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China's consumption of oil drops in the second quarter
Paris: An unexplained drop in China's oil consumption has pushed down the International Energy Agency's (IEA) estimate on Wednesday of global demand for this year.

After growing 11 percent in 2003 and 15.4 per cent last year, China's overall oil use declined 1 per cent in the second quarter from the comparable quarter a year earlier, the agency said.

Top officials of the agency have said that they believed that the decline was temporary and that they expected Chinese demand to rebound in the second half of the year, but added that world oil prices could take a heavy blow if Chinese use did not increase.

The International Energy Agency has recently warned that the world does not have enough oil and has called for the Organization of the Petroleum Exporting Countries to push its member countries to increase their output.

While many traders have expressed concern about China's announcement a week ago that it was close to completing the first of three oil tank farms for a strategic reserve, the IEA has said that they doubt that Chinese officials would opt to fill the reserve quickly as long as oil remained around $60 a barrel.

Officials of the International Energy Agency said there were four possible explanations for China's drop in oil demand in the second quarter, the most probable being that this was a temporary decrease. The most likely cause according to the agency's officials was that China had not been allowing the domestic price of electricity and many refined products, like gasoline and diesel fuel, to rise nearly as quickly as world prices. This has caused power-generating concerns and service stations to sell less electricity, and less gasoline and diesel fuel, so as to limit their losses.

Other causes would include the possibility that the overall Chinese economy is starting to slow, that China is generating more of its electricity from coal instead of oil, and that China is improving energy conservation in response to high prices.
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P&G gets nod for Gillette purchase
Wilmington: Procter & Gamble Co shareholders on Tuesday overwhelmingly approved its plan to buy Gillette Co in a $52.9bn deal that would add Gilette's top selling brands to its line-up.

Gillette shareholders are scheduled to vote later.

Warren Buffett, Gillette's largest shareholder, has called it a "dream deal".

After the acquisition of Gillette, P&G would boast more than $60bn in annual revenue.
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WorldCom's Ebbers gets 25 years in jail
NewYork: Bernard Ebbers was sentenced to a 25-year prison term, which the judge noted was, "likely to be a life sentence" for the 63-year-old Edmonton-born former CEO of WorldCom Inc.

But his legal team vowed that the world had not yet heard the last from Ebbers, despite the fact that they were this week denied an application for a new trial.

A federal jury found Ebbers guilty in March of nine counts, helping to orchestrate the largest fraud in U.S. corporate history, which took $11bn out of the WorldCom coffers, propelling it into bankruptcy and erasing $180bn from its market value. Ebbers' deputy, chief financial officer Scott Sullivan, who oversaw the scam that grossly inflated revenue and made billions in quarterly expenditures appear as capital costs, testified against the CEO in return for a reduced sentence. He has yet to be sentenced.
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US 2005 budget deficit projected at 333bn dollars
Washington D.C., USA: The US budget deficit for the fiscal year ending Sept. 30 is expected to be 333 billion dollars, a big improvement, compared with the estimated shortfall a few months ago, the administration's Office of Management and Budget (OMB) predicted Wednesday.

The revised budget gap released by the OMB was sharply narrower than the 427 billion dollars forecast by the government in February. It was also less than the record 412 billion dollars reached in the 2004 fiscal year.

According to the OMB's mid-session projections, the 333-billion- dollar deficit would amount to 2.7 pe rcent of the Gross Domestic Product, down from last year's 3.6 per cent.

Under the new projections, the budget deficit is set to fall to 162 billion dollars in 2009.

The forecast improvement was due almost entirely to an unexpectedly large tax take, with 87 billion dollars coming from better revenues and just seven billion from lower spending, OMB director Josh Bolten said.

Meanwhile, the OMB lowered its forecasts for budget gaps in the coming five years. It estimated that the government's budget shortfall over the 2006-2010 period would total 1.07 trillion dollars, down from the 1.39 trillion dollars it forecast in February.
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