Stock futures rise ahead of data, Fed

NEW YORK (Reuters) - Stock futures pointed to a higher open on Wednesday with the Federal Reserve expected to say it will not raise interest rates for some time.
At the end of its two-day meeting, the Fed is widely expected by economists to leave the benchmark federal funds rate at almost zero and soothe concerns it could hike rates as the economy shows signs of stabilizing.
Investors will watch for any economic outlook from the central bank and changes in its $300 billion program of Treasury purchases, though the Fed is not expected to ramp up asset purchases.
A statement is due at 2:15 p.m. EDT.
Before the Fed's statement, investors will take in reports on durable goods orders and new home sales, both for May.
S&P 500 futures rose 4.30 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures climbed 38 points, and Nasdaq 100 futures added 4 points.
On Tuesday, the S&P 500 rose as investors hunted for bargains, but another delay in Boeing's 787 Dreamliner project kept the Dow under water.
The broad S&P is up about 32 percent from a 12-1/2-year low in early March, though it had been up as much as 40 percent.
The Organization for Economic Cooperation and Development said the economic outlook has improved for the first time in two years. Soaring unemployment and ballooning budget deficits could knock a weak recovery off track, it said, referring to its 30 member countries.
Oracle Corp (ORCL.O) rose after the closing bell on Tuesday after the software maker reported profit and sales that beat estimates. The stock closed at $19.87 on Nasdaq.
(Reporting by Leah Schnurr; editing by Jeffrey Benkoe)

Source: Reuters

U.S. recession to bottom out this year: OECD

WASHINGTON (Reuters) - A severe U.S. recession will bottom out this year, but any recovery will be weak due to anemic markets and shrunken consumer wealth, the Organization for Economic Cooperation and Development said on Wednesday.
"In this environment, a considerable degree of economic slack, especially in the labor market, is likely to persist ... bringing inflation to very low rates," the Paris-based OECD said in a twice-yearly report on global economic conditions.
It estimated that U.S. national output will contract 2.8 percent in 2009 but grow 0.9 percent in 2010.
The OECD urged the Obama administration to push ahead with plans for public-private partnerships to remove toxic assets from banks' balance sheets, adding that, if necessary, the Federal Reserve should expand the scale of its quantitative easing measures that include buying longer-term U.S. Treasury securities.
It warned that consumer spending was unlikely to rebound because labor markets remain strained, housing and stock wealth has been drained and credit conditions still are tight.
On a positive note, the OECD said a lengthy deterioration in U.S. housing markets "may be approaching an end." In particular, it said the supply of unsold homes was declining relative to demand, a precondition for recovery.
The OECD noted a major downside risk was that financial markets remain fragile, with mortgage credit in tight supply and banks still under considerable stress.
"Restoration of trust in financial intermediaries and markets is vital for a sustained and strong economic recovery to occur," it said.
In Canada, the OECD said the economy was likely to remain in recession through the third quarter and then begin a mild recovery. It forecast gross domestic product there will shrink 2.6 percent in 2009 and then grow 0.7 percent in 2010.
One advantage that Canada has is that its banks' balance sheets remained relatively healthy and remained profitable in contrast to many other countries.
"Reasons for their strength include a more conservative lending and borrowing culture, less opportunity for regulatory arbitrage and a more conventional mortgage market with fewer subprime loans and little securitization," the OECD noted.
In Latin America, the OECD said economic activity was rebounding in Brazil after a slowing in growth during the first quarter and said retail sales had been specially resilient.
"Domestic demand is poised to gather strength in the second half of 2009 on the heels of ongoing policy easing," the OECD said.
While an "uncertain" global economy poses risks for Brazil and other emerging-market countries, the group said that if Brazilian authorities maintain abundant liquidity in coming months, the country may be poised for a stronger-than-expected rebound from about the middle of this year.
It estimated Brazil's real GDP will shrink 0.8 percent in 2009, but then grow 4 percent in 2010.

Source: Reuters

U.S. mortgage applications climb from 7-month low

By Lynn Adler
NEW YORK (Reuters) - U.S. mortgage applications climbed last week from a seven-month low, the Mortgage Bankers Association said on Wednesday, adding to emerging signs that the three-year housing market collapse may be abating.
Demand for home loans rose after four straight weekly declines, as U.S. mortgage rates dipped and more borrowers applied to buy houses as well as refinance.
The trade group's seasonally adjusted mortgage applications index, which includes both purchase and refinance loans, rose 6.6 percent to 548.2 in the week ended June 19. This modest rise is from the lowest level since late November.
"In terms of home sales and building activity, we've probably reached a bottom," Keith Hembre, chief economist at First American Funds in Minneapolis, Minnesota said on Tuesday. "But it's highly unlikely there will be a sharp recovery from here."
Existing home sales rose in May for the first back-to-back gain since September 2005, the National Association of Realtors said on Tuesday.
The average 30-year loan rate dipped 0.06 point to 5.44 percent last week, nearly a full percentage point less than a year earlier.
A rate spike from a record low 4.61 percent in March to 5.57 percent in early June, however, has crushed a burgeoning refinance boom.
With rates starting to ease again, some borrowers may be rushing to lock in now rather than chance a renewed surge in borrowing costs.
The Mortgage Bankers Association said its refinancing index rose 5.9 percent from a seven-month low to 2,116.3 last week. Demand for refinancing was at least triple this level in March when mortgage rates hit their record lows, the group said.
On Monday, the MBA slashed its forecast by more than 25 percent for total mortgage loan origination in 2009, mostly due to fewer refinancings and a slow start to the federal Home Affordable Refinance Program.
A plodding upturn in home purchases has been dominated by first-time buyers taking advantage of a federal tax credit and distressed prices on foreclosures.
The mortgage purchase index increased 7.3 percent to 280.3, the highest since early April, the MBA said.
"I've seen for the last several months a flattening of the market, which candidly is close to euphoria if you're a new home builder given how bad it has been," Richard Dugas, chief executive of No. 2 U.S. home builder Pulte Homes, said this week at the Reuters Global Real Estate Summit in New York.
Mortgage rates are still "incredibly good" despite rising from historic lows, he noted.
The greater deterrents are the longest recession since the Great Depression and the highest unemployment rate in more than 26 years, most economists agree.

