P E T R O L E O S M E X I C A N O S
Balancing Costs and Competition New York Times
La UE desafía a Rusia y abre una batalla legal contra Gazprom El Pais
Asian Morning Briefing: Nasdaq Nears a Record Wall Street Journal
Lavrov Calls EU Charges Against Russia's Gazprom 'Unacceptable' Moscow Times
Mexico’s Pemex to Stick to Budget Austerity in 2016 Due to Low Oil Prices
Wall Street Journal
BP offloads North Sea pipeline stake Financial Times
Freeport-McMoRan weighs up selling minority stake in oil unit Financial Times
Flash crash trader charged, Petrobras's $17bn hit, Facebook empire-building costs
Petrobras struggles with losses as probe drags on Financial Times
Caterpillar Nudges Profit Forecast Higher Wall Street Journal
Aznar se solidariza con Felipe González por los ataques de Venezuela El Pais
El petróleo sube por temores sobre Yemen y el debilitamiento del dólar El Comercio
U.S. Oil Prices Hit 2015 High on Supply Expectations Wall Street Journal
NY mill to get natural gas by truck after scrapping pipeline Wall Street Journal
China may raise retail oil prices China Daily
Balancing Costs and Competition
Renewable energy was never a bargain compared with fossil fuels like natural gas and coal. Steep price declines in those commodities, especially lately, make it even tougher for alternatives like solar, wind and hydroelectric power to compete.
Natural gas costs about $2.60 per thousand cubic feet, barely half as much as a year ago and over 80 percent less than its 2005 peak. Coal prices have fallen too, although less sharply. Even so, technological improvements and a persistent push from regulators for utilities to use cleaner fuel sources are keeping supply and demand for renewables high and reducing cost disadvantages over the long haul.
“We’re seeing a secular increase in renewable capacity regardless of the current price of fossil fuels,” said Francis O’Sullivan, director of research and analysis at the M.I.T. Energy Initiative, a multidisciplinary group that studies energy issues.
“Capital costs, particularly for solar, have been falling quite dramatically over the last four or five years,” he said. “Similar gains in competitiveness likely will not be achieved for conventional generation; that technology is much further along on the maturity curve.”
But the price gap is still there, even if it’s closing. That’s slowing momentum toward renewables in the short run, said Deborah L. Byers, an expert on United States oil and gas at Ernst & Young. “Costs have come down on wind farms built in the last few years, and they’re making money, but we haven’t seen installations of new wind farms, either,” she said.
M.I.T. estimates that a megawatt-hour of electricity, enough to power about 500 homes for an afternoon, will cost $65 to $70 this year if generated from water or land-based wind facilities; offshore wind and solar cost around twice as much. Natural gas is expected to beat them all easily: $40 for the same amount of electricity.
The impact of plunging fossil fuel prices on renewables has not been greater in part because energy tends to be bought through long-term contracts. Southern California Edison, for instance, buys power in agreements lasting 10 to 30 years. Deals are signed continually — often on better terms for the utility — as old ones expire.
“The newer the agreement, the lower the price” for renewables, “because the technology is improving and their prices are becoming more competitive,” said Robert Laffoon-Villegas, a spokesman at Southern California Edison.
Makers of solar panels can slice the silicon wafers from which they’re made ever thinner, making each panel cheaper by using less material. Wind turbines are built larger, stronger and out of lighter-weight materials, increasing efficiency.
Other breakthroughs, like new storage methods, are making renewable energy more user-friendly, said Dan Reicher, director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University. “If you’re running the grid, you’re much more interested in a kilowatt-hour of intermittent solar or wind power if you know it can be managed,” he said. “The sun shines in the day but power is used at night; that’s where storage comes in.”
New industrial-scale batteries facilitate storage, as do improved pumping techniques. Power generated during off-peak hours is used to push water uphill; when demand rises, the water is released, allowing gravity to supply the grid. Another method relies on compressed air.
Renewables accounted for 13 percent of American electricity generation in 2013, according to the United States Energy Information Administration. It forecasts the proportion to rise to 18 percent in 2040.
