Connect with us

Business

Can Trump stop the oil war? It would mean a ‘180’ on his distaste for OPEC – Yahoo Canada Finance

Published

on


US President Donald Trump speaks during the daily briefing on the novel coronavirus, COVID-19, in the Brady Briefing Room at the White House on March 25, 2020, in Washington, DC. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)

U.S. President Donald Trump is in a tough spot if he intends to broker peace in the raging oil price war that has delivered a gut-punch to North American producers and compounded the impact of the COVID-19 virus. 

Doing so would mean walking back his hatred of OPEC, and his long-held preference for cheap oil, according to one analyst. Trump’s intervention to support prices, if successful, would also have the dual effects of pushing gasoline prices higher as the U.S. economy sits on the brink of recession, while also winning political support in energy-dependent regions in an election year if prices rise.  

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“It’s a really interesting challenge for him,” said Helima Croft, RBC Capital Markets’ managing director and global head of commodity strategy, on the bank’s podcast.&nbsp;” data-reactid=”25″>“It’s a really interesting challenge for him,” said Helima Croft, RBC Capital Markets’ managing director and global head of commodity strategy, on the bank’s podcast

“He essentially has to do a 180 and appeal to the Saudis to play the regulator role, to work with the other sovereign producers to cut production to shore up U.S. oil producers. It’s not an easy balance.”

Trump has been a vocal critic of OPEC’s role in regulating output. He has lashed out in tweets predating his presidency, accusing the group of “ripping us off” and branding it a “monopoly.”

More recently, he has encouraged Saudi Arabia to keep the market well supplied, and touted low gasoline prices as a signature achievement of his presidency.

“It’s interesting to think about what leverage the U.S. has when the administration has spent three years being highly critical of [OPEC] playing the role of the central banker of oil,” Croft said.

On a recent trip to Western Pennsylvania, Trump celebrated the oil and gas boom in the region, calling the resources under his feet “our gold.”

Last week, Trump said he would intervene in the price war at “the appropriate time,” adding the downturn “hurts a great industry, and a very powerful industry.” He also noted that low gas prices are helpful to consumers. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Trump recently ordered U.S energy officials to purchase “large amounts” of oil to top up the nation’s emergency reserve and absorb some of the glut in crude markets. The plan, backed by oil industry lobbyists, was quashed on Thursday when the U.S. Department of Energy said it lacked funding from Congress.” data-reactid=”32″>Trump recently ordered U.S energy officials to purchase “large amounts” of oil to top up the nation’s emergency reserve and absorb some of the glut in crude markets. The plan, backed by oil industry lobbyists, was quashed on Thursday when the U.S. Department of Energy said it lacked funding from Congress.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="North American benchmark West Texas Intermediate (WTI)(CL=F) fell about four per cent on Thursday morning after showing signs of strength on Wednesday. The price of WTI has declined about 60 per cent year-to-date, falling well below the break-even price for nearly all North American producers.” data-reactid=”33″>North American benchmark West Texas Intermediate (WTI)(CL=F) fell about four per cent on Thursday morning after showing signs of strength on Wednesday. The price of WTI has declined about 60 per cent year-to-date, falling well below the break-even price for nearly all North American producers.

On Tuesday, G7 leaders appealed to oil producing countries to “support international efforts to promote global economic stability.”

The spat between Saudi Arabia and Russia started at the March 5 OPEC meeting in Vienna. Russia balked at a plan to restrain production to stabilize the global crude market in response to COVID-19. Saudi Arabia promptly responded by slashing its official selling prices for April deliveries to between US$6 and US$8 per barrel. With the previously agreed upon OPEC production cuts expiring at the end of March, Saudi Arabia and Russia can theoretically pump as much as they want.

Croft said while Saudi Arabia’s actions were likely designed to force Russia back the table, the June OPEC meeting is probably the earliest point at which the two sides could bury the hatchet. She said Russia is probably betting the Kingdom cannot sustain such low prices for long.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.” data-reactid=”37″>Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Download the Yahoo Finance app, available for&nbsp;Apple&nbsp;and&nbsp;Android.” data-reactid=”38″>Download the Yahoo Finance app, available for Apple and Android.

Let’s block ads! (Why?)



Source link

Business

China’s March Factory Outlook Jumps as Global Threat Looms – Yahoo Canada Finance

Published

on


(Bloomberg) — Chinese manufacturing activity rebounded strongly in March, signaling that the world’s second-largest economy is restarting just as it faces a growing threat from slumping external demand.

