Oil, Deals and Directionless Market

123jump.com Staff
30 Nov, -0001
New York City

White House lowers the annual GDP forecast for the year from 3.5% to 3.4% and raises the monthly job creation to 178 K from 175 K. 10-year note fell to 3.93% as coprporate new issue supplies hit the bond market. Kirkorian's tender offer for GM manages to raise stake to 7.2% but misses the 8% target. IAC/interactive sells its stake in VivendiUniversal for $3.4 B.

Markets open higher as reflected in the futures trading. Falling oil prices, positive outlook from Texas Instruments contributed to the early trading momentum. Crude oil which opened lower and then traded higher at mid-day fell at the end of the day. Oil, gasoline, heating oil, propane fell during the day's trading. Crude oil fell by $1.16 to $52.60 per barrel.

Energy department noted the following in the weekly report.

U.S. crude oil refinery inputs averaged nearly 16.1 million barrels per day
during the week ending June 3, down 26,000 barrels per day from the previous week's average. Refineries operated at 94.9 percent of their operable capacity last week.

While refinery inputs were relatively unchanged, gasoline production declined last week, averaging over 9.0 million barrels per day. However, distillate fuel production increased slightly, averaging over 4.2 million barrels per day.

U.S. crude oil imports averaged over 10.2 million barrels per day last week,
down 478,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged over 10.5 million barrels per day, which is 185,000 barrels per day more than averaged over the comparable four weeks last year.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 836,000 barrels per day, while distillate fuel imports averaged 162,000 barrels per day.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) fell by 3.0 million barrels from the previous week. At 330.8million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year. Total motor gasoline inventories inched lower by 0.1 million barrels last week, putting them below the upper end of the average range.

Distillate fuel inventories rose by 1.3 million barrels last week, but remain in the lower half of the average range for this time of year. All of the increase was in low-sulfur distillate fuel (diesel fuel), with high-sulfur distillate fuel (heating oil) inventories remaining the same as the previous week. Total commercial petroleum inventories declined by 0.1 million barrels last week, but are in the upper half of the average range.

Total product supplied over the last four-week period has averaged nearly 20.5 million barrels per day, or 1.3 percent more than averaged over the same period last year.

Over the last four weeks, motor gasoline demand has averaged 9.4 million barrels per day, or 2.4 percent above the same period last year, while distillate fuel demand has averaged 4.1 million barrels per day, or 6.6 percent above the same period last year. Kerosene-type jet fuel demand is up 3.4 percent over the last four weeks compared to the same four-week period last year.

Stocks of truck transportation companies are trading lower. Shares of Imclone, IAC/Interactive, Gilat Satellite and American Ecology are trading higher.

IAC/Interactive is in a deal with Vivendi Universal to sell its stake to NBC for $3.4 billion.

Investment vehicle, Tracinda Corp, of Kirk Kerkorian raised its stake in General Motors to 7.2% after it purchased 18.9 million shares in the tender offer that expired yesterday. However the offer failed to raise its stake to 8.8% as planned. On Tuesday, GM Chairman said that it plans to reduce workforce by 25,000 by the end of 2008. The plan is viewed with skepticism by investors and union and is viewed too little and too late.

Asian-Pacific markets finished higher as technology shares attracted investors and led gain after the chip maker Texas Instruments lifted its profit and sales outlook. Japanese stock average climbed 0.6% up, Hong Kong edged up 0.4%, China’s Shanghai Composite index surged 8.2% on talk that government could be acting behind scenes to prop up shares.

European shares traded lower in day’s trading on mixed corporate earnings news. Investors were also influenced by mixed Tuesday US markets but there was some positive news for the tech sector from Texas Instruments which boosted 2Q profit outlook. European semiconductor stocks reached higher. Philips Electronics rose 2.5% and STMicro rose 2.6%. News of the U.S. crude inventory fell by 3 million barrel drove several energy stocks higher. France oil giant Total edged up 0.2% and Shell lost 0.5%. Averages in U.K., France, Germany, Spain, and Switzerland fell less than 0.5% but that in Norway rose 1.33%.

FGL, sportswear retailer, reported 1Q net loss of 23 cents compared with net profit of 3 cents a year ago on soft corporate sales and lower margin. Comparable store sales fell 4.3%.

Comtech, communication equipment maker, posted 3Q 75 % profit rise of 39 cents vs. 22 cents last year beating estimates of 24 cents on strong sales. Revenue rose 47%.

Hayes Lemmerz, reported 1Q 4.0% sales increase to $618 million and operating earnings decline from $14.8 million down from $28.2 million. The company confirmed its 2005 earnings outlook.