Wednesday, August 20, 2008

Today's Headlines

- A zinc supply surplus widened in the first half of the year, led by gains in Chinese production, the International Lead and Zinc Study Group said. World output outpaced usage by 72,000 metric tons in the period, compared with a surplus of 11,000 tons a year earlier, the Lisbon-based group said today. Output in China, the biggest producer, increased 3 percent to 1.92 million tons.
- Crude oil fell more than $1 a barrel after a government report showed the biggest U.S. inventory gain in more than seven years. Stockpiles rose 9.39 million barrels to 305.9 million barrels, the biggest gain in since March 2001, the Energy Department said. U.S. fuel demand averaged 20.2 million barrels a day during the past four weeks, down 3 percent from a year earlier, the department said. Gasoline consumption averaged 9.46 million barrels a day over the period, down 1.6 percent. Refineries operated at 85.7 percent of capacity in the week ended Aug. 15, down 0.2 percentage point from the week before and the lowest since the week ended May 2, the report showed. Regular gasoline, averaged nationwide, fell 1.3 cents to $3.717 a gallon, the AAA said today on its Web site. Prices reached a record $4.114 a gallon on July 17.
- Andy Lipow, president of Lipow Oil Assoc. LLC, calls oil supply rise ‘bearish factor’ for oil prices. (video)

- Iraq's Oil Minister Hussain al- Shahristani will visit Beijing at the end of this week to conclude a contract to develop the Ahdab oil field with a unit of China National Petroleum Corp., an official at the ministry said. The contract may be signed after al-Shahristani meets officials from China National's Al Waha Petroleum Co. unit, the official, who declined to be identified for security reasons, said by telephone yesterday. The government has said the Ahdab field in southern Iraq may produce about 90,000 barrels a day. Iraq is currently preparing its first exploration licensing round that may render the technical service negotiations redundant as companies bid for access to help develop the untapped reserves, which may exceed 200 billion barrels of crude, according U.S. Energy Department estimates.
- The euro fell to near the lowest level against the dollar in six months as Germany's economic outlook deteriorated and crude oil prices declined. The pound approached a two-year low versus the dollar as minutes of the Bank of England's August meeting indicated British inflation risks may have ``eased a little'' while the outlook for the economy worsened. The dollar has risen 8 percent versus the euro from the record low set in July. ``The market was waiting for a big correction after such a massive dollar rally, but they never got it,'' said Steve Butler, director of foreign-exchange trading at Scotia Capital Inc. in Toronto.
- Goldman Sachs Group Inc.(GS), Morgan Stanley(MS) and Lehman Brothers Holdings Inc.(LEH) had their earnings estimates reduced by Sanford Bernstein & Co.'s Brad Hintz, at least the third analyst to lower profit predictions this week.
- The yuan climbed by the most in three weeks after U.S. Treasury Secretary Henry Paulson urged China to let its currency appreciate to curb inflation and deter Congress from introducing trade penalties.

Wall Street Journal:
In an early sign that investors are starting to pounce on the billions of dollars of troubled land and construction loans that banks are looking to unload, a venture headed by LandCap Partners is buying $40 million of such assets from Wachovia Corp.(WB).
- When U.S. futures regulators recently reclassified one of the largest traders in the oil market as a speculator, they didn't identify the firm. But people familiar with the matter now say the company whose activities helped change perceptions about the escalating pace of oil speculation is Vitol Group, a large commodity-trading company with headquarters in Europe. Though less well-known in the U.S., the company is one of the biggest players in the oil market, linking buyers and sellers of physical crude oil and refined products.

- U.S. retail gasoline demand dropped 7.8 percent from the same period last year despite a dip in gasoline prices, MasterCard Advisors said Tuesday. A better indication of consumption trends is the four-week moving average, which shows a gasoline demand decline of 4.8 percent from year-ago levels, McNamara said. The average price of gasoline in the U.S. slipped 7 cents last week to $3.77 per gallon, but prices will have to drop further for U.S. consumers to ramp up their consumption of the motor fuel, McNamara said.
- Syrian President Bashar al-Assad said on Wednesday he would use this week's visit to Russia to expand military ties with Moscow whose arms sales to the Middle Eastern state have angered the West. Israel and the United States have long urged Russia not to sell weapons to Syria -- a key Moscow ally during the Cold War now at the centre of Kremlin ambitions of reviving Russia's Soviet-era role in the Middle East.

International Herald Tribune:
- I got an e-mail the other day from a friend at the New America Foundation, a Washington public policy institute, inviting me to participate in a panel on "whether the media can handle good news - whether it's on Iraq" or whatever. I accepted, although there's not much to discuss: The media are lousy at good news (a virtual oxymoron).

Kuwait News Agency:
- Abu Dhabi Investment Council, the sovereign wealth fund which this year acquired the Chrysler Building, plans to target investments in Japan, the US and Europe.

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