But renewables are still more expensive than gas. Utilities use them in part because they have to. Thirty states have mandates to increase the proportion of electricity generated from renewables, according to the E.I.A., including all Northeastern states except Vermont.
Some organizations, such as the Institute for Energy Research, a Washington think tank, say mandates prop up electricity bills by raising demand for energy from more expensive sources. But certain renewables, like solar, wind and hydroelectric power, enjoy economies of scale that fossil fuels do not, others say, resulting in lower costs from the increased demand.
“Renewables have the advantage that their marginal cost is close to zero,” Mr. O’Sullivan said. “When you develop a renewable facility and are able to get a connection to the grid, you’ll always be the lowest-cost power source.”
But you have to build the installation first. The investment and regulatory approvals needed to harness renewable energy are considerable.
Economies of scale and competition among providers of renewable energy and between them and fossil fuel companies propel technological improvements that bring down the price of renewables and stimulate sales that finance the next round of innovation. Advances have been so swift and steady, especially in solar, that producers are inclined to bet on the future when they bid on contracts. “The numbers tend to be quite aggressive,” Mr. O’Sullivan said, below what would be profitable today.
Aggressive but perhaps not imprudent. M.I.T. projects the cost of electricity produced from onshore wind to drop about 10 percent by 2030, with declines of about 30 percent forecast for offshore wind and solar. Meanwhile, gas prices are forecast to rise about 25 percent. “Further declines in the cost of renewables are likely,” Mr. O’Sullivan said. “The slope of that decline is where the debate is; prices won’t always march downward. But if renewables become a low-cost source, the grinding of teeth regarding fossil fuel usage will end.”
La UE desafía a Rusia y abre una batalla legal contra Gazprom
Los entes posmodernos como la UE no envían tanques contra sus adversarios, sino legislación: disuasión legal y económica. La Comisión Europea, el brazo ejecutivo de la Unión, dio este miércoles un sensacional golpe de efecto en su pelea con Rusia con la apertura de una batalla legal contra Gazprom, la compañía paraestatal rusa que controla el 30% del gas en el continente. La comisaria de Competencia, la danesa Marghrete Vestager, presentó un pliego de cargos contra Gazprom —el primer paso hacia una multa que podría ser millonaria— por abusar de su poder de mercado; por imponer condiciones leoninas a varios socios de Europa central y del Este.
La Unión mantiene fuertes sanciones económicas y financieras tras la invasión de Ucrania, que han yugulado el crecimiento de Rusia con la inestimable ayuda del desplome de los precios del petróleo. Y abre así un nuevo y atrevido frente, esta vez en el plano legal, para contrarrestar la actitud abiertamente hostil del país que preside Vladímir Putin.
Bruselas presentó el caso como un asunto técnico, con la Comisión empeñada en negar lo evidente, interesada en dar el aire solemne y aparentemente aburrido de las cuestiones jurídicas a una decisión con claras connotaciones geoestratégicas. “Esta no es una decisión política”, negó hasta tres veces Vestager. Pero la comisaria es consciente de lo que se juega Europa: el futuro de la relación con Rusia, muy dañada tras la invasión de Ucrania y los sucesivos y poco fiables acuerdos de paz, y por el acercamiento reciente entre Moscú y Atenas. Y, sobre todo, una cuestión más de fondo: la posición de Europa en el debate energético global.
Bruselas dio 12 semanas a Gazprom para reaccionar. La compañía tardó menos de una hora: calificó las denuncias de “infundadas” y subrayó que espera un acuerdo “a nivel intergubernamental”, entre el Kremlin y Bruselas, destacando así la naturaleza política del conflicto. La reacción de la presidenta de Lituania, Dalia Grybauskatie —“la era de los chantajes políticos y económicos del Kremlin toca a su fin”— desmiente también la supuesta asepsia de la decisión europea.