Source: Reuters

Oil dips under $69 on higher gasoline stocks

By Chris Baldwin
LONDON (Reuters) - Oil dropped to under $69 a barrel on Wednesday, falling back after U.S. industry data showed gasoline reservoirs swelled unexpectedly.
By 1125 GMT (6:25 a.m. EDT), U.S. crude for August delivery was down 46 cents at $68.78. London Brent crude fell 50 cents to $68.30.
American Petroleum Institute (API) data on Tuesday showed inventories of gasoline surged 3.7 million barrels, well above the predicted 1.3-million-barrel increase, as refiners raised their utilization rates and imports rose.
The U.S. government's Energy Information Administration data on Wednesday was expected to confirm the API's view.
"The API figures are not a favorable precursor for the EIA numbers when these get released later on Wednesday," analyst Edward Meir at MF Global wrote in a note to investors.
"What could offset this bearish pressure somewhat, will be what happens to the dollar in the wake of the Fed decision."
The dollar tumbled to its lowest levels for a week against the euro on Wednesday, as markets braced for the Federal Reserve to dampen expectations for higher interest rates at the end of its meeting later in the day.
Oil prices have more than doubled since last winter's low $30s as investors have begun pricing in expectations of an economic recovery that should boost consumption.
The Commerce Department will release U.S. May durable goods orders at 1230 GMT (8:30 a.m. EDT). Economists polled by Reuters expected a fall in orders of 0.6 percent versus a rise of 1.7 percent in April.
U.S. new home sales for May were expected to rise to 360,000 annualized units versus 352,000 in April, a Reuters poll showed.
(Additional reporting by Jennifer Tan in Singapore, editing by Keiron Henderson)

Source: Reuters

Asia stocks recover from 1-month low, eyes on Fed

By Eric Burroughs
HONG KONG (Reuters) - Asian stocks bounced up on Wednesday from a one-month low hit the previous day while the dollar drifted, with investors bracing for a Federal Reserve decision and any signs the central bank is worried about the jump in U.S. bond yields.
Futures on European shares .STXEc1 pointed to gains in early trade.
Taiwan's TAIEX index led the gains in Asia, jumping 2.95 percent on speculation that the country will sign an agreement with China that could spur investment in its financial industry.
The rise in stocks was limited across the continent before the outcome of the Fed meeting.
The U.S. central bank is widely expected to keep interest rates on hold at a record low and keep its planned debt purchases unchanged. So the focus is on whether it tweaks its statement to rein in a slide in U.S. Treasuries that has threatened the economy's budding recovery.
Benchmark Treasury yields surged to an eight-month peak above 4 percent earlier in the month, pushing up mortgage rates and offsetting the Fed's efforts to help the economy by buying hefty amounts of government and mortgage-related debt.
Investors have started to question how the Fed will step back from its array of emergency programs to stem the crisis and whether its quantitative easing will stoke inflation.
"The Fed will likely attempt to assure markets that it will have a credible exit strategy when the time is right," said analysts at Calyon in a note to clients.
The dollar found its footing after a sharp slide the previous day, the latest volatile move across markets in the last days of the second quarter.
Government bonds also have recovered on building doubts about the strength of any economic recovery. Japan's 10-year government bond yield hit a three-month low.
Market players are keeping a close eye on the results of a special one-year unlimited funding operation the European Central Bank is offering to banks, looking for signs of financial strain in the euro zone if demand is sizeable.
The MSCI index of Asia-Pacific shares outside Japan climbed 1.8 percent, steadying after hitting a one-month low the previous day.
Financials and technology shares led gains. Taiwan's Cathay Financial (2882.TW) was up 6.9 percent, while South Korea's LG Display (034220.KS) rose 2.7 percent.
Asian shares outperformed their U.S. counterparts after the S&P 500 .SPX edged up 0.2 percent on Tuesday.
Japan's Nikkei average .N225 climbed 0.4 percent, underpinned by a rise in energy shares such as Inpex (1605.T) after a jump in oil prices the previous day. Continued...
Source: Reuters

Fed to hold fire on buying, talk down rate hikes

By Alister Bull
WASHINGTON (Reuters) - The Federal Reserve will emphasize that the U.S. economy remains fragile in a policy statement later on Wednesday, as it talks down expectations for a rate hike this year and holds fire on expanding asset purchases.
The statement is due after 2:15 p.m. EDT at the conclusion of a regular two-day policy meeting.
Analysts widely expect that the U.S. central bank will hold the benchmark overnight federal funds rate between zero and 0.25 percent, while emphasizing it will remain in this range for some time.
"With 'core' inflation beginning to moderate again, and legitimate threats to recovery still in evidence, officials have scant reason to turn hawkish," Morgan Stanley economist Richard Berner wrote in a note to clients.
U.S. core inflation, which excludes volatile food and energy costs, slowed to 1.8 percent year-on-year in May compared with 1.9 percent in April.
Fed officials have indicated that they would like to keep inflation close to, but under, 2 percent.
In addition, the U.S. economy is widely expected to have contracted further in the second quarter, albeit at a sharply slower rate of decline than the 5.7 percent annualized drop seen in the first three months of the year.
But some recent economic data has been better than expected, helping to harden speculation in futures markets that the Fed would hike rates to 0.5 percent by the end of the year, although these bets have eased in the past week.
The Fed is expected to push back against the idea of a rate hike this year in the statement it will issue at the meeting's end. Economists are focused on how the central bank's language could be tweaked to accomplish this tricky communication.
Economists at Goldman Sachs said one option would be for the Fed to say something along the lines of "conditions are likely to warrant a federal funds rate in the current range for an extended period," ruling out modest hikes to 1 percent.
At the Fed's last meeting on April 28-29, it said "conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."
The Goldman economists said their suggestion would offer a clearer signal.
Either way, officials may be wary of offering too explicit a commitment. In 2003-04, they vowed to hold rates low for a "considerable period," and kept rates at a 1 percent for a year -- a stretch which many economists say helped inflate the housing bubble.
"We're not calling for an exact repeat of the 'considerable period' ... but we wouldn't be surprised to see the Fed use a similar phrase that becomes part of the financial lexicon for the balance of 2009 and the first half of 2010," said Michael Darda, chief economist at MKM Partners.
The Fed is not expected to ramp up asset purchases above an existing promise to buy $300 billion of longer-dated U.S. government bonds and $1.45 trillion of mortgage debt, although it might make some minor changes. Continued...
Source: Reuters

