SINGAPORE: Asia’s cash premiums for jet fuel inched up on Tuesday as traders expect aviation demand to strengthen gradually in the coming months.
Cash differentials for jet fuel rose by a cent to a premium of $1.18 a barrel to Singapore quotes.
Domestic airline capacity across the globe this week stood at 10% below where it was in 2019, but scheduled international capacity remained 45% lower compared with the same period, according to aviation data firm OAG.
Total scheduled airline capacity in South Asia in the week to Monday rose 3.4% from the previous week, while scheduled seats in Central Asia increased 2.3%, OAG data showed.
“As we look forward over the next three months, (global) capacity is expected to reach 96.6 million seats by the middle of May; airlines have added 19.3 million seats into the next three months scheduled capacity compared to last week,” OAG said in a statement.
India’s fuel consumption in 2022-23, a proxy for oil demand, could rise to 214.5 million tonnes from the revised estimates of 203.3 million tonnes for the current fiscal year ending March 2022, according to government forecasts.
Efforts by governments to drive an economic rebound are likely to add strain to tight oil supplies and could send prices to fresh peaks, unless international talks end sanctions on Tehran and lead to a surge in Iranian exports.
Oil prices jumped more than $2 on Tuesday on supply disruption worries as tensions between Russia and Ukraine escalated after Moscow ordered troops into two breakaway regions in eastern Ukraine.