Airlines hedge against higher oil prices by buying futures contracts. A futures contract is an agreement to buy a certain commodity (in this case oil) at a certain price at a certain time in the future. By buying oil futures contracts, airlines are able to lock-in the price that they will pay for oil in the future.
By the way, oil futures prices are high and they indicate that the market is expecting tight oil supplies in the future.How does a airlines company hedge with rising oil price? Will the airlines industry tumble? Can we buy ';value';
1. Airlines company can hedge by promising to buy a certain quantity of fuel in future at a designated price. Through this they are safeguarding themselves against future rise in the oil prices. In case, the prices fall, the company looses but still it is a good strategy to mitigate the risk of oil price increase.
A company can further hedge itself against the abovementioned risk (of prices of future oil falling) by dealing in oil futures options in the commodities market.
2. What industry - the american airlines industry, the european airlines industry, the asian low cost airlines industry, or the asian conventional airlines industry?
Airlines industry is extremely competitive and hardly gives a good profit margin for most competitors. A lot of lowcost airlines have come and gone. Definitely some airlines will be affected by the prices in future. There will always be winners and losers, and maybe more losers than winners.
3. ??? I didn't understand.How does a airlines company hedge with rising oil price? Will the airlines industry tumble? Can we buy ';value';
A few of them bought aircraft fuel futures. The agree to buy x thousand gallons for x dollars. Even though most will increase fares anyway they can, temporarily layoff some of their staff, and ground / lease to others some of their planes (often those that burn more fuel). Even those who boutht fuel futures will raise their fares if the other airlines did also. Unfortunately, this method often causes the airline to spiral downwards even more.
no now they are just charging us for each piece of baggage that we check....they are saying that now it will just be cheaper for people to UPS their luggage to avoid this BS they are pulling!
Wednesday, April 28, 2010
What can you say about the issue of oil price edge higher in Asian Trade?
Please help me to answer this question for my projectWhat can you say about the issue of oil price edge higher in Asian Trade?
Your best bet will be the Homework Section.
best of luck to you!mascara
Your best bet will be the Homework Section.
best of luck to you!
How does it affects the world business? the oil price increase in the world market?
guys i need specific examples please.. if you know a good web page for that i would highly appreciate it! help! it's my assignment. thank you. God blessHow does it affects the world business? the oil price increase in the world market?
negatively. By causing consumers to pay more for oil (inelastic demand) it causes people to spend more on it thus reducing disposable income.
negatively. By causing consumers to pay more for oil (inelastic demand) it causes people to spend more on it thus reducing disposable income.
Is there a connection between crude oil prices and the price of gas at local gas stations?
Obviously.
The higher the price of crude oil, the higher the price of gasoline.
The more the store owner has to pay for gasoline to sell, the higher the price he or she will charge the consumer. Its the opposite when the price is lower.Is there a connection between crude oil prices and the price of gas at local gas stations?
seriously?? well of course. gasoline is a by-product of crude oil. therefore, oil and gasoline proces almost always move up or down together
The higher the price of crude oil, the higher the price of gasoline.
The more the store owner has to pay for gasoline to sell, the higher the price he or she will charge the consumer. Its the opposite when the price is lower.Is there a connection between crude oil prices and the price of gas at local gas stations?
seriously?? well of course. gasoline is a by-product of crude oil. therefore, oil and gasoline proces almost always move up or down together
If the oil price go down,will if affect housing price in BC?
I've heard an analysis about oil price will down to $100 and then around $88 sth.Will it affect housing price in BC? If it happen, should buy or rent?If the oil price go down,will if affect housing price in BC?
Typically oil prices don't have that big an effect on housing prices. The exception is when the oil industry is really big in that area (not sure if BC has a big oil industry or not) but even if that is the case, I personally doubt it would have such a huge effect considering that oil prices were $20 or so 8 years ago.
Typically oil prices don't have that big an effect on housing prices. The exception is when the oil industry is really big in that area (not sure if BC has a big oil industry or not) but even if that is the case, I personally doubt it would have such a huge effect considering that oil prices were $20 or so 8 years ago.
Why is the oil price rising?
Why is the oil price rising? Are these guys raising the oil prices just to suck the juices out of other nations that do not have oil reserve?Why is the oil price rising?
