Platts FOB Singapore jet fuel/kerosene trades surges in June on flight resumptions

Singapore — The volume of jet fuel physical trades concluded during the Platts Market on Close assessment process in Singapore rose by more than threefold, or 266.33%, to a five-month high of 1.795 million barrels in June, from 490,000 barrels in May, S&P Global Platts data showed.

The traded volume was last higher in January 2020, when 2.5 million barrels of jet fuel changed hands during the Platts MOC assessment process, the data showed. A total of 10 cargoes changed hands in June, with BP selling the most in the month at 895,000 barrels, while Unipec was the main buyer with 740,000 barrels.

The sudden rise in the volume of jet fuel traded was attributed to the gradual resumption of domestic and international flights, which increased jet fuel procurement and lifted overall market sentiment.

In early June, flagship carrier Singapore Airlines announced plans to increase the number of destinations as well as ramp up the frequency of flights on its existing network over June and July. The airline said that the partial reinstatement will add 500 new flights to 11 additional cities, revising the airline's capacity cuts to 94%, from 96% in March.

Meanwhile, Japan's top airline All Nippon Airways said earlier in June that it will resume a roundtrip passenger flight from Haneda in Tokyo to Bangkok and increase flights to Jakarta in July, further supporting a recovery in the ailing regional jet fuel demand. Starting in July, ANA will also resume its normal service of seven round trips a week from Haneda to Bangkok, a route which it currently operates for the transport of cargoes from the Tokyo airport and a passenger return flight from the Thai capital, a company spokesman said.

In light of regional airlines resuming flights and taking to the skies, the value of FOB Singapore jet fuel/kerosene trended higher in the month and averaged $41.19/b in June, Platts data showed, marking a $12.30/b, or 42.58%, spike from the monthly average of $28.89/b in May, Platts data showed.

In the derivative market, the Q3/Q4 Singapore jet fuel/kerosene quarterly spread -- an indication of near term sentiment -- also trended higher to end June at minus $1.97/b, rising 76 cents/b from the start of the month, Platts data showed.

For the FOB Singapore assessment process, Platts publishes bids, offers and trades for FOB Straits cargoes loading from terminals in Singapore and Malaysia.