Kerosene Price Trend and Forecast

Regional Price Overview

Get the latest insights on price movement and trend analysis of Kerosene in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Kerosene Price Trend for the Second Half of 2023

Asia

The volatility in the cost of crude oil and cuts in the upstream oil production by Russia caused havoc in the kerosene market during the third quarter of 2023, resulting in an incline in the kerosene price trend. The market dynamics also climbed with the help of limited imports from other overseas sectors, too, while the demand climbed severalfold.

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Further, the depreciation in the Indian rupee as compared to the US dollar also increased the cost of imports in the region, supporting the uptrend in kerosene prices. However, the market winds turned unfavorable in the fourth quarter with insufficient support from the feedstock sector and disruptions in the supply routes.

Europe

The surge in cost of production and rise in the quoted prices of oil from exporting countries such as Saudi Arabia were reflected in the inclining trajectory of the kerosene price trend during the third quarter of 2023.

The adverse weather further reduced the number of shipments reaching the European ports, decreasing the region's availability. However, the market condition turned adverse in the last quarter of the year when the supply chains worked at utmost efficiency, and the demand from the downstream industries started to decline. The depreciation in the market momentum was also influenced by the disruptions in the trading activities caused by the Israel-Hamas conflict.

North America

The rise in the cost of production and constriction in supply chains depleted the inventories of kerosene in North America during the third quarter of 2023. The concerns regarding the supply chains and operation challenges intensified with each month of Q3, supporting an uptick in the kerosene price trend.

The market, however, returned to its previous levels in the fourth quarter, moved by the volatility in the prices of crude oil. The geopolitical concerns arising from the ongoing war between Israel and Hamas further reduced the interest and confidence of both consumers and investors in this sector, negatively influencing the kerosene price trend.

Analyst Insight

According to Procurement Resource, the price trend of Kerosene is expected to showcase only limited movement given the negatively influencing trends in its market drivers.

Kerosene Price Trend for the First Half of 2023

Asia

The Asian countries reported a lack of interest in the downstream domestic industries and dire purchasing activities. The high volume of stock availability and modest movement of the industrial sector further degraded the interest of investors in this sector and resulted in the stunted growth of the kerosene price trend in the said period of 2023. In the second quarter, the reduced cost of crude oil and weak international trading activities further increased the strain on the kerosene market and kept the prices on the lower end.

Europe

The European countries did not register a major shift in the market fundamentals during the first half of 2023. The demand for the commodity remained unchanged, and even the supply chains experienced a dry season, which suggested a dim outlook for the industrial sector.

Even after a reduction in the quoted prices by a significant margin, the condition of the market fundamentals remained the same. Additionally, the global economic slowdown further worsened the potential growth aspects, and thus, the kerosene prices traced a southwards trajectory.

North America

The contraction in kerosene prices during the first half of 2023 in North America was the consequence of Russia Ukraine crisis and constrictions in the supply chain. There were some instances, though, during the said duration where the inventories dried out amid the slow supply from overseas suppliers, but the weak demand and dire conditions of the US economy eventually resulted in the downfall of the kerosene price trend.

Analyst Insight

According to Procurement Resource, the price trend of Kerosene is estimated to struggle in the next few quarters as the weak market fundamentals project a dim outlook of the market.

Kerosene Price Trend for the Second Half of 2022

Asia

The price trend of kerosene experienced a consistent downfall throughout the third and fourth quarters of 2023. The market's setback came from limited support from the downstream industries, and the excessive rise in the cost of feedstock materials restricted the expansion of manufacturing plants and led to the depreciation of the prices of kerosene.

In the last months of the year, the market also seemed to function under the pressure of poor economic growth of Asian countries, particularly China, and increasing trade restrictions amid the rising number of COVID restrictions.

Europe

In European countries, the kerosene price trend suffered from the ongoing war between Russia and Ukraine and the unprecedented rise in the cost of crude oil. There were several instances of rerouting of freight routes and labor shortages, hindering the growth rate of the kerosene market. In the fourth quarter, a slight uptick in the prices was experienced but the region's rising inflation rate and downturn of the European economy depreciated the overall momentum of the kerosene market.

North America

As compared to the rest of the world, the prices of kerosene were stable in the third quarter as the refineries lowered their production rates amid rising prices of feedstock materials, and the downstream players presented a consistent number of inquiries and demand, supporting the uptrend in the kerosene price trend. However, in the fourth quarter, the rising inflation and interest rates slowed down the momentum a little bit, but the market remained resilient throughout the said period.