For manufacturing, the official purchasing managers’ index rose to 52.0 this month, according to data released by the National Bureau of Statistics on Tuesday. That’s up from a record low of 35.7 in February and above the 50 mark which signals improving conditions. The gauge covering services and construction was at 52.3.

While the rise indicates better sentiment at Chinese factories, output remains a long way from normal. The survey asks firms to state how business was compared to last month, so the data just show that Chinese companies think things have improved from the sharpest contraction since at least 2005, when the series began.

China is still expected to have an unprecedented economic contraction this quarter, something that would have been unthinkable before the viral outbreak. The outlook for the April-June period depends both on how quickly domestic demand can rebound now the virus is contained, and the strength of demand from overseas markets like the U.S. which are facing their own spikes in infections.

“The number above 50 doesn’t mean that economic activity is fully resumed,” Zhang Liqun, a researcher at China Logistics Information Center, which helps compile the data, said in a statement on its website. “We need to fully understand the unprecedented austerity and complexity, and should pay great attention to the virus shocks on production and demand.”

The Second Virus Shockwave Is Hitting China’s Factories Already

S&P 500 futures erased gains after hitting their highs Tuesday morning after the data. Asian stocks were mixed.

Chinese factories, which endured weeks of work suspensions in February after travel and trade stopped nationwide, are now facing canceled export orders as the pandemic hits the rest of the world.

“While manufacturing PMI rebounded rapidly in March, the survey showed companies still face relatively big operational pressures,” the NBS said in a statement, adding that more firms are reporting funding shortages and falling demand than in February. “The global virus spread will hit the world economy and trade seriously and bring new, severe challenges to the Chinese economy.”

A sub-index of new export orders rose to 46.4 in March, up from 28.7. A manufacturing employment indicator stood at 50.9, compared with 31.8 in February.

What Bloomberg’s Economists Say…

“Despite improving conditions, the Chinese economy has not returned to normal, and faces challenges unseen for decades on both domestic and external fronts. Policy support is likely to be stepped up, especially fiscal measures. We also expect more monetary policy easing.”

— Chang Shu and David Qu, Bloomberg Economics

See here for the full note

Around the region data showed a mixed picture for industry. Japanese industrial output rose slightly in February from January, boosted by output of electronics in the period before the virus really started to hit global supply chains. Car production was down and total output is forecast to drop 5.3% this month.

South Korean output dropped 3.8% in February from January, with much of that caused by a shortage of auto parts affecting car production, according to Citigroup economists.

In China’s services and construction sectors, while the headline number rose above 50, much of the underlying activity was still in contraction, with employment at 47.7 and new export orders at 38.6. That indicates companies don’t want to hire before they can confirm there’s been a solid return of business activities, according to Iris Pang, Chief Greater China Economist at ING NV in Hong Kong.

“This won’t change overall policy stance,” according to Zhou Hao, an economist at Commerzbank AG. “I think the government is looking at the hard data to determine the policy steps, which is probably pointing to further economic headwinds and more policy support.”

(Adds markets in sixth paragraph, data on Japanese and South Korean output from 10th paragraph.)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For more articles like this, please visit us at bloomberg.com” data-reactid=”36″>For more articles like this, please visit us at bloomberg.com

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Subscribe now to stay ahead with the most trusted business news source.” data-reactid=”37″>Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.

Let’s block ads! (Why?)



Source link

Continue Reading

Business

China shows strong factory activity in March – MarketWatch

Published

on


BEIJING–An official gauge of China’s manufacturing activity rebounded strongly in March as factory production resumed after the coronavirus epidemic was largely put under control in the country.

The official manufacturing purchasing managers’ index rose to 52.0 in March from a record low of 35.7 in February, the National Bureau of Statistics said Tuesday. The 50 mark separates expansion of activity from contraction.

The March result came in above the median forecast of 51.5 by economists surveyed by The Wall Street Journal. Purchasing by manufacturers is a leading indicator of business activity because factories buy supplies in anticipation of demand.

The statistics bureau said the reading only reflects work resumption from February and it doesn’t mean China’s economic activity has returned to normal.

The production subindex climbed to 54.1 from 27.8 in February. The new-export-orders subindex, a gauge of external demand, rose to 46.4 in March from 28.7 in February. The subindex measuring imports increased to 48.4 from February’s 31.9.