Banking "broken," consumers need help: watchdog

By Kevin Drawbaugh and Karey Wutkowski
WASHINGTON (Reuters) - The outspoken head of a U.S. Congressional watchdog panel will strongly urge lawmakers on Wednesday to set up a new government agency to protect consumers from "tricks and traps" set by banks.
President Barack Obama has called for creating an independent financial products agency to oversee consumer lending as part of his sweeping proposal to overhaul the U.S. financial regulatory system.
"We can help fix the broken credit market. And I can sum it up in four words: Consumer Financial Protection Agency," said Elizabeth Warren, chairman of the Congressional Oversight Panel of the Troubled Asset Relief Program, in prepared remarks.
Warren, who is a professor at Harvard Law School, will be the marquee witness at a House of Representatives committee hearing on Wednesday looking at a key provision of Obama's broad plan to drag the aging U.S. financial regulatory system into the 21st century.
The provision to establish a financial protection agency for consumers "will be carried out," Senator Jack Reed, chairman of the Senate securities subcommittee, said in an interview with Reuters Television on Tuesday.
"Definitely you have to have a consumer protection agency," he said, echoing vows made in recent days by Obama and by Senate Banking Committee Chairman Christopher Dodd on a proposal that is meeting more criticism from business interests than perhaps any other part of the Obama plan.
Congress is only beginning to delve deeply into the plan, a far-reaching response to the severe banking and capital markets crisis that has rocked economies around the world. The European Union is eyeing similar reforms.
One issue in the crisis was the enormous debt shouldered by Americans in a real estate bubble fueled by subprime mortgages that many borrowers could not afford and did not understand, a factor that contributed to a huge spike in foreclosures that has helped drag the United States into recession.
Ending such lending practices is a key goal of the reforms being proposed by Obama and backed by congressional Democrats.
WARREN SEEN HEADING AGENCY
Warren, in her remarks to be given before the House committee led by Democratic Representative Barney Frank, cited studies and said that most consumers don't understand the terms underlying credit cards, mortgages, payday loans, tax refund anticipation loans and credit scores.
"The broken credit market has put American taxpayers on the hook for billions in subsidies and trillions in guarantees to shore up our largest financial institutions. ... If we do not fix this, we will be hurt again and again," she said.
A financial protection agency would help consumers make better decisions for themselves, she said.
Warren said that banking has changed over the years, from an old model that she called "simple and effective: consumers shopped around for products and terms, and lenders evaluated the creditworthiness of potential borrowers before making loans.
"Today, the business model has shifted. Giant lenders 'compete' for business by talking about nominal interest rates, free gifts and warm feelings, but the fine print hides the things that really rake in the cash. Today's business model is about making money through tricks and traps," she said. Continued...
Source: Reuters

Apple's Jobs has "excellent prognosis" after transplant

By Gabriel Madway
SAN FRANCISCO (Reuters) - Apple Inc chief executive Steve Jobs underwent a liver transplant at a Tennessee hospital and has "an excellent prognosis," the hospital that performed the operation confirmed on Tuesday.
Jobs, 54, received the transplant because he was "the sickest patient on the waiting list at the time a donor organ became available," the Methodist University Hospital Transplant Institute said in a statement on its Website.
"Mr. Jobs is now recovering well and has an excellent prognosis," the statement said. James Eason, program director at the institute and the hospital's chief of transplantation, added that the confirmation had come with Jobs's permission.
The hospital did not release details of Job's condition or when the operation was performed, but the Wall Street Journal reported over the weekend that the transplant took place about two months ago.
Hospital spokeswoman Ruth Ann Hale did not immediately respond to a request for comment on Jobs' condition. A prognosis refers to a doctor's prediction regarding the probable course of a disease, disorder or injury.
Apple shares have often fluctuated on speculation about Jobs' health. The executive, considered by many investors to be the driving force behind Apple's reputation for innovation, was treated in 2004 for a rare form of pancreatic cancer called an islet-cell, or neuroendocrine, tumor.
But he appeared gaunt at an Apple event in the summer of 2008, setting off a storm of speculation about his health that failed to abate in the ensuing months.
In January, after initially blaming his weight loss on a hormone imbalance, he announced his medical leave, saying his health issues were "more complex" than originally thought.
He has not been heard from since, though a Reuters witness spotted Jobs at Apple's campus in Cupertino, California, on Monday and Jobs was quoted in a company press release.
The company would not say whether Jobs is off medical leave and back at work. Apple has said repeatedly that it looks forward to his return at the end of June.
A FULL LIFE
Jobs is viewed as the key visionary driving the company's product development and the mastermind behind iconic products such as the iPod and the iPhone.
But analysts say Wall Street has become much more comfortable with other key executives in Jobs's absence.
Apple shares have surged around 60 percent this year, despite falling 10 percent following Jobs announcement of medical leave.
Methodist's confirmation comes as some newspaper and Internet reports speculated on whether Jobs waited his turn for a transplant. Continued...
Source: Reuters

Oracle profit beats forecast, margin at record

By Jim Finkle
BOSTON (Reuters) - Oracle Corp reported quarterly earnings above expectations as the No. 3 software maker's profit margin hit a record thanks to robust growth in its maintenance business, sending shares up 2.7 percent.
The company run by billionaire Larry Ellison also reported a smaller-than-expected drop in new software sales and said it grabbed market share from SAP in certain segments -- signs that Oracle may be weathering the downturn better than rivals.
"We've been able to push through the economic situation rather well and I have to tell you that I still see the pipeline growing rather significantly," Oracle President Safra Catz said in a conference call.
Oracle's quarterly results and outlook beat expectations it set in March, when executives warned the recession and strong dollar would take a substantial bite out of profits. Since then, the economy has stabilized and the currency has weakened, setting Oracle up to beat those conservative estimates.
Oracle executives were more optimistic on Tuesday, saying customers are telling the company they need to move forward in implementing new projects to keep their businesses running.
Ellison cited customers as saying they want to spend more in the second half, but he added that remained to be seen.
Morgan Stanley analyst Adam Holt believed Oracle was taking customers away from German rival SAP AG in the market for business management software as well as boosting share in its database business, where it competes with IBM and Microsoft Corp.
"If they are able to gain share through the downturn then they will have stronger customer relationships as the economy improves," Holt said.
New software sales, a closely watched revenue measure, fell 13 percent to $2.7 billion. Analysts had been expecting them to slide about 18 percent.
GREAT EXPECTATIONS
Oracle reported profit, excluding items, of 46 cents per share in the fourth quarter, ended May 31, beating analysts' average forecast of 44 cents, according to Reuters Estimates.
"It's all about expectations. Everything looks good across the board," said Goldman Sachs analyst Sarah Friar.
Oracle said its adjusted operating margin was 51 percent, up 2.4 percentage points from a year-ago.
Catz said much of the increase was due to growth in revenue from its highly profitable software maintenance business, which rose 8 percent from a year earlier to $3.05 billion.
Customers buy annual maintenance subscriptions that entitle them to upgrades, bug fixes and technical support for about 22 percent of the original software cost. Continued...
Source: Reuters

