High gas prices to persist for 3 years

The implication is that in three years gas will magically be cheaper? :blink:

 

<div class='quotetop'>QUOTE(darelldd @ May 1 2006, 10:23 PM) [snapback]248413[/snapback]</div>

Or that in 3 years there will be a new administration in charge. Then it's their problem. <_<

 

[size=2]On the other hand...

(Or is this kid whistling as he walks by the cemetery?)[/size]


DJ UPDATE: GM CEO Sees Gasoline Prices Eventually Declining

Source: DJ
Date: 01:25 PM

05/03 13:25 =DJ UPDATE: GM CEO Sees Gasoline Prices Eventually Declining


By John D. Stoll and Terry Kosdrosky

Of DOW JONES NEWSWIRES



DETROIT (Dow Jones)--General Motors Corp. (GM) Chief Executive Rick Wagoner said Wednesday that the auto maker expects gasoline prices to eventually fall based on analysis of the current supply and demand equation for oil.

"They are too high right now and they will come back down," Wagoner said of oil prices during a conference at the company's headquarters in Detroit that was broadcast over the Internet. He said consumer behavior isn't expected to be negatively impacted by current gasoline prices, which are averaging about $2.92 a gallon according to the American Automobile Association.

"We don't expect (oil) to get to a price range when it would affect behavior," Wagoner said. He said gasoline prices would conceivably need to be well in excess of $3 a gallon in order to significantly hurt consumers.

He said consumers are impacted by "the ups and downs" created by the constant barrage of media coverage surrounding high gasoline prices. He said the coverage "makes it very, very hard to deal with."

U.S. auto sales data for April released on Monday indicated that demand for large SUVs and light trucks has fallen amid the recent surge in gasoline prices. Sales of GM's large utilities held up better than those at its main competitors as the top U.S. auto maker's new line of SUVs has been well-received by consumers.

Wagoner said GM aims to keep developing engines for its vehicles with improved fuel economy in mind. He said buyers tend to gravitate to bigger, more-powerful vehicles that typically consume relatively high levels of fuel. GM has touted its new full-size SUVs as being capable of achieving 20 miles per gallon, and the auto maker has a number of vehicles capable of achieving better than 30 miles per gallon.

"We really need to be able to respond to high gas prices," Wagoner said.

He noted that the company is offering consumers vehicles capable of running on ethanol and GM this summer will launch a hybrid vehicle capable of running on a combination of battery power and traditional combustion engine technology.


Uncertain About Potential For Hybrids
Wagoner struck a cautious tone in regards to hybrid vehicles. Although the company is preparing to launch a hybrid SUV for its Saturn brand that will cost $23,000, or nearly 20% less than Ford Motor Co.'s (F) hybrid SUV, Wagoner said GM in not placing concrete bets on how big the hybrid market will get. He did suggest, however, that consistently higher-than-normal gas prices could drive demand.

"A question I'm often asked is: How big the hybrid market could get to be? The honest answer to that is, I don't think anybody really knows. If you believe we're going to be at $120 (per barrel oil price) for a long period of time, the answer is a heck of a lot more than if you believe $60. Consumers will drive this. Our focus is to make sure we have the capability."

Crude oil has been hovering at near-record levels above $70 per barrel in recent weeks.

Wagoner said GM can adjust hybrid production to respond to demand on a monthly or quarterly basis. The company is not projecting how many hybrids it plans to sell in 2006 or years following. GM is partnering with DaimlerChrysler AG (DCX) and BMW AG (BMW.XE) in developing hybrid technologies.

GM's lack of clarity on its hybrid vehicle ambitions contrasts with the approach adopted by Ford Motor Co. (F) and Toyota Motor Corp. ™, both of which are following aggressive hybrid strategies. Ford plans to build as many as 250,000 hybrids annually by the end of the decade, while Toyota forecasts the hybrid vehicle market will reach 400,000 vehicles annually by 2007, or double the market in 2005.

