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Analysis-Physical crude oil market steams ahead after Omicron blip

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Frantic oil buying driven by supply outages and signs the Omicron variant won’t be as disruptive as feared has pushed some crude grades to multi-year highs, suggesting the rally in Brent futures could be sustained a while longer, traders said.

Prices for physical cargoes do not always trade in tandem with oil futures and when differentials widen rapidly and considerably, they can indicate speculators have oversold or overbought futures versus fundamentals.

Brent oil futures have jumped 10% since the start of the year but the physical market is still racing ahead, with differentials for some grades hitting multi-year highs, suggesting a tight market will push the futures rally on.

“These are crazy numbers. There clearly is physical tightness,” a North Sea oil trader said.

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Key benchmark grade Forties traded at a fresh two-year high on Thursday at Dated Brent plus $1.80 a barrel.

Other North Sea grades have also hit one or two year highs. Prices for key west African grades like Nigeria’s Bonny Light have jumped too since the start of the year.

Graphic – Atlantic Basin crude differentials jump: https://graphics.reuters.com/OIL-DEMAND/klvykqjxbvg/chart_eikon.jpg

The tightness began in the Atlantic Basin and spread as Asian buyers were forced to look for cheaper cargoes elsewhere. Differentials for crude from Oman, the UAE and Russia’s Far East have jumped as Brent crude’s premium to Dubai swaps is at its widest in two months.

Several factors have fuelled prices. After the wildfire spread of Omicron in the fourth quarter, oil demand has not been badly hit in a surprise to refiners that had reduced purchases. Now, they suddenly have to make up for the gap.

Violent protests in Kazakhstan at the start of the year prompted fears of a prolonged oil outage, which did not materialise, that would have compounded outages elsewhere such as in Libya, Canada and Ecuador. The Libyan and Ecuadorian outages were largely resolved in the past week after taking out close to 1 million barrels per day.

At the same time, OPEC and its allies have stuck by their timeline to slowly increase output, despite repeated calls by the United States and elsewhere to go faster. Meanwhile, nuclear talks with Iran, that could also boost supply, appear stalled.

“Turns out Omicron wasn’t so bad and supply issues were worse than anticipated,” a U.S. crude trader said.

“(Buyers) are snapping up everything no matter what grade.”

Inventories have also shrunk in the United States and Canada. The U.S. Energy Information Administration said on Wednesday crude oil stockpiles fell more than expected to their lowest since October 2018.

“With spring and summer on the horizon … people are getting prepared to enjoy a strong market,” a U.S. trader said.

Some traders still believe the market could run out of steam due to new COVID variants, seasonal refinery maintenance in the second quarter, and a potential slowdown in China.

“I think it’s more trying to get ahead of tightness they think is coming … back to a ‘herd of lemmings’ market dynamic,” another market player said of the recent rally.

Graphic – Physical price of North Sea Forties grade vs Brent futures: https://fingfx.thomsonreuters.com/gfx/ce/akvezejbapr/forties%20vs%20brent%20futures%203%20month.jpeg

 

(Reporting by Julia Payne, Arathy Somasekhar and Florence Tan; Additional reporting by Stephanie Kelly in New York and Alex Lawler in London; Editing by Mark Potter)

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Canada carbon tax rebate: 2024 deposits start for some – CTV News

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OTTAWA –

The first instalment of the 2024 Canada carbon rebate will be delivered to some Canadians Monday as long as they filed their taxes by the middle of March.

Canadians living in Alberta, Saskatchewan, Manitoba, Ontario, and all four Atlantic provinces will receive the first of four instalments Monday if they filed their 2023 taxes by March 15.

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Those who filed their taxes since March 15 will see their first instalment on May 15, while those who file after Monday will wait until June or July.

The payments are based on household size and for a family of four range from $190 in New Brunswick to $450 in Alberta.

Ottawa also has just launched a new online estimator that shows how much you should get from the rebates.

In a bid to make the rebates more understandable Ottawa renamed them the “Canada Carbon Rebate” this year but is still negotiating with the big banks about changing how the deposits are labelled when they show up in your account.

Ottawa has been battling with banks about how the deposits are labelled since they moved to quarterly payments for the rebates in 2022.

Many Canadians were confused, or didn’t realize they even got the rebate, when payments showed up with vague labels including “EFT deposit from Canada”, “EFT Credit Canada.” or sometimes just “federal payment.”

The federal government asked the banks to help label them with the old moniker — the climate action incentive payment — but some didn’t arguing they had a 15 character limit for deposit description.

The deposits will be labelled different depending on where you bank, with some going with the full Canada Carbon Rebate name, others shortening it “CDACarbonRebate” or “Canada CCR/RCC.”

