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New Record for Crude/Honda Cuts Fit Sales Target

Crude oil for May delivery rose $1.08, to $70.40 a barrel, the highest level at the end of a trading session since the contract was introduced on the exchange in March 1983. The price was short of an intraday high of $70.85 a barrel touched on Aug. 30, after Hurricane Katrina shut down production in the Gulf of Mexico. Most attribute the latest spike in prices to political instability--especially Iran and Nigeria. "Without question, this is the worst political-risk year we've seen for energy supplies since 1973," said Ian Bremmer, the president of the Eurasia Group, referring to the year of the first Arab oil embargo. Making matters worse, we're approaching peak demand during the summer driving season.

Honda trimmed its U.S. sales target for the Fit by as much as 24 percent as it shifts factory capacity to make more Civics which are up in the U.S. 32 percent this year through March. Honda now expects to sell 38,000 to 42,000 Fits in the 12 months after it goes on sale this month said John Mendel, senior vice president of the company's U.S. sales unit. The Civic is undoubtedly a higher profit car for Honda, so it would make sense for it meet demand for the sure bet.