Pacific Rubiales: Mexico probably represents the “best short-term opportunity”

Pacific Rubiales Energy Corp. (PRE), Latin America’s largest non-state oil producer, hasn’t been approached by a potential buyer, Chief Executive Officer Ronald Pantin said today.

The appointment of a strategic adviser is limited to the future of the company’s midstream assets, Pantin said during an investor event in New York.

“We have not been approached by anyone,” the CEO said. “We have these guys for Pacific Midstream.”

Pacific Rubiales is seeking to raise as much as $1.4 billion in asset sales to trim debt built up through at least 10 acquisitions of other companies and oil-block stakes in the past two years, Pantin said in a Jan. 28 interview. His latest comments come after people familiar with the matter told Bloomberg in March that the Bogota-based company had hired Bank of America Corp. (BAC) to review its strategic options.

The company plans to sell shares in infrastructure assets next year, Pantin said. That’s after it accepted an offer for a 38 percent stake in its Pacific Midstream investment vehicle, which includes pipeline and energy transmission assets, at the start of the year.

Pantin said Mexico probably represents the “best short-term opportunity,” the company has.

“We have been in Mexico for two years now, not only looking at regulations, laws, possible contracts, but also reservoir levels.”

Pacific expects to be among the first companies to sign contracts in Mexico and is open to a joint venture with Petroleos Mexicanos, the state energy company.

Bloomberg: Asian Stocks Index Extends Biggest Rally in Seven Weeks

Asian stocks rose, with the regional benchmark index extending its biggest rally in seven weeks yesterday, as U.S. equity gauges held at record highs and investors weighed earnings.

The MSCI Asia Pacific Index rose 0.3 percent to 139.72 as of 10:56 a.m. in Tokyo with all but one of its 10 industry groups climbing. The measure jumped 1.1 percent yesterday, the biggest advance since March 24.

“The U.S. economy and corporate earnings are strong, which are reflected in that stocks haven’t fallen from record highs,” said Takahiro Nakano, a Tokyo-based senior strategist at Mizuho Trust & Banking Co., a unit of Japan’s third-largest bank by market value. In Asia, “earnings have been good, but companies are conservative about their outlook, making it hard for investors to raise hopes.”

Among companies on the Asian gauge that reported quarterly results from April 1 through yesterday and for which Bloomberg had estimates, 52 percent beat profit expectations, according to data compiled by Bloomberg.

Japan’s Topix (TPX) index added 0.1 percent as the yen traded at 102.20 per dollar after falling a third day yesterday. South Korea’s Kospi index rose 0.7 percent. Australia’s S&P/ASX 200 Index fell 0.2 percent and New Zealand’s NZX 50 Index added 0.2 percent. Taiwan’s Taiex index advanced 0.1 percent, while Singapore’s Straits Times Index increased 0.9 percent as the market reopened following a holiday.

Hong Kong’s Hang Seng Index advanced 0.3 percent. The Hang Seng China Enterprises Index of mainland companies traded in the city added 0.5 percent. The Shanghai Composite Index was little changed.

The Asia-Pacific gauge traded at 12.7 times estimated earnings as of yesterday compared with 16.1 for the S&P 500 and 15.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

China Telecom seeking private investment: paper

 State-owned China Telecom Corp Ltd , China's third-largest carrier, is seeking private investment for new businesses, the official English-language China Daily newspaper reported on Wednesday.

"Joint ventures and acquisitions are both possible ways for us to cooperate with private firms," China Daily quoted China Telecom chairman Wang Xiaochu as saying.

China's government is pushing reforms that would introduce mixed public and private ownership in state-owned enterprises, such as China's three telecommunications carriers.

Source: Reuters

Global economy still faces considerable risks: leading economic organizations

 World economy still faces various risks despite its recent improvements, and further efforts on growth and consolidation are needed, said heads of world's leading economic organizations on Tuesday.

High unemployment, significant output gap, low investment, rising inequality and slowdown in emerging economies still have an impact on global growth prospects, said chiefs of the Organization for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF), the World Bank, the International Labor Organization (ILO) and the World Trade Organization (WTO) in a joint statement with German Chancellor Angela Merkel released after their meeting in Berlin.

"The global economy has noticeably improved, but is still far from a robust, sustainable growth," the statement said.

