Platts To Reveal Final Plans For Dated Brent Changes Mid-Sept

--Platts is to reveal final proposals on changes to way it calculates dated Brent in mid-September

--Changes needed to combat declining production volumes of crudes feeding into Brent

--Shell says changes should be delayed to 1Q 2013

LONDON -(Dow Jones)- Oil price assessment company Platts plans in mid-September to reveal its final proposals on changes to the way it calculates dated Brent, the benchmark used to price more than half the world's crude oil, after extensive consultations with the oil industry conclude on Sept. 9, representatives of the company said this week.

Platts wants to boost liquidity in the market so the global oil benchmark is less vulnerable to manipulation by big players or price spikes due to production and maintenance issues at key North Sea oil fields. The McGraw Hill (MHP) company has proposed extending the timeframe over which it looks at trades to calculate the price of the benchmark on the physical market--a move it says will increase the volume of trades considered by 25% to 30%.

The core of what Platts is trying to do is protect the integrity of the assessment process, Platts Global Director of Markets Reporting Jorge Montepeque said.

"The fact is, production [in the North Sea] has fallen. There were some issues this summer and there are issues every summer," he said.

This year, maintenance on the giant Buzzard oil field and the discovery of a World War II mine near a major pipeline have resulted in shutdowns on top of earlier delays and cancelations to crude oil cargoes. The various issues combined to cause the supply of Forties crude, the largest component of the Brent marker, to fall to its lowest level since May 2008, pushing up prices in the physical market and feeding through into futures prices.

Declining output of North Sea crudes feeding into the benchmark has been an ongoing problem over the past decade. Initially, the benchmark comprised only Brent, but as production peaked and began sharply declining, it wasn't difficult for a market participant to buy all the cargoes in a given month and push the price up. Platts added other North Sea crude grades Forties, Oseberg and Ekofisk to bulk up the Brent benchmark and increase liquidity in the market.

Now, it wants to boost liquidity in the number of trades evaluated in the trading window for the same reason.

Platts currently evaluates oil prices in a 12-day window 10 to 21 days ahead of the current date. From January 2012, Platts wants to expand the period to a 16-day window based on trades made 10 to 25 days ahead.

However, not all market participants are happy with the changes Platts plans to implement.

In mid-August, Royal Dutch Shell PLC (RDSB.LN), a major player in the North Sea oil market, issued a public statement on the website of its trading arm, Stasco, criticizing some of the proposed changes and calling for delays to their implementation.

Shell wants to delay the revisions to the first quarter of 2013 and link them with changes to the expiry date of Brent on the futures market and an earlier publication of the crude blend's monthly loading volumes.

The Anglo-Dutch oil giant said it had discussed its ideas with some of the more active players in the Brent market and had found general support for them.

North Sea crude traders from other integrated oil companies and trading houses told Dow Jones Newswires that there was general support for Shell's proposals.

"Certainly there seems to be widespread thought that implementation of a change as soon as January 6, 2012 would not be wise," a North Sea crude trader said.

Implementing the changes too quickly could be disruptive and would require large-scale coordination between a number of people in the futures market as well as the physical market, traders have said.

Platts executives said a final decision on when the changes would be implemented hasn't yet been taken, adding that the company is consulting with a very wide range of market participants and would consider all their views.

"It is not uncommon at all to get many different views...to call out one is not particularly relevant for us," said Dan Tanz, vice president of editorial for Platts. It is not about who says what, it is the power, logic and rationale behind the proposals put forward, he said.

However, market participants said Platts would find it hard to ignore such an emphatic statement from a company as prominent in the North Sea market as Shell.

"I think it unlikely they would be able to ignore such an important player and think they can override Shell," another trader in the North Sea market said.

(Konstantin Rozhnov in London contributed to this article.)

Copyright © 2011 Dow Jones Newswires

Glum Fed considered even bolder action in August

By Pedro Nicolaci da Costa

WASHINGTON (Reuters) - The Federal Reserve considered a range of actions to help a struggling economy at its August meeting, including the unprecedented step of tying the interest rate policy outlook to a specific unemployment level.

Before settling on a promise to keep rates near zero until 2013, a decision that prompted three dissents, Fed officials noted the economic outlook had worsened significantly, arguing that the weakness seen during the first half of the year could no longer be dismissed as solely temporary.

"Participants noted a deterioration in labor market conditions, slower household spending, a drop in consumer and business confidence and continued weakness in the housing sector," according to minutes from the central bank's August 9 meeting released on Tuesday.

Against that backdrop, a few Fed members wanted to take even bolder action but, the minutes said, "were willing to accept the stronger forward guidance as a step in the direction of additional accommodation."

The economy sputtered in the first six months of 2011, with gross domestic product expanding at less than a 1 percent annual pace. The jobless rate, meanwhile, remains stuck above 9 percent.

At its meeting, the Fed discussed a range of tools for additional monetary easing, including engaging in further asset purchases or shifting the composition of bonds on the central bank's portfolio toward longer-dated maturities.

Purchases of longer-dated securities could further depress long-term borrowing costs, though some Fed officials expressed doubt that any of these steps would offer much support to growth.

Still, given the prospect of a protracted snail-paced recovery and tighter fiscal policy, Fed officials scrambled for unorthodox ways they could bolster the recovery.

"In choosing to phrase the outlook for policy in terms of a time horizon, members also considered conditioning the outlook for the level of the federal funds rate on explicit numerical values for the unemployment rate or the inflation rate," the minutes said.

Vermont flooded after Irene's torrential rains

BRATTLEBORO, Vt. (Reuters) - Vermont residents battled epic flooding Monday after the remnants of Hurricane Irene set off the state's worst deluge in more than 80 years, washing out roads, knocking out power and forcing hundreds into shelters.

At least one person was killed after being swept into a swollen river in the mountainous, land-locked New England state, which rarely sees tropical storms.

Hurricane Irene had been reduced to tropical storm status by the time it reached Vermont but it still dumped 7 inches of rain that flooded homes and businesses. Floodwaters gushed through downtown Brattleboro, an artsy community of 12,000 along the Connecticut River.

Several of the state's historic covered bridges were washed away as Irene's rains sent rivers spilling over their banks in what officials called catastrophic flooding and the worst natural disaster since 1927.

While the sun was out on Monday, officials worried that more damage could still be done. "The bigger rivers haven't crested yet because the smaller brooks feed into them," Governor Peter Shumlin said in a radio interview with Democracy Now, a daily TV/radio news program. "It means more flooding. We continue to be challenged here."

Several people had to be rescued from floodwaters and some 50,000 people are without power. Some patients at the Vermont State Hospital had to be moved within the grounds and 80 people from a nearby nursing home were evacuated to Rutland Regional Medical Center, a spokesman said. The governor and others were surveying the vast damage by helicopter, officials said.

In Woodstock, called America's prettiest small town by Ladies Home Journal, a water main break left the town without water coming from faucets and toilets but with plenty gushing through the streets, including through the bottom of the Woodstock Inn. The Simon Pearce glass blowing studio in Quechee, which draws power from the Ottaquechee River, was flooded and the historic bridge leading to the studio, store and restaurant was teetering, a staff member said.

"It is complete mayhem up here," a spokesman at the Woodstock police department said.

State offices, businesses and many schools were closed on Monday as officials urged Vermont residents to stay indoors and off the roads as emergency crews approach the worst hit areas in Rutland and Addison counties in the south and middle of the state.

Weather reporters said the flooding was the worst in Vermont since 1973 and perhaps since 1927.

Hurricane Irene chugged up the eastern seaboard Saturday and Sunday, starting in North Carolina, and appears to have inflicted the greatest damage farther inland with heavy rains in western Massachusetts and Vermont.

Overnight every road in Vermont -- except interstate highways Routes 89 and 91 -- was closed at one one point due to flooding, Robert Stirewalt, a spokesman for the Vermont Emergency Management Agency said Monday.

"Things are bad throughout the state and we are just starting the recovery process in the light of day," he said. "It is too early to say what the damage will be as we assess it and we hope it won't be more extensive than last night indicated."

On Sunday and overnight nine Red Cross shelters and 27 community shelters opened their doors to aid the state's roughly 625,000 citizens and by Monday officials said they were filling up fast with people whose homes were waterlogged.

Known for its many rivers and creeks, Vermont had swift water rescue teams ready to move and every single emergency worker in the small state was called up to help, officials said.

