Re: Fuel Prices


> It's hardly speculation AFTER THE FACT, other than how the market will
> react; in that case, it's a FORECAST since it's based on historical data.

I disagree, the fuels markets are always full of speculation. There is
still A LOT we don't know about the fall out of Katrina. Once that is
all know, speculation will be based on something else. Just look at the
fluctuations in the futures markets. Think of it this way. If your
neighbor knew exactly what the cost of supplying fuel was today and you
actually had knowledge of future events to come who would make the most
money in the market? You would buy fuels when you knew prices were
going up and wait when you knew prices were going down. Your neighbor
would just be reacting to current events and always one step behind the
market. The airlines have entire departments of people who's jobs are
to evaluate the fuel markets and try to gain knowledge of the markets
that others don't. At certain points they buy contracts. That's why
Southwest is doing so well right now. They are paying the lowest price
in the industry for jet-A because they bought a contract awhile back
that holds their prices until the end of the year. I was at the airport
the other day talking to a Citation driver who just paid under $3/gal
for his fuel. His company bought a contract before prices went up. Who
knows if they got lucky or were smart.

-Robert, MBA w/ a concentration in financial markets.

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