It's very simple really. It's called greed. We are nearing the end of the term for our two oil men in office and since they can't run again,now is the perfect time for the greedy oil companies to see how much profit they can run up while their two men are in office.
If you remember , Dick Cheney had the oil companies come to the white house and draw up an energy plan for the country.. You are seeing the results of that energy plan right now in the price of oil headed for $5 a gallon. Dick Cheney gets one million dollars a year in retirement benefits from Haliburton ( a major player in the oil industry, not to mention the Iraq war) I would say that they got a very good investment on their million dollars a year. wouldn't you?Why is the oil price rising?
As the value of the dollar sinks the prices go up, it is known as inverse economics.
Apparently junior was out of class that day and doing a couple of ';lines';.
But then when someone mentioned the fact that the price of gasoline was approaching $4.00 a gallon a while ago he was confused. Oh well we get what we deserve when we vote into office an incompetent don't we.
Think when you go to vote in November. Friends do NOT let friends vote republican.
Even a caveman knows that, now you do as well.
Democrat Pelosi promised to lower gas prices 2 years ago if we elected a Democrat congress. Go figure, they are all politicians like Hillary and lie.
It is simply greed, greed and then more greed. Congress is about to raise taxes on gas again.
The only ones willing to help are McCain, Obama and Clinton if elected President, yea, right.
Because it can!
It is rising in large part because of Bush's failure to address economic interests in 7 years and limit out tax-base by giving tax-cuts to the wealthy, exactly those who do not need a tax-cut. They have plenty of shelters and write-offs while many people in this country file the EZ form and have NO write-offs at all. Now people who are making $160,000 a year are complaining about their $800.00 fuel bill to fill their oil tank! I could care less about them as 1/2 of America makes less than $30,000 a year!
Thanks to Bush, our dollar fell on the market 10% last month so your dollar buys less!
Because China is willing to pay more for it and BUSH wont do **** to drill around here. We are so dependent on every other nation its sick. Were spending millions to fix other countries while our country is on a short fuse of economic depression.
Supply and demand. The price of oil is set on the world market..............trading in futures. You've seen nothing yet as those futures which were traded have not yet been felt on our gas pump prices.
The demand for oil is rising. We get our oil from foreign countries, and so they can pretty much charge whatever they want knowing that we'll pay. That's why we should start processing fuel here.
Maybe it's running out? who knows, it could be because the US president wants to make another bundle before he gets out of office, but it won't go back down.
Supply and demand. Also oil execs are greedy bastards.
Got it in one
Apparently Exxon's profits are not acceptable.
thst id correct shell made 14 billion last year and first quarter thsi year 7 billion thats 3.3million an hour
Bingo!
It's very simple really. It's called greed. We are nearing the end of the term for our two oil men in office and since they can't run again,now is the perfect time for the greedy oil companies to see how much profit they can run up while their two men are in office.
If you remember , Dick Cheney had the oil companies come to the white house and draw up an energy plan for the country.. You are seeing the results of that energy plan right now in the price of oil headed for $5 a gallon. Dick Cheney gets one million dollars a year in retirement benefits from Haliburton ( a major player in the oil industry, not to mention the Iraq war) I would say that they got a very good investment on their million dollars a year. wouldn't you?Why is the oil price rising?
As the value of the dollar sinks the prices go up, it is known as inverse economics.
Apparently junior was out of class that day and doing a couple of ';lines';.
But then when someone mentioned the fact that the price of gasoline was approaching $4.00 a gallon a while ago he was confused. Oh well we get what we deserve when we vote into office an incompetent don't we.
Think when you go to vote in November. Friends do NOT let friends vote republican.
Even a caveman knows that, now you do as well.
Democrat Pelosi promised to lower gas prices 2 years ago if we elected a Democrat congress. Go figure, they are all politicians like Hillary and lie.
It is simply greed, greed and then more greed. Congress is about to raise taxes on gas again.
The only ones willing to help are McCain, Obama and Clinton if elected President, yea, right.
Because it can!
It is rising in large part because of Bush's failure to address economic interests in 7 years and limit out tax-base by giving tax-cuts to the wealthy, exactly those who do not need a tax-cut. They have plenty of shelters and write-offs while many people in this country file the EZ form and have NO write-offs at all. Now people who are making $160,000 a year are complaining about their $800.00 fuel bill to fill their oil tank! I could care less about them as 1/2 of America makes less than $30,000 a year!