But even some of the helpers encountered terrifying conditions and had to turn back on some occasions, officials said. The state Emergency Management Office in Waterbury was forced out to evacuate its building overnight and move in with a the Federal Emergency Management Agency in a nearby building. (Additional reporting by Toni Clarke and Lauren Keiper; Editing by Bill Trott)

France eyes financial transaction tax deal at G20

PARIS (Reuters) - France wants concrete results for a controversial international tax on financial transactions at November's G20 summit of leading economies, Finance Minister Francois Baroin said in remarks published on Sunday.

Francois Baroin and his German counterpart Wolfgang Schaeuble met in Paris on August 23 with a view to tabling a joint proposal to their European Union partners in September.

European banks have poured scorn on the idea of a financial transaction tax, a long-standing French proposal, saying it would not stabilize markets.

"We are working on a proposal that we will present to the European Union in September, which will be studied in the autumn," Baroin said in an interview with newspaper Le Journal du Dimanche. "We are determined to get results at the G20 on November 3-4 in Cannes."

European Central Bank President Jean-Claude Trichet has said in the past that such a tax would not work unless it is applied globally and Britain, home to the region's biggest financial center, is also opposed to the EU going it alone.

Baroin said no definitive position on the details of the proposal had been set.

Last week's meeting with Schaeuble also aimed to flesh out objectives President Nicolas Sarkozy and German Chancellor Angela Merkel agreed earlier in August to step up economic governance of the euro zone, including specific plans for France and Germany to align their corporate tax bases and tax rates from 2013.

Baroin said the company tax convergence would serve as an example for wider European integration and that proposals would be set out for 2012 with its adoption the following year.

"In practice, we anticipate beginning convergence as soon as September's budget amendments," Baroin said.

(Reporting by John Irish; Editing by David Holmes)

IMF sees no new recession but risks rising: Lipsky

WASHINGTON (Reuters) - The IMF's updated forecasts to be released next month do not foresee a global recession but risks have risen, a senior International Monetary Fund official said on Friday.

"I can say that our base case is certainly not a recession," IMF First Deputy Managing Director John Lipsky told CNBC television. "There's no doubt however that risks have risen given the weak performance in many economic data in the last few months," he added.

Lipsky said rising risks to the global economy reflected a lack of confidence in policymakers' ability to rein in debts.

He urged both the United States and Europe to develop credible medium-term fiscal plans to boost confidence in their ability to cut their debt levels.

"It is clear what is needed is credible medium-term fiscal plans that will give confidence to investors and others that the deficit will be controlled and fiscal policy will be appropriate in the medium term," Lipsky said, speaking from the U.S. Federal Reserve's annual retreat in Jackson Hole, Wyoming.

"The more credible medium term planning, the more flexibility that will exist with temporary impacts, such as potential impact of the hurricane (Irene)," said Lipsky.

He said effective fiscal measures could include a combination of U.S. tax reforms and clear-cut spending plans.

The White House said President Barack Obama and IMF chief Christine Lagarde spoke by phone earlier on Friday and agreed that the world economy needs further steps to boost growth in the short term.

(Reporting by Lesley Wroughton; Editing by James Dalgleish)

New York City to Shutter Mass Transit on Saturday

New York City's mass transit system, which serves eight million riders a day, will be shut ahead of Hurricane Irene at approximately noon on Saturday, Governor Andrew Cuomo said in a statement on Friday.

The shutdown includes subways, buses and commuter lines that serve the surrounding suburbs, and the loss of mass transit could complicate any possible evacuations.

(Reporting by Joan Gralla; Editing by Gary Crosse))

British American Tobacco Buys 200,000 Own Shares To Hold In Treasury

LONDON -(Dow Jones)- British American Tobacco PLC (BATS.LN), said Thursday that it purchased 200,000 of its Ordinary shares of 25 pence each to hold in treasury.

MAIN FACTS:

-The average price was 2,693.6757 pence per share.

-The highest price paid was 2,747.5 pence per share and the lowest price paid was 2,647.5 pence per share.

-Following the purchase of these shares, the Company holds 48,249,554 of its shares in Treasury.

-The Company has 1,977,721,221 ordinary shares in issue excluding Treasury shares.

Copyright © 2011 Dow Jones Newswires

Peru's Buenaventura Mining Company Says No Effects From Quake

LIMA, Peru -(Dow Jones)- One of largest mining companies operating in northern Peru says that a 7-magnitude earthquake that hit Peru on Wednesday hadn't interrupted operations.

Roque Benavides, chief executive of precious metals mining concern Compania de Minas Buenaventura (BVN, BUENAVC1.Vl), said in an email message that he wasn't aware of any damage from the earthquake on its operations in northern Peru.

Buenaventura holds a 43.65% share in the Yanacocha gold mine in northern Peru, while Newmont Mining Corp. (NEM) has a 51.35% stake.

Barrick Gold Corp. (ABX) runs the Lagunas Norte mine in northern Peru, but no one was immediately available for comment at that company.

The U.S. Geological Survey said that the earthquake struck at 1746 GMT and had a magnitude of 7, with the epicenter near the border with Brazil. The quake occurred at a depth of 145 kilometers (90.2 miles), the USGS said.

The Peruvian Geological Institute said that there is no possibility of any tsunami, as the earthquake was located in the Amazon jungle region.

Copyright © 2011 Dow Jones Newswires

MUFG's Morgan Stanley stake now worth $1.8 billion less

NEW YORK (Reuters) - Mitsubishi UFJ Financial Group has lost $1.8 billion from its common stock investment in Morgan Stanley so far, at least on paper, according to a regulatory filing on Tuesday.

MUFG's paper losses show how treacherous investments in the financial sector can be as financial markets whipsaw.

MUFG converted 7.8 million Morgan Stanley preferred shares into 385.5 million shares of common stock at a price of $20.34 per share on June 30. On Monday, the company's shares closed at $15.67, but on Tuesday afternoon the bank's shares were 11 cents higher at $15.78.

The conversion was previously announced, but specific pricing details were released in MUFG's filing with the U.S. Securities and Exchange Commission on Tuesday.

Morgan Stanley said in April it would offer MUFG an additional 75 million common shares to convert MUFG's preferred stake earlier than scheduled. MUFG said Tuesday that it still holds 519,882 shares of Series C non-voting perpetual preferred stock.

Morgan Stanley took a $1.7 billion non-cash charge to second-quarter earnings to reflect the cost of issuing additional stock. Not having to pay preferred dividends saves the bank $800 million per year for the securities.

Morgan Stanley issued the preferred stock at the height of the financial crisis in 2008 in exchange for a $9 billion lifeline from MUFG. The securities were scheduled to be converted or repurchased in 2013.

The early conversion helped lift Morgan Stanley's common equity, as it works to comply with tougher global capital rules. The bank's Tier 1 common ratio rose to 14.6 percent at June 30 from 11.8 percent three months earlier.

Since the time of the MUFG conversion, Morgan Stanley shares, like those of other large banks, have been pummeled by broad concerns about the markets and global economy.

MUFG's 385.5 million common shares have taken a paper loss of $1.8 billion since June 30, even though they were issued at a 13 percent discount to the previous day's closing price.

(Reporting by Lauren Tara LaCapra; Editing by Dan Wilchins and Matthew Lewis)

Crude Prices Slip as Libya Oil Restart Eyed

Reuters

Brent crude edged lower on Monday in choppy trading as investors hoped the process to restart oil exports from OPEC member Libya would begin soon as the country's six-month-old civil war neared an end.

Brent pared losses, bouncing with rallying U.S. crude on the day the September contract expired as rising Wall Street equities provided a boost.

Brent crude's forward curve flattened in the months through early next year and its premium to U.S. crude fell on hopes that a swift end to Libya's civil war would bring the country's oil exports back to the market.

Some output will be able to restart in a few months, but it will take as long as 18 months to reach prewar levels, Libya's former top oil official Shokri Ghanem said.

Muammar Gaddafi was a hunted man as remnants of his forces made a last-ditch stand in Libya's capital.

"While the Libyan leadership could be in the state of flux for several more days or even a few weeks, developments thus far strongly suggest a return of Libyan exports to the global market place," Jim Ritterbusch, president at Ritterbusch & Associates in Galena, Illinois, said in a note.

U.S. crude prices had an early boost from dollar weakness before the U.S. currency recovered as the euro fell back. The dollar had been pressured on speculation that the Federal Reserve this week might indicate a need to take additional measures to support an ailing economy.

U.S. equities also seesawed, slipping early, bouncing and pushing higher, then ending little changed as investors remained cautious after recent sharp declines.

