Crude oil prices - the key determinant of jet fuel prices - are set to remain high despite easing demand growth and a "transformative" supply shock from surging North American production, as markets remain worried about the geopolitical risk to supplies.
According to International Energy Agency head of oil Antoine Halff, the advent of North American alternative supplies - from Canadian tar sands and so-called "fracking" of oil-rich shale deposits - will be as transformative of the market over the coming five years as the rise of Chinese demand has been over the last 15, but the risk to supplies is "real". The outcome of the war in Syria, he says, could have dramatic implications for oil supplies from the Middle East and Persian Gulf.
And, he says, while Libyan production has come back on stream since its revolution, output remains uncertain. Unrest in Nigeria does not at present threaten the country's oil-producing regions, but traders are concerned about instability there.
But Halff, speaking at the Platt's crude oil summit in London to present the IEA's medium-term oil market report for the period to 2018, says one broad conclusion to draw is that, despite geopolitical risks, market fundamentals suggest a more comfortable global oil supply-demand balance over the next five years.
According to the IEA report, over the 2013-2018 period world liquid production capacity should grow by 8.9 million barrels per day, "significantly faster" than the 6.9mb/d growth forecast for demand, while global refining capacity is expected to jump by 9.5mb/d.
Further easing demand for liquid fuels will be a rising call for relatively clean-burning natural gas to power road vehicles.
However, he says, the changes to the market over the next five years will be largely on the supply side, as infrastructure development is realised.
Impact on demand, and by implication prices, may not come for several years. By 2018, for example, gas will account for just 2.5% of road transport fuel demand, up from just 0.2% in 2000.
Meanwhile, gasoline demand growth is slowing to 1.2% per year, owing to fuel switching and improved vehicle efficiency. Jet fuel demand is rising by 1.1% annually
Summit chair Johannes Benigni, managing director of Singapore oil and gas consultancy JBC Asia, says that while the rise of North American production and shift to gas may ultimately change the nature of the oil market, there is no cause to expect any change to one enduring feature of markets that bears directly on aviation. The nearly direct connection between crude prices and jet fuel prices, he says, should remain in place.