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South Sudan Budgeted $850 Million to Crush Rebellion, UN Says

South Sudan, one of the world’s most corrupt and least developed countries, prepared an $850 million budget to crush a rebellion shortly after the insurgency began almost two years ago, the United Nations said. The supply of Israeli automatic rifles, Chinese missiles, Russian attack helicopters and amphibious vehicles “has been instrumental in prolonging and escalating the war,” now in its 21st month, and enabled large-scale violations of humanitarian law, according to a yet to be published interim report by the UN Panel of Experts on South Sudan. South Sudan’s pursuit of “greater air and riverine capacity” is part of a strategy against a mobile insurgency that relies on small arms, the UN says in the report, obtained by Bloomberg from a person who asked not to be identified because it hasn’t yet been made public. South Sudan army spokesman Philip Aguer said the military needed more weapons, gunships and […]

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Beijing capitulates after spending $200bn to prop up equities

Sign up for quick access to a wealth of global business news, including: Beijing capitulates after spending $200bn to prop up equities Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no no […]

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China’s ghost towns point to nation’s waning fortunes

Factory workers go about their jobs at a Shenyang machine tool company. (Adam Dean/For The Washington Post) SHENFU, China — Giant skyscrapers tower unfinished and abandoned around a lake that forms the centerpiece of this new town. The wind blows through the empty hulk of what was supposed to be a multi-story hotel and restaurant complex. A salesman insists that people have moved into one of the few housing complexes to be completed around the shore, but as dusk falls only a handful of lights blink on. He offers to throw in a free car with every apartment purchased. This is Shenfu New Town in the northeastern province of Liaoning, built to handle the overflow from the once-booming industrial cities of Shenyang and Fushun. “Build it and they will come,” the saying goes, but here, in China’s industrial heartland, people are leaving instead of coming. For much of the […]

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China stocks plunge to eight-month lows before paring losses

A passerby walks past a panel displaying China stock indexes at the financial Central district in Hong Kong, China August 24, 2015. China’s major stock indexes slumped more than 6 percent to 8-month lows in early trade on Tuesday before paring losses, after a catastrophic Monday that destabilized financial markets around the world. By 0200 GMT (10 p.m. ET Monday), the CSI300 index .CSI300 was down 4.4 percent at 3,132.26 points, while the Shanghai Composite Index .SSEC Shanghai composite lost 4.8 percent to 3,057.04 points. Chinese stocks plunged more than 8 percent on Monday in panic selling, with flagship indexes smashing key support levels and posting their biggest one-day percentage losses since the height of the global financial crisis in 2007. Stock futures pointed to expectations of further losses. China CSI300 stock index futures CIFc1 for September fell 2.6 percent to 3,053.4, 78.86 points below the current value of […]

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China’s yuan weakens as stock market extends decline

A man walks past an advertisement promoting China’s renminbi (RMB) or yuan, U.S. dollar and Euro exchange services at foreign exchange store in Hong Kong, China, August 13, 2015. SHANGHAI， China’s yuan dipped against the dollar on Tuesday after closing at its weakest level since 2011 on Monday, hit by another slump in the mainland’s stock market and a weak central bank midpoint. Traders said they believed the yuan’s current range between 6.29 and 6.43 to the dollar was well accepted by the market after the currency’s recent volatility once threatened a sharper depreciation. "The yuan is unlikely to depreciate to 6.50," said a trader at a foreign bank in Shanghai, adding that the central bank was likely to intervene to slow down the depreciation. China’s major stock indexes slumped more than 6 percent to 8-month lows in early trade on Tuesday before paring some losses by midday, continuing […]

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China oil rig to keep drilling in waters disputed with Vietnam

Chinese ships are seen on the horizon guarding the Haiyang Shiyou 981, known in Vietnam as HD-981, oil rig (2nd R) in the South China Sea, July 15, 2014. A Chinese oil rig at the center of last year’s standoff between China and Vietnam will continue drilling not far from Vietnam’s coast, China’s maritime safety authorities said on Tuesday. The deployment of the $1 billion deepwater rig last year about 120 nautical miles off Vietnam’s coast, in what Vietnam considers its exclusive economic zone (EEZ), led to the worst breakdown in relations since a brief border war in 1979. China said at the time the rig was operating completely within its waters. The rig, called the Haiyang Shiyou 981, was removed last July, but returned to the area in June of this year to explore for oil and gas. A notice from China’s Maritime Safety Administration said at the […]

