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Energy Sector Roundup: Oil Out of Gas
© 2008 The Associated Press
NEW YORK — Following is a summary of top stories in the energy sector Friday afternoon.
Crude Holds Its Ground
Oil ended the day flat, keeping its distance from that $112.21 a barrel record set earlier in the week. Light, sweet crude for May delivery fell 70 cents to $109.41 on the New York Mercantile Exchange. But retail gas and diesel prices jumped to new records.
Light, sweet crude for May delivery rose 3 cents to $110.14 on the New York Mercantile Exchange, as the stock market took a battering _ shaken by disappointing first-quarter earnings from General Electric and sobering news of gloomy consumer sentiment.
Gas prices at the pump added 0.8 cent to $3.365 a gallon, according to AAA and the Oil Price Information Service. Retail diesel prices rose 2.1 cents to $4.066, topping the previous high set a day earlier.
In other Nymex trading, heating oil futures added 0.35 cent a gallon to $3.1975, while gasoline futures gained 1.52 cents at $2.8073 a gallon. Natural gas futures slipped by 19.7 cents to $9.901 per 1,000 cubic feet.
IEA Says Oil Demand Slipping
The International Energy Agency says demand for oil will slip in the coming months as the global economy slows _ but prices may remain high because of uncertainty over supply.
The Paris-based IEA revised downward its overall forecast for oil demand in 2008 by 310,000 barrels a day to 87.2 million barrels, following new projections on slumping worldwide economic growth by the International Monetary Fund.
Falling demand in rich countries in the past delivered some relief from high oil prices, but the IEA also noted a drop in global oil supply in March, by 100,000 barrels a day.
The report forecasts a global oil supply surplus in April and May, but said a similar surplus last year did little to stem rising oil prices.
Oilfield Services May See Slower Growth
Shares of oilfield services companies sank with the broader market in Friday's session. The Philadelphia Oil Service Sector Index (OSX) fell about 1.5 percent in afternoon trading, to 296.79.
As the first-quarter earnings season gets under way, Calyon Securities analyst Mark Urness said investors can expect slower growth from service and drilling companies after average 7 percent revenue growth over the past 2 1/2 years.
"However, we expect oil service and drilling companies to show slightly moderating but attractive earnings growth in the first quarter of 2008 both on a sequential and year-over-year basis," he said. "In our view, some midcap equipment companies, onshore drillers and most deepwater drillers will drive the earnings growth."
Schlumberger Ltd. kicks off the earnings season for the sector a week from today, and Urness expects a "rocky start" with the company missing analysts' estimates of $1.12 per share.
"During the first quarter, rising international demand driven by the Eastern Hemisphere and Latin American markets is expected to be offset by some weakness in North America, resulting in the large-cap equipment companies showing flat sequential earnings."
Fewer Rigs Working in U.S.
The number of rigs actively exploring for oil and natural gas in the U.S. this week dropped by 15 from last week to 1,815.
Baker Hughes Inc., which tracks rigs worldwide, said 1,451 were looking for natural gas and 355 for oil. Nine are considered "miscellaneous."
A year ago, the rig count stood at 1,758.
This week, 62 rigs are working offshore _ almost all are in the Gulf of Mexico.
There are 112 rigs working in Canada, down 14 from a week ago, up 15 from a year ago.
China March Oil Imports Hit Record
China's oil imports surged to a record 17.3 million tons in March, according to government data.
China, which imports almost half the oil it uses, imported an average of just over 4 million barrels a day last month. The U.S. imports about 10 million barrels of oil a day and remains the biggest consumer of petroleum in the world.
Japan imported about 4.4 million barrels of oil a day in February, based on data from the country's Natural Resources and Energy Agency.
China's oil imports in the first quarter of the year rose 15 percent from a year earlier, to 45.5 million tons. The value of those imports jumped 91 percent, year-on-year, to $30 billion, as the price of crude oil surged.
Energy Dept. Offers Loan Guarantees for Nuclear, Renewables
The Energy Department says it will start taking more applications this summer for as much as $38.5 billion in loan guarantees for projects that reduce or eliminate greenhouse gas emissions. That includes nuclear and renewable energy.
Up to $18.5 billion in guarantees could go to nuclear power and $2 billion for facilities linked to "front-end" activities such as uranium enrichment.
DOE said it may also provide $10 billion for efficiency, renewable energy, and transmission projects, and $8 billion for advanced fossil energy projects.
The Energy Department has the budget authority to issue the loan guarantees through fiscal 2009.
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