Tuesday AM May 15th, 2007

AAA notes record $3.07 average for regular unleaded gasoline...ConocoPhillips oil projects in Venezuela hit by huge tax bills...Texas Senate bill would shift annual sales tax holiday from first weekend in August to third weekend...

Motorists gritting their teeth as they fill up at the pump are finding more reason for consternation. AAA says gas prices have hit a new record of more than $3.07 a gallon for regular unleaded. That's up almost a penny from just Sunday, and above the previous record before that set after Hurricane Katrina hit in 2005. The peak driving season hasn't even begun yet. The government last week reported that gasoline inventories rose slightly last week, but remain low by historic standards.

Traders are watching U.S. gasoline inventories, which rose slightly in the week ended May 5th despite glitches at refineries that have reduced supplies for nearly three months. Traders are wondering whether U.S. gasoline inventories can meet summer driving demand and by a disruption of oil supplies from Nigeria. Analysts are concerned that gasoline supplies, though rising, won't meet the peak demand of the U.S. summer driving season, which begins Memorial Day weekend at the end of May. Unplanned outages and scheduled maintenance at refineries, sluggish imports and strong demand have plagued gasoline stocks since early February. At least a dozen additional partial shutdowns have occurred in the U.S. and internationally that cut refining capacity.ξ Other factors affecting crude oil futuresξinclude the violence in Nigeria that has cut off the supply of more than 800,000 barrels a day.


Two ConocoPhillips oil projects in Venezuela have been hit by huge tax bills, according to the Houston Business Journal. Reuters says a $464 million tax claim was imposed on the Petrozuata oil project, which is 50.1 percent owned by ConocoPhillips. A $79.4 million tax claim was placed on the Hamaca project, which is 40 percent owned by ConocoPhillips. The Venezuelan state oil company took over operation of the projects earlier this month, preparing to assume at least 60 percent ownership. The government of President Hugo Chavez has given companies until June 26th to decide if they will continue as minority partners.


The annual sales tax holiday would shift from the first weekend in August to the third weekend of the month under a bill approved today by the Texas Senate. Senator Rodney Ellis of Houston says his plan is designed to move the sales tax holiday closer to the new school year start date--now the fourth Monday in August. The sales tax holiday exempts certain clothing, shoes, socks and underwear from sales tax for a three-day period.


Two Congressional Democrats are investigating whether BP disregarded necessary maintenance before oil spills in Alaska last year. That's as the two Michigan Democrats--John Dingell and Bart Stupak--prepare to question BP's top U.S. official at a Wednesday hearing. They sent a letter Friday to President Robert Malone of BP's U.S. subsidiary, asking why a BP report on leaks in its Alaska pipelines would omit a suggestion that budget constraints led to a lack of maintenance. According to the letter, a draft of the report by consulting firm Booz Allen Hamilton contains a sentence describing "budget pressure'' as a reason that maintenance was scaled back. But the congressmen state they've been informed the conclusion is no longer in the report. A spokesman for London-based BP declined to comment. BP operates a Prudhoe Bay, Alaska, field for itself and other producers, including Houston-based ConocoPhillips and Irving-based ExxonMobil. A government report released in March also blamed BP for cost-cutting at its Texas City refinery, where a 2005 explosion killed 15 people and injured more than 170 others.


A newspaper reports that relatives of 140 workers who died on the job in Texas were denied more than $17 million in compensation benefits. The Houston Chronicle says they were denied because of the state's narrow definition of who can receive the money. Typically, only spouses and minor-age children are eligible for the lump-sum compensation, often more than $100,000 per worker under state law. Parents and older children must demonstrate financial dependence on the killed worker to receive benefits. If the worker was unmarried and childless, and didn't monetarily support other family members, the death benefits are diverted to a fund for workers who have suffered multiple injuries on the job. But the Chronicle reports that most of that money goes back to insurance companies that underwrite workers' compensation. The paper reviewed state data from the last three years. In Texas, about 450 people are killed every year in workplace accidents.


Houston now has 87 consulate offices, with the establishment of the Republic of Namibia's consulate on Post Oak. Houston has the third-largest consular corps in the United States after New York and Los Angeles. Namibia is the ninth country from Africa to be represented in Houston. Namibia is a mineral-rich country on the southern Atlantic coast of Africa, sharing borders with Angola, Botswana, Zambia and South Africa.


Five major freight railroads are the subject of a price-fixing lawsuit filed in federal court in New Jersey. Phoenix-based Dust Pro filed the suit in a Newark, New Jersey, federal court on behalf of other parties who shipped goods on one or more of the railroads since July 2003. It's alleged the railroads "moved in uniform lockstep'' to fix prices for fuel surcharges. The lawsuit claims the surcharges had no relationship to actual fuel cost increases. The suit seeks unspecified monetary damages from Fort Worth-based BNSF Railway, as well as CSX Transportation, Norfolk Southern Railway, Union Pacific Railroad and Kansas City Southern Railway. The five railroads have offices or rail lines in New Jersey.


Farmers in the nation's leading cotton-producing state have gone from dealing with Texas drought--to now hoping things dry out and heat up. Soil temperatures need to average about 60 degrees for planted cottonseed to germinate and begin to grow. But records show daytime temperatures in the Lubbock area have been as much as four degrees below normal this month. Heavy rains--nearly two and a-quarter inches above normal for May alone--have also chilled cotton fields. Roger Haldenby with Plains Cotton Growers says cool and wet weather means that the seed is setting in chilly ground. He says that's not conducive to rapid and healthy growth. If the seedlings don't start growing within about two weeks, producers have to decide whether to replant--or go to another crop.


The 2007 Acura MDX sport utility vehicle and the 2008 Ford Taurus and Mercury Sable passenger cars have received top scores in new crash tests released by the insurance industry. The Insurance Institute for Highway Safety has given its highest score of "good'' in frontal, side and rear-impact testing for the vehicles, built by Honda and Ford. The MDX, Taurus and Sable received the institute's "Top Safety Pick'' award. It's given to vehicles that receive the highest scores on the crash tests and have electronic stability control. Stability control is optional on the 2008 Taurus and Sable, which also offer side air bags with head protection as standard equipment. Earlier versions of the 2007 MDX had low ratings in seat/head restraints. But the institute says Honda engineers improved the design of the head restraint.


Buying fashion online is in fashion itself. A new report says consumers spent more online for clothing than computers last year for the first time. A unit of the National Retail Federation, says ten percent of all clothing sales are expected to be done online this year. Consumers are said to be reacting to new companies doing business online as well as liberal shipping polices, including free shipping on returns and exchanges. Computer hardware and software had traditionally led among categories, excluding travel purchases. Shop.org, part of the trade group, looks for online sales generally to rise 18 percent this year to some $259 billion. The report was conducted by Forrester Research.


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