"Considerable risks of various kinds remain," said the leaders. "The debt level of most industrialized countries remains too high at the level of the state, enterprises and households. In many countries, the unsatisfactory development of the labor market must continue to be addressed urgently."

They urged governments to continue their efforts on promoting growth and ensuring fiscal consolidation.

Structural reforms should continue to be implemented in the euro zone to strengthen the stability and competitiveness in the common currency area.

In the United States, a credible medium-term budget is needed for its fiscal consolidation, as the country still suffers from a high level of debt.

Emerging economies, meanwhile, must retain their strategies to ensure sustainable growth, improve adaptability to external shocks, and to reduce poverty.

According to IMF, global economy would grow by 3.6 percent in 2014 and by 3.9 percent in 2015.

Source: Xinhua

China's Jan.-April industrial added value up 8.7 %

 China's industrial added value expanded 8.7 percent year on year in the first four months of 2014, official figures revealed on Tuesday.

On a month-to-month basis, industrial added value in April also rose 8.7 percent from a year earlier and 0.82 percent from the previous month, the National Bureau of Statistics said.

Source: Xinhua

China's fixed-asset investment up 17.3 %

China's urban fixed asset investment surged 17.3 percent year on year to 10.71 trillion yuan (1.74 trillion U.S. dollars) in the first four months, the National Bureau of Statistics said Tuesday.

The growth rate was 0.3 percentage points slower than that for the first quarter.

Source: Xinhua

China's April retail sales up 11.9 %

 China's retail sales grew 11.9 percent year on year to 1.97 trillion yuan (322.97 billion U.S. dollars) in April, the National Bureau of Statistics (NBS) said on Tuesday.

In the first four months, China's retail sales grew 12 percent year on year to 8.18 trillion yuan. The growth rate was the same as that in the first quarter.

Retail sales in rural areas outpaced those in cities and towns.

Sales in rural areas rose 13.2 percent in the first four months from the same period last year. Retail sales in urban areas climbed 11.7 percent year on year in the same period.

The Consumer Price Index (CPI), a main gauge of inflation, increased 1.8 percent year on year in April, much lower from the 2.4 percent in March, said the NBS last Friday.

Largely because of the relatively low CPI, retail sales remained flat in the first four months as in the first three months, according to Niu Li, an economist at the State Information Center, which is under the National Development and Reform Commission

Source: Xinhua

WSJ: Oil Exports Face Washington Bottleneck

U.S. benchmark oil prices got a jolt upward Tuesday morning after Energy Secretary Ernest Moniz, speaking at a conference, said the issue of allowing exports of crude was "under consideration." This, it seems, matters more than another set of weak economic data from China or news that Libyan oil output could double after protests there ended.

Allowing more exports of U.S. crude oil, effectively banned since 1975, would raise the price of grades like West Texas Intermediate toward that of foreign benchmarks such as Brent. Rising U.S. output of light, sweet oil is running into the constraint of domestic refineries built to use a lot of imported heavy, sourer oil. The result is a landlocked glut of crude oil, capping prices and potentially discouraging some future drilling.

But anyone expecting export policy to change soon should remember that this is an election year. The first thought of many voters, especially those recalling gas-station lines in the 1970s, is that exporting U.S. oil will raise pump prices. It probably wouldn't, given that products such as gasoline are influenced more by global prices. Allowing exports could actually help to curb prices over time by encouraging more U.S. drilling and supply.

Try explaining that in a sound bite, though. Given that, plus the fact that oil exports figure large in the opposition to the Keystone XL pipeline, and there is little incentive for the White House to weigh in now. The same goes for many members of Congress.

Moreover, the issue of oil exports divides the industry itself. Refiners, who can freely export refined products, benefit from the ban holding down the cost of their main input, crude oil. This, too, muddies the political waters. As Kevin Book at ClearView Energy Partners points out, Sen. Mary Landrieu heads her chamber's energy committee and has long supported natural-gas exports. However, her state, Louisiana, also hosts nearly one-fifth of U.S. refining capacity. Facing a hard re-election battle, she may be reluctant to advance the oil-export cause too much.

