Summer markets for refined oil products are anticipating big numbers, with the AAA teasing the potential for a 4.8% surge in Memorial Day weekend air travelers and rising demand for jet fuel as opposed to gasoline for the busiest driving period of the year, Bloomberg reports.
AAA is expecting a two-decade record high number of travelers flying for Memorial Day weekend, further supported by global crude oil consumption that analysts at JPMorgan Chase said on Friday would soar by 2.8 million barrels a day from May through August. The analysts also predicted an increase of 430,000 barrels per day in jet fuel demand during that same time period.
Bloomberg NEF is projecting that flying passengers will continue to increase in number in the coming weeks, with jet fuel demand already at its highest seasonally since 2019.
"We see jet as our fastest-growing fuel globally," Bloomberg cited Wood Mackenzie analyst Austin Lin as saying on Monday, adding that we could see U.S. jet fuel demand increase another 5% this year amid strong American consumer spending. At the same time, gasoline demand is rather duller by comparison, up this week but still hovering around two-year seasonal lows, according to JPMorgan, which sees global demand for gasoline declining next year by around 100,000 bpd.
AAA also indicated that post-COVID changes in how Americans view international air travel could be contributing to increasing jet fuel demand, with the association seeing less reluctance to spend on big trips to Europe and Asia.
Just over a month ago, Reuters reported that global flight activity had managed to crawl past its pre-pandemic levels for the "first time in four years" but that jet fuel demand growth was not yet keeping pace. Still, citing the IEA, Reuters reported that jet fuel had been the largest contributor to oil-positive performance in the post-pandemic period.
By Josh Owens for Oilprice.com
Josh Owens is the Content Director at Oilprice.com. An International Relations and Politics graduate from the University of Edinburgh, Josh specialized in Middle East and… More
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