Brent October crude fell 26 cents to settle at $108.36 a barrel, having bounced off a $105.15 low. Brent also had technical support from its intraday recovery back above its 200-day moving average of $107.91.

U.S. expiring September crude rose $1.86 to settle at $84.12 a barrel, having recovered from $81.13. More actively traded October crude rose $2.01 to settle at $84.42 a barrel.

Brent's premium to U.S. crude narrowed to below $24 a barrel, after reaching a record $26.69 on Friday.

U.S. crude trading volumes slightly outpaced Brent. Both topped 500,000 lots traded and Brent surpassed its 30-day average.

Part of U.S. crude divergence from Brent is because traders are starting to bail out of their Brent/U.S. spread positions, said Dominick Chirichella of the Energy Management Institute.

Brent's premium to U.S. crude, partially blamed on the glut of crude at the Cushing, Oklahoma, hub, may linger as the effort to build a pipeline to move crude to the refinery-rich Houston area stalls.
Enterprise Products Partners' cancellation last week of a joint venture pipeline with Energy Transfer Partners due to lack of shipper commitment was the first casualty in the race to build a pipeline.

Before the war cut Libya's output, the country pumped around 1.6 million barrels per day. Most of Libya's high-quality crude went to European refiners. After Libyan exports ceased, tighter supply sent Brent to a two-year high of $127.02 in April.

"The limited resistance to rebel forces entering Tripoli may herald a swift resolution to the civil war, opening the potential for the resumption of Libyan oil exports by the end of 2011," JPMorgan said in a note to clients.

Ahead of weekly reports from industry and government on U.S. oil inventories, a preliminary survey of analysts on Monday yielded a forecast for crude stocks to have fallen slightly last week.
Hurricane Irene, the first hurricane of the 2011 Atlantic season, was expected to hit Florida but projected to turn away from the concentrations of production and refineries to the west.

ECONOMIC CONCERNS REMAIN

The sputtering global economy had investors awaiting any indications of central bank intent on stimulus at a gathering of policymakers and other financial leaders in Wyoming later this week.

Federal Reserve Chairman Ben Bernanke will make a speech on Friday at a lodge in Wyoming's Jackson Hole, where policymakers and academics meet once a year.

Bangladesh textile millers threaten to shut

DHAKA (Reuters) - Textile manufacturers in Bangladesh said they might be forced close their factories unless the government acts to provide more cash incentives and restrictions on imported yarn and fabrics from India.

"Without these measures we can not survive," said Jahangir Alamin, president of Bangladesh Textile Mills Association.

He told Reuters in an interview on Sunday that the manufacturing firms also can not utilize their capacity due to shortages of gas and electricity.

"We will have no alternative but to shut our business, after the Muslim Eid al-Fitr festival at the start of September, as half of the (manufacturing) firms have already become inoperative," said Jahangir Alamin.

He said that if the government did not raise an cash export incentive for textile makers to 15 percent from 5 percent now, "it would be very difficult for them to survive and remain competitive in the international market.

"While the cash incentive should remain in force until 2015, the government should also take initiative to encourage use of local fabric and yarn," Alamin added.

The government is considering these issues after meeting on Sunday, but no specific decisions were announced.

There are more than 1,300 primary textile manufacturing factories in Bangladesh's textile sector with a total investment of more than $4.0 billion, which help the country to save huge foreign exchange.

"Now we are able to supply up to 80 percent and 40 percent of fabrics for the export-oriented knit and woven industries respectively," Alamin said

Readymade garments are the principal export earner for Bangladesh, and also the biggest employer, after agriculture, in the country.

The textile mills could not use more than 35 percent of their production capacity due to a lack of electricity and gas supplies, Alamin said.

He added that business conditions deteriorated further due to relaxation of rules of origin by the European Union earlier in the year.

Bangladesh at present suffers daily shortages of up to 2,000 megawatts of electricity and 500 million cubic feet of gas due to demand that is growing much faster than output.

"Besides, we had to buy cotton at exorbitant prices from the international market during the March-April this year, but now the market rate of cotton has dropped to less than half of its procurement rate."

Purchasing cotton at high price caused the millers to incur substantial losses, to the extent that many factories became unable to continue production.

Alamin said that cotton-exporting India frequently changed its trade policies according to the state of demand but Bangladesh did not take any measure as such, that pushed its textile sector to an uneven competition.

"India has been giving cash support at the rate of over 25 percent in different stages to its textile sector," he said.

"Recently, India has declared 7.67 percent cash incentive on export of knit and woven fabrics and yarn, effective from April 1, 2011. The new measure has come as another severe blow for us," Alamin added.

The BTMA president said that due to an increasing trend of importing yarn and woven and knit fabrics at rates dictated by ups and downs in international cotton market, the local millers in Bangladesh are suffering.

"Local garment factory owners have been importing knit and woven fabrics from India at prices lower than our production cost, but the government did not take any initiative to check the import despite repeated requests," Alamin said.

"As a result, Bangladeshi millers have a stockpile of 2.5 million tons of unsold yarn, worth $121 million."

Bangladesh imported 278 million kgs of yarn and fabric in the first half of 2011, which is 25 percent higher than in the same period of last year, according to government and BTMA statistics.

(Reporting by Serajul Islam Quadir; Editing by Anis Ahmed and Hans-Juergen Peters)

Germany rebuffs renewed euro bond debate

BERLIN (Reuters) - Germany on Saturday rebuffed renewed calls that euro zone countries should issue joint euro-denominated bonds and have a joint finance minister, arguing that would only be possible if fiscal policy were collective already.

"As long as we don't collectivise financial policy we also cannot have a uniform interest rate level. The different rate levels are the incentive to run a solid economy or the punishment if you are not running it properly," Finance Minister Wolfgang Schaeuble, speaking at his ministry's open day.

"So the question is, how do we manage to promote political integration step by step. We cannot collectivise interest rates," Schaeuble said, referring to proposals that the euro currency bloc should issue common euro bonds.

Germany has led resistance to calls that the euro currency bloc should issue common euro bonds and expand its bailout fund to calm repeated market selloffs of government bonds and bank shares of vulnerable debtor countries.

Der Spiegel magazine reported finance ministry calculations that showed issuing joint euro bonds would cost Germany billions of euros each year.

However, Martin Blessing, Chief Executive of Germany's second-largest lender Commerzbank said a European finance minister with sway over member states' taxes and budget was needed to lead the euro zone out of its debt crisis.

Berlin is also facing criticism over its own proposals to solve the euro zone crisis, which include a financial transaction tax that Chancellor Angela Merkel and French President Nicolas Sarkozy said this week they would propose to other euro zone members.

Schaeuble is to meet his French counterpart Francois Baroin in Paris on Tuesday to discuss the health of Europe's finances including remedies such as the tax.

"The big tax income will fail to appear," he told Bild am Sonntag newspaper. Proponents of the tax expect it could raise 30 to 50 billion euros a year.

(Reporting by Annika Breidthardt; editing by James Jukwey)

Shell Stops North Sea Pipe Leak

--Shell divers close relief valve to stop affected pipe leaking

--Removal of remaining crude in pipeline will "take time"

--"Extensive" monitoring phase to begin

--No impact so far on sea, bird life

LONDON -(Dow Jones)- Royal Dutch Shell PLC (RDSA.LN) has stopped a leak from an underwater pipe at its Gannet Alpha platform that had been spilling crude oil into the North Sea for more than a week, the Anglo-Dutch major said Friday.

"Today, Shell divers closed the relief valve from which oil had been seeping at a rate of less than one barrel a day," said Shell. "Now there will be a phase of monitoring the flowline [the pipe] to check that it remains sealed," it added.

Shell has been battling a leak at the 18-year-old installation since last Wednesday. It estimates some 218 tons of crude oil have already spilled into the sea since then, though this isn't expected to reach land. Shell and U.K. environmental authorities say they expect the oil to be naturally dispersed through wave action.

"It is clearly good news that Shell has managed to close the valves," said Scottish Environment Secretary Richard Lochhead.

Meanwhile, Glen Cayley, technical director of Shell's exploration and production activities in Europe, said: "Closing the valve is a key step. It was a careful and complex operation conducted by skilled divers, with support from our technical teams onshore [but] we will be watching the line closely over the next 24 hours and beyond."

However, some 660 tons of residual oil remain in the depressurized pipe, which has been secured on the seabed with concrete mats. The next phase of the operation will be to remove this remaining oil from the pipe, though Cayley cautioned this will take time.

