Wednesday PM, January 2nd, 2008
by: Ed Mayberry, January 2, 2008 12:01:00 am
Oscar Wyatt, Jr., has begun his one-year prison sentence at a minimum security federal prison in Beaumont. The 83-year-old Houston oilman pleaded guilty October 1st to a single count of conspiring to make illegal payments for Iraqi oil under the United Nations’ Oil-for-Food program. Wyatt was accused of funneling millions in illegal surcharges to Saddam Hussein’s regime to buy Iraqi crude under the Oil-for-Food program. The program was developed while Iraq was under international sanctions because of Saddam’s 1990 invasion of Kuwait. Iraqi oil resources were to help provide much-needed food and medicine for the Iraqis.
About 1,000 protesters blocked all but one lane of the bridge between Ciudad Juarez and El Paso on New Year’s Day to protest the opening of Mexico’s market to U.S. corn and sugar as part of the North American Free Trade Agreement. That’s the last of the agriculture tariffs under NAFTA, which have been phasing out in an effort to ease the transition. The agreement took effect in 1994, making some tariffs immediately disappear. Now duties have been eliminated on all Mexican peanuts, frozen concentrated juice and winter vegetables. Mexico has now eliminated tariffs on imports of dry beans, milk powder and corn.
Crude oil prices hit $100 a barrel for the first time, before closing at $99.62 a barrel. The milestone reflects the outlook that global demand for oil and related products will continue to outstrip supplies. Surging economies in China and India fed by oil and gasoline have sent prices soaring over the past year, while tensions in oil-producing nations like Nigeria and Iran have increasingly made investors nervous, prompting speculators to drive prices even higher. Word that several Mexican oil ports were closed because of weather are also said to have added to the gains. One analyst notes that the violence in Nigeria hasn't affected oil exports so far. However, he says that militant attacks have reduced Nigeria's crude output by about 20 percent since 2006.
The White House ruled out a release of fuel from the nation's oil reserves to drive down soaring prices. As of early November, the Strategic Petroleum Reserve—a system of salt caverns along the Louisiana and Texas coast—had 694 million barrels of oil. The government is working to fill it to its 727 million barrel capacity. Press Secretary Dana Perino says President Bush won't use the Strategic Petroleum Reserve to manipulate prices unless there's a true emergency. She says Bush is focused on ways to increase oil supply in the United States.
Newly released meeting minutes indicate that the growing problems in the housing, credit and financial markets prompted the Federal Reserve to cut its key interest rate again last month with the hope it would help the slowing economy. The minutes from the December 11th meeting indicate that the problems were seen increasing uncertainty about the outlook, suggesting that fed policymakers were keeping their options open regarding their next move. Chairman Ben Bernanke and all but one of his colleagues agreed to trim the Fed's key rate by one-quarter percentage point to 4.25 percent, a two-year low. The central bank ordered its key rate to be lowered three times last year. The central bank had hinted at its earlier meeting in October that its two rate cuts could be enough to help the economy survive the housing and credit stresses. But the problems intensified after that meeting, forcing the fed to change its stance. Many economists predict the fed will slice rates yet again at its next meeting, later this month.
Date and research provider Comscore says online sales were up 19 percent during the holiday season, but that growth slowed from a year ago. Figures show that from November first to December 27th, online sales grew to $28 billion from $23.6 billion during the corresponding period a year ago. However, between Thanksgiving and Christmas, online sales rose 21 percent this year 2007, compared with the 26 percent growth recorded in 2006. During the complete holiday season, which includes all of November and December, Comscore is predicting that sales will be up 20 percent--to $29.5 billion.