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Msg  91055 of 447412  at  4/12/2012 9:09:54 AM  by

sophocles


Record Oil-Gas Ratio May Spur Truck-Fuel Shift

Record Oil-Gas Ratio May Spur Truck-Fuel Shift

By David Wilson

April 12 (Bloomberg) -- Natural gas is the truck fuel of
the future because crude oil and related products have become
increasingly costly in relative terms, according to Alexander E.
Potter, an analyst at Piper Jaffray Cos.
The CHART OF THE DAY tracks the price ratio between a
barrel of oil and a million British thermal units of gas on the
New York Mercantile Exchange. The ratio rose above 50 yesterday
for the first time since gas futures began trading on the Nymex
in April 1990.
Average U.S. pump prices for the diesel fuel used in trucks
have risen about three times as much as crude since 2008, when
the chart begins, according to data compiled by the American
Automobile Association.
“Natural gas is replacing diesel as the preferred truck
fuel,” Potter, based in Minneapolis, wrote in a report two days
ago. He estimated that trucks running on compressed or liquefied
natural gas may rise to 20 percent of sales in five years. They
accounted for only 0.9 percent of North American sales in 2010,
according to Frost & Sullivan, a consulting firm.
Trucking companies can save as much as $32,000 a year by
fueling their vehicles with gas rather than diesel, the report
said. The savings approach the $35,000 cost of converting to a
gas-powered truck.
“Diesel will one day be considered obsolete when it comes
to fueling truck fleets,” Potter wrote. He recommended buying
shares of Westport Innovations Inc., the maker of a gas engine
suitable for heavy trucks, to profit from the shift.


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