The U.K. Department of Energy and Climate Change official tasked with overseeing the operation, Hugh Shaw, said the closure of the valves didn't mean the end of the operation.

"There will now be a period of extensive monitoring to determine whether the operation has been successful and whether the leak has been stemmed. This will be done through subsea surveillance as well as by aerial surveillance by government aircraft," said Shaw.

Shell said it has three vessels standing by the affected site with dispersants and specialized oil spill response equipment if needed.

The Marine Coastguard's latest estimate is that the sheen currently covers an area of 6.7 square kilometers and is 3.62 metric tons by volume. Initial environmental impact studies by Marine Scotland have showed no impact from the spill on local marine and bird life.

Shaw said the relevant U.K. authorities will be conducting an investigation. "A full report will, if appropriate, be sent to the Procurator Fiscal [public prosecutor]," said Shaw.

Copyright © 2011 Dow Jones Newswires

British American Tobacco Buys 200,000 Own Shares

LONDON -(Dow Jones)- British American Tobacco PLC (BATS.LN), announced Thursday that it purchased 200,000 of its ordinary shares of 25 pence each.

MAIN FACTS:

-The average price was 2,684.9783 pence per share.

-Shares closed Thursday at 2676.5 pence

Copyright © 2011 Dow Jones Newswires

Despite Economy, Movies Poised to Make Record Summer

A popular boy wizard, comic-book heroes and some foul-mouthed women are leading Hollywood toward a record-breaking summer despite the sour economy and high unemployment resulting in tightened consumer spending.

Underscoring the notion that movies are recession-proof, U.S. and Canadian ticket sales are expected to finish nearly 5 percent higher than a year ago thanks to the ``Harry Potter'' finale and other big-budget sequels plus raunchy adult comedies such as ``Bridesmaids.''

Summer ticket sales in the domestic (U.S. and Canadian) market through last weekend stood at an estimated $3.8 billion. Attendance was up 2.8 percent, though that was compared with last year's 13-year low, according to figures from tracking firm Hollywood.com. Premium charges for 3D films and slightly higher average ticket prices helped raise revenue.

``If we keep at this pace, we should wind up with $4.5 billion,'' the highest summer total ever, said Paul Dergarabedian, box office analyst with Hollywood.com.

The summer film season -- usually measured from early May through Labor Day weekend in September -- represents the most lucrative time of the year for studios, providing as much as 40 percent of annual box-office dollars.

Still, year-to-date box office revenue is down 4 percent from 2010 while attendance has shrunk 5 percent after weak winter and spring ticket sales. Studios need a strong holiday season to regain lost ground at a time when the U.S. economy is sputtering.

``Overall I think people are feeling good'' about the summer results, said Rory Bruer, president of worldwide distribution for Columbia Pictures, a unit of Sony Corp that rang up big sales with family film ``The Smurfs.''

HOLLYWOOD BUCKS THE ECONOMY

The strong summer box office belies recent data on consumer spending from the Bureau of Economic Analysis, which showed that Americans spent less and saved more money in June, just as the summer season was moving into full swing. It also goes against concerns among economists about the possibility of a double-dip recession brought on by high unemployment and anemic economic growth.

But moviegoing, which is one of the cheaper entertainment options for consumers, usually holds up in weak economies, industry players said. For instance, in summer 2008, the most recent comparable period to this summer in terms of the macro-economy, domestic box-office sales gained 0.5 percent year-over-year, though that was largely due to ticket price increases. Attendance actually fell 3.7 percent that summer.

Box-office success is tied more to the quality of the films than economic trends, Dergarabedian said. ``Good movies are recession-proof,'' he said.

Chris Aronson, senior vice president for domestic distribution at 20th Century Fox, added that ``lower-quality 3D films could be under pressure as audiences become more discerning.'' Overall box-office totals for 2011 ``will probably get to a position where we are level with last year,'' he said.

WINNERS AND LOSERS

This summer's standout performers thus far include ``Harry Potter and the Deathly Hallows - Part 2,'' which broke records worldwide and was among three movies to sell more than $1 billion globally. The others were the third ``Transformers'' and fourth ``Pirates of the Caribbean.''

``The one consistent area of success is still in the big franchise and in the big sequel,'' said Rob Moore, vice chairman of Paramount Pictures, a unit of Viacom Inc.

Foul-mouthed women scored big with better-than-expected sales for ``Bridesmaids'' and ``Bad Teacher.'' Another adult comedy, ``The Hangover 2,'' also was a hit.

Superheroes abounded on screens -- to mixed results. ''Captain America: The First Avenger'' and ``Thor'' performed well while ``The Green Lantern'' fizzled.

Four of the five highest-grossing summer 2011 films were offered in 3D, as were several other summer flicks. But filmgoers often decided to live with two dimensions, sparking a debate in the industry over whether the appetite for 3D movies had petered out.

``Avatar'' director James Cameron recently urged Hollywood to make sure 3D movies provided a quality experience to justify the higher price.

``This is a good moment for Hollywood to acknowledge that they have to try harder to maintain the idea that 3D is a premium experience. We can't take cheap routes,'' Cameron told Reuters in an interview.

Walt Disney Co's revered Pixar animation unit for the first time stumbled with critics who panned ``Cars 2.'' The film has proven resilient with audiences, however, surpassing the original's box-office tally with more than $476 million in gross sales worldwide.

But the strong performance of sequels this summer has a downside.

``There really weren't any new franchises created ... This summer may wind up with record gross (box office), but I don't know if enough seeds were planted for the future,'' said Brandon Gray, president of industry tracking firm boxofficemojo.com.

From that perspective, the rest of the year appears ominous for studios, with sequels to ``Twilight,'' ``Mission Impossible,'' ''Happy Feet'' and ``Alvin and the Chipmunks'' all set for release. (Reporting by Lisa Richwine; Editing by Bob Tourtellotte, Peter Lauria and Matthew Lewis)

Shell Says Oil Spill Leakage Rate Continues To Decline

LONDON -(Dow Jones)- Less oil is leaking from a ruptured underwater pipe at Royal Dutch Shell PLC's (RDSA, RDSA.LN, RDSB.LN) Gannet Alpha platform in the U.K. North Sea, the Anglo-Dutch oil major said Tuesday, although the sheen now affects a wider area due to a change in wave and wind conditions.

"The rate of leakage from the flowline to the Gannet platform continues to decline and currently stands at less than one barrel a day," said Glen Cayley, technical director of Shell's exploration and production activities in Europe.

Shell has been working to contain a leak from a ruptured undersea pipe at the Gannet Alpha platform since last Wednesday. Shell said the leak is "under control" and that the well that feeds the pipeline, shut in since Wednesday, remains closed.

Shell said it estimates around 1,300 barrels of oil have been spilled as a result of the leak. If Shell's estimate is correct, it is the largest to affect the country since 2000. On Monday, the company said oil was leaking at a rate of less than five barrels a day.

Shell said the sheen now affects a wider area of approximately 26 square kilometers and is estimated to be between one and 10 tons in volume.

However, Shell said it still didn't expect the spill to reach land.

"The situation remains that there is no need for use of dispersant, and we continue to expect that it will not reach the shore," said Shell.

Copyright © 2011 Dow Jones Newswires

More homeowners refinancing into shorter loans-survey

NEW YORK (Reuters) - More homeowners prefer to pay off their mortgages sooner as interest rates have stayed near rock-bottom and weak labor conditions have caused them to reduce their debt loads, a survey showed on Monday.

The current trend in refinancing into shorter-loan terms is a stark contrast to the one during the height of the housing boom, when families were taking out bigger mortgages against the rising values of their homes.

Of those homeowners who refinanced a 30-year fixed-rate mortgage during the second quarter, 37 percent moved into a 15-year or 20-year fixed-rate loan. This is the highest since the third quarter of 2003, mortgage finance agency Freddie Mac said.

In the second quarter, interest on the 30-year mortgage averaged 4.65 percent, compared with a 3.84 percent average on 15-year mortgages, the company said.

"It's no wonder we continue to see strong refinance activity into fixed-rate loans," Freddie Mac Chief Economist Frank Nothaft said in a statement.

Refinancing has comprised the bulk of U.S. mortgage activity since the housing bust that led to the 2007-2009 global financial crisis.

During the second quarter, the refinance share of mortgage applications, versus the share of applications for loans to buy a home, averaged 70 percent, Freddie Mac said.

