US Jet-Fuel Inventories Sink To 17 Year Low As Soaring Costs May Spark Ticket Inflation

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by Tyler Durden
Thursday, Apr 07, 2022 - 11:00 AM

US jet-fuel inventories have fallen to a seventeen-year low. More troubling is that jet-fuel inventories for the US East Coast (PADD 1) have fallen to a 25-year low. Tight fuel supplies ahead of a traditionally busy travel season may suggest ticket prices could jump. 

US jet-fuel inventories are well below average. 

US East Coast PADD 1 Jet-Fuel Inventory Hits 25-Year Low 

On the other hand, Jet-fuel prices (now at a record-high) have risen more than 162% since mid-March, mainly on energy supply disruptions following the Russian invasion of Ukraine and Western sanctions. 

What this may suggest is that tight fuel supplies plus soaring travel demand could force airlines to boost ticket prices. Although the correlation between jet-fuel inventories at PADD 1 and US CPI airfare isn't clean, it at least allows some understanding that airlines could soon pass along fuel costs to consumers with higher airfare.  

"The consumer will see an impact in fares. There's no question about it. Or they will see airlines cut back on flights," Tom Kloza, global head of energy analysis at OPIS, told CNN.

With Memorial Day holiday weekend (one of the busiest travel times of the year) less than two months away, consumers could be greeted with rising ticket prices, and those who drive will be greeted with record-high gasoline and diesel prices. On top of this, consumers are getting hit with record-high food inflation. It's only a matter of time before consumers go on strike.