The price for a barrel of Crude for October delivery rose $16.37, or 15.7%, to close at $120.92 by the end of today's trading in New York. Why? There doesn't actually appear to be any one particular reason, with speculation of an improving economy due to the Bush administration's hopeful ability to revitalize the struggling financial sector and overall economy taking top honors. This spike represents the largest ever pricing increase for oil in the history of trading. Most analysts seem to believe that this spike is a short-term event, though the situation bears watching over the next few days. Stay tuned.

[Source: MarketWatch]

There's a new video from Good Magazine that explains the viewpoint of those who believe that using crops for biofuels isn't good for the environment with simple and clear language. The short clip references articles from newspapers such as the LA Times and the NY Times, as well as official agencies like the DOE. The video outlines the reasons as follows: if high demand and fear of the short of supply make oil prices rise, then biofuel producers use feedstock to make their biofuels. Then, the high oil prices and the shortage of feedstocks make food more expensive, giving us the global crisis we've seen recently. If you think that the light relief from recent cuts in oil prices is enough to keep us saved, keep this video in mind. Watch it after the jump.

Who's to blame for the current spike in oil prices and who exactly is benefiting? It seems everyone has an answer to these questions lately. Regardless of whether one believes that we should drill the ANWR region, end oil speculation, boost refinery capability, or pressure automakers to deliver fuel-efficient or electric vehicles, it still doesn't take away the current sting of paying more for gas than we've ever experienced.

That sting has been aptly called "nozzlerage." Some creative filmmakers decided to channel their nozzlerage into an entertaining video on youtube.

Many in the green transportation field see high gas prices as the ultimate motivator to shift the transportation paradigm on a mass scale. Not only are Americans starting to think differently about fossil fuel usage, but they are also acting differently. Current prices have led to the greatest change in driving behavior since the 1970s. While this change is still only a 1% drop in average miles driven over a six month period, it is considered a "historic" phenomenon.

Perhaps nozzlerage can be good thing?

Part of the problem is speculation: individual and institutional investors betting on higher future oil prices. Another big factor is the very weak U.S. dollar. But the bulk of the reason oil and gas prices have climbed so high is that age-old Economics 101 supply/demand equation. Global demand, especially by developing countries, continues to grow, while supply does not.

Most agree that conservation is the critically important first step in altering that equation. Next comes development of alternatives, some that can propel our vehicles, others that cannot but can displace oil and natural gas now being used for energy production.

As high fuel prices make it more expensive for people to run their cars, services that specialize in replacing those cars, full-time or part-time, are seeing their businesses grow along with the pump price. Earlier, we told you about Zipcar's improved performance of late, and now we can tell you that at least one Vanpool service is also reaping the benefits of a public fed up with expensive gas. VPSI, Inc. of Troy, MI runs vanpools in the U.S. and the Netherlands and told the Detroit Free Press that it's on pace to add 1,100 new vans to its fleet before this year is out. That fleet is already 15% larger than it was at this time last year, and there's no sign of things slowing down, as people look for ways to save a few bucks on their daily commute. Customers pay, on average, around $100/month plus gas to participate in one of VPSI's pools. The company certainly has staying power. It was formed after the 1970s oil crunch and has stayed afloat ever since, surviving a few ownership changes along the way. Once again, people are changing their habits in response to oil prices, and VPSI's ready to give them a ride, just as it has been for the last 30 years or so.

[Source: Freep]

OPEC president Chakib Khelil believes that the already staggering price for a barrel of oil could continue to rise. Citing the low value of the U.S. dollar, Khelil says that investors are likely to continue to place their bets on oil, a necessary commodity. With current prices hovering around $120 per barrel of dino-juice, the sixty percent increase mentioned by OPEC's leading man would place the going-rate darn near $200 a barrel.

Those of us living in the U.S. have seen our gas prices rise at an alarming rate, but Whatcar in the U.K. highlights more problems for those living across the pond. A strike at the Grangemoth oil refinery in Scotland could cause a ripple effect which would reach consumers just in time for the summer driving season. OPEC has chosen not to increase their output to help curb the supply and demand problem. Kinda makes us long for the electric car, huh?

[Source: What Car]

Oil hit a new record high price of $111.80 yesterday morning, but settled at $105.68 later, a drop of $4.42 for the day. While we're not yet ready to suggest that an end has come to the daily rise in oil prices, seeing the price for a barrel of crude drop, if only for a day, is probably a bit of a relief to some. Before yesterday's drop in prices, many analysts were suggesting that the falling value of the dollar was the largest cause for the recent upward trend in oil prices. Another contributing factor are the Federal Reserve's recent rate cuts. Monday's drop in oil prices though, could possibly point to a more serious problem which has to do with the U.S. economy as a whole. Some analysts see the sale of investment bank Bear Stearns as a sign that our economy is in even worse shape than previously thought.

We aren't stock market experts, so if you want to read more analysis related to the day's events, click here and here.

