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U.S. Jet Fuel Demand Recovers Faster Than Expected

Jet fuel demand in the United States is recovering faster than in many other regional markets such as Europe and Asia minus China, the U.S. Energy Information Administration (EIA) said on Tuesday.  

Consumption of jet fuel by U.S. commercial passenger flights was approximately 612,000 barrels per day (bpd) as of August 16, which was 43 percent of the estimated volumes of jet fuel consumed on the same date last year, the EIA has estimated using raw flight data from Cirium. From the end of April through May, U.S. jet fuel consumption by commercial flights was below 20 percent, the estimates show.   

The U.S. recovery has been stronger than that in many other markets because of the greater domestic air travel than in other regions. While in mid-August, jet fuel demand in the U.S. was 43 percent of the same period in 2019, consumption in Europe was just 36 percent of year-ago levels, jet fuel demand in the Middle East and North Africa was 30 percent of last year’s. The rest of Africa saw jet fuel consumption at 31 percent, the rest of Asia excluding China 28 percent, and the rest of Americas saw 24 percent of year-ago levels.

China’s jet fuel consumption was 60 percent of the volumes consumed last year, the EIA has estimated.

Apart from the COVID-19 travel restrictions, the differences among the regional markets also depend on how much domestic air travel contributes to total commercial passenger flights.

“Because of the less severe restrictions on domestic travel, the shorter distances typically involved, and the larger share of domestic air travel that is non-discretionary, domestic air travel has, in most markets, been relatively less affected by COVID-19 mitigation efforts than international air travel,” the EIA said.

Aviation fuel is the worst-hit fuel in the COVID-19 crisis and faces the most prolonged period of recovery compared to other fuels such as gasoline or diesel.

A very slow recovery in jet fuel demand will drag on global oil demand for at least another two years as overall passenger traffic numbers continue to be low, and mandatory quarantines continue to prevent people from traveling on international flights.

By Charles Kennedy for Oilprice.com

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