December 4, 2022

Oil Giants Invest Heavily in Exploration Near Shetlands

The partners plan to drill at least five new wells over two years at a cost of about $100 million each on a project they are calling Greater Clair. Depending on the results, another seven wells could be added, pushing the cost of what they are calling an “appraisal program” to more than $1 billion.

Trevor Garlick, BP’s regional president for the North Sea area, said that if successful, the operations could develop into another major investment. BP is shedding small fields off Britain and elsewhere in order to raise cash and free management to focus on major projects.

“The area is becoming more significant every year,” he said.

Analysts think the area west of the Shetlands is among the most promising sites in Britain.

“It is among the least drilled areas in the U.K. in terms of exploration,” says Lindsay Wexelstein, an analyst at the consultancy Wood Mackenzie in Edinburgh.

The companies and the British government hope that development off the Shetlands can help offset the rapid fall of production in the North Sea, where nearly all of Britain’s fields are located — or even lead to an increase in Britain’s output. BP and various partners are planning to invest more than $12 billion over the next few years in the area, which is environmentally sensitive and where oil installations have to be built to withstand waves of up to 20 meters, or more than 60 feet.

What is attracting the companies are larger fields than are generally available in other waters to the east and south in the North Sea. New technology, as well as high oil prices, are making it feasible to extract oil that was previously undiscovered or economically unfeasible.

The Clair field, for instance, is a vast area 40 kilometers, or nearly 25 miles, long that holds an estimated eight billion barrels — a very large amount of oil by any standard.

“This is one of the areas in this part of the world where there are still giant fields to develop,” Mr. Garlick, BP’s North Sea president, said. “There is probably a lot yet to find.”

BP and its partners, Shell, Chevron, and ConocoPhillips, are already producing oil from one platform and are building larger ones at a cost of $7 billion to tap more oil to the northwest at a location known as Clair Ridge, which is scheduled to begin production in 2016. These two sections hold about half of the Clair field’s oil, the company says, but it thinks it will only extract about a billion barrels from the sections at this stage.

BP thinks that it will be able to extract about 25 percent of the oil from the first two phases of Clair. If it can repeat this performance in a third phase, Greater Clair, the oil recovered could be worth about $100 billion at current prices.

Now the companies have decided to research whether it is worth trying to tap into a series of geologically tricky fields that hold another four billion barrels, or about half of Clair’s oil, and create another production center, Mr. Garlick says.

Advances in seismic technology, which is used to produce images of the oil beneath the sea bed, make the companies confident that they can find the hidden crude.

BP is also experimenting with an injection technique that cuts the salt content of the water used to maintain the pressure in underground reservoirs and, thus, may allow greater oil recovery.

Greater Clair is just one of a group of major projects in the West of Shetlands region. BP is also upgrading a field called Schiehallion at a cost of $5 billion. The French oil company Total has a gas project in the area called Laggan, while Chevron is working on a field called Rosebank that is in the most remote part of the region.

Although Britain was once a major producer, its output of both oil and gas fell by about 14 percent in 2012 compared with a year earlier, the government said Thursday. Oil output fell below the key level of one million barrels a day for the year. By comparison, oil output averaged about 2.5 million barrels per day in 2001.

A not-so-subtle reminder of Britain’s waning oil and gas power and increased dependence on imports came late last week. A burst of bitter cold combined with the brief outage of a natural gas pipeline from Belgium led to a spike in gas prices and worries about shortages.

Because of the production declines, “Britain has become more vulnerable to shocks than it used to be,” says Catherine Robinson, a senior director at the research firm IHS Cera in London.

The sharp production drop has caught the attention of the government, whose budget includes tax relief on decommissioning — the cleanup of depleted fields and installations — and other breaks to help the oil business.

“These measures will have a profound positive impact on industry activity and there are signs they are already encouraging new commercial activity across the U.K. Continental Shelf,” Oil and Gas UK, an industry group, said in a statement.

But a comeback appears to be in the works. Ms. Wexelstein, the analyst at Wood Mackenzie, says the industry is likely to invest $70 billion in Britain from 2012 to 2016 — the most, even accounting for inflation, since the 1970s.

“We are expecting the decline in liquids production to halt and gas production to rise, “ Ms. Wexelstein says.

