Friday PM May 25th, 2007

Memorial Day weekend kicks off as gasoline prices break records...Foreign oil workers kidnapped in Nigeria, including three Americans...U.S. Department of Energy: both proposed FutureGen sites in Texas pass environmental review...

This is getaway day for what's seen as the unofficial start of summer. Millions of people will be climbing into their cars or getting on airplanes for the Memorial Day weekend. Gas prices are high: averaging $3.23 a gallon. But that's not expected to keep people from traveling. AAA has said it thinks people will still take their summer vacations but will try to spend less on hotels and restaurants.

Texans are paying record-high average retail gasoline prices. The weekly AAA Texas gasoline price survey finds the average price of regular-grade gas rose 13 cents to $3.08 per gallon. That exceeds the record set in early September 2005 in the wake of Hurricane Rita. The national average rose 11 cents to a record $3.23 per gallon. Houston's rate is at $3.03—up over 11 cents per gallon. Auto club spokeswoman Rose Rougeau says tight supplies, surging demand and stressed refiners continue to fuel the increase. She says gas prices in Texas this Memorial Day weekend are averaging nearly 30 cents a gallon more than last year's holiday. The most expensive gasoline in any of the 11 Texas cities surveyed is found in Amarillo and El Paso, where regular-grade averages $3.28 per gallon. That's a seven-cent increase in Amarillo and 11 cents higher in El Paso. The cheapest gas is found in San Antonio, where it averages $2.99 per gallon. That's 13 cents higher than last week.

Authorities say a group of foreign oil workers has been kidnapped in Nigeria, including three Americans. U.S. and British embassy officials say at least seven people were taken, the three Americans and four British citizens. But security officials in the region say only six were abducted, including an Indian. Such kidnappings have been common in Nigeria's southern petroleum-producing region.

The U.S. Department of Energy says both proposed FutureGen sites in Odessa and Jewett have passed the environmental review. Public hearings are scheduled in both locations—June 19th in Odessa and June 21st in Jewett. The state's final FutureGen legislation, which puts additional incentives in place, has passed both the state Senate and House and is on the governor's desk. This fall, the FutureGen Industrial Alliance, which will operate the $1 billion, near-zero emissions coal-fueled power plant, will choose between four finalist sites, including two sites in Illinois.

Despite this week's report of a huge increase in sales of new homes last month, it is clear the housing market isn't out of the woods yet. The National Association of Realtors reports sales of previously-owned homes fell by 2.6 percent in April to an annual rate of just under six million units. That's the slowest sales pace in nearly four years. At the same time, the median price of a home sold during the month fell eight-tenths percent from a year ago—to $220,900. The median is the mid-point selling price: half of the prices are above it and half are below. The price decline was the ninth in nine months--a sign that troubles in the subprime mortgage market continue to be a drag on housing.

The number of rigs actively exploring for oil and natural gas in the United States increased by 16 this week to 1,760. Houston-based Baker Hughes reports that of the rigs running nationwide, 1,471 were exploring for natural gas and 287 for oil. Two are listed as miscellaneous. A year ago, the rig count stood at 1,649. Of the major oil- and gas-producing states, Texas gained five. Baker Hughes has tracked rig counts since 1944. The tally peaked at 4,530 in 1981, at the height of the oil boom. The industry posted several record lows in 1999, bottoming out at 488.

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