SINGAPORE: Asian refining margins for jet fuel rose for a sixth straight session on Tuesday, surging to their strongest level in nearly four weeks, as airlines across the globe continue to add capacity with more people opting for international air travel.
Refining margins, or cracks, for jet fuel rose to $39.43 per barrel over Dubai crude during Asian trading hours, the highest since May 5 when they hit a record high of $39.44 a barrel. The cracks were at $37.50 a barrel on Monday. Global airline capacity rose 2.4% or by about 2.2 million seats this week to over 91 million seats for the first time since March 2020, according to aviation data firm OAG. The capacity now stands 20% lower compared with the corresponding week in pre-pandemic 2019.
“International airline capacity continued its recovery with another 4% increase in seats this week versus last week. That’s an extra 1.3 million seats in international airline schedules,” OAG said in a statement. Total scheduled airline capacity in Northeast Asia rose 1.4% this week, while capacity in Southeast Asia climbed 2.9% from the previous week, OAG data showed.
Cash differentials for jet fuel were at a premium of $3.92 a barrel to Singapore quotes on Tuesday, compared with $3.37 per barrel a day earlier, while the June/July time spread for the aviation fuel traded at $4.10 per barrel.
Meanwhile, refining margins for 10 ppm gasoil jumped to $50.23 per barrel over Dubai crude on Tuesday, a fresh all-time high, according to Refinitiv Eikon data that goes back to 2014. The cracks were at $43.50 per barrel a day earlier.