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Gas jumps nearly 3 cents to record; oil crosses $124
Thursday May 8, 4:05 pm

Gas prices jumped nearly 3 cents to a new record, while oil passes $124 for the first time

NEW YORK (AP) -- Gasoline and crude oil jumped to new records Thursday, with gas rising 3 cents to an average national price of nearly $3.65 a gallon and oil crossing $124 a barrel for the first time.
At the pump, the average price of a gallon of regular gas nationwide rose 2.7 cents to a record $3.645, according to a survey of stations by AAA and the Oil Price Information Service. Diesel prices also rose, adding 0.9 cent to match a record national average of $4.251 a gallon.

Gas prices tend to lag oil futures, and with crude rising to a new record near $124 a barrel Wednesday and likely headed higher, it's widely expected the average price of gas will soon rise as high as $4. Motorists in many areas, including parts of California and Hawaii, are already paying that much, or more.

"If oil prices go the way that pundits are expecting, there's no way we'll stay under $4 a gallon," said Fadel Gheit, an analyst at Oppenheimer & Co. in New York.

Meanwhile, light, sweet crude for June delivery rose 16 cents to reach a settlement record of $123.69 a barrel on the New York Mercantile Exchange Thursday after spending much of the day in negative territory. But in after-market electronic trading, prices shot to a new trading record of $124.61. Analysts said volume was quite low, making it easy for oil to keep pushing higher.

"This appears to me to be computer-generated buying," said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos. Some investors use software that buys automatically when prices rise to certain levels; Thursday's record settlement may have triggered a flurry of electronic buy orders.

"There is no fundamental news out to cause this market to move like this," Rafield said.

Bullish momentum -- and expectations that the dollar will continue to weaken against foreign currencies including the euro -- are likely to keep pushing oil to new records, he said.

Goldman Sachs analysts recently predicted prices will rise as high as $150 to $200 a barrel within two years. That forecast has driven much of oil's gains in recent days.

Analysts at Goldman and firms such as Barclays Capital believe tight global supplies and growing demand from fast-growing economies in countries such as China and India are driving oil higher. But Gheit and analysts including Tim Evans at Citi Futures Perspective argue that supply and demand fundamentals don't support such high prices.

"There is no reason why oil prices should be above $60," Gheit said, noting that domestic crude supplies are at average levels, and that refineries are cutting gasoline production as high prices cut consumers demand for fuel. "The physical supplies do not justify the price, it just doesn't make sense."

OPEC Secretary General Abdalla Salem El-Badri on Thursday reiterated his position that oil supplies are adequate, and that there is no need for the cartel to boost production. He said several Organization of Petroleum Exporting Countries oil projects are coming on line, but he noted that several member countries are having a hard time finding buyers for their additional supplies.

El-Badri agrees with analysts who feel speculative investment driven by the dollar's protracted decline is the real reason behind higher prices. The dollar fell against the euro Thursday, attracting investors who view commodities such as oil as a hedge against inflation. Also, a weaker dollar makes oil cheaper to investors overseas.

Still, the market sometimes ignores the dollar, as it did Wednesday when oil surged to new records although the dollar advanced. Some analysts say that's a sign that many investors are buying on pure momentum -- believing prices will head higher regardless of negative data, news or dollar movements.

"There's a lot of momentum driving the oil price up," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

In other Nymex trading, June gasoline futures rose 1.96 cents to settle at a record $3.1378 a gallon after earlier rising to a trading record of $3.14, and June heating oil futures rose 6.25 cents to settle at a record $3.5098 a gallon after earlier reaching their own trading record of $3.5152. June natural gas futures fell 6.4 cents to settle at $11.263 per 1,000 cubic feet. The Energy Department said natural gas inventories rose by 65 billion cubic feet last week, but remain slightly below the 5-year average.

In London, June Brent crude futures rose 52 cents to settle at $122.84 a barrel on the ICE Futures exchange.

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Stocks rise modestly even as oil extends record high run
Thursday May 8, 5:53 pm

Wall Street, led by commodities producers, rises as oil prices reach new record above $124

NEW YORK -- Wall Street closed a quiet session with a moderate advance Thursday, with energy and other commodities companies leading the market as oil prices extended their record-breaking run.
The price of crude oil swept past $124 a barrel in late New York Mercantile Exchange trading, while gasoline rose to a new record of its own at the pump, climbing to a national average of nearly $3.65 a gallon.