[Source: CNN Money, AP]

It's no secret that the auto industry's most profitable vehicles are also the hardest hit when gasoline prices climb past consumers' comfort levels. Bo Andersson, the man behind GM's purchasing decisions, says that the tipping point currently hovers around $3.30 a gallon. At that price, sales start to slow, causing a world of hurt for GM and the other automakers. But, he pointed out another rising cost which hurts the industry: shipping. As the auto market shifts towards sourcing parts from all over the world, the rising cost of oil is raising the cost of getting parts from their country of origin to the plant making the vehicle. According to Andersson, for every dollar the price of oil increases, GM spends $6 million more for global logistics. That's a very large number, and the price of oil is doing nothing but climbing these days.

[Source: Automotive News]

Lately, record oil prices have been a daily topic here on AutoblogGreen because every day the old record, set the previous day, is being beaten out by the day's closing price. Guess what? We're back at it today. That's right, a barrel of oil passed the $110 plateau for the first time ever. This latest price increase comes despite there being a surplus of oil available, which caused a brief dip in oil trading prices early in the day, and the fact that the demand for gasoline has remained mostly flat as of late.

These high crude oil prices have led to the highest ever average price for a gallon of regular-grade gasoline at $3.246 a gallon. Many "analysts" are attributing the cost spike to the weak dollar, which is causing investors to buy commodities at a higher-than-normal rate. Whatever the reason, perhaps the situation will scare more consumers into taking fuel efficiency more seriously when considering their next automobile purchase. If it's not time for a new car, there are always these tips to keep in mind.

[Source: CNN Money]

Well, it's not like we need to tell you that $3 gas is pretty much the new black. While the price of a barrel of oil hasn't broken the $100 barrier yet, it is sitting pretty at around $96 these days and the AP is saying that the high prices mean that the price of oil is set "for its biggest annual gain this decade as dwindling fuel stocks and growing concern over political turmoil offset the impact of a softening U.S. economy." You hear that, SUV drivers?

At the beginning of 2007, the price of a barrel of oil was $61, which makes the annual jump almost 58 percent. As the AP so gently reminds us, "Oil's rally is entering its seventh year, more than quadrupling its market value of below $20 at the start of 2002." The average price for 2007 is going to be about $72.30, a nine percent jump from 2006 and way higher than analysts' predictions of a $63.23 average. For 2008, a "consensus forecast" sees an average of $77.62 a barrel next year. Wonder how right/wrong that'll look in 12 months.

Oh, and Happy New Year!

[Source: AP]

Dear ABG Readers: I have seen your comments and know some have nearly had their fill of posts about economics. I was going to lay off for a while BUT this (subs req'd) Paul Krugman NYTimes column was too good to pass up. Being green means holding onto your green, so please bear with me. It all begins with the recent stock market decline . . .

Krugman writes about three things in our current economy. One is the fear of bad credit - hedge fund problems impacting the stock market. The second is the magnitude and duration of the current housing slump. But outta the blue came the third major cause - no, it wasn't Britney Spears, Paris Hilton or even Lindsay Lohan. It is the persistent rise of oil prices - something I thought most everyone had gotten used to.

Krugman sees us as already coping with three years of high oil prices and that has happened without any big disruption in world supply to trigger it. It is just that supply is tight and that most new production makes up for the drop off in old field production. That is why oil prices are high - over $70 a barrel and staying so - despite no hurricanes, wars, terrorism or acts of God having happened. Where will prices go when those events do occur? Not down.

So keep reading ABG and trying to time what vehicle decisions you will be making in the near future. How far are you willing to drive to that new job? Should you move out to the ex-urbs? Whether you want new technologies or new fuels or both in your next vehicle purchase? The future has a knack of becoming the present pretty fast.

I live near a bus line. How about you?

[Source: New York Times]

It might be the auto and energy question of the decade: what effect do gas prices have on green car habits and green car technology? Automakers are investing billions in gas-free propulsion sources and sales figures show that consumers are more than eager to go along with these advanced powertrains. At least, consumers who want to get the most out of $3.50-a-gallon gas were. But what happens when gas gets cheap(er)? Recently, we had posts about the possible return of $1.15 gas as well as customers' attitudes about high gas prices. The current situation lies somewhere in between, and when crude prices dropped to below $60 a barrel Monday they brought the average price of gasoline down to $2.38 a gallon in the United States. Some energy analysts told the AP that it's headed even further south, to around $2 a gallon. In light of this, some OPEC members have hinted at a production cut if prices stay below $60 a barrel. The future is uncertain. Do you know what you'll be driving?

Related:

• Gas for $1.15 a gallon? It could happen again
• JD Power on high gas prices and auto consumers

[Source: AP via Yahoo! News, thanks to Ann]

The managing director for the International Monetary Fund, Rodrigo Rato, said Sunday that high gas prices around the world are here to stay. In an interview with the Spanish newspaper El Mundo that focused on the European market with an eye toward the global situation, Rato said, "In Europe there is too much rhetoric and too little reform" of the economy and that,  "oil prices are going to remain at high levels given the forecasts of rising demand and the supply limitations." All the more reason for energy conservation and alternative sources of power and transportation to gain wider acceptance around the globe.

[Source: Reuters via EV World]