Oil News Roundup
May 25, 2006Volatile crude-oil futures plunged by nearly $2 to settle at less than $70 a barrel on the New York Mercantile Exchange, battered by speculators and a U.S. government report of rising inventories of gasoline and other distillates. Here is today’s roundup of news about oil and energy.
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UNREST IN INDIA: Protests by hundreds of contract workers for Oil India Limited, India’s state-owned oil company, disrupted production in oil-rich Assam State. The workers, agitating for higher pay and benefits, set three oil pits ablaze after battling with police earlier in the week. Assam accounts for about 5 million tons of India’s 30-million-ton annual crude-oil production.
AIMING HIGHER: Morgan Stanley analyst Douglas Terreson raised his forecast for the average price of WTI crude oil in 2006 to $65 a barrel from $57.50. He raised his projected 2007 price to $60 a barrel from $55. He also boosted his estimate of U.S. refining margins, lifting profit forecasts for major oil companies in the quarters to come. “We are buyers of the integrated oil stocks,” he wrote.
•Cuban Drilling Party Grows: State-owned companies Norsk Hydro of Norway and ONGC Videsh of India will join Spain’s Repsol in drilling for oil off the coast of Cuba in the Gulf of Mexico, the Financial Times reports. Drilling is expected to start in about 18 months. The oil-rich waters north of Cuba were divided in a 1977 treaty between Cuba and the U.S. Drilling is prohibited in the U.S. side.
•Bulgarian Oil Spill: A Bahamian-flagged oil tanker bound for a Bulgarian refinery spilled crude oil into the Black Sea near the port of Burgas, AFP reports. The spill covered about 280 square miles.
•Rate Raise in Malaysia: Malaysia said it will increase electricity prices for the first time in nearly a decade.
•Oil Grows on Trees: China is planting some 666,000 hectares of jatropha curcas trees in southwest Yunnan Province in an effort to meet its swollen energy demand, the state-run Xinhua news agency reports. Jatropha curcas seeds are especially useful for biodiesel production, Xinhua says.