Oil Slides on Renewed Recession Worries

Oil futures fell below $90 a barrel Monday, extending their recent streak of back and forth trading as recession fears reasserted themselves. Concerns about a severe economic slowdown were reignited by a dismal report on new home sales in the United States as well as by overnight declines in global stock markets. Sales of new homes plummeted a record 26.4 percent last year while the median price of a new home edged up just 0.2 percent, the worst showing since 1991, the Commerce Department said.

Stocks fluctuated in Monday trading on investor nervousness. Energy investors often view equity markets as a proxy for economic growth, fearing that a slowdown would curtail demand for oil and petroleum products such as gasoline and heating oil. "The movements in the equity markets reflect the sentiment on the U.S. economy and how other economies in the world may be affected ... if it slides into a deep recession," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

Indeed, domestic demand for gasoline fell last week by 152,000 barrels, according to the Energy Department, and some analysts think demand will fall more sharply in the coming weeks.
"I still think we have some ugly demand numbers coming out," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J. Light, sweet crude for March delivery fell $1.50 to $89.21 a barrel on the New York Mercantile Exchange, reversing two days of gains that had pushed prices back above $90.

At the pump, meanwhile, gas prices fell 0.5 cent Monday to a national average of $2.981 a gallon, according to AAA and the Oil Price Information Service. Retail gas prices, which typically lag the futures market, have mostly fallen since oil began its retreat from the record $100 level earlier this month. Tepid demand is also pressuring gas prices, though many analysts and the Energy Department expect prices to reverse and rise to new records near $3.50 a gallon when demand rebounds in the spring.

Energy traders are awaiting Wednesday's Federal Reserve meeting and a Friday OPEC meeting. If the Fed cuts rates sharply, energy investors could send prices higher, as they did last week on optimism sparked by a surprise Fed rate cut and a Congressional plan to stimulate the economy. On the other hand, analysts warn that investors could view another big rate cut as a sign the economy is in worse shape than thought, and send prices lower.

The Organization of Petroleum Exporting Countries is expected to hold production levels steady at its Vienna meeting, though any surprise could send prices sharply higher or lower.
Other energy futures also fell Monday. Heating oil futures for February delivery fell 4.29 cents to $2.4762 a gallon on the Nymex while February gasoline futures dropped 3.12 cents to $2.287 a gallon. February natural gas futures slipped 1.7 cents to $7.966 per 1,000 cubic feet.
In London, Brent crude fell $1.15 to $89.75 a barrel on the ICE Futures exchange.
By John Wilen
Source: Associated Press

1 Killed when helicopter crashes on L.A. freeway

One person was killed when a small helicopter crashed onto a busy freeway, officials said.
The helicopter crashed Friday night on the southbound lanes of Highway 110 in south Los Angeles, Los Angeles Fire Department spokesman Ron Myers said. Fire crews arrived at the scene to find the aircraft burning. One body was later found in the wreckage. The victim's identity was not immediately released.

Myers said the helicopter was possibly homemade, with just one or two seats. There were no immediate reports of any vehicles being involved in the crash.
Debris was scattered across several hundred yards of the freeway, but the California Highway Patrol reopened some lanes in both directions late Friday, Myers said.
Source: Associated Press

Obama Delivers Letterman's Top 10 List

Sen. Barack Obama is making some campaign promises we can be pretty sure he won't keep.
Appearing Thursday on the "Late Show With David Letterman," the Democratic presidential candidate delivered a tongue-in-cheek list of his top 10 campaign promises, including a pledge to rename the tenth month of the year "Barack-tober."

Also on the list is a vow to "appoint Mitt Romney secretary of lookin' good" and another to "put Regis on the nickel." And the No. 1 campaign promise? "Three words: Vice President Oprah."

Obama, the latest in a string of candidates to show up on Letterman's show, appeared just briefly to deliver the night's list. Earlier this week, candidate John Edwards came on the show only to have his carefully coifed hair messed up by the host. On Thursday, Obama joked that Lettermen couldn't repeat that prank, telling him: "you can't muss my hair."
Source: Google News

Oil Prices Rise to Near $90 a Barrel

Oil futures rose Friday in Asia to extend a gain of more than $2 a barrel after U.S. leaders agreed to a stimulus plan in an effort to avert a major slowdown in the world's largest economy. Light, sweet crude for March delivery rose 39 cents to $89.80 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract gained $2.42 to settle at $89.41 a barrel in the floor session.

