Main page | May 18, 2008 - May 24, 2008 »

Backseat Driver: Oil prices, silver linings and olde gas pumps

Oil prices are now over $127 a barrel, gas prices are fast approaching $4.00 a gallon ($2.79 in Jamestown Thursday evening) but George W. Bush was unable to convince Saudi Arabia to increase oil production when he met with King Abdullah on Friday.

So prices are expected to keep going up (although some see a bubble of speculative buying causing a drop at some point) with Goldman Sachs revising its forecast from $107 to $141 a barrel for the second half of the year. It had earlier talked about $150 to $200 a barrel.

The surge in energy prices is certainly spelling an end to the era of cheap oil. When I covered the industry in New York in the early 1980s, it was all about supply. OPEC was the name of the game and every meeting of the oil ministers held the potential of an immediate increase or decrease in the price of oil depending on whether they decided to up, hold or lower production.

Today the name of the game is demand, especially from the growing mega economies like China and India.

But the serendipitous silver lining to this cloud of smog is that it is forcing us to economize and find alternative sources of energy just as concern over global warming is getting ever more serious.

Indeed, just this week, the Interior Department declared the polar bear a threatened species because of the loss of Arctic sea ice.

GM has apparently gotten the message, with a new advertising campaign focusing on its smaller cars, according to thecarconnection.com citing a report in the Detroit News. Apparently, the company had been “holding out hope that U.S. truck sales would rebound.” Yes, and I expect to win the lottery.

And then there was this story from The New York Times about old fashioned gasoline pumps being unable to register a price of more than $3.99 on their dials – or a sale more than $99.99.

It said there are about 8,500 service stations out of the nation’s total of 170,000 that are equipped with these old pumps. Unfortunately, such stations tend to be Mom-and-Pop operations that cannot afford to upgrade or replace them.

Posted by Peter C. T. Elsworth  at 1:50 PM to commentary | Permalink | Comments 0

Oil pushed above $127 a barrel for first time

Oil prices soared more than $3 a barrel, surpassing $127 for the first time Friday and putting more pressure on already lofty gasoline and diesel prices ahead of the summer driving season in the northern hemisphere, according to the Associated Press.

Also pushing oil prices up were speculation that China's demand for diesel needed to fuel its power plants would rise due to reconstruction efforts after this week's earthquakes and an upward revision of an oil price forecast by investment bank Goldman Sachs from $107 to $141 a barrel for the second half of the year.

Light, sweet crude for June delivery on the New York Mercantile Exchange rose as high as $127.82 a barrel in electronic trading by afternoon in Europe, before retreating to $127.55, up from Thursday's close of $124.12.

Posted by Peter C. T. Elsworth  at 10:32 AM to Crude oil market | Permalink | Comments 0

Backseat Driver: Fuel efficiency and green sell right now

Hybrids may be mostly Plain Janes but any car that gets good gas mileage is selling right now. And that usually means small and not very stylish.

Indeed, many of them look like bars of soap on wheels.

But that is hardly the point. In these uncertain days of rocketing gas prices, a lot of people are looking for economy. To heck with styling.

And not only hybrids. As a front page story in today’s USA Today reveals, the second-hand market for the small econoboxes from the 1990s like the Ford Festiva, Hyundai Excel and Geo Metro is booming.

At the same time, the second-hand market for SUVs is dead in the water, with many owners getting a nasty shock when they trade them in and get offers way below published values. But dealers can’t move them for love or money so cannot be blamed for offering cents on the dollar.

In another sign of the times, thecarconnection.com’s new Website offers car reviews by the following styles: Sedan; 2-Door; SUV/Wagon; Van; Truck; and Green Car.

And the Detroit Free Press reports that the iconic Toyota Prius is the world’s first mass-produced gas-electric hybrid vehicle to hit the one million mark in sales.

High gas prices, an unpopular war and looming clouds over the economy are making us all more frugal.

- Peter C.T. Elsworth

Posted by Peter C. T. Elsworth  at 10:16 AM to Fuel economy | Permalink | Comments 1

Nerdy, fuel-stingy cars are hot wheels

Some of the nerdiest-looking cars in recent automotive history are making a comeback, at least in resale value, as a growing number of value-driven drivers put gas thriftiness ahead of image, according to USA Today citing Kelley Blue Book.

Early-1990s econoboxes such as Ford Festiva, Hyundai Excel and Geo Metro — once the punch line of jokes — have seen their used car prices climb from giveaway levels as low as $1,100 a few months ago to upward of $6,000 today, Kelley Blue Book says.

Posted by Peter C. T. Elsworth  at 9:40 AM to Sales | Permalink | Comments 0

Smart puts 'high level of safety into very small package'

Smart got the highest rating of 'Good' for front crash protection.

The tiniest car sold in the USA posted some of the best crash-test results, the Insurance Institute for Highway Safety will announce Wednesday, according to USA Today.

The Smart ForTwo, the twin-seat micro that's so small that two can fit in a single parking space, earned the top rating in front- and side-impact crash tests. It was rated "acceptable" for whiplash protection in rear-end crashes, the agency says.

There's an important caveat: While the frontal tests do a good job of replicating a crash against a fixed object, there is no overcoming the laws of physics when it comes to crashes against larger, heavier vehicles such as SUVs and big pickups.

"All things being equal, bigger and heavier is always better," says institute President Adrian Lund. "But among the smallest cars, the engineers of the Smart did their homework and designed a high level of safety into a very small package."

