sailingfun

China does pay for their oil. They compete for the same global supply that we compete for. They are building and adding cars in China and India at a incredible rate. Oil may dip back down for a few years but over time it has no where to go but up. If oil is still at 120 dollars a barrel in the fall you will see a massive parking of domestic aircraft. The cutbacks will be huge and the effect on the airline industry will be ugly.

ewrbasedpilot

Oil is ABOVE $150 a bbl for airlines already. CAL posts the cost for a bbl including the "crack" spread which the airlines pay to have the oil "cracked" into jet fuel. It went over $150 yesterday...........................

B757200ER

This sky-hi oil pricing is going to cause 2-3 more airline casualties. Soon.

Not good, and totally unnecessary.

ewrbasedpilot

The price we pay is being based on the demand in China and India, so in essence, we are paying for China's oil demands, not the USA's. Consumption in the USA has dropped almost 7% in the past couple of months, yet the price continues to skyrocket up. So how can it be based on our demand?

ewrbasedpilot

Talked to a buddy of mine who had Larry Kellner on the flight the other day. Kellner said their is NO reason for oil/jet fuel to be where it's at. Until our transportation industry comes to a grinding halt, I don't think you're going to see anything done. Sad thing is that we (the USA) are SUBSIDIZING the Iraqi's so they pay less for their oil and they are making incredible profits on what they produce. Pathetic, isn't it?

sailingfun

Boy you have me confused on your post. There is only so much oil in the world. The more people who want that oil the higher the price will be. If you supply oil you are going to sell it to the highest bidder. As long as world wide demand is going up oil prices will go up. The demand in the US has dipped only a tiny fraction of last year. The world wide demand is going up every day. Supply and Demand. There is not enough supply and lots of demand.

siyer

Based on supply and demand, Oil should be around $50 a barrel.

http://www.inflationdata.com/inflati...ices_Table.asp

http://www.wtrg.com/prices.htm

HercDriver130

oil is just like anything else.... it is worth what someone will pay for it. I dont like it... but thats just a pure simple fact.

AAflyer

Exactly!!

AA

bbtp

i'll agree that china/india growth is having an impact, but let's put it in perspective:

- the U.S. constitues OVER 25% of world oil consumption
- the U.S. consumes OVER 3x as much as oil as China does every day
- even w/ China increasing year-over-year consumption by 800,000 barrels a day, it would take quite a long time for it to approach U.S. levels of consumption

what does this mean? it means that through sound policy (which in my opinion is less red tape and less government intervention), the U.S. can, on its own, make a meaningful impact on world oil consumption.

If Mr. Kellner firmly believes what your friend said he said, then why does Continental continue to hedge? oh wait, they're in the futures market for the same reason as the <gasp!!!> "speculators".

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