By Automotive World staff writer (DI)
31 October, 2007
Source: Automotive World
31 October, 2007
Source: Automotive World
Wednesday, October 31, 2007
2008 Chrysler Town & Country - MSN Video
http://video.msn.com/video.aspx/v/video.aspx?mkt=en-us&vid=eadef863-57cb-4f7c-bebe-f759457eaa58
Chrysler 2008 minivans' practical interior touches.
Oil jumps over $2 as crude supplies drop
Unexpected decline comes despite fall in refining activity; gasoline, distillate supplies rise.
NEW YORK (CNNMoney.com) -- Oil prices jumped over $2 a barrel Wednesday after the government said supplies of crude oil fell unexpectedly despite a drop in refining activity.
U.S. light crude for December delivery rose $2.67 to $93.05 a barrel on the New York Mercantile Exchange. Oil had traded 85 cents higher just prior to the report's release.
In its weekly inventory report, the Energy Information Administration said crude stocks fell by 3.9 million barrels last week. Analysts were looking for a gain of 100,000 barrels, according to a Dow Jones poll.
But the drop in crude stocks came at the same time that refiners scaled back operations, running at just over 86 percent capacity.
Distillates, used to make heating oil and diesel fuel, rose by 800,000 barrels while gasoline supplies increased by 1.3 million barrels. Analysts were looking for a 1 million barrel drop in distillate supplies and a 400,000 barrel gain in gasoline stockpiles.
The new math of oil
High energy prices are always bad, right? Not necessarily, says Fortune's Geoff Colvin.
We're experiencing a demand shock, not a supply
shock .(Fortune Magazine) -- We're hard-wired to tremble when oil prices rocket, and the past few weeks have looked like another example of why. Whenever stocks fell sharply, as they did several times, traders blamed the fast-rising price of oil.
But that chain of logic is misleading. The bigger picture shows that the relation between oil and the economy is changing, and we'll have to rewire our brains to understand what's happening. Watching oil prices rise and fall is no longer enough; the key now is understanding why they're moving.
You know something strange is going on when you step back and examine the stock market's performance not of the past three weeks but of the past five years. As oil prices have surged, they haven't knocked down stocks or hobbled the economy. Instead just the opposite has happened: Oil has tripled, yet stocks have roared ahead to new records, and the U.S. economy has grown smartly over the whole period. That is not how things work, or so we learned after oil spikes triggered recessions in 1973, 1980, 1981, and 1990.The critical insight into what's happening comes from Daniel Yergin, chairman of Cambridge Energy Research Associates and a longtime authority on world energy. "This is a demand shock, not a supply shock," he says. "What's causing it is the extraordinary economic growth of the past few years."
Previous oil spikes happened when OPEC closed the spigots; the resulting high prices were a tax on the world economy and slowed everything down. But today's situation is the opposite: Strong global economic growth is pushing oil prices up. As Yergin puts it, "The economy is having a greater impact on oil prices than oil prices are having on the economy."
Of course demand isn't the only factor pushing oil up, as Yergin and every other analyst understands. The price rise of the past few weeks, from the high 70s to the high 80s, seems clearly a result of fear that supplies will be disrupted by a possible Turkish incursion into northern Iraq or some kind of crisis with Iran. That makes this latest rise an old-fashioned supply shock, or rather a fear of one, which is why it has hammered the markets.
But the fear factor is responsible for only part of today's high price. The real culprit is broadly growing global demand. We're in the midst of a virtually unprecedented period in which nearly every major nation's economy has been expanding. So to figure out how we feel about rising oil prices, we must now ask why they're rising. If they're caused by constricted supply, they'll probably trigger bad news, like a recession. But if they're caused by strong demand, they're probably the result of good news, a growing world economy.
Here's one more part of the puzzle: Markets clearly expect the price of oil to decline. Specifically, crude oil futures reflect a price that falls further for each additional month they extend. In addition, the stock prices of Exxon Mobil (Charts, Fortune 500), Chevron (Charts, Fortune 500), ConocoPhillips (Charts, Fortune 500), and other giant producers reflect investors' expectations of falling oil prices.
If you take the profits of these companies over the past four quarters and capitalize those profits at the appropriate capital cost, you get what each firm would be worth if it were to continue cranking out the past year's profits every year. But in each case the company's actual market value is lower; that is, the market expects each company's profits to fall, for which the only plausible explanation would be declining oil prices.
Now for a real-world test of our new mental wiring: Should we be cheering or crying over the fact that prices are likely to head lower? A decline of 10% or a bit more, assuming it reflected vaporization of the recent fear premium, would certainly be good.
Beyond that, we can expect downward price pressure from basic, predictable economic forces: increased supply induced by today's high prices, though bringing it online takes a while, and substitution as alternative energy sources start to make sense vs. expensive oil. More downward pressure will come from the world economy continuing to become less energy intensive, producing more GDP per barrel. That's all good.
But we need to remember that recessions in some or all of the world's major economies would also bring oil prices down. So if the market is right and prices do fall, let's check our instinct to cheer and first ask why. It's possible that in today's economy, a declining price of oil could truly be cause to tremble.
Project X: Diesel Done Right
Kirk Manuel
Kirk Manuel is head manager of Manuel Auto Group in Fort Worth, Texas
It all started in June of last year, when a couple of truck guys and me came up with a pretty wild idea: Why not create a high-performance truck to blow the doors off the competition?We put our heads together and thought that with all of the focus on diesel technology as of late, a diesel truck would be a pretty good place to start.
We all had solid backgrounds in drag racing, so the idea was easy to swallow. We found ourselves a stock 2003 Dodge Ram Quad Cab truck and got to work making it race-worthy. This was actually a pretty well-used farm vehicle with a stock 5.9-liter Cummins diesel engine and over 200,000 miles on the odometer.
Needless to say, we were going to have to put some guts in the thing to make her run like a drag racer. The 5.9-liter Cummins turbodiesel was already a solid piece of work, but it was going to require some serious upgrades to qualify as worthy of the raceway.
We added all kinds of equipment to make her quick, from new computers to control the boost and output, to new transmissions, gears and tires to keep it gripping the road. Thirty grand later, we had ourselves a real beast with over 900 horsepower and more than 1,800 lb.-ft. of torque. ‘Fast’ would be an understatement.
The Project X truck can blow the doors off of a Mustang GT, and we clocked a quarter-mile on the Houston drag strip at 11.30 seconds at well over 120 miles per hour. Not bad for a workhorse that used to lug ranching equipment and feed for livestock. We’ve gotten the needle all the way to 161 in the Texas Mile.
This truck has gotten pretty good coverage in everything from the Dallas News and nitrousexpress.com, to enthusiast magazines like Diesel Power Magazine (the editor, David Kennedy, was one of the guys who helped put this thing together).
In the coming months, we’re racing X at a number of tracks in different states. If you want to see a good example of Project X in action, a video of one of our runs down the dragway can be found here.
Magnitude 5.6 - SAN FRANCISCO BAY AREA, CALIFORNIA
Earthquake Details
| Magnitude | 5.6 |
|---|---|
| Date-Time |
|
| Location | 37.432°N, 121.776°W |
| Depth | 9.2 km (5.7 miles) |
| Region | SAN FRANCISCO BAY AREA, CALIFORNIA |
| Distances |
|
| Location Uncertainty | horizontal +/- 0.1 km (0.1 miles); depth +/- 0.3 km (0.2 miles) |
| Parameters | Nst=250, Nph=250, Dmin=3 km, Rmss=0.07 sec, Gp= 32°, M-type=regional moment magnitude (Mw), Version=3 |
| Source | |
| Event ID | nc40204628 |
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