Both Ford and Toyota saw healthy hybrid sales in April. Ford said it set a record for hybrid sales, thanks to 0% financing on the vehicles, aggressive advertising and high gas prices. Toyota, meanwhile, had its second-best month ever in terms of hybrid sales, with hybrid sales accounting for 6.5% of total sales for the month, according to Merrill Lynch analysis. "There is no question that soaring gas prices are having an impact on consumer preferences," Merrill Lynch auto analyst John Murphy wrote in a note to investors Wednesday.

Wagoner said GM's bet on ethanol technology is probably a better long-term answer to volatile fuel prices. Both GM and Ford separately have more than 1 million vehicles on the road capable of running on ethanol and both auto makers have launched considerable marketing efforts aimed at promoting their efforts.

"Our perception and understanding of the U.S. customer is that the ethanol option probably is going to sell more (than hybrids) because frankly it's significantly less costly to apply to vehicles," Wagoner said. "We think that ( ethanol) is more likely to be a fast ramp up and then obviously the ethanol economics look a lot better if oil prices stay high for a long period of time."

GM shares were down 1.7% at $22.80 in recent trading.



-By John D. Stoll, Dow Jones Newswires; (313) 226-1249; john.stoll@ dowjones.com



(END) Dow Jones Newswires

05-03-06 1325ET

Copyright © 2006 Dow Jones & Company, Inc.

 

GM, still floating down a river in Egypt.
.
_H*

 

"We don't expect (oil) to get to a price range when it would affect behavior", said General Motors Corp. (GM) Chief Executive Rick Wagoner.

That's a great quote, because it doesn't actually match reality. They don't expect it. So... will they see it? I have already. The population of gas-guzzlers has dropped dramatically lately (here in Minnesota, at least). I am sharing the road with far more friendlier vehicles than usual. It is a definite sign that change has occurred.

The belief that the price of gas at $3 per gallon won't make a difference is yet another example of the deep state of denial they are in.

 

<div class='quotetop'>QUOTE(Begreen @ May 2 2006, 01:45 AM) [snapback]248422[/snapback]</div>

:lol: Exactly. If a democrat gets in to the White House, we'll hear a neverending stream of diatribes coming from the republicans about how it's all the democrats' fault even though the republicans have pretty much run everything their way for a long time and run everything in to the ground.

 

One has to read the GM guy's earlier nonsense to see that he actually knows that gas guzzzlers are on the way out. He just cannot say so.

This month, and for the next couple, the SUV fanatics are flocking to the new models. That group, however, is a very limited resource; and when it dries up by summer, then we will see how much $3+ petrol affects more mainstream consumer choice.

Or you could ask Ford. They already know. If one looks at the sales of SUVs and trucks for entire industry, trucks are holding their own, but SUV's are rather clearly trending down in sales. This was true already during the couple of months that petrol was $2.30 - $2.50 a gallon.

Americans seem to acclimate to increased fuel prices. If petrol STAYS at $3/gallon throughout the summer, it might be enough to stabilize the SUV market. But if there are peaks up to $4, even for a short time, I think a large fraction of that buying group will be spooked, and change their buying habits.

Anyway -- my thoughts.

 

Hello Forum-

This is my first post here, I belive I've earned the right, as I've placed an order for a new Prius, I feel I'll be justified in the long run. Not only the oil market today, but oil futures have made me realize we are on borrowed time. The consumers of oil to date, by the lion's share is the USA--- However, I've seen no mention of the developing countries, especially China. There's a whole lot of folks over there, more than any other country in the world... China is the "awakening giant" of this century.

Our oil problems will not go away.... Although the oil companies to date say that the refining capacity of the gulf states have been impacted by the recent weather in the gulf states, I feel that that is very short sighted. The virtual pipeline between the oil rich arab nations and our facilities has many weak links, and are more fragile than most will admit. A few small nukes from "hostile" factions can make an extreme infulence on our way of life.

