Economic Outlook: Driving the economy

Saudi Arabian Oil Minister Ali Naimi called the price of oil nearly perfect this week, perhaps a premature comment, all things considered.

Oil prices suddenly rose after his comment, jumping to an 18-month high above $85 per barrel in a week dominated by conversations about the environment, the economy and the U.S. standard of living.

Environmental Protection Agency Administrator Lisa Jackson and Transportation Secretary Ray LaHood made the connections perfectly clear when they announced new fuel-efficiency standards that would apply to cars built between 2012 and 2016.

Pushing for average fleet fuel efficiency of 34.1 miles per gallon for cars built by the end of that stretch -- with an expected improvement in efficiency of 5 percent a year -- LaHood called the higher standards "ambitious but achievable." He also said, "We will be helping American motorists save money while putting less pollution in the air."

Jackson said the standards were "an important example of how our economic and environmental priorities go hand in hand."

Of course, the equations are not always so simple, but it is a pleasant concept that every time you do something to help the environment, you can also put money in the bank. In this case, consumers can expect to save $3,000 in gas purchases over the life of a car affected by the mandate, and collectively the atmosphere will be spared 960 million metric tons of carbon dioxide emissions.

Win-win-win … who loses? Cynics will point out the announcement came a day after President Barack Obama took a political risk by lifting some limitations on offshore oil exploration, a move that appears to have had a favorable, if muted, response from the industry but made some environmentalists hopping mad.

Ali Naimi, it might be noted, called the price of oil "perfect" Dec. 9 when a barrel of oil cost about $71. This week, he said the price was "close to perfection" at $80 plus.

At whatever price, perfection implies two critical concerns for the Organization of Petroleum Exporting Countries, of which Ali Naimi is, arguably, the most influential member.

The perfect price allows oil exporters to afford exploration for future wells and future sales. It also keeps customers satisfied with a price low enough that it does not slow economic development around the world.

In March, the Toyota Motor Co. sold 186,863 vehicles in the United States with an average incentive of $2,256 to customers to drive cars off dealership lots, The Washington Post reported Friday.

Toyota's sales jumped 41 percent from March 2009 and Ford Motor Corp. sales surged 40 percent from a year ago with an average incentive of $3,304 dangled in front of customers. General Motors Co. had sales climb 22 percent from a year ago but with a higher average incentive offered, and Chrysler Group spent $3,3559 on incentives in a less effective campaign with sales off 8 percent from March 2009.

And where is a driver going to go these days? In Washington, the White House took another stab at placating environmentalists by announcing it would buy the first 100 all-electric Chevrolet Volts that roll off the assembly line this year, helping them avoid what is likely to be $3 per gallon gasoline by the time the first Volts are charged up.

In international markets Friday, the Nikkei 225 in Japan rose 0.37 percent and the Shanghai composite index in China added 0.33 percent. The Hang Seng index in Hong Kong rose 1.4 percent and the Sinsex in India gained 0.94 percent.

The S&P/ASX 200 in Australia rose 0.66 percent.

In midday trading in Europe, the FTSE 100 index in Britain rose 1.15 percent and the pan-European DJ Stoxx 50 rose 1.51 percent.