Saudi Aramco likely to seek higher prices for jet fuel

SINGAPORE: Saudi Aramco will kick off term jet fuel negotiations with trading firms in mid-November, and is likely to seek higher prices despite a global slowdown, traders said yesterday. Aramco may ask for higher term prices compared with the current year’s supply contract, on expectations of falling jet fuel exports from the United Arab Emirates, they said. “The term talks will start next month and the Emirates will be exporting less jet fuel because of rising domestic demand,” said a Singapore trader. The number of passengers at Abu Dhabi airport rose a third from a year ago in the nine months to Sept. 30 to more than 6.67 million passengers. Aramco could eye on a premium of $3 a barrel to Middle East quotes on a free-on-board (FOB) basis for January to December 2009 supplies. At present, spot jet fuel supplies traded at $3.80 a barrel above the Middle East quotes, FOB. “But lots of the players would not want to pay those numbers because of fears of global demand slowdown,” the trader said. For 2008 supplies, Saudi Arabia’s term jet fuel exports were 1 million tons, the same volumes as last year. Aramco sold the cargoes for lifting from Yanbu near the Red Sea at $2.80 a barrel versus $2.40 in 2007, FOB. Reuters