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Oil-News Roundup

April 28, 2006 12:40 a.m.

Oil fell to nearly $71 a barrel Thursday on the New York Mercantile Exchange. But crude prices are still up 16% this year and analysts believe they will stay lofty, thanks to brisk global demand and seemingly endless supply worries. Here is today's well of news about oil and fuel prices.

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EXXON's PAYDAY: Exxon Mobil reported blockbuster earnings — quarterly profit rose 7% to $8.4 billion. Revenue for the quarter climbed 8.4% to $88.98 billion. But the world's biggest oil company missed Wall Street's more-demanding forecasts, and investors sent Exxon's stock price down 1.1% by the close. The latest bulging profit from Exxon comes at a time when both Wall Street and Washington are criticizing Big Oil for amassing hefty cash piles. For its part, Exxon trumpeted two statistics to indicate it is trying to get more oil and natural gas out of the ground. The company said its capital and exploration spending totaled $4.8 billion in the quarter, 41% more than in the year-earlier period. And it said its fossil-fuel production averaged 4.6 million barrels of oil equivalent a day, up an unusually strong 5% from a year earlier.

TAX BREAKS AND REBATES: Congress is having second thoughts about the tax breaks it gave oil companies just last year, the New York Times reported. Meanwhile, apparently to atone for their sins, lawmakers are considering giving away more money — this time in the form of $100 gas-tax rebates to consumers, MarketWatch reported. (See related article.)

Reservations About Reserves: Oil analyst Daniel Yergin, in a Wall Street Journal opinion piece, raises questions about the way oil companies account for their reserves.

More Stock for Cnooc: Chinese oil company Cnooc plans to sell up to $2 billion in new stock in a secondary offering, MarketWatch reported.

Preferential Treatment: The Financial Times reported that Nigeria is near a deal to give China special rights in bidding for oil-drilling licenses.

Auto Summit: Bush will meet with the leaders of Detroit's Big Three next month to discuss energy and conservation, among other things, the New York Times reported.

Road Rage: Motorists paying up to $3.50 a gallon for gas are lashing out at oil companies, the Los Angeles Times wrote. Among the “high-octane epithets”: “Greedy. Un-American. The new robber barons.”

Outsourcing Oil: Shell admitted to subcontracting work to groups linked to an insurrection that shut down 40% of Nigeria's oil output in 2003, reported the Financial Times.

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