Jet Fuel Demand Back with a Vengeance
Jet fuel demand has come back with a vengeance, despite the recent bout of Covid-19, and should continue to grow into 2023.
That’s what BofA Global Research stated in a new report sent to Rigzone recently, which noted that jet fuel prices lagged other products in 2020 and 2021 “as the crucial eight million barrel per day market crashed on border restrictions and travel fears”.
“Yet air travel demand has come back with a vengeance despite the recent bout of Covid-19 infections, saturating airports and airline seats alike,” the BofA Global Research report stated.
“The post-pandemic global air travel recovery that started in the Americas and expanded to Europe should now expand to Asia as restrictions ease, lending support to both crude and distillate prices,” the report added.
“As such, we continue to expect Brent to average $100 per barrel next year compared to a forward market price of $91 per barrel, and distillate cracks against Brent to near $26 per barrel, with jet fuel leading,” the BofA Global Research report continued.
In the report, BofA Global Research forecasts global oil demand to grow by 1.7 million barrels per day “on a post-pandemic demand recovery and substitution into oil”.
“As air travel demand normalizes, jet should account for more than a quarter of our projected petroleum fuel consumption growth next year and possibly as much as half compared to just 20 percent historically,” the report noted.
“Still, key risks to our view include (1) deeper than expected permanent business travel demand destruction, (2) geopolitical risks including Ukraine and Taiwan acting as a deterrent to international travel, and (3) a new deadly viral strain that unexpectedly forces border closures again,” the BofA Global Research report continued.
Eight of the last 10 weeks have registered increases in global Covid-19 cases, with seven of the last 10 weeks also registering a rise in Covid-19 deaths, according to the latest figures from the World Health Organization (WHO). Both Covid-19 cases and deaths are still well below peaks seen during previous phases of the pandemic, however, WHO data shows.
Total Covid-19 cases now stand at 588 million and total Covid-19 deaths stand at 6.4 million, the latest WHO data outlines. As of August 9, a total of 12.3 billion vaccine doses are said to have been administered.
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