OPEC Production Increase Appears Unlikely

Key members of the Organization of Petroleum Exporting Countries say global oil markets are amply supplied with crude, signaling that the cartel will maintain its current output targets at this week's meeting in Vienna.

Oil and energy ministers for Iran, Iraq, Kuwait, Libya, Nigeria and Venezuela told reporters on the eve of the meeting that the 12-nation group felt little pressure to loosen its taps.

With the summer driving season over, and demand for gasoline and diesel fuel slackening, OPEC appeared almost certain to maintain its official output quota of 25.8 million barrels a day.

Saudi Arabia, OPEC's top producer and the cartel's leading member, has not said publicly what it wants the cartel to do -- triggering speculation that it might be hedging its bets and considering a push for a modest increase in output.

"This could be either the most uneventful OPEC meeting ever, or they may come with something up their sleeves," said analyst John Hall of London-based John Hall Associates.

Pipeline Blasts Boost Natural Gas

Natural gas futures jumped after a series of explosions hit gas pipelines owned by Mexico's state-owned oil company, Pemex. A company official said the blasts were deliberate. Left-wing guerillas have hit the country's natural gas infrastructure in the past, although no one has yet claimed responsibility for Monday's explosions. The U.S. imported 12.7 million cubic feet of natural gas from Mexico last year, about 0.3 percent of total imports.

There were also reports of an explosion that shut down a pipeline supplying Turkey with gas from Iran. Repairs are under way, and Turkish authorities said supplies to customers were not affected.

Nymex natural gas rose 9.3 cents to $5.594 per 1,000 cubic feet.

Oil and gasoline futures fell, as traders kept an eye on the OPEC meeting in Vienna.

Light, sweet crude for October delivery lost 65 cents to $76.05 a barrel on the New York Mercantile Exchange after trading down more than $1 earlier.

Gasoline futures fell 3.94 cents to $1.970 a gallon, and heating oil for October was off 0.12 cent at $2.1420 a gallon.

At the pump, gasoline prices fell 0.8 cent overnight to a national average of $2.819 a gallon, reversing a recent trend of rising prices.

RBC Lowers Natural Gas Price Outlook, Raises Oil Estimates

RBC Capital Markets cut its outlook for natural gas prices in the second half of the year and raised its estimate for oil prices.

The firm lowered its forecast for natural gas prices (per thousand cubic feet) for the third quarter to $6.16 from $7.50 and for the fourth quarter to $6.50 from $7.50, said analyst Scott Hanold.

"Inventories continue to be on track to hit an all-time record due to the absence of hot summer weather and hurricane disruptions coupled with growing supply," he said.

The analyst expects natural gas to trend downward in the next few weeks before rising again toward the end of the year. "We believe natural gas prices will recover to at least $7 per thousand cubic feet during December as the market builds in a premium in anticipation of winter demand."

Hanold increased his oil price outlook for the second half by 9 percent overall -- to $73 per barrel from $63 in the third quarter and to $65 from $64 in the fourth quarter.

"Oil prices have shown remarkable strength thus far in 3Q07 as a result of fears of future supply disruption, worries about the gasoline market and pure investor exuberance."

But Hanold does not think oil prices have unlimited upside. "We still believe that current prices are too high and that prices will likely drop once we enter the shoulder season in late summer/early fall as demand wanes."

U.S Rig Count Rises in August

In its monthly rig count, Baker Hughes Inc. said 1,804 rigs were operating in the U.S. during August -- 27 more than in July and 66 more than in August 2006.

The international count was 1,009 rigs operating last month, down nine from July and 55 higher than in August 2006.

Baker Hughes said 16 fewer offshore rigs operated in August than in July, as Hurricane Dean shutdown some rigs for a time.

Hybrids and Diesel in Spotlight at Frankfurt Auto Show

The world's automakers will make new efforts to win customers over with more environmentally friendly cars at the Frankfurt Auto Show this week as they tout new vehicles with hybrid propulsion and more advanced, cleaner engines.

The show, which runs from Sept. 13-23, will reflect concerns about high gas prices, fuel efficiency and global warming by putting green products and technologies front and center: lower-emission diesels, new hybrids and hydrogen fuel cells -- some market-ready, others as concepts.

BMW AG, Porsche AG, Volkswagen AG and DaimlerChrysler AG will all be showing cars with low-emission diesel engines; hybrids that feature electricity to augment traditional fuel motors; as well as hydrogen fuel cell concepts that BMW is researching. All of it is part of the effort to make high-mileage, cleaner cars that also meet drivers' expectations for performance.

Swedish automaker Volvo AB, owned by Ford Motor Co., will have its plug-in hybrid concept at the show. Called the ReCharge and based on its C30 hatchback, the hybrid is similar to GM's Chevrolet's Volt, which was unveiled at the Detroit auto show earlier this year.

Sasol Selling Stake to Black Investors

South African energy company Sasol said it will sell a stake to black investors as part of a campaign to address inequities created by the country's apartheid past.

The deal is valued at about $2.5 billion and will be implemented next year if approved by shareholders.

Under the structure, a 3 percent stake would go to black South Africans and 4 percent would be divided between Sasol's 27,000 mainly black employees and a company foundation that will focus on skill development in communities around the company's main plants.

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