Dead cat bounce

Despite yesterday's dead cat bounce, I see no reversal in the downward trend for oil futures prices. Yesterday $1+ increase came on the heels of horrible jobless numbers. The just released durable goods numbers came as a complete surprise to those who think we're spiraling down into recession (clue: we're not). Housing is still going to suck for sellers in the short term although this is quickly turning into a buyer's paradise.

But back to oil. Ford's decision to build their European line here in The States in what will become former SUV factories will offer the American car-driving public the opportunity to purchase cars that get 60+ mpg.

No, really.

Ford already manufactures vehicles for the European market that get 65 mpg -- the Ford Fiesta with a 1.8 liter turbo diesel. GM sells 9-3 Saabs in Europe with a 1.9 liter turbo diesel that are rated at 62 mpg highway. Once those vehicle start hitting the market, oil demand in The States will drop, further depressing the prices of crude futures. As more production comes online in the Bakken field, supply will increase, causing oil to sink further.

All this is good. Methinks $4 per gallon petrol caused a tectonic shift in American consumer attitudes. The age of the SUV is over and greening of America will begin in earnest. But don't think for one minute that we'll become a nation of bicycle riding vegans. We'll just be better at squeezing energy out of resources than everybody else now that it's fashionable.