Prices were also boosted Thursday after the U.S. government reported a drop in heating oil supplies. But the overnight gains really accelerated -- with oil posting its largest rise in over three weeks on word that the Bush administration and Congressional leaders had reached an agreement on an economic stimulus package. Traders have bet that the tax rebates of $600 to $1,200 that are part of the package will boost oil demand.

Meanwhile, the weekly inventory report from the Energy Department's Energy Information Administration showed stocks of distillates, which include heating oil and diesel fuel, fell 1.3 million barrels last week. Analysts surveyed by Dow Jones Newswires had said, on average, distillate supplies would remain unchanged. That decline was countered by domestic gasoline inventories, which jumped 5 million barrels, more than triple the analysts' expectations. Crude inventories rose 2.3 million barrels, the EIA said, slightly more than expected.

Because the report was mixed, investors' attention has returned to the economy and rebounding global stock markets. Oil prices fell in recent days, following equity markets that dropped earlier this week on U.S. recession worries. But with the Federal Reserve's emergency cut in its key interest rate Tuesday, stock markets worldwide have been rebounding, although extreme volatility continues to mark trading.

On Friday in Asia, Japan's benchmark Nikkei index was up 2.9 percent in afternoon trading, while Hong Kong's Hang Seng had gained as much as 5.9 percent in its morning session. On Thursday, the Dow Jones industrial average gained more than 100 points for its second straight positive finish. Energy investors often view stocks as a proxy for economic growth, fearing that a slowdown would curtail demand for oil and petroleum products such as gasoline and heating oil.

In London, March Brent crude rose 33 cents to $89.40 a barrel on the ICE Futures exchange in London. Nymex heating oil futures rose 0.92 cent to $2.4855 a gallon while gasoline prices added 0.97 cent to $2.2925 a gallon. November natural gas futures rose 5.8 cents to $7.86 per 1,000 cubic feet.
Source: Google News

GOP Rivals Depict Clinton As Unworthy

Republican presidential contenders depicted Sen. Hillary Rodham Clinton as weak on Iraq and certain to raise taxes Thursday night, setting aside their own campaign debate squabbles long enough to agree that she is unworthy of the White House. "She is so out of step with the American people," said former Massachusetts Gov. Mitt Romney, joined by Sen. John McCain and Rudy Giuliani in criticizing the former first lady.

The chorus of criticism came as Republicans strived to present their credentials as advocates of tax cuts, particularly to head off the threat of recession. They generally agreed that the newly minted, bipartisan economic stimulus package was a good start but did not go far enough.

"I will vote for it," said McCain, the only contender on stage with a Senate seat. He quickly added he wants the tax cuts President Bush won from Congress in 2001 and 2003 to be made permanent. Former Arkansas Gov. Mike Huckabee and Texas Rep. Ron Paul shared the debate stage, five days before the Florida primary that is the latest pivot point in the battle for the Republican presidential nomination.

The 90-minute debate featured a series of remarkably blunt questions to the five candidates on stage.Giuliani was asked why his poll numbers are deteriorating in Florida, a state where he has devoted two weeks to campaigning. With a smile, he said he was like the New York Giants, the professional football team that made its way through a turbulent season and will play in the Super Bowl.

McCain was asked about his own mother's statement that he lacked support from certain elements of the Republican Party. He said -- despite primary day polls that showed otherwise -- that he won the Republican vote in the New Hampshire and South Carolina primaries, then pivoted to add that he won the support of independents as well.

"They know I'll put my country ahead of my party every time," he added, attempting to portray himself as more electable than his rivals in the general election.It wasn't the only moment where the focus turned away from the battle for the Republican presidential nomination, and toward the general election campaign with the Democrats. Romney had a quick reply when asked how he would run against the team of Clinton and her husband, the former president.

