Oil Slides Despite Cuts
The Organization of Petroleum Exporting Countries (OPEC) met Friday for an emergency meeting in Vienna to steady oil prices but to no avail. U.S. oil prices slid down to $64.15 a barrel on Friday and continued to drop to $62 a barrel today.

The prices continued to fall even after OPEC cut about 5 percent of its total daily output — approximately 1.5 million barrels of crude — off the world market, Reuters reports. The reduction would take effect Nov. 1.

"The power to influence oil prices is moving farther and farther away from Opec," oil analyst Stephen Schork said to BBC News. "Everyone thought China and India would go on buying oil forever, but that's not the case. The demand is no longer there. People fooled themselves when they said emerging markets could weather a US downturn."

Says Deutsche Bank analyst Michael Lewis in a note, "[...] we believe production cuts will not rescue the oil price." The bank expects U.S. crude oil prices will hit $50 a barrel next year.

The 13-nation producer group is responsible for producing roughly 40 percent of the world's supply and says it will continue to provide crude volumes as required by consumers. OPEC will review their decision at their December meeting but will consider further cuts beforehand, if necessary.

Steel and Aluminum Shipments Continue Sinking
Steel and aluminum product shipments from metals service centers continue to decline in year-over-year comparisons during September, but inventories of the two metals rose slightly from 2007, the Metals Service Center Institute (MSCI) shows.

Goldman Sachs Group analyst Sal Tharani says to Purchasing Magazine that although inventories remain low by historical standards, they appear high compared to very weak demand. Tharani expects a further decline in inventories "for at least the balance of this year."

According to various mills and service centers, demand started to deteriorate in September and conditions have worsened since, Purchasing reports.

September shipments of steel products in 2008 totaled nearly 3.73 million tons, a decline of 7.6 percent from September 2007. Month-end inventories of steel products totaled 10.66 million tons, 0.9 percent more than a year ago, representing a 2.9-month supply, MSCI says.

Aluminum shipments totaled 137,200 tons in September, a decline of 3.7 percent from September 2007. Aluminum inventories at the end of September totaled 450,400 tons, 1.4 percent more than last year at this time, signifying a 3.3-month supply.

Jobless Claims Goes Up
After two weeks of jobless benefits claims falling, the U.S. Department of Labor reports an increase of 15,000 jobless claims for the week ending Oct. 18.

It estimates about 12,000 of those claims were because of Hurricane Ike. The four-week moving average, which smooths out fluctuations, decreased to 480,250 — a drop of 4,500 from the previous week.

With the demand for American-made goods continuing to wane and as companies announce layoff intentions, economists are bracing for the October job loss report set to come out Nov. 7. Many economists predict the number to exceed 200,000

"My view is that it will be near 8 or 8.5 percent by the end of next year," Nigel Gault, chief domestic economist at Global Insight, says to the New York Times. That would be the highest unemployment rate since the early 1980s.

GM/Chrylser Sales Talk Intensifies
General Motor Corp. strengthened its bid to buy Chrysler LLC's auto operations from Cerberus Capital Management saying it intends to seek U.S. government aid to support the deal, Reuters says. This acquisition will also involve a transfer of ownership of GMAC, GM's financing arm. GM owns 49 percent of GMAC after selling 51 percent to Cerberus for $7.4 billion in 2006.

The merger would give control to GM but leave Cerberus with stake of less than 10 percent, says an updated report by Reuters. "Such a merger would shake up the U.S. industrial landscape and create an automaker with about a third of the U.S. car market by sales," Reuters adds.

And it's not just GM who is interested in Chrysler. Nissan is proposing to buy about 20 percent of Chrysler and possibly have a three-way link-up with GM like it suggested back in 2006, Reuters reports.

Iceland Solidifies
After Iceland's banks unraveled almost three weeks ago, resulting in the nationalizing of its three biggest banks and a row with the U.K. over £4 billion in deposits, Iceland has agreed to accept an International Monetary Fund (IMF) bailout.

Iceland is believed to have negotiated a $6 billion IMF-led rescue package backed by the central banks of its Nordic cousins, although the IMF has yet to make a formal announcement, The Times (UK) reports. IMF may provide about $1 billion in emergency cash for Iceland with the balance lent by Norway, Sweden and Denmark and additional money possibly coming from Russia and Japan.

Britain also pledged to resolve the impasse and has lent Iceland £100 million to help it meet some of the cost of Icesave deposits. According to BBC News, the U.K. has guaranteed the deposits of all U.K. private depositors in Icelandic banks, but "part of the compensation for Icesave's U.K. customers should come from Iceland because the bank is not registered in the U.K.," the U.K. government says.

Manufacturing Confidence Falls in Britain, China
Manufacturing confidence across the Atlantic is also at a freefall with orders for U.K.-made goods falling at their fastest rate since 1999, CBI magazine says. The latest quarterly CBI Industrial Trends survey shows that declining demand for manufactured goods, coupled with a sharp fall in output, has resulted in the sharpest single quarter fall in manufacturing confidence for 28 years.

Even export orders, which have been supported by the depreciating sterling, fell with 35 percent of CBI survey respondents citing a drop in orders. Economists pay close attention to the CBI survey because it generally has been a guide to predicting future levels of activity, Financial Times (UK) says.

According to CBI, manufacturers see no let-up in the coming quarter with output (-31 percent), domestic orders (-42 percent) and export orders (-21 percent) all expected to fall further.

Across the Pacific, China is also on a scramble to shore up its exports by increasing rebates on more than a quarter of taxable goods, IndustryWeek reports. Falling demand has threatened the booming Chinese economy and kept its economic growth to 9 percent — the lowest level in five years.

The new rebates will go in effect Nov. 1 and will apply to 3,486 items, including textiles, clothing and toys.

Britain Cuts Carbon Emissions
Britain will introduce a legally-binding pledge to cut carbon emissions by 80 percent by 2050, the minister for the newly-created Department for Energy and Climate Change said Oct. 16 (via IndustryWeek). It became the first country to introduce legally-binding cuts in CO₂ emission when both the House of Commons and House of Lords passed the bill in March.

The cuts will cover all industries — including shipping and aviation — and would cost around 1 percent to 2 percent of gross domestic product (GDP) in 2050. It is "challenging but feasible," says the government committee who made the initial recommendation.

Challenging indeed as delays with the National Grid upgrade may mean the U.K. will miss its renewable energy and climate change targets for 2020, reports The Times (UK). "Under an EU agreement earlier this year, Britain committed itself to increasing its reliance on renewable energy from about 2 percent to 15 percent. To reach the target, up to 40 per cent of electricity will have to come from renewable sources."

Unless it becomes easier for renewable energy generators to connect to the grid, Britain will miss its targets. The delays already have postponed projects and developers are now being told they may have to wait until 2018 to connect.