Analyst Insight

According to Procurement Resource, the price trend of Kerosene is estimated to be based on the limited interest of the downstream industries and feeble demand from these industries.

For the Second Quarter of 2022

Asia

With Europe announcing the embargo on Russian oil and China lifting its covid-19 restrictions, crude oil prices and its allied products surged further globally. In India, Kerosene (non-PDS) prices averaged 1,11,814.23 INR/kL in Delhi, 1,15,263.23 INR/kL in Mumbai and 1,15,436 INR/kL in Chennai during the said quarter. Indian kerosene jet fuel prices soared, averaging around 1,16,851.46 INR/kl.

Europe

The continuing Russian-Ukrainian geopolitical conflict has led to surging energy costs and runaway inflation in Europe. Owing to the surging crude oil costs, the prices of Kerosene in the European domestic market went from 1.49 EURO/gallon in April 2022 to 1.81 EURO/gallon in June 2022.

North America

Due to the muted market demand for kerosene jet fuel, many refineries shifted to petroleum and diesel, and now the turnaround is moving slowly. Amidst rising demands and constricted supply, the price of kerosene-type jet fuel (US Gulf Coast) went from 3.914 USD/gallon in April 2022 to 4.120 USD/gallon in this quarter.

For the First Quarter of 2022

Asia

In February 2022, in India, kerosene prices were 57.09 INR/L. As nations' economies improved, disposable money rose, resulting in an increase in air traffic. In addition, the presence of many rivals in the airline business reduced the cost of air travel.

As a result, the worldwide kerosene market witnessed a huge increase in growth. The rising use of alternative clean energy sources such as biofuels and fuel cells was a major market limitation for the worldwide kerosene industry. This had lead to the substitution of kerosene, which had stifle market development.

For the Fourth Quarter of 2021

Asia

By mid-November FY21, Asian jet fuel demand had climbed to 45 cents/b FOB Singapore, nearly double the value at the start of the month, suggesting increasing aircraft activity. By December, the cash difference had climbed to 75 cents/b, while refining margins had contracted to 11.52 USD/b above Dubai crude, indicating a significant increase in demand from the aviation industry.

Indian kerosene prices increased by an average of 13% from Q3 levels in Q4 of FY21 on an ex-Mumbai basis as demand recovered in October as the number of passengers travelling by air increased by 70%, according to the DGCA, as a result of subsidizing pandemic effects and easing restrictions on both international and domestic travel. In October, India's jet fuel usage also hit a 19-month high.

Europe

European imports increased to an annual high in October before gradually declining in the following two months due to decreased demand. According to Refinitiv statistics, Europe received over one million tonnes of jet fuel stockpiles from Asia and the Middle East. In the month of January (2022), Europe was expected to receive about 650000 tonnes of jet fuel from Asia and the Middle East.

Throughout the final three months of FY21, European refiners prioritized diesel over jet fuel. The trend was anticipated reverse in the new year, with refiner margins expected to grow to 20 USD/MT in relation to Brent oil prices, before declining in the first half of FY22 and bottoming out in June.

North America

Kerosene prices in the United States were higher in Q4 of FY21 compared to the previous quarter due to increased upstream crude oil prices. Prices were about 15% higher in Q4 than they were in Q3. On a FOB US Gulf basis, the average price was around 2.14 USD/Gallon. By the second week of October, kerosene prices had risen to an annual high of 2.31 USD/Gallon but had gradually declined owing to dwindling demand by the end of December.

Unexpected refinery disruptions in December, such as at Exxon's Baytown complex, are likely to jeopardize supplies in the first quarter of FY22. Spot export prices were expected to recover in the new year, as supply-side constraints combined with higher demand from Europe was anticipated to improve the US side of the arbitrage in the coming weeks.

Latin America

Since June 2021, the Brazilian fuel market had maintained an upward trend, maintaining above pre-pandemic levels. EPE anticipates 7.6% rise in diesel sales, 7.9% growth in gasoline sales, and 23% growth in jet fuel sales in its November 2021 Brazil's Short-Term Fuel Market Outlook. For 2022, EPE believes that the revival of economic activity would fuel increase in Brazil's use of petroleum products and biofuels. Jet kerosene prices were anticipated to rise by 31%.

