European jet fuel values tripled in early swaps trading this morning, making historic gains, having already been at record highs at the market close yesterday, 3 March.
The March jet fuel swap traded around $650/t above front-month Ice gasoil futures by 10:00 GMT today, 4 March. This was almost three times its market close value of $220/t on 3 March, which was already the highest ever prompt jet swap on Argus' records.
Jet fuel refining margins jumped to over $130/bl at the same time, based on Ice Brent crude prices — almost double the previous day's premium of over $70/bl, and an all-time high.
Jet fuel's premium to diesel — known as the regrade — soared to $75/bl, which would also be an all-time high. Argus assessed it at over $20/bl on 3 March.
European jet fuel's premium to Singapore equivalents raced to $38/bl, after being assessed at almost $20/bl on 3 March. In Singapore, jet fuel cracks closed at over $100/bl on 3 March, while the regrade rose to $85/bl.
Even though jet fuel supply is under significant threat because of the conflict in the Middle East, market participants said that jet fuel values have become extremely detached from fundamentals. "No fundamentals can explain these prices", one trader said.
Market participants said that the March swap has since dropped — to around $270/t above Ice gasoil by 11:45 GMT, and continues to fall. But it remains at all-time high, and more than 20pc higher than at the 3 March close. But traders were reluctant to say that the market has calmed, given the extreme volatility and liquidity at present.
