Energy Roundup: EIA Chief Sees Lower Oil

EIA Chief Sees Lower Oil Prices

Oil prices are likely to fall at least another $10 a barrel by next year, a top Energy Department official said, but he warned gasoline and heating oil prices will continue to rise in coming weeks.

Guy Caruso, chief of the Energy Department's statistical division -- the Energy Information Administration -- said prices should retreat to around $80 per barrel next year based on assumptions about new supplies and limited growth in demand.

But Caruso thinks the possibility of supply disruptions in Nigeria, Russia and elsewhere -- as well as the heavy speculative trading of oil futures on Wall Street -- will keep prices volatile.

Oil Futures Settle Over $94 Again

Oil futures rebounded after a sharp decline in the previous session, as investors questioned whether OPEC will increase production and expectations rose ahead of the Energy Department's weekly inventories report.

Light, sweet crude for December delivery rose $2.92 to settle at $94.09 a barrel on the New York Mercantile Exchange after a $3.45 drop on Tuesday.

Other petroleum futures also rose. December gasoline jumped 5.37 cents to settle at $2.3704 a gallon on the Nymex, while heating oil for December delivery added 7.13 cents to settle at $2.5734 a gallon.

Nymex natural gas for December fell 11.4 cents to settle at $7.835 per 1,000 cubic feet.

Pump Prices Put Brakes on Demand

A weekly survey by MasterCard SpendingPulse found gasoline demand at the pump fell again last week. For the week ending Nov. 9, demand declined 1 percent compared with the previous week, and 1.2 percent versus the comparable week a year ago.

"Demand is down about a million barrels per day from the peak last summer," said study author Michael McNamara said in a telephone interview. "We haven't been down to these levels since last spring."

Rising pump prices appeared to limit visits to the gas station for many drivers. The average retail price for regular gasoline jumped 14 cents per gallon from the previous week, a rise of almost 5 percent week-over-week and equal to the weekly increase for the week ending March 24, 2006. The last week to exceed this increase ended Sept. 23, 2005.

At $3.05 per gallon, the average price of gas is up 37.4 percent from a year ago.

McNamara said drivers have traditionally shown resistance to pump prices above $3 a gallon. But he thinks demand will rise again for the Thanksgiving holiday next week. Many drivers, he said, will have no choice but to drive to family dinners and shopping malls.

"It will be more interesting to watch the year-over-year trend (instead of week-to-week)," McNamara said. "Will we see declines or a bit of a rebound?"

SpendingPulse is a macroeconomic indicator of national retail sales based on aggregate sales activity in the MasterCard payments network, together with estimates for all other payment forms, including cash and check. MasterCard SpendingPulse does not represent MasterCard financial performance.

Chevron Settling Iraq Oil-for-Food Charges

Chevron Corp. will pay $30 million to settle charges that it paid kickbacks to Iraq for oil purchased in 2001 and 2002 under the United Nation's oil-for-food program.

The Securities and Exchange Commission said Chevron agreed to the settlement brought under the Foreign Corrupt Practices Act without admitting or denying the allegations. But the U.S. Attorney for the Southern District of New York said the nation's second largest oil company could still be prosecuted for criminal tax violations.

Chevron agreed to hand over $25 million in profits and to pay a $3 million civil penalty. The company will also pay the Treasury Department's Office of Foreign Asset Controls $2 million.

Four other companies have agreed to settle SEC corruption charges stemming from alleged kickbacks to Saddam Hussein's regime. They include El Paso Corp., Textron Inc., Ingersoll-Rand Co. and York International Corp.

Chevron's financial penalty is the largest of the five.

BP Finds More Caspian Gas

BP PLC said it made "a potentially significant" gas discovery in the Caspian Sea south of Azerbaijan.

The new reservoir lies beneath an existing source at the Shah Deniz field, in water between 164 feet and 1,968 feet deep, some 44 miles south east of Baku.

BP leads development of the field, where it is already producing gas at a rate of 8.6 billion cubic meters a year.

Azerbaijan's estimates natural gas reserves at Shah Deniz could be as much as 1.2 trillion cubic meters of natural gas and 240 million tons of gas condensate.

Solar Shares Rise on Earnings and Supply Deal

Solar shares got a boost after Canadian Solar Inc. posted a surprise third-quarter profit and Suntech Power Holdings Co. reported a silicon supply deal.

Canadian Solar shares surged to a new high of $17.10, before falling back to $14.53, up $3.29 or 29.3. Suntech rose $2.15, or 3.6 percent, to $61.85.

Canadian Solar's profit more than doubled, and the company raised its full-year revenue outlook by $30 million.

Suntech signed two fixed-price supply agreements with an unnamed Korean company. One is an 18-month deal starting in January. The other is a seven-year agreement that starts in 2009. Investors like these supply contracts because they make prices for silicon -- the key component of solar products -- more predictable.

Cowen and Co. analyst Rob Stone said it follows recent supply arrangements with Nitol, Asia Silicon and ReneSola. "The way pricing has been characterized for the Asia Silicon contract and this latest Korean wafer supply deal, we believe that Suntech's cost of material should improve significantly in 2009."

Shares of other solar companies also made strong gains. Sunpower Corp. rose $7.48, or 6.9 percent, to $115.90. Solarfun Power Holdings Co. added $1.10, or 9.9 percent, to $12.19 as Akeena Solar Inc. gained 50 cents, or 9.1 percent, to $6.

Westinghouse and Emerson Extend Nuclear Plant Deal

Westinghouse Electric and Emerson Electric Co.'s Emerson Process Management agreed to a 10-year extension of an agreement for Emerson to provide automation technology for nuclear power plants using the Westinghouse AP1000 design.

The AP1000 is Westinghouse's latest advanced pressurized water reactor, capable of producing over 1,100 megawatts of electricity. It employs a number of passive safety features, the aim of which is to reduce chances of mechanical and human operational failure.

Four Westinghouse AP1000 plants are to be built in China. The design is also the basis for a dozen advanced nuclear plants planned in the U.S. over the next 10 to 12 years.

Westinghouse, a Toshiba company, said its technology is the basis for about half of the world's operating nuclear plants, including 60 percent of the nuclear plants in the U.S.

Emerson shares hit a new high of $56.70, then finished up 25 cents at $55.55.

Coal Stays King in China and India

China and India are under pressure to reduce their carbon emissions, but energy executives and government representatives at The World Energy Congress in Rome agreed the two booming economies will stick with coal -- whether the rest of the world likes it or not.

"In terms of power generation, for those two countries it will be primarily coal, because that's what they have, it's lower cost and it's reliable," John Krenicki, president and chief executive of GE Energy said in an interview with The Associated Press.

Worldwide demand of coal is projected to rise by about 60 percent through 2030 to 6.9 billion tons a year, most of it going to electrical power plants.

--Compiled by AP Business Writer Greg Stec. Questions or comments can be directed to .