Crude oil inventories grew last week after unexpected drops in the prior two periods. That's according to the Energy Department. The report shows that demand for gasoline over the past month was down from a year ago. Crude oil inventories grew by 2.4 million barrels last week. They remain 5.6 percent below year-ago levels. That is a larger-than-expected gain. Gasoline inventories fell by 3.2 million barrels. Inventories of distillates, which include diesel and heating oil, fell by 1.4 million barrels.
Gasoline prices rose more than two cents overnight to a national average of $3.53 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. Many forecasters believe pump prices could spike as high as $4 a gallon nationally over the next couple of months. Gas prices are nearly 66 cents higher than last year, when they peaked at a then-record of $3.23 in late May, and have prompted many analysts to raise their estimates of where gas is going to go. Prices for diesel--used to transport most food, industrial and commercial goods--have hit a new record of $4.20 a gallon. Oil prices are also up.
High jet fuel prices are to blame for billions of dollars in losses for the airlines. Combined, Delta Air Lines and planned merger partner Northwest lost more than $10 billion. Delta Air Lines, the nation's third-largest carrier, says it suffered a nearly $6.4 billion loss in the latest quarter due to soaring fuel prices and the steep decline in the company's market value. Northwest Airlines, which plans to combine with Delta to create the world's largest airline, reported a $4.1 billion loss in the period. Delta's results badly missed Wall Street expectations, despite a 12 percent increase in sales. Delta says the red ink was driven by a $585 million year-over-year increase in the cost of fuel. Delta last week announced plans to buy Northwest Airlines in a stock-swap that, if approved, would create world's largest airline.
The three former British bankers who pleaded guilty in an Enron-related fraud have been ordered to three separate prisons. Gary Mulgrew has been ordered to Big Spring, Texas on April 30th. Giles Darby must report to the Allenwood facility in White Deer, Pennsylvania on May 7th. David Bermingham has to surrender to a prison in Lompoc, California on May 9th. The three received 37-month prison terms on February 22nd.
Texas oilman Oscar Wyatt, Jr., is asking a judge to let him serve his final six months for improper payments in the United Nations Oil-for Food program in a halfway house and at home. The 83-year-old billionaire pleaded guilty to conspiracy to commit wire fraud. The founder of Coastal Corporation was accused of paying millions of dollars outside of the 1996 UN relief program, which had been set up to allow Iraq to use oil revenue for food and medicine. Wyatt's been in a Beaumont federal prison since January 2nd. His attorney cites his age and health in requesting the move.
Germany's investment promotion agency hosts a reception and dinner for Houston businesses interested in expanding their reach into European markets. Invest in Germany is hosting the event this evening at the Houstonian Hotel on Post Oak. The German Chamber of Commerce reopened its doors in Houston this January. American companies employ more than 440,000 people in Germany. The session this evening includes remarks from the German Secretary of State, Federal Minister of Transportation, Building and Urban Affairs and the CFO of Porsche North America.
Toyota has taken the global automotive sales leadfrom General Motors in the first three months of the year. GM says its first-quarter sales dropped across the globe by less than one percent. Toyota sales were up 2.7 percent during the same period. GM barely won the global sales race with Japan-based Toyota last year. A GM executive notes that Toyota beat the Detroit-based automaker in last year's first quarter as well, but GM was able to retake the lead by year-end. He says GM is more focused on turning around its North American operations and becoming profitable worldwide than it is on beating Toyota.
General Motors finally has bragging rights for mileage among mid-size cars. For 2008, the new Chevy Malibu comes equipped with a six-speed automatic transmission, mated with a four-cylinder engine that lifts the vehicle to a highway mileage rating of 32, the best among highly competitive midsize cars. The new powertrain debuts in the Malibu LTZ this year and next year in two lower-priced models. The 32 mileage figure betters the existing four-cylinder Malibu rating by two miles per gallon. And the Malibu now beats the Toyota Camry and Honda Accord models for mileage, because both of them offer 31 miles per gallon. The Bush administration has just revealed proposed rules that would require new cars and trucks to meet a fleet average of 31.6 mpg by 2015.
House Republicans are favoring a trimmed down plan to counter a $300 billion housing rescue program offered by Democrats. Spencer Bachus is the top GOP representative on the House Financial Services Committee. He wants to expand a Bush administration program that allows some struggling homeowners with subprime loans to refinance into more affordable mortgages backed by the government. The proposal calls for an overhaul of the federal housing administration and new regulations for government-sponsored housing lenders Fannie Mae and Freddie Mac. However, the Bachus plan would reach far fewer borrowers than the proposal offered by Democrat Barney Frank, who chairs the financial services panel. Frank plans to have the committee vote on his plan Thursday.