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  • Oil jumps nearly 3% as supply outages outweigh recession fears

    Oil jumps nearly 3% as supply outages outweigh recession fears

    Oil prices rose nearly 3% on Friday as supply outages in Libya and expected shutdowns in Norway outweighed expectations that an economic slowdown could dent demand.

    Brent crude futures were up $2.71, or 2.5%, at $111.74 a barrel, while West Texas Intermediate crude (WTI) gained $2.81, or 2.7%, to $108.57 a barrel.

    Both contracts fell around 3% on Thursday, ending the month lower for the first time since November. For the week, Brent was on track for a loss of 1.2%, while WTI was set to rise 0.9%.

    Prices rose on Friday despite the release of industry data showing U.S manufacturing activity slowed more than expected last month, adding to evidence that the country’s economy was cooling as the Federal Reserve tightens monetary policy.

    The Institute for Supply Management said that its index of national factory activity dropped to 53.0 last month, the lowest reading in two years.

    Still, low crude and fuel supplies supported the oil market even as equities slumped and the U.S. dollar, which typically has an inverse relationship with crude, rose.

    “The ability of the complex to post a strong advance today in the face of significant U.S. dollar strength and a weak equity trade suggests some refocus on tight oil supplies,” Jim Ritterbusch, president of Ritterbusch and Associates LLC, said in a note.

    A planned strike among Norwegian oil and gas workers on July 5 could cut the country’s overall petroleum output by around 8%, or around 320,000 barrels of oil equivalent per day, unless a last-minute agreement is found over wage demands, a Reuters calculation showed.

    Libya’s National Oil Corporation on Thursday declared force majeure at the Es Sider and Ras Lanuf ports, as well as the El Feel oilfield. Force majeure is still in effect at the ports of Brega and Zueitina, NOC said.

    Production has seen a sharp decline, with daily exports ranging between 365,000 and 409,000 barrels per day, a decrease of 865,000 bpd compared with production in “normal circumstances”, NOC said.

    The U.S. oil rig count, an early indicator of future output, rose by one to 595 this week, their highest since March 2020, according to energy services firm Baker Hughes Co.

    Even though the U.S. oil rig count has risen for a record 22 months through June, weekly increases have mostly been in single digits as many companies focus more on returning money to investors and paying down debt rather than boosting output.

    Meanwhile, Ecuador’s government and indigenous groups’ leaders on Thursday reached an agreement to end more than two weeks of protests which had led to the shut-in of more than half of the country’s pre-crisis 500,000-bpd oil output.

    On Thursday, the OPEC+ group of producers, including Russia, agreed to stick to its output strategy after two days of meetings. However, the producer club avoided discussing policy from September onwards.

    Previously, OPEC+ decided to increase output each month by 648,000 barrels per day (bpd) in July and August, up from a previous plan to add 432,000 bpd per month.

    A Reuters survey found that OPEC pumped 28.52 million bpd in June, down 100,000 bpd from May’s revised total. [OPEC/O]

    U.S. President Joe Biden will make a three-stop trip to the Middle East in mid-July that includes a visit to Saudi Arabia, pushing energy policy into the spotlight as the United States and other countries face soaring fuel prices that are driving up inflation.

    Biden said on Thursday he would not directly press Saudi Arabia to increase oil output to curb soaring prices when he sees the Saudi king and crown prince during a visit this month.

  • Major crypto broker Voyager Digital suspends all trading, deposits and withdrawals

    Major crypto broker Voyager Digital suspends all trading, deposits and withdrawals

    • Digital asset brokerage Voyager Digital is pausing all customer temporarily suspending customer trading, deposits, and withdrawals, according to a statement released Friday afternoon.
    • “This was a tremendously difficult decision, but we believe it is the right one given current market conditions,” said Stephen Ehrlich, CEO of lending company Voyager.

    https://www.cnbc.com/2022/07/01/voyager-digital-suspends-all-trading-deposits-and-withdrawals-.html

  • Oil dips as supply concerns linger and OPEC+ sticks to policy

    Oil prices dipped in volatile trading on Thursday as concerns over global supply appeared to outweigh a build in U.S. fuel product inventories as OPEC+ decided stick to its measured output strategy.

    Brent crude futures for September, the more actively traded contract, were down 96 cents, or 0.9%, at $111.49 a barrel. The August contract, which expires on Thursday, was down 78 cents, or 0.7%, at $115.48.

