Oil & Energy
Crude Oil Prices Stabilise At $97.88pb
The international crude oil
prices stabilised Friday, following a recent jump. The escalating turmoil in Libya still left major indexes down about 2 per cent last week.
Oil prices settled at $97.88, down from a high of $103 Thursday but still up 13 per cent over the last week.
Oil prices have been rising, sending stocks lower, as concerns rose that violence would spread throughout North Africa and the Middle East, affecting oil production for big OPEC producers like Iran and Saudi Arabia.
Those concerns eased late Thursday after the International Energy Agency said the impact was far less than analysts had estimated and that any shortfall could be easily made up by tapping oil reserves in other countries.
Boeing Co. rose 2.2 percent after the Air Force awarded the company a $35 billion contract Thursday, one of the largest ever made by the military, for nearly 200 airborne refueling tankers.
DreamWorks Animation SKG Inc. fell 2.8 percent after the entertainment company reported revenue and earnings that were far below what analysts were expecting. Poor box office results from the Will Ferrell movie “Megamind” were partly to blame.
The Dow Jones industrial average rose 61.95, or 0.5 percent, to close at 12,130.45. It was the first rise for the Dow after three days of losses.
The Standard & Poor’s 500 index rose 13.78, or 1.1 per cent, to 1,319.88. The Nasdaq composite rose 43.15, or 1.6 per cent, to 2,781.05
All three indexes are still down for the week, largely a result of the fighting in Libya.
Libya is Africa’s largest producer of oil but only ranks 15th among the world’s oil exporters. Traders have been concerned that fighting could not only threaten Libya’s oil production but also spread to other countries in the region such as Saudi Arabia.
Higher oil prices also weigh on the United States economy by increasing the costs of moving goods and filling up gas tanks. A sustained $10 increase in the price of oil translates into a 0.2 per cent cut in economic growth over 12 months, according to a recent estimate by economists at Goldman Sachs.
Treasury inched up Friday on reports the economy grew more slowly than first thought in the last three months of 2010. The yield on the 10-year Treasury note edged down to 3.42 per cent from 3.46 per cent late Thursday.
The Commerce Department said the economy expanded at an annual rate of 2.8 per cent in the October-December quarter. That’s weaker than the previous estimate of 3.2 per cent.
In an attempt to close budget gaps, state and local governments have cut spending much more deeply than previously thought.
Despite this week’s slide, the S&P 500 is up 2.6 per cent in February and 4.9 per cent for the year. Stronger earnings from a wide range of companies, including Archer Daniels Midland Co. and Dell Inc., have helped drive stocks higher.
Five stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume was 3.9 billion shares.
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By Felicity Bradstock for Oilprice.com 16
Oil & Energy
Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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