A Budding Recovery in West Coast Flight Traffic Is Good for Oil

A
rebound in both commercial and cargo flights on the U.S. West Coast is a
good sign for the global oil market that is still facing the lingering
consequences of this years collapse in air travel.To get more news about
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　　Physical barrels of jet fuel in Los Angeles are trading at the
smallest discount to Nymex futures in since July as the market for the
fuel picks up. At the same time, the cargo hub in Alaska is doing so
well it saw record jet fuel imports from South Korea in the third
quarter, according to Vortexa Ltd., a tanker analytics firm.
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　　“It looks like the demand decline is slightly less out here than the
overall U.S.,” said John Faulstich, an oil analyst at Stillwater
Associates in Irvine, California.
　　The West Coast is traditionally
the biggest consumer of jet fuel with transpacific flights for
passengers and cargo supporting demand. Departures in both Los Angeles
and Asia Pacific nations increased in the week ending October 20, while
traffic in other regions declined, according to BloombergNEF. The market
for jet fuel made up about 8% of the global oil market pre-pandemic.

　　Despite refiners having issues getting rid of jet fuel or injecting
it into diesel supplies, the region is attracting imports from Asia.

West Coast refiners have kept jet fuel supply largely under control.
With the exception of last year, stockpiles last week seasonally were at
their lowest in the region since 2005, according to the Energy
Information Administration.
　　Record Drop in U.S. Fares Shows How Far Airlines Have to Climb

　　In another indication of recovering demand, passenger traffic through
U.S. airports last Sunday topped 1 million people for the first time
since March.
　　Still, the outlook for a robust demand rebound is
still bleak. Valero Energy Corp. is keeping distillates-focused units at
one of its Texas refineries shut because of weak consumption and Bank
of America Corp. analysts see weak jet demand delaying a full recovery
for middle distillates until 2023.