Opec To Cut Oil Output Target Again!

[zonecontroller]

Reuters Photo
OPEC to Cut Oil Production by 4 Percent (AP) - OPEC will cut its production target by 4 percent as scheduled, the president of the group said Wednesday — a move that analysts say could drive crude oil prices higher even as U.S. customers are already facing high gasoline prices. The Organization of Petroleum Exporting Countries, which pumps about a third of the world's oil, will reduce its output ceiling by 1 million barrels per day effective Thursday.

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[repeet]

With our "friends" the Saudi Arabians leading the charge, OPEC agreed today to REDUCE the oil supply to the world by One Million Barrels Per Day, every day.

Everyone of us drive by the gas station each day, and are shocked by the continually rising price of gasoline.

As we have already, and are continually being asked to, "right size" our budget to the new economic realities; I think we need to consider the impact of high oil prices on our company and the Airline industry as a whole.

I think we can depand on the U.S. Government to continue the past practice of sitting on their hands and letting economic forces "sort themselves out".

Since the company in all of their Harvardian and Yale'ian wisdom, has for decades foregone the foolish practice of hedging fuel; the question becomes will we be the first Airline to become bankrupted by increased fuel costs, or will one of the others succumb first?

 

[mrman]

This bad guy is not OPEC, the bad guy is U inablility(due to lack of assets) or poor management not to be hedged in oil by obtaining futures contracts. I believe WN has about 80 % of fuel for this year hedged.

 

[FA4UA]

The news said last night that present gas prices at the pump when adjusted for inflation are cheaper then they were 40 years ago. Interesting factoid!

Barron's had a great article last week concerning the Airlines, Hedging and losses as a result! Page 8 has a graph on the 22Mar04 edition that shows what a 10% shift in oil prices will do. It would cause Delta to loose $3.50 a share (the largest looser) as well as cause NW and CO to loose 1.75 and .50 respectively per share. For some odd reason US and UA weren't on the list. Maybe it's just too ugly to print!?

Southwest still looks positive at .60 a share. Lan Chile was +1.60/sh, America West +1.15/sh and Alaska was +1.10/sh. Ironically with only 4% of their fuel hedged Frontier would be expected to still make $1 a share!

Northwest has no fuel hedging in place for 2004 as does West Jet.

Just food for thought...

FA4UA

 

[usfliboi]

This bad guy is not OPEC, the bad guy is U inablility(due to lack of assets) or poor management not to be hedged in oil by obtaining futures contracts. I believe WN has about 80 % of fuel for this year hedged.

Your kidding?????????? You obviously dont read the facts. Us does not have the money to hedge , PLAIN AND SIMPLE!

 

[ITRADE]

This bad guy is not OPEC, the bad guy is U inablility(due to lack of assets) or poor management not to be hedged in oil by obtaining futures contracts. I believe WN has about 80 % of fuel for this year hedged.

I'm sorry, but you just have not read this board recently. This topic has been discussed over and over. And as I noted earlier, if Gordon Bethune and Richard Anderson decided not to hedge, US's decision was not the only one to be a gamble.

 

[ringmaruf]

I'm sorry, but you just have not read this board recently. This topic has been discussed over and over. And as I noted earlier, if Gordon Bethune and Richard Anderson decided not to hedge, US's decision was not the only one to be a gamble.

I totally agree. Even the all-wonderful America West isn't hedged.

 

[SpinDoc]

I totally agree. Even the all-wonderful America West isn't hedged.

The U.S. military should have turned Iraq and Afghanistan into glass when we had the chance and then invaded Saudi Arabia. Oil prices are getting ridiculous and it's time for our government to put the squeeze on OPEC again. The last time OPEC started raising prices, President Bush announced a new pact with our old friends in the Kremlin (Russia and associated Eastern Europe hold over 30% of the world's untapped oil reserves) and prices eased somewhat. It's time to roll the price back to October 1997 when I was paying .69/9 for a gallon of regular unleaded in Atlanta.

 

[ITRADE]

The U.S. military should have turned Iraq and Afghanistan into glass when we had the chance and then invaded Saudi Arabia. Oil prices are getting ridiculous and it's time for our government to put the squeeze on OPEC again. The last time OPEC started raising prices, President Bush announced a new pact with our old friends in the Kremlin (Russia and associated Eastern Europe hold over 30% of the world's untapped oil reserves) and prices eased somewhat. It's time to roll the price back to October 1997 when I was paying .69/9 for a gallon of regular unleaded in Atlanta.

Or something relating to Anwar......

 

[USA320Pilot]

To hedge fuel you have to buy option contracts, which requires significant up front capital, and then bet on the price direction of the commodity.

For those who believe this is so easy, I suggest you take a Futures & Options course, open a brokerage account, and then trade on the NYMEX.

This is a very risky strategy where 95% of all traders lose money. Moreover, US Airways does not have the millions of dollars that would be required in premium to buy the contracts.

Regards,

USA320Pilot

 

[pitguy]

They just paid down debt of $250 million. That money could have hedged fuel. Southwest does it. Why don't the wizards in Crystal City do it? That is why they are paid the big bucks for the big decisions.

 

[a320av8r]

YOUR president, George WMD Bush, is filling the strategic oil reserves "to the brim". This helps in keeping oil prices at record highs. Guess where the oil comes from? Don't screw with the Bush family's oil!

Remember this in November.

 

[mweiss]

av8r,

Strategic reserves were not set up to mitigate prices. They were set up to provide a few weeks' supply in case the import supply got cut off suddenly. To use them as a means of reducing the price would be irresponsible.

I'm not a fan of that guy, but he's doing the right thing here (albeit perhaps for the wrong reasons).

 

[mweiss]

The U.S. military should have turned Iraq and Afghanistan into glass when we had the chance and then invaded Saudi Arabia.

Please tell me you're not serious.

 

[lavMON]

This bad guy is not OPEC, the bad guy is U inablility(due to lack of assets) or poor management not to be hedged in oil by obtaining futures contracts. I believe WN has about 80 % of fuel for this year hedged.

hows about the inability of the democratic congress getting off their duff's and opening up offshore and ANWAR? my goodness....isn't that one of sweeny's pre-req's for a president hopeful?
last i heard 'W' wants to open ANWAR for drilling....maybe sweeny could call george up??maybe dave could get us the help we need??