Oil Prices Pushing 100-Dollar Mark

Anthony Fontanelle
November 24, 2007

The price of oil in the world market continues to increase much to the dismay of the general public. It recently made a run towards the $100 per barrel. In New York, the price of crude oil reached $99.29 before falling back t0 97.29 per barrel at the end of the day. But even with that development, experts are expecting that crude oil price per barrel will hit the 100 dollar mark in the very near future.

But investors are not worried about the price reaching that mark. Mike Fitzpatrick of MF Global said: "To us, this level represents something of a mythical milestone: we will all still be here in the morning, after triple-digit oil. There is no skull-and-crossbones on our charts at 100 dollars. We expect prices to continue higher. Supply concerns centered around plunging global oil inventories are justified. Refinery snafus and geopolitics continue to feed the bulls, as well."

This increasing price of crude oil has strong repercussions in the auto industry. For months now, auto buyers have been calling for fuel efficient vehicles from automakers. The responses of automakers vary. Toyota launched the Prius, a vehicle which runs on a combination of electricity and gasoline. Other automakers though are still in the development process of vehicles which can compete with the Prius' fuel efficiency.

European automakers are looking at the direction of diesel technology. Audi is one of the leading manufacturers of clean diesel vehicles. The automaker even went as far as creating a race car with a diesel engine. Said race car has won the prestigious 24 Hours of Le Mans two years in a row.

But while there are clean diesel vehicles and hybrids already in the market, the bulk of vehicles being manufactured by major automakers like General Motors, Chrysler, and Ford are still running on gasoline fuel solely although their efficiency has been improved and their emissions cut down.

Independent technology provider and deep-content strategic management consultant for automotive companies Ricardo recently conducted a study to find out how oil prices affects the trend in the auto market.

Dr. Raul Meyer, marketing & business development director for Ricardo said: "Our research tells us that while consumers are not typically willing to pay a significant premium in the purchase price of a new vehicle in order to achieve lower regulated tailpipe emissions or the green badge of lower CO2, they are strongly influenced by hard facts such as running costs and performance."

During these times, people are more concerned about the fuel efficiency of vehicles more than how expensive vehicles are or auto parts like Kia Spectra radiator. "With crude oil now approaching $100/barrel, consequent hikes in pump prices are likely to make high fuel-efficiency technologies significantly more attractive to consumers," concluded Dr. Meyer.

Source:  Amazines.com