Rather than abandon Britain, the industry appears to be shifting into a new phase. The major producers are shedding smaller depleted fields and moving north, though the central North Sea off Scotland will likely remain the key producer for a longtime.

BP has sold off about $3 billion worth of older North Sea fields in recent months, giving the company more cash to invest West of Shetlands and elsewhere.

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I.M.F. Reduces Estimates for Global Growth

Releasing quarterly updates of three reports on the outlooks for the economy, debt and global financial stability, the fund cut its estimates of global growth this year to 3.25 percent, from the 4 percent it forecast in September, on “sharply escalated” risks emanating from Europe.

In light of that market uncertainty and sluggish growth, the fund is seeking to raise up to $500 billion in additional lending capacity. It is also calling on the European Union to expand its bailout fund to at least $1 trillion from its current capacity of 440 billion euros, or about $570 billion, according to a person with knowledge of the negotiations.

José Viñals, director of the I.M.F.’s monetary and capital markets department, told reporters that the fund sought to build a “global firewall” — both to help ease the euro crisis and to ensure that no bystanders to it find themselves locked out of the global financing markets.

In a speech in Berlin on Monday, Christine Lagarde, managing director of the fund, said: “The longer we wait, the worse it will get. The only solution is to move forward together.” She call on the world to help bolster the I.M.F.’s resources and on Europe to bolster its own. “The world must find the political will to do what it knows must be done.”

In its quarterly update, the fund said that “risks to stability have increased, despite various policy steps to contain the euro area debt crisis and banking problems.”

The I.M.F. cited continued high financing costs for European countries and weakness in European banks as two risks that had the capability to intensify each other and lead to “sizable contractions” in economic activity.

Other risks include investor fear over the debts of big countries like the United States and Japan, a “hard landing” in emerging economies and spiraling oil prices as the European bloc and the United States confront Iran.

The fund cut its growth forecasts for every region in the world, as well as for trade and commodity prices. The fund now estimates that Europe will experience a mild 0.1 percent contraction — down from a September forecast of 1.4 percent growth — with a sharper contraction of 0.5 percent among the 17 countries that use the euro currency and deeper recessions in Italy and Spain. It also cut its estimate of global trade volumes.

The I.M.F. did not change its growth forecast for the United States, however. Speaking with reporters, Olivier Blanchard, the fund’s chief economist, said that the “good and bad news” about the American economy were “more or less canceling each other” out: The country’s economic growth is now self-sustaining, but a Europe in recession and a slowdown in emerging-markets promise to weigh on the United States in 2012.

The fund also made a stark warning about the safety of the American financial system. The fund said that “potential spillovers” from the euro area crisis might “include direct exposures of U.S. banks to euro-area banks, or the sale of U.S. assets by European banks.”

In recent months, American regulators and policy makers have played down such risks, pointing to sharply reduced exposure to Europe among money-market funds and investment banks.

The I.M.F. also warned that the United States might turn to austerity budgeting too soon, imperiling its own recovery. Carlo Cottarelli, the director of the fiscal affairs department, cited such premature fiscal tightening as a “concrete risk.” He noted that the steep, automatic budget cuts put into place by Congress last year would lead to the biggest hit to spending in four decades. He called for a more “gradual decline in the deficit.”

The same advice applies to the rest of the world, the fund said. Mr. Cottarelli warned that “both too little and too much adjustment will be bad for growth. Both extremes will be bad for growth.” The main risk is that too many countries will cut their budgets too deeply, too soon, sapping demand from the still-weak global economy.

Mr. Viñals, the director of the I.M.F.’s monetary and capital markets department, acknowledged that bond yields had declined in Europe in recent weeks. But he warned it “should not be taken for granted, as some sovereign debt markets remain under stress and bank funding markets are on life support by the European Central Bank.”

Banks should continue to deleverage, the fund said, adding that they should do so by raising funds, rather than reducing credit and thus hampering economic activity.

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Bucks Blog: Thursday Reading: Your Body Is Trying to Keep You Fat

December 29

Thursday Reading: Your Body Is Trying to Keep You Fat

Oil prices are expected to stay high, younger women are choosing school over work, how your body works against your weight-loss success and other consumer-focused news from The New York Times.

