Even though oil futures slipped slightly Tuesday on word that OPEC may boost production, the ongoing gains in the price of crude and of products like gasoline is getting a lot of buzz.
For business journalists, it’s worth the time to breathe some new life into this perennial topic and help readers make sense of potential effects on themselves and the larger economy. From a skittish stock market to summer tourism to supermarket shelves, fuel price surges can seriously crimp hope-for rebounds.
The U.S. Department of Energy on Tuesday predicted average gasoline prices of $3.70 by spring, well before the usual Memorial Day weekend gas-price annual peak.
This Chicago Tribune article from Monday is a good mix of macro and micro examples; note the diner owner who gives specifics about what garbage pickup and delivery price hikes will do to his expenses. (The report also contains a number of interesting expert sources you might want to seek out.)
Of course, companies that are heavy fuel consumers by the nature of their business – shippers, airlines, cruise lines, etc. – quickly come to mind when energy costs soar.
But as this Associated Press report points out, we know from 2008 gasoline price spikes that small businesses like taxicab companies, florists, pizza delivery shops and others who ferry patrons and wares around will also be hit by the surge.
You might want to round up energy analysts at local investment companies, universities and trade groups to get similar gritty examples pertinent to your region. Also, don’t forget to use big local companies as experts on the market, not just on themselves. Find a local fleet-dependent company – like a food processor, or a mail-order firm, or a parts manufacturer – and get to know their in-house energy expert; he or she may be a good source of information on regional supply and demand quirks, etc.
Other angles:
Biofuels and agriculture. According to this report, “Amid rising oil prices, makers of corn-based ethanol crank up output,” the ethanol industry and related controversies are revving up. Corn growers, as in this South Bend Tribune report, are refuting the notion that using the grain for fuel will drive up food prices.
As spring planting season reaches your region, it might be interesting to take a look at what crops are being emphasized this year and how the corn market may be influencing farmers’ choices. Also, are some crops heavier users of fuel than others, in terms of cultivation equipment and the costs to harvest, transport and process them? At what point do fuel costs determine what’s planted in your region’s agricultural land?
Diesel. Generally fuel-price stories focus on unleaded gasoline costs to consumers; just for a change you might generate a story about the history and outlook for diesel fuel prices and how that affects truckers, fleets, heavy equipment operators, bus companies and others. The fuel last week hit its highest price since March 2008, and as this article from The Trucker shows, concern about even bigger hikes is growing.
Boats and RVs. After clawing back a bit last year, the recreational vehicle and boat industry was hoping for an even better boost in 2011. But when you sell 36-foot coaches and craft that get single-digit fuel mileage, the specter of $4 a gallon must really put a cramp in spring sales projections. It probably doesn’t help cash-strapped consumers and small dealers trying to sell used stock on the secondary market, either. A timely look at recreational fuel users and the campgrounds, marinas, equipment suppliers, tourism centers and other businesses that depend on them would make a great business centerpiece.
Who benefits? Conventional wisdom has it that fast-food chains will reap as moderately priced chains lose customers worried about their fuel budgets. That seems a bit far-fetched in regions where consumers are within a short drive of a plethora of chains but you might ask eateries and wholesale suppliers about the outlook for this summer. Same with local tourism attractions, retailers and others who might capitalize on stay-near-home consumers.
Source: http://businessjournalism.org
For business journalists, it’s worth the time to breathe some new life into this perennial topic and help readers make sense of potential effects on themselves and the larger economy. From a skittish stock market to summer tourism to supermarket shelves, fuel price surges can seriously crimp hope-for rebounds.
The U.S. Department of Energy on Tuesday predicted average gasoline prices of $3.70 by spring, well before the usual Memorial Day weekend gas-price annual peak.
This Chicago Tribune article from Monday is a good mix of macro and micro examples; note the diner owner who gives specifics about what garbage pickup and delivery price hikes will do to his expenses. (The report also contains a number of interesting expert sources you might want to seek out.)
Of course, companies that are heavy fuel consumers by the nature of their business – shippers, airlines, cruise lines, etc. – quickly come to mind when energy costs soar.
But as this Associated Press report points out, we know from 2008 gasoline price spikes that small businesses like taxicab companies, florists, pizza delivery shops and others who ferry patrons and wares around will also be hit by the surge.
You might want to round up energy analysts at local investment companies, universities and trade groups to get similar gritty examples pertinent to your region. Also, don’t forget to use big local companies as experts on the market, not just on themselves. Find a local fleet-dependent company – like a food processor, or a mail-order firm, or a parts manufacturer – and get to know their in-house energy expert; he or she may be a good source of information on regional supply and demand quirks, etc.
Other angles:
Biofuels and agriculture. According to this report, “Amid rising oil prices, makers of corn-based ethanol crank up output,” the ethanol industry and related controversies are revving up. Corn growers, as in this South Bend Tribune report, are refuting the notion that using the grain for fuel will drive up food prices.
As spring planting season reaches your region, it might be interesting to take a look at what crops are being emphasized this year and how the corn market may be influencing farmers’ choices. Also, are some crops heavier users of fuel than others, in terms of cultivation equipment and the costs to harvest, transport and process them? At what point do fuel costs determine what’s planted in your region’s agricultural land?
Diesel. Generally fuel-price stories focus on unleaded gasoline costs to consumers; just for a change you might generate a story about the history and outlook for diesel fuel prices and how that affects truckers, fleets, heavy equipment operators, bus companies and others. The fuel last week hit its highest price since March 2008, and as this article from The Trucker shows, concern about even bigger hikes is growing.
Boats and RVs. After clawing back a bit last year, the recreational vehicle and boat industry was hoping for an even better boost in 2011. But when you sell 36-foot coaches and craft that get single-digit fuel mileage, the specter of $4 a gallon must really put a cramp in spring sales projections. It probably doesn’t help cash-strapped consumers and small dealers trying to sell used stock on the secondary market, either. A timely look at recreational fuel users and the campgrounds, marinas, equipment suppliers, tourism centers and other businesses that depend on them would make a great business centerpiece.
Who benefits? Conventional wisdom has it that fast-food chains will reap as moderately priced chains lose customers worried about their fuel budgets. That seems a bit far-fetched in regions where consumers are within a short drive of a plethora of chains but you might ask eateries and wholesale suppliers about the outlook for this summer. Same with local tourism attractions, retailers and others who might capitalize on stay-near-home consumers.
Source: http://businessjournalism.org
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