Oil prices rose yesterday, powered higher by growing optimism that the recession-stricken U.S. economy is on the mend after a series of positive corporate earnings reports. Crude oil for September delivery climbed 89 cents (U.S.) to close at 68.05 dollars a barrel.

Schlumberger Ltd. exemplified the ongoing troubles for oil and gas industry, reporting yesterday its second-quarter earnings tumbled 57 per cent and offering an uncertain outlook for the rest of 2009 and beyond. Oil and gas producers continue to cancel or postpone exploration and drilling projects, many of which aren't worth it at current commodity prices. Schlumberger chairman and CEO Andrew Gould said clients weren't likely to substantially increase spending until prices - and their cash flows - improved. He said oil's volatile swings in the past year made it impossible to predict when activity might rebound. "Even our very largest customers are having to borrow or dip into their war chests to sustain their spending," Mr. Gould said on a conference call with analysts. "And they'll only go on doing that for a certain period of time." Profit for the April-June period fell to $613-million (U.S.), or 51 cents per share, from $1.42 billion, or $1.16, a year earlier. Revenue fell 18 per cent to $5.53-billion but beat the consensus forecast of $5.46 billion. SLB (NYSE) fell 43 cents to $57.34.

A refinery shelved, a province's ambition on hold


Irving Oil Ltd. and partner BP PLC have shelved plans for an $8-billion refinery in Saint John, based on a stunning 30-year forecast that North American gasoline consumption has peaked for the foreseeable future.


Many refiners in the U.S. and Canada have re-evaluated expansion plans after last year's record oil prices and the recession have driven down demand.


A number of analysts now believe gasoline consumption in North America reached a high-water mark last year, and will remain weak even when the economy recovers.

CLOSING PRICES (SPOT)

Gold US$/troy ounce 951.93 1.63

Silver US$/troy ounce 13.89 0.13

Copper US$/lb 2.50 0.00

Lead US$/lb 0.78 0.00

Zinc US$/lb 0.76 0.00

Aluminum US$/lb 0.81 0.01

Nickel US$/lb 7.57 0.17

Oil West Texas US$/bbl 66.67 0.81

Nat Gas Henry Hub US$ mmbtu 3.37 -0.29

Nat.Gas AECO C C$/gigajoule 3.18 0.08

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