Oil prices at highest for this year
- NEW YORK: A weakened dollar and evidence that OPEC has significantly slowed production sent oil prices soaring to new highs for the year Thursday.
"I think we'll see higher oil prices for a while," said Michael Lynch, president of Strategic Energy & Economic Research.
"There's an expectation that the market has bottomed out."
Benchmark crude for April delivery surged $3.47, or 7 percent, to settle at $51.61 a barrel on the New York Mercantile Exchange.
Oil prices hit $52.25 earlier in the day, a price last seen on Dec. 1.
Crude prices have increased 11.6 percent since OPEC ministers met in Vienna on Sunday.
The group said it would not cut production again immediately, but there is growing consensus that the millions of barrels taken off the market already each day are starting to balance a supply and demand picture that has been skewed for months.
With the April contract set to expire Friday, most of the trading had shifted to the contract for May delivery, where prices jumped $3.14 to settle at $52.04 a barrel....
Weakening US Dollar and rising oil.
I wonder what AirAsia is thinking right now?
Itching to hedge the rising oil prices now???
And the US Dollar weakening, what did AirAsia do the last time round?
*whistle*
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1 comments:
If you compare the 3rd and 4th quarter results of 2008, you will see something weired.
In the 3rd quarter Air Asia booked a loss of 215m exceptional item. In Note 16 there is no mentioning of cost for Thai AirAsia or PT Indonesia AirAsia on this matter. Amount due from these two companies in the balance sheet are 101m and 143m.
In the 4th quarter Air Asia had an exceptional item of 426m. In note 16 suddenly there are amounts of 222m and 207m "apportionment of derivative unwinding cost". The amount due from the two daughter companies in the balance sheet increased to 313m and 332m.
It looks like "suddenly" Air Asia realized that the losses from their hedging activities were getting too high, and they decided to shift parts of it to their two daughter companies.
The way they account for these daughters is that they dont equity account any more losses there, since their initial investment has been written off. So what is increasing is the amount due from these companies
I find this all rather fishy, this whole way of accounting for the two daughter companies.
By the way, from their 2008 annual report, interview with Tony:
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Q: Has your appetite for risk changed as a result of a more challenging economic climate and higher fuel price?
A : The definitive answer is “no.” AirAsia has long pursued a disciplined, consistent and prudent approach to business risk management. This means our risk appetite remains consistent whether the economy is growing or slowing. It’s an approach that
delivers better and more predictable returns for our shareholders.
=============================
Dude, are you sure? Better and more predictable reurns to the shareholders?
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