Lithuania gets a better natural gas deal with OAO Gazprom,price will fall at least 20%

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WSJ: Ukraine Break-Up: Economist Spells Out the Risk to Bonds

     The WSJ reports,"separatists in Donetsk and Luhansk held referendums at the weekend, which Ukraine said were illegal, where organizers said roughly 9 out of every 10 voters called for independence from Ukraine amid the ongoing tensions with Russia.

Should those two regions and neighboring Kharkiv succeed in splitting from Ukraine, the International Monetary Fund–which last month approved a $17 billion aid program for the country–could call for some form of debt restructuring, said Vadim Khramov, an economist at Bank of America Merrill Lynch".

"In a more extreme scenario where all eight southeastern ‘Novorossiya’ regions were to break away (including Dnipropetrovsk, Zaporizhya, Mykolayiv, Kherson and Odessa,) Ukraine’s debt load would become unsustainable and the IMF, which has said it would need to re-design Ukraine’s aid program if the country loses control over its eastern regions, could demand debt restructuring with bondholders taking a sizeable hit, Mr. Khramov said. The IMF couldn’t immediately be reached for comment.

It’s not hard to see why such a scenario would be grim for Ukraine’s ability to service its debts. Those regions, along with Crimea–which was annexed by Russia in March–make up almost half of Ukraine’s gross-domestic product and account for almost two-thirds of the country’s industrial production. That would clobber the country’s revenues and push the government’s debt-to-GDP ratio to almost 120%, Bank of America analysis shows.

Ukraine’s bonds maturing April 2023 are yielding about 10.2%, according to Tradeweb, roughly 2 percentage points more than at the start of April but still about 1 percentage point below February’s highs".

WSJ: Market Divided over Russia’s Push to Settle Exports in Ruble

In early May, President Vladimir Putin signed a bill that gives the government a right to switch part of Russia’s trade to the national currency.

On Monday, the country’s deputy finance minister said in an interview with a state-run TV channel that such a shift would have only a “microscopic negative consequence.”

On Tuesday, Andrey Bogatenkov, head of crude trading for Russian state producer Rosneft said trading in dollars “is more convenient, it’s the traditional way. But there are also possibilities.”

Also Tuesday, Dmitry Piskulov, chairman of the country’s National Foreign Exchange Association said “there are no legal or technical obstacles in the banking system against this proposal. These matters have been discussed and this may even potentially increase the FX market turnover.”

And yet a panelist at a conference to discuss ruble settlement hosted by Icap in London, sitting next to Mr. Piskulov, described the notion as “ridiculous and absurd idea.” It is “just a hot topic in Russian mass media,” said Sergey Romanchuk, president for Russia for the ACI—a financial-markets association.

Among the challenges in this plan: It’s not really up to Russia. At least, not entirely.

“The choice of an invoicing currency for trade depends on both sides,” said David Hauner, economist at Bank of America Merrill Lynch. “The Russians can try to negotiate with their trade partners. They can try to push for trade in rubles. But it is not clear that they will get their way.” In any case, “Russia needs dollars, for its reserves and for its imports. They export raw materials, but they buy consumer goods, high-tech goods, cars, and so on.”

WSJ:Morning MoneyBeat Asia: U.S. Stocks Look Weary, Still Push to Fresh Highs

At the New York close: S&P 500 0.1% at 1897.45. DJIA 0.1% at 16715.440. Nasdaq Comp down 0.3% at 4130.17. Treasury yields down; 10-year at 2. 2.618%. Nymex crude oil up 1.1% at $101.70. Gold down 0.1% at $1,294.60/ounce.

How We Got Here: It was basically a flat day for U.S. stocks, albeit with the major indexes in record territory. The S&P 500 on Tuesday traded over the 1900 mark for the first time. Even if the gains were slight, you’ve got some observers wondering if this new leg up will be enough to embolden another round of buying.

The most interesting news on Tuesday came out of Europe, where Germany’s central bank apparently readied to accept some of the “unconventional” monetary schemes the ECB is dreaming up, including negative real interest rates.

The euro fell modestly amid implications for a weaker common currency, but it’s still trading above $1.37. It’s all fine and good that Europe’s central bankers are achieving some consensus about the need to do something to weaken the euro. But with central bankers elsewhere actively working to weaken their own currencies, the Europeans will have to do more than talk about consensus.

