ST. LOUIS
Oil rose above $85 per barrel Tuesday on encouraging economic news from Asia and Europe. Benchmark West Texas Intermediate crude rose $1.02 to finish at $85.44 per barrel in New York. Brent crude, which is used to price oil produced abroad, increased $1.08 to $109.44 per barrel in London.
Prices rose following reports of better-than-expected manufacturing activity in China and Europe. And stocks rose in the U.S. ahead of an expected announcement from the Federal Reserve on Friday to further stimulate the nation’s economy.
The positive news was offset by reports of more unrest in Libya’s capitol as the Gadhafi regime appeared near collapse.
An end to the country’s six-month rebellion would clear the way for oil exports to resume, but analysts cautioned that it will likely take more than a year for oil to begin flowing at levels that would affect prices.
“Crude from Libya is going to be a story for 2012 or 2013. Not today,” said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service fast cash loans.
Fighting during the last six months has all but stopped activity in Libya’s oil fields. The country previously supplied about 1.5 million barrels per day for world markets. That’s roughly 2 percent of daily global oil demand.
Meanwhile, U.S. gas pump prices rose Tuesday to a national average $3.572 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is 86.4 cents more expensive than the same time last year.
In other energy trading, heating oil rose 3.18 cents to end at $2.9425 per gallon and gasoline futures added 4.15 cents to finish at $2.8766 per gallon. Natural gas rose 10.4 cents to end the day at $3.993 per 1,000 cubic feet.
Asian markets moved mostly lower early Friday as a congressional vote on a bill to extend the U.S. government’s debt ceiling was delayed with time running out ahead of a deadline for action next week.
The Treasury Department says the debt ceiling _ currently at $14.3 trillion _ must be raised by Tuesday or the government won’t have enough money to cover all its bills, which has led to fears the United States could default on its debt and harm the fragile global economy.
In Asia, markets moved downward, but the declines were far from steep as investors appeared to take a wait-and-see stance amid the ongoing political wrangling in Washington.
Japan’s Nikkei 225 stock average fell 0.1 percent to 9,891.45. Hong Kong’s Hang Seng index slipped 0.2 percent to 22,525.65. China’s Shanghai Composite Index fell 0.1 percent to 2,707.28.
South Korea’s Kospi fell 0.3 percent to 2,149.15. Australia’s benchmark also fell, but New Zealand’s moved higher.
The dollar fell to 77.72 yen in Asia from 77.88 yen late Thursday in New York. The euro fell to $1.4313 from $1.4311.
Republican leaders in the House of Representatives delayed the vote on the bill to extend the government’s debt limit and cut federal spending, though there was an expectation it would occur later Thursday evening in Washington.
On Wall Street, a late sell-off Thursday erased earlier gains as investors fretted that the bill headed for a vote in the House of Representatives would fail to lead to a breakthrough in the debt stalemate.
The Dow Jones industrial average fell 62.44 points, or 0.5 percent, to close at 12,240.11 on Thursday. The index had been up as many 82 points earlier in the day following an unexpected decrease in new claims for unemployment benefits.
The Standard & Poor’s 500 fell 0.3 percent to close at 1,300.67. The Nasdaq composite index, however, edged up 0.1 percent to 2,766.25.
Benchmark oil for September delivery was down 24 cents to $97.20 a barrel in electronic trading on the New York Mercantile Exchange. Crude rose 4 cents to settle at $97.44 Thursday.
Regulators have rejected a Pfizer Inc. pain drug that is designed to discourage abuse.
The New York drugmaker said the Food and Drug Administration asked for more information about the drug, called Remoxy. In May it said approval of Remoxy could be delayed because of issues with the manufacturing part of its application. Pfizer did not say Friday if the FDA’s decision was related to those problems. Its shares slipped 8 cents to $20.57 in premarket trading.
Shares of Pfizer’s partners on Remoxy, Pain Therapeutics Inc. and Durect Corp., both plunged. Durect shares dropped 89 cents, or 29 percent, to $2.20. Pain Therapeutics stock gave up $4.83, or 52 percent, to $4.41.
