NWE cold weather boosts kero demand
Kerosene demand for heating has been boosted by the recent spell of cold weather across much of Northern Europe including the UK. "Demand for kerosene in November was up 18%, and up 10% in December," said a trader. Although the market is only into the first week of 2009, the trader noted that demand strength had persisted. "Demand is very strong across the UK at the moment, and I see market fundamentals [still] improving," said the trader.
While sources report a quiet start to the first full week of the new year, there was a suggestion that the paper markets were looking stronger. Sources also noted that renewed conflict in the Middle East was, as yet, not providing any extra support for jet fuel prices. "I've not seen any extra jet demand, it is all localized action, and the Israelis have enough jet fuel," said another trader. However, he did suggest there might be a residual knock-on effect, with fewer passengers booking flights into the region while the military action continued, although there was no confirmation of this from airlines.
There was one solitary voice of caution that the conflict, if unresolved in the short-term, might give a boost to jet fuel trading activity. "Previously, every time the Israeli military has been engaged, we have seen extra jet demand," said a third trader. Market sources have said that jet fuel demand normally rises in conflicts as modern armies consume large quantities of the product. Monday saw a more active Platts Market on Close assessment process, with BP lifting two Stasco cargoes.
06-Jan-09