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Brace yourself — gas prices are hitting records as global energy crisis arrives in Canada – CBC.ca

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An acute energy crisis is making its presence felt in North America as consumers are finally starting to feel the pinch of much higher prices to fill up their cars and heat their homes.

The average retail price of gasoline in Canada hit $1.45 a litre on Wednesday, according to data compiled by retail analytics firm Kalibrate. 

That’s a three-cent rise from Tuesday’s level and enough to beat the previous record of 143.6 cents, set this August. Prior to that, you had to go back several years to see higher gas prices.

The average pump price topped $1.40 a litre for the first time in 2008 and then $1.41 in 2014, research analyst Suzanne Gray told CBC News in an emailed statement.

While there are many factors that determine the price of retail gasoline, the price of oil is the biggest one, and crude prices around the world have roared back in recent months as supply and demand is proving to be more volatile than usual while the global economy is trying to emerge from the depths of the pandemic.

WATCH | Here’s why oil prices are spiking

Reduced supply driving increasing oil prices

19 hours ago

As demand exceeds supply after months of lockdown, gas prices are rising in Canada. Other countries are also seeing higher prices for fuel, but are more concerned about overall availability. 2:00

Like just about everything else, oil prices took a swan dive in the early days of the pandemic, as travel slowed to a crawl, factories closed up shop and the world economy effectively went into hibernation.

This slowdown went as far as causing the oil price to dip below zero for the first time on record in April of 2020. Oil traders literally couldn’t give away a barrel of oil for free and had to pay money to have people take it off their hands.

Oil rigs went into survival mode to make it through the pandemic. But as demand started to creep back, so, too, did prices. After dipping below zero barely a year ago, crude prices are now back to their highest level in seven years, and analysts say higher highs are coming.

“We’re probably going to see prices continue to rise through the end of the year unless we see another kind of COVID acceleration,” said Rory Johnston, founder of the Commodity Context newsletter and managing director at Toronto-based investment firm Price Street.

Normally, oil prices tend to ease off in the winter as demand for driving and flying in the northern hemisphere declines. But COVID has thrown the normal seasonal patterns completely out the window.

“Because of all of the pent up demand and these random reopening paths we’re on globally, it’s really hard to … ascribe a very normal seasonal pattern,” Johnston said. “I think it still is yet to be seen whether or not that happens.”

Edward Moya, an analyst at foreign exchange firm Oanda, says crude prices could have a lot more room to run.

“The oil market is still heavily in deficit and that will likely be the story over the winter.  If the north has a cold winter, the prospects of $90 oil seem very likely.” 

Global energy crisis

Higher pump prices are probably the most obvious example that consumers notice, but in reality, what Canadians pay at the gas station is only now catching up to what the rest of the world has been seeing in energy for a while now. Put simply, the price of everything is skyrocketing.

Natural gas prices are skyrocketing in Europe and Asia in recent months as demand has increased at a time when supplies have never been lower.

The fall has been colder than normal across much of Europe, causing Europeans to reach for the thermostat. But supplies are lower than usual because exports from major suppliers, such as Norway and Russia, are down.

According to data from Gas Infrastructure Europe, the association for gas companies on the continent, storage tanks are almost one quarter empty right now. Typically at this time of year, they would be full to the brim in advance of the cold months to come.

Natural gas prices have increased more than fivefold in recent months, and more hikes are expected.

Europeans aren’t the only ones short on gas either; China finds itself with a voracious demand for energy, too, which is causing gas exporters to go to the highest bidder. Rolling blackouts and shuttered factories are the norm in China right now, as the world’s most populous country is having trouble keeping the lights on as things reopen from COVID-19.

It’s gotten so bad that it has declared a temporary truce in its ongoing trade war with Australia, because it is so desperate for coal

In Britain, gas stations are running out of fuel, with little relief in sight.

WATCH | Why the U.K. seems to be running out of gas

Severe gasoline shortage at pumps in the U.K.

10 days ago

Britain is trying to find 5,000 truck drivers to deliver gasoline to stations, even issuing temporary visas to Europeans to help ease supply chain problems. (Jon Super/The Associated Press) 1:36

Utility bills expected to rise in B.C., Ont.

While drama like that hasn’t happened yet in North America, consumers should expect their bills to rise.

B.C.’s main gas distributor, FortisBC warned customers in September that the average bill is set to go up between nine and 12 per cent starting this month. And Ontario’s biggest gas company, Enbridge, has applied with the province’s regulator to increase what it charges consumers starting in January.

