JET fuel demand in China is on the mend as flights return to the skies, offering some support to domestic refiners grappling with muted diesel and gasoline consumption that's weighed on the industry.
Oil processors in the world's largest crude importer are lifting output of aviation fuel to take advantage of improved margins.
Total air traffic grew by 14 per cent in June, compared with same period in 2019 before the pandemic, with domestic flights up by nearly 18 per cent, according to government data, reports Bloomberg.
China's refiners - state-owned as well as private - have struggled this year as the economy has lost steam, electrification of the nation's passenger car fleet dented gasoline demand, and more trucks turned to gas instead of diesel.
'Double-digit growth in jet fuel consumption this year may be able to narrow the plunge in gasoline and diesel,' said Amy Sun, a Guangzhou-based consultant at GL Consulting, a think-tank under data provider Mysteel.
'But given its small market share, it can hardly reverse the bearishness in overall margins as fuel displacement accelerates amid a softer economy.'
Across the global oil market, the aviation sector remains one of the more resilient in terms of consumption as alternative fuels have been slow to displace the use of petroleum to power aeroplanes.
In China as pandemic curbs were loosened, domestic travel returned at a faster clip than overseas services, but more international capacity set to be added.
'We foresee a further expansion in foreign passenger flights, which will likely reach 90 per cent of 2019 levels over end-24,' said Jianan Sun, a London-based analyst at Energy Aspects Ltd, who noted that Chinese jet fuel demand may average 960,000 barrels a day in 2024, just 2 per cent lower than in 2019.
On a global level, there's more scope for a jet fuel recovery, according to Goldman Sachs Group Inc.
Although worldwide passenger numbers have about caught up with 2019 levels, they are still firmly below pre-pandemic growth trends, and consumption is still 1.2 million barrels a day, or 15 per cent, below pre-pandemic levels, it said in a recent note.
Part of the reason may be that newer planes burn less fuel per flight. Major airlines are replacing their fleets with new, modern airplanes that are 25 per cent more fuel efficient.
SeaNews Turkey
Oil processors in the world's largest crude importer are lifting output of aviation fuel to take advantage of improved margins.
Total air traffic grew by 14 per cent in June, compared with same period in 2019 before the pandemic, with domestic flights up by nearly 18 per cent, according to government data, reports Bloomberg.
China's refiners - state-owned as well as private - have struggled this year as the economy has lost steam, electrification of the nation's passenger car fleet dented gasoline demand, and more trucks turned to gas instead of diesel.
'Double-digit growth in jet fuel consumption this year may be able to narrow the plunge in gasoline and diesel,' said Amy Sun, a Guangzhou-based consultant at GL Consulting, a think-tank under data provider Mysteel.
'But given its small market share, it can hardly reverse the bearishness in overall margins as fuel displacement accelerates amid a softer economy.'
Across the global oil market, the aviation sector remains one of the more resilient in terms of consumption as alternative fuels have been slow to displace the use of petroleum to power aeroplanes.
In China as pandemic curbs were loosened, domestic travel returned at a faster clip than overseas services, but more international capacity set to be added.
'We foresee a further expansion in foreign passenger flights, which will likely reach 90 per cent of 2019 levels over end-24,' said Jianan Sun, a London-based analyst at Energy Aspects Ltd, who noted that Chinese jet fuel demand may average 960,000 barrels a day in 2024, just 2 per cent lower than in 2019.
On a global level, there's more scope for a jet fuel recovery, according to Goldman Sachs Group Inc.
Although worldwide passenger numbers have about caught up with 2019 levels, they are still firmly below pre-pandemic growth trends, and consumption is still 1.2 million barrels a day, or 15 per cent, below pre-pandemic levels, it said in a recent note.
Part of the reason may be that newer planes burn less fuel per flight. Major airlines are replacing their fleets with new, modern airplanes that are 25 per cent more fuel efficient.
SeaNews Turkey
