Markets
The jet-fuel crack eases, and winter hedges look less cruel
Desk tape shows Jet-A off the late-summer spike. Airlines that bought cover in August are no longer the punchline.
David Khoury
Markets correspondent
London4 min
Analysis
Desk tape shows Jet-A off the late-summer spike. Airlines that bought cover in August are no longer the punchline.
Jet-A on the desk tape closed the week at $92.40 a barrel, $1.80 under the prior mark, and the crack against crude narrowed enough that fuel buyers used the word “ordinary” in interviews for the first time since July. Ordinary is not cheap. It is the absence of a spiral.
The airlines that look clever are the ones that hedged a slice of the winter in August, when the move felt late and slightly embarrassing. Hedge committees hate buying strength. They hate explaining an open position in November more. A treasurer at a European leisure carrier, speaking privately, said the August hedge is now “a conversation I can have with the board without a weather map.”
Nothing in the physical market has been fixed. Refinery work in two exporting regions is still taking jet barrels out of the prompt market, and the monsoon disruptions on the subcontinent are a reminder that demand can disappear for a weekend and return angry on Monday. The tape’s job is not to predict that. It is to show that the winter cover, this week, costs less courage than it did in late summer.
WAAN World’s tape is prepared by the desk for this edition. It is not an exchange feed, and it should not be traded against. It is here so a reader can see the number the stories are talking about.
