There is a growing glut of jet-A as air traffic markedly declines globally due to the Covid-19 crisis. In fact, the fuel market is seeing its lowest demand for jet-A since the aftermath of the 9/11 terror attacks in 2001.
Airline fuel consumption before Covid-19 in the U.S. was running about 1.7 million barrels per day (b/d),” said Ben Brockwell, co-founder and executive director of strategic content at the market analyst Oil Price Information Service (OPIS). “That is now down to 1.3 million b/d, and even that number is high because it reflects barrels being produced and going into storage and not into aircraft for consumption.”
According to the Department of Energy, over the past month jet fuel consumption is down 16.4 percent, and year-over-year is showing a decline of nearly 8 percent. As the epidemic continues to grow, those numbers are expected to freefall.
“IHS Markit, our parent company, estimates that U.S. jet fuel demand in April will fall to 607,000 b/d compared to 1.75 million b/d the same time last year,” Brockwell told AIN. “That is a huge drop, and the country is running out of space to store fuel.” He added that in response, the U.S. production of jet fuel has dropped to 1.12 million b/d. "Those numbers rival the cuts made back in September 2008 during the Great Recession, and are as low as at any time following 9/11."
For those still flying, the situation has resulted in a glimmer of good news at the fuel pump. “Airline fuel demand is down and supply is up,” said Brockwell, “a basic equation for prices being as cheap as they have been in two decades.”