Banking "broken," consumers need help: U.S. watchdog

By Kevin Drawbaugh and Karey Wutkowski
WASHINGTON (Reuters) - The outspoken head of a U.S. Congressional watchdog panel will strongly urge lawmakers on Wednesday to set up a new government agency to protect consumers from "tricks and traps" set by banks.
President Barack Obama has called for creating an independent financial products agency to oversee consumer lending as part of his sweeping proposal to overhaul the U.S. financial regulatory system.
"We can help fix the broken credit market. And I can sum it up in four words: Consumer Financial Protection Agency," said Elizabeth Warren, chairman of the Congressional Oversight Panel of the Troubled Asset Relief Program, in prepared remarks.
Warren, who is a professor at Harvard Law School, will be the marquee witness at a House of Representatives committee hearing on Wednesday looking at a key provision of Obama's broad plan to drag the aging U.S. financial regulatory system into the 21st century.
The provision to establish a financial protection agency for consumers "will be carried out," Senator Jack Reed, chairman of the Senate securities subcommittee, said in an interview with Reuters Television on Tuesday.
"Definitely you have to have a consumer protection agency," he said, echoing vows made in recent days by Obama and by Senate Banking Committee Chairman Christopher Dodd on a proposal that is meeting more criticism from business interests than perhaps any other part of the Obama plan.
Congress is only beginning to delve deeply into the plan, a far-reaching response to the severe banking and capital markets crisis that has rocked economies around the world. The European Union is eyeing similar reforms.
One issue in the crisis was the enormous debt shouldered by Americans in a real estate bubble fueled by subprime mortgages that many borrowers could not afford and did not understand, a factor that contributed to a huge spike in foreclosures that has helped drag the United States into recession.
Ending such lending practices is a key goal of the reforms being proposed by Obama and backed by congressional Democrats.
WARREN SEEN HEADING AGENCY
Warren, in her remarks to be given before the House committee led by Democratic Representative Barney Frank, cited studies and said that most consumers don't understand the terms underlying credit cards, mortgages, payday loans, tax refund anticipation loans and credit scores.
"The broken credit market has put American taxpayers on the hook for billions in subsidies and trillions in guarantees to shore up our largest financial institutions. ... If we do not fix this, we will be hurt again and again," she said.
A financial protection agency would help consumers make better decisions for themselves, she said.
Warren said that banking has changed over the years, from an old model that she called "simple and effective: consumers shopped around for products and terms, and lenders evaluated the creditworthiness of potential borrowers before making loans.
"Today, the business model has shifted. Giant lenders 'compete' for business by talking about nominal interest rates, free gifts and warm feelings, but the fine print hides the things that really rake in the cash. Today's business model is about making money through tricks and traps," she said. Continued...
Source: Reuters

China defends export policies against WTO complaint

US files WTO case against China
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By Chris Buckley
BEIJING (Reuters) - China on Wednesday rejected charges from the United States and Europe that its restrictions on raw materials exports violated international trade rules, saying that its policies were in keeping with WTO regulations.
The European Union and the United States said on Tuesday they were taking a complaint to the World Trade Organization over China's export curbs on some industrial raw materials used in steel, cars, microchips, planes and other products.
In the first official Chinese response, the Ministry of Commerce rejected the complaint but said it would go along with the consultation procedures required under WTO rules.
"The main objective of China's relevant export policies is to protect the environment and natural resources. China believes the policies in question are in keeping with WTO rules," the press office of the ministry said in a faxed statement.
"Following the WTO procedures for dispute resolution, China will appropriately handle the request for consultations."
Washington and Brussels have launched the WTO case while they are also looking for China's cooperation in pulling the world economy out of a slump. The complaint may become another irritant in ties alongside recent friction over military modernization, Internet controls and the United States' own economic policies.
But China's initial response was relatively mild compared with its vehement reaction to earlier WTO complaints. And traders said the move would have little immediate impact on trade flows.
"I don't think it will impact exports as steel wire rod has already carried a 15 percent export tax, therefore no one can ship any anyway," said a senior executive at Sinosteel Corp, the country's largest state-owned steel trader. He spoke on condition of anonymity.
Brussels and Washington say Beijing continues to restrict exports of raw materials used in steel, semiconductors, aircraft and other products despite China's pledge to eliminate taxes and charges on exports when it joined the WTO in 2001.
This hurts foreign "downstream producers" of goods, such as aluminum producers and steelworkers, since the export restraints limit their access to raw materials and raise world market prices for the materials while lowering the prices that domestic Chinese producers have to pay, U.S. officials said.
Included in the materials covered by the case is a range of strategic minor metals used in applications such as alloys, ceramics, mobile phones and light bulbs.
Zhou Shijian, a former Chinese trade official, said the U.S. and EU were guilty of hypocrisy.
"Protecting natural resources is perfectly reasonable, and all countries in the world, including the United States, protect their national resources," Zhou told the Global Times, a Chinese-language paper.
"The WTO stresses one cannot restrict imports and should open markets, but it doesn't have specific rules on what should be done about exports," said Zhou.
(Additional reporting by Alfred Cang in Shanghai; Editing by Ken Wills and Dean Yates)

