Oil prices fell more than $5 on Monday as fears over weaker fuel demand in China grew after its financial hub of Shanghai launched a planned two-stage lockdown on Monday to contain a surge in COVID-19 infections.
The market kicked off another week of uncertainty, buffeted on one side by the ongoing war between Ukraine and Russia, the world’s second-largest crude exporter, and the expansion of COVID-related lockdowns in China, the world’s largest crude importer. [nL2N2VU0G0]
Brent crude futures traded $5.27, or 4.4%, lower at $115.44 per barrel.
U.S. West Texas Intermediate (WTI) crude futures slid 4.8%, or $5.48, to trade at $108.42.
Both benchmark contracts rose 1.4% on Friday, notching their first weekly gains in three weeks, with Brent surging more than 11.5% and WTI climbing 8.8%.
“Shanghai’s lockdown prompted a fresh sell-off from disappointed investors as they expected such a lockdown would be avoided,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.
China’s financial hub of Shanghai launched a planned two-stage lockdown of the city of 26 million people on Monday, closing bridges and tunnels, and restricting highway traffic in a scramble to contain surging local COVID-19 cases.
Saito said that the bullish reaction to a missile attack by Yemen’s Houthis on a Saudi oil distribution facility had run its course on Friday.
But, he expected the oil market to turn bullish when the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, meet on Thursday, as the group was “less likely to raise oil output at a faster pace than in recent months”.
Analysts have varying estimates of how hard Russian oil exports could be hit by economic sanctions imposed on Moscow by the United States and its allies following Russia’s invasion of Ukraine. Some reckon that one million to three million barrels per day of Russian oil might not make it to the market.
Russia exports between 4 million and 5 million barrels of crude every day, making it the world’s second-largest exporter behind Saudi Arabia.
OPEC+ has so far resisted calls from major consuming nations to step up an output boost. The group has been raising output by 400,000 barrels per day (bpd) each month since August to unwind cuts made when the COVID-19 pandemic hit demand.
“Oil prices will likely stay above $100 a barrel for a while as global supply will only get tighter as supply from Russia declines while the United States is headed to driving season,” said Tetsu Emori, CEO of Emori Fund Management Inc.
Global stockpiles are at their lowest since 2014.
To help ease tight supply, the United States is considering another release of oil from the Strategic Petroleum Reserve (SPR) that could be bigger than the sale of 30 million barrels earlier this month, a source said.
“But given the already-low inventories, there will be limited release of SPR, which is seen as another supporting factor to the market,” Emori said.
U.S. drillers added oil rigs for a 19th month in a row but at the slowest pace since 2020 even though the government urged producers to boost output.
If Elon Musk scraps Twitter deal, here's what may happen to the stock – Yahoo Canada Finance
Twitter investors should brace for an all-out crash in the stock price if Tesla CEO Elon Musk abandons his bid for the social media platform, warns one veteran tech analyst.
“In the absence of a bid, we would not be surprised to see the stock find a floor at $22.50,” said Jefferies analyst Brent Thill said Tuesday in a new note to clients. Such a price would be about 40% lower than Twitter’s current trading level.
Musk’s outstanding deal for Twitter is for $54.20 a share.
The path is being cut for that price put forth by Thill for Twitter shares, by Musk’s own doing.
In an early morning Tweet, Musk said “Yesterday, Twitter’s CEO publicly refused to show proof of <5%,” adding that “this deal cannot move forward until he does.”
The new tweet from Musk arrives after a tense exchange on the social media platform on Monday.
Twitter CEO Parag Agrawal wrote a long tweet thread to try to counter Musk’s claims the platform was chock full of fake accounts.
“We suspend over half a million spam accounts every day, usually before any of you even see them on Twitter,” Agrawal said in the 13-tweet thread. “We also lock millions of accounts each week that we suspect may be spam — if they can’t pass human verification challenges (captchas, phone verification, etc).”
Musk responded with a poop emoji.
Musk, the world’s richest person on paper, then followed up 14 minutes later with: “So how do advertisers know what they’re getting for their money? This is fundamental to the financial health of Twitter.”
Thill says Musk is simply trying to negotiate a lower price for Twitter. A fair value for Twitter in light of the rout in tech stocks in recent months would be $42 a share, Thill estimates.
Other analysts on Wall Street think a deal doesn’t get done.
“The chances of a deal ultimately getting done is not looking good now and it’s likely a 60%+ chance from our view Musk ultimately walks from the deal and pays the breakup fee,” Wedbush tech analyst Dan Ives said in a note to clients.
Why You Can’t Just Order Baby Formula From Canada – Lifehacker
With baby formula continuing to be in short supply, parents of infants are looking for creative ways to get their hands on that precious Enfamil—but a simple, seemingly ingenious solution that’s going viral right now will not work as described. The suggestion that’s spreading on Facebook and Twitter advises parents to go to Amazon and change their account’s country from the U.S. to Canada.
