the 26-year-old son of a man found dead on British Columbia’s Sunshine Coast has been charged with his murder.
Police say 58-year-old Henry Doyle was found badly injured on a forest service road in Egmont last September and died of his injuries.
The homicide team took over when the BC Coroners Service said the man’s death was suspicious.
It says in a statement that the BC Prosecution Service has approved one count of first-degree murder against the man’s son, Jackson Doyle.
Police say the accused will remain in custody until at least his next court appearance.
The homicide team says investigators remained committed to solving the case with the help of the community of Egmont, the RCMP on the Sunshine Coast and in Richmond, and the Vancouver Police Department.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, have broken off without an agreement following 15 hours of talks.
Joe McCann, president of Amalgamated Transit Union Local 1724, says they stayed at the bargaining table with help from a mediator until 2 a.m. Friday and made “some progress.”
However, he says the union negotiators didn’t get an offer that they could recommend to the membership.
McCann says that in some ways they are close to an agreement, but in other areas they are “miles apart.”
About 600 employees of the door-to-door transit service for people who can’t navigate the conventional transit system have been on strike since last week, pausing service for all but essential medical trips.
McCann asks HandyDART users to be “patient,” since they are trying to get not only a fair contract for workers but also a better service for customers.
He says it’s unclear when the talks will resume, but he hopes next week at the latest.
The employer, Transdev, didn’t reply to an interview request before publication.
This report by The Canadian Press was first published Sept. 13, 2024.
