Shale’s surge could cause problems for jet fuel

Airlines take note: America’s surging shale oil production is bringing with it ever more jet fuel. The combination of rising output of the petroleum product in the US and expansion in refinery capacity in Asia has led to a growing surplus just as the northern hemisphere summer peak period approaches. That’s pushing down margins on the fuel. The US is currently producing about 300,000 barrels a day more than a decade ago, Energy Information Administration data show. The growth alone is equivalent to about 4% of global demand. Airlines may struggle to reap immediate benefits from weakness in the market because they typically hedge against the risk that one of their biggest costs will increase. The falling premium to crude will help to damp the impact of rising oil prices. <br/>