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Jobless Rate Dips to Lowest Level in More Than 2 Years

In the midst of the European debt crisis, lingering instability in the oil-rich Middle East and concerns about a Chinese economic slowdown, the American unemployment rate unexpectedly dropped last month to 8.6 percent, its lowest level in two and a half years. The Labor Department also said that the nation’s employers added 120,000 jobs in November and that job growth for the previous two months was better than initially reported. That looks like good news for President Obama as he heads into the 2012 presidential election — especially since just a few months ago the picture looked bleak.

“If you go back to August, all sorts of people were telling us that the economy was headed straight into recession,” said Paul Ashworth, senior United States economist at Capital Economics. “Since that point, we’ve become more and more worried about the euro zone and other areas of the global economy, but somehow, at least for the moment, the U.S. economy seems to be shrugging all that off.”

Even so, part of the reason the jobless rate fell so low was that 315,000 unemployed workers simply stopped applying for jobs. And resilient as the economy seems to have been since this summer, the fate of the fragile recovery is still tied to external — and especially European — events.

So far Europe’s problems have been relatively contained to the Continent. Many economists worry that a disorderly default of Greece or Italy, which still looks alarmingly possible, could plunge Europe into a depression.

If recent history is any guide, even a modest shock wave from across the ocean could throw the American economy off course; earlier this year, a series of shocks from higher oil prices, the Japanese earthquake and the stalemate over the United States debt ceiling managed to drain the energy from the recovery.

November’s drop in unemployment was a welcome relief, given that the jobless rate had been stuck at 9 percent for most of 2011. It is at the lowest level since March 2009; the rate has been above 8 percent for 33 months.

The share of workers who were unemployed fell in November partly because some people found jobs and partly because some discouraged workers dropped out of the labor force altogether. That left the share of Americans participating in the work force at a historically depressed 64 percent, down from 64.2 percent in October.

A separate survey of employers, which economists pay more attention to than the unemployment rate, found that companies added 120,000 jobs last month after adding 100,000 in October.

These numbers were not particularly impressive by historical standards — payroll growth was just about enough to keep up with population growth — but there were other signs of resilience.

Companies have been taking on more and more temporary workers, suggesting that more permanent hiring may be in the cards. What is more, help-wanted advertising, retail sales and auto sales have risen; jobless claims have fallen; and businesses seem to be getting loans more easily. Perhaps most encouraging was a recent survey of small businesses that found hiring intentions to be at their highest level since September 2008, when Lehman Brothers collapsed.

“Small businesses were cheering up at the end of last year but then got clobbered by the jump in oil prices, the Japanese earthquake and then the debt ceiling fiasco,” said Ian Shepherdson, chief United States economist at High Frequency Economics. “Small businesses employ half the work force, and we need them on board.”

Still, serious concerns remain about the economy’s ability to weather the financial and economic turmoil from abroad. The public sector continues to lay off workers at the federal, state and local level. And excluding the hundreds of thousands who have left the labor force, the country still has a backlog of more than 13 million unemployed workers, whose average period of unemployment is at a record high of 40.9 weeks. The median period, the point between the top and bottom halves, is 21.6 weeks.

“They say businesses are refusing to look at résumés from the unemployed,” said Esther Perry, 59, of Bedford, Mass., who participated in a recent report on unemployed workers put together by USAction, a liberal coalition. “What do you think my chances are? Once unemployment runs out, I don’t know what I will do.”

Even those with jobs are in weak positions. Average hourly earnings fell 0.1 percent in November, and a Labor Department report released Wednesday found that the share of national income going to labor was at a record low last quarter.

These softer spots in Friday’s numbers underscored just how much President Obama could use additional stimulus, a tidy and fast resolution to the European debt crisis or some other economic breakthrough to reinvigorate the job market before the 2012 presidential election.

“As president, my most pressing challenge is doing everything I can every single day to get this economy growing faster and create more jobs,” President Obama said Friday in Washington.

On the issue of government action to stimulate the economy, there has been some movement in Washington toward extending the payroll tax cut, which is scheduled to expire at the end of this month. Economists have said that allowing the tax cut — which lets more than 160 million mostly middle-class Americans keep two percentage points more of their paychecks — to expire could be a severe drag on both job creation and output growth.

