A Study On Crude Oil Futures And Hedge For Jet Fuel

Since the World War II, energy has been considered to be a key factor that could influence the development of the world significantly. It has a great influence on our daily life, such as the war and peace, global economic prosperity and development. Particularly crude oil is a non-renewable strategic resource and its supply and demand have been attracting the attention of people all over the world. Nowadays China has already become the world's second largest consumer of crude oil, just behind the U.S. And it is facing severe challenges in the areas of energy security and sustainable development.A study on crude oil futures and hedge for jet fuel oil has been launched as follows:Some issues were introduced in Chapter I, involving the characteristics of futures trading, crude oil futures market and the domestic fuel oil futures market. Chapter II then, from the fundamentals of the international crude oil, explored the relationship between supply and demand. In addition the pricing mechanism was also studied. Chapter III analyzed the main factors that influence the crude oil futures. They were summarized as follows: large-scale institutional funds, the closely relationship between Dollar Index and the price of crude oil, the international system of exchange rate. With a more comprehensive understanding of the crude oil, the crude oil futures and options were introduced as tools for rational and effective hedge. In Chapter VI, the futures and options were respectively used to explore the basic principles of hedging for jet fuel oil in detail, and their advantages & disadvantages were also compared. Chapter VII focused on case studies of China Eastern Airlines in 2008, detailed discussions have been analyzed. Finally, the derivatives to hedge for enterprises under the control of the central government and the country's energy security & prospects were summarized.