Sunday, December 8, 2013
5:29 AMMexico unveils radical bill to open up energy market
- Legislators in Mexico are today due to start debating a draft bill to open up the country's energy industry and end the decades-long monopoly of state-run Pemex, which suffers from inefficiency, falling output and chronic under-investment.
- The measures would allow private oil companies to explore for, produce, and refine oil and gas, as well as share and market the resources they extract. Firms would also be able to include the projected income of long-term contracts on their balance sheets, something that is crucial for obtaining funds. However, the proposals stop short of offering firms full-blow concessions - a loaded term in Mexico.
- If the bill becomes law, it could add 50-100 bps to Mexico's GDP and prompt rating agencies to give the country's debt a positive outlook, says economist Pedro Tuesta.
- Congress is expected to pass the legislation this week, as it's supported by the main opposition party as well as by the government, although it faces significant public hostility.
- ETFs: UNG, USO, OIL, UCO, EWW, GAZ, SCO, UGAZ, BOIL, DBO, DTO, BNO, DGAZ, UNL, CRUD, KOLD, USL, NAGS, DBE, GASZ, RJN, DNO, SZO, OILZ, UWTI, DWTI, OLO, DCNG, UOIL, JJE, UMX, RGRE, ONG, DOIL, SMK, OLEM, TWTI, UBN
5:15 AMFreezing weather hits airlines, freight companies
- Airlines have canceled over 1,000 flights, while freight companies and online retailers have delayed deliveries, due to severe winter weather across the U.S., particularly in the south.
- American Airlines (AAMRQ, LCC) has been especially affected after more than 400 flights from Dallas/Fort Worth, American's largest hub, were scrapped.
- FedEx (FDX) and UPS (UPS) have also felt the impact of the weather, while eBay (EBAY) has warned of shipment delays.
- Meanwhile, ice storms have cut power to over 200,000 homes from Texas to Tennessee.
- More freezing weather is predicted for tomorrow.
- It's likely to take a while for the economic cost of the storm to be calculated. Insurer Aon (AON) reckons that the losses from the tornadoes and thunderstorms that hit the U.S. last month will top $1B. Allstate (ALL) may take a large hit after towns in Illinois, where it is the second-biggest insurer, were among those to feel the full wrath of the storms.
- ETFs: KIE, IAK, KBWP, KBWI
4:38 AMBP enjoys another court win
- U.S. District Judge Keith Ellison has blocked an attempt by BP (BP) shareholders to join together in a class action suit against the company over accusations that it misled them before and after the 2010 Gulf of Mexico oil spill, which led to a steep fall in the firm's stock price.
- However, Ellison gave the plaintiffs 30 days to file a new motion so they can re-argue their case.
- Ellison based his decision on a Supreme Court ruling in March that a class action against Comcast was improperly certified.
- Ellison's verdict came after BP won a favorable decision earlier last week over the compensation it has to pay out for the spill. That decision could save the company hundreds of millions of dollars.