(Reporting by Richard Leong; Editing by Dan Grebler)

Switzerland likely to strike tax deal with Britain soon: source

Such a deal would come hot on the heels of a tax agreement recently reached between Switzerland and Germany that will net Berlin billions of Swiss francs and force the Swiss banking sector to clean up its act.

Odier, president of the Swiss Bankers Association, said talks with Britain were very advanced, though he added important points still have to be clarified.

"I have no doubt that we will strike a deal with Britain very soon," Odier said. "I hope that the conclusion comes in the coming weeks," he said.

In an interview with Swiss newspaper Sonntag, Claude-Alain Margelisch, chief executive of the Swiss Bankers Association, said that the flat-rate withholding tax rates in the British deal would be in line with Britain's domestic tax burden.

Odier also said the German deal had had a "signaling effect" on France and Italy, and that he hoped new negotiations with these countries would be held.

"I am sure that other countries in Europe will also say that they would like to reach a deal with Switzerland," Odier said, adding the deal with Germany would likely cost Swiss banks about $642.9 million to implement.

Swiss banks have also come into the crosshairs of U.S. authorities.

In 2009, the Swiss government cut a deal with Washington to hand over the details of 4,450 UBS accounts in return for the dropping of a damaging lawsuit against the bank, while U.S. authorities are now also investigating Credit Suisse.

"We would welcome it if Switzerland and the United States were able to start talks quickly for a global solution," Odier said when asked about the problems facing Swiss banks in the United States.

Margelisch said it could not be ruled out that Switzerland would have to hand over details of accounts to the United States again.

"The American want client details. If this is delivered, then it clearly has to be done within the legal framework," Margelisch was quoted as saying in the interview.

(Reporting by Katie Reid; editing by Mike Nesbit)

Shell Fighting Oil Spill At North Sea Platform

--Shell says an oil spill has occurred at its Gannet Alpha platform in the U.K. North Sea

--Shell spokesman says the company has stemmed the leak significantly and is taking measure to isolate it

--Government spokesman says spill doesn't appear to be big

(Adds Department of Energy and Climate Change comment in sixth paragraph, details on prior leaks at the platform in the ninth paragraph.)

LONDON (Dow Jones)--Royal Dutch Shell PLC (RDSA, RDSA.LN, RDSB, RDSB.LN) said Friday an oil spill has occurred at its Gannet Alpha platform in the U.K. North Sea, although it wasn't immediately able to detail the amount of crude that has leaked into the ocean.

"We can confirm we are managing an oil leak in a flow line that serves the Shell-operated Gannet Alpha platform," said Shell spokesman Kim Blomley.

"We have stemmed the leak significantly and we are taking further measures to isolate it," he said. "The subsea well has been shut in, and the flow line is being depressurized. We continue to monitor the situation on the surface and subsea."

"We deployed a Remote-Operated Vehicle to check for a subsea leak after a light sheen was noticed in the area," added Blomley.

Blomley said Shell has informed the relevant U.K. authorities.

"It doesn't appear to be a big oil spill," said Department of Energy and Climate Change spokesman Jonathan Farr.

The Maritime and Coastguard Agency said: "We are aware of the incident, our counter-pollution and salvage officer is monitoring the situation." The Health and Safety Executive said it was making enquiries into the incident.

The platform is located 180 kilometers east of Aberdeen, Scotland. Shell operates the platform along with partner Exxon Mobil Corp.'s (XOM) U.K. unit Esso. Oil from the Gannet system is taken to Teesside, U.K., through the Fulmar pipeline as part of Ekofisk blend.

The platform had 10 leak incidents in 2009 and 2010, according to an HSE document showing voluntarily declared spills. Only one of the incidents was described as "significant" while the others were logged as "minor."

Production at the facility is estimated to be around 6,000 barrels a day, according to a trader.

The incident is the second to affect Ekofisk in weeks. Last month, a fire broke out on BP PLC's (BP, BP.LN) Valhall platform in the Norwegian North Sea, with production unlikely to resume before the end of August.

Copyright © 2011 Dow Jones Newswires

Ternium May Gain Licence For Acu, Brazil Mill Sept

--Ternium may get permission in September to build a steel mill at Acu, Brazil

--Mill is expected to have a capacity to produce up to 7.5 million metric tons a year of steel

(Updates with oil processing licence in sixth paragraph, negotiations with automaker in tenth paragraph, LLX 2Q loss in penultimate paragraph.)

RIO DE JANEIRO -(Dow Jones)- Latin American steelmaker Ternium SA (TX) may get the go-ahead in September to build a steel mill at Acu, the industrial port in Brazil's Rio de Janeiro state being developed by LLX Logistica SA (LLXL3.BR), LLX said Friday.

"A public hearing (on the project) early June went according to plan," LLX's chief financial officer Leonardo Gadelha told analysts on a conference call. "We expect Ternium will receive a preliminary licence by September."

The new steel mill, which will be 100% owned by Ternium, is expected to have a capacity to produce up to 7.5 million metric tons a year of steel slabs. According to Gadelha, it will take "several years to build the steel plant and a pellet plant."

Ternium officials in Brazil, Mexico and Venezuela weren't available to comment on the LLX director's statement.

LLX since 2007 has invested 1.8 billion Brazilian reais ($1.11 billion) in building the Acu port, which is due to start operations in late 2012, in total a BRL3.4 billion investment. Investments will accelerate to BRL450 million in the second half as contracts are expected to be signed with oil companies for oil processing at the site and as dredging work progresses, particularly at the inland canal that is being built to expand quay area, Gadelha said.

Brazil's oil industry regulator ANP in June approved LLX's application for installation of oil industry treatment facilities at Acu. The port will have the capacity to storage 14 million barrels of oil and process 1.2 million barrels per day, Gadelha said.

Recent investments at Acu have focused on the LLX Minas-Rio iron ore pier, where dredging has now been concluded, the LLX executive said. The iron ore pier has two berths and will have the capacity to export more than 50 million metric tons a year of iron ore, he said. The port is designed to export ore from Anglo American plc (AAL.LON)'s Minas Rio iron ore mines operations, which will have an initial capacity of 26.6 million tons a year of the steelmaking raw material.

Acu port will initially have a water depth of 21 meters, to be expanded later to 25 meters, and will be able to accommodate Capesize and Chinamax vessels, LLX said.

The Ternium steel mill plant is one of two integrated steel-mill projects slated for Acu port. The second, a five-million-tons a year slabs project by China's Wuhan Iron & Steel Co., or Wisco, is still in the study stage, LLX said.

LLX meanwhile also continues negotiations with an automaker for installation of a factory at Acu "in the medium term", Gadelha said.

LLX late Thursday reported a net loss of BRL15.2 million, on expenses of BRL35 million. This compares to a loss of BRL11.24 million in the same 2010 period, when expenses were BRL26.4 million.

LLX said it currently has BRL697.1 million in cash and its assets grew to BRL1 billion in the second quarter from BRL791.9 million a year earlier due to the development of Acu's port facilities.

Copyright © 2011 Dow Jones Newswires

Warren Buffett buying in down market: Fortune

NEW YORK (Reuters) - Warren Buffett has been buying amid this week's sharp declines in the market, and has not yet seen anything that suggests another downturn is emerging, the legendary investor told Fortune magazine.

In an interview published on Thursday, Buffett also told the magazine he understood why Standard & Poor's lowered its outlook on the credit rating of his conglomerate Berkshire Hathaway , but said he disagreed with the underlying premise - the downgrade of the United States' credit rating.

The 80-year-old "Oracle of Omaha" is known for his love of a good deal, which is why his company made an unsolicited offer below book value for reinsurance company Transatlantic Holdings last weekend, and why Berkshire sold $2 billion of senior unsecured notes this week at historically low rates.

In that vein, Buffett told Fortune Managing Editor Andy Serwer the market declines have not fazed him.

"The lower things go, the more I buy. We are in the business of buying," he said, adding that he had "never been better."

Buffett also told the magazine that he was not seeing fresh indications of the economy turning bad again, though things could change if market conditions do not improve.

"Up until right now, all of our businesses have been coming back -- even Europe isn't doing that badly -- except for businesses relating to home construction which is on its rear end," Buffett said.

(Reporting by Ben Berkowitz, editing by Dave Zimmerman)

Obama Will Meet With Bernanke Later Wednesday

WASHINGTON - President Barack Obama and his top economic advisors will meet with Federal Reserve Chairman Ben Bernanke later on Wednesday, White House spokesman Jay Carney said. Carney said the economy has been weaker than White House economists had expected. He said there was no expectation of another recession. "We...continue to believe that the economy will keep growing," Carney said. On Tuesday, the Fed downgraded its assessment of the economic outlook and pledged to keep its benchmark rate near zero. Stocks have sunk in part on the Fed's gloomy outlook. Obama and Treasury Secretary Timothy Geithner remain in close touch with European leaders about the ongoing financial tensions in the U.S. and the euro-zone.

