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Tuesday, January 6, 2009

Analysts Predicting Oil Rally

Despite analysts’ predictions that oil prices could rally, airlines could still comfortably live with the $60.10 per barrel they expect by the end of 2009, confirming what the International Air Transport Association predicted a few weeks ago. Analysts base their assumption on similar events a decade ago after Russian defaulted which was coupled with the collapse of the Long-Term Capital Management LP hedge fund, according to Bloomberg. They pointed to the ensuing OPEC production cut of nearly seven percent which doubled the price during 1999. OPEC, having already cut production recently by 4.5 percent, is saying it will cut by nine percent this year.

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