• 4 minutes US-backed coup in Venezuela not so smooth
  • 7 minutes Why Trump will win the wall fight
  • 11 minutes Oil imports by countries
  • 13 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 43 mins Climate Change: A Summer of Storms and Smog Is Coming
  • 10 mins Itt looks like natural gas may be at its lowest price ever.
  • 1 hour Venezuela: Nicolas Maduro closes border with Brazil
  • 4 hours Teens For Climate: Swedish Student Leader Wins EU Pledge To Spend Billions On Climate
  • 1 min Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 2 hours Amazon’s Exit Could Scare Off Tech Companies From New York
  • 17 hours students walk out of school in protest of climate change
  • 22 hours North Korea's Kim To Travel To Vietnam By Train, Summit At Government Guesthouse
  • 2 days Washington Eyes Crackdown On OPEC
  • 1 day Europe Adds Saudi Arabia to Dirty-Money Blacklist
  • 1 day Some Good News on Climate Change Maybe
  • 1 day America’s Shale Boom Keeps Rolling Even as Wildcatters Save Cash
A Worrying Trend For International Oil Giants

A Worrying Trend For International Oil Giants

Fitch has awarded Abu Dhabi’s…

Rising Energy Demand Could Be A Boon For The Philippines

Rising Energy Demand Could Be A Boon For The Philippines

The private sector is accelerating…

Airlines Hedge Cheap Oil, Protecting Them Through 2019

Airlines are locking in cheap oil for the next few years, taking advantage of what could end up being a temporary period of low prices.

Reuters reports that some of the largest airlines are stepping up their hedging programs in a big way for the first time since prices started to collapse in mid-2014. Last week, several airlines secured hedges for oil at low prices for 2017, 2018, and even 2019, although the exact companies were not disclosed. Still, Reuters says it was the most active hedging activity from the airline industry in more than a year.

Related: $120 Oil As Soon As 2018?

That comes after several airline companies – including Southwest and United Continental Holdings – hedged oil prices last summer when oil prices rose to $60 per barrel, an unfortunate bit of timing given that prices proceeded to fall in subsequent months. However, with crude oil below $40 today, most airlines see very little room on the downside. That has them scrambling to secure several years’ worth of oil supplies at cheap prices.

If crude oil bounces off of today’s lows, and rises to $50, $60, or $70 per barrel, for example, many of these airlines will be protected.

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Dave on April 07 2016 said:
    Hi
    So how do you reconcile this against your article yesterday saying exactly the opposite and the world over supply will infact produce further falls rather than rises ?

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News