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The WALL STREET JOURNAL: Oil News Roundup: Wednesday June 14, 2006

Oil prices tumbled again, shedding nearly $2 to settle at less than $69 a barrel on the New York Mercantile Exchange on worries that rising interest rates will choke global economic growth and demand for oil. Here is Tuesday’s roundup of oil and energy news.

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INVESTING IN GREEN: Despite the recent tumble in oil prices, many companies are still planning for a future that includes expensive crude. In Tokyo, Toyota President Katsuaki Watanabe told reporters the world’s soon-to-be No. 1 auto maker plans to double its line of gasoline-electric hybrid cars by 2010 and pump more money into researching plug-in electric cars. And in Paris, Archer Daniels Midland CEO Patricia A. Woertz told an analyst conference the agricultural products giant plans to double its spending on ethanol, biodiesel and similar projects to between $3.5 billion and $4 billion in the next few years — projects that will be profitable even if oil falls stays below $70 a barrel, Ms. Woertz said.

NATIONALIZATION’S PULL: Meanwhile, in St. Petersburg, Russia’s natural-resources minister Yuri Trutnev said tightening restrictions on foreign oil companies and defining a broader swath of oil and gas fields as “strategic” were steps necessary to protect Russia’s interests, the Financial Times reports. Russia and many other oil-producing nations have lately shown a tendency — alarming to many energy customers in the West — toward taking greater control of their natural resources. “We don’t consider it energy egotism,” Mr. Trutnev said of his proposal. “We consider it concern for our national economy.”

•Limiting Access: Russian officials confirmed fears that the Kremlin will restrict foreign energy companies to the role of junior partners in all but the country’s smallest oil and gas fields, keeping the richest reserves for newly assertive domestic companies.

•Test for Iraq: A Norwegian oil company’s new discovery of crude reserves in Iraq’s Kurdish-controlled territory — the first such discovery since the ratification of Iraq’s constitution last year — presents a test of the new Iraqi government’s approach to the contentious issue of dividing oil revenue, the FT reports (subscription required).

•Call for Unity: A Chinese government agency called for the country to become more integrated with global oil markets.

•Growing Vulnerability: The U.S. economy is more vulnerable than ever to short-term and long-term disruptions in oil supplies from Venezuela, according to a draft report by the General Accountability Office.

•Rudy’s Energy Plan: He is not officially running for president yet, but former New York City Mayor Rudy Giuliani told the Manhattan Institute, a conservative think tank, that he has a plan to wean the nation of its dependence on foreign oil. The plan includes tax incentives for ethanol use. Coincidentally, ethanol has long been a hot-button issue in Iowa, which will host the nation’s first presidential primary in 2008. A potential Democratic foe in 2008, Sen. Hillary Rodham Clinton, has also called for expanded ethanol use.

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