I will believe the Saudis don't see any upcoming problems with Ghawar when they cancel one of their projects due to low oil prices. If they continue to be full steam ahead with increasing their capacity then I think they are aware that Ghawar may not be as robust in 5 years time as they would like us to believe.
The fuel's premium should decline to 2 to 8 cents a gallon by the fourth quarter, Busby said.
Price Decline
The airline cutbacks ``should help bring the price down,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. The current premium is because of ``more than anything the summer demand, the peak demand.''
In 1991, when U.S. jet fuel consumption slid 8.2 percent, crude oil fell 40 percent from a high of $32 a barrel in January to $19.12 by the end of the year. Jet fuel traded at a 1.55 cent discount to heating oil by Dec. 11 of that year, down from a 3.85 cent premium six months earlier.
The fuel's premium should decline to 2 to 8 cents a gallon by the fourth quarter, Busby said.
Price Decline
The airline cutbacks ``should help bring the price down,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. The current premium is because of ``more than anything the summer demand, the peak demand.''
In 1991, when U.S. jet fuel consumption slid 8.2 percent, crude oil fell 40 percent from a high of $32 a barrel in January to $19.12 by the end of the year. Jet fuel traded at a 1.55 cent discount to heating oil by Dec. 11 of that year, down from a 3.85 cent premium six months earlier.
WILL THE SAME THING HAPPEN TO GASOLINE?
No..... It is still a supply vs demand equilibrium..
We are still demanding just as much crude, and supplying not nearly enough, and the demand is increasing.
Thats great that jet fuel grade is seeing a drop in demand, but I can guarantee everything else is still increasing in demand. Jet fuel only makes up a small percentage of a barrel of crude oil. _________________ Tired of high gas prices? Then stop driving to work, duh..... Learn to Work from home
Posted: Mon Jul 14, 2008 2:38 pm Post subject: Re: Jet fuel prices set to collapse; demand is slackening
Uhhhhhh... Jet fuel is currently priced at ~4.25 per gallon. This is about a 0.5% to 2% decline by the end of the year. This isn't exacly a "collapse" in the price. While I won't argue that it's not weakening, I would say that in order to get oil to drop by 40% ($58/bbl) we would have to see far more significant examples of demand destruction - but maybe I'm wrong.
I love the way the MSM spins the rise and fall of the price of a barrel of crude - oil goes up $5.00 in one day and "Oil Moves Higher". Oil drops $3.00 in a day and "Oil Plummets"...... Which is the more accurate statement?
Joined: Oct 11, 2005 Posts: 415 Location: Arizona, USA
Posted: Mon Jul 14, 2008 3:45 pm Post subject: Re: Jet fuel prices set to collapse; demand is slackening
Can jet fuel be used in other applications besides jets? Can it be more or less refined in order to produce more of a different type of fuel? Are its properties close enough to another type of petroleum distillate that it can make a good substitute for it? I am wondering if there are other types of applications that could soak up any losses in demand from jet fuel. If so, then I would expect to see the decrease in jet fuel demand to be absorbed by other uses elsewhere, resulting in basically no downward effect on prices.
Posted: Mon Jul 14, 2008 4:00 pm Post subject: Re: Jet fuel prices set to collapse; demand is slackening
Windmills wrote:
Can jet fuel be used in other applications besides jets? Can it be more or less refined in order to produce more of a different type of fuel? Are its properties close enough to another type of petroleum distillate that it can make a good substitute for it? I am wondering if there are other types of applications that could soak up any losses in demand from jet fuel. If so, then I would expect to see the decrease in jet fuel demand to be absorbed by other uses elsewhere, resulting in basically no downward effect on prices.
Gas turbines (for power generation) can be made to run on it. They can be made to run on quite a lot of liquids, actually. They are a good choice for peaking plant, due to this flexibility and quick start-up. Some new baseload capacity in the ME Gulf is liquid-fired, although it is as likely to be fuel oil. _________________ Volatility. When life isn't exciting enough.
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Then stop driving to work, duh..... 