Thanks to Bush, our dollar fell on the market 10% last month so your dollar buys less!
Because China is willing to pay more for it and BUSH wont do **** to drill around here. We are so dependent on every other nation its sick. Were spending millions to fix other countries while our country is on a short fuse of economic depression.
Supply and demand. The price of oil is set on the world market..............trading in futures. You've seen nothing yet as those futures which were traded have not yet been felt on our gas pump prices.
The demand for oil is rising. We get our oil from foreign countries, and so they can pretty much charge whatever they want knowing that we'll pay. That's why we should start processing fuel here.
Maybe it's running out? who knows, it could be because the US president wants to make another bundle before he gets out of office, but it won't go back down.
Supply and demand. Also oil execs are greedy bastards.
Got it in one
Apparently Exxon's profits are not acceptable.
thst id correct shell made 14 billion last year and first quarter thsi year 7 billion thats 3.3million an hour
Bingo!
Are the Democrats responsible for high Oil price?
They control the Congress and what goes on. Oil was about $40 a barrel when we were fooled voting them into office and giving them control. Now its $130
';It aint BUSH he got NO POWER'; as it could be said.
When can we expect some Action on the Dems part to lower those prices for us poor working souls?
Gosh, whats your guess on Oil when Obama wins ?Are the Democrats responsible for high Oil price?
Just a dream. I dream he will fool everybody and fight to trigger a revolution toward all that is green. I pray he will pull in the nation's horns and call for a national all out effort ot restructure the energy business into competing companies and the next bill gates will be the one who comes up with the trully powerful, doable plan to make great strides torward energy independence. by any means neccsarry. that alone could make him a great president eligable for a second term. all the rest is bull. that would have a profound affect on the economy and coould become a national obssession like the moom mission and nasa.that would be the bedrock program for both stabalising the economy and giveing everybody a worthy cause. plain and simple. put the big bet on that one.windmills, solar panels, new kinds of cars, infrastructure redesign, trains even steam and nuclear. got after it like a damn moon shot. more of the same will just fizzle and make things worse. this must be a mobilzation of the people to change this damn opec crud, once and for all.Are the Democrats responsible for high Oil price?
Its the environmentalists in Washington who have caused the energy crisis, they refuse to go energy independent, and the environmental wackos refuse to allow us to drill in our own country for oil and natural gas.. We are sitting on billions of barrels but the environmentalists starting with the Clinton administration have blocked any access.
Supply and demand, China and India are developing countries who have an insatiable thirst for gas. They are finally on the verge of huge expansion. THIS is causing a huge pressure on demand. Market speculators are also buying up oil in the open market. And lastly, the falling dollar which is tied to oil, because oil is traded in dollars not euros is also causing the pressure up. Also the speculators trading up the oil futures are creating higher prices.
Their are no easy solutions, but a combination of them. Brazil will be energy independent in just a few years, they got on the ball and had an energy policy that is working very good for them. If we would have done the same, 10 years ago, prices would be much lower. As long as we continue to rely on the middle east and refuse to explore here, we will be at the mercy of the open markets, hope this helps.
If Obama wins expect higher gas prices.
Oil was between $60.00 ant $70.00 when the Democratic congress took over. It started rising dramatically about a year and a half ago. What specifically do you think congress did or did not do to cause oil prices to rise?
I can tell you for sure that the deficit and spend policies of the previous republican congress and the republican administration play a role in this. Our currency is devalued, and printing money without collecting taxes contributes to this.
Neither the Congress or the president has the right to set prices. (Nixon tried it in the 70's and look how he is remembered.) The price of oil is simply the effect of the law of supply and demand. China and India and other developing countries are expanding the demand for oil, and OPEC and the other countries are holding down the supply.
The best solution, for both keeping prices in line, and for making the US more energy independent, is for us to produce more oil. The Democrats, influenced by the environmentalists, have prevented us from drilling for our own oil and building our own refineries. And before you tree-huggers out there claim that it'll ruin the environment, look at how responsible US companies are as compared to foreign countries. And those who say it'll take 10 years for us to see any oil from ANWR or new refineries, I have to ask you, ';Aren't we going to need oil then?'; And if, heaven forbid, the Middle East blows up or refuses to sell us oil, we need to have our own supply, or $4 gas will look cheap.
