Recovery of US jet fuel demand?

In the fourth quarter of 2000 the US demand for jet/kerosene accounted for 8.9% of total oil demand and following the 11th September, in the fourth quarter of 2001 this was down to 7.4%. The moving annual average change in US jet/kerosene demand (March 2001 to March 2002) shows a reduction of 7.9% (Source IEA Oil Market Report June 2002).

Petroleum Intelligence Weekly (PIW) reports in its 10 June newsletter that the US’ Air Transport Association (ATA) forecast that US air transport could recover to its pre-September 11 passenger volumes by the third quarter of this year. Judging by the IEA numbers this could then lift US oil demand by slightly below 0.3 mbd. PIW does not share the optimism of the US Air Transport Association and relates the downturn in demand also to the slowdown in the US economy which started before the September 11th attacks. US domestic passenger numbers are down 12%-13% on average this year to date, relative to 2001. Furthermore there is evidence that more travellers are using the roads or rail for shorter trips. International air travel numbers have also declined by 12.7%, with trans-ocean routes hardest hit.

One should note, however, that the major fuel in US oil demand is gasoline accounting for 40% of totals and gasoil with 17% of demand. Both these fuels have kept up their share in the two quarters as referred to in the first paragraph. It is jet/kerosene, naphtha and particularly residual fuel oil that have been less in demand. For the tanker market it is also important to note that US jet/kerosene demand is largely supplied through domestic refining and not so much by imports. An upswing in jet/kerosene demand would have an impact on crude oil imports. US crude oil imports during the first four months of 2002 are below the same period in 2001 levels, but more or less on the 1999 and 2000 levels.