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E-Travel Blackboard: Lower jet fuel prices won’t be here to stay, says Shell Aviation

Monday, November 13, 2006

Mike Lumley, a Marketing Executive for Shell Aviation – who supplies jet fuel to 1,100 airports in more than 90 countries – warns that recent jet fuel price reductions will be overshadowed by future price hikes.

The executive spoke at Outlook 2007 last week and explained that, among other factors, supply constraints will pressure an upward movement in price. When this will happen is less certain as price movements are generally difficult to forecast.

“It’s too early to call it the beginning of the end,” Mr. Lumley said.

“Spare capacity is tighter than it’s ever been,” he added, which has been exacerbated by underinvestment in extraction and refining infrastructure.

“The future holds a very high level of uncertainty and volatility, and if you don’t manage your risk, you’re speculating,” cautioned Mr Lumley.
 

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