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European automakers have put on a brave face and fared better than their U.S. counterparts but a reality check looms as surging fuel and raw material prices put earning forecasts at risk.

Analysts say France’s PSA Peugeot Citroen (PEUP.PA: Quote, Profile, Research, Stock Buzz) and Renault (RENA.PA: Quote, Profile, Research, Stock Buzz) could miss their operating margin targets, forcing them to either trim targets or boost cost cutting, possibly as part of mid-year results due this month.

“It’s unrealistic to assume that Renault will achieve its original guidance,” said Pierre-Yves Quemener, head auto analyst at Landesbanki Kepler.

“The chances of “commitments miss” are growing week after week as cost inflation bites each time deeper and as the macro environment is depressing volumes.”

PSA and Renault, Europe’s No 2 and No 6 makers, have declined to comment ahead of their mid-year results cheap payday loans.

Sergio Marchionne, CEO of Italy’s Fiat (FIA.MI: Quote, Profile, Research, Stock Buzz), which ranks fifth, has stood by his group targets.

“Despite what is happening, we are not only keeping our 2008 profit and cash flow forecasts, but we confirm those for 2009,” Marchionne told a conference this week.

But in a year when the price of oil is up 45 percent, some steel prices are up 50 percent and other raw materials such as aluminum have also surged, assumptions and forecasts are proving hard to hold on to. 

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Manhattan apartment sales dropped the most for a second quarter since 1998 and unsold inventory approached an eight-year record, two signs prices may be poised to drop in the nation's most expensive urban housing market.

Sales fell 22 percent from a year earlier and inventory rose 31 percent to 6,869 units, New York-based real estate appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. The median price of a co-operative or condominium apartment increased almost 15 percent to a record $1.03 million, lifted by new developments.

Transactions are declining as financial firms have announced plans to cut almost 90,000 jobs after taking more than $400 billion in mortgage-related losses and writedowns. Those companies may lose as many as 175,000 employees by next June, according to executive recruiters such as New York's Gerson Group, casting a pall on a property market driven by Wall Street compensation.

“People are asking: `Am I going to have a job?''' said Pamela Liebman, chief executive officer of the Corcoran Group, a Manhattan-based real estate brokerage that also issued a price report today. “There is a lot of uncertainty and uncertainty puts people on the sidelines.''

The U.S. housing slump started in mid-2005 when sales of new and existing homes began to drop, bringing a five-year boom to a close. Prices for existing homes started falling last July and finished the year below 2006 levels, the first annual decline since the Great Depression, according to the National Association of Realtors in Chicago.

Longer Selling Time

While prices in New York City are holding up for now, buyers remain wary and apartments are taking longer to sell. The average time spent on the market rose 15 percent to 135 days, according to Miller Samuel. At the end of May, there were 7,320 housing units for sale in Manhattan, the second-highest number for the month since Miller began keeping records in 2001.

“There is sort of the anticipation, the expectation that the other shoe is going to drop,'' Miller Samuel President Jonathan Miller said. “I think for this quarter, it hasn't.''

All four reports issued today show price increases. Corcoran, owned by Apollo Management LP, and the New York-based brokers Brown Harris Stevens and Halstead Property LLC, owned by Terra Holdings LLC, produced reports in addition to Miller's. The figures vary in part because the brokers include some of their own sales that have yet to show up in the city's public records database.

Manhattan apartment prices rose 3.6 percent in 2007, according to Miller Samuel.

Luxury Sales

About a third of second-quarter closings were new condominiums, some of which went into contract before turmoil hit the credit markets last August and September, said Gregory Heym, chief economist for Terra Holdings us fast cash.

Many of the units closing now are multimillion dollar condominiums at the recently converted Plaza and at architect Robert A.M. Stern's 15 Central Park West.

Those properties helped drive the median condominium price up almost 22 percent to $1.3 million in the three months ended in June and contributed more than three percentage points to the city's overall increase in median price, according to Miller. Without them, the median rose 11.2 percent, Miller said.

Goldman Sachs Group Inc. Chairman Lloyd Blankfein, former Citigroup Inc. Chairman Sanford Weill and rock star Sting have bought units at 15 Central Park West, where the apartments have heated bathroom floors, Vermont marble countertops and six-burner Thermador ranges.

Future Bonuses

Other buyers there include Nascar Inc. Chairman Brian France, who paid $10.7 million, and Mitchell Julis, co-founder of the asset management firm Canyon Partners LLC, who paid $10.2 million, according to city records.

