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Stable Demand for Jet Fuel Offsets Some Macro Volatility

Minneapolis, MN | December 12, 2023 | By: Steve Sinos, Blue Lacy Advisors, LLC

Stable Demand for Jet Fuel Offsets Some Macro Volatility, but Prices Continue to be Highly Correlation to Gasoil.

Three Things

  1. Asian air traffic has been stable, though not growing fast enough to outrun crude oil volatility. Flight activity continues to come in at about 80% of 2019’s peak, and global estimates of jet fuel demand look in line with activity.

  2. This is further reflected in jet fuel flows. Despite routine seasonal lulls and lower supply because of maintenance, intra-regional movements appear to match activity.

  3. Jet fuel prices have only recently shown comparative strength, but even a $3 rally in basis doesn’t offset gasoil’s volatility.

Traffic Numbers Appear Stable

Price activity seems to be in line with consumption activity. Jodi data, which doesn’t include major consumers like China, showed jet fuel demand continues to pace above 1mm bpd, even as it softens relative to the summer peak. The September numbers align with the average pace of the ten years ending 2019 and continue to trend higher than 2022.

*This summary is based off December 3, 2023

A free excerpt, such as this one, will be published on a delay periodically. This is an excerpt from Blue Lacy Advisors, LLC's (“Blue Lacy”) weekly commentary for clients, which is based on a collection of models, research/analytical subscriptions, and bespoke work. Each week Blue Lacy explores how market drivers included in these analyses might affect or be used in clients' planning, budgeting, and execution of strategy. Call Blue Lacy to make an appointment today!


Meet the Author!

Phone: +1-832-413-3124

Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.

He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.

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