Thread: Oil Slick Stuff

Venezuelan 1st-Qtr GDP Grows 9.4 Percent on Oil Surge (Update1)
May 16 (Bloomberg) -- Venezuela's economy grew more than 9 percent for a fourth straight quarter in the January-through- March period as President Hugo Chavez boosted spending on food and medical services and scholarships for literacy classes and job training.

Gross domestic product, the broadest measure of a country's production of goods and services, expanded 9.4 percent in the first quarter from the year-earlier period after growing 10.2 percent in the fourth quarter and 9.8 percent in the third, the central bank said.

Venezuela, South American's largest oil exporter, has become one of the fastest growing economies in the world on the back of the oil price surge. The country's oil exports jumped to a record $13.9 billion in the first quarter, bolstering government coffers.

``The oil bonanza continues,'' said Asdrubal Oliveros, an analyst with Santander Investment in Caracas. ``High oil prices are fueling the increased spending, which in turn fuels consumer demand.''

JPMorgan Chase & Co. estimates that Chavez, who faces re- election in December, increased government spending 70 percent in the first quarter after boosting it 43 percent last year. The central bank has not yet released government spending figures for this year.

DirecTV's Sales

``Spending is unlikely to slow in the remainder of the year as President Chavez uses the oil windfall to secure his re- election in December,'' JPMorgan wrote in a report released earlier this month. The bank forecasts Venezuela's economy will expand 6.5 percent this year after growing 9.3 percent in 2005.

Higher government spending is helping buoy sales for DirecTV Group Inc. in Venezuela, said Francisco Trujillo, the commercial vice president for the company's local unit. The satellite-TV provider expects to increase its number of subscribers in Venezuela by as much as 20 percent to about 400,000 this year, a record high, Trujillo said.

``The increased spending helps everyone,'' Trujillo said in a telephone interview.

Oil industry production, refining and marketing fell 0.2 percent in Venezuela, the world's fifth-largest crude exporter, while non-oil GDP grew 11 percent, the central bank said. Construction expanded 21 percent and manufacturing jumped 9.4 percent during the first quarter, the bank said.

The surplus of the current account, the broadest measure of a country's trade in goods and services, grew to $7.4 billion in the first quarter from $4.7 billion in the year-ago period, the bank said. The current account surplus for 2005 rose 84 percent to a record $25.4 billion.

The capital account, which measures investment flows, had a deficit of $6.3 billion in the first quarter, the highest level since the bank began reporting quarterly balance of payment figures in 1997. The capital account deficit for 2005 was $16.2 billion, also a record.

CSR 2nd-Half Profit More Than Doubles on Sugar Demand (Update2)
May 17 (Bloomberg) -- CSR Ltd., Australia's biggest sugar refiner, more than doubled second-half profit as more cane was diverted to make ethanol, an alternative fuel to oil, sending prices of the sweetener to a record.

Net income rose to A$190.4 million ($146 million) in the six months ended March 31, from A$87.8 million a year earlier. Second-half earnings were calculated by subtracting first-half profit from the full-year result Sydney-based CSR released today. Sales rose 36 percent to A$1.47 billion.

CSR forecast earnings before interest and tax will rise about 10 percent this fiscal year if sugar prices remain ``at or near current levels,'' Chief Executive Officer Alec Brennan said in a statement. Brennan will retire in March after more than 37 years at the company, including four as CEO.

CSR shares fell 1.3 percent to A$3.96 at 10:21 a.m. in Sydney. The stock has climbed 68 percent in the past year, more than double the benchmark S&P/ASX200 Index's 32 percent gain.

Full-year earnings before interest and tax at CSR's sugar unit jumped 27 percent to A$123.7 million as sugar prices more than doubled. Record oil prices prompted Brazil, the world's biggest sugar producer, to divert more cane to making ethanol, reducing global stockpiles of the sweetener.

Brazil will raise ethanol production 7 percent to 17 billion liters (4.5 billion gallons) in the year starting this month, the International Sugar Organization said May 11.

``Increasing demand for ethanol is likely to keep the price of sugar high for at least another year or two,'' David Leitch and Ben Gilbert, analysts at UBS AG in Sydney, said in a note to clients this month. ``CSR will benefit from increased sugar prices.''

