SINGAPORE: Asian refining margins for jet fuel rose on Tuesday, partly riding on weaker feedstock crude prices, while a gradual uptick in global airline capacity has raised hopes for aviation demand recovery.
Refining margins, or cracks, for jet fuel climbed to $13.51 per barrel over Dubai crude during Asian trading hours, up from $12.66 per barrel a day earlier.
Global airline capacity inched up 0.1% this week to 82 million seats, staying 23% lower compared with the corresponding week in pre-pandemic 2019, but carriers expect the capacity to reach 100 million seats in the next three months, aviation data firm OAG said in a statement.
Total scheduled airline capacity in South Asia in the week to Monday rose 1.3% from the previous week, while scheduled seats in Central Asia were up 2.1%, OAG data showed.
The overall capacity in North East Asia, however, has slipped 3.1% this week due to the recent COVID-19 outbreaks in China, OAG said. Cash premiums for jet fuel rose to $3.86 a barrel to Singapore quotes, compared with $3.61 per barrel a day earlier.
Clogged ports and labour shortages will help drive air freight in the first half of this year with demand outstripping supply, Taiwan’s China Airlines Ltd said on Tuesday as it reported record freight revenue in the fourth quarter.
China Airlines, Taiwan’s largest carrier, is also the world’s fifth largest air freight operator. The airline said freight revenue in the last three months of last year hit T$43.2 billion ($1.51 billion), up 67% year-on-year and a record for the quarter.
China’s daily oil processing rate dropped 1.1% in the first two months of 2022 from a year ago, to the lowest since December 2020, as independent refiners scaled back operations after Beijing slashed their crude oil import quotas.
Throughput in the January-February period reached 113.01 million tonnes, data from the National Bureau of Statistics showed on Tuesday, equivalent to 13.98 million barrels per day (bpd). Oil prices extended losses on Tuesday, sliding to a two-week low as ceasefire talks between Russia and Ukraine eased fears of further supply disruptions and surging COVID-19 cases in China fuelled concerns about slower demand.
Norwegian state oil company Equinor said it would stop trading in Russian oil as the company shuts down operations in Russia following its invasion of Ukraine.