Oil Price over $60 - Fuel Economy Vehicles in Demand.

VIENNA (AP) - Oil prices vaulted over the $60 mark Monday to trade at record highs amid concerns that supplies would not meet demand, especially in the United States, the world's largest energy consumer.
Analysts said that with $60 a barrel no longer a threshold - and amid continued concerns about refining capacities - prices appear set to go even higher.
After settling at $59.84 a barrel Friday, the front-month August contract for crude smashed through the psychologically important $60 barrier in heavy Asian and European trading on the New York Mercantile Exchange.
Other petroleum products followed crude's rise. Despite a traditional seasonal lull, heating oil was 1.66 cent at $1.6670. Gasoline surged to $1.6640 a gallon, up 0.83 cent.
On London's International Petroleum Exchange, August Brent was up 40 cents at $58.76 a barrel.
Nymex crude had briefly touched the $60 mark on several occasions last week before Friday's settlement price, the highest since futures began trading on the exchange in 1983.
"The psychology of the market is that once $60 is breached, then there is tendency to test how much higher it can go, or how long $60 can be sustained," said Victor Shum, petroleum analyst at energy consultants Purvin & Gertz.
"There's a lot of speculative activity. It is a red-hot market," said Shum.
Vienna's PVM Oil Associates shared that view.
"All looks set for oil prices to continue to remain high, which capacity tightness in many sectors of the industry means that any serious glitches are bound to make prices shoot (even) higher," its daily energy market report said. PVM also noted that the election of a perceived hard-liner as Iran's president and market speculation likely also were contributing to bullish sentiment.
After a meeting with Dutch Prime Minister Jan Peter Balkenende, Nigerian President Olusegun Obasanjo said Nigeria is prepared to increase oil production if asked to do so by OPEC. Obasanjo said Nigeria prefers predictable oil prices.
"We do believe the prices of oil should neither be too high nor too low," he said.
Oil prices are more than 60% higher compared to a year ago, but would still have to surpass $90 to breach the all-time, inflation-adjusted high set 25 years ago.
Much of the worry surrounding crude is demand-driven speculation, analysts say, and it primarily surrounds how much supply there is currently and how much spare there is in the event of a production glitch.
With demand expected to average 84 million barrels a day in 2005, there is not enough of a supply cushion to shield the market from any prolonged output disruption. Excess production capacity is estimated to be about 1.5 million barrels a day, most of it in Saudi Arabia.
Another reason for trepidation among traders is the limited refining capacity in the United States, which is increasingly reliant on imports of gasoline. Therefore, any glitch in the U.S. refining system puts more strain on the global supply chain.
Still, record-setting prices have yet to cool demand for gasoline in the United States, where consumption is up - in a time when prices are 40% higher compared to a year ago.
"These high prices really have not significantly dented demand particularly in the United States market," said Shum. "U.S. refineries in the past week have been running very full at 96, 97%."
The Lundberg survey, which tracks gasoline prices from 7,000 gas stations in the United States, said Sunday prices at pumps across the country were up an average of 8 cents a gallon for the two-week period ending June 24.
With the summer driving season underway, the average retail price for all three grades of gas hit $2.24 a gallon on Friday, up from $2.16 on June 10.
OPEC President Sheik Ahmed Fahd Al Ahmed Al Sabah over the weekend began consultations with fellow members about raising the ceiling for oil production, but said they would monitor prices further first.
"I think we've got to wait for a while to see exactly what is the behavior of the prices, because until now it's not clear," said Al Sabah.
The Organization of Petroleum Exporting Countries raised its production quota by 500,000 barrels in mid-June, bringing the official output target to 28 million barrels a day. However, traders brushed off the move as insignificant since it would further deplete the cartel's razor-thin supply cushion and because its members were already pumping above the quota.
Including Iraq, which is not bound by the quota, OPEC's production is close to 30 million barrels a day.

Top 10 Most Fuel-Efficient SUVs and Pickups for 2005

In the past, new truck shoppers were more concerned with power, cargo capacity and off-road ability than fuel economy. Now that gas prices are hitting all-time highs, however, fuel-efficiency has become an important issue for buyers, even those who need a vehicle capable of hauling more than just a bag of groceries. With this in mind, we've compiled a list of the top 10 most fuel-efficient pickups and SUVs sold in the U.S. today, based on the Environmental Protection Agency's (EPA) miles-per-gallon ratings for city and highway travel. The only hybrid vehicle to make the list is the new Ford Escape, which offers stellar economy for such a versatile vehicle. Later in 2005, a hybrid version of Toyota's Highlander will also arrive - likely as a 2006 model. Our hierarchy is based on the EPA's formula for combined fuel economy: 55 percent of city mpg rating plus 45 percent of highway mpg rating. The rating for each vehicle below is expressed in mpg as a city/highway ratio. With exceptions for the Dodge Magnum, Ford Escape Hybrid, Honda CR-V, Jeep Liberty Diesel, Subaru Baja and Toyota Highlander, all ratings apply to base models equipped with a manual transmission - and for pickups, a regular cab/standard bed configuration. Likewise, all ratings apply to 2WD models, with the exceptions being all the Subarus and the Jeep Liberty Diesel. You'll notice that some decidedly carlike vehicles made the list this year, such as Chrysler's PT Cruiser and the Dodge Magnum, and that's because the EPA classifies them as SUVs - even though they're basically station wagons.