The claim is that if you do this, you will be rewarded with all kinds of baby formula-purchasing options—because Canada doesn’t have a major formula shortage. The problem, however, comes when you want to get the formula (or anything else) actually delivered from Amazon Canada. The company will only ship products within Canada, so unless you have a friend in Manitoba, it’s not going to work.
Amazon’s shipping restrictions page says:
Certain restrictions prevent us from shipping certain products to all geographical locations. Restrictions for specific items may require the purchaser to provide additional information in order to ship the item.
You might be able to find a third-party formula shipper on Amazon, but this is expensive in terms of shipping costs, and it might not be legal, depending on the kind of formula being imported.
The FDA’s role in all this
The larger issue of why the U.S. as a nation doesn’t import more baby formula is more complicated than Amazon’s rules. Only about 2% of the U.S.’s formula comes from foreign sources. February’s recall from major manufacturer Abbott threw off our delicate national formula supply chain, and correcting the problem presents some serious challenges.
If it was some other commodity, maybe more could have been imported quickly, but we’re particular about our baby formula. Formula has to meet the FDA’s nutritional standards and other requirements to be sold here. While European brands of formula generally meet or exceed the FDA’s nutritional requirements, (so much so that there’s a black market for foreign formula) the packaging and other aspects of the products are a different story.
The recall and FDA approval is only part of the story—the rest is economics.
Tariffs and dairy protection
In order to protect the U.S. dairy farming industry and U.S. formula manufacturers, the tariff on importing baby formula is set at 17.5% for most kinds of infant formula. The recently revamped NAFTA agreement actually raised the cost of importing Canadian formula, discouraging anyone from building a new plant there, and making it costly to import any excess from Canadian factories.
Light at the end of the tunnel?
While there’s no way to change tariffs quickly, the government is taking other steps to try to end the crisis. The FDA this week announced plans to ease the shortage through loosening up some of its rules (but not the ones covering nutritional requirements), and Abbot today announced its facility should be back online, with new safety standards in place, in a couple weeks.
NS gas prices jump by 9.5 cents – CTV News Atlantic
Tuesday was another record-breaking day for gas prices in Nova Scotia after they jumped by 9.5 cents overnight — just four days after they had reached $2 per litre in some parts of the province.
The minimum price of regular self-serve is now $2.08 per litre in the Halifax area, or Zone 1. The new maximum price is $2.10.
The biggest jump was in Cape Breton, or Zone 6, where the minimum price of regular self-serve gas is now $2.10 per litre. The maximum price is $2.12.
There were long lineups at some Nova Scotia gas stations Monday night after the Utility and Review Board announced that it would invoke its interrupter clause at midnight.
The price of diesel did not change Monday. However, the UARB said Tuesday that it would invoke the interrupter clause, and the price of diesel oil would be adjusted at midnight.
The price of gasoline won’t be affected by the adjustment.
The UARB said the price adjustments are “necessary due to significant shifts in the market price” of gasoline and diesel.
Gas prices are showing no signs of letting up as the average price in Canada tops $2 a litre for the first time.
Natural Resources Canada says the average price across the country for regular gasoline hit $2.06 per litre on Monday for an all-time high.
The average was a nine-cent jump from the $1.97 per litre record set last week, and is up about 30 cents a litre since mid-April.
Gas prices have been climbing steadily since late February when oil spiked to around US$100 a barrel after Russia invaded Ukraine. The price jumped to over US$110 per barrel last week.
Record-high gas prices fuel frustration
When Sam Vatcher saw the price at the pumps in Halifax this morning, she was shocked.
“I don’t know how anyone is going to drive anywhere,” said Vatcher.
The latest prices have SUV driver Bill Foster wondering how he will be able to afford fuel going forward.
“I’ve got to get kids to sports and I’ve got to get kids to school,” said Foster. “Other stuff is going to have to get cut out just to pay for gas.”
In addition to the conflict in Ukraine, gas analyst Patrick Dehaan says the high gas prices are also largely linked to the pandemic.
“Canadians and Americans’ global consumption plummeted along with oil prices,” said Dehaan. “To the degree that oil companies started shutting down production. That was the problem.”
Dehaan said, during the pandemic, oil production went offline. Then, as the economy reopened, Canadians started leaving their homes and travelling more.
“Global demand started going back up,” he explained. “But because of the shutdowns, we very quickly developed an imbalance between supply-and-demand that has grown over time.”
As a result, some feel Canadian consumers will move away from oil and gas in favour of electric vehicles.
Electric vehicle advocate Kurt Sampson says he tells his children every day, “when you are older, and when you grow up it will be the opposite. Everybody will be driving electric vehicles.”
Sampson has an app on his phone that tracks fuel savings. By switching to an electric vehicle and not purchasing gas, he is on pace to have yearly savings in the range of $8,000.
“Electric vehicles are cheaper to own and operate,” said Sampson. “If you do the long-term calculation, not just a sticker price, they will save you money. They are also better for the environment.”
Sampson said drivers are increasingly switching to electric vehicles, and with fuel prices continuing to climb, he expects the trend to increase even more in the coming years.
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