Rat 5.
Oil is just " pulling back " its decline coincides with money moving into the market over the last few days but soon it will be a both a speculative instrument / in demand again. Today the uptrend in oil continued rising 4% ( the fact is the Americans are not using less but more as inventory figures in the US show american reserves are dwindling again . Soon the " admnistration " will be pleading with OPEC once more .
The dollar has not weakened at the same pace as oil has increased so to say that oil is as cheap as ever in euro land is wrong. Especially over the last 3 years where MOL has made his best money. He c***ed it up when he did not hedge and now he cant.
Furthermore with the ECB unable to cut rates due to inflation and the BOE being able to do so in the near term its likely that the pound will weaken further against the euro , the BOE have hinted at being happy with 1.20 euros to the pound calling the current downtrend of the pound a " welcome correction ". A weak pound has traditionally been a problem for Irish exporters.
MOL called it a perfect storm for his business when it wasnt looking as grim. He will probably prance around like a schoolboy if Alitalia goes belly up but many of the mainline carriers he talks about going pop are cash rich and hedged.
Last edited by thirtysomething; 3rd April 2008 at 00:59.