Southwest Jet Fuel Hedge

47. The first container has 3 gallons 3 quarts 1 pint of diesel fuel, the second container has 5

High desiel prices are a consequence of capitalism. As all fuel prices have been going up people are blaming the federal govenerment. They believe the president has influence of derterming the outcomes of tensions betwwen Israel and Iran. Some people blame incrased prices based on fears around the world. It all comes down to one thing to blame, capitalism. Calitalism can be great to an economic system because of its emphasis on efficienc and inbradible success rate at allowing those who control the means of production and resources to meet the demands of those with purchasing power. Capitalism is constantly evolveing and will impact the gap between current and future goals on oil prices.

Unprocessed quantity will be 7,800 bbls (12,600 – 4,800) including 3200 bbls in bins and 4,600 bbls in trucks (7,800 – 3,200).

chart about electricity generation by fuel, for 2040 sixteen percent of the electricity is going to come from

The consumption of the oil cause changes in the supply and demand. The United States produces 11 million barrels of oil every day. We are one of the biggest countries to have a big influence on the production and prices of the oil. The basic supply and demand theory explains that the if a product is produced more, the cheaper it should sell. If a country were to double the output of oil day, prices would fall and the Production is high, but the distribution of oil isn’t keeping up with the market. The United States builds an average of one oil refinery per 10 years. This is a net loss due to the fact construction has slowed down since 1970s. Since 1970s, the United States has 8 less oil refineries today. The reason why we are not oversupplied with cheap oil is because of the other countries’ higher net margin and the only operate at 62% of their capacity. Excess capacity is only there to meet future demand. With demand moving accordingly, oil prices will continue to be set mostly by the market — despite external players’ best efforts. (McFarlane)

2. (Table: Barrels of Oil) Refer to the table. What is the marginal revenue of producing the fifth

The Present Worth of this project with a 36,000 bbl/day facility is $404.5M and the total profit that Wildcat Oil is expected to make is $404.5M - $260.4M, which amounts to $144.1M.

If the consumption continues at the current rate it is being consumed now it could be sooner like ten to fifthteen years. (Non Renewable Resources, 2015)

The problem with this formula is not all of these components contribute equally. So let’s take a look at each of these components and what economic impacts have on that mentioned gallon of gas .Crude oil is 69% of the cost and those cost exist of finding it, getting it out of the ground, and transporting it to the refinery. Refining the crude oil cost another 6%. Selling the gasoline is 10%

Traveling through 4 states, It's transporting four hundred and seventy thousand barrels of crude oil in a day- that’s one hundred and seventy one billion barrels of oil a year.

If market conditions change, the capacity of the pipeline could be increased to 830,000 barrels per day (bpd). The overall pipeline is estimated to cost 7$ billion.

Even if a vehicle can realistically maintain the doubled MPG standard, it is touted to save 2 million oil barrels per day or 84 million gallons per day. However, this only accounts for only a conservative 25% of the total 8.774 million barrels or 368 million gallons of gasoline consumed per day (USDOE). At the heart of this law is the cutting of 6 billion metric tons of harmful greenhouse gases over the lifetime of the program. Some may state that any decrease in greenhouse gases is a step forward. Either way, the typical passenger vehicle emits 4.7 million metric tons of harmful greenhouse gases per year (Greenhouse gas emissions). Considering the overall benefit of cutting out 6 billion metric tons, it is equivalent to taking 1,276 passenger vehicles off of the road. According to the USDOT, there were 253,639,386 registered vehicles on the road in 2012, which would reduce the amount of vehicles on the road by .0004% by the end of this

1815*88.39 = 160,430 1815 is the amount of gallons Novo needs, 88.39 is the price per gallon we found

From its definition it can be noticed that hedging is a strategy employed by companies in an effort to safeguard their economic position and to prevent the company from the losses which are associated with the unforeseen risks. Companies can hedge against risks which are associated with losses by taking control of their future purchases. The commodity prices vary in different markets and are caused or influenced by different economic factors. Some commodities are very scarce and with the increased depletion subject to the global demand in different foreign markets, the prices are set to be hiked in response to the established demand which positions the companies that use those particular commodities to have cash flow problems.

One of the first ways that airlines save money is by fuel hedging. Southwest airlines paid $3.4 billion less in fuel costs between 1994 and 2001 doing just this. Fuel hedging is when an airline enters into contracts at the current fuel price. If, the prices go