WSJ: Don’t Restore Fannie Mae and Freddie Mac, Says Their Former Regulator

        The WSJ reports,"Mel Watt, the new director of the Federal Housing Finance Agency, signaled a clear pivot on housing-finance policy in his first public speech Tuesday morning. A few hours later, his predecessor, Edward DeMarco, offered some parting reflections on housing policy at a banking conference in Charlotte, N.C.

Their views couldn’t have been more different.

In his talk, Mr. DeMarco made an impassioned plea to abandon the housing-finance system dominated by Fannie MaeFNMA +7.78% and Freddie MacFMCC +6.90%, the companies he oversaw as the FHFA’s acting director for the past five years. “Rather than striving to preserve a system that failed so spectacularly and in so many ways, we need to find our courage and our creativity to build a new system,” he said in prepared remarks.

Mr. Watt, earlier in the day, said he wanted to broaden the role of Fannie and Freddie and labeled as “irresponsible” any move to wind them down without clear proof that private investors were poised to take their placez".

A little context: several bills have been introduced in Congress to replace Fannie and Freddie, but none of them appear capable of garnering enough votes to move anywhere fast. In the House, Republicans passed on a party-line vote in the financial-services committee last summer a bill to replace Fannie and Freddie with a mostly private mortgage market. In the Senate, the banking committee is gearing up to pass a bipartisan bill with a slim majority on Thursday that would construct a new system of federal reinsurance of mortgage-backed securities to replace the loan giants.

If these approaches flame out, the odds rise that lawmakers could eventually coalesce around restructuring Fannie and Freddie rather than crafting some wholesale replacement. Leaders of some consumer and industry groups, including the California Association of Realtors, have suggested that when it comes to housing-finance overhauls, smaller changes may trump big ones.

Mr. DeMarco disagreed strongly with that view. “Restoring Fannie Mae and Freddie Mac is not the solution. They failed and their business model failed,” he said. “Going backwards to an obviously failed model cannot be dressed up with some promise of higher capital or explicit rather than implicit guarantees.”

Mr. DeMarco pushed back against the idea, made repeatedly by critics of the House and Senate bills, that “something new is ‘risky’ or that we cannot do better than what we had,” he said. “Often you will find someone protecting an existing interest…in preserving the status quo.”

Finally, he warned against calls for the government to help unqualified borrowers buy homes. “A government effort to assist families with limited resources and poor credit history take on increased leverage seems a curious public policy,” he said.

As acting director of the FHFA, Mr. DeMarco had focused on contracting the footprints of the companies in a bid to crowd-in private investment. He also established a new company, jointly owned by Fannie and Freddie, to develop an industry-wide platform for mortgage securitization.

WSJ: Pioneer Investments Bets on Emerging Markets

        The WSJ reports, "Pioneer Investment,the Boston-based money manager, which oversees roughly US$250 billion in assets, this month began to move money into emerging markets, where it had previously been running an underweight position, said group chief investment officer Giordano Lombardo".

“The most constructive approach has been very recent…so in the past two weeks,” Mr. Lombardo said. Key to this decision is Pioneer’s long position in Chinese stocks, an admittedly against-the-grain view, he said. Hong Kong-listed Chinese stocks are down 9% so far this year, one of the worst-performing markets in the world.

“The entire emerging market story will be driven by what happens in China,” he said. “We are not saying that everything is rosy–there are challenges–but I think our job is to balance the positive and negative.” China’s efforts to clamp down on excessive credit growth is among those positives, he said, as well as an eventual narrowing between ultra-loose monetary policy in the U.S. and tight monetary conditions in China.

Pioneer’s increased investment puts it among other large money managers starting to give emerging markets a chance again. In March, U.S. mutual-fund company American Funds launched a Developing World Growth and Income Fund, which invests in dividend-paying emerging-markets stocks. The company famously eschews hot market trends and hadn’t launched a stock fund since 2008.

Better returns for emerging markets after years of underperformance are helping make a case for money managers to get back into the asset class. The MSCI Emerging Market Index is up 7.4% in the past three months, far outpacing a 2.5% rise for the MSCI EAFE index, which tracks developed markets.

Six Ukrainian soldiers killed in Donetsk ambush

A solution to the crisis in east Ukraine seemed as far away as ever on Tuesday, as six Ukrainian army servicemen were killed in an ambush by rebels and attempts to get Kiev and the armed separatists to negotiate came to nothing.

