Will rebound in jet fuel cracks last?

SINGAPORE (Reuters) - Asian Jet fuel edged up on Thursday, with its cracks firming above $11.00 a barrel and its price spread to gas oil returning to positive territory, around levels before the onset of the volcanic ash cloud, as nearly all European flights resumed following a five-day ban.

Bulls say that clearing current flight backlogs, resulting from the massive disruption of timetables during the ban, would jump-start physical jet demand for at least four to six weeks, and extended by the improving global economy.

However, the rebound seems muted and bears argue that demand would not return to pre-economic crisis levels any time soon, given persistently low demand by major carriers so far, despite growing signs of a global recovery.

Jet's May cracks rose 38 cents to $11.19 a barrel by Thursday's close, from $10.47 a barrel on Monday, while regrade -- the price differential between jet fuel and gas oil -- rose 10 cents to a premium of 5 cents a barrel, from a one-month low of a discount of 25 cents on Monday.