    U.S. West Texas Intermediate (WTI) crude futures fell $1.25, or 1.1%, to $108.53.

    The OPEC+ group of producers including Russia, on Thursday agreed to stick to its output strategy after two days of meetings, sources told Reuters.

    Sanctions on Russian oil since Russia’s invasion of Ukraine have helped to send energy prices soaring, stoking inflation and recession fears.

    Crude inventories fell by 2.8 million barrels in the week to June 24, U.S. Energy Information Administration data showed, far exceeding the 569,000 barrel drop forecast in a Reuters poll of analysts.

    However, fuel stocks rose as refiners ramped up activity, operating at nearly full capacity, the highest at this time of year in four years.

    “The net drop in crude oil inventories was flattered by SPR (Strategic Petroleum Reserve) releases, while the gasoline stock jump is because U.S. refineries are running at over 95% capacity,” said Jeffrey Halley, OANDA’s senior market analyst for Asia Pacific.

    But further disruptions to supply could limit price declines amid a suspension of Libyan shipments from two eastern ports while Ecuador output fell because of ongoing protests.

    Exports of Ecuador’s Oriente crude remain suspended under a force majeure declaration as the spread of anti-government protests hurt oil output, state-run Petroecuador said on Wednesday.

  • Supreme Court says EPA does not have authority to set climate standards for power plants

    Supreme Court says EPA does not have authority to set climate standards for power plants

    The Supreme Court on Thursday ruled the EPA does not have authority to set standards on climate-changing greenhouse gas emissions for existing power plants.

    The court’s ruling on the case, West Virginia v. the Environmental Protection Agency, affects the federal government’s authority to set standards for planet-warming pollutants like carbon dioxide from existing power plants under the landmark Clean Air Act.

    The decision could have a major impact on the Biden administration’s agenda to combat climate change, specifically the goal to zero out carbon emissions from power plants by 2035 and halve the country’s emissions by the end of the decade.

    Fossil fuel-fired power plants are the second-largest source of pollution in the U.S. behind transportation, according to the EPA. The U.S. is also the second-largest producer of greenhouse gases behind China, making it a key player in global efforts to combat climate change.

    The court’s six-justice conservative majority has been skeptical of the federal agency’s authority to set national standards.

    The legal fighting over the EPA’s authority began several years ago when the Obama administration set strict carbon limits for each state in an effort to reduce emissions from power plants, and urged states to meet limits by shifting to cleaner energy alternatives like wind and solar.

    The Obama administration’s Clean Power Plan was temporarily blocked in 2016 by the Supreme Court and then repealed in 2019 by the Trump administration, which argued that the plan exceeded the EPA’s authority under the Clean Air Act. It argued that the act only allowed the agency to set standards on the physical premises of a power plant — or “inside the fenceline.” 

    The Trump administration proposed more lenient standards to regulate emissions only from existing coal-fired steam plants, a policy called the Affordable Clean Energy Rule. The revision was challenged by states and environmental groups and ultimately struck down by the U.S. Court of Appeals for the District of Columbia Circuit.

    Since then, there hasn’t been an EPA standard with respect to carbon pollution from existing power plants.

    Republican attorneys general led by West Virginia, a major coal producer, along with coal companies and industry groups, pursued the case, arguing that the EPA doesn’t have the authority to transition the country to cleaner energy sources and that such authority belongs to Congress.

    Lawyers representing the EPA and U.S. utility industry lobby groups pushed back on arguments restricting the agency’s authority, arguing that doing so would prompt lawsuits against power providers.

    Under the Biden administration, the EPA has indicated that it will not attempt to resurrect the Clean Power Plan, but rather create its own rules to regulate power plant emissions.

    This is breaking news. Check back for updates.

