Venezuela, which is among the major oil exporters in the world every year to lose 21 billion dollars for state subsidies for petrol, says a report of the New York branch of investment bank Nomura. The country’s president Hugo Chavez announced that losses for the state budget for that sector were 1.5 billion dollars. Currently liter of gasoline sold in Venezuela for 2.2 cents. According to estimates of specialists daily needs of petrol in the country is 500,000 barrels. Authorities in the country had fixed the price of gasoline of 3.5 dollars per barrel (159 liters), while the global markets it is 120 dollars. Venezuelans living in border areas of Brazil, Guyana and Colombia, do not fail to benefit from the price difference by illicit business. Daily thousands of Venezuelan drivers crossing the border to sell cheap gasoline. Profits from illegal business reach 4,000 percent. In November last year, Venezuelan authorities were forced to put on each car special chip to limit the number of charges. The measure, however, proved ineffective as soon started on the black market sale of counterfeit chips for $ 20 number.
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The rapid jump in oil prices early this year and improved returns from refining are probably brought solid gains of major oil companies in the first quarter. It is not excluded that the profits of American oil companies for this year can compete with record levels for the industry since 2008, said publication. Then oil prices reached $ 147 a barrel, marking its highest levels in history. In the first quarter price of a barrel of oil rose to an average $ 100, which is about 20% more than a year ago. The reason for this were mostly concerns about breaches of its exports because of political unrest in the Arab world. The recovery of world economy at the same time intensify speculation about higher oil demand, which also supported the price of the black gold. The jump in oil prices expected to rise by about 50 per cent profit on the largest U.S. oil company Exxon Mobil in the first quarter. For the second and third largest U.S. oil companies Chevron and ConocoPhillips this growth is estimated to be about 33% annually. Of course, the year is still in its beginning and forecasts for record profits is too early to judge. Prices of U.S. light crude hover over 112 dollars a barrel in New York and about 124 dollars a barrel Brent crude in Europe. This unusually large difference in oil prices, sold in the U.S. and Europe, however, can support the profits of U.S. oil companies in two ways.
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The prices of U.S. light crude have risen by 15% since the beginning of this quarter against the civilian protests against longtime regimes in the Arab world and the current geopolitical crisis in the oil-rich region. The jump in oil prices, reported from January to March, the strongest of the first three months of 2005 onwards, because the insurgency in North Africa and the Middle East have disrupted supplies of energy raw materials, most noticeably from Libya, which is the third largest producer in Africa. The fears of deepening crisis in the Arab region is reflected in large measure on the cost of extraction in the North Sea Brent, because of the dependence of European countries by the Libyan crude oil. Price was raised even more by 22% this quarter. Meanwhile, the accumulation of oil reserves in the U.S. rose to their highest levels in history, failed to stop the increase in commodity prices. U.S. is largest consumer of oil in the world, followed by China and Japan. The U.S. light crude for delivery in May, rising by 0.4 percent to 104.68 dollars a barrel in today’s electronic trading on the New York Petroleum Exchange. The reason for this was the retreat of the rebels in Libya, which were driven yesterday by troops loyal to Muammar Gaddafi. The weekly report by the Ministry of Energy of USA, came after the end of yesterday’s regular session in New York showed that the country’s oil reserves have increased by nearly 3 million to a record 355.7 million barrels for the week to March 25.
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The coalition of businesses, regulators, accountants, stock exchanges and NGOs launched an initiative to revise the standards for international financial reporting in order to prevent a new financial crisis, writes Financial Times. The crisis raises many questions about how to rely on corporate statements. Annual reports and financial statements of banks have been particularly criticized for not having warned investors about the risks that companies take. International Integrated Reporting Committee, using the accumulated discontent as a result of the crisis, wants to make a radical change in financial reporting. The proposed new reporting model will consider not only the company’s financial position, but will also include comments on leadership, corporate policy, payment, and issues related to environmental and social responsibility. Investors focus increasingly on issues such as the impact that could have climate change on the finances of a company. Among participants in the initiative are Nestlé, Aviva, EDF, HSBC, Tata, big four auditing companies PwC, Deloitte, Ernst & Young and KPMG, a number of universities, including Harvard Business School, and influential non-governmental organizations such as Global Reporting Initiative and Accounting for Sustainability Initiative.
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The crude oil prices sank sharply in the past day, as the quotations lost nearly 3 per cent. The reason for this was lowering the credit ratings of Greece and Portugal, which led to a serious sell off in global markets. The problems of two European countries came to the U.S., leading to decline in the leading stock indexes in the country yesterday. Exchange in New York on Tuesday with oil contracts in June delivery lost 2.1 percent to 82.44 dollars a barrel. The night of quotations continued to retreat, sinking below 82 dollars a barrel, but this time managed to have stabilized at 82.12 dollars a barrel. The reason for this stabilization has become part of the recovery of lost items of the euro, which rose after a strong decline from yesterday. This morning the single currency is exchanged at 1.3211 dollars per euro after yesterday fell below 1,32 EUR / USD. Yesterday in London, Brent crude from oil fell 1.2 percent to 85.78 dollars a barrel.
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