Argus Jet Fuel Index
US jet fuel prices sank to their lowest levels in half a year as domestic demand retreated nearly 25pc from near-record highs set during the December holiday period.
This put demand at just under 1.6mn b/d. US Gulf coast jet fuel prices shed 23¢/USG, or 12pc, to 171.68¢/USG, while US Atlantic coast values fell by 20¢/USG, or 10pc, to 179.29¢/USG over the past month. Flagging US domestic demand saw US stockpiles of jet fuel swell by 3mn bl to 42.4mn bl over the course of the first three weeks of January.
Supplies reached their highest levels in three months, running just under 1pc over the four-week average. Export demand soaked up more than 4.2mn bl during the first three weeks of 2020 with Canada emerging as the top importer of US jet fuel, according to oil analytics firm Vortexa.
At least seven cargoes were booked to Canada, while Brazil, Colombia, Honduras and Mexico combined accounted for 768,000 bl of exports this month, according to Vortexa data.
January jet fuel exports averaged 241,000 b/d, up by 21,000 b/d, or 10pc, from December’s levels, yet down by 5.5pc on year-ago levels. Looking forward, worsening US jet fuel margins could see refiners shift production toward naphtha. US Gulf coast jet fuel margins have declined by more than $5/bl, or nearly 30pc, over the course of the last month to just over $12/bl. Jet fuel margins reached the lowest levels since March 2018 during the third week of January.
Global jet markets will also contend with an oversupplied Asian jet fuel market where margins have slumped to two and a half year lows on signs the coronavirus outbreak in China could hit regional demand.
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