Spot jet fuel prices weaken on US flight reductions

: Oil products
25/11/11

US jet fuel prices fell against the diesel futures market today as US airports continue to face thousands of flight cancellations and delays, even as the US House of Representatives prepares to vote on a bill that would end the government shutdown that has disrupted air travel.

The jet fuel market has been volatile as lower prompt demand clashed with Nymex futures prices that are being driven higher by optimism over a possible end to the shutdown, today on its 42nd day. The Argus US jet fuel index rose by 2.88¢/USG to $2.44/USG as declines in cash differentials failed to offset the gains seen in the Nymex ultra-low sulphur diesel (ULSD) contract, which establishes a base price for all distillates prices, including jet fuel.

The index had already jumped by more than 5¢/USG on Monday though cash differentials were mostly steady after news the US Senate had voted 60-40 on Sunday night to begin debate on a Republican-backed bill that would fund most of the federal government through 30 January.

But US Gulf coast jet fuel prices fell by 10.5¢/USG against Nymex week-on-week through today, while US west coast prices decreased by 9.25¢/USG on expectations of continued restrictions on travel in the near-term.

Cancellations continue

The US Federal Aviation Administration (FAA) last week mandated flight reductions of up to 10pc across 40 high-traffic airports, to be ramped up through the remainder of this week, in response to a shortage in air traffic controllers willing to work without pay.

More than 1,200 US flights were cancelled and another 2,630 were delayed as of 4:30pm ET today, bringing the tally to 10,208 cancellations and 69,100 delays since 1 November, according flight-tracking site FlightAware. The count also includes mechanical, weather-related, and other incidents.

Although the FAA order required reductions of only 6pc by today before ramping up to 8pc by 13 November and 10pc by 14 November, some airports were showing much higher percentages — presumably a partial result of differences in staffing across the nation.

New York's LaGuardia airport was the hardest hit today, cancelling 65 outbound flights and 64 inbound flights, or 11pc of total traffic, FlightAware data show. Roughly 35pc of the remaining outbound flights were delayed today, along with 40pc of inbound flights.

New York Harbor jet fuel decreased by 1.375¢/USG today, partially reversing a near 6¢/USG gain against Nymex seen Monday after setting a 2.5-month low at -18¢/USG on the first day of the FAA reductions on 7 November. Today's price still reflects a 12.5¢/USG decrease compared to the same day last week.

Chicago jet fuel meanwhile fell by 5¢/USG against Nymex ULSD futures today to a 15¢/USG discount — its widest discount to the basis since 15 September. The city's O'Hare International Airport reported the second-largest volume of total cancellations today at 64 outbound and 57 inbound flights. The airport's reduction percentage fell short of the 6pc mandate by one percentage point, though it also experienced delays in 9pc of outbound flights and 8pc of inbound flights.

"Today has been a much better day," said US Transportation Secretary Sean Duffy in a press conference today, referencing hundreds of air traffic controllers who have returned to work — a day after US president Donald Trump threatened to dock pay for those who do not.

Duffy did not provide a concrete timeline for rolling back flight reductions.

"We're going to wait to see the data on our end before we take out the restrictions on travel — the 6pc we have right now," he said. "It depends on air traffic controllers coming back on work."

Air traffic controllers returning to work can expect to receive 70pc of their back pay within 24-48 hours of the government re-opening, Duffy said.

By Amanda Hilow

Total US flight reductions
Date	Cancellations	Delays
1-Nov-25	173	4,611
2-Nov-25	244	5,897
3-Nov-25	84	4,720
4-Nov-25	151	4,297
5-Nov-25	171	4,301
6-Nov-25	202	7,352
7-Nov-25	1,025	7,017
8-Nov-25	1,566	7,545
9-Nov-25	2,953	11,145
10-Nov-25	2,422	9,584
11-Nov-25	1,223*	2,630*
*As of 4:30pm ET
FlightAware

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Qatar presents 2040 climate target to UN

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Idemitsu, Kanematsu start biofuel supply for ships

25/12/03

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25/12/03

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25/12/02

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