Although the rising price of oil ignited concerns about inflation on Wednesday, knocking the Dow Jones industrial average down more than 200 points, stocks managed to hold on to their gains even as oil rose Thursday. Some of the big gainers were the companies that would benefit the most from higher commodities prices -- the oil companies and metals producers like Alcoa Inc. -- and they helped lift the major indexes.

Stocks also rose after retailers issued April sales results that, while not strong overall, were less gloomy than expected. The data suggested that high energy costs are leading consumers to alter their spending, and Wal-Mart Stores Inc. was one of the beneficiaries of that trend. But some apparel stores -- whose merchandise falls into the category of discretionary items -- again saw depressed sales as consumers budgeted more for gasoline and food.

Financial stocks were the worst performers of the day. Philip S. Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis, said investors likely are still jittery over the sector, with continued concern about whether the companies have problems on their books beyond subprime mortgages. "Our guess is that the worst is not over for the financials on a fundamentals basis," he said.

The Dow rose 52.43, or 0.41 percent, to 12,866.78.

Broader stock indicators turned higher after fluctuating at times during the session. The Standard & Poor's 500 index rose 5.11, or 0.37 percent, to 1,397.68, and the Nasdaq composite index rose 12.75, or 0.52 percent, to 2,451.24.

Bond prices rose as some investors sought the safety of government debt despite the gains in stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.78 percent in late trading from 3.85 percent late Wednesday.

Gold prices rose, while the dollar declined against most other major global currencies.

Mixed economic readings and lofty energy prices could keep the market in a holding pattern through the summer, said Janna Sampson, director of portfolio management at Oakbrook Investments. "With oil high and continuing to go up, it's going to be tough to get the market to have a sustainable rally."

Alfred E. Goldman, chief market strategist at Wachovia Securities, was a bit more optimistic, saying he estimates the economy is four months away from the end of an average-length recession, so the stock market should resume its climb again soon.

"Basically, the market is taking a time-out after the prior six weeks," Goldman said. "The bigger picture is a market that's in the process of transitioning from a bear to a bull, shifting from a situation where the glass is half-empty to one where the glass is half-full. And that takes time."

In a positive sign for the U.S. employment picture, which has seen four straight months of jobs losses, the Labor Department said Thursday the number of newly laid off workers seeking unemployment benefits dropped by 18,000 last week to 365,000 -- a larger decline than expected.

Aluminum producer Alcoa rose $1.56, or 4.1 percent, to $39.65. Oil companies also gained; Exxon Mobil Corp. rose $1.11 to $89.93, while Chevon Corp. was up $2.11, or 2.3 percent, at $97.44.

Wal-Mart rose 33 cents to $57.16, but Target Corp. fell $1.10, or 2.1 percent, to $52.34 after saying its same-store sales rose in April by an amount that was smaller than analysts forecast. Same-store sales are an important barometer of a retailer's health that reflects sales at stores open at least a year.

A weak U.S. consumer weighed on Toyota Motor Corp., which said late Wednesday that profits in the January-to-March period tumbled 28 percent due to the rising yen and weak North American sales. The Japanese automaker also predicted sales will drop for the fiscal year through March 2009 for the first time in several years, and that earnings will fall 27 percent.

Toyota's U.S.-traded shares fell $4.20 or 4 percent, to $100.56.

The Russell 2000 index rose 3.34, or 0.47 percent, to 719.55.

Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where consolidated volume amounted to a light 3.70 billion shares, compared with 3.94 billion shares traded Wednesday.

The European Central Bank left its interest rates unchanged Thursday. ECB President Jean-Claude Trichet pointed to clear upside risks to price stability, indicating that the bank is unlikely to lower its rates in the near future.

In overseas trading, Japan's Nikkei index fell 1.13 percent, Britain's FTSE index rose 0.16 percent, Germany's DAX index fell 0.06 percent, and France's CAC-40 fell 0.39 percent.

Google execs hope for long-term ad deal with *****
Thursday May 8, 11:26 pm

Google execs: Search leader still hopes to strike long-term ad deal with *****

MOUNTAIN VIEW, Calif. -- Google Inc.'s top executives expressed hope Thursday that the Internet search leader will be able to form a potentially lucrative advertising partnership with ***** Inc. -- a deal that would lower the odds of Microsoft Corp. renewing its attempts to buy *****.
"We have been talking to ***** and we are very excited to be working with them," Google co-founder Sergey Brin told reporters before the company's annual shareholders meeting. "We share a lot of values with them."

