Morning Business Memo:
Remember all those dire forecasts about $5 gas for the summer? It’s not likely to happen. Gas prices are likely to fall more as the world price of oil continues to drop. West Texas crude is under $90.50 a barrel, while Brent crude for July delivery is just over $105. Both prices are at seven-month lows. Oil futures have plunged 15 percent in just three weeks. Concerns about a weaker global economy are the trigger — largely because of the European debt crisis. Another cause of cheaper oil: tensions with Iran are off the boil for now.
Plunging prices for natural gas have prompted some truckers to ditch diesel. “The economics favoring natural gas are overwhelming,” Scott Perry of Ryder Systems tells the Wall Street Journal. Ryder is one of the largest truck leasing systems. Utilities have been shifting their source of power from coal to natural gas. But the Journal reports many fleet operators, especially long-haul truckers, are concerned about a scarcity of re-fueling stations.
Europe agrees on nothing! The region’s leaders appear to be hopelessly split over what to do about Greece, and other weak economies. For the first time officials in Brussels are drawing up contingency plans in case Greece drops out of the euro currency. A messy departure could cause financial chaos and European officials are looking at how to protect bond markets and banks if Greece walks away from its obligations. At yesterday’s summit meeting in Brussels, European leaders argued over what to do, but made no clear progress in the growth vs. austerity debate.
The housing market has become to climb back from a deep slump. Sales and prices are rising. But nearly 16 million homeowners were underwater on their mortgages in the first quarter of 2012, owing a collective $1.2 trillion more than their homes were worth. The finding by the real estate information firm Zillow is that nearly one-third (31.4 percent) of U.S. homeowners with mortgages were underwater. Foreclosure is not imminent for most underwater homeowners. Nine out of 10 continue to make their mortgage and home loan payments on time, with 10.1 percent more than 90 days delinquent.
Yahoo is trying to get back in the browser biz, launching a new app called Axis. A version released in Apple’s app store alters browsers made by other companies to display search results in what is supposed to be a more convenient and visual format. The software also can be installed as a plug-in on most major browsers used on desktop computers and laptops. Apps for other mobile devices are in the works.
Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc