Jet Stocks Soar

Passenger traffic, jet demand, refiner output, and ballooning inventories

Mobius Intel Brief:

DOE-reported US jet fuel inventories grew to nearly 48 million barrels (MMb) in the week ending September 6 — their highest since at least 2010 and approximately 6.7 MMb higher Y/Y. (See Chart)

  • Why: Summer 2024 air travel fell short of airlines’ expectations for 6.3% Y/Y growth as US refiners’ jet production surged 4.64 MMb higher Y/Y to the 20YR 96th percentile (See Chart).

According to TSA data, cumulative daily checkpoint travel numbers between June 1 and August 31 grew 5.7% from 2023’s TSA-reported 232.8 million to 246.2 million — a record high but slower growth from 2023’s +11.8% and 2022’s +16.1% Y/Y gains (See Chart).

  • Note: Despite cumulative Y/Y growth, the 10-day moving average for TSA daily passenger volume fell below 2023’s levels by September’s start, indicating broader economic headwinds are cutting into travel activity.

The latest numbers for US jet fuel consumption show conflicting trends.

DOE-reported kerosene-type jet fuel supplied (a proxy for demand) fell 3.51 MMb from the seasonally adjusted 20YR 95th percentile in May to the 75th percentile in June at 51.3 MMb. June’s DOE-reported consumption fell 1.36 MMb Y/Y. (See Chart)

Meanwhile, July’s Bureau of Transportation Statistics (BTS) data shows the largest domestic airlines’ jet demand increased by 809 Kb M/M and 717 Kb Y/Y to 27.1 MMb — the 25YR seasonally adjusted 75th percentile. (See Chart)

BTS-reported international airline jet fuel consumption increased by 655 Kb Y/Y to 14.2 MMb — the 25YR seasonally adjusted 100th percentile. (See Chart)

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