Despite lengthy lockdowns in Asia’s largest aviation market, global airline capacity has risen to its highest level since 2022 this week, owing to a comeback in Chinese domestic demand.
Asian jet fuel refining margins were at $30.04 a barrel above Dubai crude on Monday, according to Refinitiv Eikon data. They had more than doubled in the previous two months.
The COVID-19 lockdown in Shanghai is already in its fourth week, and widespread testing orders in Beijing have fuelled fears that the Chinese capital would follow suit.
This reverses capacity reductions that have happened in recent weeks as a result of travel restrictions, particularly in the Shanghai area. However, in the week leading up to Monday, international airlines added 2.5 million seats, about half of which were in China.
Over the next three months, planned capacity has pushed closer to 2019 levels, indicating optimism in the travel rebound. This week, total global domestic & global airline capacity grew by 3.3 percent.
Oil prices dipped on Tuesday as Beijing, China’s capital, increased COVID mass testing, raising demand fears and outweighing the risk of supply interruptions. The discharge of oil from emergency stocks has alleviated supply problems.
The price of Brent crude futures was down 0.5 percent. COVID-19 mass testing in China’s capital Beijing has been expanded from one district to the entire city of approximately 22 million people this week. The population braced for a lockdown equivalent to Shanghai’s draconian restrictions.
Germany’s ruling coalition’s parliamentary parties have urged the government to move through with a plan to shut out Russian oil and gas supplies. The threat of physical market supply tightness due to the phase-out of Russian oil slowed the price decline.
The world’s largest palm oil exporter intends to prohibit RBD palm olein shipments but will allow crude palm oil to be exported. Authorities will keep a close eye on local supplies of refined and crude palm oil.
If global airlines (domestic) constraints of derivatives used in the manufacturing of cooking oil occur, Indonesia is preparing to broaden its prohibition on exports of palm-based olein.
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