I got very excited today as I came back from my grandparents and checked how things are going on on Bloomberg.
As I predicted, oil was in a bubble. It fell all the way to $108 from its $145 peak in July. That's under the $110 limit that I was expecting - even if the Dow is just partially stable. Congrats to all of those who were shorting it! We'll see what's going to happen next.
Small things like this make me so happy sometimes :))
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Does this mean that flights won't be as prohibitively expensive as everyone is raving about?
I hope so.
I wouldn't think so :(
Even if the price of crude oil is down, that doesn't mean that the overall economy is doing better or that the other prices will lower too. Since people are afraid of inflation, they will increase prices for "protection". And since there are only a few airline companies out there, and it's a pretty hard to enter industry, they can "tacitly" agree to increase prices. Even if oil is down, they could justify their increase because of their other costs. I don't think they will lower them (to the initial level anyway)...unless the government interferes. But I don't think the government will do anything about it anyway, since they have a lot of other losses to take care of right now. They think that the one who needs to fly, flies anyway, and the one who doesn't...can as well spend his/her vacation somewhere closer.
So...let's all book our tickets way in advance :(
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