Remoxy is similar to Purdue Pharma LP’s pain drug OxyContin. Both drugs contain an extended-release version of the drug oxycodone and both are intended to treat severe pain. OxyContin is one of the most frequently abused prescription drugs, and Remoxy is designed to be more difficult to abuse. The oxycodone in Remoxy is in a thick liquid form, which is designed to make it hard to crush and snort, or be injected, or dissolved in alcohol. Remoxy is a key part of Pfizer’s $3.6 billion acquisition of King Pharmaceuticals, which closed in March.
Purdue began selling a new tampering-resistant version of OxyContin last year. The time-release formula in the original version could be avoided if the drug was crushed or dissolved, which delivered the full dose quickly and created a high similar to heroin.
The FDA has long been concerned about abuse of prescription pain drugs, and in May, the agency called a meeting with drug companies who were studying extended-release opioid pain drugs. They discussed ways to train prescribers and reduce the risks of the drugs. Pfizer said those issues could also complicate approval for Remoxy.
The agency also delayed approval of Remoxy in December 2008, saying it needed more data.
Remoxy was developed by Durect, which licensed it to Pain Therapeutics in 2002. Pain Therapeutics later sublicensed the rights to King Pharmaceuticals, which was acquired by Pfizer.
Striking Canada Post workers had to be legislated back to work or this year
European Union agriculture ministers are assessing whether farmers will be able to recoup from EU coffers up to 30 percent of the cost of vegetables that cannot be sold because of the German E.coli contamination crisis.
Two officials said Tuesday that the EU Commission has come up with the proposal as a base for negotiations at a special emergency meeting of farm ministers dealing with the economic impact of the crisis. The officials spoke on condition of anonymity because of the sensitivity of the negotiations.
Earlier Tuesday, the EU health chief warned Germany against premature _ and inaccurate _ conclusions on the source of contaminated food that have spread fear all over Europe and cost farmers in exports.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
BERLIN (AP) _ Germany’s national disease control center says a further 94 people have been sickened by the deadliest E guaranteed high risk personal loans.coli outbreak in modern history.
The Robert Koch Institute said the number of registered infections in Germany rose to 2,325 Tuesday, with those in other European countries still standing at about 100.
The institute adds the latest figures indicate that the number of new cases is declining _ a sign that the epidemic that might have reached its peak. But it cautions that it is not certain whether the latest decrease will continue in the coming days.
It said the number of people suffering from a serious complication that may lead to kidney failure among those sickened rose by 12 to 642.
The outbreak has killed a total of 22 people across Europe within a month.
NEW YORK
Treasuries rose for a third week, generating the biggest monthly return since August, as cooling economic growth and the Federal Reserve’s commitment to maintain stimulus encouraged demand for the safety of government debt.
Two-year note yields dropped the most in a month since January 2010 as policy makers said after a meeting that a $600 billion debt-purchase program will continue through June. Fed Chairman Ben S. Bernanke said he was unsure when monetary stimulus will unwind. Employers added fewer jobs in April than in March, a report next week is forecast to show.
“The lack of growth is supporting the Treasury market,” said Siddharth Joshi, an interest-rate strategist in New York at Citigroup Inc., one of the 20 primary dealers that trade with the U.S. central bank. “The Fed expressed very cautious sentiment toward growth and made it clear they aren’t going to do anything until sustainable growth has picked up.”
Two-year note yields fell five basis points this week, or 0.05 percentage point, to 0.60 percent in New York, according to Bloomberg Bond Trader prices. It was the lowest since March 21. The yields dropped 22 basis points in April, the most since sliding 32 basis points in January 2010.
Ten-year note yields declined 10 basis points to 3.29 percent yesterday, from 3.39 percent on April 22, and fell 18 basis points in April in the first monthly decrease since tumbling 44 basis points in August. They reached 3.28 percent, the least since March 23.
Monthly Return
Treasuries returned 1.1 percent this month, the first monthly gain since January and the biggest since August, according to the Bank of America Merrill Lynch Treasury Master index. The Standard & Poor’s 500 Index of stocks advanced 2.9 percent in April.