Well, they could be responsible for opening up some of the areas that are off-limits to drilling.
We have 86 BILLION barrels of crude oil in American territory that enviro-terrorists and Democrats have made absolutely inaccessible to drilling. While it would take some time, oil independence is crucial to bringing down the prices we pay. There will be a major recession or depression if something is not changed very soon.
its not just democrats neccessirly that has resulted in high gas prices.
1.supply and demand=there is alot of demand and little supply(or so were told)
2.lack of refineries=we havent built a new oil refinery in the united states in 30 years.
3.the falling value of the dollar compared to euro and yen has caused us to have to pay more per barrel.so in theory if we can fix our mortgage crisis and get our economy growing again the dollar would gain value and the price pere barrel would decrease.
Obama will take us out of the poor-house, and put us in the poverty-stricken house. He doesn't understand squat about the economic workings of our country, corporations, and the working class - and how everything works together.
His obsession with division, separation, and unfair burdens placed on select companies and individuals - - - - will throw this country into a deep depression.
Obama = Disaster
Price of gas will go up no matter who wins.
How come the price of gas is so high in Europe and Asian countries? stop blaming any party..And by the way..the war in Iraq is OUR war and not just Bush's war as the Congress voted for this war...Democrats and Republicans..I have lost all respect for Democrats for being weasels and saying they did not mean to vote for the war....fess up..both parties came together on this issue...support the troops and support the USA..
For the past 20 years there have been attempts to do more domestic drilling and to build new refineries to increase the supply. They have always stopped them. That is a contributing factor.
There has been a great increase of the world wide demand for oil, especially with the booming economies of China and India. That is another factor.
It's all ';W'; and his stupid War! That's why the Traders are going to town! All you gotta do is pay attention! Be a Hard Thinker! Sit Down an Try it sometime! They are not even Covering it up very good at all! Obama pulls us out of IRAQ, and you can bet ';Somebody'; has got to start some S*%T, somewhere in the Middle East, or the Oil prices are going to drop like bad habits! It could go either way! Sucks Don't it!
NO they are not and neither are the republicans you have to get a grip and find out what is going on its the people that won't let us drill here in the U.S. such places as Color. state, few others but they will be sooner then you think and the we'll be fine. to heck with the saudias.
No, the public is responsible for high oil prices - SUVs, oversized house, use of plastic (a petroleum product) etc. We use 25 barrels per person a year. The next in line is China at 3 barrels.
Why are people so STUPID and don't realize we don't control the price of oil.
Blame india and china for their booming economy and blame the weak dollar
if the dollar wasn't so weak, gas would be cheaper.
Simple: Drill for more oil, more supply thus, lower prices.
So, I would have to say that the demorats are the problem for not allowing further drilling in the US.
Obviously.
They say gas causing ';global warming'; and no one wants that.
And they proposed something to congress that doubled gas in England.
Stupid democrats.
Ever hear of something called supply and demand? The US dollar is extremely weak because of the president you voted for. It's amazing how ignorant people can be.
I voted for CHANGE when I elected Democratics to Congress in 2006. I got change back from my four $20 bills when I filled my car up yesterday.
80% of the price increase in oil is due to inflation(i.e. a weaker dollar).
The dems and repubs both get the blame for that.
Yes they are. My guess is he will ban oil, because crude oil is black, which could be considered offesive to blacks.
Yes Democrats screw everything up so vote for john McCain
Yes! Their the reason were not drilling in this country and don't us enough nuclear power! Just look at what the socialist are doing in Europe.
THEY ARE NOT RESPONSIBLE FOR THE HIGH GAS PRICES
dems are only a small part of the probelm
The main reason is the weakening US dollar
Not really... I think it's because OPEC decided that they wanted to pump less oil and gain more money.
yes
The republican plan is working to perfection,and once they let Obama win the presidency,Bush will declare martial law and stay in office...or...things will get so horrible they will hand Obama the keys and make everything appear to be his fault.much Like Carter in the 70s....The republicans Filibuster everything that might help lower prices,and then there are a few dems who are owned by big oil,so of course they want to keep their buddies happy and vote against anything that would lower prices.Face it..Oil will continue to go up and up,eventually I see gas at around 50 bucks a gallon so that only those with huge bank accounts can drive,the oil companies dont care where the money comes from.The only problem is that the price of food and everything else will skyrocket as well and the democrats will get the blame,even though it was the assinine republican policies that got us here,we need 60 dems in the senate,and to do away with those dems who vote in favor of big oil,otherwise you might as well buy a nice bike now
the trick is to get everyone to buy electric hybrid cars.
sales are slow on these models.
to remove the v8 gas guzlers too.
to sell more economy cars.
and for the fat cats in oil to fill their pockets.
