China Aviation Oil (CAO) has closed its tender for jet fuel deliveries, seeking supplies for November. The tender ended at 3 p.m. local time (0700 GMT) on October 28 and will remain valid until 8 p.m. the same day. The company has not yet responded to a request for comment from Reuters.
According to sources, it has been several years since CAO last imported jet fuel for China. CAO serves as the main supplier of imported jet fuel to the country’s civil aviation sector, as noted on its website.
Interest in purchasing jet fuel appears to be linked to tighter export quotas for fuel in the fourth quarter. One source suggested that these shipments could be used to refuel international flights. In its third batch of refined fuel export quotas, released late last month, Beijing allocated approximately 8 million tons, a significant decrease from the 12 million tons allocated in the same period last year.
Of the total 8 million tons, about 1.53 million tons are set aside for the trade processing route, which includes aviation fuel intended for international flight refueling.
Additionally, another source indicated that the purchase might involve some “arbitrage price play,” as jet fuel export margins for Chinese refiners are currently more favorable compared to those for gasoline or diesel.
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