“If it isn’t extended, it will have an impact on consumer spending in the first half of next year because it’ll put a big dent in consumer income,” said Conrad DeQuadros, senior economist at RDQ Economics. “To the extent that reduces spending, there will be second-round effects on hiring.”

According to some estimates, an extension would probably lead to 600,000 to one million more jobs. The other major stimulus program scheduled to expire by 2012 is the extension of unemployment insurance benefits, allowing some jobless workers to continue collecting for as long as 99 weeks. Already, millions of people have exhausted their benefits. Failing to renew the federal benefit extensions will cause five million additional people to lose benefits next year, Labor Secretary Hilda Solis said in an interview.

Unemployment benefits are believed to have one of the most stimulative effects on the economy, because recipients are likely to spend all of the money they receive quickly and pump more spending through the economy.

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Wall St. Banks Expected to Post Weak 2nd-Quarter Results

But when the bank reports its second-quarter results this week, that hot streak will have come to an end. Analysts expect JPMorgan to count an almost 20 percent drop in its sales and trading revenues, reflecting a slowdown in investor activity and the dismal performance of its fixed-income and commodities groups.

Bank of America, Citigroup, Goldman Sachs and Morgan Stanley are expected to report similar news. After helping prop up Wall Street during the financial crisis, core trading revenue is projected to drop, on average, by as much as 25 percent from the first quarter, according to Credit Suisse research.

That will put further pressure on the banks’ growth prospects, which are already strained by stagnant loan growth and more stringent regulation. It is also prompting nearly every major Wall Street firm to contemplate another round of layoffs amid growing concerns that at least part of the weak results are permanent.

“We are undoubtedly being impacted by lower levels of activity,” said William Tanona, a financial services analyst with UBS. “There is a lot of uncertainty out there.”

Together, the five Wall Street banks are still going to take in more than $20 billion from their core trading operations, largely from business done on behalf of clients. For example, the banks routinely help airlines hedge oil prices or bring together buyers and sellers of stock, bonds and other complex securities — often putting their own money on the line to facilitate a trade. But during the second quarter, the business was particularly hard hit.

Trading volumes fell sharply as investors became unnerved by the running debt crisis in Europe, the political standoff over the debt ceiling in the United States, and lingering concerns over the anemic growth of the broader economy. Even when investors did place their bets, they were far more hesitant to take big risks — something known on Wall Street as lacking conviction. That meant the banks missed out on the lucrative fees they can generate by selling more high-octane products, like complex options and derivatives.

Fixed-income traders, among the biggest moneymakers for Wall Street, faced a bruising market. In the commodities business, for example, oil, gold and other metals prices had been rising quickly during the early part of the year as investors anticipated high demand for materials to keep the global economy humming. But as cracks in the recovery kept surfacing, prices headed south — and traders raced to the sidelines. That left most Wall Street desks, which had stocked up on inventory to facilitate trades, holding losing positions.

At JPMorgan, for instance, energy traders were having a gangbuster year, earning several hundred million dollars for its burgeoning commodities unit. Yet when the market turned in early May, they gave back some of those gains, according to market participants. Morgan Stanley, meanwhile, suffered tens of millions in losses on its interest rate desk when a bet on lower inflation turned against the bank’s position.

Mortgage trading did not fare much better. After rallying from highly depressed values for much the last two years, mortgage-backed securities prices fell sharply during the second quarter. The reason? The government started dumping into the market its vast portfolio of mortgage bonds acquired from its rescue of the American International Group, and investors believed the outsize supply would cause values to plummet. (Only recently, when the Treasury announced it was halting its auctions, did mortgage bond prices start to stabilize.)

Although the banks have slowed the spill of red ink from troubled mortgages and other bad loans, they are struggling to increase revenue in their more traditional banking businesses, too.

New financial regulations have chipped away at once-lucrative sources of income, like overdraft charges and credit card penalty fees. Starting this fall, banks are expecting to absorb a multibillion-dollar hit when they are forced to sharply lower the fees they charge each time consumers swipe their debit cards. Higher capital requirements, meanwhile, could further depress profits if some banks are forced to lighten their balance sheets or exit certain businesses altogether.