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For All Its Heft, China’s Economy Is a Black Box

For sheer clout, China’s economy outweighs every country in the world save the U.S. But on transparency, it remains distinctly an emerging market, with murky politics, unreliable data and opaque decision making. This veil dims the understanding of China’s economy and is an important reason its recent slowdown has produced so much turmoil. Economists widely doubt that China grew at a robust 7% pace in the second quarter, as the country’s official statistics say. Citing other data, such as power generation and passenger travel, some think the rate might be as little as half that. Similarly, when the People’s Bank of China devalued its currency two weeks ago, a step that sparked much of the recent market upheaval, officials couched the move as part of a long-term effort to align the yuan’s value more closely with market forces. Some outside analysts, noting that the PBOC isn’t independent, saw a […]

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Shanghai index falls another 7.6%

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A Warning on China Seems Prescient

Photo Kenneth Rogoff, a crisis expert. Credit Gleb Shchelkunov/Kommersant Photo, via Getty Images Kenneth Rogoff has long warned of a potential financial crisis in China. Mr. Rogoff, a professor of economics at Harvard University, accurately predicted the eurozone debt crisis and for years has been telling anyone who would listen that China posed the next big threat to the global economy. He is starting to look right, again. “In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could,” Mr. Rogoff said on Monday from Cambridge, Mass., repeating a favorite line from Rudi Dornbusch, the German economist. (Mr. Rogoff sat in on Mr. Dornbusch’s class at M.I.T. in 1977.) Mr. Rogoff, who is a chess grandmaster, has made a career of studying financial crises. After the 2008 financial crisis, Mr. Rogoff co-wrote “This Time Is Different,” a seminal […]

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Moody’s Cuts Credit Rating of Canadian Oil Sands

The rating action targeting the largest owner of Canada’s giant Syncrude oil-sands mining consortium comes amid a swoon in oil prices below $40 a barrel, which has eroded profit margins in the energy industry and made it more difficult for highly-levered oil producers to service their debt loads. Moody’s lowered its creditworthiness assessment of Canadian Oil Sands’ senior unsecured debt to Baa 3 from Baa 2 and kept its “negative” outlook for the Calgary-based company. Baa 3 is Moody’s lowest rung of investment-grade credit and just above the speculative, or junk, grade. “Moody’s expects negative free cash flow [at Canadian Oil Sands] of about 125 million Canadian dollars ($94 million) from June 30, 2015, to September 30, 2016, to be largely debt funded,” it said. The ratings action was prompted by the recent tumble in crude prices to more than six-year lows and Canadian Oil Sands’ deteriorating balance sheet. […]

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Risks Grow for Slow but Steady U.S. Expansion

The U.S. has been the tortoise in a global race for economic growth, plodding out a slow but steady expansion while China signals exhaustion and the rest of the world wobbles. Now, market turmoil and China’s troubles threaten to undermine the already unspectacular U.S. outlook. Few economists see a U.S. recession. In fact, some recent developments, including lower oil prices, will help U.S. consumers and businesses. But an uneven global growth outlook is pushing the value of the dollar higher, making U.S. goods more expensive overseas and harder to export. That could restrain the U.S. economy in the months ahead. Stock-market declines could further hurt U.S. consumer sentiment and spending, if the drops are sustained, and they make businesses even less willing to invest. Federal Reserve officials now need to decide if they should alter their planned course on interest rates. Officials have been signaling for months that at […]

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Boehner: Oil export ban thwarts success

Speaker of the House John Boehner, R-Ohio, writes an op-ed in Pennsylvania newspaper in support of ending a 1970s ban on U.S. crude oil exports. File Photo by Kevin Dietsch/UPI PITTSBURGH, Aug. 24 (UPI) — U.S. House Speaker John Boehner wrote in a Pennsylvania newspaper the nation’s oil sector is headed for a "brick wall" in the form of a crude oil export ban. "For all its success, this energy boom is currently running into a brick wall in the form of … federal government policies that date back to the 1970s," Boehner wrote in the (Pittsburgh) News-Tribune-Review. Boehner, his Republican colleagues, led by Sen. Lisa Murkowski , R-Alaska, and some Democrats, notably Sen. Heidi Heitkamp, D-N.D., have moved several pieces of legislation aimed at overturning the 1970s ban on the export of domestic crude oil. The ban was enacted after Arab members of the Organization of Petroleum Exporting […]

