Oil prices still falling

SlumTodd_Millionaire

Evil Landlord Capitalist
Man, this is going even better than I predicted. Right now oil is trading at $57.45/bbl. Every airline should be making decent profits at these prices.
 

Barty

Well-Known Member
I just like it because every dollar it drops, the tighter the noose gets around the necks of Chavez and Ahmadinejad. Their saber rattling has been directly fueled by profits from the sale of their oil.
 

v1valarob

Well-Known Member
Yeah, I have been keeping an eye on this too. I want to see premium fuel prices back below $2 before I get really excited.

This article in USA Today was a favorite of mine over the weekend, gave me a good laugh. http://www.usatoday.com/travel/flights/2008-10-28-jet-fuel-surcharges_N.htm

I find it funny how when data shows airlines are losing billions, people on the outisde will still cry foul about how the airlines are just being greedy.
At my local 7-11 gas is 1.89/1.99/2.09. Its so close!!!!
 

the_dmn8tr

New Member
So this begs the question, what do the people who got the 2.99 gas guarantee from buying a new dodge or jeep or whatever it was do?
 

PGT

Well-Known Member
What's the Dodge/Jeep thing?

It's good that gas prices keep falling, now I just wish people would still be for alternative energies rather than "gas is down, who cares" thinking
 

ready2fly

Well-Known Member
Doesn't Planeiscool trade oil? I'd like to see his take on this.

Either way - feels a lot better to fill my tank up for under $40 than it did at around $70.
 

FlybyLaw

Well-Known Member
And the smart airline Financial people all hedged at least around the $100 mark. Meaning they are still losing money on the fuel side. They just can't get it right. Screwing all that are not in the top tier of the company.
 

WestIndian425

Well-Known Member
Question...can those hedges be redone? If not, when do these hedges expire? I'm sure the airline financial folks are scrambling to secure new hedge contracts at these lower rates.
 

SpiraMirabilis

Possible Subversive
They hedged fuel to reduce risk. Had they not hedged they would have been speculating that the fuel price would go down, which is riskier than hedging. Once they purchased the options for fuel at a particular price they became indifferent to the movement of the market, at least as indifferent as one can be at $140/barrel anyway.

Now that the price of fuel dropped dramatically we can see that they have lost money on the value of their options however this is probably outweighed by the profits they will realize from the lower cost commodity. A lot of people say company X lost Y dollars from fuel hedging -- well, it is not really an accurate comparisan unless you also account for the amount of money they made from low fuel prices.
 

wheelsup

Well-Known Member
It's sweet gas fell a buck/gal but my 401k has lost thousands so I guess pick your poison?

I'd rather have gas where it was a few months ago and my 401k where it was a few months ago.

Also oil was $15-$30/bbl in the years after 9/11 but airlines still lost billions...travel demand has more to do with airline profits than oil prices. There is less and less travel demand with each passing day.
 

mhcasey

Well-Known Member
Man, this is going even better than I predicted. Right now oil is trading at $57.45/bbl. Every airline should be making decent profits at these prices.
That's odd...I thought there was a correlation between the drop of oil, the plummeting economy, and people not flying as much. Costs are down, but I'm sure revenues are as well. Aviation management teams always find a way to lose money anyway...

I'm not holding my breath that prices stay this low forever. When the Saudis know we can afford it again, supply will drop and prices will rise. Unless President Elect Obama fixes things for the world like he promises to.
 

Trip7

Well-Known Member
The airlines would MUCH rather have falling demand than skyhigh fuel. Even with falling demand the chances of pulling a profit are still high.
 
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