Floods drives up gas prices

NEW YORK (CNNMoney) -- Flooding along the Mississippi River is driving up gas prices over fears that refineries could become inundated in coming weeks, especially as the flood heads downriver for Louisiana.
"When we've had flood waters in this part of Louisiana before, it has closed up to 12 refineries," said Peter Beutel, analyst with energy risk management firm Cameron Hanover, referring to the impact of Hurricane Katrina in 2005. "The fear here is that we could see refineries close again."

Gas spending and prices by state

Prices at the pump can vary widely among states due to a number of factors. More

The nationwide average price for unleaded gasoline climbed 1.1 cents to $3.962 per gallon on Wednesday, according to motorist group AAA, reversing the downward trend of the previous five days.

"The concern is that the infrastructure could be dampened or knocked out for a while," said Joseph Stanislaw, an independent senior adviser at Deloitte LLP & Touche LLP.

Stanislaw said the impact is "both physical and psychological." The flood has already impacted some refineries, such as a Valero (VLO, Fortune 500) facility in Memphis, where the flood has already crested.

There are concerns that the flood will wash over refineries in New Orleans in the next two weeks, driving up gas prices further, he said.
He said that supply would be impacted as refineries either shut down or slow down production, going into "maintenance mode."
Valero spokesman Bill Day said the Memphis refinery is still operating, but barge access to and from the facility is limited, so the refinery has had to fall back on other means of shipping, such as pipelines.
The company is also bracing for flood-level waters at its refinery in St. Charles, La., located on the Mississippi River immediately upstream from New Orleans.
"We're taking precautions at that plant very similar to what we do during hurricane season," he said, explaining that the plant is protected by levees but workers are also moving electrical equipment to higher ground and stocking up on supplies. "We don't expect there will be any interruptions to production."
Some of the largest refineries in the U.S. are located next to the Mississippi River downstream from Memphis, which means they have yet to be impacted by the water. But flood-level waters are imminent as they head downstream.

The riverside refineries in Louisiana include ExxonMobil's (XOM, Fortune 500) facility in Baton Rouge, the second-largest U.S. refinery with a daily capacity of 504,500 barrels. The fourth-largest U.S. refinery, owned by Marathon Oil Corp., (MRO, Fortune 500) is located on the Mississippi River in Garyville and produces 436,000 barrels a day. ConocoPhillips (COP, Fortune 500) has a refinery next to the river in Belle Chasse, immediately downstream of New Orleans, with a daily production of 247,000 barrels.

"We're doing everything we can to protect our facility," said ExxonMobil spokesman Kevin Allexon, explaining that workers are sandbagging parts of the refinery complex and moving equipment to higher ground. "We're going to continue to operate as best we can."
Spokesmen Marathon and ConocoPhillips were not immediately available for comment.
Tom Kloza, the chief oil analyst for Oil Price Information Service, said that rival refineries will capitalize on the shut-downs.
"The notion of flood-inspired refinery problems had tones of the Epic of Gilgamesh yesterday," said Kloza, referring to an ancient Iraqi story that references a legendary flood. "The water poses logistical issues but there is incredible profit motive to run refineries everywhere else and take advantage of incredibly wide refining margins."
Were it not for the flood, gas prices would probably be headed lower, said Beutel. He said that wholesale gasoline prices, which typically lead retail prices, were down last week on a variety of economic factors.

This would include a recent plunge in oil prices. Last week, crude oil futures dropped nearly 15% in their biggest weekly decline since last 2008. 

