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Oil is up more than 80% this year. On Thursday, Brent crude closed at $113, a 5-month high. And two famous voices see next year completely differently. Billionaire investor Bill Ackman says "In the wars and markets boom." You get those out of the way, inflation comes down, rates come down, you know, you're going to have we're going to have an amazing 2027.
But the man running United Airlines is planning for the opposite, higher oil next year. Someone's right. The hedge fund billionaire or the airline bosses paying fuel bill. Receipts only. First, how we got here. Brent started the year near $61. After the war with Iran began, it spiked to 118 by the end of March.
It slid back to about 73 in June. Then a climb began all the way to 113. Thursday's jump of about 4% came after a New York Times report that strikes on Iran could resume after the US midterm elections. And it hits your wallet. US gasoline averaged $4.35 a gallon in September. Gasoline made up more than half of the latest rise in consumer prices.
And inflation is running at 3.7%. Ackman's case. On Thursday, the Pershing Square boss told CNBC that the wars are the overhang. And again, once the overhang of the war is done, and if, you know, it sounds like we're all potentially heading in the right direction on Russia-Ukraine, energy prices could come way down.
And obviously that would be, you know, very, very good for inflation and for markets. His logic is a chain. The wars end, energy prices fall, inflation cools, rates come down, and stocks, which he calls a very booming market, get even better. One note, we're only checking his market call, not his views on the war.
Now the other side, the people who actually buy the fuel. United Scott Kirby says the bill is so big he can't pass all of it on to you. We're going to pass on about 72% of the increase in fuel. We'd like to get that to 100%. Kirby has said six in 10 US airlines will lose money this year. When CNBC asked when the casualties come, he said this.
And I think well, higher oil prices, the stress is is increasing. I don't know when it's going to happen, uh but I do think it's going to And his plan for next year? We're planning for higher oil uh or higher jet fuel prices and also uh higher industry capacity next year. He's not alone. Southwest Bob Jordan on Thursday.
The all you can do is plan in the environment that you know. And today fuel prices are high. We are we are planning as as if those persist into 2027. And at American, Robert Isom put it bluntly. It's all fuel. Uh that's the issue. Fuel in the third quarter up $1.9 billion as we look out into the the fourth quarter up $2.8 billion.
$7 billion more this year. And next year? So, if you look out into the into the new year, yes, I think that fuel prices are going to be higher longer, but we adjust to that. Okay, receipts. United still made record revenue last quarter, $17.9 billion. But fuel costs jumped 62% and its outlook for this quarter, 50 cents to $1.50 a share, came in far below the $1.76 analysts expected.
American now expects a full-year adjusted loss of a dollar to $1.60 a share. And Delta cut its outlook, too, on a $6 billion jump in its fuel bill. Now, the market's own forecast, Brent for delivery in December 2027 closed Thursday at $86.58. That's about 24% below today's price. So, traders agree with Ackman on direction.
The government's EIA agrees too. It sees Brent at $84 next year. A month earlier, it said 74. And it assumes most Middle East oil is back by mid-2027. Here's the catch for Ackman. Even $84 is almost 40% above where oil started this year. And the 10-year Treasury yield is 4.95% up from 4.16 at the end of last year.
And investors, the S&P 500 is up almost 12% this year. United is down about nine. American almost 18. Delta, the exception, is up 14. Scoreboard: Ackman futures and the EIA see oil falling and stocks are still up. Kirby: fuel is eating airline profits and they're planning for high prices into 2027. My take: they can both be right on different clocks.
Ackman is calling the direction. The airlines are planning for the level. Oil can fall a lot and still be expensive. And if the wars drag on, that amazing year moves further out. Watch three things: the Fed's rate decision on October 28th, the EIA's next outlook on November 10th, and any progress or setbacks on Iran and Ukraine.
Subscribe for receipts, not hype. Team Ackman or team Kirby? Tell me below. Not financial advice.
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