(Bloomberg) — Petroleo Brasileiro SA’s incoming chief executive officer wants to continue opening the refining industry to outside investment and will avoid losses on fuel prices.
Joaquim Silva e Luna, a former defense minister who President Jair Bolsonaro abruptly named to lead the state-controlled oil company last week, said in an interview that he’ll work with the board to understand how it prices fuel, while adding that there should be less volatility and more “predictability” and “transparency” for consumers.
Petrobras will continue to focus on its most profitable oil fields in the so-called pre-salt region in deep waters, Silva e Luna said Wednesday in e-mailed response to questions. Brazil’s pre-salt has some of the most productive oil wells anywhere and Petrobras has been directing an increasingly large share of its business plan to develop them.
“We can’t forget the basics. Petrobras is the company with the most know how and has leadership in deep water-exploration, where the pre-salt reserves are located,” he said. “We can’t pull back from exploring.”
Petrobras shares extended gains after his comments and were up 2.5% to 24.66 reais as of 2:08 p.m. in Sao Paulo. The stock tanked 22% Monday as investors worried Silva e Luna’s appointment signaled government interference at the company.
Brazil Markets Tumble as Bolsonaro Pivots to Interventionism
CEO Roberto Castello Branco, who has publicly clashed with the president over the scale of recent price increases, will keep his job until his term ends on March 20, Petrobras said in a statement Tuesday. Silva e Luna said he respects Castello Branco and hopes to meet with him and current management for an orderly transition.
“I believe that there are opportunities to attract companies interested in refining our oil,” Luna said.
Rising oil prices have been a mixed blessing for Petrobras historically because it has come under pressure from both business- and labor-friendly administrations to suppress fuel costs. Truckers, who brought the economy to a halt during a strike in 2018 and are part of Bolsonaro’s political base, have been complaining about rising diesel prices and threatening to strike, prompting the president to publicly criticize what he called excessive increases.
“There are things we practically have no power to change, like the exchange rate and the international price of oil, that will strongly impact fuel prices and affect the pockets of consumers,” he said. “We will look for other ways, like I say, always in in consensus with the other directors and the board, taking measures together, to see what is possible to do, without suffering losses.”
(Adds shares, other comments from Luna starting on fifth paragraph)
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TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
