Oil hits record $121 on supply woes

TheStar.com - Business - Oil hits record $121 on supply woes

CP PHOTO
A pumpjack sits surrounded by canola flowers near Carstairs, Alta., in this July 2004 file photo.
May 06, 2008 GILLIAN WONGThe Associated Press
SINGAPORE–Oil futures rose to an all-time high near $121 a barrel Tuesday in Asia, fueled by worries about threats to supply and a weakening of the U.S. dollar.
The surge in oil prices was also fueled by hopes that the U.S. economy will be spared a sharp downturn after the release of data Monday showing an unexpected expansion in the U.S. service sector in April, analysts said.

Light, sweet crude for June delivery rose to a record $120.93 a barrel in electronic trading on the New York Mercantile Exchange on Tuesday. The contract later retreated to $120.24 a barrel, up 27 cents from Monday's close.

Crude futures settled on Monday at $119.97 a barrel, up $3.65 from Friday's close.
"The bulls are in control of the market," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "The economic report out of the U.S. yesterday on the service sector seems to suggest the economic slowdown may not be as deep as initially thought.''

"The sentiment is that the oil pricing is likely going to stay quite strong, with a lot of volatility," Shum said.

The dollar weakened against the euro on Monday, attracting investors to oil and other commodities viewed as hedges against inflation. Also, a falling dollar makes oil less expensive to investors overseas. A series of U.S. Federal Reserve rate cuts starting last year weakened the dollar considerably against foreign currencies, and analysts blame the dollar's protracted decline for oil's sharp rise this spring.

Supply outages or potential threats to supply emerged in Iran and Nigeria over the weekend and from Iraq on Monday; events in all three nations have caused prices to spike many times in recent months.

In Iraq, Kurdish rebels warned they could launch suicide attacks against American interests to punish the U.S. for sharing intelligence with Turkey after Turkey bombed rebel bases in Iraq on Friday. In Nigeria, a Royal Dutch Shell PLC spokesman said attackers hit an oil facility belonging to Shell's joint venture in southern Nigeria and that some oil production has been shut down.

And Iran's Supreme Leader Ayatollah Ali Khamenei said his country will not bend to international pressure and give up its nuclear program.

Energy investors grow concerned any time conflict breaks out or is threatened in the oil-rich Middle East. Years of unrest in Nigeria have cut off nearly a quarter of the major U.S. supplier's oil output.

Amid the occasional threats to crude supplies, global demand for oil continues to grow. While demand for oil and gasoline has been soft in the U.S., the Chinese and Indian economies are growing by double digits, boosting global demand for oil.

In other Nymex trading, heating oil futures rose 0.75 cent to $3.314 a gallon (3.8 liters) while gasoline prices added 1.21 cents to $3.065 a gallon. Natural gas futures gained 0.8 cent to $11.186 per 1,000 cubic feet.

Brent crude futures rose 72 cents to $118.71 a barrel on the ICE Futures exchange in London.

Timminco ex-CEO trading reviewed

Timminco ex-CEO trading reviewed

ANDY HOFFMAN

00:00 EDT Saturday, May 03, 2008

The former chief executive officer of Timminco Ltd. bought 152,000 company shares in the weeks before the company revealed it had developed a "breakthrough" technology to produce solar grade silicon.

The acquisitions by John Walsh included a purchase just 15 days before the first contract with a solar cell maker was announced.

Trading by Mr. Walsh, who left Timminco and its board of directors last month, has been made the subject of "certain reviews and inquiries," the company disclosed this week in a regulatory filing.

Timminco officials declined to discuss the nature of the reviews and inquiries or who was making them.

The contract with an unnamed solar cell maker was announced on March 15, 2007. It was the initial catalyst for an astounding run-up in Timminco shares, which rose from 40 cents each before the solar-grade silicon capability was revealed to $21.95 by the end of 2007. The stock recently traded above $28 after Timminco said it won a supply contract with Q-Cells AG, the world's largest solar cell producer.

Trading records filed with regulators show Mr. Walsh, who was named Timminco's president and CEO in December, 2006, bought the 152,000 shares in three separate transactions between Feb. 7 and Feb. 28, 2007 for $58,250. Based on yesterday's closing price, those shares are now worth more than $3-million.

On Feb. 7, Mr. Walsh paid 35 cents each for 43,000 shares. On Feb. 21, he bought 101,000 shares at 40 cents a piece, the records show. A week later, Mr. Walsh bought 8,000 shares at 35 cents each. Fifteen days later, Timminco announced it could produce solar grade silicon and the stock began its ascent towards becoming the top performing equity on the Toronto Stock Exchange in 2007.

