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Old Oct 21, 08, 4:21 am
Join Date: Jun 2008
Location: SFO
Programs: AA LTP 2MM, Marriott/SPG Rabid Plat w/Ambassador, HHonors Gold
Posts: 691
Originally Posted by ContinentalFan View Post
And it's not going to happen! For oil and its downstream products price is highly inelastic; refineries were at capacity. So, when the quantity demanded is strong, the price shoots up; as the global economy weakens, it's tough times for the industry and OPEC won't be able to stop it. There's a good chance that we'll see a price of $30 to $50 in the next few months.
If oil really drops to $50, AA should be hedging like mad. If AA management isn't incompentent, they are already hedging at the current price. There's still far too much demand for oil to drop to $30 anytime soon.
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