Vestager se erige así como el último y más afilado ariete de Bruselas en el tablero geoeconómico mundial, ya sea contra las todopoderosas empresas tecnológicas estadounidenses —abrió un proceso similar contra Google hace una semana que le ha granjeado duras críticas en Washington— o contra una de las compañías de bandera de Rusia. Las fuentes consultadas en la Comisión admiten, sin embargo, que el caso estaba listo desde hace meses. El excomisario Joaquín Almunia intentó activarlo en septiembre. Sin éxito: el expresidente José Manuel Barroso decidió mantener el pliego de cargos en el congelador en busca de una ventana de oportunidad, “del momento más adecuado para no descarrilar el proceso de paz en Ucrania”. En vista de que ese momento no llegaba, el presidente Jean-Claude Juncker deja hacer a Vestager: las fuentes consultadas explicaban anoche que la comisaria mueve ficha “con criterios estrictamente técnicos”. Pero ni los diplomáticos ni los analistas se creen una palabra acerca de esas pretendidas motivaciones. “Reconozco que probablemente habrá especulaciones sobre esta decisión”, reconoció ante la prensa Vestager, la nueva dama de hierro de la competencia continental.
La investigación se remonta a 2011. En marzo del año pasado, Gazprom y Bruselas buscaban sellarla con una negociación que se bloqueó tras la invasión de Crimea. Tenían prácticamente cerrado un pacto con soluciones para las cláusulas abusivas que exige Gazprom y que impiden a los socios reexportar gas o usar las infraestructuras para dejar fluir el combustible hacia otros países. Pero Gazprom estaba y está realmente nerviosa por la tercera pata legal del caso: los precios predatorios que impone a algunos países, que según la Comisión se fijan sin ningún fundamento económico; en función, poco más o menos, de los intereses de Rusia.
Vestager cosecha un inusitado protagonismo por segunda vez en dos semanas. No ha mostrado dudas en los que probablemente serán los dos grandes casos de su mandato: ha tardado seis meses en lanzar acusaciones contra Google y Gazprom en cuanto se ha convencido de que tenía indicios sólidos. Y lo ha hecho de una tacada, con apenas una semana de diferencia: “Gazprom ha levantado barreras artificiales, y cobra precios injustos”, dijo con su estilo claro y directo. Hasta ocho socios se han visto perjudicados: Hungría, Bulgaria, República Checa, Polonia, Eslovaquia y los tres bálticos. Vestager se fue a EE UU tras abrir el melón con Google, sin rehuir la pelea. Con Gazprom y Rusia en liza, la refriega está asegurada sin necesidad de viajar.
Asian Morning Briefing: Nasdaq Nears a Record
U.S. stocks rose as the Nasdaq neared a record. Bond yields climbed amid a broad wave of global selling as demand for haven assets pulled back. The Swiss franc fell sharply against the dollar and euro on SNB moves. Oil prices fell after inventory data showing ample supplies. Gold slid on higher U.S. interest-rate expectations.
Investors in Asia will have a slew of economic data to digest Thursday. Among the reports due out are the HSBC China Flash Manufacturing PMI and the Japan Flash Manufacturing PMI. South Korea reports its first-quarter advance GDP, which is expected by analysts to rise 2.5% year-over-year. Elsewhere, Taiwan's industrial output is expected to post a 5.11% gain on the year and Singapore's CPI is seen edging lower by -0.5%,
U.S. stocks rose, with the Nasdaq Composite Index inching closer to breaking its 15-year-old record high.
Stocks opened higher and then quickly turned lower, pushing the Dow down 62 points at its low of the session. Stocks pared losses by midmorning and pushed to session highs in afternoon trading.
Traders said there wasn't one piece of news driving stocks higher, pointing to gains in technology stocks ahead of key earnings reports, a selloff in government bonds and stronger-than-expected housing data.
Technology stocks in the S&P 500 rose 1.1%, posting the biggest sector gain.
Recent action in the major indexes has been choppy, leaving them trading in a range below all-time highs. The Dow is 1.4% away from its record of 18288.63 and the S&P is 0.4% below its closing high of 2117.39.
"We've really been in a trading range since earnings started," said Tom Wright, director of equities at JMP Securities. "For me, one of the key factors is that on selloffs, we definitely see new money coming to the market. We are encouraged by that," he added.