Neither Brin nor Google Chairman Eric Schmidt would indicate how far along the two sides are in their negotiations after a two-week test was completed last month. During the trial run, Google supplied a small portion of the text-based ads that appeared alongside the search results on *****'s Web site.

Because Google's technology proved it could select more profitable ads, the alliance could help ***** snap out of a prolonged slump that made it vulnerable to Microsoft's unsolicited buyout bid. Microsoft orally raised the bid to $47.5 billion, or $33 per share, before pulling it off the table last weekend.

Microsoft cited *****'s willingness to subordinate its own ad system to Google's as a major reason for dropping its bid.

Google suggested the ad partnership to ***** as a weapon to fend off Microsoft.

"We really believe in companies having choices about their destinies," Brin said. "It's not about scuttling (the deal). They were under a hostile attack and we wanted to make sure they had as many options as possible."

Schmidt left little doubt that Google was pleased to spoil the deal, however. He said he wanted to keep ***** out of Microsoft's hands largely because he was concerned the world's largest software maker would abuse the added power it would acquire in e-mail and instant messaging to limit consumer choices.

"Obviously, we are happy that is not going to happen," Schmidt said. He described Google's current relationship with ***** as "very, very friendly."

If ***** were to sign a long-term ad deal with Google, some analysts believe that would repel Microsoft for good. Although Microsoft executives have publicly indicated they are looking for other ways to bolster the software maker's unprofitable Internet operations, some investors still suspect another bid may surface if ***** continues to struggle in the months ahead.

The hopes for another bid have helped cushion the blow to *****'s stock since Microsoft walked away. ***** shares rose 58 cents to finish Thursday at $26.22 -- 8.5 percent below their price when Microsoft made its last bid.

A partnership between Google and ***** almost certainly would face intense antitrust scrutiny because the two companies together control more than 80 percent of the U.S. market for online search advertising. The U.S. Justice Department has already made inquiries about the two-week test they conducted.

"If there were a deal (with *****), we would anticipate structuring the deal to address the antitrust concerns that have been widely discussed," Schmidt said.

Although Schmidt wouldn't specify how Google might address the antitrust issues, analysts have speculated that it could be done by running the partnership as an auction-style system that would allow other rivals, including Microsoft, to show ads on *****.

Depending on the breadth of the partnership, Google's ad system could nearly double 2009 profit, UBS analyst Benjamin Schachter estimated in a research report released Thursday.

Google shareholders attending Thursday's meeting didn't seem to care about the implications of a potential ***** partnership. One shareholder, though, did ask Brin and fellow Google founder Larry Page about their recent marriages. Brin deflected the question, saying they preferred to confine the discussion to business.

In an unusual move, Brin abstained on two shareholder proposals that the company's board opposed.

One proposal sought to create a special committee on human rights to review the ramifications of the company's policies. The other asked for Google to stiffen its opposition to the demands of governments in China, Burma, North Korea, Iran and other countries that seek to censor search results and other Web content.

Although he said he didn't fully support the proposals, Brin said he empathized with the issues they addressed. He holds a special class of Google stock that gives him 28.5 percent voting power over shareholder issues.

Both shareholder proposals were defeated, according to Google, but a breakdown of the vote won't be disclosed until later this year.

SpiceJet launches tickets for Rs three

New Delhi, May 08: As full-service carriers hiked fares and surcharges due to skyrocketing jet fuel prices, the no-frill ones have launched special offers with SpiceJet On Thursday announcing the sale of three lakh tickets for Rs three each plus taxes and surcharge from tomorrow.

To celebrate its third anniversary on May 23, SpiceJet announced the special price of Rs three per ticket on all its flights, the booking for which starts tomorrow.

SpiceJet followed its low-cost competitor Goair, which recently introduced `zero fare` tickets, and state-owned air India express that offered tickets for Rs 99 plus taxes and surcharges.

Booking under the SpiceJet offer opens on May 9 and "will continue till the tickets are sold out", an airline spokesperson said, adding that bookings could be made through the airline`s call centre and the website.

The airline`s Chief Commercial Officer S Sridharan said in the past three years, SpiceJet has flown 8.1 million passengers and bagged 10.3 per cent share in the domestic aviation market.

No respite for common man as inflation soars to 7.61%


New Delhi, May 09: The latest figures released by the government on Friday confirmed that the wholesale price index based inflation rose to 7.61 percent for the week ended April 26, as against 7.57 percent in the previous week. The reports suggest that the rate was 3½-year high since November 13, 2004 when it stood at 7.68 percent. Inflation stood at 6.01 percent in the corresponding week a year ago.

