Over a barrel

Energy risk

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The price of crude oil is making daily headlines; but for airlines, high prices are just the beginning of the problem. The difference between the price of crude oil and the price of jet fuel – the crack spread – is widening fast, against an already inflated oil price. During the first half of 2004, the spread averaged US$7 per barrel and rarely exceeded $10 per barrel. Since the third quarter of 2004, however, crack spreads widened sharply and are now at $17 per barrel, because of demand and pr

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