That’s the message the administration of United States President Joe Biden sent to the Organization of the Petroleum Exporting Countries (OPEC) and its allies on Wednesday, imploring them to do more to support the global economic recovery and ease the painfully high prices Americans have been experiencing at the petrol pump.
“President Biden has made clear that he wants Americans to have access to affordable and reliable energy, including at the pump,” US National Security Advisor Jake Sullivan said in a statement Wednesday urging OPEC and its allies led by Russia, known as OPEC+, to further unwind production cuts — and fast.
“While OPEC+ recently agreed to production increases, these increases will not fully offset previous production cuts that OPEC+ imposed during the [coronavirus] pandemic until well into 2022,” Sullivan said. “At a critical moment in the global recovery, this is simply not enough.”
Sullivan’s statement was released on the same day that US government data showed petrol prices climbed 2.4 percent in July from the previous month — the second consecutive month of price increases.
Overall, gasoline prices are up a whopping 41.8 percent from this time last year, the Consumer Price Index from the US Bureau of Labor Statistics showed, although some of that can be attributed to so-called base effects, given oil demand was gutted when the pandemic struck last year and had only just started creeping back up in the summer of 2020.
OPEC+ controls over 50 percent of the global supply of crude. That gives it tremendous sway over oil prices, which the cartel can influence by boosting or cutting production.
The US pumps out plenty of crude in its own right, some 20 percent of total world oil production, making it the largest oil producer in the world, according to the US Energy Information Administration.
But it also consumes a lot of oil — 21 percent of the world total. Moreover, its production costs are far higher than OPEC’s biggest member, Saudi Arabia.
That leaves the US walking something of a tightrope when it comes to oil prices: too high, and American consumers feel pain at the pumps; too low, and US shale oil producers cannot stay in business because their prices aren’t competitive.
“Although we are not a party to OPEC, the United States will always speak to international partners regarding issues of significance that affect our national economic and security affairs, in public and private,” Sullivan said in his statement Wednesday.
“We are engaging with relevant OPEC+ members on the importance of competitive markets in setting prices. Competitive energy markets will ensure reliable and stable energy supplies, and OPEC+ must do more to support the recovery,” he added.
It’s been a turbulent time for the oil industry. When the pandemic struck in March 2020, prices plummeted as global oil demand fell by roughly a third. A full-on crash ensued after Saudi Arabia initiated a price war with Russia after the two oil producers could not agree on a production-cut target to shore up prices.
The price war strained the 75-year-old relationship between the US and Saudi Arabia. Higher-cost US shale oil producers, many of them laden with debt, faced an existential crisis. In April of 2020, with the world awash in oil, prices of benchmark US crude turned negative as traders paid to have oil taken off of their hands rather than scramble for a place to store it.
After diplomatic finagling by then-US President Donald Trump, OPEC and its allies agreed to scale back production to 9.7 million barrels per day (bpd), a record low.
That marked a long road to recovery for oil prices, which started to climb again as economies reopened and demand revived. In February of this year, benchmark global Brent crude surpassed its pre-pandemic level.
In July, OPEC+ producers agreed to ramp up production by a cautious 400,000 bpd, but are wary about moving too quickly to unwind cuts as the Delta variant of the coronavirus surges and as China once again locks down parts of the country in an effort to curb the spread of the virus.
Climbing petrol prices, like the ones displayed here at an Exxon station in Littleton, Colorado on July 25, 2021, threaten to weigh on the US’s economic recovery [File: David Zalubowski/AP Photo]
At the same time, the US economy is experiencing surging inflation that has spooked investors — even as Federal Reserve Chairman Jerome Powell seeks to assure them it will pass as the disruptions of the pandemic ebb.
Powell has repeatedly said that the inflation the US economy is experiencing is a temporary consequence of supply bottlenecks for raw materials and labour forming as coronavirus vaccination rates climb, pandemic restrictions are lifted, consumers unleash pent-up demand and businesses around the country gear up operations.
But high petrol prices have the potential to weigh on the US economic recovery and anger consumers, which is partly why the White House is speaking up now.
August in the US is traditionally a time when Americans hit the road for vacations ahead of the start of the school year for children. Nothing puts a damper on a road trip like high petrol prices.
The current average price for a gallon (four litres) of unleaded fuel in the US is $3.185, up from $3.144 a month ago and $2.174 a year ago, according to the American Automobile Association. That’s still well below the record price of $4.114, which the US hit in July 2008.
Climbing petrol prices also have political consequences, and calls for OPEC+ to do more are a strategic move for Biden, who has an eye towards the 2022 midterm elections in which members of his party are up for re-election in Congress.
Inflation, high petrol prices and falling purchasing power could provide a different kind of fuel for Republicans who have accused his administration of running the US economy too hot.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