Once the remaining units in Stern's building and the Plaza close, average prices may drop as much as $200,000, Heym said.

“I don't expect to see any dramatic price change before the end of the year,'' Heym said. “The real telling thing will be Wall Street bonuses and how the city looks going into 2009.''

Prices of two-bedroom apartments rose 18 percent to $1.65 million, the biggest increase for any size category. Studios rose almost 12 percent to $480,000, one bedrooms increased 11 percent to $778,961, three bedrooms by 3 percent to $3.7 million and apartments with four or more bedrooms climbed 11 percent to a median of $7.35 million, Miller's data show.

`Kiss the Ground'

The top end of the residential market remained the strongest as wealthy buyers bought condominiums with amenities such as gym and spa services, hotel-style room service and swimming pools.

The median price of a luxury apartment rose almost 38 percent to $4.95 million in the Miller Samuel survey and 35 percent to $4.88 million, according to Corcoran. Both companies consider apartments of more than $3.1 million as luxury.

“Real estate markets go up and down, and when it comes to New York City, it's an island. There's not a lot of land, and it'll survive,'' said Dottie Herman, chief executive officer of Prudential Douglas Elliman. “I think we need to kiss the ground because we live in New York.''

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World energy use is expected to surge 50% from 2005 to 2030, largely due to an expanding population and rapid economic growth, according to a government report Wednesday.

Without any new laws restricting greenhouse gases, carbon dioxide emissions will see a similar jump, the Energy Information Administration said in its annual report on global energy markets.

Demand for new energy is led by the developing world, EIA said.

While developed countries are expected to see a 19% rise in energy use, demand for energy in the developing world is expected to surge 85%.

Oil prices are expected to range from $113 to $186 a barrel, under different price scenarios the agency modeled.

"Given current market conditions, it appears that world oil prices are on a path that more closely resembles the projection in the high price case than in the reference case," the report said.

Under the high price case, world oil use is expected to grow to 99 million barrels a day in 2030, from about 85 million barrels a day currently, as high prices limit demand.

In the medium price case, worldwide oil use is expected to jump to 113 million barrels a day, EIA said, as oil prices ease to about $70 in the next few years and new supplies come online.

The projections in the report were based on 2007 oil prices. Oil has nearly doubled in price since then.

Although the government and the oil companies say producing 113 million barrels of oil a day is possible, market skepticism has kept oil prices high over the last few years.

The International Energy Agency, a sister organization to EIA established by developed countries to counter the influence of OPEC, recently said it is revising its assumptions about oil supply. That agency said it’s likely the world will not be able to produce more than 100 million barrels of oil a day by 2030.

Others in the industry, like the oilman T. Boone Pickens, feel the world is pretty much maxed out at 85 million barrels a day.

"The key here is going to be supply," said Paul Horsnell, head of commodities research at Barclays Capital in London http://us-no-fax-payday-loans.com. "And we’re thinking closer to 100 [million barrels a day] as opposed to 115."

The report also said that rising prices are expected to decrease the use of oil and biofuels as a fuel, going from 37% of the world’s energy use in 2005 to 33% in 2030, although liquids will remain the largest single source of energy.

Production of so called non-conventional liquid fuels - things like ethanol, coal-to-liquid, heavy oil and oil from tar sands - is expected to see a big increase.

Under the medium price scenario, these unconventional fuels go from 2.5 million barrels a day in 2005 to nearly 10 million barrels a day in 2030. Under the high price scenario, these numbers could be much higher, the report said.

Without any new greenhouse gas restrictions, coal use is expected to soar - increasing 64% by 2030.

China - which the report said has doubled its coal use since 2000 - is leading the way, accounting for over 70% of new coal consumption.

China, along with India and the U.S., has huge amounts of coal, which is a cheap but dirty fuel.

Electricity generation under the medium prices scenario is expected to nearly double by 2030, the report said, fueled mainly by coal and natural gas.

But future legislation could curb those predictions. The agency noted that "the outlook for fossil-fuel-fired generation could be altered substantially by international agreements to reduce greenhouse gas emissions."

Nuclear power is expected to increase by nearly 50%, the report said, mostly in India and China.

Use of renewable energy is expected to increase nearly 70% by 2030. But much of that is due to large hydropower projects, and under current policies, renewables’ overall contribution to global energy supply remains small.  

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