Global jet fuel demand under pressure

Global jet fuel markets stayed under pressure on Tuesday as more countries expanded border restrictions to keep the new Omicron coronavirus variant at bay, prompting travellers to reconsider their plans.

Jet fuel demand, the biggest laggard in the oil complex, had been forecast to post the strongest growth of 550 000 barrels per day to 5.9 million bpd in fourth quarter, according to the International Energy Agency in its Nov. 16 report.

But now Omicron pose the greatest risk to jet fuel consumption. Hong Kong expanded a ban on entry for non-residents from several countries, the latest to expand travel curbs after Israel and Japan have already announced border closures to all foreign travellers.

Britain and Australia have tightened rules for all arrivals in response to the new variant while hundreds and thousands of would-be travellers are now considering to cancel or delay their trips in response to renewed restrictions.

The real risk from the new variant is the reimposition of more widespread flight restrictions during the winter and again reducing current global jet fuel demand of some 6 million barrels per day significantly," energy consultancy FGE said in a note.

Asian refining margins for jet fuel slumped to their lowest in more that two months on Monday at US$6.92 a barrel, while the front-month time spread for the aviation fuel in Singapore flipped to a contango for the first time since end-September. -Nampa/Reuters