Bonds climbed on April 28 as Commerce Department data showed U.S. gross domestic product slowed to a 1.8 percent annual pace in the first quarter, from a 3.1 percent pace in the fourth. The Institute for Supply Management-Chicago Inc. said yesterday its business barometer declined to 67.6 this month, more than economists forecast, from 70.6 in March.
Initial claims for jobless benefits unexpectedly increased last week, Labor Department data showed on April 28.
U.S. nonfarm payrolls added 190,000 workers in April after a gain of 216,000 the prior month, according to the median estimate of economists in a Bloomberg News survey before the Labor Department reports the data on May 6.
‘Not Bouncing Back’
“Growth is not bouncing back as much as economists thought,” said Gary Pollack, head of fixed-income trading at a Deutsche Bank AG Private Wealth Management group in New York that oversees $12 billion. “Fiscal tightening, curtailing of industrial production, subdued inflationary pressures and a Fed that is on hold for a long time have left investors comfortable to go out on the curve and buy bonds.”
A bond market measure of inflation expectations the Fed uses to help determine monetary policy was at 2 no fax payday loan.96 percentage points, compared with a three-month high of 3.13 percent on April 15 and a 2011 low of 2.77 percentage points on Feb. 16.
The five-year forward break-even rate projects what the pace of consumer price increases may be beginning in 2016. It averaged 2.78 percentage points over the past five years.
“The market is battling the notion that there are inflationary risks in the system with the reality that growth has been slower than even the Fed thought it would be,” said Ian Lyngen, a government bond strategist at CRT Capital Group LLC in Stamford, Connecticut. “It doesn’t mean inflation risks are off the table, but slower growth is an offset.”
No Prediction
Bernanke indicated during a press conference after a Fed meeting ended on April 27 the central bank will maintain record monetary stimulus once U.S. debt purchases end in June, reinvesting principal payments from its securities holdings, while the need to cap inflation means further easing is unlikely. He wouldn’t predict when stimulus would end.
The central bank said in November it would buy Treasuries through the middle of 2011 to spur economic growth. It purchased $22.6 billion of them this week as part of the program.
“The broader economy is in a moderate recovery,” Bernanke said yesterday in a speech in Arlington, Virginia. “But our economy is far from where we would like it to be, and many people and neighborhoods are in danger of being left behind.”
The likelihood policy makers will raise the target rate for overnight lending between banks at their March 2012 meeting decreased to 44 percent yesterday, from 61 percent a month ago, Fed funds futures showed.
The central bank has kept the benchmark rate at zero to 0.25 percent since December 2008 to support the economy.
Bill Rates
Six-month bill rates slid to a record-low 0.0895 percent on April 28. Bill rates have fallen as the Treasury cut issuance on behalf of a Fed program as the federal debt ceiling approaches.
President Barack Obama has offered the outlines of a program to reduce the nation’s debt by $4 trillion over 12 years through a combination of spending cuts and tax increases.
“Our deficits are too high,” Treasury Secretary Timothy F. Geithner said April 28 in Detroit. “They will not be solved by future economic growth, and left unaddressed they will hurt future economic growth.”
The Treasury auctioned $99 billion in two-, five- and seven-year notes this week. It sold $29 billion in seven-year debt on April 28 at a yield of 2.712 percent, $35 billion of five-year securities April 27 at a 2.124 percent yield and $35 billion of two-year notes April 26 at a yield of 0.673 percent.
The European Central Bank increased risks for the euro by raising interest rates too soon for a region that’s grappling with a debt crisis, according to Standard Life Investments.
The currency may tumble at least 16 percent to below its “fair value” of between $1.20 and $1.25, said Ken Dickson, investment director for currencies at the Edinburgh-based company, which oversees about 157 billion pounds ($256 billion).
“The euro is a particularly risky currency at these levels because the increasingly restrictive policy and the financial conditions are not really appropriate,” Dickson said in an interview. A series of rate increases “is not appropriate for the conditions or economics of Europe as a whole,” he said.
Investment strategists at Standard Life, Aberdeen Asset Management Plc and Scottish Widows Investment Partnership said last month the biggest risk to markets was the possibility of policy makers getting decisions wrong. While ECB President Jean- Claude Trichet said this month’s quarter-point increase in the refinancing rate wasn’t necessarily the start of a series, colleagues signaled more are to come.