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Gasoline Is Both Incredibly Cheap and Absurdly Expensive

Filling up with gasoline in the U.S. is the cheapest it’s been in a decade and yet way too expensive. The average retail price in the U.S. dipped to $2.595 a gallon yesterday, down 7.5 cents from the previous week and the lowest for this time of year since 2004, according to Heathrow, Florida-based AAA, the nation’s largest motoring group. Costs are sliding on the back of oil futures tumbling for eight consecutive weeks, the longest drop since 1986. Given that crude traded as low as $37.75 a barrel Monday, gasoline should be a lot cheaper. Since AAA started tracking prices in 2004, retail gasoline has only twice been above $2 a gallon while crude was under $40. Prices at the pump are now almost three times as high as oil on a per-barrel basis, the biggest gap on record. There are a couple reasons for the disconnect. Summer […]

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BofA Says Collapsing Crude Drags U.S. LNG Exports Down With It

Plummeting crude oil prices have dimmed prospects for soon-to-start U.S. liquefied natural gas exports, Bank of America Corp. said in a note to clients Monday. The gap between U.S. and global prices for the fuel has narrowed as oil’s collapse reduced the cost of crude-linked LNG contracts in Asia and Europe, Max Denery, an analyst at the bank in New York, said in the report. Oil in London has tumbled 25 percent this year, falling below $45 a barrel Monday for the first time since 2009, while U.S. gas has dropped 8.3 percent. The reduced price advantage comes as Cheniere Energy Inc. finishes construction of its Louisiana export terminal, which is poised to send the first shipment of U.S. LNG from the lower 48 states before the end of the year. North American cargoes will enter the market as gas from newly-built Australian terminals adds to a global supply […]

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Russian ruble collapses to 7-month low on weak oil prices

AP Photo/Alexander Zemlianichenko MOSCOW (AP) — The Russian ruble plunged 2.9 percent on Monday to hit a seven-month low amid a further drop in oil prices, the country’s key export. The ruble was trading at 71.04 to the dollar at the close of trading in Moscow, its lowest level since Jan. 30, when Russian markets were hit by a combination of low energy prices and Western sanctions. After the market closed, the ruble recovered slightly in futures trading in an indication that it may recover some of its losses. Oil is the backbone of the Russian economy and the fall of the ruble follows a sharp decline in the price of crude. The U.S. oil contract on Friday dropped below $40 per barrel for the first time since 2009 and on Monday was down another $1.23 a barrel at $39.22. The ruble’s slide was accompanied by falls in the […]

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Russia Trims GDP Forecasts as New Oil Plunge Batters Ruble

Russia lowered its economic forecasts for this year and next year as a renewed plunge in energy prices sank the ruble and sanctions over Ukraine looked set to persist. Gross domestic product in the world’s largest energy exporter will fall 3.3 percent in 2015 before rebounding as much as 2 percent in 2016, Economy Minister Alexei Ulyukayev said Tuesday in Kuala Lumpur, the Interfax news service reported. The ministry had earlier projected a 2.8 percent contraction followed by 2.3 percent growth. Russia’s slump reached a “fragile” bottom last month, Ulyukayev said, predicting an improvement in the economy in the fourth quarter. “I don’t think we’ll go any lower but it’s hard to say when we’ll see significant growth.” Russia, mired in its first recession in six years, is battling a new wave of oil-price weakness that’s sent the ruble to its lowest level against the dollar in seven months. […]

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Oil slides to 6-year low as commodities tumble

Sign up for quick access to a wealth of global business news, including: Oil slides to 6-year low as commodities tumble Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no no For […]

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Oil Tumbles to Fresh Lows on China Market Turmoil

Oil prices tumbled to fresh lows in Asian trade Monday, in line with the selloff in wider financial markets, as investors were shaken by the rout in Chinese equity markets and worries about global economic growth. Brent crude, the global oil-price benchmark, dropped below the $45 a barrel mark for the first time since March 2009. It is now trading around 56% lower from its year-high of $103.19 a barrel reached in August last year. Oil prices have been under pressure for several months due to oversupply concerns, but the slump deepened in recent weeks on fears of a sharp slowdown in the Chinese economy and its impact on global markets. The recent devaluation of the yuan also added to market uncertainty, stoking concerns that China’s oil and commodities imports could fall further. On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at […]

