The new wave of lockdowns around the world is sending U.S. jet fuel prices slumping and exports slowing to a trickle all over again.
It’s not as bad as the crash last April, but the headwinds the aviation market still faces before vaccines bring life to normal are increasingly showing. Benchmark jet fuel prices in New York and Houston hit six-month lows, and demand in both markets plunged to a seasonal seven-year low last week.
While oil got a boost this year from a Saudi output-cut pledge, vaccine rollouts and a potential $1.9 trillion U.S. aid package, the outlook for flying remains far from rosy.
Jet fuel in Houston fell to a 16.25-cent discount to diesel futures in New York on Thursday, the weakest since July 6. New York jet fuel, mostly supplied from the Gulf Coast, was at a 12.25-cent discount to diesel, the lowest since August.
Meanwhile, exports of jet fuel last week fell to 34,000 barrels a day for the lowest since late August, Energy Information Administration data show. The flow has halved from the average of the last 12 months. Shipments at that daily level across a full month would represent the equivalent of just three full tankers leaving U.S. ports.
Chevron Corp., Trafigura Group and Citgo Petroleum Corp. shipped a combined four cargoes of jet fuel to Mexico last month, with the last cargo leaving Dec. 12 before the price downturn, according to shipping data compiled by Bloomberg. Mexico is the primary export customer of U.S.-made aviation fuel,EIA data show.
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