Ewald Nowotny, an ECB governing council member and governor of Austria’s central bank, told Bloomberg News in Washington on April 16 that investor expectations that the rate will rise an extra 50 basis points in 2011 are “well-founded.” Belgian counterpart Luc Coene said on April 17 that monetary “conditions are too accommodative.”
Yo-Yo Rates
Dickson said at his office on April 18 it was “feasible” the ECB may raise the cost of borrowing by more than is justified by the outlook for the economy and inflation, and then be forced to cut rates again.
The ECB in Frankfurt lifted its main rate to 1.25 percent on April 7, the first increase since July 2008, as it sought to contain an inflation rate that exceeded its 2 percent target.
The central bank is trying to balance the need for tighter policy in countries including Germany, whose economy is booming, against the risk of exacerbating the debt crisis afflicting Greece, Ireland and Portugal. Inflation accelerated to 2.7 percent in March, the fastest since October 2008.
The euro has declined 0.7 percent against its nine most- actively traded peers since April 7, trimming this year’s gains to 3 percent, Bloomberg Correlation-Weighted indexes show. The euro’s value was at 101.1241, down from a 2011 high of 102.7109, reached on April 12. The euro traded at $1.4321 yesterday, up 7 percent since Dec. 31.
Policy ‘Fear’
Strategists in Scotland said at a discussion in Bloomberg’s Edinburgh office on March 23 that the timing of rate increases in developed economies, China’s accelerating inflation, the European debt crisis and the U.S. fiscal deficit all posed bigger threats to markets than higher oil prices.
“Our fear is that tightening policy, both from interest rates and through further appreciation in the euro is not the right economic formula for Europe at this time,” Dickson said. “We expect the euro to move to an undervalued position. It’s feasible that it could take longer than this year but we think the end of this year the clear direction of travel would be for the euro to weaken.”
Dickson advises Standard Life money managers on currency investments. The company boosted assets under management by 13 percent last year, while Aberdeen Asset Management Plc, the largest fund company in Scotland, increased its funds 27 percent to 183.3 billion pounds. Scottish Widows Investment Partnership lifted assets 3.2 percent to 146 billion pounds.
Libya’s rebels will agree to a cease-fire if Moammar Gadhafi pulls his military forces out of cities and allows peaceful protests against his regime, an opposition leader said Friday.
Mustafa Abdul-Jalil, head of the opposition’s interim governing council based in Benghazi, spoke during a joint press conference with U.N. envoy Abdelilah Al-Khatib. Al-Khatib is visiting the rebels’ de facto stronghold of Benghazi in hopes of reaching a political solution to the crisis embroiling the North African nation.
Abdul-Jalil said the rebels’ condition for a cease-fire is “that the Gadhafi brigades and forces withdraw from inside and outside Libyan cities to give freedom to the Libyan people to choose and the world will see that they will choose freedom.”
The U.N. resolution that authorized international airstrikes against Libya called for Gadhafi and the rebels to end hostilities. Gadhafi announced a cease-fire immediately but has shown no sign of heeding it. His forces continue to attack rebels in the east, where the opposition in strongest, and have besieged the only major rebel-held city in the west, Misrata.
Abdul-Jalil said the regime must withdraw its forces and lift all sieges.
He stressed the ultimate goal was Gadhafi’s ouster.
“Our aim is to liberate and have sovereignty over all of Libya with its capital in Tripoli,” he said.
The U.N. said Al-Khatib, arrived Thursday in Tripoli.
Forces loyal to Libya’s leader of nearly 42 years spent much of this week pushing the rebels back about 100 miles (160 kilometers) along the coast, and the opposition was trying to regroup. The rebels had mortars Friday, weapons they previously appeared to have lacked, and on Thursday night they drove in a convoy with at least eight rocket launchers _ more artillery than usual.
The rebels also appeared to have more communication equipment such as radios and satellite phones, and were working in more organized units, in which military defectors were each leading six or seven volunteers.
The rebels’ losses this week, and others before airstrikes began March 19, underlined that their equipment, training and organization were far inferior to those of Gadhafi’s forces. The recent changes appear to be an attempt to correct, or at least ease, the imbalance.
