Chart Of The Day: Gas Prices, Trucks And Automobiles

It'll be interesting to see how the fracking issue plays out in Denton...

@Dave M. In an urban setting a fracking operation needs to be ultra clean. No trucks. Everything in and out via buried pipelines. Government inspectors all over the place all the time.

The thing about fracking is that it's brute strength hydraulic fracturing of the shale. There's already a dry fracking technology that uses no water, using metal oxides to create a high pressure thermal reaction to heat up and fracture the shale. Even better would be a form of ultrasound fracturing that could be repeated to create smaller and smaller fractures, releasing the oil in multiple stages. That's still theoretical, but offers even higher production from the same shale play than one time hydraulic fracturing, and spreading the cost over more barrels produced. The Saudis may be able to kill off the high cost or over-extended frackers, but the march of technology and the richest shale deposits is likely to make America once again the arbiter of oil prices.

I agree that the chart seems biased and to me, is meaningless without historical data, as you suggest.

good point i didn't consider. cheap loans moved more people into trucks and large SUV/CUV than gas prices. And 5 months data in an industry that has 6 year model cycles with products that have 15-20 year life is pretty pointless. Just seasonal changes alone have impact. that is like me judging the weather in July 2014 and predicting weather in July 2015 by just looking at November 2014 - February 2015.

Over a longer period of time using historical data, you'll muddy the short term effect of gas prices on current models available. Over a longer term, technology and automakers' production mix can change. Derek was limiting the oil/gas price effect to the mix of models available now and in the next couple years. That's the period of flux before the oil markets settle into a new regime and car makers have time to adjust their offerings.

@Lorenzo, I don't disagree that fuel prices do play a role in purchasing decisions. Over the period I'm suggesting is you can also look at previous fluctuations in fuel prices as well. But, you can also see what impact employment, interest rates, loan terms, etc can have as well. People just don't go out and say "Geez I will spend $39 000 today and buy a new pickup". Most people I know spend a much longer time ccons!dering what direction to take prior to the purchase. This time would be prior to the current drop in oil pricing. So, is their decision to go out now and buy made because of the longer term loans? A person looking at buying a pickup would have already chosen a pickup. The decision might be between a V6 or V8 pickup or even a midsizer vs a V6 full size.

".....people are making good decisions in the macro sense..... " Who's to say what is a "good decision?" If Americans continue to make the F150 and Camry the best selling vehicles in America, it must be the "good decision" for them, wouldn't you say? Lower fuel prices are great until the unintended consequences set in. And they will. In the mean time, enjoy the lower cost of fuel. I do.

@highdesertcat What's the unintended consequence? Someone bought a new truck or SUV they couldn't afford anyways? 1st, a Yaris is a gas guzzler when an owner can barely pay the gas card, regardless of fuel prices. Most Americans r!de that edge of financial disaster everyday. They must love that (?). And the graph proves nothing. Pickups have been growing in popularity for decades. The graph says nothing about commercial/business/utilities/government/military/oil extraction, as the economy improves. Booms in some sectors. Nor if it's simply more pickups getting traded in for more pickups. And don't the new pickups get dramatically better FE than the old pickups? OR heavy duty pickups traded for 1/2 tons? 1/2 tons for mids!ze? You already know it's old pickups that go to Mexico. We ship possibly a million+ pickups down there annually. So out go the gas guzzler pickups with every new pickup sale.

@highdesertcat Some things make us richer and some things make us poorer. We have the ability to measure GDP and trade deficit, and the measurements are relatively objective. Falling dollar-value oil imports will boost GDP. We should enjoy the prosperity all the time, but people can't tell the difference between getting rich and getting poor.