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Brent, U.S. oil mark fresh 6-1/2-year lows on China and oversupply

A service truck drives past an oil well on the Fort Berthold Indian Reservation in North Dakota, November 1, 2014. Brent and U.S. crude oil futures hit fresh 6-1/2-year lows on Monday to drop below the latest supports of $45 a barrel and $40 a barrel respectively as investors fretted that a slowing Chinese economy will lead to weaker demand amid a global supply surplus. Other commodities also hit fresh lows in early Asian trading as fears spread that a more severe slowdown in China would pull down other economies in the region, denting energy and raw material consumption. Brent oil LCOc1 was trading down 82 cents a barrel at $44.64 as of 0425 GMT (0025 EDT), after hitting an intraday low of $44.24, its lowest since March 2009. On Friday it ended $1.16, or 2.5 percent, lower at $45.46 a barrel. U.S. October crude CLc1 fell 93 cents […]

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Future Risks of an Iran Nuclear Deal

WASHINGTON — As President Obama begins his three-week push to win approval of the Iran nuclear deal, he is confronting this political reality: His strongest argument in favor of passage has also become his greatest vulnerability. Mr. Obama has been pressing the case that the sharp limits on how much nuclear fuel Iran can hold, how many centrifuges it can spin and what kind of technology it can acquire would make it extraordinarily difficult for Iran to race for the bomb over the next 15 years. His problem is that most of the significant constraints on Tehran’s program lapse after 15 years — and, after that, Iran is free to produce uranium on an industrial scale. “The chief reservation I have about the agreement is the fact that in 15 years they have a highly modern and internationally legitimized enrichment capability,” said Representative Adam B. Schiff, a California Democrat […]

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Iran says an OPEC emergency meeting may stop oil price slide: Shana

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. Iran’s Oil Minister, Bijan Zanganeh, said on Sunday that holding an emergency OPEC meeting may be "effective" in stabilizing the oil price, Iran’s oil ministry news agency Shana reported. Algeria said earlier this month that the Organization of Petroleum Exporting Countries could hold an emergency meeting to discuss the drop in oil prices but other OPEC delegates said no meeting was planned. "Iran endorses an emergency OPEC meeting and would not disagree with it," Zanganeh told reporters in Tehran, according to Shana. U.S. oil prices CLc1 fell below $40 a barrel on Friday for the first time since the 2009 financial crisis, pressured by signs of oversupply in the United States and weak Chinese manufacturing data. [O/R] OPEC is not due to meet until Dec. 4. While […]

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Iran to Raise Oil Output ‘at Any Cost’ to Defend Market Share

Iran plans to raise oil production “at any cost” to defend the country’s market share and joins calls for an emergency OPEC meeting to help shore up crude prices. “We will be raising our oil production at any cost and we have no other alternative,” said Oil Minister Bijan Namdar Zanganeh, according to his ministry’s news website Shana. “If Iran’s oil production hike is not done promptly, we will be losing our market share permanently.” Iran had the second-biggest output in the Organization of Petroleum Exporting Countries before U.S.-led sanctions banning the purchase, transport, finance and insuring of its crude began July 2012. Oil producers such as BP Plc and Royal Dutch Shell Plc have expressed interest in developing its reserves, the world’s fourth-biggest, once sanctions are removed. Zanganeh was speaking during the first visit by a British foreign secretary to Iran since 2003. Philip Hammond was accompanied by […]

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Crime Soars in Oil Region of Southern Iraq

By Matt Bradley And Ali A. Nabhan BASRA, Iraq–Just past midnight, a chain-smoking Hussein al-Rashid, head of a local oil services company, received the phone call he had been waiting for all day. "We’ve got your guys," the voice over the phone told Mr. Rashid. "And we want $200,000." The man on the phone wasn’t an Islamist militant and the kidnapping of three of Mr. Rashid’s employees didn’t occur anywhere near the front lines of fighting between Islamic State and government forces. Rather, the men were taken hostage in Basra, Iraq’s third-largest city and the heart of its oil industry in the country’s predominantly Shiite south. Until last year, Basra was a secure haven in a country torn apart by war. But the armed thugs now in control of its streets and the crime wave sweeping the city illustrate how the conflict with Islamic State is rippling beyond the […]

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Al Qaeda Fighters Try to Seize Yemeni Military Base in Aden