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At the Paris Air Show, Anticipating a Surge in Sales

The organizers of the Paris Air Show, which opens on Monday at Le Bourget airport, north of the capital, said that most major exhibitors had reduced their budgets for the weeklong trade show by 10 to 30 percent from the levels of 2009, the last time the industry gathered here.

Still, the number of exhibitors was expected to reach a record, 2,100 — many of them subcontractors and suppliers to companies like Boeing and Airbus — from 80 countries.

Louis Gallois, the chief executive of European Aeronautic Defense and Space, the parent company of Airbus, said he expected a lively week.

“The market is dynamic and definitely on the right track,” Mr. Gallois said during a recent interview. “Traffic is good and airlines are in a better financial situation.”

The global airline industry made a net profit of $18 billion in 2010, bouncing back from combined losses of nearly $26 billion in 2008 and 2009. The airlines are expected to be profitable again this year, to the tune of about $4 billion, according to the International Air Transport Association.

Despite the recent jump in oil prices and turmoil in Japan, North Africa and the Middle East, air passenger and cargo demand are expected to increase 4.4 and 5.5 percent, respectively, this year, largely in line with long-term trends.

“The downturn in commercial orders was short-lived,” said Philip Toy, a commercial aerospace analyst at AlixPartners in Southfield, Mich. He, too, forecast the signing of a number of new contracts in coming days, particularly for the newest version of Airbus’s popular A320 single-aisle jet, which will be fitted with more fuel-efficient engines and a more aerodynamic wing.

The A320neo — the letters stand for new engine option — will be available for delivery beginning in 2016, and Airbus has been promising fuel savings of as much as 15 percent over current engines. It is expected also to run more quietly, with lower operating costs, and be able to fly farther or carry heavier payloads while emitting less greenhouse gas.

Airbus has booked more than 200 firm orders for the A320neo since it was introduced late last year, with commitments from customers to buy as many as 200 more.

Analysts said the momentum building behind the A320neo was putting pressure on Boeing, the American plane maker, to follow suit with a revamped version of its 737, rather than produce a fully redesigned single-aisle jet. After more than 18 months of deliberation, Boeing has yet to decide which strategy to pursue. Boeing has indicated that an announcement is unlikely at Le Bourget.

“They need to make an announcement very soon, before the end of this calendar year,” or risk losing customers to Airbus, Mr. Toy said. “Airbus is no doubt anxious to increase the noise about Boeing’s indecision.”

Randy Tinseth, vice president for marketing at Boeing, said that the manufacturer continued to lean toward an all-new 737 replacement jet that would enter the market in 2019 or 2020 — an approach he said was preferred by customers. But Boeing was not ruling out a new engine, which he said would be 11 percent more fuel-efficient than those on existing models.

“We are going to take our time,” Mr. Tinseth said. “When the decision is ready to be made, we will make it.”

Meanwhile, Airbus also plans to give an update on the development of its latest plane, the A350-XWB, which is slated for delivery in late 2013. The assembly of the first test aircraft is expected to begin at the end of this year, with flight tests scheduled for 2012.

Analysts said Boeing probably would seek to focus attention during the show on its newest twin-aisle jets: the 787 Dreamliner, its competitor to the A350; and the 747-8, a stretched version of the 747. Both the Dreamliner and the 747-8 will be on display at Le Bourget this year for the first time.

“Boeing will quietly take their blows on the narrow-body front while playing up” its wide-body offerings, said Richard Aboulafia, an analyst with the Teal Group, an aerospace and defense consulting group in Fairfax, Va.

After nearly three years of production delays, Boeing plans to deliver its first 787 — 52 percent of which is made from lightweight composite materials rather than metal — to All Nippon Airways in late July or early August. Meanwhile, delivery of the first freighter version of the 747-8, to Cargolux of Luxembourg, is also expected this summer. Lufthansa will be the first airline to receive the passenger version of the plane, which can seat as many as 500 people, in early 2012.

At the smaller end of the spectrum, analysts said they would be watching closely to see how many orders the makers of regional jets, which typically seat 100 to 200 passengers, would manage to garner at the show.