The spiralling rate of inflation once again reflects that the slew of measures taken by the government is yet to yield concrete results. However the Centre seems optimistic that the rate will come under control in a couple of weeks with the PM assuring about the same.

Making life more difficult for the common man, the prices of certain essential commodities like fruits and vegetables rose by one percent, fish marine by two percent, spices and cardamoms by three percent. The price of tea also rose by 11 percent.

However, prices of pulses declined by nearly one percent. Among manufactured products, mustard oil and imported edible oil went expensive by one percent and four percent respectively.

The price of steel rose by 11% despite a cut announced by companies. The government has also got assurance from cement firms on price cuts.

The UPA government under pressure to contain prices ahead of elections due by next year, has cut import duties on edible oil and curbed rice exports and cement and asked steel firms to roll back price rises to fight inflation.

The Central Bank maintained a tight monetary stance, and last month it raised the Cash Reserve Ratio by 0.25 to 8.25 percent, its highest level in seven years, to drain extra cash.

Oil surpasses $125 per barrel ahead of US driving season
Friday May 9, 6:52 am


Oil prices surpass $125 a barrel before US driving season as investors flee the dollar

Oil prices surged past $125 per barrel Friday on the eve of the U.S. driving season as a weakening U.S. dollar drove investors to snap up commodities.
Light, sweet crude for June delivery rose as high as $125.12 a barrel in electronic trading on the New York Mercantile Exchange at midday before falling back to $124.86 by early afternoon in Europe.

On Thursday, the contract rose to a record close of $123.69 a barrel.

In London, Brent crude contracts also hit record highs before slipping and traded up $1.13 on the day at $123.97 a barrel on the ICE Futures exchange. Earlier Friday, Brent had reached $124.25 before falling back.

On Friday, The Wall Street Journal published a report that suggested closer ties between Venezuelan President Hugo Chavez and rebels attempting to overthrow Colombia's government, heightening chances that the U.S. could impose sanctions on one of its biggest oil suppliers as a state sponsor of terror.

Chavez has been linked to Colombian rebels previously, but the paper reported it had reviewed computer files indicating concrete offers by Venezuela's leader to arm guerillas.

Comments Thursday from European Central Bank president Jean-Claude Trichet signaling that the bank was unlikely to consider interest rate cuts helped strengthen the euro against the U.S. currency.

By midday in Europe, the euro stood at $1.5466 compared to $1.5404 in late trading Thursday night in New York. The dollar was also weaker Friday against the British pound and the Japanese yen.

Investors view commodities such as oil as a hedge against inflation, and some analysts think the dollar's protracted decline is the main reason behind oil prices doubling from a year ago. Also, a weaker dollar makes oil cheaper to investors overseas.

A prediction by analysts at Goldman Sachs seeing oil rising as high as $150 to $200 a barrel within two years also has boosted prices.

Analysts, however, struggled to explain the continued rise of oil futures after a larger-than-expected build in crude oil stocks reported Wednesday in the United States.

Some pointed to a small decline in distillate stocks, which include diesel and heating oil and normally drive prices during the Northern Hemisphere winter; others said speculation and computer-generated buying was keeping oil prices high.

"Crude oil is currently held up in a tug-of-war between the Goldman reality and the physical reality," said Olivier Jakob of Switzerland's Petromatrix in a research note, adding that the investment bank's prediction made for "a great story to support pension funds piling more into commodities."

Mark Pervan, senior commodity strategist at ANZ Bank in Melbourne, Australia, said it may be a combination of continued wariness over potential supply disruptions as well as prospects for a strengthening in crude demand heading into the U.S. summer driving season.

"U.S. gasoline stocks have certainly dropped quite sharply over the last month," he said. "What'll happen in the near term is that we may likely see an uptick in U.S. refining capacity to rebuild gasoline stocks and we may see a short-term build in crude demand as a result."

Computer files retrieved from the laptop of a top guerrilla suggested broader and deeper ties between Venezuela's leader and the Revolutionary Armed Forces of Colombia than has been reported in the past, The Wall Street Journal reported Friday.

Ties between the U.S. and Venezuela are already strained. Chavez has said the computer files are fakes.

Prices may also be getting a boost from comments Thursday by the OPEC secretary general.

Abdalla Salem El-Badri on Thursday reiterated his position that oil supplies are adequate. He said several Organization of Petroleum Exporting Countries oil projects are coming on line, but he noted that several member countries are having a hard time finding buyers for their additional supplies.

