Jet fuel demand outlook sours after fleeting market optimism

Jet fuel demand outlook sours after fleeting market optimism

NEW YORK/SINGAPORE/LONDON, Aug 2 (Reuters) - For a faint moment, energy traders had an inkling that demand for jet fuel, the worst-hit product in fuel markets due to the coronavirus pandemic, might stage a bit of a rebound. The number of flights increased in the United States in early July, making some traders optimistic. That spurred a bevy of shipments of jet fuel to the U.S. West Coast from locales in Asia. But with a resurgence in coronavirus cases, passenger air traffic has pulled back. Commercial aviation was easily the hardest-hit of the major transport sectors when coronavirus hit, given the close proximity of passengers in an air-conditioned space where viruses can spread. International flights remain down more than 80% from year-ago levels, Rystad Energy said. In Europe, traders were hopeful that the summer vacation season would increase demand for jet fuel. But stocks recently hit a record high despite subdued imports to the region and high exports as more countries impose border restrictions to control the new wave of the pandemic. Stocks had set new records in July at 984,000 tonnes in a fifth weekly consecutive rise, according to data from Dutch consultancy Insights Global. They slightly fell last week to 937,000 tonnes. Exports westward have come largely from countries such as South Korea, Japan and India. That has decreased jet fuel and kerosene floating storage in Asia to 1.1 million barrels from four million barrels in early May, according to Vortexa. The rising stocks in Europe and the ...
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