Oil prices have slid back since reaching a peak of $145 a barrel in July, resulting in jet-A prices finally falling by a significant amount. Although they remain sharply higher compared to this time last year, retail jet-A prices at U.S. FBOs have dropped in many cases below $6 per gallon. And while some FBOs at major U.S.
“The fundamentals don’t support the price of oil,” Hiller Group national sales manager Wesley Earl told attendees of the Florida Aviation Trade Association annual meeting on Tuesday. Tampa, Fla.-based Hiller Group is a fuel distributor that provides Chevron and Texaco branded fuel to more than 350 FBOs. Factors inflating fuel prices include the dwindling number of refineries (especially for jet-A), geopolitical issues, lack of a U.S.
Energy companies’ experience of the early-1990s Gulf War suggests that any sudden increase in oil prices owing to a new Iraq conflict might be brief, since the market has become much more responsive to demand. However, current oil supplies are plentiful, according to a petroleum industry senior executive.
According to BP, rapid growth in demand for all forms of energy dominated world energy markets last year, leading to rising prices. While growth in demand from China in particular was exceptional, BP said the strength of demand growth was a global phenomenon, increasing above the 10-year trend in every region of the world.