Asian jet crack weakens, contango steepens despite EU record flight numbers

London, (Quantum Commodity Intelligence) – The contango in the market structure for jet kerosene in Asia steepened marginally in trade on Monday while the front month paper cracks weakened, despite news that Europe was seeing record flight numbers.

The contango between July and August has widened slightly from -$0.25/b last week to -$0.30/b, according to Quantum data, in a sign that jet demand is not recovering as much as initially anticipated earlier last month.

That contango was just -$0.15/b three weeks ago.

The jet crack for July is now at the lowest for six weeks at $3.77/b and comes despite EU flight data showing the number of flights in Europe rose 12.5% last week to the highest level so far this year.

However, US passenger data shows that passenger growth has started to slow, with an average of 1.74 million Americans boarding aircraft each day on average for the past seven days.

While this level is almost sixfold higher than 2020 levels, it remains 30% below 2020 levels and average passenger numbers have stayed more or less static for two weeks.

Last week, the UK government virtually banned international holidays without the need to quarantine, leaving some budget airlines to cancel June's flight schedule.

The weaker crack also comes as some India states start to ease restrictions after case numbers have fallen more than 70% from the peak of 400,000 to 100,000 on Monday.

And in Japan's capital, Tokyo, infections are down 30% in a week, with national infections falling 20%.