Business

Oil prices rise 1% in early trading as tensions in the Middle East mount – CNBC

Published

5 years ago

January 5, 2020

Oil prices jumped 1% during Sunday night trading — building on Friday’s gains — as tensions in the Middle East escalated over the weekend.

Following Thursday’s death of top Iranian commander Qasem Soleimani, on Sunday an Iranian state-run television broadcast said that the nation would no longer respect uranium enrichment restrictions set forth in 2015’s nuclear deal.

International benchmark Brent crude gained 1.5% to trade at $69.64 per barrel, while U.S. West Texas Intermediate climbed 1.3% to $63.86 per barrel.

On Friday Brent hit a more than three month high of $69.50, before settling at $68.60. Meantime WTI rose to a session high of $64.09 — its highest level since April — before pulling back to settle at $63.05, for a gain of 3.06%.

Iran has vowed to retaliate against the U.S., and the form that this retaliation takes will determine oil’s next move, according to Wall Street analysts. For instance, if the nation targets production in Saudi Arabia or Iraq — OPEC’s two largest producers — prices could move higher for longer.

On Friday, Citi global head of commodity research Ed Morse said that Brent prices will top $70 in short order, while Again Capital’s John Kilduff said that if Iraq production takes a hit “oil prices will spike higher.”

Iraq is OPEC’s second largest oil producer, pumping around 4.6 million barrels per day in December. On Sunday the Iraqi parliament passed a resolution calling for an expulsion of foreign troops, which raises question about the future of the allied mission that has successfully fought the “Islamic State,” or ISIS, in recent years.

Helima Croft, RBC’s global head of commodity research, noted that in the past a geopolitical event of this nature would have caused a larger spike in oil, which demonstrates how resilient prices have become to geopolitical tensions.

This resiliency was on display in September after drone attacks on Saudi Arabia’s oil facilities in Abqaiq and Khurais took an estimated 5.7 million barrels of oil offline. While oil initially spiked 8% and climbed higher, prices ultimately drifted back down and a few weeks later were back at pre-attack levels after Saudi Aramco quickly restored production.

But this time around prices could stay elevated for longer, given tight supply and a historically weak part of the year for oil.

On Friday Eurasia Group raised its 2020 high-end base case oil target to $75 per barrel, based on “rising risk to oil infrastructure in the region.” If conflict breaks out, which the firm’s Middle East and North Africa head of research Ayham Kamel places at 30% likelihood, prices could climb as high as $95.

Citi said that other possible retaliations could be “attacks on pipeline oil flows or shipping through either the Strait of Hormuz or the Red Sea,” through which more than a fifth of the world’s oil supply flows.

Thursday’s airstrike comes following an especially strong fourth quarter for oil, which saw OPEC+ announce deeper-than-expected production cuts in December, and as easing trade tensions led to upbeat outlooks for demand.

WTI gained 10.68% in December — its best month since January 2019 — and 12.93% for the quarter. It’s 34.46% gain for the year was its best since 2016. Brent gained 5.7% in December and 8.59% for the quarter. It also had its best year since 2016, gaining 22.68%.

Carter Braxton Worth from Cornerstone Macro said WTI looks set to reach $72 per barrel, and that investors should “embrace” the pop. “It will be right to play energy stocks on the long side in the weeks/months again,” he said in a note to clients Sunday.

That said, analysts at Morgan Stanley said that “any further escalation could keep oil prices supported in the short term,” but that any gains could be short lived. The firm said it sees Brent closer to $60 rather than $70 for the year given “an oversupplied oil market in 2020 as a whole.”

– CNBC’s Michael Bloom, Amanda Macias and Spencer Kimball contributed to this report.

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Business

Carry On Canadian Business. Carry On!

Published

12 hours ago

October 22, 2024

Steven Kaszab

Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.

I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.

Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.

Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.

Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca

Business

Imperial to cut prices in NWT community after low river prevented resupply by barges

Published

15 hours ago

October 22, 2024

Anne Joseph

NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.

Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.

The air transportation increase, it further states, will be implemented over a longer period.

It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.

Gasoline and heating fuel prices approached $5 a litre at the start of this month.

Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.

“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.

The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.

“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.

Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.

Additionally, she said the government has donated $150,000 to the Norman Wells food bank.

In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.

It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.

This report by The Canadian Press was first published Oct. 21, 2024.

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Business

U.S. vote has Canadian business leaders worried about protectionist policies: KPMG

Published

15 hours ago

October 22, 2024

Anne Joseph

TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.

The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs

It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.

The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.

Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.

Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.

This report by The Canadian Press was first published Oct. 22, 2024.

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