Source: Reuters

GM will do "heavy lifting" toward plug-in goal

SAN FRANCISCO (Reuters) - General Motors Corp will do the "heavy lifting" to help meet the ambitious goal set by President Barack Obama of having one million plug-in hybrid and electric vehicles on U.S. roads by 2015, a GM executive said on Tuesday.
Britta Gross is GM's director of global energy systems and infrastructure commercialization, a key element to the reshaping of the bankrupt automaker to be less dependent on gasoline-fueled vehicles.
"I can tell you we can definitely do the heavy lifting part of that," Gross said during a telephone interview with Reuters. "We definitely will lift up our end of that."
Major automakers, including GM, have been ramping up plans for a range of electric-drive vehicles intended to meet sharply higher U.S. fuel economy standards and an expected increase in demand for more fuel efficient vehicles.
GM will launch the rechargeable Chevy Volt plug-in hybrid by the end of 2010 and plans to have a total of 14 hybrid models in production by 2012.
Gross said it would be a stretch for the industry to meet the White House's stated goal of having one million plug-in hybrid cars within six years, but added that GM was prepared to do its part if key hurdles can be overcome.
"The capacity of General Motors or any large automaker to deploy plug-in vehicles depends on the capacity of suppliers," Gross said. "Among them are battery suppliers. We need more capacity."
Gross said it would take five or more battery manufacturers to make enough batteries to power a million plug-in hybrid vehicles.
Lithium ion batteries have been widely used successfully in laptop computers and telephones, and automakers have been trying to scale down battery size in an effort to power cars without taking up too much space or making vehicles too heavy.
The No. 1. U.S. automaker by sales, GM has been operating in bankruptcy protection since the start of the month in a reorganization funded and steered by the Obama administration.
The showcase vehicle for GM's effort to reinvent itself has been the Volt, a rechargeable electric-drive vehicle.
GM has designed the Volt to carry a lithium-ion battery with an all-electric driving range of 40 miles. A small gasoline engine will power the battery for longer trips.
Gross would not say how many Volts GM hopes to sell in its first year but executives have cautioned that the car's price and availability will limit initial sales.
The Volt is expected to cost around $40,000. Federal tax incentives could bring the cost to consumers closer to $32,500.
The most expensive component in the Volt will be its 400-pound (181 kg) battery pack.
GM will import lithium-ion battery cells from Korea's LG Chem and assemble the finished battery packs for the Volt in Michigan, where the car will be produced. Continued...
Source: Reuters

Oil falls below $69 on build in U.S. gasoline stocks

By Jennifer Tan
SINGAPORE (Reuters) - Oil slid back below $69 a barrel on Wednesday, reversing a 2.6 percent gain the day before, after data showed a surge in U.S. gasoline stocks, signaling weaker-than-expected demand from the world's top energy user.
The market awaits confirmation of the American Petroleum Institute's (API) bearish figures with the release of the U.S. Energy Information Administration's (EIA) own data later.
U.S. economic figures due later will shed more light on the health of the U.S. economy. May durable goods orders and new home sales figures could show the recession might be near a bottom, but a firm rebound is likely to be slow to emerge.
By 11:29 p.m. EDT, U.S. crude for August delivery was down 77 cents at $68.47, off a morning low of $68.06, after settling at $69.24 on Tuesday. London Brent crude fell 84 cents to $67.96.
"We're seeing potentially the third week in a row of increased gasoline stocks, which is a cautious sign, and would indicate that demand conditions are not that strong, and the U.S. driving season is not panning out as expected," said Mark Pervan, senior commodity strategist with ANZ Bank.
"Prices have run up very strongly, so there's a natural pullback. Fundamentally, the market may be swinging toward focusing more on negative data which it has ignored in the last few weeks, and the API data could be the trigger," he added.
Pervan expects crude to trade between $62 and $69 a barrel over the next week.
Oil prices have more than doubled since last winter's low $30s as investors have started to price in expectations for an economic recovery which should boost consumption.
API data on Tuesday showed U.S. crude stocks fell 72,000 barrels last week, far less than expectations of a 1-million-barrel decline in a Reuters poll.
Gasoline stocks surged 3.7 million barrels against expectations of a 1.3-million-barrel increase, as refiners raised utilization rates and product imports rose.
The Commerce Department will release U.S. May durable goods orders at 8:30 a.m. EDT. Economists polled by Reuters expect a fall in orders of 0.6 percent versus a rise of 1.7 percent in April.
U.S. new home sales for May are expected to rise to 360,000 annualized units versus 352,000 in April, according to a Reuters poll.
But oil is likely to be buoyed by a softer U.S. dollar and disruptions from OPEC member Nigeria.
The dollar hovered at its lowest levels for a week against the euro on Wednesday after tumbling sharply across the board, as the market braced for the Federal Reserve to dampen expectations for higher interest rates at the end of its meeting later.
Italian oil company ENI declared force majeure on shipments of Brass River crude oil from Nigeria, while Royal Dutch Shell (RDSa.L) said it was checking its oil operations in the Niger Delta after militants claimed they launched three attacks against its facilities at the weekend.
(Editing by Ben Tan)

Source: Reuters

S&P gains on bargain hunting, but Boeing hits Dow

Business Update: Asia tumbles
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By Caroline Valetkevitch
NEW YORK (Reuters) - The S&P 500 rose on Tuesday as investors hunted for bargains a day after a steep sell-off, but another delay for Boeing's 787 Dreamliner kept the Dow in the red.
Shares that led the market down on Monday, when the market suffered its worst one-day loss in two months, were among the positive influences, including banks, energy and materials.
JPMorgan Chase (JPM.N) shares rose 2.1 percent to $33.57 after falling 6.1 percent on Monday, while Bank of America (BAC.N) gained 2.4 percent to $12.23 a day after sliding 9.7 percent. Shares of Chevron Corp (CVX.N) rose 0.3 percent to $65.96 after losing 3.4 percent on Monday.
There was also caution a day ahead of the Federal Reserve's assessment of economic conditions.
"The market's really trying to stabilize after a pretty sharp decline yesterday," said Michael Sheldon, chief market strategist of RDM Financial in Westport, Connecticut.
Energy shares also got a boost from a 2.6 percent gain in U.S. oil futures prices.
The Dow Jones industrial average .DJI was down 16.10 points, or 0.19 percent, at 8,322.91. But the Standard & Poor's 500 Index .SPX was up 2.06 points, or 0.23 percent, at 895.10. The Nasdaq Composite Index .IXIC was down 1.27 points, or 0.07 percent, at 1,764.92.
The broad S&P 500 index dropped back into negative territory for the year on Monday. Although the index is up about 32 percent from a 12-and-a-half-year low hit in early March, it had been up as much as 40 percent.
ORACLE JUMPS LATE
After the close, shares of Oracle Corp (ORCL.O) gained 1.4 percent to $20.14 after the software maker reported profit and sales that beat forecasts. The stock had closed at $19.87 on Nasdaq.
During the regular session, Boeing Co (BA.N) dominated the downside. The plane maker's stock was the Dow's biggest drag after the company said the inaugural flight of its long-delayed 787 Dreamliner will be postponed so it can reinforce a section of the aircraft.
Boeing's stock fell 6.5 percent to $43.87, marking its worst one-day drop since November.
Other industrial shares also fell, including United Technologies Corp (UTX.N), down 1.4 percent at $51.84.
After its two-day meeting ends Wednesday, the Fed is widely expected to leave the benchmark fed funds rate at almost zero. But investors will check its statement closely for clues on the central bank's economic outlook.
"The only question will be what they say after the meeting in terms of tempering investors' expectations about when the Fed will ultimately start to rein in liquidity and tighten policy," Sheldon said. Continued...
Source: Reuters

