The International Energy Agency said on Wednesday that fears of jet fuel shortages leading into the summer travel season have abated as refineries raised output and exports grew.
U.S. refineries produced more than 2 million barrels per day of jet fuel in March, while European refineries supplied 1.3 million barrels per day during the same month. According to the IEA, production levels continued to climb through April and May.
American exports to Europe hit record levels as domestic production reached new highs. U.S. jet fuel inventories also remained above their historical average, providing a buffer that supported export availability.
New supply routes to Europe have emerged as well. Data from Kpler cited by the IEA showed imports from Nigeria reached 127,000 barrels per day in the first part of June, while imports from the United States were at 136,000 barrels per day during that period.
In Europe, the IEA said higher refining margins for middle distillates prompted increased runs at facilities in Italy, Norway and Denmark. Additional output came as maintenance work at refineries in Poland, Belgium and Germany was completed.
The agency noted that the jump in jet fuel production did not come at the expense of diesel supply. The report indicated refineries were able to obtain more low-sulphur feedstocks for processing through available hydrocracking capacity, allowing both products to be produced without obvious trade-offs.
"Jet fuel continues to price high enough to sustain its share of the overall product output, with the regrade of jet fuel to diesel narrowing to close to pre-conflict levels, even as diesel cracks remain close to $40 a barrel," the report said.
The IEA's findings point to a restoration of balance between supply and demand for jet fuel in the run-up to peak travel season, driven by stronger refining throughput, redistribution of exports and the return of refinery units from maintenance.
Summary
Rising refinery production in the United States and Europe, record U.S. exports to Europe, above-average U.S. stocks and growing imports from Nigeria helped reduce earlier concerns of a jet fuel shortfall ahead of the summer travel season. Production gains in April and May and resumed output after maintenance in several European refineries supported the improvement, and higher middle-distillate margins encouraged additional runs without lowering diesel output.