OPEC keeping crude oil output at current level…Price manipulation trial of three former El Paso traders underway… Dispute over two proposed wind farms in south Texas enters Austin courts…
OPEC is going to keep its output limits where they are. The oil-producing nations plan to meet again in February to review the decision. And that’s expected to limit any price swings. The decision may reflect concern by OPEC that it would be counterproductive to raise overall production quotas even as prices retreat about ten percent from recent record highs. The move also seems to suggest that OPEC now sees prices of about $90 a barrel as acceptable. It’s an increase of about $40 since the start of the year. But the announcement of another meeting early next year is an indication that OPEC is prepared to increase its quotas if prices go much higher. The final statement from the oil ministers’ meeting in Abu Dhabi says the group will leave output unchanged ”for the time being” because the world is ”well supplied” and crude reserves are at comfortable levels.
Prosecutors say three former El Paso Corporation traders conspired to manipulate the price of natural gas by reporting false data. The comments were made in opening statements Wednesday in the Houston trial for James Brooks, Wesley C. Walton and James Patrick Phillips. Prosecutors tell jurors that the trio reported bogus trade data used to calculate natural gas index prices in order to earn bigger work bonuses. But defense attorneys say the ex-traders never submitted false data and were victims of unclear policies on how to report pricing information. Each defendant is on trial for 49 counts of conspiracy, false reporting and wire fraud. The indictment accuses Brooks, Walton and Phillips of getting El Paso traders to e-mail inaccurate data at least 26 times from 2000 to 2002 to a pair of industry journals.
At hearings in Washington, credit card company executives were looking to deflect Congressional criticism of their practice of using falling credit scores to charge customers higher interest rates. Industry critics say it’s another example of abusive, confusing credit card practices that can push consumers deeper into debt. Michigan Democrat Senator Carl Levin said customers who consistently pay on time are getting whacked by credit-card issuers that raise rates without an adequate warning or a clear notice. He’s holding out the possibility of legislation to spur voluntary changes by the industry. Executives from Bank of America and Discover Financial Services told the panel that a credit score is one of several factors in determining whether to increase a customer’s interest rate. Americans are weighed down by some $900 billion in credit card debt, an average $2,200 per household.
A dispute over building two wind farms adjacent to the famed King Ranch in south Texas has entered the courts in Austin. An alliance of conservation and related groups are suing to stop the projects on the Kenedy Ranch–by raising environmental and regulatory concerns. The Coastal Habitat Alliance, which includes King Ranch, filed separate state and federal lawsuits. John Calaway with Babcock & Brown, one of the wind-farm developers, says the lawsuits would have no effect on construction–which already has started. The Australian outfit plans to spend up to $800 million to build 157 turbines. The Public Utility Commission last month approved plans for a $60 million transmission-line project by AEP Texas. The PUC had no immediate comment.
Dell is reviving plans to buy back shares in the company. Chairman and CEO Michael Dell says it will begin to repurchase $10 billion in common stock this week. Dell had suspended its buyback program in August 2006 until it could file a backlog of earnings reports with the Securities and Exchange Commission. Dell Chief Financial Officer Don Carty says there was no time frame for the repurchase plan. He says the company has $15 billion in cash and is generating another $1 billion per quarter that could be put toward the repurchase.
The TV industry is bracing for a long strike by writers, even as both sides returned to the bargaining table. Leslie Moonves, chief executive officer of CBS, told an investor conference in New York that he’s hopeful, but “not terribly optimistic.” Moonves says the two sides conceded there are likely to be ratings shortfalls if the five-week strike drags on. But he says programming costs would fall as well, resulting in no significant financial impact to the network in the short to medium term. Bargaining resumed in Los Angeles after a four-day recess, with a relatively scant $21 million separating contract proposals by studios and striking Hollywood writers.