Energy Sector Roundup: Crude settles above $127

Following is a summary of top stories in the energy sector Monday afternoon.

Oil, Gasoline and Diesel Reach New Highs

Crude oil settled at a new high, and retail gasoline and diesel prices reached new records as well, adding to the pressure on drivers planning road trips for the coming holiday weekend.

Drivers are now paying an average of $3.79 for a gallon of regular gas, according to a survey by AAA and the Oil Price Information Service. Diesel, used to transport a wide range of goods, now costs $4.52 a gallon.

Light, sweet crude for June delivery rose 76 cents to settle at $127.05 a barrel on the New York Mercantile Exchange.

Gasoline futures added 1.31 cents to settle at $3.2242 a gallon. Heating oil futures fell 2.77 cents to settle at $3.6751 a gallon. Natural gas futures lost 14 cents to settle at $10.954 per 1,000 cubic feet on the Nymex.

Bush Ending Strategic Petroleum Purchases

President Bush still thinks a bill forcing his administration to temporarily stop buying oil for the country's Strategic Petroleum Reserve is a bad idea, but he'll sign it anyway.

"The president is not going to stand in their way on this bill," said deputy press secretary Scott Stanzel.

The Senate last week voted 97-1 and the House 385-25 for the legislation.

Earlier, the White House had vowed to veto such a measure.

"He remains against it," Stanzel said. So why is he signing it? "I think he saw the overwhelming numbers of members of Congress who want to attempt to have an impact on prices by stopping the fill of the Strategic Petroleum Reserve."

Sponsors of the bill hope the move will help lower energy prices. But the administration says the amount of oil involved _ about 76,000 barrels a day _ is relatively small and will not affect gas prices.

Holly N.M. Refinery Unit Shut Down

A key unit at Holly Corp.'s New Mexico refinery is down for repairs, with gasoline production off by as much as 756,000 gallons this month.

The shutdown of the fluid catalytic cracking unit at the Navajo Refinery in Artesia, N.M., followed a shutdown due to an instrument control malfunction on May 7.

As the unit was being brought back on line after the initial shutdown, the unit experienced catalyst circulation problems that forced a second shutdown on Friday. Repairs should take about a week.

Cracking units turn unrefined crude oil into refined products such as gasoline and diesel.

For May, Holly said total gasoline production is expected to be reduced by approximately 13,000 to 18,000 barrels per day while total diesel production should be reduced by 3,000 to 5,000 barrels per day. There are 42 gallons in a barrel.

Survey Says Power Consumers Would Pay More to Stop Global Warming

New surveys of regulators and consumers conducted by Deloitte LLP find many people are willing to pay higher prices for electricity, if the costs help reduce global warming.

Most of the 50 state public utility regulators interviewed think the costs of electricity will rise next year because of fuel costs, environmental compliance and capital costs.

But 62 percent of 1,000 consumers surveyed said they would pay five percent more for power to stop greenhouse gas emissions. Slightly more than half said they would support "clean coal" technology. Most of the nation's power plants are fueled by coal.

Deloitte's surveys "show a desire for more efficient energy and a willingness to pay some amount for it," said Greg Aliff, vice chairman and U.S. Energy & Resources leader for Deloitte. "The real question is just how much these technology advances will actually cost, and how much consumers are going to willingly accept."

Pacific Ethanol Earnings Surprise

Shares of Pacific Ethanol Inc. shot up as much as 46 percent after the ethanol producer's first-quarter results, adjusted to exclude a charge, surpassed analysts' expectations.

For the three months ended March 31, Pacific Ethanol lost $35.2 million, or 90 cents per share, compared with earnings of $3 million, or 5 cents per share, a year ago.

But excluding a one-time impairment charge of 96 cents, the company posted an adjusted first-quarter profit of 6 cents per share.

Analysts polled by Thomson Financial expected, on average, a loss of 9 cents per share. Those estimates typically do not count one-time charges and gains.

"It appears Pacific was able to overcome lower average ethanol prices and higher corn costs to modestly improve its year-over-year results excluding one-time items," Oppenheimer & Co. analyst Joseph Gomes Jr. said in a note to investors.

Shares rose $1.35, or 42.2 percent, to $4.55 in afternoon trading.

Halliburton May Bid on Expro This Week

Oilfield services company Halliburton Inc. is expected to decide this week if it will launch a $3.5 billion counteroffer for its U.K. rival Expro International Group PLC, according to the Daily Telegraph. Halliburton has been conducting due diligence on the company since Expro agreed to accept a $28-per-share takeover offer from a consortium made up of private equity firms Candover, Alpinvest and Goldman Sachs.

The newspaper says Halliburton has until this weekend to decide on a formal bid, under U.K. rules. Expro shareholders meet June 2 to decide on Candover's offer.

Kazakhstan Stops Exporting Refined Products

Kazakhstan banned the export of all refined oil products, as the energy-rich Central Asian nation grapples with soaring fuel costs.

The announcement, made by Prime Minister Karim Masimov at a government meeting, comes just days after opposition parties called on his government to resign amid what they call a worsening economic climate.

Kazakhstan has huge oil and gas resources, but soaring prices for consumer products like diesel and other fuel are having a knock-on effect on the country's agricultural sector.

The increase in the cost of diesel and gasoline have outstripped the rate of inflation, which is approaching an annual rate of 18 percent.

--Compiled by AP Business Writer Greg Stec. Questions or comments can be directed to gstec@ap.org.