Energy Sector Roundup: Gasoline Hits $3.60 a Gallon
NEW YORK—Following is a summary of top stories in the energy sector Monday afternoon.
Gasoline and Crude Rise to New Records
Gas prices hit $3.60 a gallon and oil futures rose to a new record as well, near $120 a barrel, as strikes overseas raises concerns about crude supplies.
Light, sweet crude for June delivery rose to a record $119.93 a barrel in electronic trading on the New York Mercantile Exchange overnight on concerns about supply disruptions in the U.K. and Nigeria. Prices later retreated to settle up 23 cents at $118.75 a barrel after the dollar stabilized against the euro.
At the pump, the national average price for a gallon of regular rose 0.4 cent overnight to a record $3.603 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. While prices are 66 cents higher than a year ago, the rate of increase slowed since last week, when prices jumped more than 2 cents a day at times.
That could suggest that a price peak is near, analysts said. May gasoline futures fell 2.3 cents to settle at $3.0307 a gallon.
May heating oil futures fell 0.4 cent to settle at $3.2988 a gallon, and natural gas rose 31.7 cents to settle at $11.280 per 1,000 cubic feet.
Strikes Keep Oil Prices Up
Labor actions that cut crude supplies from the North Sea and Nigeria helped keep oil prices up around $120 a barrel. BP PLC on Sunday shut down the Forties Pipeline System that carries more than 700,000 barrels of oil a day to the U.K. because of a 48-hour walkout by employees in a pension dispute at a refinery in central Scotland.
Workers will return to the Grangemouth refinery Tuesday, their union said. But the union also said further industrial action is possible unless refinery owner Ineos backs down.
Representatives of ExxonMobil Corp. met with striking white-collar workers who have shut down oil production at the company's operations in Nigeria.
The strike began late last week, and the company said oil output was affected, although it's not clear by how much. ExxonMobil notified clients it may not be able to meet contractual obligations for oil.
A company spokesman said reports suggesting that the company's entire 800,000 or so barrel per day production was locked in were "unverifiable." He said oil was still being pumped from one area.
The strikers are demanding better pay and benefits. Nigeria is a major provider of oil to the U.S., shipping over a million barrels a day.
"Present disruptions, with the exception of the ongoing Nigeria civil strife, are not expected to be of long duration," said Platts Chief Economist Larry G. Chorn. "Hence prices are expected to return to the $110 to $115 range over the next few days. There are adequate inventories in place to offset temporary production shortfalls.
"That being said, the global supply capacity is very tight with approximately an additional one million barrels of OPEC per day available within a 30-day window and no non-OPEC volumes available," Chorn said.
Energy Dependence Tops U.S. Security Concerns
A new survey from Public Agenda and the publication Foreign Affairs finds U.S. dependence on foreign oil a top national security concern for Americans.
The sixth edition of the Confidence in Foreign Policy Index, which tracks attitudes on over 110 items related to foreign policy, shows about 60 percent of Americans think reducing energy dependence would strengthen national security "a great deal," replacing improving intelligence operations at the top of the list of strategies for better national security.
"The most important takeaway for leaders is this: The public's concerns about energy policy aren't limited to rising gas prices. Americans are connecting energy policy to national security issues in ways that they didn't just a few years ago," said Public Agenda Chairman Daniel Yankelovich.
The study was based on telephone interviews with a nationwide sample of more than 1,000 adults between March 18 and April 1.
PetroChina Blames Government Controls for Profit Plunge
PetroChina Ltd. said first-quarter profit plunged 31.5 percent in large part because of government controls that bar it from passing on record crude-oil costs to consumers.
China's biggest oil company said profit was 28.8 billion yuan ($4.1 billion) for the three months ending March 31. PetroChina is the publicly traded arm of government-owned China National Petroleum Corp.
Chinese producers are suffering heavy losses that they blame on government controls that have frozen retail gasoline and diesel prices.
PetroChina's first-quarter revenue jumped 41.9 percent over the same period of 2007 to 259 billion yuan ($37 billion). Sales of gasoline, diesel and kerosene rose 18.5 percent, driven by China's economic boom and increased car ownership.
PetroChina American Depositary Shares fell $3.77, or 2.5 percent, to $145.73 in afternoon trading.
Total Buying Canada Oil Sands Company
Total SA plans to buy Synenco Energy Inc. for 478 million Canadian dollars ($472 million).
Synenco's main asset is a 60 percent stake in the Northern Lights project. SinoCanada Petroleum Corp., a subsidiary of China-based Sinopec, owns the rest.
"The project is well advanced through the regulatory process, however significant new capital would be required to fund the company's share of the costs to develop the Northern Lights assets," Synenco CEO Mike Supple said in a conference call with analysts.
Synenco, based in Calgary, Alberta, said in February that it was looking for a buyer. Northern Lights has been on hold since last May, after estimated costs to develop the project swelled to more than $10 billion.
Total is already invested in the Alberta oil sands region -- including two leases expected to produce more than 250,000 barrels per day in the next decade.
Group Says Energy Companies Must Disclose More
The anti-corruption group Transparency International rated more than 40 energy companies on how much they disclose about where they get their revenue, how much they pay host governments and how they operate.
The survey gave low grades to Exxon Mobil but praised Shell and Petrobras.
Royal Dutch Shell PLC, Brazil's Petrobras, Norway's StatoilHydro ASA and Petro-Canada are among the most forthcoming companies. U.S.-based Exxon Mobil Corp., Russia's OAO Lukoil and the China National Offshore Oil Corp., known as CNOOC, fell into the lowest tier.
"Information is crucial, it's fundamental for civil societies to request information on where the revenue from energy extraction is going to and coming from," said Juanita Olaya, who manages the program for the report.
Exxon Mobil said it was working to establish transparency agreements with governments where it had significant investments, including Chad, Azerbaijan, Kazakhstan and Nigeria.
The company said in a statement that it was "committed to honest and ethical behavior" and "constructively participates in transparency and anti-corruption programs."
BP PLC, Chevron Corp., ConocoPhilips, Eni SpA and Total SA were in the middle tier of companies that disclose revenue by geographic region and which the report said could improve by giving a country-by-country breakdown.
--Compiled by AP Business Writer Greg Stec. Questions or comments can be directed to gstec@ap.org.
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