For First, Second and Third Quarters of 2021

Asia

Asian nations' demand for jet kerosene fluctuated in response to the aviation sector's recovery following the COVID 19 crisis. Demand from India's aviation sector improved significantly, supporting prices throughout the country. Kerosene prices increased by 9.9% in India during the third quarter, owing to a rebound in crude oil prices. During the third quarter of this year, Asian usage differed by nation. Domestic Jet Kerosene usage increased significantly in China during Q2 2021.

Meanwhile, in India, a sharp fall in Jet Fuel usage was noted during this time period, owing to the abrupt introduction of COVID restrictions in the aftermath of the country's second pandemic wave. Under worldwide pressure, prices, however, continued to rise. As a result, kerosene prices increased in India during the third quarter from 967.6 USD/MT to 1072.2 USD/MT.

The third quarter saw an increase in industrial activity, which boosted the worldwide aviation industry, including India. Despite the fact that India's aviation sector resumed strength in the third quarter following the destruction caused by the second wave of COVID, prices remained within a restricted range. In India, jet kerosene prices increased in the second part of August and ultimately stabilized at 627 USD/MT in September.

Europe

During Q1 2021, it was noted that activities decreased from the previous quarter as a result of new constraints in a number of economies. As a result, demand from the aviation sector initially remained low, resulting in an excessive amount of stability in prices. Additionally, Europe saw a sharp increase in prices during this quarter, owing to a resurgence in regional aviation demand.

In Q3 2021, the European region's overall demand remained strong. Despite fears about the COVID-19 Delta variant's spread, critical oil-based transportation fuels returned to pre-pandemic levels when the global economy reopened. While demand for jet fuel has failed to recover in the face of worldwide travel restrictions, gasoline and diesel sales rebounded significantly.

North America

In North America, demand had been steadily increasing compared to the previous quarter, as foreign flights accelerated in response to the economic recovery. With continuous demand from the aviation sector, the price increased from 972.5 USD/MT in January to 1197 USD/MT in March, despite decreased supply from the US Gulf Coast due to winter disruptions.

Rapid recovery from the pandemic following a successful vaccination campaign resulted in a rise in usage across North America during the third quarter. Following this increase, an effective comeback in prices was also noticed in the United States, where prices slowly increased as the US government gradually repealed its foreign travel prohibition. Additionally, rising oil prices compounded this price increase, putting the USA in a bind as a result of a rapid increase in demand coupled with growing upstream costs.

In the North American area, US refiners reported better third-quarter profitability due to increased margins on gasoline and diesel sales despite rising crude oil prices and low crude oil stockpiles. Energy demand swiftly rebounded from the pandemic's worst days in 2020, and Brent and US crude oil prices hit multi-year highs in Q3 2021.

For the Year 2020

Asia

Asian kerosene prices increased somewhat in Q3 2020, owing to increased demand for heating oil kerosene ahead of the winter season. However, with the conclusion of the travel season in the world's biggest economies, the market saw a slump in demand by late September.

While stockpiling in response to seasonal shortages briefly alleviated downward pressure on already-weak margins, a substantial recovery was expected to take at least a year owing to uncertainty about travel activity.

Europe

In Q3, demand in Europe was hampered as a return of coronavirus infections exacerbated worldwide travel restrictions. Surplus shipments in the face of declining demand exacerbated the supply-side dilemma. With consumption patterns largely determined by travel patterns, demand remained dampened in the face of protracted limitations on international travel activities due to worries of a second coronavirus outbreak.

North America

Due to increased domestic travel activities, the market fundamentals in North America experienced an unusual rebound compared to other areas. As the peak travel season ended in September, demand was anticipated to plateau for many months due to decreased commercial travel. Demand recovery was expected to boost in the last quarter of 2020, as a result of an increased foreign tourism, since coronavirus infections plateaued in many nations following a peak.

South America

Monthly US jet fuel shipments to Latin America fell to an 11-year low in May, with just under 300,000 barrels transported to the area (excluding overseas territories) during the month, according to the latest US Energy Information Administration figures. With shipments to the region at 299,000 barrels, volumes were down 62.2% for the month and 90.97% from the same time in 2019, EIA statistics indicated.

Only four Latin American countries got US jet fuel throughout the course of the month, with the whole volume shared between end-users in Mexico, the Bahamas, Panama and Nicaragua. Import Parity Platts Jet fuel shipped to the Brazilian port of Santos cost USD 67.07 per barrel on Jan. 8, down from USD 93.83 in 2020. However, Santos' jet kerosene prices have gradually grown since reaching an all-time low of USD 32.47/b on April 28, 2020.

Procurement Resource provides latest prices of Kerosene. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.