Todd80Z28

I, for one, hope that the one thing automakers learn from this is that small-engined cars needn't be **** boxes. They figured this out decades ago in Europe, all they have to do is bring it over here.

You can continue driving the 15mpg truck, that's your option. There are many among us wanting well-appointed vehicles that do much better than that. I don't wish to haul around 3000lbs of unnecessary weight everyday for the few times a year I need a pickup bed. It's not worth the $150/mo+ penalty in fuel costs to me. My monthly need for that is covered by $25 for the Lowe's flatbed truck.

Z28x

Because no one will there to buy them. Why make more trucks than the public wants to buy in a year. Keep supply tight and resale values high.

I guess they only talked about cars that haven't been shown yet.


That is what the media and political witch huts would like you to believe. Demand is climbing by as much as 10% a year in some developing countries. yet supply has been flat since 2005.

Speculation works both ways too. Right now there is more short sellers than usual. You could say these people keep prices artificially low. Many people still think oil is a bubble despite the fundamentals. Remember, oil is a consumable unlike gold and stocks.

CaminoLS6

Let's not forget the lack of adequate refining capacity ( no new refineries built for 30 years).

No matter where the price goes, it is high time to start seriously replacing oil with alternatives. Conservation will never solve the problem, so all the econoboxes are at best, a delaying tactic. Time to change the fuel, not the cars.

detltu

Your posts are always informative but you seem to be taking an overly simplistic view of this situation. Supply and demand certainly affect the price of oil. Speculators cannot magically drive up the price of oil for very long. And small changes in supply and demand will certainly have what appears to be a larger affect than they should on oil prices. The supply of oil and the demand for oil have stayed relatively stable relative to each other. We don't see mass shortages of gasoline or oil nor do we see large surpluses of oil. Supply and demand is working on a few different levels with oil and gas prices though. There is supply and demand at the pumps which have remained basically stable with each other. Supply of oil to refinerys and Refinerys demand for oil. and then there is supply and demand of oil contracts (futures). The supply of oil futures has remained relativley stable while the demand for oil futures has increased significantly. This has artificially driven up the price of oil which then trickles down to the gas pumps. By the time the price of gas at the pumps reduces demand and makes its way back through the refinerys and into the futures it will pop the bubble. When that will be is anyones guess as significantly reducing our demand for oil will not be a quick fix.

jg95z28

Not if it means replacing them with smaller, more efficient, yet just as powerful V8s with DI.

Bert02SS

I think Direct Injection will be the single greatest mileage/power booster since Fuel Injection. Perhaps in 5-10 years it will become the norm as FI is now.

Z28x

Last I read a month or so ago refineries were running at 85% capacity and gasoline supplies were higher than usual. I don't see any lack. There hasn't been any gasoline shortages yet. More diesel refining capacity might be needed though.

Honda Civic has already replaced the F-150 as the nations best selling vehicle in June. I think the days of F-series/Silverado/Ram being the top 3 selling vehicles are over. 35mpg+ cars like Civic, Focus, Corolla, Cruze/Cobalt will be the new sales kings. This should kill even more demand for gasoline. Then by 2015 there should be a good amount of plug-in hybrids on the road taking even more demand out of the market.

formula79

I think your not understanding....and making the seperation between demand for actual oil, and demand for oil commodities to invest in.

Though production is limited, there are enough oil futures out there to supply demand. No one that I know of is "waiting" for oil...which would be the first indicator of a supply issue. The problem is, there are 10x the investors trying to buy those set number of futures then than say 5 years ago. Again I restate, the demand is not in that there is enough oil to fill demand. The demand is created by there being 10x more investors trying to buy the same number of oil futures (with cheap loans). These people would normally be investing in other things like real estate, grains, metals, whatever. They are investing in oil now because it is cheap to do so on margin and as the headlines prove..it keeps going up. If you have 10 people trying to buy your house as investment...odds are the sale price will end up higher than if you have two.

Also your argument fails because oil is one of the few things in the world that you "have" to buy. PS3 is too expensive...well you don't buy it. House costs to much to buy you rent one. Oil costs to much...and you.....

*crickets*

There is no way of getting around oil, and it's use. Drive less? Well you still need electric and heat? Need food...thats packaged in plastic? The list goes on and on. While a prolonged period of high gas prices would grandually change spending habits over several years...we are talking a U turn with an aircraft carrier....not a S2000 at an Autocross. Cars and better gas milage are just a small peice of consumer spending that would have to change to reduce oil use enough for the standard elasticity idea to work.



You fail to understand the concept of demand elasticity. If there exists no desirable alternative to a given commodity, then very small changes in supply or demand can cause large and seemingly disproportionate swings in price.

It'd be great if people would have paid attention in economics class, because this is all pretty basic stuff.[/QUOTE]

SSbaby

Well, that's the contentious bit... I'm assuming that will not proceed, and that we will stick to what we already have?