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Jet fuel prices: Where would they be without worst recession in 70 years? Oil prices hover at USD60

22-May-2009

Oil prices have rallied almost 80% in just three months to over USD62 per barrel, despite the worst global recession in 70 years. Crude is still some 54% below levels 12 months ago, but if the oil price can blossom on a few "green shoots", the global airline industry - particularly the LCC sector - must be dreading the potential increases when a full blown economic recovery occurs.

Earlier in the week, oil traded above USD60 per barrel for the first time in six months. Jet fuel prices have again trailed the increase in crude prices in the past week (to 12-May-09), falling back 1.5% in New York, -1.0% at the US Gulf Coast, -0.4% in Los Angeles and -2.0% in Amsterdam. Prices edged up 0.9% in Singapore.

Jet fuel prices are down around 62% year-on-year. The growing gap with the underlying crude price reflects weak demand for jet fuel as airlines slash capacity. For example, the Air Transport Association of America (ATA) reports US carriers had a 14.2% year-on-year reduction in jet fuel usage in 1Q2009, to 4.1 billion gallons. Member airlines paid on average USD1.76 per gallon for fuel, down 35% year-on-year.

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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): 12-May-09 to 19-May-09

 

12-May-09

13-May-09

14-May-09

15-May-09

18-May-09

19-May-09

one week
Change

12 month
Change

New York Harbor

152.75

151

150.65

143.7

149.6

150.45

-1.5%

-62.0%

U.S. Gulf Coast

149.5

147.5

147.15

141.2

147.1

147.95

-1.0%

-62.0%

Los Angeles

153.25

151

151.4

144.7

150.85

152.7

-0.4%

-61.9%

Amsterdam-Rotterdam-Antwerp

155.61

152.96

153.79

146.69

151.91

152.51

-2.0%

-62.5%

Singapore

152.14

153.45

151.19

152.38

147.26

153.45

0.9%

-60.4%

WTI Spot

58.81

58

58.58

56.52

58.99

59.52

1.2%

-53.8%

Daily jet fuel prices (kerosene, cents per gallon) at New York, US Gulf Coast, Los Angeles, Amsterdam, Singapore: 02-Dec-08 to 19-May-09


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