BET YOU WISH YOU HAD A 787 NOW!!!!

Crude breaches $119 in frantic trading! Brent crude had breached $119 a barrel during a period of frantic trading around 0745 GMT as industrial needs were hedged and traders exploited an explosion of upside momentum. Crude fell back to the $110 mark as profits were taken.

You have to admit that an online casino Airbus played it and beat the house. The Libya crisis has resulted in the A320neo looking like a good option right now as oil has increased $17 in three days of trading. And as we know, unless the Chinese economy shows signs of slowing the oil price will keep heading upwards in a stop-start fashion as profits are cashed in on shorts. Libya is one of the largest producers of sweet light crude which means it has a huge impact on global prices as it is easier to refine. For that reason as Libya falls into the abyss of civil war and possible partition we must all consider the fact that all oil bets are off and we are heading for the $150 barrier before too long.

There will be airlines across the globe falling into the red due to fuel in 2011. As I said back in November and December 2010; 2011 is the year that fuel hedges should have been put back into place – Airlines must consider the fact that hedges, for the majority, before 2008/2009 saved them a fortune; they are a must. This view needs to be tempered though as China will feel the full force of higher fuel prices before any other economy and as such we could see some slowing there. This ironically would help them as they have very high inflation and an under-valued currency, which means they are actually losing money on bond sales at this time, but also the Chinese callable zero bubble might just put the brakes on the economic boom and drag us all down with it, this could see oil fall below $90 a barrel. So if a hedge cannot be obtained around the $80 mark, which it cannot now, then you are best to avoid them altogether. …the boat has sailed for a safe bet on oil.