BUSINESS BRIEFS
Oil futures near $94, a record high
Associated Press
NEW YORK — Oil futures surged to a record high near $94 yesterday, propelled by the weak dollar and news that Mexico's state oil company had suspended a fifth of its oil production because of stormy weather.
Crude futures rallied late in the session as the euro rebounded against the dollar, analysts said. The euro hit a record high against the dollar early yesterday morning, then declined only to rally back later in the day.
The dollar's descent against other major currencies has drawn investors to crude futures as a hedge against the weakening currency and made dollar-denominated oil futures less expensive to people dealing in other currencies, said David Moore, with the Commonwealth Bank of Australia.
Light, sweet crude for December rose $1.67 to settle at a record $93.53 a barrel on the New York Mercantile Exchange after rising as high as $93.80 earlier, a trading record. Crude prices are closing in on the inflation-adjusted highs hit in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $101 or more today.
FED OPTIONS OPEN ON CREDIT WOES
WASHINGTON — The message from Ben Bernanke and his Federal Reserve colleagues is clear: The housing slump will drag on well into next year as credit problems linger. What's not so apparent is how they'll deal with the crisis, although another interest rate cut could come this week.
In recent speeches, Fed policymakers have stressed that the country is going through a period marked by a high degree of economic uncertainty. Given that, Bernanke and his fellow policymakers have kept their options open about the Fed's next move.
Since cutting a key rate last month for the first time in just over four years, Fed policymakers have pledged to "act as needed" to keep the economy growing and inflation in check. That broad pledge has left the door open to, among other things, another reduction to its key rate, holding that rate steady or taking more narrowly tailored action.
With the housing slump deepening, credit troubles persisting and Wall Street on edge, a growing number of investors and economists believe the Fed will lower its key rate.
The federal funds rate probably will be cut by one-quarter percentage point to 4.50 at the end of a two-day meeting tomorrow, these analysts predict. The federal funds rate affects many other interest rates charged to individuals and businesses and is the Fed's most potent tool for influencing economic activity.
HIGH COURT TAKES EXXON VALDEZ CASE
WASHINGTON — The Supreme Court agreed yesterday to decide whether Exxon Mobil Corp. should pay $2.5 billion in punitive damages to victims of the huge Exxon Valdez oil spill that fouled more than 1,200 miles of Alaskan coastline in 1989.
The high court stepped into the long-running battle over the damages that Exxon Mobil owes from the supertanker accident in Prince William Sound that was the worst oil spill in U.S. history. The Exxon Valdez ran aground on a reef, cracking its hull and spilling 11 million gallons of oil.
Hundreds of thousands of seabirds and marine animals died as a result.
The award, even after it was cut in half by a federal appeals court in December, would be the largest punitive damages judgment ever. A jury in Alaska awarded $5 billion in damages in 1994 and the company has been appealing the verdict ever since.
Exxon Mobil is the world's largest publicly traded oil company and last year posted a record largest annual profit by a U.S. company — $39.5 billion.
VERIZON EARNINGS FALL IN 3RD QUARTER
NEW YORK — Verizon Communications Inc. yesterday reported third-quarter earnings that were largely in line with expectations, reflecting steady growth in its wireless operations and a slow decline in its wired telephone business.
The nation's second largest telecommunications company earned $1.27 billion, or 44 cents per share, in the July-September period, down 34 percent from $1.92 billion, or 66 cents per share, a year earlier.
Revenue came to $23.8 billion in the latest quarter, up 5.8 percent from $22.5 billion a year ago.
