Gasoline supplies and crude oil inventories rise…Enron shareholders ask SEC to help bring their civil lawsuit to trial…METRO selects firm to develop first phase of major rapid transit expansion project…
Gasoline supplies have reversed a 12-week decline. The Energy Information Administration, the Energy Department’s statistical arm, says the gasoline inventory rose by 400,000 barrels last week to 193.5 million barrels. The EIA’s weekly inventory report says oil refineries around the country ran at 89 percent of capacity on average, up seven-tenths of a percentage point from the previous week. The report also shows crude oil inventories increased by 5.6 million barrels, or 1.7 percent, to 341.2 million barrels last week. And it shows that stocks of distillate fuel, which include diesel and heating oil, rose by 1.7 million barrels to 118.8 million barrels. The decline in the gasoline supply over the past 12 weeks has helped push pump prices to near-record levels ahead of the summer driving season. The building inventory could ease the upward pressure on those prices. Crude oil futures were down more than a dollar a barrel after the report.
Enron shareholders are asking the Securities and Exchange Commission to help bring their lawsuit to trial. A coalition of consumer and labor organizations and Enron shareholders has filed a petition with the U.S. Supreme Court, asking for a review of its class action lawsuit against several investment banks. Attorney William LeRach says Enron shareholders want the SEC’s backing in litigation against Merrill Lynch, Credit Suisse First Boston and Barclays. The Enron civil case already has secured more than $7.3 billion, mostly from JPMorgan Chase, Citigroup and the Canadian Imperial Bank of Commerce. Without admitting wrongdoing, those three banks also settled SEC charges of helping Enron manipulate financial statements. A panel of the 5th U.S. Circuit Court of Appeals in March threw out the lawsuit’s class-action status and ruled the plaintiffs cannot allege the banks were primary players in the fraud at Enron. The banks countered that they didn’t prepare or approve Enron’s financial statements. Investors lost more than $40 billion with Enron’s collapse.
The Securities and Exchange Commission has informed Nabors Industries of plans to end a probe of the company’s stock-option granting practices. The Houston-based contract oil driller says the SEC advises it’ll recommend no enforcement action at this time. In March, Nabors said an internal review found it had misdated past stock-option grants. Those included some awarded on dates when recipients included Chief Executive Eugene Isenberg. Nabors said then that the review found no fraud or intentional wrongdoing–but it recorded an after-tax charge of more than $38 million in its fourth-quarter 2006 results. That was to account for the understatement of compensation expense due to the favorably priced options. The fortunate timing of many option grants to Isenberg was a focus of a December page one article in the Wall Street Journal. The article noted that of 11 new option grants to Isenberg between 1991 and 2002, two were dated at quarterly lows for Nabors’ stock price and five more at monthly lows. Before publication of the article, Nabors strongly denied any backdating or misdating of its options.
The Metropolitan Transit Authority of Harris County has selected Washington Group International for a $77 million contract to develop and construct the first phase of a major rapid transit expansion project. The Boise, Idaho-based engineering firm will design, construct, operate and maintain 20 miles of guided rapid transit in four corridors. The four routes will join the existing Main Street Corridor light-rail system, adding 34 new transit stations throughout Houston. Final design and construction of Phase Two by California-based Granite Construction will start in early 2008.
Sterling Construction says it was the low bidder on a $36.2 million Texas Department of Transportation reconstruction project in Harris County. Work on Interstate 45 from Medical Center Boulevard to half a mile south of NASA Road 1 is slated to begin in the fourth quarter, lasting 26 months.
The Federal Reserve has left a key interest rate unchanged at 5.25 percent. This, as the central bank watches to see whether it has done enough to restrain inflation. That’s the word from policy makers after their latest session. It’s the 7th time in a row the federal Open Market Committee has decided no change in interest rates is needed. The decision had been widely expected by financial markets. The federal funds rate, the interest that banks charge each other, has been at 5.25 percent since last June when the central bank capped a two-year, credit-tightening campaign with its 17th consecutive quarter-point rate hike. In announcing the decision, the Fed said inflation “remains somewhat elevated” and it will continue to monitor inflation, to see whether it’s done enough to restrain it. The Fed’s monetary policy seems to be working according to plan. Economic growth has slowed to the slowest pace in four years, taking the pressure off tight labor markets and helping to reduce inflation.