Analysts see a new plateau in fuel prices, with possible spikes. CNBC ran a series suggesting that current prices did not include a premium for hurricanes or other disasters.

Some analysts project gasoline prices of $7 to $10/gallon.

Thoughtful economic observers like James Hamilton attempt to separate the secular trend from speculation.

Meanwhile, many businesses are operating without much information, even when fuel costs represent one of their biggest threats.

Auto companies, airlines, and fleet managers are all scrambling to evaluate the threat. Is this really a surprise? The demand for fuel from developing countries is clear, US demand has remained relatively inelastic (so far) and supplies are not responding. It is time for a plan.

When we work to help fleet managers and CFO’s, we always try to get the best possible pricing. While it is not our business to predict oil prices, we use every resource possible to find good entry points for those trying to hedge.

A month ago we highlighted an interview with T. Boone Pickens, suggesting that there might be a dip to $78/barrel before prices moved higher. Take a look at the chart and commentary below, taken from Greg J. Troccoli,’s excellent daily Opaleque Technical Research Briefing. It is worth a close look. (Click on image to enlarge).

It is unusual for gasoline prices to remain high at the end of the summer driving season, but the Department of Energy reports that to be the case this year. Some experts see this as a new plateau, while others believe there could be a pull back. Check out the entire story in Automotive Fleet.

Fleet managers who are thinking about hedging strategies might hope for a dip and get ready to act.

Many fleet managers would like to do fuel price hedging but run into an accounting problem. Either Treasury or accountants raise a question about qualifying under the FAS 133 regulations.

Gas-Lock Advisors has had excellent results in meeting the “hedge effectiveness” test required under FAS 133. Any fleet managers or CFO’s running into this problem should get in touch with us to learn how we are able to do this.

Sample reports are available. Your accountant will smile at the results. Call us at 630-548-0611 or email at jmiller@gas-lock.com.

Our reading today took us to a speech made by current Fed Chairman Ben Bernanke, delivered back when he was a Fed Governor. As part of his analysis, he noted the following:

…it is rarely the case in economics that the optimal amount of insurance in any situation is zero.

Now Bernanke was not speaking about fuel hedging, but he could have been. It is as easy as one, two, three…

1. Surging fuel prices are a threat to the budgets of many businesses.
2. Insurance, in the form of simple hedging plans, is available.
3. There is an optimal amount of this insurance for each company….

…and that amount is not zero!

Fuel managers and CFO’s who do not yet have a hedging plan sometimes worry that they are “too late” to act. Bernanke’s sound economic principle would suggest doing something ….just get started. It is not the manager’s job to guess the future direction of energy prices any more than it would be to guess if and when there might be a fire.