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Energy Quakes as OPEC Stands Pat

OPEC Secretary General Abdalla Salem El-Badri, center, is interviewed in Vienna ahead of the oil… ENLARGE OPEC Secretary General Abdalla Salem El-Badri, center, is interviewed in Vienna ahead of the oil cartel’s meeting on Thursday. Agence France-Presse/Getty Images Energy company stocks and the currencies of major oil-producing nations stumbled Friday as OPEC’s decision to maintain crude output levels despite a glut rippled across the globe. The Organization of the Petroleum Exporting Countries’ decision knocked down U.S. benchmark oil prices on Friday by 10% to $66.15 a barrel, the lowest level since September 2009. Uneasy investors dumped energy stocks. Among the hardest hit were U.S. domestic oil producers including Continental Resources Co., the biggest producer in North Dakota’s Bakken Shale. Its shares plunged on Friday nearly 20%, to $40.98. Exxon Mobil Corp. fell 4.2%, BP PLC dropped 5.5% and Royal Dutch Shell PLC lost 7%, all in abbreviated New York […]

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Venezuela’s Maduro Plans To Slash Spending as Oil Price Drops

By Kejal Vyas CARACAS–Venezuelan President Nicolás Maduro announced plans on Friday to cut public spending, beginning with his own salary, as the price of oil continues its slump. The slide in crude prices of more than 30% since the summer has added a new layer of concern for Mr. Maduro, whose popularity, polls show, has dropped to a record low. The South American country is struggling with soaring inflation as well as a dollar crunch that has led to shortages of food and consumer goods. Venezuela’s basket of heavy crude and petroleum products tumbled 89 cents to end the week at $68.08 a barrel, the lowest in more than four years, the oil ministry reported. "I don’t take this blow from the drop in oil prices badly," Mr. Maduro said in a televised address to industry workers at the Miraflores presidential palace. "I take it as an opportunity to […]

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Mexico’s Peso Feels Heat from Falling Oil Prices

By Anthony Harrup MEXICO CITY–Mexico’s peso fell Friday to its weakest level against the U.S. dollar in more than two years as the continuing decline in world oil prices pressured commodity-dependent currencies. As the most traded of the emerging-market currencies, the peso is often used by investors to hedge emerging market exposure and sold off in times of global financial turmoil. Already under pressure along with other emerging market currencies on prospects of higher U.S. interest rates, the Mexican currency lost further ground after the Organization of the Petroleum Exporting Countries decided against cutting crude oil output to address falling prices. The Mexican currency weakened as far as 13.96 to the dollar during Friday’s session before settling back to 13.9080, its weakest close since mid-2012. The drop in oil prices, and the lack of liquidity because of the U.S. Thanksgiving holiday, were pressuring the exchange rate, local currency traders […]

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The First Oil-Exporting Casualty Of The Crude Carnage: Venezuela

In the aftermath of OPEC’s failure to cut oil production, Russia has been acting surprisingly sanguine, perhaps as a result of less leverage in its system as compared to America’s own high yield-funded shale complex – now that it is a race to who will default first and be forced to take production offline – with Putin today saying “Russia will cope with the rout in crude oil”,  and adding that “we are satisfied overall with the situation and do not see anything so extraordinary in what is happening. Winter is coming and I am sure that the market will come into balance again in the first quarter or toward the middle of next year.” Maybe it will, or maybe not, if indeed as those with a working frontal cortex suggest the plunge in crude prices is merely a function of a collapse in global demand now that the […]

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Beijing issues smog alert

BEIJING, Nov. 29 (Xinhua) — Beijing air control authorities issued a hazardous air alert and urged residents to stay indoors as a heavy blanket of smog covered the city on Saturday. The city’s office for severe air pollution emergency response issued a "blue alert", the lowest of a four-level warning system, on Saturday morning, blaming regional pollution and unfavorable weather conditions for the build-up of pollutants. Beijing’s air quality index (AQI) hit 276 at 12 p.m., according to the Beijing Environmental Protection Monitoring Center. The office has ordered local pollution emitters to take further measures to cut emissions and advised residents to stay indoors and to wear masks if venturing out. Children, the elderly and those who suffer respiratory and cardio-cerebrovascular diseases have been urged to reduce outdoor activity. The air is forecast to gradually clear up the over the next few day as strong gales from the north […]

