The summer months always constitute the peak travel season for US airlines, making the third quarter traditionally the heaviest sustained demand portion of the year. But Q3 2018 was something the industry had never seen. Record demand for jet fuel in both the US and Latin America, combined with sagging Renewable Volume Obligation (RVO) values, led to unprecedented strength in prices during Q3. US jet fuel demand reached an all-time high this summer. Seven percent airline year-on-year growth on average across the US,” said a Gulf Coast jet fuel trader. Added to the domestic strength, Q3 demand for jet exports to Latin American demand also reached record highs. Latin America takes around 50% of US jet exports, and Mexico is the region’s top importer. Jet fuel imports now cover around 63% of Mexico’s domestic demand, compared with 53% in 2017, 44% in 2016 and 33% in 2015. In July 2018, USGC jet exports averaged 236,625 b/d, up from 164,888 b/d over the same month in 2017 and 146,665 b/d in 2016, according to US Energy Information Administration data. Mexico led the way in July with 1.45 million barrels imported from the US, followed by Brazil at 932,000 barrels. US refiners… continue reading
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Source: CTRM Center