Energy Futures Waver, Gas Prices Rise

Energy futures fluctuated Thursday, buffeted by slower-than-expected economic growth figures and Wednesday's government report of a sharp decline in inventories.

Selling by investors to lock in profits from the previous day's rally also pressured prices, analysts said.

Gas prices at the pump, meanwhile, climbed again overnight. Retail prices, which typically lag the futures market, are rising as retailers buy gasoline to supply drivers over the coming Labor Day weekend.

"People are expecting the one last surge in demand," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass.

But longer-term demand concerns remain. Second-quarter gross domestic product rose 4 percent in the second quarter, slower than many analysts had expected. And jobless claims rose unexpectedly last week to the highest level since spring.

"The concern is that we're going to see some weakness," Lynch said.

Energy investors worry that a slower economy means less demand for oil and gasoline.

Light, sweet crude for October delivery fell 29 cents to $73.22 a barrel on the New York Mercantile Exchange, while September gasoline fell 4.13 cents to $2.0595 a gallon. Both contracts alternated between gains and losses.

Gasoline and oil futures rose sharply Wednesday after the government reported surprisingly large declines in inventories of both on an unexpected drop in refinery activity.

In London, October Brent crude fell 33 cents to $71.80 a barrel on the ICE Futures exchange.

At the pump, meanwhile, gas prices rose 1.1 cents overnight to a national average of $2.769 a gallon, according to AAA and the Oil Price Information Service. Gas prices peaked at $3.227 in late May as refineries struggled to produce enough gas to meet peak summer driving demand.

With the summer almost over, refiners are switching over to produce more heating oil, analysts say. That has some analysts worried anew about gasoline inventories, which are at 2-year lows. But others think the inventory drop is a natural reaction by refiners to lower anticipated fall demand.

"We would not get too concerned about gasoline right now," wrote MF Global UK Ltd. analyst Edward Meir in a research note. "The U.S. driving season is officially ending after one 'last hurrah' this coming weekend."

Retail prices are responding in part to the futures market, where prices has risen over the last week in response to lower gasoline supplies. But contributing to higher prices is buying by retailers anticipating a jump in demand over the holiday weekend, analysts said.

In other Nymex trading, heating oil futures fell 1.09 cents to $2.031 a gallon, and natural gas futures rose 8.9 cents to $5.67 per 1,000 cubic feet after the government reported that inventories rose by 43 billion cubic feet last week, slightly less than analysts were expecting.

Natural gas supplies are at record levels, which has kept prices below year-ago levels. Heating oil inventories, on the other hand, are lower than they were a year ago, which has driven prices higher. The result could be lower heating bills this winter for natural gas customers, and higher bills for heating oil customers.
Source : http://www.forbes.com

FEATURE-US immigrants worry as families face deportation

When 300 U.S. immigration agents surrounded the chicken processing plant where Danny Alvarez-Reyes works, he did the only thing he could think of: he gave his coat to a scared friend determined to hide in the walk-in freezer.

Alvarez-Reyes, 27, works legally at the Koch Food plant near Cincinnati and could only watch as co-workers were rounded up during a raid on Tuesday that netted 160 illegal workers.

But after an exhausting day trying to help his friends' families, Alvarez-Reyes was still worried about the five co-workers he watched hide in the giant freezer.

"I don't know if they ever got out, that's all I want to know," he said, gathering with friends at a neighborhood taco restaurant to rehash the trauma of the day and trade rumors about who will be deported.

A day after one of the largest workplace immigration raids in Ohio, the Hispanic community in Cincinnati's suburbs was scrambling to track down missing family members and arrange care for children whose parents were caught up in the raid.

U.S. Immigration and Customs Enforcement said the raid was the culmination of a two-year investigation of Koch Foods, suspected of knowingly hiring undocumented workers. The company said it was cooperating.

"Koch Foods is committed to complying with all immigration laws, and we look forward to resolving this matter quickly," it said in a statement.
Source : http://today.reuters.com

No US dollar sell-off, Chinese central bank official says

China sought yesterday to dampen speculation it will conduct a massive sell-off of US dollar holdings, with a central bank official saying the US dollar remains a mainstay of its foreign exchange reserves.

In an interview carried by the government's Xinhua news agency, an unnamed official with the People's Bank of China said US dollars and government bonds are "an important part of China's foreign reserve investments."

China's US$1.3 trillion in foreign exchange reserves are the largest in the world and are believed to be comprised largely of dollar assets, potentially giving Beijing enormous sway over the dollar's value worldwide.

A report in the British newspaper the Daily Telegraph last week that quoted Chinese government economists as saying China would dump its dollar holdings in the event of a trade war with Washington added to jitters in stock markets already unnerved by volatility in US share markets.

Xinhua said the central banker's remarks were intended to counter reports in Western media that China "is threatening to carry out a sell-off of US dollars."

The People's Bank does not disclose the composition of its foreign exchange reserves, which have swelled in recent years as China's exports surged and investors poured money into the country to profit from an economy now in its fourth straight year of double-digit growth.

But the reserves have become a political issue both within China and between Beijing and Washington. As the US dollar has fallen in value, the People's Bank has come under pressure to diversify its holdings to maintain the value of the reserves and improve returns.
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Source : http://www.taipeitimes.com