“As if we don’t have enough sources of inflation pressures flaring,” Bank of Montreal economist Doug Porter said in a note to clients on Thursday.

Soaring demand around the world “points to higher prices ahead for Canadians to heat their homes this winter,” he said.

Kit Juckes, a strategist with French investment bank Société Générale, says energy prices are spiking so much that he expects governments around the world may eventually have to step in.

“How much governments will end up subsidising gas use will vary from place to place,” he said in a note to clients on Wednesday.

“In the longer run, we don’t think current prices are sustainable, but the short run will matter more in the weeks ahead.”

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Dollar set for another week of losses even as Fed tapering looms

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The dollar was heading for a second week of declines on Friday as sentiment stayed tilted towards riskier assets, while an intervention by the Australian central bank put a halt to the Aussie dollar’s recent surge.

The dollar index was last at 93.733, little changed in Asian hours but off 0.24% on the week, as it continues its fall from a 12-month high of 94.565 hit in earlier this month.

It had managed to stem losses on Thursday, bouncing on better U.S. jobs and housing data, but the rally petered out on Friday morning in Asia, where risk sentiment was boosted news that beleaguered developer China Evergrande Group has supplied funds to pay interest on a U.S. dollar bond, averting a default.

But traders are still trying to assess whether the dollar has scope to fall further, or if this is a temporary blip on a march higher.

“People are wondering whether we are at an inflection point, as the dollar has been weakening and that doesn’t really fit with the broader narrative that global growth is cooling and the Fed is on the path to tapering, which should be supportive for the dollar,” said Paul Mackel, global head of FX research at HSBC.

On Friday, benchmark 10-year U.S. Treasury yields were at 1.6872%, slightly off from Thursday’s multi-month high of 1.7%, as markets continue to prepare themselves for an announcement by the Federal Reserve that it will start to wind down its massive bond buying programme, which is widely expected for November.

Mackel said part of the reason for the dollar’s weakness had been strong performances by currencies from most commodity exporting countries.

These were quieter on Friday, however, as traders took profits, analysts said, and energy prices softened.

Brent crude, which had risen above $86 dollars a barrel on Thursday, continued its tumble and was last at $84.10.

The Australian dollar was at $0.7475, off Thursday’s three-month top, as the boost to the China-exposed currency from Evergrande’s news was outweighed by action from the Reserve Bank of Australia to stem a bond sell off, as well as the pause in energy price rises.

The RBA said on Friday it had stepped in to defend its yield target for the first time in eight months, spending A$1 billion ($750 million) to dampen an aggressive bonds sell-off as traders have bet on inflation pulling forward rate hikes.

Also affected by energy prices, the Canadian dollar slipped to C$1.2352 per U.S. dollar, off Thursday’s C$1.2287, a level last seen in June.

The British pound paused for breath at $1.3798, off a month peak hit earlier in the week, to which it had been carried by growing expectations of an interest rate hike to combat rising inflationary pressures.

The euro was little changed at $1.1627, while the yen wobbled within sight of its multi-year lows, with one dollar worth 114.01 yen, compared with 114.69 earlier in the week, a four-year low.

China’s yuan eased against the dollar on Friday after the FX regulator warned of possible action if the currency market is hit by greater volatility following its recent rally. But the yuan still looked set for the biggest weekly gain since May.

Bitcoin was at $63,928, a little off Wednesday’s all-time high of $67,016

 

(Reporting by Alun John; Editing by Sam Holmes and Kim Coghill)

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Pandemic opens doors to switch jobs in Japan, but pay not rising much

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The  Covid-19 pandemic has unexpectedly helped Japan’s nursing homes and  Information Technology companies overcome years of labour shortages, as job cuts at restaurants and hotels have prompted workers to look for new careers.

This newfound job mobility marks a shift in a country whose rigid labour practices are partially blamed for a long term decline in productivity.

But it is too soon to say whether the change will ultimately lead to higher wages, which are desperately needed to revive demand and growth in an economy that is still struggling to break free from decades of deflation.

For now, the job-hoppers tend to trade one low-paying career for another.

Toshiki Kurimata, who used to make 2.8 million yen ($25,000) a year as a masseur, quit after 12 years as the pandemic caused a sharp drop in customers. Now he works at a nursing care centre and is taking classes to become a registered caregiver.

With that qualification, he expects to earn around 3.3 million yen – an increase of about 18%. The even bigger attraction, he says, is job stability.

“I like working in nursing care and it’s stable,” Kurimata said. “There aren’t age limits on the work and you can find work even if, like me, you are inexperienced.”

Experts aren’t sure whether the job-switching will remain limited to certain industries or become a broader trend.