Copyright © 2011 MarketWatch, Inc.

MARKET SNAPSHOT: U.S. Stocks Higher In Rebound From Rout

NEW YORK (MarketWatch) -- U.S. stocks rose sharply Tuesday as Wall Street reclaimed a portion of the prior day's massive losses while waiting for what investors hope will be economic reassurances from the Federal Reserve.

Investors are "crossing their fingers that Ben is going to come to the rescue," said Nick Raich, director of research at Key Private Bank, referring to Federal Reserve Chairman Ben Bernanke.

The Fed will do what it can to "try to calm the markets," said Raich, who said one option would have the central bank opting to "continue to buy back Treasurys but not expand its balance sheets."

The Federal Open Market Committee's policy statement is scheduled for release Tuesday afternoon, with investors looking for any signs of what the Fed might do to bolster the U.S. economy. .

After relinquishing 634.76 points, or 5.6%, in Monday's battering -- the sixth-largest point loss in its history -- the Dow Jones Industrial Average (DJI) rallied back as much as 243 points, and was lately up 168.96 points, or 1.6%, to 10,978.81, with all but three of its 30 components rising.

Wall Street's recent havoc is "giving investors flashbacks to the nightmare of 2008. However, unlike Freddie Krueger, 2008 isn't back," said Matt Freund, senior vice president of investment-portfolio management at USAA Investment Management Co.

"Unlike three years ago, corporate balance sheets are healthy, liquidity is plentiful and the level of speculative investing is down dramatically," said Freund, who attributed the current market volatility to "the ongoing situation in Europe and the potential for a slowing global economy."

The S&P 500 Index (SPX) added 25.37 points, or 2.2%, to 1,144.42, with financial firms faring best of the index's 10 industry groups after getting socked the hardest on Monday.

The Nasdaq Composite Index (RIXF) climbed 73.05 points, or 3.1%, to 2,430.37.

For every stock falling nine gained on the New York Stock Exchange, where 1 billion shares exchanged hands as of 1:30 p.m.

The recent decline in equities, which last week had the market in a correction mode, followed by then Monday's stunning drop involves "a market pricing in increased chances of debt default out of Europe," said Raich at Key Private Bank.

"Economic activity will slow in Europe because of increased austerity measures, but right now the market is pricing in off the cliff. If we can avoid that, if the [European Central Bank] can manage to get through, then the market is oversold," said Raich.

Copyright © 2011 Dow Jones Newswires

Deja Vu: Dow Crumbles 635 After Economic, Debt Fears Engulf Wall Street

Reuters

FOX Business: The Power to Prosper

After closing out the worst week since 2008, Wall Street was once again pummeled on Monday after global sovereign debt and economic fears sent traders fleeing equities with few shelters in sight.

Today's Markets

The Dow Jones Industrial Average plunged 635 points, or 5.6%, to 10,810, the S&P 500 tumbled 79.9 points, or 6.7%, to 1,119 and the Nasdaq Composite dipped 174.7 points, or 6.9%, to 2,358. The FOX 50 sank 50.7 points, or 5.9%, to 814.

Volatility has been extremely high in recent trading sessions. The selloff over the past two weeks has been so furious in fact that "its force now rivals almost anything we’ve seen in the post war era," according to Daniel Greenhaus, chief global strategist at BTIG. The VIX, often referred to as a fear gauge, spiked 45% to a 52-week high.

The selloff was broad, with every major sector taking deep losses. In a sign of the depth of the selling, 98% of the volume on the New York Stock exchange was in declining shares. The Dow closed below 11,000 for the first time since October 2010, and every blue chip ended in the red.

Financial shares like Dow-component Bank of America (BAC) and Citigroup (C) took the biggest hit. The cost to insure the debt of major banking institutions skyrocketed as concerns spread that the institutions may need to seek fresh capital. Bank of America quickly spoke out against the concerns, saying it has sufficient capital, but it couldn't stem the 19% slide its stock took.

Despite the steep retreat from equities, some market participants were optimistic that markets are in the process of bottoming out.

"We’re experiencing the market bottom right now," Paul Dietrich, CEO and co-chief investment officer at Foxhall Capital Management, told FOX Business. He cited leading indicators like auto sales and sales tax revenues.

"I think we’ll bounce around the bottom for a while but I believe over the next quarter or two you will start seeing a movement up of consumer spending."

For the first time in history, S&P cut America's top-notch credit rating one notch to AA-plus from AAA after the close of trading on Friday. The ratings company also said Monday it would slice Fannie Mae and Freddie Mac's debt rating because the mortgage companies directly rely on the U.S. government.

S&P's move came as a result of concerns over the country's substantial public debt burden and deep divides within Congress that almost sparked an unprecedented default on U.S. sovereign debt. Moody's Investor Service, another ratings company, affirmed American's AAA rating, while Fitch is still performing a review.

Many large investors noted the short-term impact of the downgrade may be muted, however, it could foreshadow deeper economic issues.

BlackRock said in a release the move by S&P "does not imply a fundamental increase in risk" and shouldn't prompt investors to "change their behavior solely on the downgrade." However, the company that manages $3.7 trillion in assets warned that "continued economic weakness and regulatory uncertainty ... may provide a signal to some investors to reassess their risk appetite."

A round of disappointing economic data, capped with a mixed monthly employment report has weighed heavily on sentiment in recent weeks. There are only a handful of data releases scheduled for the first half of the week, however, traders are expected to pay close attention to the Federal Reserve's statement on Tuesday to see if the central bank signals another round of quantitative easing.

Market participants will also be watching a slew of economic data slated for release by China overnight, according to Peter Boockvar, managing director at Miller Tabak+Co. China is one of the world's largest economies and can have a drastic impact on global markets.

Global Governments Act

Meanwhile, global governments acted on Sunday to try to stem market fears across the world. The European Central Bank said it was prepared to "actively implement" a program by which it would purchase Italian and Spanish debt. European credit markets have been rattled as debt worries have cascaded from smaller economies like Greece to more substantial ones like Italy.

The Group of 7 finance ministers also made a statement late Sunday, saying it was prepared to take whatever steps are necessary to calm global markets that were slammed last week.

Still, many market participants questioned what actions global governments would be able to take to tame tumultuous markets. The statement by G7 "sought to bolster confidence but offered only consoling words," analysts at Barclays Capital wrote in a note to clients.

The selloff on Monday comes on the heels of the steepest retreat for Wall Street since the financial crisis in 2008. The broad S&P 500 plunged 7.2%, the Dow shed 5.8%, and the Nasdaq plunged 8.1%.

In a sign of the uneasiness on Wall Street, gold, seen as a safe haven, has continually leaped to record highs. The precious metal soared $61.40, or 3.7%, to $1,713 a troy ounce -- breaking the $1,700-mark for the first time. In fact, gold prices surpasses platinum prices for the first time since 2008 on Monday.

Energy markets followed equity markets deep into the red.

Light, sweet crude dipped $5.57, or 6.4%, to a new 2011 closing low of $81.31 a barrel. Wholesale RBOB gasoline slid 11 cents, or 4.1%, to $2.69 a gallon.

The U.S. dollar gained 0.15% against a basket of world currencies, while the euro plummeted 1.2% against the greenback.

Prices at the pump moderated somewhat last week following the selloff in the futures markets. A gallon of regular costs $3.66 on average nationwide, down from $3.71 last month, but considerably more than the $2.78 drivers paid last year, according to the AAA Fuel Gauge report.

Corporate News

Berkshire Hathaway made a $3.3 billion bid for Transatlantic Holdings (TRH), topping two other takeover offers.

Foreign Markets

The English FTSE 100 slid 3.4% to 5,069, the French CAC 40 tumbled 4.7% to 3,125 and the German DAX plunged 5% 5,923.

In Asia, the Japanese Nikkei 225 plummeted 2.2% to 9,098 and the Chinese Hang Seng sank 2.2% to 20,491.

China Criticizes ConocoPhillips For Slowness On Oil Leaks

BEIJING -(Dow Jones)- China's State Oceanic Administration has criticized ConocoPhillips (COP) for moving slowly to block oil leaks at drilling platforms off China's northeast coast.