Oracle software sales beat forecasts, shares rise

By Jim Finkle
BOSTON (Reuters) - Oracle Corp's quarterly earnings beat market expectations as profit margins hit a record high and software sales fell less than anticipated, sending its shares up 2.5 percent.
The No. 3 software maker said on Tuesday that it gained share from SAP AG in the market for business management software, a sign it may be continuing to weather the economic downturn better than its main rival.
Morgan Stanley analyst Adam Holt said he believed Oracle is also winning share in its database business, where it competes with International Business Corp and Microsoft Corp.
"If they are able to gain share through the downturn then they will have stronger customer relationships as the economy improves," Holt said.
Oracle had helped set analysts' forecasts in March, when executives warned that the recession and strong dollar would take a substantial bite out of profits.
Since then, the economy has stabilized and the U.S. currency has weakened, setting Oracle up to beat those conservative estimates.
New software sales, a closely watched revenue measure, fell 13 percent to $2.7 billion in Oracle's fiscal fourth quarter ended May 31. Analysts were expecting them to decline about 18 percent.
Oracle reported profit, excluding items, of 46 cents per share, beating analysts' average forecast of 44 cents, according to Reuters Estimates.
"It's all about expectations. Everything looks good across the board," said Goldman Sachs analyst Sarah Friar.
Oracle, led by billionaire Larry Ellison, said its adjusted operating margin was 51 percent, up 2.4 percentage points from a year ago.
Its margin rose on an increase in revenue from its highly profitable software maintenance business. Its costs also benefited from the decline in new software sales, because the company paid less in commissions to its sales staff, whose bonus targets were set a year ago when the economy was in better shape.
Oracle reported that net income fell 7 percent to $1.9 billion, or 38 cents a share, from $2.0 billion, or 39 cents, a year earlier.
Shares in the Redwood City, California-based company rose to $20.37 in extended trading. They had fallen 0.5 percent to $19.87 on Nasdaq.
(Reporting by Jim Finkle; Editing by Richard Chang)

Source: Reuters

Ford to get $6 billion technology loan

By Kevin Krolicki
DEARBORN, Michigan (Reuters) - Ford Motor Co will receive nearly $5.9 billion in U.S. government loans to spur development of more fuel-efficient vehicles, the Obama administration said on Tuesday.
Japan's Nissan Motor Co Ltd will receive $1.6 billion, and start-up Tesla Motors Inc will receive $465 million in advanced technology financing from the Energy Department program.
"By supporting key technologies and sound business plans, we can jumpstart the production of fuel-efficient vehicles in America," Energy Secretary Steven Chu said at Ford headquarters.
"These investments will come back to our country many times over by creating new jobs, reducing our dependence on oil, and reducing our greenhouse gas emissions," he said.
The agency plans additional loans over the next several months to automakers and suppliers.
Chu said the administration began talks with Chrysler Group LLC on possible energy technology loans immediately after the company stepped out of bankruptcy protection this month. It is also having "technical" discussions with General Motors Corp, which is currently reorganizing in bankruptcy proceedings.
Both companies applied for financing last year but their financial distress disqualified them from consideration in the first round of financing. The $25 billion program is only open to viable companies.
Chrysler is operating in an alliance with Italy's Fiat.
"There is money there -- I wouldn't say set aside -- but we are trying to stretch these dollars as far as we can," Chu told reporters.
Both Chrysler and GM rely on government bailout funds to operate. Ford, struggling like other companies with the industry's sharp sales decline this year, is the only U.S. auto manufacturer that did not seek bailout assistance.
Ford will receive loan funds through 2011 to retool factories in Michigan, Ohio, Illinois, Kentucky and Missouri in order to produce 13 models. Ford is focusing on electrification and improvements to conventional engines as well as converting two truck plants for car production.
The loan is part of a $14 billion investment Ford plans in advanced technology vehicles over the next seven years, said Ford Chief Executive Alan Mulally.
The No. 2 U.S. automaker hopes most of that financing will come from government loans.
Nissan's North American unit will receive the funds to retool its Smyrna, Tennessee, facility to build electric cars and an advanced battery manufacturing plant, Chu said.
Tesla, based in San Carlos, California, will receive funds to build electric drive trains and electric vehicles. Continued...
Source: Reuters

U.S. home sales rise, manufacturing activity mends

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By Lucia Mutikani
WASHINGTON (Reuters) - Sales of previously owned U.S. homes rose for a second straight month in May but were weaker than expected, adding to growing fears of an anemic economic recovery from a deep recession.
The chief economist of the National Association of Realtors, which released the data on Tuesday, said sales in some areas appeared to be slowing and warned of the danger of a "delayed" housing market recovery.
The Realtors' group said sales climbed 2.4 percent last month to an annual rate of 4.77 million units. While that pace was below market forecasts it was the second straight month sales had risen, for the first back-to-back gain since September 2005.
Despite signs the market is stabilizing, the NAR said the median national home price fell 16.8 percent in May from a year earlier, the third-largest drop on record.
A separate government report on Tuesday showed home prices fell 6.8 percent year-on-year in April after dropping 7.3 percent the previous month.
The blue chip Dow Jones industrial average ended down 16.10 points at 8,322.91 .DJI amid disappointment with the data, which fed the view the economy's recovery from its longest recession since the Great Depression would be tepid.
Yet another postponement by Boeing Co (BA.N) of the inaugural flight of its long-delayed 787 Dreamliner also weighed on stocks. U.S. government bond prices rallied on the data and as market participants adjusted positions ahead of the Federal Reserve's interest rate verdict on Wednesday.
The Fed -- the U.S. central bank -- is expected to hold its target for federal funds in the zero to 0.25 percent range reached in December, but it is expected to dampen market expectations for interest rate hikes this year.
"The housing number suggests that things are bottoming, but that's a far cry from improving. The markets are focused on how fast the recovery is going to be, and I think it won't be as fast as people are thinking," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.
DISTRESSED SALES MODERATE
The Realtors report showed sales remained down 3.6 percent compared to May last year. Distressed sales made up 33 percent of the sales in May, but this compared to the 45 to 50 percent seen in the past few months.
Other housing data have also suggested the three-year housing slump was nearing a bottom but a surge in mortgage rates and persistently high unemployment threaten this budding optimism.
"There is a danger that the recent surge in mortgage rates will snuff out a recovery before it even begins," said Paul Dales, an economist at Capital Economics in Toronto.
Collapsing home values and tighter access to credit are forcing U.S. households to become more frugal, a trend that could make the widely anticipated economic recovery in the second half of 2009 feeble and lacking on the jobs front.
A monthly survey of manufacturers from the Federal Reserve Bank of Richmond showed factory activity in the U.S. mid-Atlantic states quickened in June compared with May. However, manufacturers' outlook for the next six months softened, signaling conditions remain fragile. Continued...
Source: Reuters