Mr. Walsh's trading records with the Ontario Securities Commission were amended. He originally said he had purchased 98,000 shares on March, 5, 2007. On April 24, he filed an amended statement saying the March 5 share purchase had, in fact, taken place on Feb. 28, and was for only 8,000 shares not 98,000.

Timminco officials, including vice-chairman Arthur Spector and chief financial officer Robert Dietrich declined comment. Officials at the Ontario Securities Commission would not answer questions about Timminco. Attempts to reach Mr. Walsh, who is believed to reside in Delaware, were unsuccessful.

In a regulatory filing, Timminco said that during 2007, it "reimbursed approximately $16,000 to Mr. Walsh, pursuant to an agreement of the corporation to indemnify Mr. Walsh in connection with certain reviews and inquiries related to trading of the common shares of the corporation held by him in April 2007."

The trading records show that Mr. Walsh bought another 200,000 shares for 89 cents each on April 3, 2007. The next day, on April 4, Timminco announced it had won its second solar silicon contract.

Prior to joining Timminco, Mr. Walsh was the chief executive officer of Alanx Wear Solutions Inc., a Delaware headquartered maker of bullet-proof clothing and protective wear. Alanx was sold to Calgary's Ceramic Protection Corp. in 2004. Alanx was controlled by Allied Resource Corp., whose chairman, Heinz Schimmelbusch is also the chairman of Timminco. Mr. Schimmelbusch assumed the CEO duties at Timminco in August, 2007. Mr. Walsh was reassigned to head Timminco's magnesium business. Mr. Walsh left Timminco and its board last month to "pursue other opportunities," the company said.

At the end of January, 2007, a month and a half before the solar silicon deal was announced, Timminco executives including Mr. Schimmelbusch were awarded more than one million Timminco stock options priced at 40 cents each.

In an interview this week, Mr. Dietrich said Timminco had followed all timely disclosure rules and that "there was no certainty until the first customer signed the contract that there would be a contract."
Timminco (TIM)
Close: $19.88, up 39¢

I was walking by the mental hospital the other day

and all I could hear was the sound of patients yelling

13,13,13


the fence was too high to see over,

But I saw a little space between the boards

and I looked through to see what was going on

some Jerk poked me in the eye with a stick

then all I could here was "14... 14... 14..."

Just thought I'd be the one to warn you 1st

Are U.S. rate cuts near an End?

Are U.S. rate cuts near an end?
RTGAM

Here's Allan Robinson's At The Bell which you'll find in tomorrow's newspaper:

The U.S. economy is just crawling along, but investors are betting that the U.S. Federal Reserve Board is almost finished its work, at least so far as lowering short-term interest rates go.The consensus opinion is that the Fed will lower the federal funds rate by one-quarter of a percentage point today to 2 per cent, but what investors will be looking for are hints."Growth appears to have ground to a halt with consumers tapped out, businesses on a recession-watch, and home builders still hacking away at output to pare bloated inventories," said Sal Guatieri, a senior economist with BMO Nesbitt Burns Inc.Nevertheless, it looks like the Fed may signal a pause in its rate-cutting strategy, Mr. Guatieri said.

"There's a sense if you keep cutting rates you get less and less of a bang for the buck," he said. The Fed has reduced the cost of borrowing and helped to deal with the availability of credit, he said. The federal funds rate has been lowered three percentage points since September.WHAT TO KEEP AN EYE ONThere is a lot of stimulus that has been injected into the system and concern is growing about the impact of the weak U.S. dollar on inflation, Mr. Guatieri said.

The first-quarter gross domestic product data, which is also scheduled for release today, is forecast to have increased at an annual rate of 0.5 per cent, compared with 0.6 per cent during the fourth quarter, according to a survey of economists by Bloomberg.Rising price pressures are also expected to be evident today with the GDP price index increasing to an annual rate of 3 per cent during the first quarter, up from 2.4 per cent during the fourth quarter of 2007 and only 1 per cent in the third quarter.HOW WILL THE MARKET REACT?All in all, that leaves investors in the somewhat precarious position of waiting for the economic turnaround.And indications that the Fed might be ending its rate-cutting strategy have already led to a stronger U.S. dollar.

The problem facing investors is that energy and materials, which account for about 50 per cent of the S+P/TSX, would be exposed to weaker commodity prices resulting from the stronger dollar. "A change in equilibrium of resource prices will have a large effect on the [index] performance," wrote Clement Gignac and Pierre Lapointe, strategists with National Bank Financial Inc.Copyright 2001 The Globe and Mail