Ukraine's defence ministry released a statement saying that six of its soldiers had been killed and a further eight wounded during an ambush outside the town of Kramatorsk, in Donetsk region. The attackers used grenade launchers and automatic weapons to fire at the Ukrainian column, hitting an armoured personnel carrier.

More than 50 people have died in Donetsk region since Kiev began its "anti-terrorism operation" in the area, but Tuesday's attack represents the greatest loss of life for the Ukrainian army in a single incident.

The de facto separatist government in Donetsk repeated on Tuesday lunchtime that the Ukrainian army was now considered to be an "occupying force", and the ambush appeared to be a bloody restatement of their case.

The "Donetsk People's Republic" was proclaimed on Monday, after a hastily arranged referendum resulted in nearly 90% of votes being given in favour of its creation. Critics have pointed out that there were no observers and that most of those who remain loyal to Kiev simply stayed at home. Nevertheless, the region announced independence and immediately appealed to Russia to accept it as a new region.

Russia is unlikely to annex the territory as it did with Crimea, and so far has merely called for talks between Kiev and the separatists in the east. However, Denis Pushilin, one of the separatist leaders, said on Tuesday that the only thing he could talk to Kiev about was hostage exchanges.

The region's Kiev-appointed governor said that he completely dismissed the claims of the separatists and added that preparations were under way for holding Ukrainian elections in Donetsk region.

"The Donetsk People's Republic does not exist," said Serhiy Taruta at a press conference in Donetsk on Tuesday. He said that he had been negotiating with some representatives of the separatists but that each time there were different interlocutors, so it was impossible to decide who was calling the shots.

Taruta has claimed that Kiev was still in control of the region but it seems unlikely that the elections will take place in the current climate.

Source: theguardian

WSJ: How China Is Eclipsing Japan in Asia

 

Weak retail sales data puts a wrinkle on U.S. growth outlook

U.S. retail sales barely rose in April, tempering hopes of a sharp acceleration in economic growth in the second quarter.

The Commerce Department said on Tuesday retail sales edged up 0.1 percent last month, held back by declines in receipts at furniture, electronic and appliance stores, restaurants and bars and online retailers.

Retail sales, which account for a third of consumer spending, rose by a revised 1.5 percent in March. That was the largest increase since March 2010 and reflected pent-up demand after a brutally cold winter.

"You really had a spectacular March. You are now having an April hangover ... The reality of the economy is decent but not great. Some people over-extrapolated the March numbers," said Guy Berger, an economist at RBS in Stamford, Connecticut.

Economists had forecast sales advancing 0.4 percent last month after a previously reported 1.2 percent surge in March.

U.S. Treasury debt prices rose on the data, while the dollar trimmed gains versus the euro. U.S. stocks were trading higher.

Data such as employment, as well as manufacturing and services industries surveys had suggested the economy regained strength early in the second quarter. Growth was held down to a 0.1 percent annual rate in the first quarter by bad weather and a slow pace of restocking by businesses.

However, growth is likely to be revised down to show a contraction. A second report from the Commerce Department showed retail inventories excluding automobile stocks barely rising in March.

The government had assumed a big increase in these stocks when it made its advance GDP growth estimates last month. March trade, construction spending and factory inventory data, which the government did not have in hand for the GDP estimate, have also suggested downward revisions to output.

In April, a gauge of consumer spending slipped and economists said the economy's weak performance at the start of the year had probably made households more careful about spending.

Source: Reuters

Zhuhai Bests Hong Kong as China’s Most Livable City

        The WSJ reports, "Hong Kong is no longer China’s most livable city.

It’s been knocked out by Zhuhai, which lies on the southern coast of Guangdong province across the border from Macau, according to the latest rankings from the government-affiliated Chinese Academy of Social Sciences. Factors such as a large proportion of college students, a variety of dining and shopping venues and ample green space gave the city its edge, says Ni Pengfei, the director of the academy’s Center for City and Competitiveness".

Hong Kong and Haikou on Hainan Island placed second and third, respectively, while Shanghai ranked 10^th. Beijing came in at 41^st out of 294 cities, with the report attributing its low ranking to air pollution and high housing prices.

