Europe jet fuel at 30-month high as crude rises on supply fears

08 March 2011 17:22  [Source: ICIS news]

LONDON (ICIS)--Jet kerosene prices in Europe have risen to over $1,000/tonne (€720/tonne), increasing fears that airlines could introduce fuel surcharges, sources said on Tuesday.

The recent rise in jet fuel prices is a result of the ongoing violence in Libya and protests elsewhere in the Middle East and North Africa, which has led to concerns over disruptions to oil supplies, pushing up crude futures.

Robust crude oil values have supported firmer ICE gasoil numbers and jet differentials, resulting in higher flat prices of jet fuel.

At 16:30 GMT, jet kerosene prices traded at 30-month highs of $1,033.75-1,034.75/tonne CIF (cost insurance freight) NWE (northwest Europe).

These were the highest levels seen since September 2008, when cargoes traded at an average of $1,031.51/tonne CIF NWE.

Buyers from the aviation industry said that hedging could only help to minimise losses and that surcharges were needed if they were to absorb increased jet fuel costs.

A source with Germany's Lufthansa confirmed that the airline has introduced a fuel surcharge.

While the majority of sources agreed that the aviation sector was under pressure, none believed that the results would be as devastating as those seen during the last recession.

($1 = €0.72)

By: Sarah Trinder
+44 20 8652 3214

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