No, your president's war is.
';It aint BUSH he got NO POWER'; as it could be said.
When can we expect some Action on the Dems part to lower those prices for us poor working souls?
Gosh, whats your guess on Oil when Obama wins ?Are the Democrats responsible for high Oil price?
Just a dream. I dream he will fool everybody and fight to trigger a revolution toward all that is green. I pray he will pull in the nation's horns and call for a national all out effort ot restructure the energy business into competing companies and the next bill gates will be the one who comes up with the trully powerful, doable plan to make great strides torward energy independence. by any means neccsarry. that alone could make him a great president eligable for a second term. all the rest is bull. that would have a profound affect on the economy and coould become a national obssession like the moom mission and nasa.that would be the bedrock program for both stabalising the economy and giveing everybody a worthy cause. plain and simple. put the big bet on that one.windmills, solar panels, new kinds of cars, infrastructure redesign, trains even steam and nuclear. got after it like a damn moon shot. more of the same will just fizzle and make things worse. this must be a mobilzation of the people to change this damn opec crud, once and for all.Are the Democrats responsible for high Oil price?
Its the environmentalists in Washington who have caused the energy crisis, they refuse to go energy independent, and the environmental wackos refuse to allow us to drill in our own country for oil and natural gas.. We are sitting on billions of barrels but the environmentalists starting with the Clinton administration have blocked any access.
Supply and demand, China and India are developing countries who have an insatiable thirst for gas. They are finally on the verge of huge expansion. THIS is causing a huge pressure on demand. Market speculators are also buying up oil in the open market. And lastly, the falling dollar which is tied to oil, because oil is traded in dollars not euros is also causing the pressure up. Also the speculators trading up the oil futures are creating higher prices.
Their are no easy solutions, but a combination of them. Brazil will be energy independent in just a few years, they got on the ball and had an energy policy that is working very good for them. If we would have done the same, 10 years ago, prices would be much lower. As long as we continue to rely on the middle east and refuse to explore here, we will be at the mercy of the open markets, hope this helps.
If Obama wins expect higher gas prices.
Oil was between $60.00 ant $70.00 when the Democratic congress took over. It started rising dramatically about a year and a half ago. What specifically do you think congress did or did not do to cause oil prices to rise?
I can tell you for sure that the deficit and spend policies of the previous republican congress and the republican administration play a role in this. Our currency is devalued, and printing money without collecting taxes contributes to this.
Neither the Congress or the president has the right to set prices. (Nixon tried it in the 70's and look how he is remembered.) The price of oil is simply the effect of the law of supply and demand. China and India and other developing countries are expanding the demand for oil, and OPEC and the other countries are holding down the supply.
The best solution, for both keeping prices in line, and for making the US more energy independent, is for us to produce more oil. The Democrats, influenced by the environmentalists, have prevented us from drilling for our own oil and building our own refineries. And before you tree-huggers out there claim that it'll ruin the environment, look at how responsible US companies are as compared to foreign countries. And those who say it'll take 10 years for us to see any oil from ANWR or new refineries, I have to ask you, ';Aren't we going to need oil then?'; And if, heaven forbid, the Middle East blows up or refuses to sell us oil, we need to have our own supply, or $4 gas will look cheap.
Well, they could be responsible for opening up some of the areas that are off-limits to drilling.
We have 86 BILLION barrels of crude oil in American territory that enviro-terrorists and Democrats have made absolutely inaccessible to drilling. While it would take some time, oil independence is crucial to bringing down the prices we pay. There will be a major recession or depression if something is not changed very soon.
its not just democrats neccessirly that has resulted in high gas prices.
1.supply and demand=there is alot of demand and little supply(or so were told)
2.lack of refineries=we havent built a new oil refinery in the united states in 30 years.
