If Oil Prices Go Down?
Jun 27, 2008, 8:56 am
#1
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If Oil Prices Go Down?
With the slew of fees ($25.00 for a second bag, etc.) and service changes(a slice of cake as opposed to a Ice Cream Sundae, etc.) caused by the spike in oil, would the fees be rescinded and service changes restored if oil were to come back down?
In my experience it is easier to institute a change than it is to rescind it.
CO Fters, what is your take?
CO_Insider care to weigh in? (Not holding you too anything, just curious your thoughts.)
Dan
In my experience it is easier to institute a change than it is to rescind it.
CO Fters, what is your take?
CO_Insider care to weigh in? (Not holding you too anything, just curious your thoughts.)
Dan
Jun 27, 2008, 9:01 am
#2
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Originally Posted by dan1431
In my experience it is easier to institute a change than it is to rescind it.
Jun 27, 2008, 9:09 am
#3
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If oil drops too much CO is still in trouble; they're hedged to ~40% at $120-140/bbl through the next 12 months. So the costs won't immediately drop back down.
Jun 27, 2008, 9:14 am
#4
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If oil drops too much CO is still in trouble; they're hedged to ~40% at $120-140/bbl through the next 12 months. So the costs won't immediately drop back down.
At this point I don't think that it is wise to hedge above 50% even though I don't expect prices to go down if they did it could be quite bad.
Jun 27, 2008, 9:21 am
#5
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Once they have successfully implemented a fee, I doubt you will ever see it go away, regardless of what oil prices do. We only paid a federal excise tax on long-distance calls (to pay for the Spanish American War) for 108 years... 
Jun 27, 2008, 9:33 am
#6
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Once they have successfully implemented a fee, I doubt you will ever see it go away, regardless of what oil prices do. We only paid a federal excise tax on long-distance calls (to pay for the Spanish American War) for 108 years...
Jun 27, 2008, 9:34 am
#7
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Once they have successfully implemented a fee, I doubt you will ever see it go away, regardless of what oil prices do. We only paid a federal excise tax on long-distance calls (to pay for the Spanish American War) for 108 years...
Jun 27, 2008, 9:35 am
#8
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Jun 27, 2008, 9:41 am
#9
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Oil prices are not going down
While there may be slight momentary drops in oil prices, the general trend is going up. Look for prices to over double in the next two years.
Why?
1. Global demand (China, India) is booming
2. Governments continue to tax oil
3. Governments will not allow drilling for new supplies, continuing our dependence on world markets.
End game. I hope the environmentalists and politicians enjoy their decrees on drilling, refining and oil consumption.
We are headed towards a dramatic recession (called a depression).
Kiss most of the airlines goodbye.
Why?
1. Global demand (China, India) is booming
2. Governments continue to tax oil
3. Governments will not allow drilling for new supplies, continuing our dependence on world markets.
End game. I hope the environmentalists and politicians enjoy their decrees on drilling, refining and oil consumption.
We are headed towards a dramatic recession (called a depression).
Kiss most of the airlines goodbye.
Jun 27, 2008, 9:46 am
#10
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Jun 27, 2008, 9:56 am
#11
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Not your Prez. The courts held that most of services that it was imposed on did not meet the literal wording of the statute. Hence the retroactive credit. Then Congress repealed the rest of it.
Jun 27, 2008, 9:59 am
#12
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While there may be slight momentary drops in oil prices, the general trend is going up. Look for prices to over double in the next two years.
Why?
1. Global demand (China, India) is booming
2. Governments continue to tax oil
3. Governments will not allow drilling for new supplies, continuing our dependence on world markets.
End game. I hope the environmentalists and politicians enjoy their decrees on drilling, refining and oil consumption.
We are headed towards a dramatic recession (called a depression).
Kiss most of the airlines goodbye.
Why?
1. Global demand (China, India) is booming
2. Governments continue to tax oil
3. Governments will not allow drilling for new supplies, continuing our dependence on world markets.
End game. I hope the environmentalists and politicians enjoy their decrees on drilling, refining and oil consumption.
We are headed towards a dramatic recession (called a depression).
Kiss most of the airlines goodbye.
My understanding is that there is plenty of supply (crude oil) but that refining capacity is down, the dollar is weak and speculators have driven the price up artificially.
Again, I am not an expert on the subject, but that is my understanding.
Dan
Jun 27, 2008, 10:07 am
#13
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This is not my understanding, but I am not a commodities trader (nor am I an expert on the subject).
My understanding is that there is plenty of supply (crude oil) but that refining capacity is down, the dollar is weak and speculators have driven the price up artificially.
Again, I am not an expert on the subject, but that is my understanding.
Dan
My understanding is that there is plenty of supply (crude oil) but that refining capacity is down, the dollar is weak and speculators have driven the price up artificially.
Again, I am not an expert on the subject, but that is my understanding.
Dan
While speculation isn't the whole cause it is responsible for about some of the high prices. Specualtors from what I have read are adding anywhere from $50-$65/barrel. Also I have a very close friend whose father is an independent oil man and he has told me we don't have a supply problem but a refining problem. The big oil companies have not been able to build any siginificant refining facilities in decades because of government regulation and red tape. He told me if we could build even one large refinery in this country you would see a significant decrease in the price of oil.
Jun 27, 2008, 10:13 am
#14
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There are many schools of thought on this but I think your understanding is how I understand things as well.
While speculation isn't the whole cause it is responsible for about some of the high prices. Specualtors from what I have read are adding anywhere from $50-$65/barrel. Also I have a very close friend whose father is an independent oil man and he has told me we don't have a supply problem but a refining problem. The big oil companies have not been able to build any siginificant refining facilities in decades because of government regulation and red tape. He told me if we could build even one large refinery in this country you would see a significant decrease in the price of oil.
While speculation isn't the whole cause it is responsible for about some of the high prices. Specualtors from what I have read are adding anywhere from $50-$65/barrel. Also I have a very close friend whose father is an independent oil man and he has told me we don't have a supply problem but a refining problem. The big oil companies have not been able to build any siginificant refining facilities in decades because of government regulation and red tape. He told me if we could build even one large refinery in this country you would see a significant decrease in the price of oil.
Fees will not go down. I suspect if oul drops back to say $100 a barrel then we will see fares drop because the high fares out there now are probably not sustaibale for a long haul and airlines will fill empty seats in the best way they know how--drop the price.
Jun 27, 2008, 10:16 am
#15
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Over the long haul any decrease in oil prices is temporary. There is one fact that is certain: Oil is not a reknewable source of engery. Sure we may squeesze addtional supply here and there and if the price stays high that makes some oil affordable to get out of the ground. However, that oil will run out as well eventually.
Fees will not go down. I suspect if oul drops back to say $100 a barrel then we will see fares drop because the high fares out there now are probably not sustaibale for a long haul and airlines will fill empty seats in the best way they know how--drop the price.
Fees will not go down. I suspect if oul drops back to say $100 a barrel then we will see fares drop because the high fares out there now are probably not sustaibale for a long haul and airlines will fill empty seats in the best way they know how--drop the price.