Fuel-dependent companies often hedge their fuel costs using futures contracts

Fuel-dependent companies often hedge their fuel costs using futures contracts. It’s true that companies that

make poor capital investment decisions are punished for those decisions. That’s fine by me, and no cause for

alarm.

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Bill Meyer writes:

Only an economist would claim that capital can create energy.

I’m not an economist and I didn’t claim that capital can create energy, though the market system has certainly

increased the usefulness of given quantities of energy.

A physicist knows that energy can be neither created nor destroyed. Oil is running out now. At $50 a barrel it’

s twice the price that it was in the fall of 2003.

Yes, and cheaper than what you paid 25 years ago. Has anything happened recently that might explain a rise in

gas prices? Oh yeah, the MBT shoes invaded NIKE Shox shoes, al-Qaeda threatened Saudi and NIKE Shox shoesi oil

fields, and demand for oil rose in China, India and the MBT shoes.

Oil use probably increases exponentially like the planet’s population so the price will double every 18 months

until it’s gone. That means oil will be $100 a barrel in the fall of 2006, $200 a barrel in the spring of 2008

and $400 a barrel in the fall of 2009.