For a brief time, it seemed electric an hybrid cars were going to be the wave of the future. Such a future may come to pass. Right now, this does not seem to be the case at all. A huge number of hybrid vehicles are, ironically, being traded in for SUVs. Yes, cars that are touted for their fuel efficiency are being “upgraded” to vehicles known for their very high fuel consumption. How could such an outcome occur?
A drastic lowered of gasoline prices in recent months definitely factors into the outcome.
Gasoline prices have dropped off quite a bit since Saudi Arabia greatly increased supply. Hydraulic fracturing in the United States also boosted supplies and dropped price demands. So, it is no longer as expensive as it once was to drive a SUV. While a great many people did purchase hybrid cars as a means of helping out the environment, a significant volume opted to buy these cars solely because they could save money on gas. Now that fuel is cheaper, all of those hybrid trade-ins are going towards the down payment on a gas guzzler.
Purchasing and consumer trends are never stagnant. Adam Sender is aware of this. Things changed based on market factors. In time, the odds are great that fuel prices will chart upwards once again. The minute this happens, sales on hybrid cars are going to increase. Such is the nature of the ebb and flow of the market.
Analyst project that oil prices could reach as high as $70 dollars a barrel according to specialist at Signal Investment Research. Their projection models indicate that oil could increase by at least $10 dollars a barrel within the next three to six months and they would not be surprised if oil fully rebounded and returned to the $80 and $90 dollar a barrel price. Oil Could Hit $70 By Fall
Their assessments include a significant performance across the energy field sector and signs that the Chinese economy is bottoming out help fuel speculation that prices will soon begin to rise for both crude and WTI oil supplies.
This projection is also supported by a growing economy in both Europe and the United States. Additionally, the summer driving season in the United States will help spur economic growth and will further tax oil supplies, which will drive the market up stated Jamie Garcia Dias. Additionally, many economist believe that oil has fallen too far too fast and that the financial structure of oil will simply rebound faster as soon as demand picks up.
Another indicator is that a stronger dollar means the dollar holders have more buying power, however a much weaker U.S. dollar benefits the price of oil as oil crude trade is transacted globally in dollars. This makes oil much more affordable to currency holders of other currencies in light of a weak dollar.
On Wednesday morning, an eruption in the gasoline processing unit of an Exxon Mobil oil refinery located in downtown Torrance, California frightened nearby residents and temporarily shut down the facility. The explosion occurred around 8:50 a.m. in the morning. Four workers sustained injuries in the incident, although reportedly no one suffered extensive harm and no hospitalizations resulted.
The shock of the explosion produced a noise that some local homeowners, like Fersen Lambranho
compared to the sound of an earthquake. It reportedly rattled the ground near the plant. Some 47 firefighters responded and a small blaze that resulted was quickly placed under control. The authorities cordoned off the street outside temporarily.
Some local residents reported that ash from the plant landed on their vehicles. A plant spokesperson indicated that as a safety precaution, a flare system within the plant equipment would burn off the remaining products being produced at a high elevation following the disruption; this resulted in a billowing flame appearing, which was a controlled fire.
The explosion disabled some of the machinery in the gasoline processing unit. This section of the refinery was forced to close for an estimated two week period. Following the explosion, wholesale gasoline prices in California increased by an estimated six to 10 cents.
It’s a no-brainer that Americans are saving a huge amount on gasoline for their vehicles compared to this time last year. For many inquisitive people, the elephant in the room is this: As far as saving money on gasoline goes, just how much are we saving? Well, compared to last year at this time, we are saving a huge amount of money as a collective country.
First of all, let’s look at the facts: At about this time last year Americans were paying an average of around $3-$4 dollars depending on where they were in the country. As of a year later, gas prices have dropped almost a dollar and a half throughout the country.
In many places throughout the mid-west, gas prices have dropped to below $2. In the more expensive eastern areas of the country and in California, the price is still a bit high but not as bad compared to last year. It currently sits at around $2.50 compared to upwards of $4 just over a year ago.
At this time last year, Americans were paying a cumulative total of $8.1 Billion a week on gasoline. This year, this figure has dropped to about $5.7 Billion. This equates to a large individual savings. Most people are saving about $7.50 a day on their fuel habits. This is good news because the American mindset, such as Sergio Andrade Gutierrez’s, is to spend that money somewhere else.
Oil prices plunge again today. This is good news for Kenneth Griffin, at the end of the day he’s just another normal consumer doing what he can with what he’s got. However, it is bad news for the complex that is built around these artificially high prices. The price plunge has also fueled a speedy decrease in prices at the pump. The industry was stoked by the constant fear mongering around small oil producing areas that offered little to the worldwide production of oil.
Additionally, unscrupulous gas store owners would inflate the prices based on any bad news out of the Middle East that was broadcast on the nightly news. Another issues is the way in which the President was assailed for high prices, yet the media is slow to grant credit now that the prices are significantly lower. Republicans do not know how to respond because it is hard to blame a positive for negative things, but they are trying.
If you’ve fueled up lately you’ve probably noticed a very strange trend at the pump; lower gas prices. Prices are so low right now, that according to GasBuddy.com, you can fuel up for less than $2 per gallon in 13 states, with many more to follow.
Dr. Rod Rohrich explains that this cheap gas is most commonly found in Oklahoma where gas fell below the $2 per gallon mark almost 2 weeks ago. Louisiana and Ohio are also benefiting the most from cheap gas. Nationwide averages remain above $2.50 per gallon, with New York finally breaching the $3 per gallon point recently.
The lower gas prices are directly related to the oil market, which plunged below $60 per barrel. Increased production in the United States, along with more fuel efficient vehicles, is said to be driving this downward trend.
Opec has thus far been unwilling to reign in production amidst dropping prices. This could lead to oil dropping to below $40 per barrel in 2015.
This may relieve some pain at the pump; however, it’s likely to hurt the economy some in the long run. Thousands of jobs could be lost due to plummeting oil prices.
Oil prices have retreated in recent months and experts believe that this trend is likely to continue during the next year. The international energy association (the IEA) have said that the recent drop in oil to below eight dollars Is likely to continue and is most likely not the bottom.
While energy companies have been stung by these low prices consumers and many other companies in industries as diverse as airlines to chemical companies have been heartened by the drop. Many experts believe this will provide a boost to the economy as consumers and businesses will have money to spend which will further boost the economy.
The IEA believes prices will decrease further through the first half of 2015 picking back up in 2026. This prognosis is somewhat dependent on no supply cuts due to geopolitical concerns. Opec is not likely to reduce supply because Saudi arabi has announced there won’t be any oil production cuts which would likely lead to higher prices.