Monday PM October 22nd, 2007
by: Ed Mayberry, October 22, 2007 5:10:00 am
Americans have been paying a bit more for gasoline over the past couple of weeks. The new Lundberg Survey says the national average price for gas rose about five cents in the past two weeks. Trilby Lundberg says the average price of regular gasoline is now $2.80 a gallon. The nation's lowest price is in Newark, New Jersey--at an average of $2.56 a gallon. The highest is in San Francisco, where it's $3.17.
Crude futures are down. Traders are weighing concerns about economic growth that have also hurt the stock market. News of a possible ceasefire between Turkey and Kurdish rebels in Iraq added to the downward pressure on prices. The stock market's downturn Friday reignited concerns about a slowdown, which could cut demand for oil and petroleum products. Traders are also selling to lock in profits from a rally in which oil futures jumped almost 14 percent in less than two weeks. The November crude contract expired today.
Oil prices dropped in Asian trading, extending a retreat from last week's record high. Light, sweet crude for November delivery lost 86 cents to $87.74 a barrel by midmorning in electronic trading on the New York Mercantile Exchange in Singapore. Crude prices have jumped 28 percent since late August despite a growing consensus among analysts that oil's underlying supply and demand fundamentals do not support such high prices. Organizations such as the International Energy Agency and the Organization of Petroleum Exporting Countries warn that demand for oil will increase in the fourth quarter. But others think the demand forecasts are overstated. The Energy Department reports that demand for gasoline is actually falling. Domestic oil inventories are at high levels by historic standards, and grew in the week ended October 12th.
Houston-based Goodman Global is being acquired by affiliates of San Francisco-based private equity firm Hellman & Friedman in a $2.65 billion deal that takes the publicly-traded air conditioning maker private. The manufacturer sells under the brands Amana and Quietflex.
Expanding business helped Houston-based Halliburton post a 19 percent rise in third-quarter earnings. The oilfield services firm reported net income of $727 million in the July to September period. That's compared to income of $611 million in the year-ago period. The most-recent results included a favorable income tax impact valued at $133 million. Third-quarter revenue rose 16 percent to $3.93 billion.
The head of Halliburton says the company is gearing up for increased oilfield services work in the Middle East, Asia and Latin America. CEO Dave Lesar also said pricing declines for some services in North America remain a concern for the company. Halliburton this year split its corporate headquarters between Houston and Dubai, where Lesar now works--placing him closer to markets in the Middle East and Asia. Lesar says the company is intent on maintaining its growth in the eastern hemisphere, where revenue jumped 29 percent in the July-September period.
Members of Hollywood's film and television writers union have overwhelmingly voted to authorize a strike anytime after their contract expires at the end of the month. More than 5,000 members of the Writers Guild of America cast ballots, with 90 percent voting in favor of authorizing the strike. Since July, the guild has been in talks with film studios and production companies represented by the Alliance of Motion Picture and Television Producers. Both sides acknowledge they have not made progress. A key issue dividing producers and writers--as well as actors, whose contract expires next June--is compensation for DVD sales and productions that get distributed on the internet or in other new media formats.
The threat of a strike looms over the lights of Broadway. Theater stagehands have voted to give their union the authority to call a strike against Broadway producers. The move comes amid stalled labor negotiations. Producers want more flexibility in the number of stagehands they hire and in how many hours those stagehands work. The union wants to preserve jobs. The two sides have been negotiating since the summer, and producers presented what it called its final offer this month. A strike would affect most of the theaters on Broadway. Producers are under increased pressure to resolve the talks before the busy holiday season, when many shows sell out. A strike would still have to be approved by the union's parent organization. For this week, at least, the shows will go on.
This is a light week for economic data. The National Association of Realtors is to release the report on existing home sales on Wednesday. Analysts look for another decline. On Thursday, the government follows with the report on September new-home sales. Also that day, readings are due on durable goods orders and new claims for unemployment benefits.