Despite relatively weak demand, the sector has become increasingly crowded in recent years, with manufacturers from Brazil, Canada, China, Japan and Russia.

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Easier-to-Open Packaging? Thank High Oil Prices

But the maddening — and nearly impenetrable — plastic packaging known as clamshells could become a welcome casualty of the difficult economy. High oil prices have manufacturers and big retailers reconsidering the use of so much plastic, and some are aggressively looking for cheaper substitutes.

“With the instability in petroleum-based materials, people said, ‘We need an alternative to the clamshell,’ ” said Jeff Kellogg, vice president of consumer electronics and security packaging at the packaging company MeadWestvaco.

Companies are scuttling plastic of all kind wherever they can.

Target has removed the plastic lids from its Archer Farms yogurts, has redesigned packages for some light bulbs to eliminate plastic, and is selling socks held together by paper bands rather than in plastic bags.

Wal-Mart, which has pledged to reduce its packaging by 5 percent between 2008 and 2013, has pushed suppliers to concentrate laundry detergent so it can be sold in smaller containers, and made round hydrogen peroxide bottles into square ones to cut down on plastic use.

At Home Depot, Husky tools are going from clamshell to paperboard packaging, and EcoSmart LED bulbs are about to be sold in a corrugated box, rather than a larger plastic case.

“Most of our manufacturers have been working on this,” said Craig Menear, the head of merchandising at Home Depot. “We’ve certainly been encouraging them.”

Shoppers have long complained that clamshells are a literal pain, and environmentalists have blasted them as wasteful. To save money and address complaints, retailers and manufacturers started minimizing packaging in the e-commerce sphere a few years ago. Amazon, for example, unveiled a “frustration-free packaging” initiative in 2008 intended to defuse wrap rage and be more eco-friendly. Other retailers have also been looking for ways to improve the customer’s unpacking experience.

“As a guy in packaging, I get all the questions — there’s nothing worse than going to a cocktail party where someone’s asking why they can’t get into their stuff,” said Ronald Sasine, the senior director of packaging procurement at Wal-Mart. “I’ve heard over the years, ‘How come I need a knife to get into my knife?’ ‘How come I need a pair of scissors to get into my kids’ birthday present?’ ”

But reducing packaging is more complicated in physical stores. The packaging has to sell the product, whether with explanatory text, bright colors or catchy graphics. And it has to deter shoplifters. Retailers lost about 1.44 percent of sales to theft in 2009, the latest numbers available, according to the National Retail Federation.

“Clamshells actually served that purpose really well for the last 20 or 30 years,” Mr. Kellogg said. Then, petroleum prices rose, first in 2008 and again this year, so the cost of producing clamshells and other plastic packages, which are petroleum-based, shot up.

“Plastic packaging is a byproduct of a byproduct, and we don’t represent enough volume to counteract the industry,” Mr. Sasine said. “We get dictated by things like petroleum pricing, natural gas pricing, home heating oil.”

And during and after the recession, as retailers’ sales dropped, stores started looking to cut costs in new and imaginative ways.

With the interest in alternatives to so much plastic, MeadWestvaco took a tamper-evident cardboard sheet it originally supplied for pharmaceutical trials, added a clear laminate that prevented tearing, and stuck two sheets of the cardboard together. It put a cutout in the middle, and added a plastic bubble fit to a specific product, like a Swiss Army knife or a Kodak camera.

Though some of the technology, like the film that covers the cardboard, was not available until recently, “it’s a demand issue as well — it’s hard to develop something internally then go cram it into the market if there’s no need,” Mr. Kellogg said about why the package, called Natralock, was only recently introduced.

Wal-Mart began selling items in the new packaging in 2010, and though MeadWestvaco declined to release usage numbers, it says that all of the Swiss Army knives are using the new packaging, and about 85 percent of the computer memory market (like USB drives and SD cards) has switched over.

MeadWestvaco says the package reduces plastic by 60 percent, on average, versus the clamshell version for a given product. It also is lighter by 30 percent, which cuts down on transportation costs and fuel use.

Other packaging suppliers are also offering similarly treated cardboard with small plastic bubbles, which are called blister packs.

