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Saudis pledge to pump more oil

A “hastily convened conference” in Jeddah, Saudi Arabia, on the global oil squeeze ended with a Saudi pledge to increase daily oil production, said Carola Hoyos and Andrew England in the Financial Times. The increase of 200,000 barrels a day, due in July, will lift Saudi Arabia’s daily production to 9.7 million barrels, the highest level in three decades. “The kingdom also reiterated its promise” to further increase production over the long term. It is now aiming for 12.5 million barrels a day next year and an additional 2.5 million barrels “in around three years.”

The Saudis’ pledge didn’t impress the world’s oil markets, said BBCnews.com. Crude prices rose the day after the conference ended, settling at more than $136 a barrel in New York and London. “Without specific commitment from other members of the producers’ cartel, OPEC, to lift production,” most analysts were not expecting much of an impact on the global supply. Their pessimism deepened following attacks on oil-pumping facilities in Nigeria, where a militant group disabled an offshore rig, cutting Nigeria’s daily production to 1.5 million barrels from a maximum of 2.5 million barrels.

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Bonds: Worries over credit downgrades

Two of the largest U.S. bond insurers lost their blue-chip credit

ratings last week, a development that “confirmed investors’ fears that the credit crisis continues,” said Kenneth Musante in CNNmoney.com. The downgrades reflect concerns that the insurers, MBIA and Ambac Financial, might not be able to honor their promises to repay principal and interest on more than $1 trillion in bonds issued by firms and municipalities. “If insurers fail to back those investments,” bondholders “could face significant losses.”

Consumer electronics: Circuit City takes a loss

Consumer-electronics retailing giant Circuit City reported a

$164 million loss in the quarter that ended May 31, on a 7.4 percent decline in sales, said Andria Cheng in Marketwatch.com. The company has lost market share to archrival Best Buy, a decline accelerated by “a decision last year to eliminate 3,400 highly paid workers, who usually helped to push more profitable product and services sales.” To conserve cash, the company has stopped paying a dividend on its stock.

Pharmaceuticals: Generic Lipitor postponed

Pfizer last week preserved its exclusive Lipitor franchise, after a rival drugmaker agreed to postpone making a generic equivalent until 2011, said Stephanie Saul in The New York Times. “The cholesterol medication is the world’s top drug, with $12.7 billion in sales last year.” India’s Ranbaxy Laboratories has threatened to make its own version of Lipitor since 2003, but it has agreed to wait until 2011, in exchange for licenses to sell generic Lipitor in Western Europe and Australia, as well as in the U.S.

Autos: Ford’s comeback stalls

Ford Motor Co. last week postponed the launch of the “redesigned F-150 pickup truck that was once expected to drive the company’s recovery,” said Matthew Dolan in The Wall Street Journal. Ford also said it would sharply cut production of SUVs and pickups for the second time in two months. “The moves suggest the company is bracing for a greater loss in 2008 than its $2.7 billion loss last year.” Ford is postponing the rollout of the 2009 F-150 for two months, to let dealers clear out their 2008 inventory.