Energy Sector Roundup: Oil, retail gas edge up to new highs

Oil prices, gas at the pump rise to new records

Oil prices rose to a new settlement high after a bumpy day of trading, and gas prices at the pump climbed nearly 3 cents overnight to a new national record.

Light, sweet crude for June delivery rose 16 cents to reach a settlement record of $123.69 a barrel on the New York Mercantile Exchange after trading lower for much of the day, and not surpassing the previous day's trading record of $123.93.

Retail gasoline prices rose 2.7 cents to a record $3.645, according to a survey of stations by AAA and the Oil Price Information Service. Diesel prices also rose, adding 0.9 cent to match a record national average of $4.251 a gallon.

In other Nymex trading, June gasoline futures rose 1.96 cents to settle at a record $3.1378 a gallon after earlier rising to a trading record of $3.14, and June heating oil futures rose 6.25 cents to settle at a record $3.5098 a gallon after earlier reaching a trading record of $3.5152. Natural gas futures fell 6.4 cents to settle at $11.263 per 1,000 cubic feet.

Oil companies settle MTBE claims

Several major oil companies agreed to a multimillion dollar deal to settle lawsuits surrounding their use of the gasoline additive MTBE, a potential carcinogen that has been found in drinking water.

Companies including BP PLC's BP America Inc., Chevron Corp., ConocoPhillips, Royal Dutch Shell PLC's Shell Oil Co., Marathon Oil Corp. and Valero Energy Corp. agreed to pay a total of $422 million to settle the claims brought by 153 public water systems.

The agreement also calls for the companies to pay 70 percent of cleanup costs for wells contaminated by MTBE over the next 30 years, suggesting the total payout could rise, said Scott Summy, an attorney representing water systems in 17 states.

MTBE, or methyl tertiary butyl ether, is a chemical added to gasoline to boost its octane level and cut air pollution. It was first added to gasoline in 1979, but its use declined after it was found in some communities' drinking water supplies and banned in a number of states.

Iran sees oil at $200 a barrel soon

Iran's oil minister predicted oil prices will soon rise to $200 per barrel, the official IRNA news agency reported.

Oil Minister Gholam Hossein Nozari attributed crude's recent spike to production slowdowns in Nigeria and the dollar's weakening against other currencies. A number of analysts around the world have cited both factors as contributing to the recent surge in crude.

"The time when the price of oil is $200 a barrel is not far," Nozari was quoted as saying. "In fact oil has not been expensive, the dollar has been weak," he added.

Iran is the second-largest producer in the Organization of Petroleum Exporting Countries.

U.S. unveils latest blueprint for "clean coal" plants

The U.S. Energy Department laid out plans to spend up to $1.3 billion on multiple "clean" coal-fired plants designed to capture carbon emissions and store them underground. The unveiling of the project kick-starts two weeks of public comment on the proposal.

The new proposal comes after the Energy Department killed an earlier plan that would have sited a plant in Mattoon, Illinois.

Rather than site the project in a single location, the department says it prefers to distribute the money out to several projects across the U.S.

Trucking group urges slowdown to cut fuel costs

The leading U.S. trucking industry trade group laid out a plan to cut fuel consumption and emissions over the next 10 years, mostly by urging members and the public to slow down.

The American Trucking Associations, whose members include FedEx Corp., UPS Inc. and Con-way Inc., said it now costs more than $1,000 to fill a typical tractor-trailer. That means the industry could end up spending a record $135 billion on diesel this year, up $22 billion from 2007, according to the ATA.

Among the group's proposals: limiting the speed on new trucks and lowering the national speed limit to 65 mph for all vehicles, reducing engine idling, boosting fuel efficiency, and easing highway congestion, possibly with a new fuel tax.

Adopting its guidelines could cut fuel consumption by 86 billion gallons and carbon dioxide emissions by 900 million tons for all vehicles over the next decade.

Dynegy swings to 1Q loss on accounting loss

Dynegy Inc. swung to a first-quarter loss as power prices surged, leading the Houston-based power producer to record bookkeeping losses to account for some advance sales.

The company reported losing $152 million, or 18 cents per share, compared with profit of $14 million, or 3 cents per share, in the same period last year. The total included $284 million in mark-to-market accounting losses on certain forward power sales.

"The higher prices we're seeing in the forward markets, particularly in 2009 and beyond, reflect the overall tightening of electricity markets and rising energy commodity prices that set the marginal price in the marketplace," Bruce Williamson, Dynegy's chairman and chief executive, said in a statement.

--Compiled by AP Business Writer Adam Schreck