“We’ve seen a lot of small, high-value products moving away from what would have been two to three years ago a clamshell, to today what is a blister pack or blister board,” said Lorcan Sheehan, the senior vice president of marketing and strategy at ModusLink, which advises companies like Toshiba and HP on their supply chains.

The cost savings are big, Mr. Sheehan said. With a blister pack, the cost of material and labor is 20 to 30 percent cheaper than with clamshells. Also, he said, “from package density — the amount that you can fit on a shelf, or through logistics and supply chain, there is frequently 30 to 40 percent more density in these products.”

The packages also meet other requirements of retailers. Graphics and text can be printed on it.

Because most people cannot tear the product out of the blister pack with their hands, it helps prevent theft. Also, the small Sensormatic tag that is linked to a store’s alarm system is hidden between the two sheets of cardboard; with clamshells, it is stuck onto the exterior, so a shoplifter can more easily peel it off.

Though clamshells continue to dangle inside stores, “we’re seeing a significant shift,” Mr. Sheehan said. Among the manufacturers to make the change is the parent company of Wiss-brand metal-cutting snips, which are sold at Home Depot and elsewhere attached to a piece of cardboard with elastic staples — no plastic in sight.

Steven Hoskins, manager of packaging engineering for the Apex Tool Group, the parent company of Wiss, said that getting rid of the plastic packaging saved money, allowed for more products per shipment and cut down on waste.

And, Mr. Hoskins said, “the package is very attractive to the consumer.”

And relatively pain-free.

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Russia Unexpectedly Raises a Key Interest Rate

MOSCOW — Russia’s central bank surprised markets by raising its deposit rate Monday, with the chairman citing a weekend decision to lift a grain export ban as a risk factor for inflation.

The hike in the deposit rate, the central bank’s main tool for influencing money-market rates and liquidity, also reflects concern over capital outflows that have exceeded $50 billion in the past seven months despite oil prices over $100 per barrel.

The Bank of Russia raised its overnight deposit rate by 25 basis points to 3.5 percent. However, it held its refinancing rate at 8.25 percent and repo rate at 5.5 percent, and indicated that current rates will “be acceptable” in coming months.

“The decision was made taking into account still-high inflation expectations and risks to steady economic growth,” the central bank said in a statement.

April’s mixed economic data, which showed higher unemployment, slower industrial output growth and “extremely low” capital investment, indicate that “substantial risks to steady economic growth remain,” the central bank said.

Most analysts polled by Reuters had expected the central bank to keep all interest rates unchanged due to the slowing pace of recovery.

The bank chairman, Sergei Ignatyev, said last week the central bank was “in no hurry to raise rates and reserve requirements.” He struck a different note on Monday, however, describing the lifting of the grain export ban as “a significant risk factor.”

Prices on the domestic grain market, depressed by the export ban, had already started rising in anticipation of its lifting and are seen by sector experts going up further.

Annual inflation, at 9.7 percent as of May 23, is a major issue ahead of parliamentary elections in December and a presidential election in March 2012. Analysts still expect the central bank to raise interest rates later this year.

Analysts also said the hike in deposit rates reflected an attempt by the central bank to staunch capital outflows that largely result from loose monetary policy, although Russia’s negative image among some investors also plays a role.

“Low deposit rates facilitate capital outflows, which policy makers are not happy about,” said Aurelija Augulyte, an analyst at Nordea Bank.

Russian rates remain too low to attract inflows from carry trades, where investors borrow in low-interest currencies and seek a yield advantage by investing in currencies offering a higher return, economists say.

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Wall Street Indexes Are Mixed; Oil Prices Fall

Investors turned their attention back toward the state of the economic recovery and the outlook for interest rates as any euphoria surrounding the death of Osama bin Laden ran its course.

“The markets appear to be looking beyond” Bin Laden’s death, a trader at Spreadex, Andrew Sykes, said “and worries about index levels and the economic recovery are moving to center stage.”

A heap of data on the economy and corporate earnings will likely sway the stock and bond markets for much of the week, culminating in the April jobs report on Friday.

The nation’s automakers are expected to report that American sales of cars and trucks rose 19 percent in April. Americans probably more bought cars during the month because of fears that the earthquake in Japan would lead to shortages.

