Javier Blas, Bloomberg, highlights soaring jet fuel prices here…
“In some ways, the current jet-fuel market is a copy-and-paste version of what happened to gasoline in 2021. Last year, motorist returning to the roads in droves lifted gasoline consumption, pushing wholesale prices up by roughly 70% from January through August. This year, air travelers are returning. The International Energy Agency forecasts that global jet-fuel demand will jump in 2022 by 15.9%, the biggest year-on-year increase among all fuels, although still leaving it below 2019 levels.…
But demand alone doesn’t explain the tightness. Supply is a problem, too. Jet propellant belongs to a wider pool of fuels called middle distillates, which also include diesel and heating oil. Diesel demand is rocketing just as Europe and the U.S. shun Russian supplies, so European and American refiners are focused on making as much diesel as they can, at the expense of jet fuel. For much of the pandemic, that wasn’t a problem as aviation demand was in the doldrums. In fact, refiners solved part of the diesel shortage by diverting molecules that otherwise would have ended up powering airplanes into the diesel pool. But with air passengers numbers rapidly climbing and airlines adding capacity, that’s now an issue.“
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