Southwest Airlines’s Hedges

Michael Giberson “We don’t know where the price of crude is going to be,” says [Southwest Airlines’s Chris] Monroe. But, he adds, “I think we have to be generally bullish just because we’re trying to protect against an increase … So we have a little bit of a bias that prices may go higher.” He … More Southwest Airlines’s Hedges

Keeping Some Speculators out of the Oil Market May Lead to Higher Oil Prices

Michael Giberson From Fortune-Investor Daily: If Congress or the CFTC forces through stiff curbs on futures trading by so-called “speculators” — i.e. investors who use futures to bet on future price movements but don’t buy actual oil — it may lead to higher, not lower, oil prices over the long term. Why? Imagine you’re an … More Keeping Some Speculators out of the Oil Market May Lead to Higher Oil Prices

Crude Oil Price Volatility

Michael Giberson The New York Times observes that crude oil price volatility has been exceptionally high for the last eighteen months. (Hmmm. Eighteen months ago … January 2008 … the Iowa caucuses … the U.S. presidential primary season gets underway in earnest … nahhh, couldn’t be all due to presidential politics.)  Actually, eyeballing the chart … More Crude Oil Price Volatility

More on Airline Fuel Cost Hedging: Air New Zealand Takes Hit

Platts reports Air New Zealand told the Australian stock exchange that “unbooked hedge positions for its 2009 financial year, which runs from April 2008 to March 2009, stood at $126.39 million,” up from the $81 million report of unbooked losses reported in October for 2009. … More More on Airline Fuel Cost Hedging: Air New Zealand Takes Hit

Fuel Hedging: Sometimes You Get the Bear, Sometimes the Bear Gets You

Lynne Kiesling One of my father’s default tag lines was “sometimes you get the bear, sometimes the bear gets you.” I use this phrase frequently when discussing hedging future price changes — if prices move in the direction you anticipated, you earn a profit, if they move in the opposite direction, you earn a loss. … More Fuel Hedging: Sometimes You Get the Bear, Sometimes the Bear Gets You

What Fixed Vs. Flexible Retail Power Rates in Texas Tell Us About Wind Power in the Ercot Market

In parts of north Texas, electric retailers in effect are willing to pay consumers a little bit in exchange for the retailer taking on price risk. Crazy, right? No, it isn’t crazy, it is wind power. … More What Fixed Vs. Flexible Retail Power Rates in Texas Tell Us About Wind Power in the Ercot Market