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>>Volcano hits jet fuel prices

Apr 19, 2010 8:08 AM | By Reuters

The European air travel chaos caused by a huge ash cloud from a volcano in Iceland could cut jet fuel demand by nearly two million barrels, traders said on Friday.

The biggest travel disruption since the attacks of September 11 2001 has left thousands of planes parked on runways across Europe.

"Some demand will simply disappear ... there will be some flights that just will not take place," said David Wech, oil analyst at consultancy JBC Energy.

JBC Energy expects European jet fuel consumption to average 1.17-million barrels a day in 2010. Assuming that 80% of Europe's airports are shut for 48 hours, the disruption will snuff out demand for 1.87 million barrels.

With the volcano in Iceland still spewing ash into the air and high-level winds dispersing the plume over Northern Europe, disruptions could last for up to six months, according to volcanologists.

Airlines' shares were hit on Friday with Lufthansa, British Airways, Air Berlin, Air France-KLM, Iberia and Ryanair down between 0.8% and 2.2%.

European jet fuel price spot differentials fell $2.50 a ton on Friday.

But some analysts said flights would eventually resume and the price impact would be minimal. - Reuters


http://www.timeslive.co.za/business/article407364.ece/Volcano-hits-jet-fuel-prices