Hong Kong still topped the list for overall competitiveness, followed by Shenzhen and Shanghai, based on factors such as housing affordability, cultural competitiveness and environment.

The report also pointed to several international cities that Chinese cities should try to emulate, including Melbourne for its livability, Paris for its culture and Singapore for its business strengths.

JD.com China's 2nd largest e-commerce plans an IPO in the U.S. in coming weeks

WSJ: Morning MoneyBeat: Record Highs and Cautionary Trends

           The WSJ reports,"another day, another record high and another potential cause for concern.

Jonathan Krinsky, chief market technician at MKM Partners, alerted clients Monday of a sharp divergence playing out in the markets. As of late last week, some 80% of S&P 500 components traded above their 200-day moving averages—a proxy chart watchers use to gauge a market’s long-term trend.

The fact that so many companies traded above this technical indicator is a positive sign, suggesting wide participation among the market’s rally.

At the same time, only 42% of Russell 2000 small-cap stocks traded above their 200-day averages, a sharp contrast from the S&P 500. In fact, it marks the widest divergence between the two indexes since 1995, according to Mr. Krinsky’s calculations.

It’s unclear what the ramifications of this divergence suggest for the broad market’s next move, although the trend is an oddity that is gaining attention among market watchers".

"The departure between the Dow and S&P 500, which hit new records Monday, and the Russell 2000 is hardly surprising. Small-cap stocks have fallen out of favor in recent months as investors flocked to larger, dividend-paying and more attractively priced companies. The Russell 2000 Friday briefly tumbled on an intraday basis into correction territory, Wall Street parlance for a 10% drop from a recent high.

“What we have seen over the last few weeks is unprecedented in at least the last 20 years,” Mr. Krinsky said.

He outlined three instances–1995, 1999 and 2007—in which the market experienced similar—albeit not as extreme—divergences.

In 1995, stocks were in the middle of a secular bull market. The divergence between the Russell and the S&P 500 didn’t matter much as both kept rallying in lockstep through that summer. The rally ultimately continued for several years before topping out.

In early 1999, the tech bubble was in full blast just as the components in the S&P 500 and Russell 2000 were diverging. The Russell dropped about 10% that year from late-January to mid-February 1999, while the S&P 500 was relatively unchanged over that same period. “Not too dissimilar from what has happened recently,” Mr. Krinsky said. “Ultimately this was resolved with both indices moving higher for the next year, before both peaked for good in March 2000.”

And finally in 2007, the divergence between the two indexes ultimately provided a strong warning sign that the overall market was getting top heavy. Both the Russell and the S&P 500 slumped from May through July of that year. The S&P 500 recovered and made a new high in October, while the Russell lagged. Both ultimately fell in the months leading up to the recession.

In other words, three similar market divergences led to three very different results, making it difficult to glean any significant takeaways from the market’s latest moves.

Sure enough, many of the beaten-down momentum stocks jumped on Monday. The Russell 2000 rose 2.4%, its biggest gain since March 4. The tech-heavy Nasdaq Composite increased 1.8%. It sits less than 1% from turning positive for the year".

But one day doesn’t make a trend. And Mr. Krinsky says he will remain guarded about the market heading into the summer.

“Nobody knows for sure which way the present market will resolve itself, but given the sector action we have been seeing, we remain on the cautious side until proven otherwise,” he said.

US retail sales increased 0.1% in April

                                The WSJ reports,retail sales increased 0.1% in April from the prior month to a seasonally adjusted $434.57 billion, the Commerce Department said Tuesday. That was lower than the 0.4% gain forecast by economists surveyed by The Wall Street Journal and marked a big step down from March.

Excluding auto purchases, retail sales were unchanged.

The Commerce Department revised March's retail-sales increase upward to 1.5%. The March gain was originally reported at 1.1% but was bumped up to 1.2% as part of an annual revision on April 30.

April's data could soften hopes for a second-quarter rebound in the economy after a soft patch in the first quarter that was largely attributed to weather. Consumer spending accounts for more than two-thirds of U.S. economic output.

Tuesday's report showed spending at furniture and electronics stores fell, while spending on groceries showed modest growth. Spending on clothes, up 1.2%, was one of the few categories to show a healthy gain.

