November 15, 2013 | By Lindsay Frost
Warren Buffett's Berkshire Hathaway Inc. on Thursday disclosed a new $3.45 billion stake in Exxon Mobil Corp., after buying 40.1 million shares in the world's largest publicly traded oil company, according to Reuters. Although the investment represents just 0.9% of Houston-based Exxon's shares, analysts said it reflects strong support by the second-richest American of one of the world's largest and most profitable companies. Exxon shares rose 84 cents, or 0.9 percent, to $94.06 in after-hours trading following Berkshire's disclosure of its stake. Read more...
Update: Odebrecht explores cracker, derivatives complex in West Virginia
From IHS – Chemical Week | November 15, 2013 | Clay Boswell
(This story has been updated to include a statement from Braskem reaffirming its commitment to the Comperj project.)
Odebrecht, the parent of Braskem, is exploring the possibility of building a petrochemical complex in West Virginia, the state’s governor announced in a press release on 14 November. The project, located in the Marcellus shale region of the Northeast United States, would include an ethane cracker, three polyethylene plants, and associated infrastructure for water treatment and energy co-generation.
Odebrecht, a Brazilian engineering and construction firm, would operate the water and electric utilities associated with the complex, which the company calls the Appalachian Shale Cracker Enterprise, or Ascent. Braskem would run the petrochemical operations and market its products.
The news comes within days of a report by a Brazilian newspaper, Valor Economico, that Braskem’s Comperj project has stalled amid concern that it would no longer be competitive, given the cost advantage granted North American producers by the shale gas revolution. According to the report, Petrobras and Braskem have been unable to agree on the price of ethane feedstock.
Braskem has issued a statement reaffirming its commitment to Comperj. “Odebrecht's leadership role will allow Ascent, once its feasibility is confirmed, to be executed by Odebrecht itself," the company says. "This will allow Braskem to continue prioritizing its current projects, the most important of which is the Comperj project in Rio de Janeiro, Brazil. The project will also enable Braskem to benefit from the opportunities provided by competitive shale gas feedstock in the United States. “
Odebrecht is the second company to reveal its interest in setting up an world-scale ethylene plant close to Marcellus shale deposits, which have become a rich source of inexpensive ethane. The first, Shell Chemical, announced in 2011. The company has since chosen a site in Monaca, PA, and begun taking bids for ethane supply.
Odebrecht has already secured a purchase option on a site in Parkersburg, WV.
“As the United States’ leader in polypropylene production and with a significant footprint already in the region, we are excited about today’s announcement,” says Fernando Musa, CEO of Braskem America. “Should Ascent materialize, we look forward to serving our clients in the polyethylene market.”
Governor Earl Ray Tomblin notes that the project is only in its early phases. “Although we realize much work remains to be done, this announcement of a potential project is tremendous news for our state and our region,” he says.
U.S. Oil production now exceeds imports
U.S. oil production in October exceeds imports for the first time in 18 years, according to the U.S. Energy Information Administration.
The modest losses for Nymex oil on Thursday came amid U.S. government data showing a rise in crude supplies for the eighth straight week.
In other energy trading Friday, December gasoline -0.80% slipped nearly 3 cents, or 1%, to $2.66 a gallon on Nymex, giving back about half of the almost 6-cent rise the day before. Prices ended 4.1% higher than a week ago.
December heating oil +0.32% added less than a penny to finish at $2.94 a gallon, up 2.3% on the week, while December natural gas +1.08% closed at $3.66 per million British thermal units, up 5.5 cents, or 1.5% — for a 2.8% climb for the week. Myra Saefong is a MarketWatch reporter based in San Francisco.
William L. Watts is MarketWatch's senior markets writer, based in New York. Michael Kitchen in Los Angeles contributed to this report.
Why Crude Oil Prices Could Soar 40% by Summer 2013
Ben Gersten writes: Oil prices have continued their upward move that began at the end of 2012, gaining over 8% in the past month.
Now, an oil analyst with Goldman Sachs Group Inc. (NYSE: GS) predicts Brent crude could soar much higher in the next few months.
Jeff Currie, GS's head of commodity research, said he wouldn't be surprised "if we woke up in summer and oil cost $150" per barrel.
That would be a 35% gain from Brent's recent price of $111.
Using the narrowing spread between the Brent price and that of West Texas Intermediate (WTI), at $95, Currie's forecast implies a 40% increase in WTI prices.
And there are many reasons oil could hit those highs by summer, or even sooner. Read more...