Historic Week in LA Jet Fuel Usurps Post-Covid Boom


   
Kristina Davis
DTN Refined Fuels Market Reporter

   MIAMI, FL (DTN) -- It has been a relentless week of gains in Los Angeles jet 
fuel as West Coast refinery disruptions and crude supply tightened by the 
Middle East conflict triggered a rally that surpassed the post-pandemic boom of 
2022.

   Since Tuesday, the basis for Los Angeles jet fuel has pushed higher session 
after session, reaching a historic $1 premium over May NYMEX ULSD futures by 
Thursday.

   The 57cts gain on the week began with a 32cts surge on Tuesday that 
initially took the basis to 75cts premium. That was followed by Wednesday's 
15cts rise that drove the premium to 90cts, matching levels last seen on 
November 22, 2023, when Los Angeles jet fuel peaked amid the full recovery in 
air travel from Covid-era demand destruction.

   The rally did not stop there. By Thursday (4/16), the differential broke 
through the three-digit range for the first time ever, underscoring just how 
tight supply conditions for Los Angeles jet fuel had become.
By Friday (4/17), the premium was back to 90cts -- lower but still elevated.

   In terms of absolute pricing, Los Angeles jet fuel stands near $4.40 gallon, 
well below the peaks seen during the post-Covid high of $7.60 gallon in early 
2022.
Despite that, the market's current strength on the back of the supply squeeze 
in crude caused by the Iran war contrasts with the volatility seen in the 
post-pandemic boom.

   DTN data shows the initial collapse in air travel six years ago pushed Los 
Angeles jet fuel down to roughly 33cts gallon, as airlines grounded flights and 
global mobility slowed to a near standstill.

   After the 2022 spike to $7.60 gallon, reflecting the rapid recovery in air 
travel and tightening global fuel supply, Los Angeles witnessed turbulent price 
action, sliding to around $4 gallon by January 2026, a month before the 
outbreak of the Iran war.

   Today, the market sits somewhere between those extremes.

   Still, traders say this week's story was less about demand and more about 
supply constraints. With plant closures, maintenance events and intermittent 
disruptions limiting production at West Coast refineries, jet fuel has found 
itself climbing higher almost by default, one step and one session at a time.

    




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