CSR is seeking to tap rising demand for ethanol in Australia, spending A$15 million at its distillery in Sarina, Queensland, to expand fuel-grade ethanol production. In March, it won a contract to supply BP Plc's Australian unit 23 million liters of ethanol over the next two years.

CSR supplies about 160 gas stations in Australia, giving it more than 50 percent of the nation's ethanol market.

CSR's customers paid an average A$316 per metric ton of sugar, up from A$255 a year ago, Brennan said. Raw sugar for delivery in July dropped 0.8 percent to 17.03 cents a pound on the New York Board of Trade yesterday. Prices reached a record 19.73 cents a pound Feb. 3.

UP, DOWN, UP!
Oil edges higher
Prices have still fallen 5 percent from late last week as investors fear high crude and materials prices could slow demand for oil.
May 17, 2006: 6:02 AM EDT

http://money.cnn.com/2006/05/17/mark...ex.htm?cnn=yes

How about an "Outside-the-Box" thought... Maybe those who previously invested in the profitable oil futures markets are getting burned by the falling oil prices, and are now being forced to dump some US stock to cover their losses. Maybe just a small piece of the falling US market pictures?

Down, Up, Down?
05/18/2006 - Updated 8:04 AM ET
Crude prices extend declinesConcerns over demand, supply trigger losses</IMG>By Tomi Kilgore, MarketWatch
NEW YORK (MarketWatch) -- Crude oil futures extended declines Thursday on concerns that rising inflation, as a result of higher commodities prices, will sap demand.
June crude futures fell 19 cents to $68.50 a barrel in electronic trading.

“Berkshire Hathaway billionaire Warren Buffett's investment company, disclosed stakes in ConocoPhillips, General Electric, and United Parcel Service as part of regulatory filings detailing the company's $45.8 billion stock portfolio.
The documents filed with the Securities and Exchange Commission Monday are the first to mention Berkshire's holdings in ConocoPhillips because Berkshire had sought confidential status for its investment in the company, which was initiated last year.
Berkshire held 9.6 million shares of ConocoPhillips, worth about $559 million, on Dec. 31.
Berkshire nearly doubled that investment by March 31 when it held 17.9 million shares worth about $1.1 billion.”

- USA Today

BAAHHhhh!

05/19/2006 - Updated 10:56 AM ET
Concerns over slowing demand sinks oilNatural gas extends losses; gasoline, heating oil edge lower</IMG>By Myra P. Saefong, MarketWatchhttp://markets.usatoday.com/custom/u...46C71F580E9%7D

IS THIS GOOD OR BAD?
Oil price falls $1 to six-week low
Fears of inflation, economic slowing, drive dip in oil prices.
May 22, 2006: 6:08 AM EDT

LONDON (Reuters) - Oil prices fell $1 on Monday to a six-week low as concern that inflation may slow economic growth encouraged selling across commodities markets.
http://money.cnn.com/2006/05/22/mark...ex.htm?cnn=yes

On the way down.
Oil sinks to six-week low
Fears that rising rates will slow economic growth drive a sell-off in energy, precious metals worldwide.
May 22, 2006: 9:55 AM EDT


LONDON (Reuters) - Oil prices fell to a six-week low Monday as concern that inflation may slow economic growth encouraged selling across commodities markets.
U.S. crude slid 79 cents to $67.74 a barrel in electronic trading after sinking more than $1 in overnight trading to its lowest level since April 10.

http://money.cnn.com/2006/05/22/mark...ex.htm?cnn=yes

Originally Posted by nnuut

IS THIS GOOD OR BAD?
Oil price falls $1 to six-week low
Fears of inflation, economic slowing, drive dip in oil prices.
May 22, 2006: 6:08 AM EDT

LONDON (Reuters) - Oil prices fell $1 on Monday to a six-week low as concern that inflation may slow economic growth encouraged selling across commodities markets.
http://money.cnn.com/2006/05/22/mark...ex.htm?cnn=yes

Here's the deal. Commodities are down because of the dollar bounce. Nothing fundamentally has changed. The black boxes capture the momentum of the moment and the spinmeisters try to extend that momentum for those who are paying their salaries. How will the Media Boyz spin it in a few days when commodities are again heading for the moon? I just hit the mute button and go with the trend.

Ok Wimpy, forgot about the SPIN!!
Thanks,