DUBAI/SINGAPORE: Saudi Arabia will double its monthly spot aviation fuel supply available for exports starting in May due to lower domestic consumption, industry sources said yesterday.

The world’s top oil exporter which typically sells around 550,000 barrels of spot aviation fuel monthly, was likely to boost supply for spot sales to 1.1 million barrels monthly starting in May, traders said.

“Saudi Aramco is now looking to offer more spot because domestic demand has dropped off,” a source familiar with Saudi’s jet fuel exports said. Jet fuel consumption at airports in the kingdom for 2009, has been revised nearly six percent lower from earlier estimates to around 45,121 barrels per day (b/d), traders said. Demand at airports in Saudi was around 50,000 b/d in 2008.

Demand growth for jet fuel in the Middle East is estimated to be around two percent this year versus eight percent in 2008, traders and analysts said. “Saudi demand for jet fuel will slow considerably this year, primarily due to a slowdown in air travel due to the global economic slowdown,” said Raja Kiwan, an analyst with PFC Energy. “We expect consumption to grow marginally this year, with the busy summer months expected to provide a lift to demand.”

Aramco showed a spot cargo for mid-May loading, traders said. If the sale goes through, the cargo was likely to find its way into storage tanks given sagging demand worldwide, traders said. Around 30 million barrels of distillates such as diesel, heating oil and jet fuel is being stored on ships due to a market pricing structure, where prompt barrels are cheaper than those in later months.

The structure known as contango, provides a financial incentive to buy now and sell later. The contango for jet fuel traded in Asian yesterday was at 65 cents a barrel, while the regrade for May was traded at 20 cents a barrel. The regrade for May hit a peak of $1.90 a barrel just two weeks ago. It hit a low of 9 cents on January 2. Jet fuel has been weak since the fourth-quarter last year, as the global economic crisis hit air-travel demand. China was not repeating last year’s bumper imports, with May jet fuel purchases seen at around 200,000 tonnes.