Archive for August, 2012

Oil prices fell Wednesday as U.S. supplies of crude rose for the first time in a month and finance ministers from industrialized nations pleaded with top producers to help lower crude prices and help the global economy.

An oil pump works in the desert oil fields of Sakhir, Bahrain, Aug. 22, 2012.

By Hasan Jamali, AP

An oil pump works in the desert oil fields of Sakhir, Bahrain, Aug. 22, 2012.

 

By Hasan Jamali, AP

An oil pump works in the desert oil fields of Sakhir, Bahrain, Aug. 22, 2012.

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Traders also watched for any reports of significant damage from Tropical Storm Isaac as it passed over oil facilities in the Gulf of Mexico. Nearly 95% of Gulf production was halted because of the storm.

Benchmark oil fell 84 cents to finish at $95.49 per barrel in New York. Brent crude, which is used to price international varieties of oil, fell 4 cents to $112.54 per barrel in London.

 

The government reported that the U.S. crude inventories increased by 3.8 million barrels to 364.5 million barrels last week. Analysts had expected a drop of 2 million barrels, according to Platts, the energy information arm of McGraw-Hill.

Separately, finance ministers from the Group of Seven countries said they are concerned that higher oil prices pose a risk to the sluggish global economy. They appealed to oil-producing countries to increase output while also suggesting they could ask the International Energy Agency to release oil from strategic reserves. The G-7 includes the U.S., Japan, Germany, France, Britain, Italy and Canada. The IEA represents more than two dozen oil-importing nations.

Maria van der Hoeven, who heads the IEA, told Bloomberg News that there is no need for a release from its stockpiles. “The market is sufficiently well supplied,” she said in an interview in Stavanger, Norway, adding that any action would require “a serious disruption of supply.”

Oil futures prices

Crude oil, dollars per barrel, 6 months.

The price of oil has risen by more than 20% since late June. But both benchmark U.S. oil and Brent crude remain more than 10% below their highs for the year.

Meanwhile, Isaac, which was downgraded to a tropical storm Wednesday afternoon, was at hurrican strength when it pushed inland and battered the Gulf Coast. But it could be days before the extent of any damage to oil production facilities and coastal refineries is known.

Early reports indicated some rigs that were moved ahead of the storm were accounted for and all mobile drilling units remained in position, according to the Bureau of Safety and Environmental Enforcement.

Royal Dutch Shell plans to conduct a flyover inspection of its Gulf operations on Thursday as the weather improves. If conditions prove safe, it will deploy staff Friday to begin restarting operations. Exxon Mobil said it’s beginning to assess Isaac’s impact on its operations in and around the Gulf as well.

About 1.3 million barrels per day of oil production has been shut down because of the Gulf closures. Some of that impact has been softened by changes in the market and the facilities themselves over the past few years.

Technological advances have led to a jump in oil production from onshore operations since hurricanes last hit the Gulf in 2008. And rigs have been constructed to be more durable after previous hurricanes.

“The storm wasn’t strong enough to probably do any serious infrastructure damage,” said Kyle Cooper, managing director of research at Cyprus Energy LP. He said offshore oil production could resume within two to three days if there is no damage.

In other energy trading: heating oil fell 46 cents to end at $3.1157 per gallon; wholesale gasoline fell 2.6 cents to end at $3.10 per gallon and natural gas rose 2 cents to end at $2.634 per 1,000 cubic feet.

The government estimated that nearly 72% of Gulf natural gas production has been suspended due to Isaac.

Pamela Sampson in Bangkok contributed to this report.

Copyright 2012 The Associated Press. All rights reserved. This material may not be publishe

via Crude oil prices drop as G-7 calls for increased production – USATODAY.com.

The union for pilots at AMR Corp. (AAMRQ)’s American Airlines is appealing a U.S. bankruptcy judge’s decision that denied the company’s request to reject a labor contract with the union and impose cost reductions.

The Allied Pilots Association filed a notice of appeal today in U.S. Bankruptcy Court in Manhattan. The union didn’t give a reason for the appeal in the filing.

On Aug. 15, U.S. Bankruptcy Judge Sean Lane denied American’s request to void its contract with the pilots, finding that two elements of American’s proposal for the pilots weren’t justified.

Lane invited Fort Worth, Texas-based American to revise its proposal and come back to court for approval. The judge said American had shown that “significant changes” to the collective bargaining agreement are necessary for the company’s bankruptcy reorganization.

via American Airlines Pilots Appeal Contract Rejection Ruling – Bloomberg.

AMR says hedge funds may provide equity financing

NEW YORK | Thu Aug 30, 2012 6:54am IST

(Reuters) – The parent of American Airlines said on Wednesday a group of hedge funds was interested in providing equity financing to help it emerge from bankruptcy, with Dow Jones reporting the funds could contribute up to $2 billion.

AMR Corp AAMRQ.PK asked the U.S. Bankruptcy Court in New York for permission to pay the fees for a group of bondholders’ attorneys and financial advisors as they considered whether to provide financing.

“The engagement of the Group presents a reasonable prospect of obtaining commitments that may facilitate the reorganization efforts,” AMR said in a filing.

The group includes an affiliate of J.P. Morgan Chase as well as Carlson Capital, Cyrus Capital Partners and Claren Road Asset Management, among others.

The group was considering $1 billion to $2 billion in equity financing and could provide enough to allow AMR to exit bankruptcy on its own, Dow Jones reported, citing three unnamed people involved with the matter.