In Their Own Words Children are terrified by noises. Finding food is a challenge. There’s rarely power. Many people in Yemen and beyond dream of an end to the fighting. The Many Miseries of Yemeni Families MARCH 1, 2015 MAHRA, Yemen — Dozens of fighters belonging to Al Qaeda ’s Yemeni affiliate briefly tried to seize control of a military base and the presidential palace in the port city of Aden before suddenly withdrawing on Sunday, according to local fighters and a senior military official in the city. By Sunday afternoon, there were no signs of Qaeda militants in Tawahi, the neighborhood surrounding the palace. But their appearance, however fleeting, was an embarrassing setback for the exiled government of President Abdu Rabbu Mansour Hadi, which had described its success in securing Aden as a major victory in its war with the Houthi rebels. The government, which is backed by […]

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Countries Slow to Pledge Emissions Cuts Ahead of Paris Climate Talks

Less than a third of governments seeking a global climate agreement have submitted plans for reducing emissions, raising concerns over developing countries’ commitment to a deal just months before talks are meant to culminate in Paris. As part of the latest international effort to stave off warming, nearly 200 countries agreed to present their own plans for curbing greenhouse-gas emissions to the United Nations body overseeing the talks. The national plans are meant to be folded into a broader accord aimed at putting the world on track to cap global average temperatures at no more than 2 degrees Celsius above preindustrial levels—a goal that U.N. officials now concede is unlikely in this year’s agreement. While the European Union, China, the U.S. and other big carbon emitters have submitted their reduction targets, many major economies haven’t—including Brazil, Indonesia, Saudi Arabia and India, the fourth-biggest source of carbon dioxide emissions. The […]

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Venezuelans contend with food, medicine shortages, as low oil prices cripple economy

Empty refrigerator shelves are pictured at a Makro supermarket in Caracas, Venezuela, August 4, 2015. Venezuelan supermarkets are increasingly being targeted by looters, as swollen lines and prolonged food shortages spark frustration in the OPEC nation struggling with an economic crisis. Photo by Carlos Garcia Rawlins/Reuters Amid Venezuela’s ongoing economic crisis, protests this month in the nation’s capital over shortages of medicine and basic supermarket necessities have spotlighted the ripple effect of the falling price of oil, the country’s main export. Food shortages have prompted some violence and more than 50 incidents of grocery store looting so far in 2015. Families of children with cancer demonstrated in front of a children’s hospital in Caracas this month to protest the country’s shortage of chemotherapy treatments. Tens of thousands of Venezuelans with HIV have no access to antiretroviral drugs and condoms are scarce in the country. Venezuela has some of the […]

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Asia down as China woes unnerve markets, safe-haven yen rallies

A pedestrian touching her head walks past an electronic board showing the stock market indices of various countries including the Japan’s Nikkei average (L top) outside a brokerage in Tokyo, Japan, August 21, 2015. Asian stocks and oil fell on Monday after Wall Street suffered another bruising blow as deepening concerns over the slowing Chinese economy continued to unnerve global equity markets. The safe-haven yen rallied and key government bonds were bought from the widespread unrest in the financial markets, set in motion nearly two weeks ago when China devalued its currency and generated fears about the state of its economy. Fears of a China-led global economic slowdown drove Wall Street to its steepest one-day drop in nearly four years on Friday and left the Dow industrials more than 10 percent below a May record. A 0.6 percent fall in S&P 500 mini futures ESc1 suggested sentiment remained weak. […]

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9 Opposition Candidates Barred From Venezuela’s December Ballot

Photo Enzo Scarano, a former mayor of San Diego, Venezuela, won a primary for national legislative elections, but the government suspended his right to hold office. Credit Meridith Kohut for The New York Times SAN DIEGO, Venezuela — When he handily won a primary to run for the National Assembly, Enzo Scarano hoped to be part of a wave carrying the opposition to a legislative majority that would alter the political balance in Venezuela . But when a government agency stripped him of his right to hold public office, scuttling his candidacy, he found himself caught up in a different kind of wave — of government measures that appear aimed at weakening the opposition ahead of a make-or-break legislative election in December. “It was a message to the Venezuelan people: ‘Look, we can do whatever we want,’ ” Mr. Scarano said of the move to bar him and at […]

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China to Flood Economy With Cash as Global Markets Lose Faith