The government has rolled out a slew of measures to help factories resume production and retain workers, including offering tax cuts and cash returns. The People’s Bank of China on Monday lowered a key interest rate in the country’s interbank market, the latest effort by Beijing to restart an economy struggling to recover due to the coronavirus.

Let’s block ads! (Why?)



Source link

Continue Reading

Business

Most actively traded companies on the TSX – Yahoo Canada Finance

Published

on


TORONTO — Some of the most active companies traded Monday on the Toronto Stock Exchange:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Toronto Stock Exchange (13,038.50, up 350.76 points.)” data-reactid=”13″>Toronto Stock Exchange (13,038.50, up 350.76 points.)

Bombardier Inc. (TSX:BBD.B). Industrials. Down three cents, or 6.59 per cent, to 42.5 cents on 17.5 million shares.

Suncor Energy Inc. (TSX:SU). Energy. Up $2.54, or 15.46 per cent, to $18.97 on 15.6 million shares.

Canadian Natural Resources Ltd. (TSX:CNQ). Energy. Up $2.40, or 18.02 per cent, to $15.72 on 15.5 million shares.

Aurora Cannabis Inc. (TSX:ACB). Health care. Down 17 cents, or 11.64 per cent, to $1.29 on 15.2 million shares.

Cenovus Energy Inc. (TSX:CVE). Energy. Up six cents, or 2.55 per cent, to $2.41 on 11.4 million shares.

MEG Energy Corp. (TSX:MEG). Energy. Up 27 cents, or 22.13 per cent, to $1.49 on 11.4 million shares.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Companies in the news:” data-reactid=”20″>Companies in the news:

Transat AT. (TSX:TRZ). Down 74 cents or 7.8 per cent, to $8.75. The Competition Bureau’s warning about Air Canada’s proposed takeover of Transat AT Inc., which owns Air Transat, should be taken in context, analysts say. The watchdog said Friday that eliminating the rivalry between the two Montreal-based carriers would discourage competition by prompting higher prices and fewer services. Desjardins Securities analyst Benoit Poirier said he believes the purchase will still be approved “considering the companies’ willingness to address the bureau’s competition concerns,” such as potential dominance of airport slots.

Canadian Imperial Bank of Commerce (TSX:CM). Up $1.33 to $79. An Ontario Superior Court judge has ruled against the CIBC in an overtime class-action lawsuit filed more than a decade ago. Judge Edward Belobaba found the bank liable for breaching its overtime obligations to a class of about 31,000 current and former tellers, personal bankers and other front-line workers in branches across Canada.

Canadian Apartment Properties Real Estate Investment Trust. (TSX:CAR.UN). down 23 cents to $41.90. Some of Canada’s biggest landlords say they’re committed to working with tenants who have lost their job because of the coronavirus pandemic. Mark Kenney, CEO of Canadian Apartment Properties Real Estate Investment Trust, says the company is committed to working with those who have suddenly lost their job, and is “violently against” evicting anyone who’s in distress.

Freshii Inc. (TSX:FRII). Down one cent to $1.23. Freshii Inc. is delaying the filing of its latest financial results as it deals with the COVID-19 pandemic and its impact on its restaurants and franchise partners. The company says it has also temporarily “streamlined its head office workforce” in a move to cut costs. It did not say how many people were affected. Freshii says the COVID-19 pandemic is expected to have a material impact on its business, operations and financial performance for at least the first half of 2020.

Parkland Fuel Corp. (TSX:PKI). Up 85 cents or 3.5 per cent to $25.05. Parkland Fuel Corp. is cutting its 2020 capital spending budget by 52 per cent and trimming executive salaries in response to the uncertain economic impact of the novel coronavirus. The Calgary-based company, which sells fuel through more than 2,600 service stations throughout Canada and in the United States and Caribbean, says it plans to spend $275 million this year, down from its earlier guidance of $575 million.

Air Canada (TSX:AC). Down 67 cents or four per cent to $1608. Air Canada will temporarily lay off more than 15,000 unionized workers beginning this week as the airline struggles with fallout from the COVID-19 pandemic. The layoffs will continue through April and May amid drastically reduced flight capacity from the Montreal-based airline. Air Canada says the two-month furloughs will affect about one-third of management and administrative and support staff, including head office employees, in addition to the front-line workers.

This report by The Canadian Press was first published March 30, 2020.

The Canadian Press

Let’s block ads! (Why?)



Source link

Continue Reading

Trending