poundcake09 Posted December 12, 2014 #1 Share Posted December 12, 2014 Wishful thinking maybe... Will Carnival drop prices now that Crude Oil Prices have dropped to $57.00 a barrel? :D:D Link to comment Share on other sites More sharing options...
Disconnections Posted December 12, 2014 #2 Share Posted December 12, 2014 It is too soon to tell, but the opposite has reached other interline industries. Article: Airlines Raise U.S. Fares despite Cheaper Fuel Link to comment Share on other sites More sharing options...
andy.capitan Posted December 12, 2014 #3 Share Posted December 12, 2014 Carnival will certainly be hedging fuel again which will help keep the cost of my future cruises down. :) Carnival has an earnings call Friday Dec 19, and I think they will have some comment on fuel prices and cruise prices, although maybe not in the same sentence. Link to comment Share on other sites More sharing options...
DirtyDawg Posted December 12, 2014 #4 Share Posted December 12, 2014 (edited) A drop in oil prices leads to drops in fuel costs to many industries. Some pass that on to consumers some don't. You probably have more money to spend because gas prices have dropped. That extra money in your pocket can now be spent on other things like, Clothes, Cars, Cruises!;) So a drop in the oil price could end up increasing the demand for cruises. And we all know (well all the students in my Economics class know - I hope.) when demand goes up - prices go up. So it could be :( for your hopes for a price drop. Sorry. Edited December 12, 2014 by DirtyDawg Link to comment Share on other sites More sharing options...
DirtyDawg Posted December 13, 2014 #5 Share Posted December 13, 2014 Carnival will certainly be hedging fuel again which will help keep the cost of my future cruises down. :) Carnival has an earnings call Friday Dec 19, and I think they will have some comment on fuel prices and cruise prices, although maybe not in the same sentence. Interesting point. But hedging needs a counterparty i.e. someone willing to sell their crude at $57/bbl. Who in their right mind would do that? Sorry I take that back - there may be some oil producers who might need to lock in $57 oil. Of course those oil executives would be ex-oil executives when they are fulfilling hedge contracts at $57 when the market price is back at $100.;) Link to comment Share on other sites More sharing options...
andy.capitan Posted December 13, 2014 #6 Share Posted December 13, 2014 Interesting point. But hedging needs a counterparty i.e. someone willing to sell their crude at $57/bbl. Who in their right mind would do that? Sorry I take that back - there may be some oil producers who might need to lock in $57 oil. Of course those oil executives would be ex-oil executives when they are fulfilling hedge contracts at $57 when the market price is back at $100.;) Doesn't have to be $57. Could be $65 or $70. But since demand is expected to be down next year, $57 is looking good. Companies are still drilling and need to recoup costs. Link to comment Share on other sites More sharing options...
bury me at sea Posted December 13, 2014 #7 Share Posted December 13, 2014 Lots of world-wide repercussions. When producing oil costs more than selling it production will lessen. The Saudis have the lowest production cost per barrel. Let your imagination take you from there, that and a basic understanding of economics. Link to comment Share on other sites More sharing options...
DirtyDawg Posted December 13, 2014 #8 Share Posted December 13, 2014 Doesn't have to be $57. Could be $65 or $70. But since demand is expected to be down next year, $57 is looking good. Companies are still drilling and need to recoup costs. Sure it could be lower next year, but below $60 a significant amount of world supply is loosing real cash. They will need to shut down eventually. And when that happens there goes the demand/supply imbalance. Hey, enjoy the lower oil prices, I just don't think it will last too long. Link to comment Share on other sites More sharing options...
Stinger-pr Posted December 13, 2014 #9 Share Posted December 13, 2014 Simple economics. I'm Carnival (or any business for that matter) and I say "look, you were paying X amount of money for a cruise when oil prices were high, right? Why should I lower my prices and loose out on that extra profit? You were willing to pay up for your vacation and now you got more loose change due to lower fuel expense so it shouldn't be too much trouble for you to pay the same price while I make more money. Link to comment Share on other sites More sharing options...
