Tuesday PM January 19th, 2010
by: Ed Mayberry, January 19, 2010 9:01:07 pm
Chevron plans to shrink its international refining business in a move that will cut jobs throughout the company. Chevron, the second-largest U.S. oil company, did not say how many of its employees will be affected and whether the job cuts will be focused in the U.S. A company spokesman told the Associated Press that Chevron would make a more detailed announcement in March. Chevron, headquartered in San Ramon, California, said it is making the change because the number of refineries has increased around the world while demand for petroleum has dropped in many countries.
Planned job cuts announced by technology firms were up for the second consecutive year in 2009, according to Challenger, Gray & Christmas, reaching the highest level since 2005. The sector includes computer, electronics and telecommunications firms. The 2009 planned job cuts total of 174,629 is 12.3 per cent higher than those announced in 2008, but a sharp downward trend in the second half of the year offers hope of a 2010 turnaround. The worst of the downsizing occurred in the first quarter of 2009. The report expects companies will try to postpone hiring by achieving productivity gains through technology, which could help computer and electronics firms be among the first to see a turnaround.
The Houston real estate market closed 2009 with readings that appeared high, compared to the fall of 2008, which followed Hurricane Ike, according to theHouston Association of Realtors. December volume of single-family homes dipped 2.1 per cent compared to the same month in 2008. Congress extended the deadline for a tax credit of up to $8,000 for first-time homebuyers and expanded it to include $6,500 for existing homeowners who move. The 2010 board chair is Margie Dorrance."Our do believe our look, as we go forward, will be much more realistic because the last quarter of 2009, when we compared year-over-year, we were comparing to a time when sales almost stopped. I think first-time home buyers were given an impetus to get out there and go ahead a buy a house. And now that that has been extended and expanded, the first-time homebuyer can get a possible credit of up to $8,000. That transaction needs to be in escrow by April 30th and needs to close by June the 30th. The income for a single person can be $125,000, and for a married couple up to $225,000."
The December 2009 median price of single-family homes in Houston rose 5.2 per cent from the previous year to $152,550—the eighth consecutive monthly increase. The average price was up 15.1 per cent compared to December 2008, reaching $219,214. Total dollar volume was $1.1 billion last month—an increase of 12.9 per cent compared to a year earlier.
The National Association of Home Builders says its housing market index fell this month to the lowest level since last summer. The drop reflects fears that demand for new homes will be weak despite the extension of a federal tax credit for buyers. The reading of 15 is second-straight monthly decline and the lowest since June. The index reflects a survey of 504 residential developers nationwide. Index readings below 50 indicate negative sentiment about the market.
A forecaster that tracks advertising trends is raising its outlook for this year, saying the two-year slump in U.S. ad revenue may be ending. Magna, a unit of the Interpublic Group of Companies, said it expects 2010 ad revenue of $161 billion this year, about the same as last year if political and Olympics ads are excluded. Previously, Magna had forecast a decline of 1.3 per cent this year. Ad revenue last rose in 2007 to a peak of $204 billion. Magna says national newspapers should see an ad revenue decline of 11.2 per cent after dropping 26 per cent in 2009. It says ad revenue at local newspapers will be 10.7 per cent lower this year after falling 27.2 per cent last year.
Average retail gasoline prices in Houston are up about 1.6 cents per gallon in the past week, averaging $2.56, according to GasBuddy.com. The national average has stayed flat at $2.73, according to HoustonGasPrices.com. Prices in Houston are up almost 89 cents compared to the same day one year ago, and almost 19 cents higher than last month. The national average is up 91 cents than this day a year ago, and almost 14 cents higher than last month.
OPEC has held its projection for world oil demand steady for 2010, noting indications of improvements in the global economy but voicing concerns that oil recent price rally remains on shaky ground. In its January oil market report, the Organization of the Petroleum Exporting Countries projected the world economy would grow by 3.1 per cent this year, up from its forecast of 2.9 per cent last month. The 12-member bloc, which supplies roughly 35 per cent of the world's crude, said world oil demand was expected to grow by 800,000 barrels per day in 2010, to 85.15 million barrels per day. That's steady with its December forecast. But OPEC warns that speculation was rife in the market and buoying crude prices. Oil is currently around $78 per barrel.
Williams says it will create one of the largest natural gas partnerships in the nation by combining pipeline and processing units. The new company will have a presence from the Rocky Mountains and the Gulf Coast to the northeast. Williams, based in Tulsa, Oklahoma, will get about $3.5 billion in cash from Williams partners to help pay down debt and will contribute its substantial assets to the new, larger Williams Partners. The parent company gets about $203 million in shares and its ownership share increases from 24 per cent to 80 per cent. One key asset that Williams will contribute to the partnership is the Texas Transcontinental Gas Pipeline, which runs to the bountiful Marcellus shale of Pennsylvania. The company values the deal at about $10 billion, plus $2 billion in debt.
