Read more about Global Energy Industry Outlook 2008

Iberdrola is a 100-year-old company based in Bilbao (Basque Country) devoted to the national and international energy sector. As of March 2006, it had an installed capacity of 3914 megawatts from renewable sources of which 3598 megawatts come from wind power.

In November 2006 Iberdrola made a bid to buy Scottish Power and this was completed in April 2007. The merger created the third largest utility in Europe, and generates around 6000 megawatts of renewable energy. Iberdrola is also Spain’s largest nuclear energy producer. The price offered for Scottish Power by Iberdrola, which generates most of its energy from coal fired power stations and natural gas, is 40% higher than a bid a year earlier from E.ON of Germany.
In recent developments, Iberdola has announced that it will spend about 6 billion Euros ($8.4 billion) in buying the U.S. power company Energy East.

In June 2007 when it announced plans to acquire the utility, Iberdrola had originally announced that it would be investing around 6.4 billion Euros in Energy East.

Iberdrola Chairman Ignacio Sanchez Galan has announced that the company has set a target of achieving more than 3 billion Euros in net profit in 2008, in line with the group’s targeted core earnings of about 7 billion Euros for the year.

The chairman also stated that each of Iberdrola’s main business areas have continued to exceed the company’s anticipations since June and noted that Scottish Power is performing well despite an adverse sterling to euro exchange rate.

Iberdrola’s acquisition of Energy East will metamorphose the electricity company - which purchased Scottish Power in 2007 - into the fourth-largest in the world in terms of market capitalization.

The deal will have a favorable affect on Iberdrola’s earnings per share from the first year, with Energy East contributing to Iberdrola’s results from the fourth quarter of 2008.

Energy East supplies either electricity or natural gas to about three million customers in five states in the U.S. Northeast.

The New York regulator enforced conditions on the deal which included $275 million in tariff adaptations and a requirement for Energy East to divest fossil fuel generation.

The divestments implemented by the regulator are expected to have a fewer than 1 million euro impact on the company’s core earnings for 2008, a company executive said.
Iberdrola said it hopes to close the deal to acquire Energy East by next week.
Read more about Global Energy Industry Outlook 2008

Read more about Global Energy Industry Outlook 2008

Demand destruction and the strength of the dollar are tailor-made to send oil prices lower. If it weren’t for the active hurricane season, prices would be below $100.

Crude oil for October delivery fell $1.66, or 1.5 percent, to settle at $106.23 a barrel at 2:46 p.m. on the New York Mercantile Exchange, the lowest close since April 4. Oil has dropped six straight days, the longest stretch since April 30, 2007, through May 7, 2007. Prices are 41 percent higher than a year ago.

Gasoline for October delivery dropped 5.43 cents, or 2 percent, to $2.6861 a gallon in New York, the lowest settlement price since April 1. Heating oil slumped 4.09 cents, or 1.4 percent, to settle at $2.9828 a gallon, the lowest since April 3.

Investors looking for hedge against the dollar’s decline earlier this year helped lead crude oil, gold, corn and gasoline to records. The situation reversed over the past month as the dollar rallied against the euro.

The dollar traded at $1.4241 against the euro, compared with $1.4325 yesterday. It reached $1.4196 before, the strongest since Oct. 24.

T he Organization of Petroleum Exporting Countries, the supplier of 40 percent of the world’s oil is scheduled to meet on September 9 in Vienna to discuss output and prices. Venezuela and Iran have already made calls to trim supply because prices have dropped 28 percent from the record $147.27 reached July 11.

Saudi Arabia, the world’s biggest oil producer and OPEC’s most influential member, hasn’t said what its position on production will be at the meeting. The desert kingdom decided to unilaterally raise output by 500,000 barrels a day during June and July to curb the rise in oil prices.

Hurricane Ike, located about 425 miles (683 kilometers) north of the Leeward Islands, has maximum sustained winds of 120 miles per hour, making it a Category 3 storm. The hurricane may enter the Gulf of Mexico by the middle of next week.

The Louisiana Offshore Oil Port (LOOP), the biggest U.S. oil-import terminal, has announced that it resumed offloading of oil tankers recently. The offshore terminal was shut on August 30, and LOOP stopped shipments from its onshore operations Aug. 31 because of the approach of Gustav.

Royal Dutch Shell Plc, the largest oil producer in the Gulf of Mexico, reported light to moderate damage to equipment at three fields because of Gustav.

Continental Airlines Inc. has declared that it will charge some coach customers $15 for the first checked bag to help counterpunch rising fuel costs. The move adds to the number of fees and price increases carriers are tacking on to cover a 49 percent jump in the cost of jet fuel, the industry’s greatest expense, during the past year.
Read more about Global Energy Industry Outlook 2008

Read more about Global Energy Industry Analysis and Trends
While consumers and commercial enterprises have gotten a bit of a respite at the petrol pump as of late, the escalation in oil costs we have witnessed across the past year has directed to some outstanding modifications in gross consumer behavior. Numerous car-owners have ditched their gas-guzzling pickup trucks and sport utility vehicles at the closest used-car lot and used the proceeds to purchase some gas-sipping rides. Companies with large distribution webs have redesigned their shipping agendas, crafting more effective roads that accommodated larger truckloads.

The consequence: Gasoline sales collapsed during the first half of the year as domestic demand fell to its lowest level in five years. As a matter of fact, the United States Department of Transportation reported that Americans drove almost 5% lower in June than a year ago, and also said that the buses, subways and light-rail systems that make up the nation’s public/mass-transit systems climbed by 3.4% in the first quarter of the year.

Lately, U.S. gasoline stations have been constrained to adjust their prices (again) after prices at the pump dropped down below $3.80 a gallon - a powerful decline from the prices of $4 a gallon and higher that motorists were thrust to deal with as the summer driving season began.

Even in China, oil imports dropped considerably in July on reducing global demand. It will be interesting to see if - and by how much - the Summer Olympic Games bear upon these numbers. And even if the games propel a spike in requirement, some analysts are now predicting that a post-Olympic economic “lull” will afflict Mainland China.

This energy-price enigma does not stop there, either, as such geopolitical “wild cards” as the Russian invasion of Georgia continue to whipsaw costs. Even with such tensions, however, energy traders brushed off concerns about major supply disturbances - not the response we would’ve seen just a few months back. Late last week, in fact, oil prices took clues from the newfound strength in the dollar and dropped beneath $112 a barrel, a number not even conceivable in mid-July, when crude-oil prices reached a record level of $147.

All’s well on the energy front, it seems.

Nevertheless, one should by all odds not believe it. In the near term, crude-oil prices could well keep going down … but it’s only going to take one “real” scare - a terrorist attack, or some sort of event that creates protracted supply worries - to cause oil prices to spike in a big way.

And in the long haul, demand is going to keep rising in such emerging-market countries as China and India. That can only send oil prices higher.

Read more about Global Energy Industry Analysis and Trends