BP says it'll buy exploration rights in Brazil, Azerbaijan and the Gulf of Mexico from Devon Energy for $7 billion. BP will buy the rights for ten offshore exploration blocks in Brazil, a portfolio of rights in the U.S. Gulf of Mexico and in the Caspian Sea. BP's also selling, for $500 million, a 50 percent stake in its Kirby oil sands interests in Canada to Oklahoma Cty-based Devon, which is repositioning itself to focus on its North American onshore portfolio.
The number of newly laid-off workers requesting unemployment benefits fell last week, the latest sign the employment picture is slowly brightening. The Labor Department said initial jobless claims fell by 6,000 to a seasonally adjusted 462,000. That's close to Wall Street analysts' estimates of 460,000 and the second straight drop. Still, the four-week average of claims, which smoothes volatility, rose to 475,500, reflecting a sharp increase in claims last month. The four-week average has risen by about 25,000 since the beginning of the year, after falling for most of last year. The increase has raised concerns among economists that layoffs haven't slowed as much as hoped. Meanwhile, the number of people continuing to claim benefits rose by about 40,000 to 4.56 million.
The U.S. trade deficit unexpectedly shrank in January, reflecting a big drop in imports of oil and foreign cars. American exports also fell, a potential blow to hopes that the economic recovery will be aided this year by U.S. sales abroad. The Commerce Department said that the trade deficit declined to $37.3 billion in January, a drop of 6.6 percent from a revised December deficit of $39.9 billion. Economists had been expected the deficit to widen to $41 billion. U.S. exports dipped 0.3 percent, reflecting weaker sales of a wide variety of products from civilian aircraft and machinery to agricultural products. But imports dropped by a larger 1.7 percent as both oil and foreign cars saw big declines.
President Barack Obama says doubling exports over the next five years will boost the economy by helping U.S. companies sell their goods and services abroad and creating new jobs at home. Obama announced a series of steps toward that goal, including carving out a mini-cabinet focused on promoting exports and asking Congress for millions in new funding to support export promotion programs. The new Export Promotion Cabinet will keep export promotion as a priority for the relevant cabinet agencies, such as the Departments of Commerce and State. Obama also wants $134 million more to hire hundreds of trade experts to advise potential U.S. exporters. He also is reestablishing a Presidential Advisory Committee on International trade.
The captain of a tugboat that collided with an 800-foot tanker in a Port Arthur ship channel in January says his radio calls to the larger ship went unanswered moments before the crash. Captain Lex Wimberley says he tried to contact the tanker Eagle Otome after he saw it drop anchor and heard its distress alarm, but no one answered. The Coast Guard and the National Transportation Safety Board are holding a formal hearing into the January 23rd collision that caused the worst oil spill in Texas in 15 years. No one was injured, but 462,000 gallons of crude oil spilled into the waterway. The tanker's pilots and captain have testified they didn't contact the tugboat to inform it of problems they were encountering in the narrow Sabine-Neches waterway channel they were sailing through.
The pace of expansion of the foreclosure crisis may finally be slowing. RealtyTrac reports that the number of U.S. households facing foreclosure in February grew six percent from the year-ago level, the smallest annual increase in four years. More than 308,000 households, or one in every 418 homes, received a foreclosure-related notice last month. RealtyTrac says that's down more than two percent from January. Fears remain about the hundreds of thousands of homeowners who are still being evaluated for help under loan modification programs. Many analysts say most of those borrowers will eventually lose their homes, sparking a new round of foreclosures later this year. RealtyTrac Senior Vice President Rick Sharga says it is "premature" to declare victory in the foreclosure crisis just yet.