  • China’s Shenzhen stocks rise as data shows factory activity grew in June; Asia stocks slip

    China’s Shenzhen stocks rise as data shows factory activity grew in June; Asia stocks slip

    • Chinese markets rose on Thursday as government data showed factory activity grew in June, but most other Asia-Pacific indexes fell.
    • Japan’s industrial production plunged 7.2% in May, according to government data.
    • In corporate news, Toyota Motor missed its monthly production target in May for the third month in a row, Reuters reported.

    https://www.cnbc.com/2022/06/30/asia-markets-china-pmi-data-stocks-currencies-oil.html

  • OPEC+ sticks with planned oil production hike as supply concerns weigh on energy markets

    OPEC+ sticks with planned oil production hike as supply concerns weigh on energy markets

    • OPEC and non-OPEC partners, a group sometimes referred to as OPEC+, concluded a meeting via videoconference by deciding to stay the course with its production policy.
    • It means the Middle East-dominated group will increase monthly overall production for the month of August to 648,000 barrels per day.
    • OPEC+ said its next meeting would take place on August 3.

    https://www.cnbc.com/2022/06/30/opec-sticks-with-planned-oil-production-hike-supply-concerns-linger.html

  • Fed’s preferred inflation measure rose 4.7% in May, around multi-decade highs

    Fed’s preferred inflation measure rose 4.7% in May, around multi-decade highs

    • Core personal consumption expenditures prices, excluding food and energy, rose 4.7% from a year ago, slightly less than expected.
    • Headline inflation remained strong, rising 0.6% on the month and holding near the highest level since 1982.
    • Disposable income and inflation-adjusted spending both declined on the month.
    • Weekly jobless claims totaled 231,000, a slight decline from the previous period.

    https://www.cnbc.com/2022/06/30/feds-preferred-inflation-measure-rose-4point7percent-in-may-near-40-year-high.html

  • Air Canada reducing summer flights as industry faces ‘unprecedented strains’ on travel operations

    Air Canada reducing summer flights as industry faces ‘unprecedented strains’ on travel operations

    Air Canada, AC-T -2.29%decrease citing “unprecedented strains” on the airline industry from resurgent travel, says it is cancelling 154 flights per day in July and August, or 15 per cent of its schedule.

    “Regrettably, things are not business as usual in our industry globally, and this is affecting our operations and our ability to serve you with our normal standards of care,” chief executive Michael Rousseau said in a message to customers Wednesday night.

    “Despite detailed and careful planning, the largest and fastest scale of hiring in our history, as well as investments in aircraft and equipment, it is now clear that Air Canada’s operations too have been disrupted by the industry’s complex and unavoidable challenges.”

    Mr. Rousseau’s customer message did not provide details on the reductions, but Air Canada gave specifics in a response to questions from The Globe and Mail.

    Air Canada cancels almost 10 per cent of Toronto flights over seven days as staffing crunch, passenger surge hit Pearson airport

    The airline said it is reducing its schedule, on average, by 77 round trips, or 154 flights, a day in total for July and August. Air Canada currently operates on average about 1,000 flights a day.

    Three routes from Montreal to Pittsburgh, Baltimore and Kelowna will be temporarily suspended. Air Canada will also suspend its route from Toronto to Fort McMurray.

    Most of the flights affected are to and from Toronto or Montreal, Air Canada said. “These will be mostly frequency reductions, affecting primarily evening and late-night flights by smaller aircraft, on transborder and domestic routes,” the airline said in an e-mailed statement. “Our international flights are unaffected, with a few timing changes to reduce flying at peak times and even out the customer flow.”

    As travellers returned to the skies in 2022 after two years of the COVID-19 pandemic, the world’s airline infrastructure struggled to keep up. Travellers to Toronto’s Pearson airport have fared poorly, with massive line-ups at check-in, security and customs.

    Air Canada cancelled more than 350 flights at Pearson in the first seven days of June – almost 10 per cent of its schedule – as staffing shortages and a surge in passengers beleaguered Canada’s busiest airport. WestJet and Air Transat also had delays and cancellations at Pearson. Airports in Calgary, Montreal and Vancouver experienced bottlenecks, but not to the extent of Pearson.

    In his customer message, Mr. Rousseau described “flight cancellations and customer service shortfalls on our part that we would never have intended for our customers or for our employees, and for which we sincerely apologize.”

    “This was not an easy decision, as it will result in additional flight cancellations that will hav

    ive impact on some customers. But doing this in advance allows affected customers to take time to make other arrangements in an orderly manner, rather than have their travel disrupted shortly before or during their journey, with few alternatives available. It will also enable us to more reliably serve all customers.”

    Shortly after the e-mail went out, Air Canada said its website was ”currently experiencing technical issues that may prevent you from retrieving your booking online … We are working to resolve the issue as quickly as possible, and appreciate your patience.”