Another month of record fuel prices

It's been kind of a rude awakening the past few weeks, seeing the price of petrol diesel continue its upward spiral. According to this story in the New York Times demand for gasoline actually decreased since the beginning of the year, and miles driven dropped by the largest month-on-month (March) margin (4.3%) since record keeping began in 1942. And yet the cost of gasoline (and more dramatically, diesel) has continued to rise.

According to the Energy Information Administration:

Based on projections of weak economic growth and record high crude oil and product prices, consumption is projected to decline by 190,000 bbl/d in 2008 [...] After accounting for projected increases in ethanol use, U.S. petroleum consumption is projected to fall by 330,000 bbl/d.

So if demand is falling, why are prices rising dramatically?

World oil consumption is projected to grow by 1.2 million bbl/d in 2008. Almost all of the growth in 2008 is expected to come from the non-Organization for Economic Cooperation and Development (OECD) countries, led by China, Middle East oil producing countries, and Russia, as well as Brazil and India [...]

more than offsetting any decline in demand in the US.

Bummer for us. Of course, it's also great for us. Fuel prices are starting to more directly affect individual driving decisions, consumer vehicle preferences, and therefore auto manufacturer's vehicle production. Business Week reports:

Ford Motor (F) is cutting its production of its one-time cash cows, pickups and SUVs, to instead increase production of smaller and more fuel-efficient cars.

And the New York Times reports:

With technical and environmental hurdles overcome — and facing tougher mileage standards that call for a 35 m.p.g. average by 2020 — automakers are rushing in with clean-diesel cars.

Nice.