US trade deficit widens in March on pricier oil

US trade deficit widens in March, large increase in oil imports outpaces fast rise in exports
.US. companies sold the most goods and services overseas in nearly two decades. But a big jump in oil prices pushed the nation's trade deficit higher in March.
The trade deficit rose 6 percent to $48.2 billion, the Commerce Department said Wednesday. That's the highest level since June 2010 and up from $45.4 billion in February.
Exports increased to $172.7 billion, the most on records dating back to 1993. A weaker dollar has made U.S. goods cheaper overseas. Exports have also risen because of rapid growth in developing countries. U.S. companies exported more autos, chemicals, and agricultural goods in March.
However, oil imports soared to $39.3 billion, an 18 percent rise from the previous month. It was the highest level since August 2008 and reflects steep price increases, as well as greater demand. Excluding oil imports, the deficit narrowed.
The average price for a barrel of imported crude oil was $93.76 in March, up nearly 7.6 percent from February. Oil prices have risen even further since then, despite declines in recent weeks. Oil closed at about $104 per barrel on Tuesday.
The trade deficit is currently running at a $562.8 billion annual pace. That's above last year's total of $495.7 billion. Economic growth generally slows when imports outpace exports because more jobs go to foreign workers.
Economists expect the fast rise in exports to boost growth in the April-June quarter, even with high oil prices widening the deficit. That's because the government adjusts for inflation when calculating the nation's gross domestic product.
"The details in the report are encouraging for economic momentum," said Joseph LaVorgna, an economist at Deutsche Bank, in a note to clients. "Strong external demand fueled by a near-record low ... dollar is lifting exports, while the rise in imports is evidence of burgeoning domestic demand."
The trade deficit with China, meanwhile, decreased to $18.1 billion. That's down slightly from February.
But it is expected to rise in the coming months. On Tuesday, China reported a big increase in its April trade surplus. Its imports fell while exports jumped 30 percent. That's likely to raise pressure on China to let its currency rise.
The trade gap between the two countries was a top issue in high-level meetings between U.S. and Chinese officials earlier this week, though little progress was made on the currency issue.
The devastating earthquake and tsunami in Japan on March 11 didn't impact U.S. trade figures. Imports from Japan rose by $1.3 billion and U.S. exports to that country also increased. But disruptions to Japan's auto production are likely to reduce U.S. imports in coming months, economists say. That could narrow the trade gap.
U.S. companies sold more autos, industrial materials, and food and consumer goods in March. Auto and auto part exports rose to $11.6 billion from just below $10 billion in February.
In addition to oil, imports of computers, autos and auto parts, and aircraft rose in March.
Source:cnbc news

How Raj Could Have Gotten Away With It

 

He was close - he knew the government could be watching him, and he knew to cover his tracks. But he took a couple of missteps.

It's become obvious from what the jury used to convict him how Raj could have built a much stronger defense and gone free.

Here's what Raj should have done.

How to insider trade "legally:"

Get someone to steal the information: Weirdly, according to the definition of insider trading they're using in Raj's trial, your tipper has to be a person with material nonpublic information that they got because they are an insider at the company or know someone who is. So if your tipper just breaks in and steals the information for you, you're in the clear.

• Ask your tipper: Are you allowed to tell me this? Get him or her to say yes, and you've escaped the "knowingly accepted insider information from a company insider who received the tip in violation of their position of trust" clause.
• Tell at least 5 people what you know. Preferably, get a news article written about it. Raj's mistake is that he asked Danielle Chiesi to keep "radio silence." The prosecution says that's evidence that he knew the tip was material and nonpublic. If you're tell a few people you can say that you didn't know it was material.

• Ask your tipper: Is this info important? You're looking for an answer like this: "Nah, it's no big deal. A lot of people know about it already and no one really cares." This will challenge the materiality of the tip too.

• Be mean to your tipper. The prosecution has to prove that the tipper benefited from giving you the tip. So obviously, don't give him or her any money or give him anything quantifiable (like two BMWs). But don't be nice either. The prosecution says friendship and just enjoying giving the tip are enough to count as a "benefit." He or she should never say "thank you" and they should sound like being on the phone with you is an unpleasant experience.

• Last and most importantly: Only insider trade with someone you have something big on. That will ensure they don't testify against you like Anil Kumar did, and say the whole thing was your idea, and then laugh in your face about it.

Read more: http://www.businessinsider.com/raj-how-to-insider-trade-legally-2011-4#ixzz1M3dV30JM