The global jet kerosene market is growing as the volume of air travel continues to increase, particularly in Asia.
Global jet kerosene prices hit highs during the first quarter of 2012, supported by gains in benchmark crude oil values and Iran tensions. Jet kerosene prices are expected to remain strong during 2012, but have moved off earlier highs and could remain volatile amid lingering Iran worries and concerns over the eurozone debt crisis.
High jet fuel prices have weighed on airline margins and led to a hike in air fares.
Most of the large airlines and jet fuel consumers hedge the price of the product to limit fluctuations in costs. Global air passenger demand was strong in 2011, but airfreight was hit by the economic slowdown.
The outlook for the airline sector in 2012 remains uncertain, amid downgrades in growth forecasts for the global economy. Asia is expected to continue driving growth in 2012, with strong growth in domestic markets in China and India. Europe will remain an importer of jet fuel, dependent on imports from the Gulf and Asia. The US market for jet fuel has become increasingly volatile, creating uncertainty for the airline industry.