Wednesday AM November 8th, 2006
by: Ed Mayberry, November 8, 2006 5:11:00 am
The nation's appetite for oil is growing. The Energy Information Administration is predicting demand in the current quarter will average 21.03 million barrels a day, up 1.2 percent from a year ago. That's a gain of eight-tenths of a percent from its forecast a month earlier. The EIA is also projecting demand for the first three months of next year will be up 2.6 percent from a year ago—to 20.91 million barrels a day. For all of 2006, the agency says demand will come to 20.68 million barrels a day--a drop of six-tenths percent from 2005. But for next year, demand is expected to rebound 1.5 percent--to 20.99 million barrels a day.
Citgo Petroleum has won a jury award of $387 million for damages related to a 2001 fire at a Chicago-area refinery, according to Reuters. A jury in Cook County, Illinois, found McDermott International 45 percent liable for the fire. Former refinery owner Unocal, later acquired by Chevron, was ruled 40 percent liable. Citgo was held 15 percent liable. Citgo contends a defective pipe produced by McDermott unit Babcock and Wilson caused the fire.
The South Texas Project Unit 1 nuclear reactor has resumed power production after a 34-day shutdown for refueling. The unit was idled October 1st. Nuclear reactors need to be shut down every 18 months to be refueled. The twin-unit STNP is owned by NRG Energy and the Cities of San Antonio and Austin.
American Airlines pilots want their compensation linked to future profits, now that the Fort Worth-based air carrier's financial outlook has improved. The 13,000-member Allied Pilots Association is now in contract talks with American. Parent AMR reported a profit in the last two quarters after suffering $8.1 billion in losses between 2001 and 2005.
Dallas-based Earth Biofuels has bought a controlling stake in Houston-based petroleum recovering company Vertex Processing, according to the Houston Business Journal. Vertex owns a chemical processing facility adjacent to the Houston Ship Channel that has been converted to a biodiesel production facility. Earth biofuels sells biodiesel fuel under the name "BioWillie."
A huge drop in auto loans sent consumer borrowing tumbling in September by the largest amount since the recession of the early 1990s. The Federal Reserve reports consumer borrowing declined at an annual rate of six-tenths percent after rising 4.6 percent in August. In dollar terms, borrowing fell by $1.2 billion in September--the biggest drop since a plunge of $1.78 billion in April of 1992. The decline is the first since March, when borrowing marked a far milder decrease of less than one percent. Borrowing for auto loans slipped at an annual rate of 3.2 percent, or $4.05 billion in September. By contrast, borrowing in the category that includes credit cards rose at an annual rate of four percent in September. The Fed's consumer credit report does not cover mortgages or other loans that are secured by real estate.
Providing fresh evidence of the toll of the housing slump, two major homebuilders are reporting steep declines in new orders and weaker fourth-quarter results. Luxury home builder Toll Brothers, based in Horsham, Pennsylvania, says home-building revenue fell by ten percent and signed contracts were down by 55 percent compared with a year ago. Beazer Homes USA Atlanta reports a 44 percent decline in profit as higher revenue was offset by squeezed margins. The company said there was "significant'' discounting in most markets. New orders for Beazer fell by 58 percent as the housing market continued to slow. Beazer has cut 1,000 jobs, or 25 percent of its workforce.
Another 122 corporate chief executives left their jobs last month--down nearly 20 percent from a record-setting 152 departures the month before. Challenger, Gray and Christmas, the outplacement firm that tracks CEO departures, says 1,234 CEO changes have occurred so far this year, 11 percent more than in 2005. The company says with just two months to go, the pace of turnover virtually guarantees that the year-end total will surpass last year's record 1,322 CEO changes. Corporate heads leave for a variety of reasons, including retirement or moves to other companies. But Challenger, Gray and Christmas points out that in October, seven left their posts due to the options backdating scandal. In fact, since January of 2005, 11 CEOs have resigned or have been forced to leave. Another 24 executives also have left their companies due to the scandal.
Some $3.8 million in new federal funding from two National Cancer Institute grants will be used to support Phase II research into breast and prostate cancer detection using a laser optoacoustic image technology developed by Fairway Medical Technologies. Four years of research and pilot studies by scientists at Fairway and the University of Texas Medical Branch at Galveston indicates the system can detect breast cancer tumors potentially as small as two millimeters—five times smaller than most malignant breast tumors detected currently.
Negotiations between Plano-based Triad Hospitals and the Baptist Health System of Knoxville, Tennessee, have collapsed. The negotiations had aimed for a bailout of Baptist Health System's debt in a joint venture with Triad. The system's trustees had approved a proposed deal in June that would have created the only for-profit health-care system in the Knoxville area. But the deal collapsed after trial couldn't work out an agreement with doctors on ownership stakes. Triad operates 51 hospitals and 12 surgery centers in 16 states. It would have paid off Baptist's $217 million debt and taken 80 percent ownership in the new company. Now, Baptist's board has created a new, smaller task force to look for other potential partners. Baptist is Knoxville's fourth-largest hospital system.
Tenet Healthcare said its third-quarter loss narrowed from results that included huge restructuring charges at the hospital operator a year ago. The Dallas-based company's loss narrowed to $89 million. That's from a loss of $401 million in last year's July-to-September period. Excluding discontinued operations, Tenet reported a loss of six cents per share for the latest quarter. In the year-ago quarter, the company recorded $223 million in Goodwill and restructuring charges. Revenue fell nearly two percent to $2.12 billion as patient admissions fell 3.3 percent because of restructuring and new Medicare admission criteria.
A Dallas data processing company is offering a $10,000 reward for return of a computer containing information on as many as 1.4 million Coloradans. The computer was stolen last month from Colorado state contractor Affiliated Computer Services. It contains the data on at least $500,000 people who made child support payments to Colorado's State Department of Human Services. It also holds information on up to nearly a million Coloradans newly hired to jobs anywhere in the state. The company is offering the reward for information leading to recovery of the computer and to the arrest of a suspect. A state spokeswoman has said the computer theft was the fault of Affiliated Computer Services.