Catrin Posted December 13, 2014 #10 Share Posted December 13, 2014 the reason oil prices are dropping is because the mid east is not happy that the US is producing enough oil for the US to use. So they have begun producing more oil to lower the cost, in hopes that it is too expensive for the US companies to produce oil at a profit. forcing the US to slow down production. Link to comment Share on other sites More sharing options...
EZ4 Posted December 13, 2014 #11 Share Posted December 13, 2014 Simple economics. I'm Carnival (or any business for that matter) and I say "look, you were paying X amount of money for a cruise when oil prices were high, right? Why should I lower my prices and loose out on that extra profit? You were willing to pay up for your vacation and now you got more loose change due to lower fuel expense so it shouldn't be too much trouble for you to pay the same price while I make more money. the reason oil prices are dropping is because the mid east is not happy that the US is producing enough oil for the US to use. So they have begun producing more oil to lower the cost, in hopes that it is too expensive for the US companies to produce oil at a profit. forcing the US to slow down production. ↑↑↑↑↑ Yeah. Both of these. ↑↑↑↑↑ Link to comment Share on other sites More sharing options...
cruzfitter Posted December 13, 2014 #12 Share Posted December 13, 2014 Simple economics. I'm Carnival (or any business for that matter) and I say "look, you were paying X amount of money for a cruise when oil prices were high, right? Why should I lower my prices and loose out on that extra profit? You were willing to pay up for your vacation and now you got more loose change due to lower fuel expense so it shouldn't be too much trouble for you to pay the same price while I make more money. That's a great theory, if they were the only cruise line. But, all it takes is 1 cruise line to realize that by lowering their prices they can entice people to fill more cabins on their ships. And make more profit due to on board spending even with lower initial cabin prices. Link to comment Share on other sites More sharing options...
Rare LMaxwell Posted December 13, 2014 #13 Share Posted December 13, 2014 That's a great theory, if they were the only cruise line. But, all it takes is 1 cruise line to realize that by lowering their prices they can entice people to fill more cabins on their ships. And make more profit due to on board spending even with lower initial cabin prices. If anything Joe and Jane consumer now have more disposable income for luxuries and nice to haves like vacation. So lower oil prices with no other change could drive up demand which will see fares increase. Link to comment Share on other sites More sharing options...
EZ4 Posted December 13, 2014 #14 Share Posted December 13, 2014 That's a great theory, if they were the only cruise line. But, all it takes is 1 cruise line to realize that by lowering their prices they can entice people to fill more cabins on their ships. And make more profit due to on board spending even with lower initial cabin prices. Carnival has been leading the way on that front for the last few years. Prices have never been lower. What has that gotten them? A vicious cycle of cut backs and even lower prices. I don't think that that's the direction that they really want to be headed. Link to comment Share on other sites More sharing options...
DirtyDawg Posted December 13, 2014 #15 Share Posted December 13, 2014 (edited) the reason oil prices are dropping is because the mid east is not happy that the US is producing enough oil for the US to use. So they have begun producing more oil to lower the cost, in hopes that it is too expensive for the US companies to produce oil at a profit. forcing the US to slow down production. The growth in U.S. oil production has been significant over the last couple of years. That combined with lower demand growth from Europe, China etc, along with general conservation, has resulted in a slight over-supply in the market. But that was enough for the recent price fall. The Saudi's have usually been the swing producer, i.e. they took one for the OPEC team and reduced production in times like these despite being one of the low cost producers. Usually in a competitive marketplace it's the high cost producers who are forced to reduce production. This time the Saudi's are playing a little chicken with every other producing country to see if they will cut output first. Eventually there will be cuts in production and the market will be rebalanced again. But not before a lot of economic pain for oil producers and economic joy for consumers. :D Enjoy it while it lasts! Edited December 13, 2014 by DirtyDawg Link to comment Share on other sites More sharing options...
Joeychgo Posted December 13, 2014 #16 Share Posted December 13, 2014 the reason oil prices are dropping is because the mid east is not happy that the US is producing enough oil for the US to use. So they have begun producing more oil to lower the cost, in hopes that it is too expensive for the US companies to produce oil at a profit. forcing the US to slow down production. That's part of it but not all. The Saudis are also about driving the price down to screw with Iran and Russia. Link to comment Share on other sites More sharing options...
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