BAKU, Azerbaijan, May 4. Fitch Solutions forecasts jet fuel prices to rise from current spot levels to a global annual average of USD110/bbl for 2023, but this still marks a substantial revision of 22 percent lower than our previous forecast for USD140/bbl amid YTD price weakness, Trend reports.
“The pace of jet fuel price declines has outpaced those of oil with the US market YTD facing the steepest declines in prices followed by Europe. The more rapid decline in jet fuel prices has seen margins contract sharply although the declines in Brent price has softened the blow for refineries. However, we hold the view that prevailing slowing demand in fuels globally will see refiners pare back output in the coming months. This is due a desire to preserves elevated margins in the face of the addition of new refining capacity coming to market but also to prevent excessive storage builds which could erode margins in the longer-term,” reads the latest report published by the company.
Fitch Solutions’ price forecast expects all markets to post stronger refining margins from lows currently seen during Q223, as both demand and supply look to reverse trajectory.
“Strong demand for air travel is expected in the coming years as pent-up demand from Covid-19 boost appetite for air travel despite high airfares and the wider high inflationary environment. Although, the global macroeconomic environment has proved more resilient, our country risk team forecast global economic growth to slow from 2022 as high interest rates weigh on growth,” the report reads.
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