Midwest Airlines Is Short 2 Million Gallons of Jet Fuel

Midwest Airlines is short 2 million gallons of jet fuel. Since no jet fuel contract exists, they decide to hedge with crude oil futures. The price of jet fuel is currently $2.70 per gallon and the price of crude oil is $99 per barrel. Assuming they hold the correct number of crude oil futures contracts, what crude oil price will be needed to perfectly hedge an increase in jet fuel prices to $2.84 per gallon?

A) $ 2.84
B) $ 94.12
C) $ 99.00
D) $ 104.13