• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 59 mins Shale Oil will it self destruct?
  • 7 hours Migration From Eastern Europe Raises German Population To Record High
  • 8 hours Excellent Choice: Germany's Von der Leyen Secures Powerful EU Executive Top Job
  • 1 day Carrot And Stick: North Korea Suggests It Might Lift Weapons Test moratorium
  • 19 hours Germany exits coal: A model for Asia?
  • 21 mins Washington Post hit piece attacking oil, Christians and Trump
  • 6 mins Berkeley becomes first U.S. city to ban natural gas in new homes
  • 14 hours White House insider who predicted Iran False Flag, David Goldberg found dead in his New York apartment
  • 16 hours Starlink Internet Courtesy of Tesla
  • 2 days NYT: Mass Immigration Roundups in U.S. to Start Sunday
  • 19 hours A Silence is heard
  • 1 day South Korea imports No Oil From Iran in June - First-Half Imports Fall 37%
  • 1 day Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
Alt Text

Libya’s Oil Revenue Takes A Beating

Libya’s oil revenue fell significantly…

Alt Text

Will The U.S Gas Glut Cap Oil Production?

The gas flaring crisis in…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Largest Oil Consumers Not In A Rush To Hedge Crude

Four major airlines have said they have no plans to hedge fuel deliveries despite higher oil prices. These include Delta, American, United, and Dubai’s Emirates. This may suggest the airlines do not believe the current price increase will be a resilient, long-term one. On the other hand, for at least one of the airlines, it’s just how they do business.

“We have not hedged since the merger and our philosophy has not changed. We are the largest purchaser of jet fuel and we think we would be bidding against ourselves. The market is quite thin beyond 12 months,” said American Airlines’ managing director and assistant treasurer, Amelia Anderson, speaking at a panel during the Airline Economics conference in Dublin.

AirAsia’s CEO Tony Fernandes shares the sentiment. In a Bloomberg interview he said that after airlines have had to deal with WTI at over US$100 a barrel, WTI at US$66 is “still a honeymoon period.” Fernandes added that the airline is not worried about the future price developments because of the strong U.S. shale production, the oil demand outlook, and the gas demand outlook.

The comments of the airline executives come on the heels of IMF’s latest world economic outlook, which forecast the world’s economy will grow by 3.9 percent, a 0.2-percentage-point upward revision. Related: Saudis Unmoved By Oil Price Surge

A growing global economy will certainly mean greater demand for oil, which would support higher prices. In fact, Bloomberg’s oil strategist Julian Lee says, quoting Energy Aspects analysts, that we could next year see Brent at US$100 a barrel, albeit briefly, if new production outside of the United States declines, what with the ongoing production cuts across OPEC and Russia.

The energy consultancy is much more bullish than others about oil demand; it sees it growing by 1.7 to 2 million bpd in 2019, which is in tune with IMF’s economic outlook. Yet this rosy outlook might fail to materialize precisely because of prices: the higher they are, the less firm the demand growth will be. In this context, it would make sense for airlines to not rush to hedge fuel purchases.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play