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Greenspan: Oil will keep rising

Former Federal Reserve Chairman Alan Greenspan said oil prices will keep rising as energy companies have invested too little in production and infrastructure to cope with higher demand.

Companies haven't been reinvesting enough to keep supply growing in line with demand, Greenspan said via satellite to a conference sponsored by Deutsche Bank AG in Singapore, according to an investment strategist who attended the event and who spoke on the condition of anonymity.

Increasing futures-market activity is expanding the aggregate demand for oil because more needs to be held in storage to meet contracts, Greenspan said, according to the person who attended the event.

Crude oil for June delivery was $125.19 a barrel in electronic trading on the New York Mercantile Exchange.

The contract traded for $125.29 a barrel at 12:30 pm London time. Nymex futures have more than doubled in the past year.

Crude reached a record of $126.98 a barrel on Tuesday.

Will McCaw get it right this time?

Craig McCaw, the mobile-phone pioneer whose last two projects failed, may prove Wall Street wrong this time.

McCaw, 58, helped resurrect a merger with Sprint Nextel Corp's high-speed data unit that could give his Clearwire Corp the fastest national wireless Internet system in the United States. Following last week's announcement, though, two analysts downgraded Clearwire, sending the shares lower by 12 percent. They cited the venture's unproven technology and the cost of competing against AT&T Inc and Verizon Communications Inc.

Sellers may want to reconsider. Consumer spending on mobile Web services surged 55 percent to $24.5 billion last year in the US, according to Chetan Sharma Consulting in Issaquah, Washington. Apple Inc sold 4 million iPhones in 2007, helping expand the market. That means McCaw may now be in step with the times, unlike his failure to sell Internet access via satellites.

Arnie outlines budget plan

California Governor Arnold Schwarzenegger proposed that the most-populous US state borrow $15 billion against lottery revenue over the next three years to help fill a budget deficit.

Schwarzenegger outlined the proposal in his updated budget for the fiscal year that begins July 1. The plan would need approval by voters in November. If voters reject it or if it falters for any reason, Schwarzenegger, a Republican, will seek a temporary, 1 cent increase of the state's sales tax.

Schwarzenegger, 60, has seen his state's finances deteriorate amid the worst housing slump in the US in 26 years. In January 2007, he boasted that the state's ongoing deficit had been erased. Within 12 months, he was forced to declare a fiscal emergency as the global credit crunch slammed California's housing market, curbed tax revenue and left him with a $17 billion deficit.

(China Daily 05/15/2008 page16)