MOSCOW (MRC) -- Restrictions on long-distance flights and the surge in COVID-19 in India will keep jet fuel demand below pre-pandemic levels over the coming months, even as an easing of lockdown in some parts of the world boosts jet fuel demand, said Reuters.
Vaccination success and reduced infection rates in Western countries are allowing travel to resume. It will, however, be dominated by short-haul flights, which account for almost two thirds of the total fuel used by the sector, but on average use around 35 times less fuel than long-haul flights, the International Energy Agency estimates.
The result will be jet fuel demand of around 5.8 million barrels per day (bpd) this year, almost 30% higher than 2020, but below the 8 million bpd of 2019 before the pandemic struck, energy consultancy FGE says.
Goldman Sachs expected jet fuel demand would rise to 3.9 million bpd in May, compared to the low of 2.2 million bpd in May 2020. It predicted demand of almost 5.5 million bpd by the end of the year, compared with 7 million bpd at the same time in 2019.
"You see the passenger numbers are recovering, but they are flying shorter distances, so the relationship between the passenger number and the jet fuel demand is distorted," Cuneyt Kazokoglu, head of oil demand analysis at FGE, said.
"For the full recovery, we need international travel to recover as well, and for that we have to reach a certain level of vaccination, not just in a couple of countries."
As per MRC, jet fuel demand is picking up, which could give refiners some hope after the global pandemic boosted distillate inventories and sank margins. Refiners have been mixing jet fuel into diesel inventories for the last several months, since they have been unable to sell the product due to the sharp decline in air travel.
Indian state refiners' local fuel sales in April declined due to state-level restrictions aimed at stemming a rampant second wave of coronavirus infections, preliminary data shows. The deadly second wave topped 400,000 new daily cases for the first time on Saturday. Authorities reported 401,993 new cases in the previous 24 hours, the highest daily count globally, after 10 consecutive days over 300,000. Deaths from COVID-19 jumped by 3,523, taking the total toll in India to 211,853.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
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