Posted by Peter C. T. Elsworth  at 10:38 AM to Safety | Permalink | Comments 0

Iran report pushes oil, gas prices to new

NEW YORK -- Oil prices shot to a new record near $127 a barrel Tuesday on concerns that Iran may consider cutting crude oil production, according to the Associated Press.

Gas prices, meanwhile, rose to a new record over $3.73 a gallon Tuesday, and their advance shows little sign of slowing with Memorial Day weekend, the traditional start of the summer driving season, just 10 days away.

Posted by Peter C. T. Elsworth  at 3:09 PM to Crude oil market , Gas prices | Permalink | Comments 0

Backseat Driver: Gas prices at the kitchen table, Volvos and retail cathedrals

Oh for the days of yore when gas was affordable!

Was it just over a fortnight ago that I wrote about getting sticker shock at my local gas station when the price was $3.52 a gallon for regular?

Now it’s $3.75!

And I got another shock last Friday when my American Express bill arrived and found I had spent $400 on gas last month.

Certainly I probably drive more than the average noodle – from Jamestown to Providence and back every day for starters – but that number sure set me back a bit.

In fact, it sent me to the kitchen table with pencil and paper to look over my spending patterns – and I bet there are plenty of you out there doing the same thing.

In my case, it was not a pretty picture, not disastrous, but certainly undisciplined enough wake me up and decide on some changes.

Obviously one immediate step would be to trade in my Volvo station wagon for a smaller, lighter, more fuel efficient car. But I hesitate. With a 5-year-old, I am concerned about safety and know that with him strapped into the jump-seat on the armrest in the middle of the rear seats, he is as safe as he can possibly be. And he likes looking straight out through the gap in the front seats.

If Volvo EVER got its act together and brought over a clean diesel or hybrid, I would be first in line.

(C’mon Ford, we Volvo owners are typically green, liberal and Democratic – and proud of it! Come out with a super-green car and we’d be standing in line around the block.

Instead we have the new XC70 which I mused over the other day until I got to the sticker and saw it gets a combined 17 miles to the gallon. Forgeddaboudit!)

So I will stay with my station wagon with 130,000 miles on it because I frankly cannot afford to get into a new car right now anyway. But I am budgeting for a change next year at the latest and it will certainly be a hybrid or clean diesel – and sadly probably not a Volvo.

But I will be making fewer trips to the big retail warehouses like Walmart, Target and Gosh Knows What. The prices in these places are SO cheap, I always leave thinking what I have saved rather than what I have spent.

Let’s face it, $50 for a $100 bag of stuff I don’t really need is still $50 out of my pocket for a bag of stuff I do not need – and I am congratulating myself for my financial acumen!

Am I a dope or are these halls of consumer delight just brilliant at what they do? Both!

- Peter C.T. Elsworth, pelsworth@projo.com

Posted by Peter C. T. Elsworth  at 11:33 AM to commentary | Permalink | Comments 0

Toyota delays new U.S. auto plant due to economy

TOKYO — A senior Toyota executive said Monday that plans for a new auto assembly plant in Mississippi are being delayed by worries about slumping U.S. auto sales and a broader U.S. economic slowdown, according to USA Today.

The assembly plant being built in Blue Springs, near Tupelo, Miss., was to be up and running by late 2009 or early 2010, said Toyota Executive Vice President Mitsuo Kinoshita.

That has now been pushed back to mid-2010 after Toyota reviewed the plans and considered signs of a slowdown in the U.S. market, Kinoshita told a small group of reporters at a Tokyo hotel.

Posted by Peter C. T. Elsworth  at 10:36 AM to Toyota | Permalink | Comments 0

High gas prices mean hybrids recoup higher cost in less time

Rising fuel prices and competition among a proliferation of gasoline-electric hybrids have sliced the payback period for hybrids to two or three years in some cases, instead of five years or more that made hybrids harder to justify at lower fuel prices, according to USA Today.

At the same time, increasing interest in hybrids is driving their prices up and eroding their fuel cost-saving benefits.

An analysis for USA TODAY by auto-price consultant Edmunds.com shows that the difference between a Toyota Camry hybrid and a similarly equipped gasoline Camry was $889 Friday, up from $850 a week ago.

Assuming 15,000 miles a year, Edmunds figures just 1.7 years for the Camry hybrid's fuel savings to offset the car's higher price — slightly longer than 1.6 years when the price difference was less a week earlier.

Posted by Peter C. T. Elsworth  at 10:33 AM to Alternative fuels | Permalink | Comments 0

Gas prices jump another 10 cents

Gas prices in Rhode Island have increased another ten cents in the past week to reach another record high, according to AAA Southern New England and reported on projo.com.

The average price for a gallon of regular, unleaded gasoline is $3.709 at the self-service pump, according to AAA's weekly survey. That's 57 cents more than drivers were paying at the beginning of the year.

Diesel fuel drivers are paying even more, an average of $4.46 per gallon.

Meanwhile, oil prices slipped slightly, with light, sweet crude off 65 cents to $125.31 per barrel on the New York Mercantile Exchange, according to the Associated Press.

Oil prices surged nearly $10 last week, touching off concerns about rising prices and their effect on businesses and consumers

Posted by Peter C. T. Elsworth  at 10:21 AM to Gas prices | Permalink | Comments 0