dtwpilot225 From United States of America, joined Dec 2011, 158 posts, RR: 0 Posted (3 years 5 months 1 week 5 days 18 hours ago) and read 4099 times:
I believe it was 2008 when it hit above $150.00 a barrel. IF it goes that high again, what will happen this time? Delta and United should be able to absorb it with their merged airlines with capacity cuts. What about US Air and American? Will this lead to a merger? What about Airlines like SWA and Spirit? Spirit cut employees and slowed down deliveries last time. Last but not least, would it be the nail in the coffin for the 50 seat jet?
af1624 From France, joined Jul 2006, 690 posts, RR: 0
Reply 2, posted (3 years 5 months 1 week 5 days 18 hours ago) and read 4029 times:
The answer to the OP title is quite simple. Very high.
It's a matter of when, though, that complicates things.
You see, we already know that the oil reserves on our planet are finite, and that actually creating crude oil would cost more than finding alternative sources of energy. We also know that oil as an energy is terrible for our planet, i.e. climate change, even if some (mostly American) people seem to turn a blind eye on what is widely accepted in the world as fact.
When, in the sense that there's no real way to know WHEN the prices of oil will be high enough for people to strop travelling and for governments to really push research for new, better, more efficient, less polluting alternative sources of energy. One thing is for certain though. These prices WILL reach an impossibly high level.
I think this answers the general question. What effects this will have on which companies first, though, is a question I can't answer, but I'm sure there's plenty of people on A.net that can.
NUAir From Malaysia, joined Jun 2000, 1181 posts, RR: 0
Reply 4, posted (3 years 5 months 1 week 5 days 17 hours ago) and read 3894 times:
Quoting af1624 (Reply 2): there's no real way to know WHEN the prices of oil will be high enough for people to strop travelling
Actually it's very easy. You look at the elasticity of demand, in the case of prices today we can look back at the price shock of 2008 to find out exactly what the impacts of high fuel prices are on demand.
What we will likely see is business passengers willing to put up with higher fares while leisure passengers will delay booking flights or look at alternative modes of travel (assuming cross price elasticity warrants the switch to a substitute mode).
Quoting LOWS (Reply 3): Someone bold should start talking about alternative ways of powering flight. CO did tests with Alge fuel mixes and so did VA. I guess hydrogen is out?
I'll put my money on GTL which has been successfully tested by both Qatar and United on commercial flights. Seeing as the US is awash with cheap natural gas it's only a matter of time before they start processing mass quantities into fuel similar to what Shell is doing in the Middle East. Algae is a nice idea and the technology improves every day but still too expensive at crude prices under US$250/barrel...unless governments subsidize.
"How Many Assholes we got on this ship?" - Lord Helmet
KFlyer From Sri Lanka, joined Mar 2007, 1247 posts, RR: 0
Reply 6, posted (3 years 5 months 1 week 5 days 17 hours ago) and read 3836 times:
I am certain that what we are seeing is an artificial price and not the real bank. The real price of oil still hovers around 80-100USD. For the same reason, I do not expect to see the price go beyond USD150/barrel. At that point, the price would be no longer sustainable and the bubble will burst. But one thing is certain, if it hits USD145+, then it's going to remain that way for a long time. Possibly even longer than the 2008 peak.
The opinions above are solely my own and do not express those of my employers or clients.
Pellegrine From Turks and Caicos Islands, joined Mar 2007, 2535 posts, RR: 8
Reply 9, posted (3 years 5 months 1 week 4 days 23 hours ago) and read 3419 times:
If Israel chooses to bomb Iran (or anyone else) then VERY high indeed $150-200/bbl range. $4-5/gal gas in the US.
Prices towards $200-250/bbl are not sustainable long term, because demand would be grossly impacted. But, a military strike on Iran would erode 3-4 million barrels/day of ~85-95mb/d of crude oil from the world market. Pretty significant in a tight market. If Iran closes the Strait of Hormuz even for 1 month, it would prevent some ~15+ million barrels/day from reaching markets, which would be most catastrophic. I wouldn't even speculate about price, but the global economy would be severely impacted negatively. Because industrialized oil importers would not be able to rely on timely deliveries of the energy which runs their economies.
CaptainKramer From United Kingdom, joined Feb 2012, 235 posts, RR: 0
Reply 10, posted (3 years 5 months 1 week 4 days 19 hours ago) and read 3305 times:
I was informed by a journalist, take from it it what you will, who did a story on the oil industry. He said that there is a correlation between the price of oil and it's bearing on the long term projections of how much recoverable oil there is for future consumption. We may or may not have past peak oil, OPEC will never say officially. If we have, it will become increasingly harder to recover oil from harder to get at places, hence the push for floating drilling platforms, drilling deep sea and the on going exploration in the artic, or so they say. A high oil price helps fund these extremely expensive, risky, cutting edge technology endeavours, but If the price of oil remains low the incentive to explore for oil in these hard to get at places lowers the return on investment.
Even though demand may be lower during a ressession, the above example may be one contributing factor to a sustained higher price.
The irony is that we will never run out of oil, by the time we transition to a full Hydrogen, Fusion, Renewables based energy economy the cost of getting at it will by then be prohibitively expensive.