The Canadian energy delivery company Enbridge is proposing another major pipeline to move natural gas from the Haynesville shale and from the producing east Texas region. The company planned open houses today in Logansport and tomorrow in Natchitoches to provide information about the proposed 340-mile interstate pipeline. Preliminary plans call for it run from the Enbridge Carthage hub in Panola County, Texas, through DeSoto and Natchitoches Parishes, and connect with Southern Natural Gas Pipeline in Washington Parish. Details are not final, and the Federal Energy Regulatory Commission must review the project. It's among a number of major pipeline projects announced since the Haynesville shale got busy in the spring of 2008.
The Bureau of Land Management plans an oil and gas lease sale on federal lands in Texas, New Mexico, Oklahoma and Kansas. The sale of oil and gas mineral rights will take place Wednesday at the BLM office in Santa Fe, New Mexico. The minimum bid is $2 an acre. Leases will be awarded for ten years or for as long afterward that there is production in paying quantities. New Mexico has the most land in the sale--18 parcels totaling more than 12,750 acres. Some 14 parcels will be offered in Texas, eight in Oklahoma and one in Kansas.
Top domestic destinations for travelers from Houston are led by Orlando, Florida, followed by Las Vegas. Tying for third place are Alaskan cruises and Honolulu vacations. New York City places fifth. The top international destination is Cancun, followed by a tie between Caribbean and European cruises in the Mediterranean. Buenos Aires is in fifth place. The figures are from Houston's 11 Travel Leaders agencies.
Overall growth of about two per cent returned to international tourism in the last quarter of 2009, according to the UNWTO World Tourism Barometer. International tourist arrivals shrank by ten per cent in the first quarter, seven per cent in the second quarter and two per cent in the third quarter--an overall estimated four per cent last year to an estimated 880 million. Asia and the Pacific and the Middle East led the recovery during the second half of the year. Worldwide growth between three and four per cent is expected this year.
Britain will host a meeting of finance officials from the Group of Seven nations on January 25th to discuss measures to protect the public from future bank failures, including a proposed global insurance levy. A British treasury spokesman says the meeting of senior G-7 civil servants, representatives from the International Monetary Fund and the Financial Stability Board, will feed into an IMF report due out in April. The officials will also discuss the use of contingent capital, the holding of debt instruments by banks that could be converted quickly into equity in times of stress. British Financial Services Minister Paul Myners, who will host the meeting, says he wants to promote a global debate about a U.S.-style insurance levy as part of a wider discussion about protecting taxpayers.
A new analysis of census data suggests growth in the number of working wives over the past 40 years has resulted in a shift in who gets the biggest economic boost from marriage. Historically, marriage was the surest route to financial security for women. But a Pew Research Center report says it's now men that benefit most. A larger share of today's men are married to women whose education and income exceed their own, and a larger share of women are married to men with less education and income. Back in 1970, the reverse was true. Median household income rose 60 per cent between 1970 and 2007 for married men, married women and unmarried women, but only 16 per cent for unmarried men. The Pew researchers noted that the economic downturn is reinforcing the gender reversal trends, with men losing jobs more often than women.
Foreign demand for long-term U.S. financial assets jumped sharply in November, rising to the highest level in more than two years even though China's holdings of treasury securities fell. Continued strong demand for U.S. debt is critical to financing America's soaring budget deficits and keeping domestic interest rates low enough to support a sustained economic recovery. The Treasury Department said foreigners purchased $126.8 billion more in assets than they sold in November, the largest gain since an increase of $128.9 billion in October 2007.
More than 900 Hurricane Ike-damaged parking meters in tourist-popular Galveston will be replaced with higher-tech versions. The city this month announced plans to install new electronic meters within 90 days. The Galveston County Daily News reports that the revenue would be go to the Galveston Park board of trustees to advertise the downtown area. Some critics say Galveston, still recovering from the September 2008 hurricane, should abolish parking meters to encourage more visitors. Greg Roof said he plans to circulate a petition calling for elimination of street parking fees to spur more island residents and visitors to patronize downtown Galveston. Craig Brown with the historic downtown Strand Seaport Partnership says merchants want parking meters. Brown says many residents, employees and construction workers are using the current free spaces next to damaged meters.
A compressed week for economic reports begins tomorrow with a look at housing starts from the government. Analysts look for a modest increase. Building permits, a gauge of future activity, are seen falling. Also tomorrow, the producer price index is due. The measure of inflation at the wholesale level is expected to be flat. Later in the week, new jobless claims and the leading indicators are scheduled for release.