Caltex Australia has warned a virus-driven spate of flight cancellations could hurt jet fuel demand even more than it already has.
The company said was too early, however, to tell how steep oil price falls and COVID-19 will impact the petrol and diesel market.
The fuel retailer at its full year results last month had flagged jet fuel demand was down by 5 to 10 per cent as the coronavirus outbreak tightened its grip on the local aviation industry.
Caltex on Thursday warned this could blow out further following further service reductions by the likes of Qantas and Air NZ.
The company also said it was unable to see any clear impacts on demand in the petrol and diesel markets related to COVID-19 due to different influences on demand – including lower prices, lower volumes, weak economy and natural disasters.
“Convenience retail has benefited from stronger industry margin conditions, which has offset the earnings impact from lower volumes arising from the combination of bushfires, floods and weaker economic activity,” Caltex said in a release.
RBC Capital Markets analyst Ben Wilson said Caltex’s February refiner margin of $US4.14/bbl was “predictably weak”,although a reiteration of guidance was pleasing.
Caltex’s update comes as it negotiates a potential $8.8 billion takeover by Canadian group Couche-Tard.
Shares in the company dipped by 2.36 per cent to $26.88 after 25 minutes of trade on Thursday amid a wider market sell-off.
Caltex shares have dipped 25 per cent since hitting a near 12-month high of $35.96 in January amid the virus outbreak and an oil price war between Saudi Arabia and Russia.
Last month’s full-year result was weighed down by weak retail margins, soft economic conditions and unplanned outages at Caltex’s Lytton refinery.