Militants promise violence in Nigeria’s oil region…Retail gasoline prices sharply higher this week…Riviana Foods to phase out production at its Houston plant over next two years…
An e-mail from the Movement for the Emancipation of the Niger Delta promises a bloody fight in this new year, with the goal to “paralyze 100 percent of Nigeria’s oil exports in one swipe.” The e-mail warns residents of key oil-producing states to avoid milling around army checkpoints and armored personnel carriers, which they say are becoming targets of explosive devices. MEND claims to be fighting for an increased share of oil wealth for the people of the country’s oil-rich Niger Delta. Attacks have cut more than 20 percent of Nigeria’s daily oil production.
Retail gasoline prices are sharply higher in Texas this week, compared with last week. The weekly AAA Texas Gas Price Survey finds regular self-serve is averaging $2.93 per gallon at pumps in ten Texas cities. Houston’s average is up more than nine cents to $2.89 per gallon. Nationally, the average price rose seven cents to $3.05 per gallon. Auto club spokeswoman Rose Rougeau attributes the increase to the spike in crude oil prices, which topped $100 per barrel for the first time this week. She says supply worries and speculation are at least partly to blame for the crude oil price spike. The cheapest gas in Texas is in El Paso, where it’s averaging $2.83 per gallon. That’s up three cents from last week. The most expensive gas is in Texarkana, where the average rose 12 cents to $3.02 per gallon.
A new report indicates the nation’s services sector grew in December at a slightly slower pace. The Institute for Supply Management says its index measuring performance in non-manufacturing industries slipped to 53.9 in December from 54.1 in the previous month. It’s the lowest reading since March, but was better than expected. A reading above 50 indicates expansion, while one below 50 shows contraction. Earlier this week, a companion report suggested the U.S. manufacturing economy unexpectedly contracted in December, ending a ten-month growth streak and suggesting the economy may be weakening faster than some analysts expected.
Freddie Mac economist Frank Nothaft says that the fall in the ISM manufacturing index could possibly be a “harbinger of a more substantial economic slowdown” at the start of this year. Housing, which had enjoyed a five-year boom of soaring prices and record sales, has been in a severe slump which economists predict will continue into 2008. Rates on 30-year mortgages are at their lowest level in a month as investors find new reasons to worry about a possible recession. Freddie Mac, the mortgage company, reports that 30-year, fixed-rate mortgages averaged 6.07 percent this week. That was down from 6.17 percent last week and was the lowest level for 30-year mortgages since the week of December 6th, when they fell to a two-year low of 5.96 percent. That marked the only time that the 30-year mortgage was below six percent last year. Analysts attributed the decline in part to some weaker-than-expected economic reports.
The nation’s unemployment rate has hit a two-year high of five percent after hiring practically stalled in December. The Labor Department is raising fears that the economy could slide into a recession. It says that last month, employers added the fewest new jobs to their payrolls in more than four years. The report also shows that employment conditions are deteriorating, strained by a housing slump and credit crunch that are sapping economic strength. The unemployment rate jumped from 4.7 percent in November to five percent in December. That’s the highest since November 2005, after the devastating Gulf Coast hurricanes. Payrolls, both among private employers and in government, grew by just 18,000 last month. That’s the worst showing since August 2003, when the economy suffered job losses as it struggled to recover from the 2001 recession.
Riviana Foods plans to phase out production of packaging at its Houston plant over the next two years, affecting some 250 workers. The rice maker will close the plant down, although its headquarters will remain in Houston. Riviana is building a new rice processing and packaging plant and warehousing and distribution center in Memphis adjacent to its current packaging facility, with completion expected in mid 2010. Riviana Foods is a subsidiary of Spanish food group Ebro Puleva.
Valero Energy says it may sell its refineries in Memphis and Krotz Springs, Louisiana. Valero’s says it’s disposing of refineries that need to be upgraded to handle heavy sour crude. Heavier grades of crude oil sell for les than light, sweet crude oils.
The number of rigs actively exploring for oil and natural gas in the United States fell by eight this week to 1,774. Houston-based Baker Hughes says that of the rigs running nationwide, 1,450 were exploring for natural gas and 316 for oil. Eight are listed as miscellaneous. A year ago, the rig count stood at 1,695. Texas lost 16 rigs. Baker Hughes has tracked rig counts since 1944. The tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted several record lows in 1999, bottoming out at 488.