That could give AMR more leverage as it explores a possible merger with US Airways Group Inc (LCC.N), two of the people told Dow Jones.

The funds hold more than $600 million in AMR bonds, Dow Jones said.

A hearing to determine whether AMR should be allowed to pay the fees was set for September 20.

AMR is seeking to pay the hourly costs for law firm Milbank, Tweed, Hadley & McCloy as well as a monthly fee of $150,000 to Houlihan Lokey Howard & Zukin, the financial firm advising the group of creditors.

In a letter from the creditors to AMR that was included in the filing, the group said it was not committing to providing any financing.

“It is not at all unusual for large debt holders to express an interest in participating in the formulation of a plan of reorganization and to potentially provide equity or other financing as part of a plan,” said Sean Collins, an American Airlines spokesman.

“It also is not uncommon for the debtor to pay fees related to this effort.”

AMR filed for Chapter 11 protection in November.

The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.

via AMR says hedge funds may provide equity financing | Reuters.

California commission allocates $60 million for Metrolink fleet upgrades

Last week, the California Transportation Commission (CTC) allocated $60 million in Proposition 1A bond funds to help pay for upgrades to the Southern California Regional Rail Authority’s (Metrolink) locomotives and coach cars.

The program will enable Metrolink to upgrade 21 to 30 locomotives and 44 to 55 passenger-rail cars either by buying new equipment or rehabilitating existing equipment, Metrolink officials said in a prepared statement.

The mechanical and communications systems will be overhauled, and new seats and flooring will be installed. In addition, luggage racks, additional bike racks and higher-powered HVAC systems will be added to accommodate longer trips anticipated as part of California’s high-speed rail project between Los Angeles and San Francisco, Metrolink officials said.

via Rail News – California commission allocates $60 million for Metrolink fleet upgrades. For Railroad Career Professionals.

GOP platform calls for ending Amtrak subsidy, high-speed rail funding

Yesterday at their national convention in Tampa, Fla., Republicans approved a party platform that calls for ending federal funding for Amtrak and high-speed rail, and allocating more federal transportation dollars for highway projects instead of other transportation options, such as public transit, bicycling and pedestrian programs, according to national news reports.

The platform includes many measures that Republicans on the House Transportation and Infrastructure Committee pushed for during negotiations on the new, two-year $105 billion transportation bill that was enacted earlier this summer, news reports stated.

In particular, the platform takes a tough stance on Amtrak, calling it an “extremely expensive railroad.”

“It is long past time for the federal government to get out of the way and allow private ventures to provide passenger service to the Northeast Corridor,” The Hill newspaper quoted from the platform. “The same holds true with regard to high-speed and intercity rail across the country.”

Republicans also plan to end federal funding for other transportation projects, such as Detroit’s planned $137 million Woodward Avenue streetcar project, the Detroit News reported on its website.

Earlier this month, Mitt Romney, the Republican nominee for president, said in a Fortune interview that his deficit-cutting plans included eliminating Amtrak’s federal subsidy.

via Rail News – GOP platform calls for ending Amtrak subsidy, high-speed rail funding. For Railroad Career Professionals.

UTU promotes International VP Previsich to assistant president

The United Transportation Union’s (UTU) board has promoted International Vice President John Previsich to assistant president to succeed Arty Martin, who will retire Sept. 1.

Previsich, who was elected an international VP in 2007 and re-elected in 2011, began his railroad career in 1973 with the Southern Pacific Railroad (which now is part of Union Pacific Railroad) working in yard, road and engine service. He currently holds seniority as a switchman, brakeman, conductor, fireman and engineer at UP, and worked in commuter and long-distance passenger-rail service for 10 years.

Previsich previously was elected to numerous positions at the UTU, including local chairperson, vice general chairperson and general chairperson, representing brakemen, assistant conductors, conductors, firemen, hostlers, engineers and train dispatchers at Class Is, short lines and passenger railroads.

Martin was elected as assistant president in 2007 and was re-elected in 2011. A fourth-generation railroader, he joined UP in 1966.

via Rail News – UTU promotes International VP Previsich to assistant president. For Railroad Career Professionals.

Denver’s RTD OKs short-term plan for FasTracks

On Tuesday, the Regional Transportation District of Denver (RTD) approved a short-term plan for the FasTracks program using existing revenue as part of the Denver Regional Council of Government’s (DRCOG) Regional Transportation Plan (RTP).

RTD, the Colorado Department of Transportation (CDOT), and cities and counties in the region must identify the transportation projects that can be completed within the DRCOG 2035 plan to enable the region to continue receiving federal funding, RTD officials said in a prepared statement.

FasTracks projects identified in the RTP amendment to be completed by 2035 are based on RTD’s ability to leverage public-private funds or federal grants.

“This is what the plan looks like now, but as opportunities arise, the plan will change,” said RTD Chairman Lee Kemp. “We believe that the plan is fiscally responsible and the right thing to do for the region, as we try to remain flexible to optimize progress on the program.”

Also on Tuesday, RTD’s board awarded a contract to AECOM for final design of the North MetroRail Line from downtown Denver to the 72nd and Colorado Station. The contract contributes to RTD’s $1 billion in expenditures and commitments to the northern communities through 2017, agency officials said.

via Rail News – Denver’s RTD OKs short-term plan for FasTracks. For Railroad Career Professionals.