Companies attracting attention included McDonald's Corp. The burger giant reported a steeper-than-expected 32% decline in profit, in part because of changes in foreign-exchange rates. Revenue fell 11% to $5.96 billion, in line with Wall Street expectations. Shares rose 3.1%, adding 20 points to the Dow's overall gain.
Coca-Cola Co. reported better-than-expected profit and revenue in its first quarter. Shares added 1.3%.
Boeing Co. reported a jump in earnings in its latest quarter, but a sharp drop in cash flow for the period disappointed investors. Shares fell 1.4%.
Including results from 120 companies in the S&P 500, earnings are on track to fall 3.8% from a year earlier, according to FactSet. About 76% of those companies have beaten profit expectations that were slashed heading into the reporting season. The picture is less rosy for revenues, with just 45% of companies beating top-line expectations.
In Asian markets Wednesday, the Nikkei Stock Average closed above 20000 for the first time since 2000, the result of a rally this year driven not only by international exporters but also by lesser-known companies selling staples domestically.
The Swiss franc fell sharply against the dollar and the euro after Swiss National Bank took further measures to discourage investors from holding the currency.
The central bank said it has expanded the number of groups subject to negative rates on money deposited with the SNB, adding the federal and central bank pension funds.
The Zurich-based SNB said the groups would now be charged the 0.75% fee on deposits exceeding 10 million Swiss francs ($10.4 million). The policy will apply to the pension fund for federal employees and the bank's own pension fund.
Additionally, the SNB announced it is closing some accounts held by the cantons of Zurich and Geneva, as well as the city of Zurich. These accounts had previously been exempt from the negative rates, which are in essence a fee on the deposits.
"The SNB is still concerned with the level of the franc and they're watching it closely," said Camilla Sutton, chief currency strategist at Scotiabank. "They're trying to discourage holders of Swiss francs."
Flows into haven assets and euro weakness have strengthened the franc in recent weeks. The central bank may continue to intervene in the currency market if the franc keeps appreciating, Nikolaos Sgouropoulos, currency researcher at Barclays, wrote in a report.
The SNB implemented negative rates in January as it moved to battle a persistently strong Swiss franc. The policy applied to all banks deposits with the central bank but excluded some government institutions.
The SNB said deposits from the federal government administration, the country's social security system and disability insurance would be exempt from negative rates.
A broad wave of selling swept the world's core government bond markets, sending yields climbing in the U.S., Germany and the U.K., as demand for haven assets pulled back.
U.K. bonds were the biggest losers, with the 10-year yield registering its largest one-day increase since August 2013. The 10-year German bond yield rose the most on a one-day basis in three months. The yield on the benchmark U.S. Treasury note rose to its highest level in nearly a month. When bond prices fall, their yields rise.
A report showing sales of previously owned homes in the U.S. rose to their highest level in 18 months and the Bank of England's minutes for its recent policy meeting, which were taken as more hawkish than investors had expected, precipitated the decline. Both remind bond investors of the risk that the Federal Reserve and the BOE could raise interest rates sooner than investors expect.
Meanwhile, stocks and bonds in Greece rallied, fueled by hopes a resolution could be reached to avoid a default by Greece. The brighter sentiment sent government bond prices in the eurozone's weaker economies--Spain, Italy and Portugal--higher, while German bonds, the benchmark for the region's debt markets, sold off.
Despite the setback, bond yields in the U.S., Germany and the U.K. remain near historical lows amid an uncertain global growth outlook and ultraloose monetary stimulus from many central banks. The European Central Bank started buying bonds in March and the buying is scheduled to last through September 2016, which had sent German bond yields to a record low earlier this week.
Bond buyers have benefited from a broad decline in interest rates over the past year, which has delivered decent capital gains. Yet at these slim yield levels, analysts say bondholders are vulnerable if sentiment turns sour; even a moderate rise in bond yields could eliminate the paltry interest payments.