It is also uncertain whether job switching will continue once the pandemic dies down, although anecdotal evidence suggests people will keep leaving food-service jobs for nursing and IT.

Japan expects to have a shortage of 690,000 care workers by 2040, a tough gap to fill given the rapidly ageing population.

LOW-INCOME

OECD data put Japan’s hourly labour productivity at $47.9, making it about 60% of the United States’ level, the worst among the Group of Seven (G7) advanced economies, and 21st

among the 37 OECD members as of 2019.

And the prospect of people being stuck in low income jobs poses a big challenge for Japan’s new Prime Minister Fumio Kishida, who has pledged to bring more wealth to households via higher wages.

“COVID-19 fallouts are pushing low-paid workers into even harder situations with little, or no, increase in pay,” said Hisashi Yamada, senior economist at Japan Research Institute.

Hospitality businesses have laid off workers, with the number of employees falling to 3.9 million in 2020 from the prior year’s 4.2 million, labour ministry data shows.

By contrast, the medical and health industry saw employees hitting 8.6 million, up 200,000 from 2019. The IT sector hired 2.4 million employees, up 100,000 from 2019.

JOB TRAINING

Vocational training schools have benefited.

SAMURAI, which offers IT training, had 1.7 times more students enrolled as of April 2021 compared with a year earlier, as employees retrenched during the pandemic rushed to retrain.

Most IT jobs on offer for inexperienced workers are for programmers, on the lowest rung of the IT ladder, but they generally still pay more than can be earned in hospitality.

The average annual salary for employees at restaurants and nursing homes amounts to roughly 3 million yen, 30% less than an average Japanese workers’ salary, government data shows. IT programmers earn close to the national average.

“I saw how popular the IT sector was and thought I may land a stable job,” said Koki Shimizu, a 22-year-student at SAMURAI who lost his job as a chef and now is learning to program.

At Crie, which offers training in nursing care, classes that were only two-thirds full before the pandemic are now packed out.

The company’s head Takayuki Nakayama expects the uptrend to continue given steady job offers in the nursing care industry.

“It’s true wages are relatively low in the nursing-care industry. But many job-seekers want stability after seeing the damage inflicted on eateries and other service-sector firms.”

Retailers are also becoming alarmed over losing staff, as they are counting on a rebound in activity as Japan gradually eases COVID-19 restrictions.

Major Japanese pub chain operator Watami is scrambling to hire 100 mid-career staff this year – something it has not done for three years – and it reckons that eventually it may have to pay more.

“1,000 yen per hour may not be enough, 1,500 yen may be needed to attract workers in the future,” said the company’s chief executive Miki Watanabe.

For now, firms are wary of raising pay as the economy is still struggling in the wake of the pandemic.

($1 = 114.0100 yen)

 

(Reporting by Tetsushi Kajimoto; Editing by Leika Kihara, David Dolan & Simon Cameron-Moore)

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Pfizer-BioNTech report high efficacy of COVID boosters in study – Al Jazeera English

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The companies say phase III trial data show booster shot of COVID-19 vaccine was 95.6 percent effective against the disease.

American pharmaceutical company Pfizer and its partner BioNTech have said data from a Phase III trial demonstrated high efficacy of a booster dose of their COVID-19 vaccine against the coronavirus, including the Delta variant.

They said a trial of 10,000 participants aged 16 or older showed 95.6 percent effectiveness against the disease, during a period when the Delta strain was prevalent.

The study also found that the booster shot had a favourable safety profile.

Pfizer had said its two-shot vaccine’s efficacy drops over time, citing a study that showed 84 percent effectiveness from a peak of 96 percent four months after a second dose. Some countries had already gone ahead with plans to give booster doses.

The drugmakers said the median time between the second dose and the booster shot or the placebo in the study was about 11 months, adding that there were only five cases of COVID-19 in the booster group, compared with 109 cases in the group which received the placebo shot.

“These results provide further evidence of the benefits of boosters as we aim to keep people well-protected against this disease,” Pfizer CEO Albert Bourla said in a statement.

The median age of the participants was 53 years, with 55.5 percent of participants between 16 and 55 years, and 23.3 percent at 65 years or older.

The companies said they would submit detailed results of the trial for peer-reviewed publication to the US Food and Drug Administration (FDA), the European Medicines Agency, and other regulatory agencies as soon as possible.

The US and European regulators have already authorised a third dose of COVID-19 vaccines by Pfizer-BioNTech and Moderna Inc for patients with compromised immune systems who are likely to have weaker protection from the two-dose regimens.

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