U.S. Considers Lifting Crude Oil Export Ban

         The WSJ reports "the U.S. is considering relaxing regulations that ban the export of crude oil, citing growing domestic production of oil that isn't suitable for refining locally, U.S. Energy Secretary Ernest Moniz said Tuesday.

The statement was the most explicit yet by the Obama administration that it would push ahead with plans to study changing U.S. law to allow for exports, a contentious subject on Capitol Hill.

U.S. oil production has soared in recent years due to the use of new hydraulic fracturing technology, which has unlocked the country's large oil- and shale-gas reserves. According to the International Energy Agency, the U.S. will become the world's largest oil producer by around 2020.

But U.S. law prohibits most crude exports. That has caused some distortions in global and domestic energy markets, and dampened the price of oil in the U.S. compared with the rest of the world. With all that new crude, domestic bottlenecks have formed in places like North Dakota, transportation hubs like Cushing, Okla., and most recently, along the Gulf of Mexico coast, where much of the nation's refining capacity is located.

In recent years, many U.S. refineries there have geared their production toward processing heavy oil from Latin America and Canada. Now, they are struggling to keep up with rising supplies of light, sweet shale oil from places like North Dakota and Texas.

"The issue of crude oil exports is under consideration…A driver for this consideration is that the nature of the oil we're producing may not be well matched to our current refinery capacity," Mr. Moniz said at a media briefing Tuesday after a two-day energy conference in Seoul. He said a study of the subject, including multiple agencies, is currently taking place.

Any discussions over potential exports will likely be drawn-out and politically fraught. Many industries have benefited from lower oil prices, and won't be eager to compete with foreign buyers. Politicians will likely approach any change to policy with caution".

China's Disappointing Manufacturing and Property Data for April Show Signs of Weakness

             The WSJ reports, "China's disappointing manufacturing and property data reveal fresh signs of weakness that could pressure Beijing to prop up the economy.

 April data released on Tuesday suggest the slowdown in the property market is having a knock-on effect on factory output, retail sales, and investment in machinery, land and other physical assets, all of which posted slower growth rates compared with a year ago.

"The figures are rather serious, a signal that perhaps economic activity hasn't moved up but is still at the bottom," said Li-Gang Liu, an economist at Australia & New Zealand Banking Group Ltd.  "It's a wake-up call for policy makers for more decisive action if they're serious about their 7.5% growth target."

At least two local governments in recent weeks have rolled back housing restrictions set amid a frothy property market. Eased policies include extending preferential purchase rights to residents of neighboring communities and relaxing residency requirements for outsiders buying property.

Spending on real estate, including indirect purchases such as furniture and management fees, accounts for about a quarter of China's economy, a proportion large enough to cause a domino effect if the sector hits a wall.

"The risk to the property sector is my most worrisome concern for the Chinese economy this year," said UBS AG economist Wang Tao.

Home sales in the first four months of the year fell 9.9% to 1.53 trillion yuan ($245.6 billion), according to China's National Bureau of Statistics, compared with a 7.7% decline for the three months ended March. The statistics agency relies on year-to-date figures and doesn't break out individual months.

Demand weakened in more Chinese cities as banks continued to tighten mortgage lending and buyers stood on the sidelines, expecting developers to cut prices further".

Property investment in the first four months of 2014 rose 16.4% year-over-year to 2.23 trillion yuan, but that was down from the 16.8% growth seen in the first quarter.

Despite concerns of mounting debt, the central bank needs to relax its lending policies to property developers and households to invigorate the sluggish real-estate market, said Société Générale economist Yao Wei. If current tight credit policies remain much longer, she said, Beijing won't be able to turn around the real-estate market in the near term.

Tepid production, investment and real-estate data leading into the second quarter—traditionally a stronger period as investment growth kicks in after the winter—could pressure China's central bank to cut the reserve-ratio requirement, the amount of deposits and notes commercial banks must hold in reserve, analysts said.

Industrial production by the nation's factories and mines rose 8.7% year-over-year in April, the statistics agency said, a slight decline from 8.8% in March.

Fixed-asset investment in machinery, land and buildings, excluding rural areas, meanwhile rose 17.3% in the January to April period, compared with the same period a year earlier, a decline from the 17.6% increase in the January to March period.

Retail sales for the month rose by 11.9%, a decline from the 12.2% year-over-year increase in March.