Jet Fuel Pricing Outlook and Key Drivers

1
Jet Fuel Pricing Outlook and Key Drivers
Paul Cluett Global Sales
Co-ordination Manager
2
To Cover

• Oil and Jet Fuel Trends
• Future issues and concerns
• Key Drivers

3
World Oil Supply/Demand Balance(million b/d)
4
Total OECD Jet Demand
5
Total OECD Jet Demand
6
OPEC Basket Price
/bbl
34
32
Daily Basket Price
30
28
OPEC Price Band
26
24
22
20 Day Average
20
18
Data to 25 March
16
2-
27-
25-
21-
16-
11-
6-
4-
2-
28-
23-
17-
12-
8-
5-
1-
26-
21-
16-
11-
2-
Jan-
Feb-
Apr-
Jun-
Aug-
Oct-
Dec-
Feb-
Apr-
May-
Jul-
Sep-
Nov-
Jan-
Mar-
May-
Jun-
Aug-
Oct-
Dec-
Feb-
01
01
01
01
01
01
01
02
02
02
02
02
02
03
03
03
03
03
03
03
04
7
OPEC Basket Price in Euro
Euro/bbl
34
OPEC Price Band calculated with Euro/Dollar
rate at time of OPEC Basket introduction
32
30
OPEC Price Band
28
26
24
22
Daily Basket Price
20
20 Day Average
18
Data to 25 March
16
2-
27-
25-
21-
16-
11-
6-
4-
2-
28-
23-
17-
12-
8-
5-
1-
26-
21-
16-
11-
2-
Jan-
Feb-
Apr-
Jun-
Aug-
Oct-
Dec-
Feb-
Apr-
May-
Jul-
Sep-
Nov-
Jan-
Mar-
May-
Jun-
Aug-
Oct-
Dec-
Feb-
01
01
01
01
01
01
01
02
02
02
02
02
02
03
03
03
03
03
03
03
04
8
Selective World Jet Fuel Prices
Far East Nuclear Power Plants
Today
Extreme Cold
Oil Price Wars
9/11
9
OECD Product Stocks
million b/d
1850
1999
1800
1750
1998
1700
2002
1650
2001
1600
2004
1550
2000
2003
1500
1450
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
10
Airline Trends

• RPK - Revenue passenger km
• ASK - Available seat km
• FTK Freight tonne km
• ATK Available tonne km
• PLF Passenger load factor

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Issues and Concerns

• Fragile Airline Finances and Airline
  Bankruptcies.
• Limited Hedging cover by airlines.
• Low Sulphur Diesel and Squeeze on Jet
  production.
• Infrastructure and Investment.
• Environmental developments.
• Tax.
• Deregulation New competition.
• Airport congestion and slots.

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Key Drivers of Jet Fuel Pricing

• Jet Price levels High at present
• will they continue at current levels?.
• No more shocks Sars/Iraqi etc.
• Supply Security.
• Low stocks refinery reliability.
• Better Demand Forecasting.
• Passenger Confidence.