Airline stocks: Three factors impacting the industry

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A number of airlines including American (AAL), Spirit (SAVE), and Southwest (LUV) have warned about the impact of higher jet fuel costs. Third Bridge Global Sector Lead for Industrials Materials and Energy Peter McNally highlights three issues impacting the industry right now. The three issues McNally cites are the increase in international travel, costs, and capacity. Capacity has become an issue, he says, because now that suppliers are delivering planes, there are more seats, and that's putting 'downward pressure' on fares. 'Airlines have less pricing power now than they do at any point since the recovery began,' McNally adds.

TORONTO — The U.S. benchmark price of oil has topped US$90 per barrel for the first time since late last year. The October futures contract for West Texas Intermediate light sweet crude oil was up US$1.57 at US$90.09 in late-morning trading after going as high as US$90.26. The last time the U.S. benchmark oil price topped US$90 a barrel was in November of last year. Saudi Arabia and Russia agreed last week to extend their voluntary oil production cuts through the end of this year.

The Petra Nova CCS project, owned by a subsidiary of JX Nippon oil and Gas Exploration, aims to capture 1.4 million tonnes of carbon dioxide per year and is one of the world's largest CCUS projects. Petra Nova began operating in 2016 at a coal-fired power plant in Texas and shut down less than four years later due to a plunge in oil prices during the COVID-19 pandemic.

 

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