Daily Energy Report
Jet fuel demand down but flyers up, Rig count, OPEC production cut extension, More US sanctions on Russia, Pemex bailout, US oil/gas job losses, India record oil imports, and more.
Chart of the Day: Airline Passengers Up, but Jet Fuel Demand Down!
Summary
Figure (1) shows trends in US products supply of jet fuel, a proxy for jet fuel demand. The main point is the demand in 2023 remained lower than that of 2019. Even jet fuel demand in January 2024 is lower than that of 2019. Jet fuel demand has not recovered to pre-COVID-19 levels.
EOA’s Main Takeaways
TSA passenger volumes increased by 1.23% in 2023 over that of 2019. In January 2024, passenger volume increased by 4.87% over that of January 2019 (see Figure 2). That means the increase in the number of passengers is not being translated to increase in the number of flights and consequently an increase in jet fuel demand. The passenger data and jet fuel data show that airlines are cramming more passengers into planes. It’s not just fewer empty seats, it’s also more seats with less room for passengers. For jet fuel demand to increase, we need to see a steady increase in the number of passengers that increases the number of flights.
We added Figure (3) for clarity. It compares the number of passengers between 2019 and 2024 in the first 50 days of both years. It shows how the number of passengers in 2024 is higher than that of 2019.
Story of the Day
Bloomberg: OPEC-Watchers Predict Extension of Oil Cuts into Next Quarter
Summary
OPEC+ is likely to maintain its current oil supply cuts into the next quarter. The coalition plans to decide early next month on extending the curbs of approximately 2 mb/d past March. This decision comes as global demand growth slows and US production rises. Many OPEC+ members need higher prices for their economic needs. Oil demand is predicted to hit a new record this year, but the increase in supply from the US and others could lead to an oversupply.