California Autos Examiner

Friday, April 14, 2006

Filler 'er Up...

Gasoline prices have crossed the $3 mark in my hometown here in the Bay Area. The “cheapie” station is $3.05 so it’s only a matter of hours before this Shell station will get a new delivery and raise their price. The question is how long will prices stay over $3? If this article is any indication, it might be awhile.

As far as expert opinions go, I tend to agree with the statements of these two analysts:

Brian Hicks, co-manager of US Global Investors’ Global Resources Fund, a mutual fund heavily invested in energy, forsees oil prices trading in a range of $55 to $65 through the end of the year, with consumption tapering off anywhere above $70 and the Organization of Petroleum Exporting Countries curtailing production at around $50. James Cordier, president of Liberty Trading in Tampa, Fla., believes oil prices will climb as long as the economies of the U.S., China and India continue to grow and that prices may need to hit $75 before there is any significant demand response. “We are going to find out at what price level we start rationing demand,” Cordier said. “That is what we have to do.”

In related news, Honda reports that it may scale back production of its Accord Hybrid. The way things are shaping up, it seems that hybrid buyers are interested in economy not extra power (go figure). Furthermore, Hybrid buyers like to stand out in a crowd. The Accord fails on both of these accounts as it offers greater power but not a huge jump in fuel economy and blends in with all the other Accords. The Prius is the exact opposite: it’s setup for good fuel mileage and looks like nothing else on the road.

Carlos Ghosn of Nissan has had an axe to grind against hybrids for some time now. Ghosn doesn’t see the hybrid as a panacea to our reliance on fossil fuels and wants to investigate other alternatives. Toyota dismisses such talk as merely “spin” and continues to plan its armada of hybrids.

With gasoline once again vaulting of the $3 mark, Automotive News’ Edward Lapham is once again asking about DaimlerChrysler’s smart division. Will they or won’t they bring it to the USA? I think that DC will bring the little buggy here, but they are taking their sweet time. Weeks ago DC officials said that they were “weeks away” from making a decision, but there hasn’t been any word yet. Is the holdup MBUSA management or Germany? There’s no telling at this point, but stay tuned. With gasoline prices there will be more press coverage of all things alternative.

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