Jeff Klingelhofer, co-portfolio manager of global fixed-income portfolios at Thornburg Investment Management, which has about $61 billion in assets under management, said the selloff is a signal that bond markets will become more volatile in the months ahead given the uncertainty over when the Fed will raise interest rates for the first time since 2006.
U.S. oil prices fell as domestic crude stockpiles grew to a record, while lower-than-expected refinery activity boosted gasoline prices.
U.S. crude-oil stockpiles last week rose by 5.3 million barrels to 489 million barrels, the highest in weekly data going back to 1982, the U.S. Energy Information Administration said. In monthly data, which don't exactly correspond with weekly data, inventories haven't been this high since 1930.
The amount of domestic crude oil in storage has increased for 15 straight weeks.
The amount of crude stored in Cushing, Okla., the delivery point for the Nymex futures contract, rose to 62.2 million barrels. That's a record based on data going back to 2004 and near maximum capacity for the storage hub. Crude stored along the Gulf Coast also reached a record, totaling 242.5 million barrels, the highest in history based on data going back to 1990.
The EIA data also showed that refineries processed less crude oil into gasoline and other fuels, as their utilization rate fell from 92.3% of capacity to 91.2% in the week. This is the time of year when refinery utilization typically rises, as refiners complete seasonal maintenance and ramp up output of gasoline and other fuels ahead of the busy summer-driving season.
Gasoline stockpiles fell by 2.1 million barrels last week, more than analysts had expected. The May gasoline contract settled up 3.64 cents, or 1.9%, at $1.9245 a gallon.
The drawdown in gasoline supplies may not be a sustained trend, said Donald Morton, senior vice president at Herbert J. Sims & Co., who runs an energy-trading desk. Sellers are likely trying to get rid of the winter-grade gasoline they still have in storage to make room for summer-grade fuel, he said. "That drop in gasoline supplies is the last, or second-to-last, drop that we will see for a while," Mr. Morton said.
U.S. crude output fell for the third time in four weeks, averaging 9.37 million barrels a day last week. That is down 18,000 barrels a day from the prior week and down 0.6% from the multi-decade peak of 9.42 million barrels a day reached in March.
In the precious metals market, gold prices skidded to a three-week low after strong U.S. housing data bolstered the case for the Federal Reserve to raise interest rates in the next few months.
Facebook's Spending Weighs on Profits
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AT&T's Subscriber Growth Slows
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EBay Revenue Rises 4.4%
EBay reported that its revenue rose a better-than-expected 4.4% to $4.45 billion in the first quarter, though revenue at its key marketplace segment fell. The company posted earnings of $626 million, or 51 cents a share.
Google Unveils Wireless Service
Google launched a wireless service, entering an industry locked in a price war between leaders AT&T and Verizon Communications and chasers T-Mobile US and Sprint.
Qualcomm Sees Profit Decline 29% on Antitrust Fine in China
Qualcomm posted a 29% drop in second-quarter profit to $1.05 billion, weighed down by a fine to end an antitrust probe that had hobbled the chip maker in China's big smartphone market.
McDonald's Reports Steeper Profit Drop
McDonald's posted a steeper-than-expected drop in 1Q profit amid foreign-currency impacts and restructuring charges, though revenue met Wall Street views. It earned $811.5 million, or 84c a share, down from $1.2 billion a year ago.
Deutsche Bank Expects 1Q Profit, Despite Litigation Costs
Deutsche Bank is said to be ready to announce a settlement of more than $2.15 billion with regulatory authorities in the U.S. and Britain. The bank also said it expects to book a profit for the first quarter, despite litigation costs of some $1.61 billion.
Abe, Xi Meet at Summit of Asian and African Nations
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EU Files Antitrust Charges Against Gazprom
The European Union accused Russian energy giant Gazprom of raising barriers to competition in the gas markets of central and Eastern Europe, in a move that risks deepening a rift with Moscow.
ECB Raises Ceiling on Greek Lending
The ECB increased the amount of money Greek banks can borrow under an emergency lending program, extending a lifeline for the country's banks as its government continues tense negotiations with its creditors over its bailout program.