In French, the labels could be “Carbone RemiseCA” or “Dépôt direct/Remise canadienne sur carbone.”

The rebates are sent to offset what people pay in carbon pricing when they buy fuel so they’re not left worse off as a result.

People who do things to lower their fuel use are even better off because they still get the same rebate but pay less in carbon pricing.

The rebate amounts are set annually based on how much carbon price Ottawa expects to collect in each province.

British Columbia, Quebec and Northwest Territories have their own carbon pricing system for consumers so residents there don’t receive the federal payment. Yukon and Nunavut use the federal system but have an agreement to distribute the proceeds themselves.

The parliamentary budget officer says about 80 per cent of Canadians get back more from the rebates than they pay.

He also says though that the economic impact of carbon pricing could lower wages over time, erasing that benefit for some Canadians. The government however argues that climate change itself can cause economic harm if it is left unchecked.

This report by The Canadian Press was first published April 15, 2024.

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Meta's news ban changed how people share political info — for the worse, studies show – CBC.ca

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Since Meta blocked links to news in Canada last August to avoid paying fees to media companies, right-wing meme producer Jeff Ballingall says he has seen a surge in clicks for his Canada Proud Facebook page.

“Our numbers are growing and we’re reaching more and more people every day,” said Ballingall, who publishes up to 10 posts a day and has some 540,000 followers.

“Media is just going to get more tribal and more niche,” he added. “This is just igniting it further.”

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Canada has become ground zero for Facebook’s battle with governments that have enacted or are considering laws that force internet giants — primarily the social media platform’s owner Meta and Alphabet’s Google — to pay media companies for links to news published on their platforms.

Facebook has blocked news sharing in Canada rather than pay, saying news holds no economic value to its business.

It is seen as likely to take a similar step in Australia should Canberra try to enforce its 2021 content licensing law after Facebook said it would not extend the deals it has with news publishers there. Facebook briefly blocked news in Australia ahead of the law.

The blocking of news links has led to profound and disturbing changes in the way Canadian Facebook users engage with information about politics, two unpublished studies shared with Reuters found.

“The news being talked about in political groups is being replaced by memes,” said Taylor Owen, founding director of McGill University’s Centre for Media, Technology and Democracy, who worked on one of the studies.

“The ambient presence of journalism and true information in our feeds, the signals of reliability that were there, that’s gone.”

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The lack of news on the platform and increased user engagement with opinion and non-verified content has the potential to undermine political discourse, particularly in election years, the studies’ researchers say. Both Canada and Australia go to the polls in 2025.

Other jurisdictions, including California and Britain, are also considering legislation to force internet giants to pay for news content. Indonesia introduced a similar law this year.

Blocked

In practice, Meta’s decision means that when someone makes a post with a link to a news article, Canadians will see a box with the message: “In response to Canadian government legislation, news content can’t be shared.”

Where once news posts on Facebook garnered between five million and eight million views from Canadians per day, that has disappeared, according to the Media Ecosystem Observatory, a McGill University and University of Toronto project.

Although engagement with political influencer accounts such as partisan commentators, academics and media professionals was unchanged, reactions to image-based posts in Canadian political Facebook groups tripled to match the previous engagement with news posts, the study also found.

The research analyzed some 40,000 posts and compared user activity before and after the blocking of news links on the pages of some 1,000 news publishers, 185 political influencers and 600 political groups.

A Meta spokesperson said the research confirmed the company’s view that people still come “to Facebook and Instagram even without news on the platform.”

Canadians can still access “authoritative information from a range of sources” on Facebook, and the company’s fact-checking process was “committed to stopping the spread of misinformation on our services,” the spokesperson said.

‘Unreliable’ sources

A separate NewsGuard study conducted for Reuters found that likes, comments and shares of what it categorized as “unreliable” sources climbed to 6.9 per cent in Canada in the 90 days after the ban, compared to 2.2 per cent in the 90 days before.

“This is especially troubling,” said Gordon Crovitz, co-chief executive of New York-based NewsGuard, a fact-checking company which scores websites for accuracy.

Crovitz noted the change has come at a time when “we see a sharp uptick in the number of AI-generated news sites publishing false claims and growing numbers of faked audio, images and videos, including from hostile governments … intended to influence elections.”

WATCH | Why schools boards are suing social media platforms: 

Why Ontario school boards are suing TikTok, Meta and Snapchat

19 days ago

Duration 4:04

School boards in the Greater Toronto Area and Ottawa are taking some of the largest social media companies to court over their products, alleging they are harming students and the broader education system. CBC’s Dale Manucdoc dives into what we know so far about the lawsuit.