3.the falling value of the dollar compared to euro and yen has caused us to have to pay more per barrel.so in theory if we can fix our mortgage crisis and get our economy growing again the dollar would gain value and the price pere barrel would decrease.
Obama will take us out of the poor-house, and put us in the poverty-stricken house. He doesn't understand squat about the economic workings of our country, corporations, and the working class - and how everything works together.
His obsession with division, separation, and unfair burdens placed on select companies and individuals - - - - will throw this country into a deep depression.
Obama = Disaster
Price of gas will go up no matter who wins.
How come the price of gas is so high in Europe and Asian countries? stop blaming any party..And by the way..the war in Iraq is OUR war and not just Bush's war as the Congress voted for this war...Democrats and Republicans..I have lost all respect for Democrats for being weasels and saying they did not mean to vote for the war....fess up..both parties came together on this issue...support the troops and support the USA..
For the past 20 years there have been attempts to do more domestic drilling and to build new refineries to increase the supply. They have always stopped them. That is a contributing factor.
There has been a great increase of the world wide demand for oil, especially with the booming economies of China and India. That is another factor.
It's all ';W'; and his stupid War! That's why the Traders are going to town! All you gotta do is pay attention! Be a Hard Thinker! Sit Down an Try it sometime! They are not even Covering it up very good at all! Obama pulls us out of IRAQ, and you can bet ';Somebody'; has got to start some S*%T, somewhere in the Middle East, or the Oil prices are going to drop like bad habits! It could go either way! Sucks Don't it!
NO they are not and neither are the republicans you have to get a grip and find out what is going on its the people that won't let us drill here in the U.S. such places as Color. state, few others but they will be sooner then you think and the we'll be fine. to heck with the saudias.
No, the public is responsible for high oil prices - SUVs, oversized house, use of plastic (a petroleum product) etc. We use 25 barrels per person a year. The next in line is China at 3 barrels.
Why are people so STUPID and don't realize we don't control the price of oil.
Blame india and china for their booming economy and blame the weak dollar
if the dollar wasn't so weak, gas would be cheaper.
Simple: Drill for more oil, more supply thus, lower prices.
So, I would have to say that the demorats are the problem for not allowing further drilling in the US.
Obviously.
They say gas causing ';global warming'; and no one wants that.
And they proposed something to congress that doubled gas in England.
Stupid democrats.
Ever hear of something called supply and demand? The US dollar is extremely weak because of the president you voted for. It's amazing how ignorant people can be.
I voted for CHANGE when I elected Democratics to Congress in 2006. I got change back from my four $20 bills when I filled my car up yesterday.
80% of the price increase in oil is due to inflation(i.e. a weaker dollar).
The dems and repubs both get the blame for that.
Yes they are. My guess is he will ban oil, because crude oil is black, which could be considered offesive to blacks.
Yes Democrats screw everything up so vote for john McCain
Yes! Their the reason were not drilling in this country and don't us enough nuclear power! Just look at what the socialist are doing in Europe.
THEY ARE NOT RESPONSIBLE FOR THE HIGH GAS PRICES
dems are only a small part of the probelm
The main reason is the weakening US dollar
Not really... I think it's because OPEC decided that they wanted to pump less oil and gain more money.
yes
The republican plan is working to perfection,and once they let Obama win the presidency,Bush will declare martial law and stay in office...or...things will get so horrible they will hand Obama the keys and make everything appear to be his fault.much Like Carter in the 70s....The republicans Filibuster everything that might help lower prices,and then there are a few dems who are owned by big oil,so of course they want to keep their buddies happy and vote against anything that would lower prices.Face it..Oil will continue to go up and up,eventually I see gas at around 50 bucks a gallon so that only those with huge bank accounts can drive,the oil companies dont care where the money comes from.The only problem is that the price of food and everything else will skyrocket as well and the democrats will get the blame,even though it was the assinine republican policies that got us here,we need 60 dems in the senate,and to do away with those dems who vote in favor of big oil,otherwise you might as well buy a nice bike now
the trick is to get everyone to buy electric hybrid cars.
sales are slow on these models.
to remove the v8 gas guzlers too.
to sell more economy cars.
and for the fat cats in oil to fill their pockets.
No, your president's war is.
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