Crude Awakening, Consolidating Power
The price of oil hits a new high amid new supply fears. Energy producer NRG makes a play for rival Calpine. And in Ireland, a religious rite is becoming a financial strain.
NEWS AT A GLANCE
As supply falls, oil hits another high
The price of crude oil rose above $135 a barrel, a new high, in New York trading, after the U.S. Energy Department reported an unexpected drop in U.S. stockpiles. (Bloomberg) The Paris-based International Energy Agency, meanwhile, is preparing to sharply downgrade its estimates of the world’s future oil supply, The Wall Street Journal reported. The IAE’s findings won’t be released until November. (MarketWatch) The heads of the largest U.S. oil companies told the Senate yesterday that global supply and demand, not their companies, were responsible for the record high prices. “We cannot change the world market,” said BP America chairman Robert Malone. (CNNMoney.com)
NRG bids $10 billion for rival Calpine
NRG Energy Inc. has made an unsolicited $9.6 billion bid for rival power producer Calpine Corp., in a bid to create the largest independent power company in the U.S. The all-stock offer was 6.7 percent higher than Calpine’s closing price yesterday. (MarketWatch) The offer, made May 14, was disclosed by Calpine’s largest shareholder, Harbinger Capital Partners, which backed negotiations. NRG produces 23,000 megawatts in the U.S., mostly from coal and natural gas; Calpine generates 24,000 megawatts, almost all from cleaner-burning natural gas. (Reuters) As lawmakers look at ways to reduce carbon-dioxide emissions, said Calyon Securities analyst Gordon Howard, Calpine’s smaller “carbon footprint would be attractive.” (Bloomberg)
Air France earnings takes a dive
European carrier Air France-KLM reported an $855 million quarterly loss, its first shortfall since 2003, and warned that its operating profit could drop 29 percent this year. Much of the loss came from a $777 million after-tax charge for fixing air cargo prices. (MarketWatch) But the airline also blamed rising oil prices and reduced travel demand from the economic slowdown. “This is the shape of things to come,” said John Strickland at JLS Consulting. “All airlines are going to be massively exposed.” Air France’s shares dropped as much as 11 percent early today. (Bloomberg) Surging oil prices, now up 170 percent since January 2007, helped send airline stocks down across Asia and Europe. (Reuters)
First Communion, second mortgage
Ireland’s new-found wealth can be found on the backs of children seeking the Catholic rite of First Communion. Parents who once would have dressed their sons in second-hand suits now typically spend more than $6,500 on clothes, limousines, and a party for a dozen or more guests. The Church has had enough, noting that some parents are going into debt to “keep up with the Joneses,” as well as losing the religious focus of the ceremony. Some parishes are holding mandatory receptions and making the kids wear uniforms. But sales of $540 suits for boys are booming at Leonard Fagan’s Dublin tailor shop. Boys “come in looking for James Bond–style suits,” says Fagan. “They want to look like their idols.” (Bloomberg)
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
MOST POPULAR ON THE WEEK
- The world's dumbest idea: Taxing solar energy
- Why would a young person today be religious?
- Why atheism doesn't have the upper hand over religion
- He said he was leaving. She ignored him.
- 31 TV shows to watch in 2014
- Which states get screwed worst by the Electoral College?
- Why Good Friday is so important to Christians
- 10 things you need to know today: April 18, 2014
- Israel and Russia are getting along. Have the neocons noticed?
- Why I'm a pro-life liberal
Subscribe to the Week