ConocoPhillips closed drilling platforms B and C as requested, but it has made slow progress on the SOA's requirements to fully investigate risky spots for oil leaks and to fully block sources of leaks, the SOA's North China Sea Branch said in a statement on Friday. ConocoPhillips also "has not kept its promise" of ensuring the leaked oil would not reach shore or affect sensitive environmental areas, the statement said.

SOA officials who inspected the oil platforms at the Penglai 19-3 field on Thursday ordered the company to fix the problems immediately, the statement said.

Platform B was still intermittently leaking oil blooms recently, and an area near platform C had continuous oil blooms and a belt of oil in the nearby water, the SOA branch said in a separate statement on Friday.

The Penglai 19-3 field, a joint venture between ConocoPhillips and Cnooc Ltd. (CEO, 0883.HK), was discovered in 1999. Its production averaged 56,000 barrels a day in 2010.

Copyright © 2011 Dow Jones Newswires

U.S. government expecting debt downgrade: report

WASHINGTON (Reuters) - The U.S. government expects its debt to be downgraded from its current triple-A rating and is preparing for the event, ABC News said on Friday.

ABC cited an unnamed government official as its source and said it was uncertain whether the rating would drop from triple-A to AA+ or to AA.

(Reporting by Tim Ahmann and Glenn Somerville, Editing by Chizu Nomiyama)

Italy Brings Forward Budget Plans as Crisis Mounts

Italy buckled to world pressure in a bid to halt a market rout endangering the global economy, pledging to speed up austerity measures and social reforms in return for European Central Bank help with funding.

About $2.5 trillion has been wiped off world stocks this week on worries the euro zone debt crisis was spreading and the U.S. was slipping into recession. Better than expected U.S. jobs growth in July helped support Wall Street on Friday but stocks slipped back into the red in late trading.

After a frantic round of telephone diplomacy, Italian Prime Minister Silvio Berlusconi said his government would bring forward cuts to balance the budget in 2013, a year ahead of schedule, and rush through welfare and labour market reforms.

"We consider it appropriate to introduce an acceleration of the measures which we introduced recently in the fiscal planning law to give us the possibility of reaching our objective of balancing the budget early, by 2013 instead of 2014," Berlusconi told a news conference after a day of calls with world leaders including German Chancellor Angela Merkel and U.S. Treasury Secretary Tim Geithner.

Sources close to the matter told Reuters the European Central Bank had demanded such measures in exchange for buying bonds to ease the pressure on Italy, which has come under market attack.

There was no immediate reaction from the ECB but a European Commission spokesman said the measures responded to assessments set out earlier in the day by EU Economic and Monetary Affairs Commissioner Olli Rehn and "go in the right direction".

Investors have been unimpressed by a 48 billion euros austerity package passed by Berlusconi's government, partly because most of the measures were delayed until after elections scheduled for 2013, for clear political reasons.

The leaders of Germany, France and Spain conferred on the crisis by telephone during the day and French President Nicolas Sarkozy, who heads the Group of Seven industrialised powers and the G20 this year, said he would talk to U.S. President Barack Obama.

Discord among EU policymakers over how to stop a disastrous spread of the sovereign debt crisis to Italy and Spain, the euro zone's third and fourth biggest economies, has caused increasing frustration among investors.

The European Central Bank disappointed markets by buying Irish and Portuguese bonds but not government paper in Italy and Spain where bond yields have blown out this week on fears that they may need bailing out.

That now appears to have been a gambit to force Italy to act.

"In principle it is right to say that the ECB could start buying Spanish and Italian bonds if they made an extra effort with fiscal and structural reforms," a senior euro zone official told Reuters.

Bank of Spain governor Jose Manuel Gonazalez-Paramo, a member of the ECB's governing council, said he expected Spain to announce further measures on Aug. 19 to ensure it meets its budget austerity targets.

Earlier in the day, China and Japan called for coordinated action to avert a new worldwide crisis sourced to Europe and the United States, as did European Economic and Monetary Affairs Commissioner Olli Rehn.

"International policy coordination through the G7 and G20 is of critical importance," he told a news conference, having broken off his vacation and returned to Brussels.

Britain called for a "concerted international effort" to show governments would work together to avert a financial crisis and Brazil also urged unity, saying the world economy was "in a situation of stress."

ECB RIFT

The ECB reactivated its dormant bond-buying programme on Thursday in an attempt to address the euro zone's deepening sovereign debt crisis, but only bought Portuguese and Irish debt. Influential members of the ECB opposed even that.

Central bank sources told Reuters that four out of 23 ECB governing council members, including powerful German Bundesbank chief Jens Weidmann, voted against the decision to resume any bond purchases.

Traders said the central bank intervened for a second day on Friday, but was again only buying Portuguese and Irish paper. Pressure eased on Italian and other peripheral debt but Italy's 10-year-yields overtook those of Spain for the first time since May 2010 and both yields remained above 6 percent, confirming investors concerns about the lack of action.

Berlusconi's declaration may have broken the impasse.

"This will help overcome opposition by these ... figures in the governing council and facilitate ECB intervention, which is the only thing that can stabilise the market now. I don't see how we can survive another week like this one," one source involved in the talks said.

But more profound decisions will need to be taken, and soon.

Investors said policy differences among European Union governments and central bankers were heightening anxiety about Europe's will to stem the debt crisis.

To bail out Spain would test the fund's existing firepower to the limit while doing so for Italy would overwhelm it although Rehn insisted neither would require assistance.

In the first analyst comment on Berlusconi's announcement, Chiara Corsa, vice-president of Unicredit Research, said: "This is the response we were hoping to see and there are no doubts that the government pledged to deliver what has been called for, to say the least."

However she noted that Berlusconi and Economy Minister Giulio Tremonti had omitted to respond to EU calls for more liberalisation of the economy to boost growth, adding that whether they had done enough to calm market turmoil "depends on whether the market believes it or not".

CHINA, JAPAN SEEK ACTION

In Japan, Finance Minister Yoshihiko Noda said global policymakers needed to confront currency distortions, the debt crises and concerns about the U.S. economy.

Japan sold yen on Thursday to try to cap the currency's rise. It has become a popular safe-haven bet, as has the Swiss franc, as concerns about the United States and Europe grow.

Chinese Foreign Minister Yang Jiechi said U.S. debt risks were escalating and countries should step up cooperation on global economic risks.

Yang, who is visiting Poland, called on the United States to adopt "responsible" monetary policies and protect the dollar investments of other nations.

The U.S. Federal Reserve holds its next policy-setting meeting on Tuesday, and economists say there is little more it can do to try to spur growth.

Analysts said they would look to see if European leaders are willing to expand its emergency financial stability fund to an amount that would put a floor under the market panic. Currently at 440 billion euros, it would need to be doubled or tripled to cover economies as big as Italy and Spain.

Rehn said the EU should keep adapting its financial rescue fund and, in the longer term, consider common euro zone bonds.

EU heavyweights Germany and France have so far opposed any common debt issuance, arguing that it would remove a key driver of fiscal discipline in individual member states and push up their own borrowing costs as AAA-rated sovereigns.

In Washington, a similar sense of inertia to Europe has taken hold.

Just days after a bitterly fought, last-minute deal to raise the country's debt ceiling and avoid default, realisation has sunk in that many elements of the $2.1 trillion deficit reduction plan are not locked in place.

Doubt has spread through markets that Congress will stick to

Sunoco Swings To 2Q Loss On Write-Down As Refining Operations Weaken

Sunoco Inc. (SUN) swung to a second-quarter loss amid weak refining revenue and a large write-down from the sale of its Philadelphia chemicals plant.

Shares still rose 2.5% to $36.80 after-hours after the company reported much better-than-expected revenue. The stock was off 11% this year through Thursday's broad sell-off.

Most U.S. refiners have posted improving earnings this year as a widening price spread between two types of crude oil helps boost industry margins. Sunoco missed out on the windfall in the first quarter, however, after widespread refinery outages.

Sunoco in July closed the sale of its phenol and acetone manufacturing plant in Philadelphia to an affiliate of Honeywell International Inc. (HON), forcing the company to set aside $118 million to write down the facility's assets.

The independent refiner also finished its spinoff of SunCoke Energy, the biggest independent producer of a raw material for steelmaking. Fitch Ratings and Standard & Poor's Ratings Services both pushed Sunoco's credit ratings into junk territory after the split, saying the spinoff removed one of the company's more stable segments.