In early trading, the Dow Jones industrial average was up 8.93 points or 0.1 percent, while the broader Standard Poor’s 500-stock index lost 3.03 points or 0.2 percent. Nasdaq dropped 12.55 points or 0.4 percent.

In London, the FTSE 100 index was up less than 0.2 percent while the DAX in Frankfurt fell 0.5 percent. The CAC 40 in France was 0.35 percent lower.

Bond prices were up, sending yields lower. The yield on the 10-year Treasury note fell to 3.27 percent from 3.28 percent late Monday.

In the commodities markets, the oil prices fell below $113 a barrel Tuesday as a stronger dollar made crude more expensive for investors with other currencies. Crude for June delivery was down $1 at $112.52 a barrel in New York trading.

Gold, silver, corn, wheat and soybeans were all lower.

Some analysts considered Bin Laden’s death a minor issue for the oil market, and were more focused on monetary policy. The Federal Reserve chairman, Ben S. Bernanke, said last week that the United States would keep interest rates low for an extended period, comments that helped weaken the dollar.

“In a number of respects, Ben Bernanke is much more central to the future of oil prices than Osama bin Laden,” Cameron Hanover said in a report. “We have seen the impact a weaker U.S. dollar has had on oil prices.”

Earnings reports are mixed on Tuesday. Net income for the drug maker Pfizer increased by 10 percent, in part because of lower costs for production. But Pfizer, the maker of the cholesterol drug Lipitor and impotence pill Viagra, said its revenue fell slightly.

The home builder Beazer Homes USA reported a larger-than-expected loss. Beazer’s orders for new homes fell, reflecting continued weakness in the housing industry.

And the Molson Coors Brewing said its net income fell 21 percent on rising costs for ingredients and fuel.

In Europe, investors will be keeping a close watch on interest rate decisions from the European Central Bank and the Bank of England later this week. Neither is expected to change interest rates, though the European Central Bank is expected to indicate Thursday that it will follow April’s interest rate increase — the first in nearly three years — with another rise in June.

That belief has bolstered the euro currency in the last couple of months despite debt problems, most notably in Greece, Ireland and Portugal. While the European Central Bank is poised to raise interest rates again, the Federal Reserve in Washington has shown few signs that it is ready to lift its super-low interest rates. That has added to the dollar’s recent weakness against the euro.

The euro was at $1.4831 on Tuesday — just off Monday’s near 18-month high of $1.4902. Meanwhile, the dollar was 0.6 percent lower at 80.71 yen.

Interest rates were in focus in Asia earlier after India’s central bank raised its benchmark interest rate by half a percentage point, warning that persistent inflation has become a threat to growth in Asia’s third-largest economy.

India’s reserve bank, which has raised borrowing costs nine times in just over a year, warned that economic growth would slow to about 8 percent this year while inflation would remain close to 9 percent for the first half of the fiscal year.

Unsurprisingly, share prices fell and India’s Sensex index was down 2.4 percent.

Bucking the trend in Asia, mainland Chinese shares rose after markets reopened following Monday’s May Day holiday.

The Shanghai Composite Index gained 0.7 percent to close at 2,932.19, while the Shenzhen Composite Index rose 1.1 percent to end at 1,214.12. Hong Kong’s Hang Seng Index fell 0.4 percent to end at 23,633.25

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Chevron Profit Rises as Unrest Lifts Oil Prices

Net income rose to $6.21 billion, or $3.09 a share, from $4.55 billion, or $2.27, a year earlier, Chevron said. Sales rose 25 percent, to $60.3 billion.

Global demand for petroleum-derived fuels rose 2.9 percent during the first quarter, led by growth in China, Brazil and India, according to the International Energy Agency. Oil futures traded in New York climbed 20 percent to average $94.60 a barrel, driven in part by the civil unrest in North Africa and the Middle East that has imperiled crude supplies.

Stock in Chevron, which is based in San Ramon, Calif., rose 63 cents, to $109.44 a share.

Profit from the company’s oil and natural gas business increased 27 percent to $5.98 billion as higher commodity prices offset an output decline of less than 1 percent. Chevron said it pumped the equivalent of 2.76 million barrels of crude during the period, down from 2.78 million a year earlier.

Chevron’s refineries earned $622 million, more than three times the profit of the first quarter of 2010.

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