Americans regained more of their shrunken wealth last quarter. That was mostly because the healing economy boosted stock portfolios. But the gain was less than in the previous two quarters. The Federal Reserve reports that household net worth rose 1.3 percent in the fourth quarter to more than $54 trillion. It marks the third straight quarter of gains. Net worth had risen by a stronger 4.5 percent in the second quarter of 2009 and by an even faster 5.5 percent in the third quarter. Net worth is the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards. Even with the gain, Americans' net worth would have to rise an additional 21 percent just to get back to its pre-recession peak of nearly $66 trillion. That shows the vast loss of wealth people have suffered from the worst downturn since the 1930s.
With unemployment high and personal wealth diminished, how was it that strapped consumers were paying down their credit card debt last year? It turns out they probably weren't. An analysis of Federal Reserve data shows the bulk of 2009's drop in credit card debt came instead because banks were forced to write off loans consumers failed to pay. Loans are typically charged off by banks once they're 180 days past due, under the assumption that the debt won't be repaid. In 2009, banks wrote off a record $83.27 billion in credit card debt. A study by consumer credit research site Cardhub.com found that accounts for the bulk of the more than $93 billion drop in consumer card balances reported by the Fed for last year.
Retail gasoline prices are up across Texas for a third week in a row. The weekly AAA Texas survey released shows regular unleaded rose an average of eight cents at Texas pumps to $2.65 per gallon. Nationally, the average price rose seven cents to $2.78 per gallon. Season price increases are a factor in the increase as refineries switch to summer fuel blends and speculators consider the usual summer increase of driving. But the auto club also cites a slightly stronger economy and a soft dollar for strengthening crude oil prices. The least expensive gasoline in Texas is here in Houston, where the retail prices average $2.60 per gallon--up nine cents from last week. The most expensive gasoline is, as usual, in El Paso at $2.72 per gallon--up four cents from last week.
Auto safety officials are telling Congress the government may require automakers to include brake systems that can override the gas pedal in response to Toyota's massive recalls. David Strickland, the administrator of the National Highway Traffic Safety Administration, said in prepared remarks to a House panel that his agency may require the brake override systems, a fix intended to prevent the type of runaway car incidents that some Toyota drivers have described. It ensures that a driver stepping on the brakes can slow their car or truck even if the gas pedal is stuck or malfunctioning. Transportation Secretary Ray LaHood said last week the department may recommend the safety systems.
Senate Banking Committee Chairman Christopher Dodd plans to offer his own version of a financial regulation bill as bipartisan talks have failed to yield agreement on consumer protections and other sticking points. Dodd says that his talks with Republican Senator Bob Corker of Tennessee produced areas of common ground but a "few outstanding issues remain." The development raises new questions about one of President Barack Obama's top priorities. Congress and the administration have been trying to assemble legislation overhauling financial system regulation in hopes of preventing a recurrence of the economic crisis that hit the nation in the fall of 2008. Dodd said that some of the issues that he and corker did agree on will be incorporated into his proposed legislation.
The head of the Federal Housing Administration is warning that boosting the minimum down payment borrowers must provide to qualify for one of its home loans could threaten the housing market. FHA Commissioner David Stevens said during a House hearing that his agency would back 300,000 fewer loans per year if the mandatory down payment was hiked from the current level of 3.5 percent to 5 percent. That's a 40 percent drop. The result would be much lower demand and a potential "double-dip in housing prices," Stevens says. The FHA does not make loans, but offers insurance against their default. It has been insuring roughly 30 percent of new loans, and is the largest backer of mortgages to first-time buyers.
Mortgage rates have held below the five percent threshold for the second straight week, only weeks before a government program that has been keeping rates low is scheduled to expire. The mortgage finance company Freddie Mac said that the average rate on a 30-year fixed rate mortgage was 4.95 percent this week, down from 4.97 percent a week earlier. Rates dropped to a record low of 4.71 percent in December and have hovered around five percent since, kept down by a Federal Reserve campaign to stabilize the housing market by lowering mortgage rates. The central bank's $1.25 trillion mortgage security buyback program is set to expire March 31st. But the Fed has held the door open to extending the program if the economy weakens.