U.S., EU start WTO case against China on raw materials

By Susan Cornwell and Darren Ennis
WASHINGTON/BRUSSELS (Reuters) - The United States and European Union on Tuesday began a case against China at the World Trade Organization over its export restrictions on industrial raw materials, saying Beijing was trying to tilt the playing field in favor of its own industries.
The action followed failure to persuade resource-hungry China to reduce its export tariffs and raise quotas on a number of key materials such as coke, zinc and yellow phosphorus.
The materials are used in steel, microchips, planes and other products, and the trade flows affected are worth billions of dollars, U.S. officials said.
"After more than two years of urging China to lift these unfair restrictions, with no result, we are filing at the WTO today," U.S. Trade Representative Ron Kirk told a news conference in Washington.
"We are most troubled that this appears to be a conscious policy to create unfair preferences for Chinese industries" that use the materials, he said.
The United States and the European Commission -- which oversees trade for the 27-nation EU bloc -- are formally seeking consultations with Beijing at the global trade watchdog. If these talks fail, after 60 days the next step would be to request a WTO panel to hear the complaint.
"It is very much hoped that we will not have to proceed to the next stage," Kirk said.
In Brussels, EU Trade Commissioner Catherine Ashton said in a statement, "The Chinese restrictions on raw materials distort competition and increase global prices, making things even more difficult for our companies in this economic downturn."
"I hope that we can find an amicable solution to this issue through the consultation process," she said.
CHINA LIMITING EXPORTS
The EU and the United States say China continues to restrict exports of raw materials despite its pledge to eliminate export taxes and charges when it joined the WTO in 2001.
This seriously disadvantages foreign "downstream producers" of goods, such as aluminum producers and steelworkers, since the export restraints limit their access to raw materials and raise world market prices for the materials while lowering the prices that domestic Chinese producers have to pay, U.S. officials said.
U.S. officials said the nine materials covered by their case were bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc.
In Ottawa, Canadian officials indicated they haven't ruled out joining the case. "For the moment, we are closely monitoring developments in this file," said Melisa Leclerc, spokeswoman for Canadian Trade Minister Stockwell Day.
Taking action at the WTO is expected to further damage already brittle trade relations with China. U.S.-China tensions have been exacerbated by the growth in the U.S. trade deficit. This is the first case brought by President Barack Obama's administration against China at the WTO. Continued...
Source: Reuters

Fed starts meeting, seen confirming rates on hold

By Alister Bull
WASHINGTON (Reuters) - The Federal Reserve began a two-day meeting on Tuesday at which it is expected to dampen expectations for interest rate hikes this year, while holding steady on its plans for asset purchases.
A Fed official said the meeting got under way at around 1 p.m. A statement announcing the policy decision is expected at about 2:15 p.m. on Wednesday.
Economists widely expect the Fed to hold its target for the federal funds rate, the rate banks charge each other for overnight loans, in the zero to 0.25 percent range reached in December.
The meeting comes at a difficult juncture for the Fed and its chairman, Ben Bernanke.
Hints the economy is nearing recovery have some market participants arguing the Fed must act soon to prevent inflation from taking hold by withdrawing the extraordinary stimulus it has put in place. Others see a risk of a plunge back into a deep recession if emergency efforts are removed too soon.
President Barack Obama said on Tuesday that Bernanke had done a good job since the start of the financial crisis, but gave no hint whether he wants him to carry on when his term ends in January.
Bernanke's Fed has put in place an unprecedented array of emergency programs to fight the crisis, including large-scale purchases of mortgage debt and longer-dated U.S. government bonds.
At its June meeting, the Fed is not expected to ramp up asset purchases above an existing promise to buy $300 billion in government bonds and $1.45 trillion of mortgage debt.
It may, however, stretch out its buying of U.S. Treasury debt to last until year-end, or divert cash now earmarked for mortgage-related debt to government bonds.
Goldman Sachs economists expect the Fed to slow its purchases of longer-dated U.S. Treasuries to $5 billion a week from a current average around $13 billion to make the program last for the rest of the year.
One reason it may stop short of ramping up the actual amount of Treasuries it plans to purchase is worry among some policy-makers about inflation.
Fed officials are sensitive to accusations that it is 'monetizing' U.S. debt by printing money to purchase government bonds, which critics claim could lead to a problematic outbreak of inflation. It is a charge Bernanke has denied.
"An unchanged $300 billion program would make it easier to maintain this position because it would keep the Fed's total holdings of Treasuries just below pre-crisis levels," Goldman Sachs wrote in a note to clients.
The Fed subsequently ran down these holdings as it sold billions of dollars of Treasuries last year to sterilize the balance-sheet impact of other asset purchases it made to ease credit markets in the middle of a financial panic.
But the Fed is expected to push back against speculation that it will raise rates before the end of the year, and economists were focused on how the language of its policy statement could be tweaked to accomplish this tricky mission. Continued...
Source: Reuters

