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Jet fuel prices fall again, but airlines do not lose sight of bio-fuels

6-Feb-2009
  • Jet fuel spot prices fell by 1-5% in the past week, generally outperforming a 1.9% drop in crude prices;
  • IATA pushing for early next-gen bio-fuel approval, will keep seeking fuel cost savings from partners.

Jet fuel spot prices were down across the board in the week ended 03-Feb-09, including a further -5.2% fall in New York, -4.2% at the US Gulf Coast -4.7% in Los Angeles, -1.4% in Singapore and -0.8% in Amsterdam. This compares to a 1.9% decrease in crude prices (WTI) last week, which continues the trend in the past few weeks of a compression in jet fuel spot prices to crude.

Over the past 12 months, jet fuel prices are down 45-49%, whereas the spot price of oil (WTI) has fallen 54.6%.

Daily jet fuel prices (kerosene, cents per gallon) at New York, US Gulf Coast, Los Angeles, Amsterdam, Singapore vs Crude Spot price (WTI, USD per barrel): 27-Jan-09 to 03-Feb-09

 

27-Jan-09

28-Jan-09

29-Jan-09

30-Jan-09

02-Feb-09

03-Feb-09

one week
Change

12 month
Change

New York Harbor

141.1

144.9

144.4

146.9

139.2

133.8

-5.2%

-48.1%

U.S. Gulf Coast

135.7

139.9

139.7

141.6

135.0

130.1

-4.2%

-48.7%

Los Angeles

138.0

140.2

141.0

143.1

136.2

131.6

-4.7%

-48.5%

Amsterdam-Rotterdam-Antwerp (ARA)

135.3

138.5

143.1

144.8

137.9

134.2

-0.8%

-48.8%

Singapore

134.8

134.8

138.2

141.4

139.9

132.9

-1.4%

-45.7%

WTI Spot

41.7

42.0

41.6

41.7

41.4

40.9

-1.9%

-54.6%

Daily jet fuel prices (kerosene, cents per gallon) at New York, US Gulf Coast, Los Angeles, Amsterdam, Singapore: 27-Oct-08 to 27-Jan-09

Despite drop, IATA re-doubles bio-fuel push

The fuel price reduction is helping airlines to weather some of the effects of the sharp downturn in global passenger and cargo demand. But the fuel savings could only last for the short term, with futures markets pricing oil prices some USD12 per barrel higher in 12 months.

Efforts to conserve fuel and move to alternatives therefore remain in sharp focus for airlines, led by IATA. Last week, Director General & CEO, Giovanni Bisignani, reiterated the industry body is pushing governments for the certification timeline of new generation bio-fuels to move forward to 2010 from the current 2013.

Airlines and manufacturers are successfully testing new generation bio-fuels that are completely sustainable with the possibility of reducing CO2 emissions by 60% over their lifecycle.

IATA has also committed to continue attacking fuel fees, taxation and infrastructure charges this year - efforts it claims resulted in USD3.5 billion in cost savings to airlines last year.

IATA's target is a 25% improvement in fuel efficiency by 2020 (compared to 2005) and to achieve carbon-neutral growth on the way to a carbon-free future with a 50-year time horizon.

The next Friday Fuel Watch will be on 13-Feb-09.


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