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Jet fuel market rebalances on higher production, imports, IEA says
(Reuters) – Higher production at refineries and increased exports have helped ease concerns over a significant shortfall in the jet fuel market, the International Energy Agency said in its monthly report on Wednesday.
- “Concerns over jet fuel supply shortfalls ahead of the peak summer travel season have significantly eased in recent weeks,” the report said.
- In March, refineries in the U.S. and Europe produced over two million barrels per day (bpd) and 1.3 million bpd of jet fuel, respectively. The output rose further in April and May.
- U.S. exports to Europe rose to record highs as production hit record levels, while domestic jet fuel stockpiles remain above average, boosting availability of the product for exports.
- Nigeria was also a major exporter of the fuel to Europe, the IEA said in its report.
- Imports from Nigeria stood at 127,000 bpd so far into June, according Kpler data. For the U.S., this stands at 136,000 bpd.
- In Europe, higher refining margins of middle distillates led to stronger runs from several countries such as Italy, Norway and Denmark. Maintenance finishing at refineries in Poland, Belgium, and Germany also lifted runs.
- The IEA highlights that while more jet fuel was produced, this did not happen at the cost of diesel production – suggesting that refineries sourced more additional low-sulphur feedstocks for processing by hydrocracking capacity.
- “Jet fuel continues to price high enough to sustain its share of the overall product output, with the regrade of jet fuel to diesel narrowing to close to pre-conflict levels, even as diesel cracks remain close to $40 a barrel,” the report said.
Reporting by Seher Dareen in London; Editing by Diti Pujara
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