The resurgence of jet fuel production to pre-COVID levels in the United States signals a robust recovery in the aviation sector, which has a broader impact on various facets of the economy. This surge is fueled by a booming demand for air travel, with U.S. refiners ramping up production to meet this unprecedented need. Recent data from the U.S. Energy Information Administration (EIA) and industry analyses paint a promising picture for key players in the oil and energy sector.
Record-Breaking Jet Fuel Production and Demand
According to the EIA, U.S. refiners produced approximately 1.9 million barrels per day (bpd) of jet fuel last week. This marks an 8% increase from the prior-year period level and is the highest weekly total since January 2020. The four-week average jet fuel demand reached 1.75 million bpd, the highest for this time of the year since 2019. As summer travel peaks, agencies forecast a record number of passengers at airports, propelling jet fuel consumption above its pre-pandemic peak for the first time. U.S. refiners have added more than 2 million barrels of jet fuel to stockpiles since the beginning of the year.
3 Stocks to Keep an Eye On
As refiners ramp up their output to meet soaring demand, several energy companies stand to benefit. To simplify matters for investors, we have handpicked three energy giants, namely Exxon Mobil Corporation XOM, Chevron Corporation CVX, and Phillips 66 PSX. These companies are at the forefront of the industry to meet the increased demand. All three companies carry a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ExxonMobil, a leading integrated oil and gas company, is poised to gain from the increased demand for jet fuel. As one of the largest refiners in the United States, ExxonMobil has the capacity to ramp up production efficiently. The company’s extensive refining infrastructure means it can quickly adjust to market demands, potentially increasing its revenues from higher jet fuel sales. Moreover, as global demand for jet fuel surpasses pre-pandemic levels, ExxonMobil’s international operations can capitalize on this trend, further boosting its financial performance.
The Zacks Consensus Estimate for XOM’s 2025 earnings per share (EPS) indicates 8.83% growth over 2024. The company’s current market cap is roughly $436.7 billion. ExxonMobil’s shares have risen 6.2% over the past year.
Chevron, another heavyweight in the energy sector, also stands to benefit from the increased jet fuel output. Its integrated operations, from exploration to refining and marketing, position it well to exploit the rising demand. The company’s strategic focus on optimizing its refining operations can lead to improved margins as jet fuel prices stabilize with increased supply. Chevron’s strategically located refineries are well-positioned to supply major U.S. airports, ensuring that the company can effectively meet the surge in jet fuel demand. Additionally, Chevron’s investments in renewable energy and sustainable aviation fuels could offer a long-term competitive advantage as the industry moves toward greener solutions.
The Zacks Consensus Estimate for Chevron’s 2025 EPS indicates 16.27% growth over 2024. The company’s current market cap is roughly $286.2 billion. CVX has risen 0.8% over the past year.
Phillips 66, known for its robust refining and marketing capabilities, is particularly well-placed to benefit from the surge in jet fuel production. The company has a strong presence in the refining sector, with a focus on high-value product output, including jet fuel. The current rise in jet fuel demand aligns with Phillips 66’s strategy to maximize output from its refining operations. Additionally, the company’s efforts to increase efficiency and reduce costs can further enhance its profitability during this period of high demand.
The Zacks Consensus Estimate for PSX’s 2025 EPS indicates 20.08% growth over 2024. The company’s current market cap is roughly $58.5 billion. Phillips 66’s shares have risen 50.9% over the past year.
In conclusion, the rise in U.S. jet fuel output to pre-COVID levels presents significant opportunities for key players like ExxonMobil, Chevron and Phillips 66. As these companies ramp up their production to meet the soaring demand, they are well-positioned to improve their financial performance and solidify market position. The broader industry can also look forward to a period of stability and growth, driven by the dynamic recovery of air travel and energy consumption.
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