Sunoco posted a loss of $125 million, or $1.03 a share, compared with a prior-year profit of $145 million, or $1.20 a share. Excluding the write-down provision and other items, the company posted a 40-cent profit, down from last year's $1.31 a share. Revenue rose 25% to $12.02 billion.

Analysts polled by Thomson Reuters expected a 47-cent per-share profit and revenue of $8.75 billion.

Sunoco's core refining and supply business swung to a loss in the latest quarter on lower realized margins and decreased production volumes, though the unit's crude utilization rate climbed to 84% from 74%.

Earnings in Sunoco's retail business fell 5.5% absent a favorable litigation settlement from last year as higher credit-card fees hurt profit.

Earnings jumped 80% in the logistics business on expanded crude oil volumes and revenue from recent acquisitions.

Copyright © 2011 Dow Jones Newswires

CSN Axes Plans To Merge Iron Ore Assets, Reviews Namisa Expansion

RIO DE JANEIRO -(Dow Jones)- Brazilian steelmaker Companhia Siderurgica de Nacional SA (SID, CSNA3.BR), or CSN, has abandoned plans to merge its iron ore ventures in Brazil after two Japanese partners pulled out of one of them.

CSN said it has stopped negotiating the merger of its major Casa de Pedra mine with its Nacional de Minerios, or Namisa, mine assets and trading operation, as no accord on a merger was reached with partners. The company is now preparing a new business plan for Namisa's expansion, with revised dates and investment levels, which should be announced in the third or fourth quarter, a CSN director said on a conference call with analysts Wednesday.

CSN said two years ago that it planned to merge Casa de Pedra and Namisa and spin them off as a separate company in an initial public offering, in an effort to maximize the value of the assets amid strong global demand for iron ore, the key steelmaking ingredient. Since then, prices for the commodity have reached record highs on China-led demand. CSN sold off a minority stake to a group of Asian investors in Namisa in 2008.

One month ago, two of Namisa's Japanese partners, Nippon Steel (NISTY, 5401.TO) and Sumitomo Group, decided to sell their stakes in the iron ore company to the South Korean and Japanese partners who remained in the venture.

Nippon and Sumitomo quit as they didn't agree to the review of the Namisa development plan which is now underway, CSN mining director Ricardo Abramof said on the call.

"The expansion of Namisa is under discussion with the partners," Abramof said. "Namisa will produce 39 million tons a year of iron ore with some third-party purchases, and the capex is being discussed."

CSN plans to sell a total of 31 million metric tons of iron ore in 2011. The company is currently spending 4.2 billion Brazilian reais ($2.69 billion) on expanding Casa de Pedra to a production capacity of 50 million tons a year by 2015 and BRL2.5 billion to expand its port at Itaguai to handle 84 million tons a year, from both Casa de Pedra and Namisa, by 2014, Abramof said.

Casa de Pedra and Namisa are both located in Minas Gerais state in southeast Brazil. Itaguai is located in Rio de Janeiro state. CSN plans to build two pelletizing plants in Minas Gerais to process ore from its mines.

Copyright © 2011 Dow Jones Newswires

MARKET SNAPSHOT: U.S. Stock Losses Intensify After Senate Vote

NEW YORK (MarketWatch) -- U.S. stocks fell to their lowest levels of the session Tuesday as investors worried about the health of the economic recovery, even after the Senate approved the debt-ceiling bill and avoided a potential government default.

"The recent round of economic data has been disappointing," said Fred Dickson, chief investment strategist at Davidson Cos., pointing to a "small but growing risk that the economy might slide back into a very shallow recession."

Helping foster such fears, the Commerce Department reported consumers trimmed their spending in June for the first time in almost two years.

Extending its longest losing streak in more than a year, the Dow Jones Industrial Average (DJI) dropped 158.58 points, or 1.5%, to 11,951.91. It touched a low of 11,941.85 after the Senate vote.

The Standard & Poor's 500 Index (SPX) fell 23.04 points, or 1.8%, to 1,263.90.

The Nasdaq Composite Index (RIXF) declined 50.26 points, or 1.9%, to 2,693.35.

For every stock advancing, three fell on the New York Stock Exchange, where 632 million shares traded as of 2 p.m. Eastern.

Just hours before a potential default on the nation's debt obligations, the Senate on Tuesday approved legislation that would increase the U.S. debt ceiling and reduce planned budget deficits.

Following the vote, Fitch Ratings said that, with a deal in place to increase the U.S. debt ceiling, any risk of sovereign default -- "commensurate with [the U.S.'s] 'AAA' rating" -- remains extremely low.

Copyright © 2011 Dow Jones Newswires

FMC 2Q Net Up 63% On Strong Agricultural Products Demand

FMC Corp.'s (FMC) second-quarter profit grew 63% on higher sales for agricultural products and specialty chemicals, as the chemicals company Monday reported demand was particularly strong in rapidly developing economies.

But a weak outlook for the current quarter sent shares down 2.1% to $86.47 after-hours.

The company, which makes such products as insecticide and hydrogen peroxide, also raised the lower end of its full-year outlook by 10 cents, now seeing a profit of $5.60 to $5.80. FMC also predicted third-quarter earnings of $1.25 to $1.40 a share, compared with the $1.41 profit forecast by analysts surveyed by Thomson Reuters.

FMC's adjusted earnings have beaten expectations lately on broad growth. FMC also outperformed rivals during the recession because of its relatively low exposure to the industrial-chemicals sector, a market that struggles when the economy is pressured.

The company reported earnings of $107.2 million, or $1.49 a share, up from $65.7 million, or 90 cents a share, a year earlier. Excluding restructuring and other impacts, earnings climbed to $1.53 from $1.30. In May, the company projected a profit of $1.40 to $1.55.

Revenue grew 4.6% to $812.2 million. Analysts most recently expected $811 million.

Gross margin widened to 36.8% from 34.1%.

Pretax profit from continuing operations at FMC's largest business, agricultural products, increased 18% on a 12% jump in sales. Industrial chemicals profit was up 21%, while the figure improved 8.7% for specialty chemicals.

Copyright © 2011 Dow Jones Newswires

Honda falls on parts shortage but lifts guidance

TOKYO (Reuters) - Honda Motor Co posted a 90 percent fall in quarterly operating profit as a severe parts shortage stemming from the March 11 earthquake slashed output, but avoided an expected loss and raised its annual profit guidance by more than a third.

Japan's No.3 automaker said on Monday it made an operating profit of 22.58 billion yen ($292.5 million) in the April-June quarter, compared to a 234.4 billion yen profit a year earlier. The result was much better than the average estimate of a 67 billion yen loss in a survey of seven analysts by Thomson Reuters I/B/E/S.

It posted a net profit of 31.8 billion yen, down 88 percent from the previous year, while revenue fell 27 percent to 1.715 trillion yen.

For the full year to March 2012, the maker of Civic and Accord cars now expects operating profit, which excludes earnings from China, of 270 billion yen, or 35 percent more than the previous forecast of 200 billion yen. A poll of 21 analysts put the forecast at 407.7 billion yen.

Honda suffered the biggest drop in production from the March disasters due mainly to bad timing for the scheduled delivery of parts. The supply shortage coincided with the full remodeling this spring of its Civic model in the key U.S. market where sales of the popular car fell by a third in June.

Shares in Honda are down 4 percent in the year to date, underperforming a 1 percent drop in Tokyo's transport sector subindex . ($1 = 77.190 Japanese Yen)

(Reporting by Chang-Ran Kim; Editing by Matt Driskill)

Australian Manufacturing Declines In July: Survey

SYDNEY -- Australian manufacturing contracted in July, a survey out Monday complied by Australian Industry Group -- PwC showed. The performance of manufacturing index fell 9.5 points to 43.4 in July, falling below the 50-mark point that indicates contraction. Wood products and furniture was the weakest performing sub-sector of the survey and new orders fell 14.4 points to 40.2 in July. Difficulties facing manufacturing due to the high Australian dollar and sluggish domestic demand intensified in July, according to the survey.

Copyright © 2011 MarketWatch, Inc.

China Official PMI Slips To 50.7 In July

HONG KONG -- An official reading of China's Purchasing Managers' Index slipped to 50.7 in July from 50.9 in June as manufacturing activity eased amid tighter monetary conditions, according to reports Monday. The measure, released by China Federation of Logistics and Purchasing, was higher than 50.1 expected in a Reuters survey. A reading above 50 indicates an improvement in manuacturing activity from the previous month, while one below shows a decline. A sub-index of input prices also declined to 56.3 during the month from 56.7 in June.

Copyright © 2011 MarketWatch, Inc.