Jet stocks rise, demand continues to fall - EIA

20 August 2008 21:08  [Source: ICIS news]

HOUSTON (ICIS news)--US jet fuel stockpiles showed a week-to-week gain but demand continues to falter, according to the latest US Energy Information Administration (EIA) data, released on Wednesday.

Total US inventories of jet fuel were at 40.9m bbl, up 100,000 bbl from the previous week, the EIA said.

At a daily average of 1.567m bbl/day for 2008, jet fuel demand was 4% lower than the 1.632m bbl/day average in 2007.

According to the trade group Air Transport Association, jet fuel costs have increased 79% from last year as the unprecedented rise in fuel expenditures have forced multiple operational changes in the US airline industry, including bankruptcies, added fees and higher ticket prices.

The trade group predicted domestic passenger capacity during the Labor Day holiday will decrease by as much as 6% because of cutbacks, fuel costs and operational changes.

Despite the recent retreat from the record-high values in the energy complex, experts warn that the trend down in crude oil and refined product prices should not signal to carriers to pull back on such plans to scale back capacity.

“Just because the price of oil has come down off of its July 11, 2008 high, does not mean that the network surgery planned for the fall and winter should become an elective surgery,” airline analyst William Swelbar said.

“Rather it is mandatory surgery that has been put off too long.”

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By: Steven McGinn
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