Jet travel: not happening. File Image / Pixabay.
Jet fuel values which dropped significantly in the first part of last year have left negative territory vis-a-vis ICE low sulfur (LS) gasoil to project a reasonable premium over the gasoil benchmark, according to price reporting agency S&P Global Platts.
The pandemic decimated consumer demand for jet travel, as well as cruise, leaving the former sector's fuel with nowhwere to go.
During the first phase of the pandemic, "jet fuel values had gone negative to $80 per metric tonne (pmt) below ICE LS gasoil", said reporter Emma Thomas in a Platts oil markets podcast.
At such low values there was limited entry of jet fuel barrels into the bunker fuel pool, an unusual phenomenon reported by Ship & Bunker.
But tighter supply has put the premium back into positive territory, Thomas said with jet fuel riding above ICE at just below $20 pmt in early February.
As weak demand persists on pandemic fears, refiners refrain from long-term supply deals to stick with spot deals thereby producing a degree of market volatility, she said.