Rising US air travel since the beginning of 2021 has contributed to increased demand for kerosene-type jet fuel in the US, reports the US Energy Information Administration (EIA). However, increased production of jet fuel has outpaced the higher demand, leading to higher-than-average jet fuel inventory levels.
Strong demand for petroleum products produced along with jet fuel, particularly gasoline and diesel, has encouraged refineries to process more crude oil to produce those high-demand products. Higher refinery runs have also resulted in increased jet fuel production. Since the first week of May (ending 7 May 2021), US refinery runs have increased by nearly 6% (855 000 bpd), and refinery jet fuel production has increased by nearly 8% (102 000 bpd).
Although demand for jet fuel has grown from last year, current demand remains below the pre-pandemic five-year (2015 – 2019) average. Product supplied is often used to measure jet fuel demand; product supplied reflects withdrawals of jet fuel from the primary supply chain rather than actual consumption. As of 23 July, jet fuel product supplied was 14.8% lower than the pre-pandemic five-year average.
Increased jet fuel production and lower product supplied have contributed to rising inventories. As of 23 July, the combined total US jet fuel inventory was 9.9% higher than the five-year (2016 – 2020) combined average. In addition, on 23 July, the combined total gasoline inventory was down 0.6%, and the combined total distillate fuel oil inventory was 6.8% below the five-year combined average. Along with increased production, relatively less jet fuel has been withdrawn from inventory since May 2021, which has contributed to increased jet fuel inventory.
The higher-than-average inventories vary, depending on the region. Jet fuel inventory levels in the Rocky Mountain region (PADD 4) and the West Coast region (PADD 5) have been decreasing and are near their previous five-year averages. Inventory levels in the East Coast region (PADD 1), Midwest region (PADD 2), and Gulf Coast region (PADD 3) have been increasing and are near or above their five-year highs.
Recent news articles report that transportation constraints are limiting the amount of jet fuel going from primary inventories to airports and other points of consumption in the western regions (the Rocky Mountains and West Coast).
These constraints include limited pipeline or trucking capacity and restrictions on the volume of jet fuel that can be moved from the terminal to consumers, particularly those at more remote destinations. These constraints would also have some, although more limited, effect on the amount of jet fuel product supplied.
Read the article online at: https://www.hydrocarbonengineering.com/refining/05082021/rising-us-jet-fuel-refinery-production-contributes-to-high-jet-fuel-inventories/
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