Laura Sanicola. Ahmad Ghaddar. Koustav Saanta

(Reuters) – Jet fuel has been slow to recover to the pre-pandemic demand levels, but it appears that jet fuel is finally on track to rebound as more governments allow for easier air travel.

According to analysts, global jet fuel demand has fallen 15-20% from 2019 levels. However, increased confidence due to rising vaccination rates has resulted in an increase of passenger flight bookings.

“The rate of vaccination continues to rise. “So, I don’t see why aviation demand will not pick up,” said a Singapore-based jet fuel trader.

With the blessings of their governments, I think that airlines would be keen to capitalize on the year’s end festive travel demand. VTL (vaccinated travel path) flight setup can pose logistical challenges.

Air travel in Europe has increased over the past months. As COVID restrictions become less restrictive, more Europeans book flights to destinations beyond Europe.

The United States will accept fully vaccinated international air passengers from all 26 Schengen European countries starting Nov. 8. This includes France, Germany (Italy, Spain, Switzerland, Greece and Greece), as well as Britain and Ireland (China, India, South Africa and Iran).

Other than the United States of America, several other countries have also announced plans to remove extraordinary restrictions from international flight. These include Thailand and Singapore which are major tourism destinations.

According to Rystad Energy data, European jet fuel demand has increased for the third week in a row, reaching 72% above pre-COVID levels. This is a significant increase compared with pre-COVID periods when it would typically experience seasonal declines.

According to Reuters assessment, Northwest European spot cargo jetfuel prices have risen 30% from mid-August. They were at $734.50 per tonne as of Nov. 4. Crack spreads The price of a barrel has more than doubled, to approximately $12.7 during the same period.

The profit margins of European jet fuel processors rose to $13.50/barrel in October, reaching a record high in 2021. The crack spread is also known as the margin. It traded at around $12 a barrel in November 3, which was a fourfold increase over the same period last year. However, it remains below the crack spread of 2019.

Traders say that they are watching the speed at which airlines fill flights and add more international flights in order to determine if demand is growing.

According to a U.S. senior refined product trader, “Right at the moment there’s only one non-stop flight between Houston and London… We aren’t currently anticipating a massive spike in demand for jets yet.”

The United States is seeing a rise in domestic travel as consumers book more flights and their bookings are increasing due to the vaccination rollout for children 5-11 years old.

According to Bank of America (NYSE : ), consumer spending on U.S. airlines exceeded July’s levels for the first time in October. This could be due to parents feeling more confident about travel during the holiday season, as children get vaccinated.

TPH analysts report that U.S. diesel and gasoline demand are at 93%, 99%, and 9%, respectively. While jet fuel remains at 80%.

Matthew Blair, TPH analyst, stated that “a combination of increasing vaccinations as well reduced travel restrictions and pent up consumer savings will help narrow this gap over the next quarter.”

Current spot fuel prices for the U.S. are at $2.26/gallon. This is 69% higher than it was a year ago.

According to OAG, the global seat capacity for scheduled airlines is currently 27% lower than it was two years ago. It is forecast to increase through March according to aviation data firm OAG.

Lufthansa stated that the current level of new bookings is 80% below 2019 levels. This was due to recovering business reservations and growing demand for long-haul travel, especially to the United States.

The majority of international flights to Asia are still grounded despite the recovery in Europe and the reopening of the United States. Some East Asian countries have a quarantine requirement for international travel, even those who are vaccinated. This limits the ability of travelers to make it to their destination.

Spot fuel prices for Singapore have increased 21% in the past three months to $93.05 per barrel. Meanwhile, Asian jet fuel crack spreads rose more than 80% during the same time period, reaching almost $13 per barrel.

The Singapore-base trader stated that crack spreads were supported by tight supplies.

China has been the most populous country in the world, and there have been tightening of controls. Authorities have adopted a zero tolerance approach to COVID-19, despite very few instances. Beijing officials have instructed residents not to leave the city and postpone any weddings. They also advised them to cut down on non-essential events.

As of Wednesday morning, 60% of flights to Beijing Daxing Airport had been cancelled, while half of those at Beijing Capital International Airport had also been canceled.