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China Motorists Exceed 300 Million as Cities Struggle

Traffic moves on a road in Beijing, China, on Nov. 7, 2014. The rising number of… Read More Photographer: Tomohiro Ohsumi/Bloomberg Related China now has about the same number of licensed drivers as there are people in the U.S., even though two out of three adult Chinese still aren’t qualified to operate a motor vehicle. There are now more than 300 million motorists in China, compared with the U.S. population of 319 million, according to Chinese public security ministry and U.S. census data. It took just four years to add 100 million new drivers in China, and 35 of its cities now have more than 1 million vehicles, with major urban centers like Beijing and Shenzhen having twice that number, the ministry said in a statement on its website. The rising number of motorists will boost vehicle demand while increasing the burden on cities already struggling to cope with […]

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Oil Crash Will See Drillers Cut Spending to Shield Dividends

For the world’s largest oil companies , the accelerating crash in crude prices will probably mean scrapping investments from America’s shale fields to the seas off Brazil as CEOs protect dividend payments. The parts of the industry most exposed to cutbacks include certain U.S. shale deposits, where break-even costs vary from $40 to more than $100 a barrel. While some, such Russian oil tycoon Leonid Fedun , say the slump will halt a good deal of production, others argue that the shale industry will be able to maintain production for some time at these price levels . In the longer term, the greater dilemma for oil producers is that even as crude drops the costs of developing new reserves remain higher than ever. An extended period of lower prices will prevent companies from being able to replace production as existing fields dwindle. In ensuring investors get paid, companies may […]

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Here Comes $60 Oil as OPEC Tests U.S. Shale: Chart of the Day

OPEC’s decision not to try and eliminate an oil-supply glut means the biggest crash in six years won’t stop until prices reach $60 a barrel, according to firms including Nomura Holdings Inc. and Deutsche Bank AG. The CHART OF THE DAY shows how the group supplying 40 percent of the world’s oil has kept pumping at or above its own production limit of 30 million barrels a day even as output in the U.S. climbs to the highest in decades. Crude collapsed into a bear market this year as the U.S. boom contributed to a global surplus that Venezuela estimates at 2 million barrels a day, more than the production of five OPEC members. The Organization of Petroleum Exporting Countries, which said Nov. 27 it is taking no action to reduce supply, has exceeded its target in all but four of the 34 months since it took effect at […]

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Canadian Dollar Ends Lower As Oil Prices Plummet

By Don Curren TORONTO–The Canadian dollar ended sharply lower on Friday, suffering another day of deep losses, as oil prices spiralled lower. The currency didn’t derive sustained support from unexpectedly robust data on gross domestic product for the third quarter early in the session. The U.S. dollar was recently at C$1.1429, up from C$1.1332 at Thursday’s close, according to data provider CQG. The Canadian dollar initially advanced after news that Canada’s GDP grew 2.8% in the third quarter, much more than the expected 2.1% and the Bank of Canada’s previous forecast of 2.3%. The Canadian currency drove the U.S. dollar to C$1.1366 immediately after the data, but it was unable to hold onto gains, as crude-oil prices continued the decline after Thursday’s OPEC’s decision not to reduce production targets. The early about-face and subsequent losses by the Canadian dollar proved a little puzzling to some market participants and a […]

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France to rank cars for pollution, wants to phase out diesel fuel

PARIS Nov 28 (Reuters) – France wants to gradually phase out the use of diesel fuel for private passenger transport and will put in place a system to identify the most polluting vehicles, Prime Minister Manuel Valls said on Friday. Next year, the government will launch a car identification system that will rank vehicles by the amount of pollution they emit, Valls said in a speech. This will make it possible for local authorities to limit city access for the dirtiest cars. "In France, we have long favoured the diesel engine. This was a mistake, and we will progressively undo that, intelligently and pragmatically," Valls said. About 80 percent of French motorists drive diesel-powered cars. Valls said taxation would have to orient citizens towards more ecological choices, notably the 2015 state budget measures to reduce the tax advantage of diesel fuel versus gas. The government has announced it will […]

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