Sometimes it seems absurd that a smelly black liquid found in the ground can absorb media attention and elicit dire or hopeful predictions from world leaders. But oil is not just any old smelly liquid: It's an indispensable resource for all industrialized economies. As such, the price of oil has a tremendous impact on producer and consumer behavior.
For those of you who just stepped out of your caves, oil prices have been pretty high. Sure, Hurricane Katrina is to blame for the most recent spike. New York Mercantile Exchange crude oil futures, though, have been closing above $40 a barrel for more than a year. When oil prices will settle down even to that level remains an open question, especially as we approach winter with its added energy demand.
The recent elevated prices have been stimulating subtle responses in producer behavior, a fact most recently illustrated in Ford's
Anecdotal evidence suggests that the two companies' move is part of a larger trend. As oil prices remain high, other automakers are becoming more interested in producing vehicles that are more miserly with fuel. General Motors
For investors, the key will be singling out automakers that produce fuel-efficient cars with the style consumers want. The obvious leader in the hybrid market right now is Toyota
For additional info on oil and hybrid vehicles:
- Pricey Gas? Blame Katrina
- Is Oil Nearing Its Peak?
- GM and DaimlerChrysler Want to Play
- Hybrids: A Harder Sell
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.