A Libyan opposition official said rebels will be able to buy more arms thanks to an oil deal they reached with the tiny Arab nation of Qatar.
Ali Tarhouni, who handles finances for the opposition’s National Transitional Council, said Qatar has agreed to market oil currently in storage in rebel-controlled areas of southeastern Libya.
Tarhouni didn’t say when the deal was signed or when oil shipments will begin. He said one sticking point is how to truck the oil out of the country.
Tarhouni said money from oil sales will be put into an escrow account the opposition will use to pay for weapons, food, medicine, fuel and other needs.
It was unclear where the front line was Friday. Rebels were holding journalists back at the western gate of Ajdabiya, far from the fighting.
Thursday the opposition had moved into Brega, about 50 miles (80 kilometers) east of Ajdabiya, before Gadhafi’s forces pushed them out.
Gadhafi’s greatest losses this week were not military but political. Two members of his inner circle, including his foreign minister, abandoned him Wednesday and Thursday, setting off speculation about other officials who may be next. The defections could sway people who have stuck with Gadhafi despite the uprising that began Feb. 15 and the international airstrikes aimed at keeping the autocrat from attacking his own people low fee pay day loans.
Libyan state TV aired a phone interview with intelligence chief Bouzeid Dorda to knock down rumors that he also left Gadhafi.
“I am in Libya and will remain here steadfast in the same camp of the revolution despite everything,” Dorda said. “I never thought to cross the borders or violate commitment to the people, the revolution and the leader.”
Gadhafi struck a defiant stance in a statement Thursday, saying he’s not the one who should go _ it’s the Western leaders who attacking his military with airstrikes who should resign immediately. Gadhafi’s message was undercut by its delivery _ a scroll across the bottom of state TV as he remained out of sight.
The White House said the strongman’s inner circle was clearly crumbling with the loss of Foreign Minister Moussa Koussa, who flew from Tunisia to England on Wednesday. Koussa is privy to all the inner workings of the regime, so his departure could open the door for some hard intelligence, though Britain refused to offer him immunity from prosecution.
Ali Abdessalam Treki, a former foreign minister and U.N. General Assembly president, announced his departure on several opposition websites the next day, saying “It is our nation’s right to live in freedom and democracy and enjoy a good life.”
Gadhafi accused the leaders of the countries attacking his forces of being “affected by power madness.”
“The solution for this problem is that they resign immediately and their peoples find alternatives to them,” the Libya state news agency quoted him as saying.
His government’s forces have regained momentum on the rapidly moving front line of the battle with opposition forces, retaking the town of Brega after pushing the rebels miles back toward the territory they hold in eastern Libya.
The rebels said they were undaunted, taking heart from the departures in Gadhafi’s inner circle.
“We believe that the regime is crumbling from within,” opposition spokesman Mustafa Gheriani said in Benghazi, the rebels’ de facto capital.
Libyan officials, who initially denied Koussa’s defection, said he had resigned because he was sick with diabetes and high blood pressure. Government spokesman Moussa Ibrahim said Koussa was given permission to go to Tunisia, but the regime was surprised to learn he had flown to London.
“I talked to many people and this is not a happy piece of news, but people are saying, ‘So what? If someone wants to step down that’s his decision,’” Ibrahim said.
Nations behind the campaign of international airstrikes that have hobbled Libya’s military hailed Koussa’s resignation as a sign of weakness in Gadhafi’s reign. They’re hoping for nonmilitary solution, in part because the rebels have been seriously outgunned.
The U.S. has ruled out using ground troops in Libya but it is considering providing arms to the rebels.
Defense Secretary Robert Gates, however, told Congress on Thursday that the U.S. still knows little about the rebels, and that if anyone arms and trains them it should be some other country.
Asked by a lawmaker whether U.S. involvement might inevitably mean “boots on the ground” in Libya, Gates replied, “Not as long as I am in this job.”
NATO is among those saying a new U.N. resolution would be required to arm rebels, though Britain and the U.S. disagree. Several world leaders oppose arming rebels, including Turkish Prime Minister Recep Tayyip Erdogan, who said in London that it could “create an environment which could be conducive to terrorism.”
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