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Increasing jet fuel stocks weigh on United States West Coast refiner margins, EIA states

Refiner margins on jet fuel balanced 5 cents a gallon at the Los Angeles trading center last month, the lowest in a minimum of five years, as low demand and high supplies pushed stocks to a record high, the U.S. Energy Details Administration (EIA) stated on Wednesday.

WHY IT MATTERS

Fuel manufacturers' margins have actually compromised significantly this year as soft financial activity has moistened the post-pandemic travel boom and global supply has actually increased due to the opening of brand-new refineries and expansions of existing plants.

Weaker-than-expected jet fuel intake has been among the biggest frustrations for refiners, as the product was anticipated to be a pillar of oil need development this year.

CONTEXT

Jet fuel need on the U.S. West Coast was at the greatest in four years throughout the first half of the year, however still below its pre-pandemic levels, the EIA said on Wednesday.

West Coast air travel has recovered more gradually from pandemic-era lockdowns and aircrafts have actually become more efficient, weighing on fuel usage, the EIA stated. International travel to Asia has actually also recovered slower than other regions, the agency noted.

BY THE NUMBERS

West Coast jet fuel stocks struck an all-time high of 12.2 million barrels in the week ended Sept. 06, EIA data revealed. Weekly inventories have balanced almost 11 million barrels this year up until now, compared to just over 9 million barrels in 2023.

Jet fuel demand in the region averaged over 500,000 barrels-per-day in the very first six months this year, about 5%. listed below the first half of 2019.

The EIA this month cut its U.S. jet fuel need forecast. 1.69 million barrels per day in 2024, up 2% from in 2015. Its. previous forecast saw growth of 3.3%.

(source: Reuters)