"I frankly can't wait because the idea of Bill Clinton back in the White House with nothing to do is something I can't imagine," he said. After saying Clinton wanted to retreat from Iraq, raise taxes and win government-run health care, Romney added, "She is exactly what's wrong in Washington. I said before, `Washington is broken. She is Washington to the core."
By David Espon
Source: Google News

Existing Single-Family Home Sales Drop

Sales of existing homes fell in December, closing out a horrible year for housing in which sales of single-family homes plunged by the largest amount in 25 years. The median home price dropped for the entire year, the first time that has occurred in four decades.
The National Association of Realtors reported that sales of single-family homes and condominiums dropped by 2.2 percent in December to a seasonally adjusted annual rate of 4.89 million units.

For the year, sales of single-family homes were down by 13 percent, the biggest drop since a 17.7 percent plunge in 1982. The median price for a single-family home dropped 1.8 percent
That was the first annual price decline on records going back to 1968. Lawrence Yun, the Realtors' chief economist, said it was likely that the country has not experienced a decline in housing prices for an entire year since the Great Depression of the 1930s.

The new figures underscored the severity of the slump in housing, which has been battered for the past two years after enjoying a boom in which sales set records for five consecutive years.
The housing bust has sent shock waves through the entire economy as defaults have risen, resulting in multibillion-dollar loses for big financial firms whose investments in subprime mortgages have gone sour.

There is a concern that the housing and credit troubles could be enough to push the country into a full-blown recession. After global stock markets experienced a sharp sell-off earlier this week, the Federal Reserve announced a bold three-quarter point cut in a key interest rate and held out the promise of more rate cuts to follow. The Bush administration and congressional leaders are trying to quickly wrap up negotiations on a stimulus package in an effort to boost consumer and business confidence.

For December, sales were down in all regions of the country. Sales fell by 4.6 percent in the Northeast, 1.7 percent in the Midwest, 1 percent in the South and 2.1 percent in the West.
The inventory of unsold homes dropped by 7.4 percent, raising hopes that backlogs that had hit record levels were starting to be reduced, a key factor necessary to prompt a rebound in the market.

While Yun said he expected sales to start to rebound this spring, other analysts said housing is likely to remain in the doldrums throughout most of 2008, reflecting in part the credit crunch, which has caused lenders to tighten their standards, making it harder for prospective buyers to qualify for loans.
By Martin Crutsinger
Souce: Google News

EBay CEO Whitman Stepping Down

Calling eBay Inc. her "baby," outgoing chief executive Meg Whitman is promising a smooth transition to a new corporate leadership team as she gives up day-to-day control of the online auction company she has led for 10 years.

"EBay is my baby in many ways, and I wanted to make sure the transition was handled in a first class way," Whitman told The Associated Press. She will remain on eBay's board of directors and make herself available to the new team, but looks forward to escaping the 24/7 grind.
"I'm going to power down a little bit," she said. Whitman said she will continue working on presidential candidate Mitt Romney's campaign and a family foundation that focuses on education and health care. Whitman, 51, will leave March 31. She said she began three years ago to think seriously about who would succeed her at the Internet giant she led for 10 years.

Incoming chief executive John Donahoe said during a conference call with analysts Wednesday that eBay is not growing as rapidly as he would like, and he sees the greatest opportunity for growth in increasing the site's offering of fixed-price items. "We need to aggressively change our product, our customer approach and business model," said Donahoe, who has been heading eBay's core auction and e-commerce businesses.

EBay shares fell $2.66, or 9.2 percent, to $26.28 at the open of trading Thursday.
Donahoe pledged to upgrade the site and change the way it charges sellers for listing items. Though details are to come later, he indicated that eBay would lower the fees that people pay to list something for sale, but raise the commission that eBay takes on successful sales.
That's a move analyst Derek Brown of Cantor Fitzgerald said will be eBay's "wild card" going forward, placing pressure on the site to turn any increase in listings into actual sales transactions.

"(The fee structure change) in itself has the potential to change the face of eBay," Brown said.
Donahoe plans on upgrading the site's search function so that if there is an influx of listings, users can still easily find what they are looking for.

Brown said Donahoe's openness about some of eBay's problems is encouraging, but "it feels as if they are pulling a lot of levers at once and that can create its own challenges." The announcement of Whitman's departure came as eBay reported a 53 percent gain in fourth-quarter profits due to a strong holiday season. The results beat Wall Street's expectations, though the company's future guidance was tepid.
By Amanda Fehd
Writer Brian Bergstein contributed to this report
Source: Associated Press