Sprint CFO seeing Pre shortages, no iPhone impact

NEW YORK (Reuters) - Sprint Nextel Corp (S.N) expects shortages of Palm Inc's (PALM.O) high-profile Pre smartphone for a while but has not felt any impact from the new iPhone so far, Sprint's chief financial officer said on Tuesday.
Sprint -- the exclusive U.S. provider of Pre -- sees Pre, which sold out during its launch weekend at the beginning of June, as a key to stemming its subscriber losses. But some analysts have worried that tight supply would hurt sales.
"We still have a backlog of subscribers but it's not unmanageable and we get shipments every week," said Sprint CFO Bob Brust during a Webcast of an investor conference, adding that the shipments are increasing every week.
"We'll be short for a while but we're catching up," said Brust, who sees the phone attracting new customers as well as existing Sprint customers, potentially reducing its subscriber cancellation rate.
The Pre, which competes with Apple Inc's (AAPL.O) iPhone, went on sale roughly two weeks ahead of the launch of the newest iPhone -- the 3GS -- which sold about a million in its first weekend. In comparison, analysts estimate that Palm sold about 50,000 Pre phones in its first weekend.
Brust told investors that the rate of Pre sales does not appear to have been hurt by the new iPhone.
"We don't see any big change since the iPhone came out yet. That may happen," he said, promising a clearer update on Pre sales when Sprint reports second-quarter results next month.
Palm shares rose 79 cents, or 6 percent, to $13.65 on the Nasdaq after the comment. Sprint shares were unchanged at $4.84.
Brust, who took on the CFO job at Sprint in May last year, has been walking the tightrope between spending on marketing to improve Sprint's tarnished brand and cutting costs in the face of steadily declining revenue.
He sees phones like Pre and services such as Sprint's $50-a-month Boost unlimited services plan helping turn around revenue but said this would take time.
"The big thing for us is to turn that revenue around," said Brust, bemoaning revenue declines of about 3 pct per quarter in recent quarters.
"That's a really tough rate of decline to keep up with," he said. "So sometime out into the future, not years but quarters, I hope we'll see that revenue flatten out and then hopefully turn around, and it'll look like a different company financially when that day comes."
(Reporting by Sinead Carew; Editing by Steve Orlofsky)

Source: Reuters

U.S. Justice Dept says no plans to drop UBS case

WASHINGTON/ZURICH (Reuters) - The U.S. Justice Department said it was not planning to drop its lawsuit seeking to force UBS AG to disclose thousands of the Swiss bank's U.S. customers with secret accounts.
"There is no basis for the report in The New York Times," a Justice Department spokesman said in a statement Tuesday after the newspaper reported the case might be dropped, citing an unnamed U.S. official briefed on the matter.
The U.S. government sued UBS in February in U.S. District Court in Florida, seeking the names of 52,000 Americans suspected of using the bank to hide nearly $15 billion in assets and evade U.S. taxes.
"While the department is always willing to consider settlement in any case, the suggestion that the department is planning to drop this suit is simply untrue. The department is continuing with the case against UBS and will file its brief asking the court to enforce the summons on June 30," spokesman Charles Miller said.
A U.S. filing on the matter is due June 30 and a hearing before a judge in Miami is set for July 13.
UBS and the Swiss government have argued that any exchange of confidential banking information should be handled through existing legal treaties rather than the courts.
"We hope it's true but we also have to look at what conditions are attached," a Swiss finance ministry spokesman said of the newspaper report.
UBS, the world's largest wealth manager, which has seen big client outflows over the U.S. case, declined to comment.
UBS shares were up 2.1 percent at 14.08 Swiss francs.
Separately, ministers from OECD countries agreed on Tuesday on the possibility of imposing sanctions on countries that do not stick to the OECD's tax standards, but left open when such measures should be implemented.
The ministers were meeting to pressure nations like Switzerland to step up efforts to combat bank secrecy and to assess progress made by countries on an Organization for Economic Cooperation and Development "gray list" of states needing to improve their tax cooperation standards.
VOLUNTARY DISCLOSURE
Several attorneys have said the United States has a strong case against UBS, but even if the government won a summons for the names, it would be hard to enforce that many cases.
"My sense would be that if this case is going to get resolved, it's going to be at a fairly high government-to-government level as part of a broader package," where the Swiss give something significant in exchange, said Scott Michel, an attorney at Caplin & Drysdale. Michel represents wealthy clients coming forward as part of the U.S. Internal Revenue Service's voluntary disclosure program.
"If the case moves forward, I think the DOJ has a good litigating position based on prior case law," Michel said.
Attorneys for high-net worth individuals have reported an increase in clients coming forward to the IRS since the agency clarified guidelines to encourage taxpayers to come clean with the government, pay a fine and avoid criminal prosecution. Continued...
Source: Reuters

Oil jumps 2 percent on Nigeria disruptions, weaker dollar

By Matthew Robinson
NEW YORK (Reuters) - Oil rose nearly 2 percent on Tuesday as the dollar weakened and disruptions from OPEC member Nigeria stoked supply concerns.
U.S. crude for August settled up $1.74 at $69.24 a barrel. London Brent crude gained $1.82 to settle at $68.80 a barrel.
The U.S. dollar fell against the euro on speculation the U.S. Federal Reserve may lower expectations of an interest rate rise when it concludes its meeting on Wednesday.
The dollar's losses supported commodities denominated in the greenback, pushing up the benchmark Reuters-Jefferies CRB Index of 19 commodity futures .CRB.
"The weaker dollar is supportive and you have the supply disruptions in Nigeria and the turmoil in Iran," said Joseph Arsenio, managing director at Arsenio Capital Management in Larkspur, California.
Italian oil company ENI declared force majeure on shipments of Brass River crude oil from Nigeria.
Persistent militant attacks over the past three years have cut oil output in the OPEC member, the world's eighth biggest crude oil exporter, to less than two thirds of its installed capacity of 3 million barrels per day (bpd).
Royal Dutch Shell (RDSa.L) said it was still checking its oil operations in Nigeria's Niger Delta after militants claimed they had launched three attacks against its facilities at the weekend.
Nigerian security forces arrested nine gunmen suspected to be involved in last week's pipeline attack that forced Agip to halt some oil output in the Niger Delta.
Economic optimism has helped lift crude prices from below $40 a barrel in February to above $70 earlier this month.
The chief economist for the International Energy Agency warned that any strong price rise could clip a rebound in the global economy.
Kuwait's oil ministers said OPEC will not cut oil output at its meeting in September, after the producer group last year agreed to a series of output cuts to help lift prices.
"Nobody expected the price to reach $70 a barrel so quickly," Kuwait's Oil Minister Sheikh Ahmad al-Abdullah al-Sabah told reporters at parliament, adding OPEC would likely call for greater compliance with current output targets.
"It was forecast by the fourth quarter. So it slipped a bit but still, if we achieve $75-$80 by the end of the year, that would be fine."
OPEC's president has previously said the cartel wants an oil price of $75 a barrel by the end of the year. Continued...
Source: Reuters