I appreciate our efforts to develop and leverage alternate sources of fuel, (ethanol) but also wonder how many people die every day of hunger and realize that market pressures and politics dictate that the grain that could feed people is being used to reduse the cost to transport people to blockbuster. (Sorry, I could come up with many examples of frivolus fuel consumption...)

I myself commute 100 miles daily to go to work and contribute to corperate America. I prefer the wide open spaces and open country to living cheek to cheek in urban zones.

That's a big reason why I've decided to buy a prius, and I think the test of time will justify my decision.

Thanks, just my two cents...

Mark Walters

 

So exactly what are the folks at GM sniffing. It must be really good "shit" because they do not seem to be able to see what everyone else is seeing!

 

<div class='quotetop'>QUOTE(TimBikes @ May 1 2006, 11:56 PM) [snapback]248401[/snapback]</div>

And this all implies that the third world (China) continues to mark time and not exponentially increase their demand for fossil fuels... Do you really think that once they get a taste for oil they will back away from the fountain, or step up to get a deeper swallow?

 

<div class='quotetop'>QUOTE(Mark_W @ May 10 2006, 01:35 AM) [snapback]252653[/snapback]</div>

Sorry folks, I seem to be paranoid with the posts to date, I hope I'm wrong... I just have a very healthy respect fo the majority of the world's population...

Mark W

 

<div class='quotetop'>QUOTE(Mark_W @ May 10 2006, 02:35 AM) [snapback]252653[/snapback]</div>

...uh, heh heh....you said deeper swallow...heh heh... :lol:

okay, sorry about that flash of immaturity there....

Sorry folks, I can't see the price dropping magically in 3 years. What, in his mind, would be the reason for that? After time, $3.00 will be the "norm" for us - and then we'll continue our glutenous ways....

 

<div class='quotetop'>QUOTE(JackDodge @ May 4 2006, 01:02 PM) [snapback]249752[/snapback]</div>

Probably so. Kind of like how Bush was blamed for a recession that began before he was even elected. What goes around comes around.

 

<div class='quotetop'>QUOTE(2Hybrids @ May 10 2006, 05:44 AM) [snapback]252665[/snapback]</div>

Depends on several factors:
1. The refining capacity in the US
2. The amount of oil the US pulls out of the ground
3. Development of alternate sources of oil like tar sands, etc
4. The amount of ethanol being produced and its ability to be transported
5. The rate of State taxes on a gallon of gas
6. Adoption of a SINGLE standard grade of gasoline instead of several dozen
7. World demand for crude (esp. China and India)
8. Politcal stability in Iran (ie, taking down the current govt or not letting them develop nukes)

 

<div class='quotetop'>QUOTE(dbermanmd @ May 10 2006, 08:05 AM) [snapback]252676[/snapback]</div>

which proves just how delicate and yet volatile this situation is...

 

Yeah...but the REAL question is...Why were oil companies getting huge tax breaks in the first place? <_<

 

<div class='quotetop'>QUOTE(2Hybrids @ May 10 2006, 09:36 AM) [snapback]252703[/snapback]</div>

It would be LESS volitle if we drilled more at home, refined more at home, developed nuclear power like the europeans, and got politics out of our energy supply equation.

<div class='quotetop'>QUOTE(dutch in dallas @ May 10 2006, 10:18 AM) [snapback]252730[/snapback]</div>

Why not? What about our farmers to name one of many groups of people industries that receive favorable treatment from our government? Nobody was moaning when the oil companies where getting their clocks cleaned when oil was $7 a barrel - were you?

 

Haven't we gone through this before in '73 and '79??? People said the same things back then...



<div class='quotetop'>QUOTE(hobbit @ May 3 2006, 06:55 PM) [snapback]249363[/snapback]</div>

:lol: :lol: :lol: :lol: :lol: :lol: