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Thursday July 7th, 2005

London bomb blasts, tropical storms affect oil prices…Financial professionals predict continued economic expansion…Saint Arnold Brewery adds equipment, increases personnel… Oil prices are falling after a string of rush-hour bomb blasts in London, and an increase in U. S. heating oil supplies as traders take profits from previous run-ups. Traders say the terrorism in London has […]

London bomb blasts, tropical storms affect oil prices…Financial professionals predict continued economic expansion…Saint Arnold Brewery adds equipment, increases personnel…

Oil prices are falling after a string of rush-hour bomb blasts in London, and an increase in U. S. heating oil supplies as traders take profits from previous run-ups. Traders say the terrorism in London has raised concerns that demand may be disrupted by hurting the fuel-dependent airline industry. Immediately after the explosions in London were reported, oil futures plummeted in electronic trade, but managed to bounce back partially.

Also weighing on oil prices is the weekly energy department report on U. S. inventories. This morning’s report showed a big drop in crude supplies, but a huge build in the nation’s supply of distillate fuel, including heating oil, jet fuel and diesel. Concerns about an approaching hurricane in the Gulf of Mexico may be partially supporting oil prices. The projected path for Hurricane Dennis is that it’s headed right smack at the oil and gas production in the Gulf.

Tropical Storm Cindy cut more than 12 percent of Gulf of Mexico oil production and 7.5 percent of natural gas output this week, according to the Mineral Management Service. A second storm system approaches the area. More than 95 oil and gas platforms and drilling rigs were evacuated this week. Refinery operations at five facilities in Louisiana were disrupted because of Cindy, which came ashore Tuesday at Grand Isle, Louisiana. Crews have been returning to work offshore, but it’s not known when production will be restored. Tropical Storm Dennis was expected to become a hurricane by Friday, and companies are evaluating whether to evacuate more crews from Gulf operations. Transocean says it will be evacuating about 250 workers from three deepwater rigs. BP says non-essential workers were evacuated from deepwater facilities in the eastern Gulf.

In the aftermath of the London bombings, Continental Airlines says passengers with tickets to and from the UK can reschedule or reroute their travel once without penalty. The option is for passengers traveling between July 7th and 14th, and rescheduled travel must be re-issued by July 31st.

The Association for Financial Professionals has released its Mid-Year Business Outlook Survey. Director of Research Dr. Kevin Roth authored the survey, which he said shows the economy will continue to grow at a moderate rate.

Kevin Roth audio 1

This report shows a slight drop in optimism.

Kevin Roth audio 2

Roth says this kind of data is helpful to financial professionals.

Kevin Roth audio 3

This is the second such AFP survey, which members can use in making forecasts about future business conditions. The Association of Financial Professionals conducted a similar survey last December.

The last of five Enron Broadband defendants has been on the stand, denying taking part in any conspiracy or fraud. Former Enron Broadband Service Chief Financial Officer Kevin Howard says a video-on-demand deal had no oral side deals. Howard is now the CFO of a small pipeline company. Howard is accused of conspiracy and fraud for their role in helping Enron book earnings on a $111 million deal selling the rights for future profits on a video-on-demand business.

A bankruptcy court decision allowing Enron to unwind derivatives payments made to Bear Stearns Companies may disrupt financial markets, according to the International Swaps and Derivatives Association and the Bond Market Association. The industry groups filed a court paper backing New York-based Bear Stearns in its attempt to prevent Enron from recovering $25.9 million it paid to the bank in August 2001. Enron filed for bankruptcy four months after Houston-based Enron paid Bear Stearns in exchange for buying equity derivatives, which allowed Enron to buy its own shares at a set price.

Two former executives from Houston-based American Rice have been sentenced to prison for authorizing $500,000 in bribes to Haitian customs officials in 1998 and 1999, according to the Houston Chronicle. Former American Rice President Douglas Murphy was sentenced to 63 months in prison, according to the Securities and Exchange Commission, and former Vice President of Operations David Kay was sentenced to 37 months. American Rice was acquired by Spain’s SOS Cuetara in 2003.

Houston-based Saint Arnold Brewery is adding equipment and increasing personnel in response to demand for its beer products. The six-figure investment includes a new beer tank, extra refrigeration and a pair of new fermenters, each of which is twice the size of its existing fermenters. The company has experienced a record-breaking first half of the year and has doubled its staff to 15 in the past year. Saint Arnold’s brews five year-around and five seasonal beers.

A partnership controlled by Anschutz Pinedale Corporation has reached a deal to buy terminal and pipeline assets from San Antonio-based Valero. Pacific Energy Partners has agreed to pay $455 million for the Valero assets. The assets include a 550-mile refined products pipeline with four truck terminals and storage in the Rocky Mountains. The company is part of the holdings of Denver billionaire Philip Anschutz. Also today, a group of California utilities has bought part of a key Wyoming natural gas field from Anschutz Pinedale for $300 million. Anschutz Pinedale will continue to produce natural gas from its remaining undeveloped 8,000 acres in the Pinedale Anticline of southwestern Wyoming. The southern California companies bought 38 oil and gas wells on 1,800 acres.

Privately-owned Link Staffing Services of Houston is opening an office in Lutz, Florida in the Tampa-St. Petersburg-Clearwater area on the Gulf Coast. Link Staffing Services has more than 40 offices nationwide.

Close to 1,500 union workers are striking today at one Asarco copper-mining facility in Texas and five in Arizona. Workers at the Amarillo refinery were the last to go out. They set up picket lines after a storm blew through the area around midnight. Some 750 workers in Kearny and Hayden, Arizona walked off the job a day after their contract expired. Nearly 750 more workers in Sahuarita and Marana, Arizona and Amarillo began voting the next day to support the strike, then started walking off. Those employees had been working without a contract for the past year. Union negotiators accused the company of failing to bargain in good faith, asserting violations of fair labor practices. Asarco said it regretted and was disappointed that the unions had chosen to strike “rather than continue trying to negotiate a new contract.” Among other things, the company has asked workers to accept a three-year salary freeze.

7-Eleven has returned to Manhattan after a 23-year absence. The Dallas-based chain is using smaller, walk-up convenience stores that it pioneered in other big cities. There is no parking nor gasoline pumps. Regional Vice President Bob Cozens say the assortment is being tailored to local tastes, including grilled chicken caesar wraps, sushi and single-serve bundt and crumb cakes. Standard fare, including hot dogs, taquitos and Slurpees, will also be sold. A store in the Flatiron District opened last week. A second Manhattan store is expected to open in early fall, with others to follow. The store will be run by a franchisee who immigrated to the United States from India in 1981.

Pier One Imports has some good news and some bad news when it comes to June sales. The Fort Worth-based home furnishings retailer says sales at stores open at least one year–or same-store sales–fell almost four percent in June. But that was better than the seven percent loss expected by Wall Street analysts. Pier One says also that total sales rose 1.3 percent from June of last year, to $175 million. The company says it continues to forecast second-quarter same-store sales declines in the mid- to high-single digits, due to more difficult comparisons for July and August.

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