BEIJING—The selloff in Chinese stocks accelerated Monday , adding pressure on Beijing, which is planning to flood its banking system with new liquidity to offset effects of its recent surprise currency devaluation , according to Chinese officials and advisers to the central bank. Stocks fell sharply in morning trading, with the Shanghai Composite Index down about 8%, bringing its losses since its mid-June peak to roughly 37%. Stock markets also were down Monday morning in Japan and South Korea. The expected move to free up more funds for lending—by reducing the deposits banks must hold in reserve—is directly aimed at countering the effects of a weaker currency, which could send more funds away from Beijing’s shores. The moves reflect an economy increasingly failing to cooperate with Chinese leaders’ playbook to control the world’s No. 2 economy. Beijing’s struggles this summer have spooked many investors into viewing China as a […]

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China share slide: Pension fund to invest in stock market

Chinese lady in front of stock price board China plans to let its main state pension fund invest in the stock market for the first time, the country’s official news agency, Xinhua, has reported. Under the new rules, the fund will be allowed to invest up to 30% of its net assets in domestically-listed shares. China’s main pension fund holds 3.5tn yuan ($548bn; £349bn), Xinhua said. The move is the latest attempt by the Chinese government to arrest the slide in the country’s stock market. The fund will be allowed to invest not just in shares but in a range of market instruments, including derivatives. By increasing demand for them, the government hopes prices will rise. The Shanghai Composite Index closed down more than 4% on Friday after figures showed monthly factory activity contracting at its fastest pace in six years. It capped a tough few days for Chinese […]

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Foreign Car Factories Curb Output in China

SHANGHAI—China’s foreign-car factories, once among the world’s busiest, are starting to slack off. New weakness in the world’s largest car market has led companies such as General Motors Co. and Volkswagen AG to run their plants there at less than full capacity for the first time, according to industry data. The global auto makers, which have been some of the biggest beneficiaries of Chinese consumers’ increasing appetite for…

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China Poised to Raise Banks’ Liquidity to Boost Lending

BEIJING—The People’s Bank of China is preparing to flood the banking system with liquidity to boost lending, according to officials and advisers to the central bank, as its recent currency moves are squeezing yuan funds out of the market and renewing concerns over capital leaving Chinese shores. The planned step—which involves cutting the deposits banks are required to hold in reserve—signals that the Chinese central bank’s exchange-rate maneuvering in the past two weeks is backfiring, forcing it to again resort to the reserve-requirement reduction, the same easing measure that so far has failed to help spur economic activity. The move, which could come before the end of this month or early next month, would involve a half-percentage-point reduction in the reserve-requirement ratio, potentially releasing 678 billion yuan ($106.2 billion) in funds for banks to make loans. It would be the third comprehensive reduction in the reserve requirement this year. […]

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Lundberg Says U.S. Gasoline to Extend Slump on Crude’s Rout

U.S. gasoline prices at the pump will extend a decline after crude oil tumbled to a six-year low, said Trilby Lundberg, the president of Lundberg Survey Inc. “Retail price cuts are in the cards” for gasoline, Lundberg said Sunday in a telephone interview. “It would take a powerful oil-price hike to reverse them.” The average for regular gasoline at U.S. pumps fell 0.35 cent to $2.7073 a gallon in the two weeks ended Aug. 21, Camarillo, California-based Lundberg said Sunday. Her report is based on information from about 2,500 filling stations. The price is 77.12 cents lower than a year ago. Motorists will get the benefit of lower crude, Lundberg said. On Aug. 21, West Texas Intermediate futures for October delivery dropped 87 cents, or 2.1 percent, to settle at $40.45 a barrel on the New York Mercantile Exchange, the lowest close since March 2009. The contract touched $39.86 […]

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Refinery Woes Stall Gasoline Price Drops

U.S. oil prices briefly dropped below $40 a barrel on Friday—hitting a six-year low that adds to pressure on pump prices for Labor Day road trips. But cheap gasoline isn’t a sure bet everywhere. Even as most drivers around the country are spending 25% less on fuel than they did a year ago, California drivers have missed out on the gasoline price windfall because of refinery outages. Many drivers in the state are saving less than 10%…

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Russian PM says Russia to boost FX flows to support ruble

