OIL

OIL PRICES HIT RECORD $61.40 A BARREL AS STORM HITS GULF OF MEXICO

Tropical Storm Cindy struck a surprise blow to the American energy industry overnight by spawning problems with power supply and pipelines that affected operations of at least five Louisiana refineries.

Three refineries saw units shut down, and two were running at reduced rates in the wake of the storm, which many in the industry before landfall had dismissed as a creampuff.

The result was soaring gasoline prices in the Gulf Coast cash markets and also on the New York Mercantile Exchange, where futures surged to a new record high. Oil prices also leapt, setting a new all-time high of $61.40 a barrel.

The price surge almost certainly means gasoline prices at the pump will continue to climb to record highs, a government analyst said. “We’re almost certain that July will average higher than what we were forecasting,” said Doug MacIntyre of the federal Energy Information Administration.

Average retail gasoline prices are already 11 cents higher than the $2.12 a gallon that the statistics arm of the Department of Energy forecast for July.

– Dow Jones Newswires

AEROSPACE

BOEING’S NEW CHIEF MCNERNEY GETS $53 MILLION PAY PACKAGE

Boeing’s James McNerney, who became chief executive officer of the no. 2 American defense contractor July 1, got a pay package valued at $53 million, including $25.3 million in stock awards to replace what he would have received as CEO of 3M.

Mr. McNerney will receive an annual salary is $1.75 million and a bonus of as much as $4.03 million a year, Chicago-based Boeing said yesterday in a U.S. Securities and Exchange Commission filing.

A member of Boeing’s board for almost four years and former head of General Electric’s aircraft engines unit, Mr. McNerney, 55, will lead Boeing’s efforts to retake the title of top commercial-aircraft maker from Airbus.

Mr. McNerney’s supplemental retirement benefits total $22 million, the filing said. His contract is for three years and is renewable for a two-year term, the filing said.

– Bloomberg News

TELECOMMUNICATIONS

MICROSOFT, FRANCE TELECOM TIE UP ON PHONES

Microsoft and France Telecom, Europe’s second-biggest phone company, will jointly develop a range of handsets and work together on a system to combine voice, video, and data services over fixed and mobile networks. The companies will combine technology and software, and work on a range of cordless and cellular phones that can carry calls over the Internet, the chief executive officers of the two companies said at a press conference in Paris.

“Either we are partners or we have the potential to be rivals,” Microsoft CEO Steve Ballmer said. “For us, France Telecom is unique. It is a research and development company. Most telcos are not.”

France Telecom CEO Didier Lombard is merging telephone, Internet, and mobile offerings under the Orange brand as part of a three-year program called NExT, an acronym for New Experience in Telecom services. He aims to increase the number of fixed-line broadband customers to 12 million by the end of 2008. Products to be developed include the LivePhone, a wireless phone to connect to France Telecom’s residential LiveBox terminal, and Homezone, a device combining mobile-phone technology and Wi-Fi, Mr. Lombard said.

– Bloomberg News

YAHOO PLANS EXPANSION OF INTERNET-BASED CALLING

Yahoo is hiring engineers and adding services to carve out a bigger piece of the expanding market for Internet-based calling, company executive Brad Garlinghouse said.

“Yahoo will be a vibrant competitor,” Mr. Garlinghouse, who oversees Yahoo’s communication products including e-mail and instant messaging, said in an interview. “It’s a very high priority for the organization overall.”

Yahoo is on the hunt for engineers with “deep knowledge of the voice industry,” according to job ads posted on the company’s Web site last week. It also is in talks with SBC Communications to offer a product that meshes Yahoo Internet calling with SBC’s Web service, SBC spokesman Shawn Dainas said on July 5.

The hiring and wider range of services are aimed at courting consumers who place calls over the Internet in growing numbers, shunning home phones to slice monthly bills. Yahoo and companies including Time Warner Inc.’s America Online are playing catch-up to Web-calling providers such as Luxembourg-based Skype Technologies, which has 43.8 million users globally.

– Bloomberg News