In other Nymex trading, June gasoline futures rose 1.92 cents to $3.1570 a gallon, while heating oil futures rose 3.02 cents to $3.54 a gallon. Natural gas futures rose 5.1 cents to US$11.314 per 1,000 cubic feet.

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Gas jumps above $3.67, oil passes $126 on Venezuela concerns
Friday May 9, 12:37 pm

Gas pushses above $3.67 a gallon, while oil passes $126 on Venezuela supply concerns

NEW YORK -- Oil rose above $126 a barrel for the first time Friday, bringing its advance this week to nearly $10, as investors questioned whether a possible confrontation between the U.S. and Venezuela could cut exports from the OPEC member. Gas prices, meanwhile, rose above an average $3.67 a gallon at the pump, following oil's recent path higher.
On Friday, The Wall Street Journal published a report that suggested closer ties between Venezuelan President Hugo Chavez and rebels attempting to overthrow Colombia's government. Chavez has been linked to Colombian rebels previously, but the paper reported it had reviewed computer files indicating concrete offers by Venezuela's leader to arm guerillas. That appears to heighten the chances that the U.S. could impose sanctions on one of its biggest oil suppliers.

"If we put on sanctions, I'm sure Chavez would threaten to cut off our oil supply," said Phil Flynn, an analyst at Alaron Trading Corp. "Obviously that would have a major impact on oil prices."

Light, sweet crude for June delivery vaulted to a new record of $126.20 in morning trading on the New York Mercantile Exchange before retreating to trade up $1.28 at $124.97 a barrel.

Even if Chavez cut oil shipments to the U.S., Venezuelan oil would still make its way to the U.S. via middle men, who would buy it from Venezuela and resell it to the U.S., Flynn said. But that new layer in the supply chain would bump up costs.

Oil prices also were boosted Friday by the dollar, which declined against the euro. The European Central Bank said it was unlikely to consider interest rate cuts to cool the strong euro against the slumping dollar. Investors often buy commodities such as oil as a hedge against inflation when the greenback falls. A weaker dollar also makes oil less expensive to overseas investors.

Many analysts believe the dollar's protracted decline has much to do with the doubling in oil prices since this time last year. Another school of thought thinks tight global supplies of oil, driven by growing demand in countries such as China, Brazil and India, is the primary factor driving oil higher.

Oil's surge is pushing retail gas prices higher. The national average price of a gallon of regular gas jumped 2.6 cents overnight to a record $3.671 a gallon according to a survey of stations by AAA and the Oil Price Information Service. The Energy Department expects prices to peak at a monthly average of $3.73 in June, though many analysts say national average prices could rise as high as $4. Consumers in many regions, including parts of California and Hawaii, are already paying that much.

Demand for diesel fuel is also growing worldwide, but supplies of distillates, which include diesel and heating oil, fell unexpectedly last week, the Energy Department said Wednesday. That's pushing U.S. diesel prices to record highs and inflating heating oil prices in the futures market; heating oil futures are often viewed as a proxy for diesel.

Heating oil for June delivery rose 7.15 cents to $3.5813 on the Nymex after earlier setting a trading record of $3.6125. At truck stops, retail diesel prices rose 1.8 cents overnight to a record national average of $4.269 a gallon,

Diesel is used to move most of the world's food, consumer and industrial goods via truck, ship and rail. Skyrocketing diesel prices are part of the reason food and consumer goods prices are so high.

In other Nymex trading Friday, June gasoline futures rose 3.92 cents to $3.177 a gallon, and June natural gas futures rose 14.8 cents to $11.411 per 1,000 cubic feet.

In London, June Brent crude futures rose $1.83 to $124.67 a barrel on the ICE Futures Exchange.

Associated Press Writer Pablo Gorondi in Budapest and AP Business Writer Thomas Hogue in Bangkok, Thailand, contributed to this report.

Novartis Q4 net down by 10%

New Delhi, May 09: Drug firm Novartis India Ltd on Friday reported a net profit of Rs 21.5 crore in the quarter ended on March 31, 2008, a decline of around 10 percent compared to the same period last year.

Last year the company recorded a net profit of Rs 23.8 crore in the same quarter, Novartis said in a statement.

During the fourth quarter of financial year 2008. The company reported a total income of Rs 144.8 crore, a marginal increase of 0.75 percent as compared to the same period a year-ago.

It has reported total income of Rs 143.8 crore in the quarter ended on March 31,2007.

However in the financial ended on March 31, 2008; Novartis has reported a total income of Rs 612.3 crore and a net profit of Rs 97.2 crore.