Energy Sector Roundup: Oil bounces back

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

Oil Recoups Week's Losses

Oil prices rose back above $128 a barrel after the dollar fell in response to comments by European Central Bank President Jean-Claude Trichet suggesting the bank could raise interest rates. At the pump, meanwhile, gas prices rose to a new record near $3.99, and are likely to hit $4 soon.

Light, sweet crude for July delivery rose as high as $128.26 before retreating slightly to settle up $5.49 at $127.79 on the New York Mercantile Exchange, easily regaining all ground lost earlier in the week.

In other Nymex trading, July gasoline futures rose 13.94 cents to settle at $3.3345 a gallon while July heating oil futures rose 13.5 cents to settle at $3.6808 a gallon.

Natural Gas Supplies Grow

The Energy Department's Energy Information Administration said in its weekly report that natural-gas inventories in the lower 48 states rose by 105 billion cubic feet to nearly 1.81 trillion cubic feet for the week ending May 30.

The inventory level was slightly below the five-year average, and well below last year's storage level of more than 2.13 trillion cubic feet, according to the government data.

Natural gas for July delivery rose 14 cents to settle at $12.519 per 1,000 cubic feet on the New York Mercantile Exchange.

Cabot Buys Texas Oil Properties

Cabot Oil and Gas will buy 25,000 acres of oil-producing properties in east Texas, as well as production infrastructure, for $602.8 million.

The purchase was from a private party, Cabot said, and is near existing Cabot properties in the Minden area.

Cabot estimated the purchased fields have proved reserves of 176 billion cubic feet of equivalent.

"We view this deal positively, as we believe the proved producing assets lower the risk profile by providing a cash flow stream versus solely an acreage acquisition," said Goldman Sachs analyst Brian Singer. "We see further upside if Cabot can grow production at attractive finding and development costs over the next one to two years."

Cabot shares rose $6.29, or 10.7 percent, to $65.36 in afternoon trading. Earlier they hit a new high of $65.50.

Senate Climate Bill Faltering

A Senate bill to cut greenhouse gases and address climate change is heading toward almost certain defeat after nearly a week of stalemate and partisan bickering. Both sides are charging the other with blocking action.

The Associated Press has learned that senators close to the issue privately say there is virtually no chance to get the 60 votes they need to break a Republican filibuster. Senate Majority Leader Harry Reid has set a vote for noon on Friday. If the vote falls short, he will pull the measure off the floor.

The legislation would require power plants, refineries and factories to reduce their carbon dioxide and other greenhouse gases by 71 percent by mid-century. Republicans complain the reductions would produce higher energy costs and harm the economy. The bill's supporters say energy costs can be controlled and something must be done urgently to address global warming.

Petrobras to Spend $20B on refineries

Brazil's state-run oil company Petrobras plans to spend more than $20 billion to build two new refineries.

The media reports say the two new refineries are expected to begin operating in 2015 and will produce high grade derivatives for export.

The investment plans were announced by Petrobras president Jose Sergio Gabrielli.

The company plans to nearly double its refining capacity to 3.6 million barrels per day by 2015.

CEO of Russia's TNK-BP Questioned in Tax Case

The American chief executive of Russian oil producer TNK-BP was called in for questioning as part of a criminal investigation into possible large-scale tax evasion, according to the company.

The pressure on Robert Dudley comes as the company's Russian shareholders battle British oil major BP PLC for control of the joint venture, Russia's third-largest oil producer.

TNK-BP said the questioning was routine and not related to the shareholder dispute.

TNK-BP's Russian shareholders _ billionaires Mikhail Fridman, Viktor Vekselberg and Len Blavatnik _ last week demanded Dudley's ouster. They say he ignored the interests of Russian shareholders and runs the venture as if it were a BP subsidiary.

Dudley, who refuses to step down, says there are serious disagreements among shareholders over long-term investment plans.

Commerce Secretary Warns Ukraine on Oil Dispute

Commerce Secretary Carlos Gutierrez suggested that a growing dispute over the cancellation of a U.S. company's oil exploration contracts could damage Ukraine's reputation with foreign investors.

Gutierrez spoke to business leaders in Kiev a day after President Viktor Yushchenko ordered his top security advisory council to sort out the dispute involving the Texas-based Vanco Energy Co.

He said the Vanco dispute could frighten away investors and that Ukraine needed a clear set of rules for investment.

The government of Prime Minister Yulia Tymoshenko last month said it canceled a contract with a Vanco subsidiary to explore for oil and gas on a deep-water shelf off the Black Sea Crimean peninsula. The government said the 2006 production-sharing agreement amounted to "plundering Ukraine's mineral reserves."

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