Weather may help push up jet-fuel prices By Dan Reed, USA TODAY FORT WORTH =97 The snowstorm that rocked the Northeast the past two days=20 threatens to worsen beleaguered airlines' problem with high fuel prices.=20 Even before the storm, experts were warning that a cold snap could produce= =20 higher prices when the industry is reeling from a 55% run-up in average=20 jet-fuel prices the past 13 months. U.S. inventories of crude oil and=20 certain refined fuels, including jet fuel, have dwindled to near-record=20 lows, for several reasons. Venezuela, which supplies about 14% of U.S. oil= =20 needs, has shipped virtually no oil since December because of political=20 unrest. War jitters have sent prices higher. And U.S. and European=20 governments have been stocking up on oil =97 especially jet fuel =97 for=20 military use in an expected war against Iraq. A cold snap requiring more=20 heating oil could cause prices to jump again, experts say. In Europe, oil prices retreated a bit Monday, with the benchmark price in=20 London closing at $31.95 a barrel. U.S. markets were closed for Presidents= =20 Day. Jet fuel prices on the spot market have more than doubled, going from= =20 57 cents a gallon in early 2002 to more than $1.20 now, the Air Transport=20 Association says. Carriers actually pay significantly less, on average,=20 than the spot market price because they hedge. That is, they buy futures=20 contracts at prices they expect to be much lower than market prices when=20 the oil is delivered. But even on an average basis, fuel prices are nearing= =20 record territory. Average jet fuel prices peaked at nearly $1.14 a gallon=20 in November 1990, when the United States was preparing for the Gulf War,=20 but quickly fell to 60 cents a gallon afterward. The current average price= =20 is well above 80 cents a gallon. ATA President James May says that for each= =20 1 cent increase in the price of a gallon of jet fuel, the U.S. industry's=20 costs rise $180 million on an annualized basis. For an industry that has=20 lost $18 billion the past two years, and is expected to lose $5 billion to= =20 $10 billion this year, a 30-cent jump in average fuel prices can be=20 devastating. An effort by most major airlines to raise prices $20 round trip to=20 partially offset higher fuel prices failed when Northwest Airlines refused= =20 to go along. Competing carriers rescinded their price increases Monday=20 rather than operate at a price disadvantage. Aviation industry analyst=20 Michael Boyd of the Boyd Group in Evergreen, Colo., says that as a=20 consumer, he likes Northwest's resistance to higher fares. He says he'll=20 fly today from Denver to Detroit and back in one day for only $268. "It's=20 wonderful, as a consumer, to have these prices," he says. "My only fear, as= =20 an analyst, is that at those prices, I'm not going have service much=20 longer. Somebody's going to go out of business because they can't make any= =20 money." *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@escape.ca Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.trotters.net TnT Webdirectory: http://search.co.tt *********************************************************