Global oil traders are fixated on China’s air travel ahead of its Golden Week as a means of gauging whether or not oil prices are set to decline in the near term.
“Mainland China’s domestic jet fuel demand has almost fully recovered, while international jet fuel demand has recovered to close to 70% of pre-Covid levels,” Fenglei Shi, a director covering Chinese oil markets at S&P Global Commodity Insights observed.
Golden Week signals a major travel boom for China, with air ticket sales soaring to 120% of the pre-pandemic level of 2019, a report from Trip.com divulged. Securities Daily further reported that as of April 18, actual ticket bookings were 10 times that of the same period last year.
Should air travel during Golden Week prove to be as high as reports suggest, then oil traders may be given ground to feel optimistic about prices going forward, especially since U.S. economic fluctuations and the prospect of further interest rate hikes stir up bearish outlooks.