Oil price gusher to subside?

The FT just reported "Saudi Arabia’s powerful oil minister Ali Naimi sought to cool overheating oil markets on Tuesday, saying high oil prices were “unjustified” and that the kingdom could boost its output by as much as 25 per cent if necessary".

This is potentially good news for the global aviation industry which currently is facing a jet fuel price of $139.5 per barrel and an average price of $132.7 per barrel this year.   IATA now expects Global airlines to be operating on a wafer thin 0.5% margin in 2012 and to collectively return a relatively modest $3 billion profit.   Hence any moves to subdue the gusher in oil price rises will be welcomed not just by the aviation industry but by fare paying passengers and by motorist now paying £1.39 at forecourt pumps.