Although the Postal Service is free to cut services and close locations as it sees fit, the Postal Regulatory Commission is urging the service to give residents more advance notice and take into consideration their concerns and comments. Among the suggestions: give people more time to express their opinions and better explain the objectives and needs for post office closures and cutbacks. The latest proposal would cut out Saturday mail delivery in an effort to deal with the ever-growing budget deficit at the postal service, which hit 3.8 billion dollars last year alone. Staff has already been cut from a peak of 800,000 to fewer than 600,000 today.
The union representing mechanics and other ground workers at American Airlines is asking federal officials to let them take a big step closer toward a possible strike against the nation's second-largest carrier. The transport workers said they asked federal mediators to declare a deadlock in their negotiations over a new contract. If mediators agree to the union's request, it could start a 30-day "cooling-off" period after which the workers would be able to strike. The flight attendants' union at American has made a similar request.
A Dallas area company charges that Kroger is ripping off its technology and methods in the grocery chain's popular gasoline discount rewards program. Irving-based Excentus has filed federal suit in Texas against Cincinnati-based Kroger, saying its patents are being violated and seeking an order stopping Kroger and for unspecified damages. Kroger filed its own lawsuit, asking a federal court in Cincinnati to declare it has done nothing wrong. Excentus has the "fuelperks" gas discount system and developed programs with several Kroger rivals, including Minneapolis-based Supervalu and Pittsburgh-based Giant Eagle. Kroger says it developed its own ways of linking loyalty card data to its gas pumps.
Federal regulators are pledging a rigorous review of the proposed combination of Comcast and NBC Universal. Christine Varney, head of the Justice Department's antitrust division, and Julius Genachowski, chairman of the Federal Communications Commission, said their agencies will examine the transaction closely to ensure the deal does not stifle competition or harm consumers. Varney and Genachowski made their comments at a Senate commerce committee hearing. Comcast, the nation's largest cable company, is seeking approval to acquire a 51 percent stake in NBC Universal from General Electric. The Justice Department and the FCC are expected to approve the combination with conditions attached. But the review could last at least all year.
A federal regulator says Wall Street banks are seeking exemptions to proposed new rules for financial derivatives that could shield more than half the trades in the complex instruments that should be subject to disclosure. The chairman of the Commodity Futures Trading Commission, Gary Gensler, criticized Wall Street's stance on proposed new oversight for the shadowy $600 trillion derivatives market. Derivatives have been blamed for hastening the 2008 financial crisis. Gensler is telling a financial industry gathering that Wall Street has not been enthusiastic about proposed reforms. Gensler's comments came as the leaders of France, Germany and Greece called for a clampdown on the kind of speculative trading in derivatives that worsened Greece's debt crisis and undermined the European currency recently.
ExxonMobil says it will boost spending this year on new and existing projects even though demand for energy is still restrained in many parts of the globe. The world's largest publicly traded oil company intends to boost capital spending by three percent to about $28 billion. Spending should range between $25 billion and $30 billion a year on average through 2014. "We are executing a large inventory of projects and many others are under development," said Rex W. Tillerson, chairman and CEO of ExxonMobil. Tillerson spoke during Exxon's analyst meeting in New York. Many of Exxon's rivals have cut spending to match declining use of oil, gasoline and other products. In 2009, Exxon's capital expenditures totaled $27.1 billion.
Willbros Group reports a narrower fourth-quarter loss as it cut costs as its revenue fell by more than half. The Houston-based engineering and construction company's loss was still larger than analysts expected, and its shares tumbled 11.6 percent in midday trading. Willbros provides engineering and construction services to energy and petrochemical companies, but it's struggled as customers have canceled and delayed big spending projects. The company said conditions remain challenging, with uncertain timing of capital projects at oil and gas customers. In a separate announcement, Willbros said it agreed to buy energy-transmission provider Infrastrux Group of Seattle for about $480 million in cash and stock. Willbros says that'll give it a more strength in the fast-growing market for electric transmission and distribution.