RE: Yahoo financeWelcome Emily, hope you are enjoying your retirement. I for one am confident that commodity prices are going to spring back in the medium/short term. China is a monster with an appetite for Petroleum, demand increasing amongst its population almost 5% per year. Five percent may not seem like a large number, but upon reflecting that China has over a billion people, it is very impressive.
China is modernizing and becoming a first world nation right in front of our eyes. First world humans enjoy managing their own transportation, and tens of millions of Chinese will soon be buying their first vehicles. Consumption, consumption, consumption. Moderation, conservation, and green policies are out the door. "Bigger, badder, faster with more Horse Power" seems to be modern man's mentality.
While demand is soaring, any new, easy to produce reserves are becoming much more difficult to find. North America conventional production is in serious decline, and this is even after record drilling over the past three years. Unconventional assets are being produced, but the costs and environmental impact is much higher.
Nymex Natural Gas November delivery closed at US $6.807 today. Where exactly are the low prices? Perhaps they are viewed as low compared to the spike at $14.00, but $7.00 gas is a bonanza in my books. It won't take much longer for the market to realize the reality of the priceing environment. Not to say they won't soften, but I am feeling much more optimistic.
Back to consumption, have an excellent night...
Renewed thirst for gas guzzlers
GREG KEENAN
Thursday, October 19, 2006
As quickly as they collapsed, sales of gas guzzlers may be roaring back in the market where they're king — the United States.
Retention rates, measured by the percentage of owners of a type of vehicle who buy the same kind of car or truck when they trade in, jumped in the past seven weeks in the large pickup, large sport utility vehicle and mid-sized SUV markets, consulting firm J.D. Power and Associates says. “It's early, but this data suggests there still is life in these segments,” Tom Libby, senior director of industry analysis at the firm's Power Information Network, said in a statement.
The seven-week period from mid-August to early October coincided with a time when U.S. gas prices fell steadily and averaged $2.66 (U.S.) a gallon. During the seven weeks prior to that period, gas prices averaged $3.04 a gallon.
The collapse in sales of full-sized pickups and big SUVs — critical vehicles for the car companies because of the profits they generate — led all three Detroit-based auto makers to slash production in North America in the third and fourth quarters.
A rebound in the pickup segment would also be a happy coincidence for Ford Motor Co., General Motors Corp. and Toyota Motor Corp., all of which are gearing up major launches of pickups. New Chevrolet Silverados and GMC Sierras arrive from GM this fall, as do redesigned versions of Ford's heavier-duty trucks, the F-250 and larger series. Toyota will launch the latest version of its Tundra pickups from a new plant in Texas later this year and early in 2007.
Large pickups and full-sized and mid-sized SUVs represent almost one-quarter of the new vehicles bought by Americans, J.D. Power said.
There was not enough data from Canadian transactions to determine if the same pattern is evident here, Mr. Libby said.
Canadian sales figures, however, show that some of those key segments did not experience a similar slump in Canada when gas prices began soaring last September in the wake of Hurricane Katrina and again this spring.
Sales of large pickups in Canada, for example, slid less than 1 per cent as of the end of August from the same period a year earlier, while large SUV sales rose 8 per cent.
The good news on the pickup front continued for DaimlerChrysler AG's Chrysler group in September as Dodge Ram sales rose to 2,914 from 2,727 in September, 2005. F-series sales for Ford fell to 5,102 from 5,376.
But the mid-sized SUV market in Canada is tumbling in similar fashion to that segment south of the border. Deliveries of mid-sized SUVs were hammered, with a 31-per-cent decline in the eight months ended Aug. 31. That decline rolled into September for Ford and Chrysler. Ford Explorer sales dropped to 645 in the month from 667 a year earlier.
Grand Cherokee and Durango took it on the chin at Chrysler — down to 274 from 724 and to 203 from 249 respectively.
© The Globe and Mail