Canadian Heritage Minister Pascale St-Onge in an emailed statement to Reuters called Meta’s blocking of news an “unfortunate and reckless choice” that had left “disinformation and misinformation to spread on their platform … during need-to-know situations like wildfires, emergencies, local elections and other critical times.”

Asked about the studies, Australian Assistant Treasurer Stephen Jones said via email: “Access to trusted, quality content is important for Australians, and it is in Meta’s own interest to support this content on its platforms.”

Jones, who will decide whether to hire an arbitrator to set Facebook’s media licensing arrangements, said the government had made clear its position to Meta that Australian news media businesses should be “fairly remunerated for news content used on digital platforms.”

Meta declined to comment on future business decisions in Australia but said it would continue engaging with the government.

Facebook remains the most popular social media platform for current affairs content, studies show, even though it has been declining as a news source for years amid an exodus of younger users to rivals and Meta’s strategy of de-prioritizing politics in user feeds.

In Canada, where four-fifths of the population is on Facebook, 51 per cent obtained news on the platform in 2023, the Media Ecosystem Observatory said.

Two-thirds of Australians are on Facebook and 32 per cent used the platform for news last year, the University of Canberra said.

Unlike Facebook, Google has not indicated any changes to its deals with news publishers in Australia and reached a deal with the Canadian government to make payments to a fund that will support media outlets.

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Food service strike: Air Canada, WestJet refine options at Toronto Pearson – Global News

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More than 800 workers responsible for providing food and beverages on flights leaving Toronto Pearson International Airport are on strike.

The Gate Gourmet workers, an airline catering and logistics company, went on strike Tuesday after voting 96 per cent to reject a final offer from the company, Teamsters Local Union 647 said in a statement.

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“Our members accepted a wage freeze during the pandemic to help this company survive,” said Martin Cerqua, lead union negotiator and president of Local Union 647.

“Now their managers brag about how profitable their operations have become at Pearson, while proposing wage increases as low as 89 cents an hour.”


Click to play video: 'Westjet pilots set to walk off job Friday'

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Westjet pilots set to walk off job Friday


The union expects many flights leaving Toronto will have little to no food on board; impacted airlines include WestJet, United Airlines, Delta Airlines, TAP Air Portugal, Air India, Aero Mexico, SAS Scandinavian Airlines, Jetlines, as well as Air Canada, which the union said will be most affected by the strike.

The union added Gate Gourmet workers are paid on average between $17.69 and $20 per hour, below other airline catering companies in Toronto and Gate Gourmet workers in Vancouver. The union also claims slashed staffing levels have put workers at risk.


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In a statement, Gate Gourmet Canada said it’s “disappointed” that a strike is underway.


Click to play video: 'Busy summer travel season has begun at Toronto’s largest airport'

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Busy summer travel season has begun at Toronto’s largest airport


“On Friday, the union informed us that they would cease negotiations and demanded a final offer, which Gate Gourmet Canada presented. The union walked away from the negotiating table, despite our belief that Gate Gourmet’s offer is fair and market competitive,” it said, adding the company was offering a 12 per cent pay raise over three years.

“At our operation in Toronto, we have established contingency plans with our airline customers to minimize any impact on them and their passengers. We remain committed to doing right by our employees and ending the strike so that we can continue to partner with our airlines customers and serve the travelling public.”

Air Canada, WestJet respond to strike

Air Canada and WestJet, Canada’s largest airlines, said in separate statements they’ve prepared for the work stoppage.

“We anticipate there will be no impact on our international flights, but we plan to make some adjustments to food and beverage service on certain North American flights departing from and, in some cases on shorter routes, returning to Toronto,” an Air Canada spokesperson told Global News Toronto in a statement Tuesday.

“Short-haul flights of less than two hours duration being most impacted.”


Click to play video: 'Travel Tips: WestJet summer 2024 service'

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Travel Tips: WestJet summer 2024 service


The airline added that flights over two hours within North America will have fewer menu options, while flights under two hours will not have hot meals available; snacks and water service will remain.

Meanwhile, WestJet said its Boeing 737 flights leaving Pearson will be impacted.

“Guests who are eligible to receive an inflight meal including those in the Premium cabin or extended comfort seating, and all guests travelling on transatlantic flights will receive either an alternative option or a food and beverage voucher for use in the terminal, pre-departure,” the company said in a statement on its website.

“In addition, WestJet is advising guests travelling to or from Toronto to plan ahead and bring an extra snack and/or beverage for their journey.”

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&copy 2024 Global News, a division of Corus Entertainment Inc.

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