News at a glance
Oil: Prices spike on upheaval in Egypt; Coal mining: Massey Energy sold; Earnings: Exxon’s fourth-quarter gusher; Publishing: Hearst buys a stable of magazines; Autos: Chrysler predicts full-year profit
Oil: Prices spike on upheaval in EgyptU.S. crude-oil prices this week rose more than 5 percent, hitting their highest point since October 2008, as worries about disruptions in oil supplies from the Middle East reverberated through world markets, said Nidaa Bakhsh in Bloomberg.com. In New York, the price of a barrel of crude rose to $92.19, while in London, the price topped $100 a barrel for two consecutive days. Traders are concerned that ship traffic in Egypt’s Suez Canal, which carries an average of 1.8 million barrels a day, could be disrupted amid political unrest in Egypt. U.S. gasoline prices have risen 7 cents in the past month, to a national average this week of $3.11 a gallon of unleaded regular.
Supply worries might be overblown, said Steve Hargreaves in CNNMoney.com. In addition to the canal, where the movement of oil tankers remains unfettered, Middle East oil is shipped via the Sumed pipeline, which connects the Red Sea to the Mediterranean, handling up to 2 million barrels a day. Moreover, the Organization of the Petroleum Exporting Countries has indicated that it will increase production if necessary. But if unrest in Egypt spreads to other Middle Eastern nations, all bets are off.
Coal mining: Massey Energy sold Alpha Natural Resources has acquired controversial Massey Energy for $7.1 billion, ending the independence of “one of the most influential U.S. coal producers,” said Kris Maher in The Wall Street Journal. Last April, 29 miners died when a Massey mine collapsed in West Virginia. The accident eventually led to the departure in December of CEO Don Blankenship “as pressure mounted from regulators investigating the accident.” Founded in 1916, Massey has a long history of clashes with mine-safety regulators.
Earnings: Exxon’s fourth-quarter gusherExxon earned more than $9 billion in the fourth quarter of 2010, as an increase in the company’s oil production coincided with rising prices for crude, said Steve Gelsi in MarketWatch.com. Rising prices and higher profits in the chemicals and refining businesses also fattened the energy giant’s bottom line, with demand for specialty chemicals and refined fuels recovering along with the global economy. The final-quarter profit represents a 53 percent gain over 2009’s fourth quarter, pushing Exxon’s full-year profit to $30.5 billion, compared with $19.4 billion in 2009.
Publishing: Hearst buys a stable of magazinesAfter “lengthy” negotiations, French publisher Lagardère agreed this week to sell its international magazine business to Hearst for $887 million, said Jeff Bercovici in Forbes.com. The deal includes 102 titles, among them Woman’s Day, Car and Driver, and Elle, “Lagardère’s most important magazine.” Under a quirky arrangement, however, Lagardère won’t sell Elle, an influential fashion title, outright. Instead it will license to Hearst the right to produce and distribute all but the magazine’s French edition. Lagardère will retain nominal ownership to maintain “brand consistency.”
Autos: Chrysler predicts full-year profitChrysler, the smallest of the Big Three U.S. automakers, will turn a profit this year “now that its dealers have a new lineup of vehicles to attract shoppers,” said Alisa Priddle in The Detroit News. That’s the pledge of Chrysler CEO Sergio Marchionne, who made the forecast while announcing that the automaker, which Fiat purchased in 2009, lost $652 million in 2010. Despite that loss, Marchionne said the company would award bonuses to salaried and hourly workers. Not recognizing their efforts “would have been inexcusable,” Marchionne said.