Australia jet fuel sales at 12-month high on domestic flight recovery

London (Quantum Commodity Intelligence) – Sales of jet fuel in Australia have reached their highest level since Covid restrictions were introduced, bolstered by a recovery in domestic travel that saw demand for fuel on internal flights at 87% of the pre-pandemic level, according to government data released Friday.

Total sales of jet fuel in March this year were 325.9 million litres, of which 201.2 million (62%) was for domestic flights.

During the same period in 2020, total jet sales were 562.3 million litres, but the amount of fuel used for international flights was 330.5 million litres compared with just 124.7 million in March this year.

Quantum data shows refining margins for jet fuel in Asian trading hub of Singapore have increased nearly 8-fold since reaching a nadir at the end of March, with the month ahead crack value rising from $0.55/b on March 31 to $3.75/b at the close of trading Friday.

The market is also in a strong contango with Q3 and Q4 jet fuel FOB Singapore cracks assessed at $6.49/b and $6.99/b respectively Friday, suggesting the market is pricing in a sharp rise in air travel.

Air passenger numbers have risen fairly consistently in major economies around the world and the market is bullish more gains as restrictions are eased and summer begins in the northern hemisphere, while a short-term squeeze on distillate exports from India has also helped margins.