The administration of United States President Donald Trump plans to send a special energy representative to Saudi Arabia, officials said on Friday. The White House is scrambling to respond to the global oil price crash as a regulator from the top US oil-producing state took the rare step of considering output cuts to help stabilise markets.
Oil prices have lost more than half their value in the last two weeks as Saudi Arabia and Russia kicked off a price war, and the coronavirus pandemic destroyed demand.
The crash has shocked the oil industry as a pact among OPEC and non-OPEC producers to cooperate imploded, triggering a production free-for-all. Texas regulators are considering the unusual step of intervening to curb output for the first time in decades, while the US is scrambling to negotiate with Saudi Arabia, which has unleashed production after years of touting its role as a stabilising force for markets.
Saudi Arabia and Russia are locked in a war for global oil market share after their three-year deal to restrain output collapsed this month. The kingdom has vowed to increase production to a record 12.3 million barrels per day and has chartered numerous tankers to ship oil around the world, pushing prices to near 20-year lows this week.
US officials believe Saudi Arabia’s move to flood oil markets compounds the global economic crash at a time of a crisis caused by the pandemic.
A senior US Energy Department official will be sent to Riyadh for months to work closely with Department of State officials and the existing energy attache, the senior US officials told Reuters News Agency, on the condition of anonymity.
Trump administration officials said Saudi Arabia has, for decades, been a steadfast leader of stability in the global oil market. The energy representative would help the countries return to a path of stability, they said.
The price crash is also devastating to US oil producers, some of which have already begun putting employees on leave.
The hope is that Trump could negotiate with Saudi Arabia and Russia and convince them to match cuts with a similar cut in production in Texas, said Ryan Sitton, a commissioner with the Texas Railroad Commission, the body that regulates the state’s oil and gas industry.
Sitton said production limits could be implemented quickly, though no one who works at the agency was around the last time the state limited production in the early 1970s.
“We need to take the time to hear from everybody,” he said, adding that he was not yet advocating for the cuts. “[But] if we can help [Trump) get a deal done, then I think that’s when we do something.”
Sitton said in a tweet that he spoke with OPEC Secretary-General Mohammad Barkindo about an international deal “to ensure economic stability as we recover from” the coronavirus outbreak. Sitton said Barkindo was “kind enough to invite me to the next OPEC meeting in June”.
Barkindo told Reuters that he and Sitton discussed their “perspective on current developments and the possibility of future cooperation” in a teleconference. Barkindo and OPEC ministers have, in the past, met with shale-industry executives at annual conferences.
Frank Fannon, the US assistant secretary of state for energy resources, said that to his knowledge, the federal government does not have the ability to restrict the Texas regulator from any work with OPEC to cut production. “Those are wholly within state matters … from a federal level we have no ongoing engagements with OPEC, it’s a cartel,” Fannon told reporters late on Friday in a teleconference.
US industry unmoved
Some US industry representatives were sceptical that Texas should intervene in the market. US oil producers have long resisted such a move, and the industry’s largest trade association did not sound convinced Friday, either.
“Our view is simple. Quotas are bad,” said Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute. “They’ve been proven ineffective and harmful. There’s no reason during this time to try to imitate OPEC.”
In the last several years, shale operators using the innovative hydraulic fracturing, or fracking, technique, have boosted US oil output to nearly 13 million barrels per day, making it the world’s largest producer. Since 2016, as OPEC restrained production, the US has taken market share from Saudi Arabia, Russia, and other nations.
Russia has been slower to come on board with OPEC’s continued efforts to bolster prices, and the country’s largest oil producer, Rosneft, has been an opponent of the deal with OPEC to cut supply. Units of that company, and its managers, were recently sanctioned by the US due to its trade relationship with Venezuela.
Trump administration officials will continue to reduce global oil output with sanctions on what the officials called bad actors in Iran and Venezuela, both of which are OPEC members, and their shipping networks, the officials said. To the extent that Russia is involved in marketing Venezuelan oil, it will be sanctioned, the officials said.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
