Whacker77

Over the past month or so, I've tried to paint an optimistic view of the current oil crisis. Unfortunately, oil keeps going up even though most admit it is experiecing a hyperbolic move. Sadly, I think this week may be even worse. The European Central Bank has hinted strongly it will raise interest rates this Thursday. That move, should it occur, will further depreciate the dollar and, in turn, increase the price of oil.

Although it's possible oil will reach $150 per barrel this week, there is a positive taking place under the radar. Insiders at the oil refining companies are buying shares of their own stock at good clips. This suggests they believe oil will soon strongly retrace from the daily all-time highs it is currently achieving. Refining stocks have been murdered this year due to rising oil costs and they, refining companies, only do well when the "crack spread" is better.

I'm hopeful that the buying by refining insiders proves the adage we should follow the smart money. If that's the case, maybe lower prices are on the way. Those of you who are RAH pilots probably read Bedford's letter last week. While he painted a dim view for the aviation industry, he did say he was confident that all carriers could prosper/survive with oil at $100 or less. Maybe it's unrealistic to believe oil will retrace to that level in short order, but we shouldn't forget that oil was $100 just three months ago and $85 four months ago.

If the unthinkable happens and oil prices return to levels dictated by the fundamentals, it is possible that a disaster in the airline industry can be avoided. I'm just thinking out loud though.

etflies

Lets hope what you think becomes reality. In the mean time, I'll keep planning for the worst and hoping for the best.

Colnago

I have found myself becoming more and more interested in economics after this whole thing has been happening. Off-topic, but can anyone recommend any good books as to how these things happen the way they do? My question is always WHY WHY WHY?

I'd be extremely happy if we see some sort of improvement in 2008 though I'm highly pessimistic about it.

AviatorPop

Well if you want to really think outside the box you can always watch this movie which may answer some of your questions Zeitgeist - The Movie

Rightseat Ballast

Read the Art of War...

rickair7777

It actually explains a lot of things about life.