Dividends and Asia’s jet fuel refining margins on track to double from 2020 by end of year

In every industry, there are different measurements and margins to produce profits. Most of us have little idea of the many aspects to industries, although in general we have an idea.

In an article by Koustav Samanta, the jet fuel refining margins in Asia are on track to double by the end of 2021 from the previous year, analysts and traders say. Although before you jump out of your seat in joy, there is a long way to go from the prepandemic levels.

Richard Gorwy, managing director at consultancy JBC Energy Asia said it will take for jet fuel demand to recover to 2019 levels. Maybe look at late 2024 or early 2025.

Every time the Delta or Omicron or something raises its head, airlines trim capacity which means they use less jet fuel. Airlines are also purchasing more fuel efficient planes.

Asia’s jet fuel margins have averaged $6.82 a barrel over Dubai crude, which is up more than 12% compared to the their 5 year seasonal average for December. In 2020 at the worst of the pandemic the margins were $3.02 a barrel.

The big event in 2022 is the Beijing’s Olympics which is expected to increase demand on fuel.

Linking to dividend paying stocks, in all industries we tend to know the general but with all industries there is a specific margins and commodities link to their end consumer. For example we all know about higher demand for passenger and business travel leads to higher demand for jet fuel. How that is determined, most of us do not know, but we can find out. Often analysts and when senior executives in a company outlined their expected performance they will reference data they are very familiar with. If you invest in a company it is a good thing to learn what analysts are looking at and for, to determine given your holding is better to hold or sell?

There are more questions than answers, till the next time – to raising questions.

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