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Thursday Oil Market Round-Up
from The Bonddad Blog by bonddad
http://bonddad.blogspot.com/2008/07/thursday-oil-market-round-up.html

Why the Gulf Is Switching to Coal
The Persian Gulf may be sitting atop massive oil reserves. But with prices for crude skyrocketing, it makes more sense to sell it than to burn it. Instead, the Gulf is turning to coal for its energy needs -- to the detriment of the climate. At the end of April, for example, the state-owned Oman Oil Company signed a memorandum of understanding with two Korean companies on the construction and operation of several coal-fired power plants. Dubai, for its part, is initially planning to build at least four large facilities with a cumulative output of 4,000 megawatts. Abu Dhabi also wants to get into the act. Even Egypt is thinking of constructing its first coal-fired plant on the shores of the Red Sea. As odd as the idea may seem, coal power in the gulf is just one more outcome of skyrocketing oil prices.
http://www.spiegel.de/international/business/0,1518,563502,00.html

Merrill: GM bankruptcy 'possible'
General Motors will need to raise as much as $15bn in cash to shore up liquidity and bankruptcy is "not impossible" if the US auto market continues to slump, Merrill Lynch said, reports Reuters. Other analysts have suggested GM, whose shares fell to a new 54-year low on Wednesday, needs to raise funds to weather the downturn in the US auto market through 2009. But Merrill's estimate of GM's financing needs is the highest yet. It also carried the most stark warning of the bankruptcy risk for the largest US automaker. Merrill analyst John Murphy cut GM to "underperform" from "buy" and lowered his price target to $7 from $28. Shares fell as much as 11% to $10.50 in Wednesday's trading as the cost to insure GM's debt rose.
http://ftalphaville.ft.com/blog/2008/07/03/14272/merrill-gm-bankruptcy-possible/