Argus Americas Jet Fuel Index
US jet fuel prices pressed lower amid waning domestic demand as the summer travel season draws to a close while wider economic concerns made for volatile markets.
Weaker jet fuel differentials compounded benchmark losses, taking month-over-month losses to around 8¢/USG. Export demand was quick to absorb lingering US surplus barrels, with exports averaging nearly 50pc higher than year-ago levels.
Lower imports, particularly to the US east coast, coupled with increased export activity served to draw down US inventories by nearly 1.4mn bl over the first three weeks of August, leaving stockpiles unchanged year-over-year.
Domestic outlets were tenuous during the month, with the arbitrage to ship to the US northeast opening briefly late in the month, while oversupply in the midcontinent made economics unviable to ship from the US Gulf coast.
An expected record Labor Day travel period running from 28 August to 3 September should provide temporary stimulus to differentials alongside basis risk to the downside amid recession fears.
Mexican jet fuel supplies shrank 9.7pc despite rising output and imports as airline traffic rose more than 3pc on year-ago levels. Mexican jet fuel imports ran 26pc over year-ago levels, serving to offset a decline in Brazilian waterborne demand.
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