An employee counts Russian ruble banknotes at a private company’s office in Krasnoyarsk, Siberia, December 17, 2014. Russia’s Prime Minister Dmitry Medvedev said on Saturday that the government and central bank were preparing measures to boost foreign currency sales in response to the weakening ruble. His comments suggest Russia is again putting pressure on major exporters to help buttress the ruble by selling more of their foreign currency, a tactic used last December when the government ordered state exporters to sell part of their foreign currency over an agreed time frame. "Naturally we, I mean the government, will help the central bank in the sense of additional foreign currency inflows," Medvedev said. "In the near future we will launch foreign currency sales by our largest exporters, which will affect the ruble’s rates. So we, together with the central bank, will undertake a definite collection of agreed measures." It was […]

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NOAA: July Was Hottest Month Ever Worldwide

July was a scorcher, globally speaking. Last month was the warmest on record worldwide with many countries and the world’s oceans experiencing intense heat waves, the U.S. National Oceanic and Atmospheric Administration said today in a report . The report found that “the July average temperature across global land and ocean surfaces was 1.46°F above the 20th century average.” And since July is “climatologically the warmest month for the year, this was also the all-time highest monthly temperature in the 1880–2015 record, at 61.86°F, surpassing the previous record set in 1998 by 0.14°F.” It comes as no surprise that Arctic sea ice hasn’t fared well with all this warmth. The average Arctic sea ice extent was the eighth smallest since records began in 1979. Click on chart for larger view. Graphic credit: NOAA Click on chart for larger view. Graphic credit: NOAA The report also found that it’s been […]

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Feels like 1986: Oil on track for longest weekly losing streak in 29 years

A customer holds a nozzle to fill up his tank in a gasoline station in Nice December 5, 2014. Oil prices resumed their downward trend on Friday pulled lower by weaker global stock markets and a sharp contraction in China’s manufacturing activity, with the U.S. benchmark on track for its longest weekly losing streak since 1986. Activity in China’s factory sector shrank at its fastest pace in almost 6-1/2 years in August as domestic and export demand dwindled, adding to worries about lower demand for crude in the world’s second biggest oil consumer. Asian stocks also fell on Friday, following Wall Street down as fears took hold of a China-led deceleration in global growth. [MKTS/GLOB] Key oil benchmarks were trading near 6-1/2 year lows, with the U.S benchmark headed for its eighth straight weekly decline, the longest weekly losing streak since 1986. In late 1985, oil prices slumped to […]

Posted On : Published By : Tom Whipple
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Oil Explorers Boost U.S. Drilling Even as Price Slumps

Drillers added rigs in U.S. oilfields for the seventh time in the past eight weeks as declining crude prices fail to hold back activity. Rigs targeting oil in the U.S. rose by 2 to 674 this week, the highest since the last week of April, Baker Hughes Inc. said on its website Friday. Drilling equipment added in the Williston Basin of North Dakota and other shale plays more than offset a declining count in areas like Texas’ Eagle Ford and Permian formations. The crude being pumped out of shale rock in the U.S. has helped create a global glut that pushed prices in New York below $40 a barrel for the first time in more than six years on Friday. At such low prices, the recent drilling increase may be short-lived, and the rig count remains almost 60 percent lower than in October. “We hit bottom, we bounced off […]

Posted On : Published By : Tom Whipple
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Oil Falls in Asia After Weak Chinese Manufacturing Data

A tanker vessel sat moored outside a plant in Shunan, Japan, on July 20. Oil prices resumed their downward trajectory in Asian trade on Friday following weak Chinese manufacturing data, as markets remain jittery due to concerns about global economic growth. U.S. oil prices reversed overnight gains pressured by rising supply levels and are still vulnerable to falling below the key psychological price level of $40 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in October recently traded at $40.80 a barrel, down $0.52 in the Globex electronic session. October Brent crude on London’s ICE Futures exchange fell $0.52 to $46.10 a barrel. Early Friday, the preliminary Caixin China Manufacturing Purchasing Managers’ Index, a gauge of nationwide manufacturing activity, fell to a 77-month low in August to 47.1, compared with a final reading of 47.8 in July. “Today’s weaker-than-expected PMI will add to […]

Posted On : Published By : Tom Whipple
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Natural Gas Slides as Autumn Nears

Natural gas prices sank to a two-month low Friday as the approaching autumn threatens demand. Futures for September delivery settled down 7.9 cents, or 2.9%, to $2.676 a million British thermal units on the New York Mercantile Exchange. It is the lowest settlement since June 5 and breaks gas out slightly from a 25-cent range it had settled within every session since then. Gas lost 4.5% for the week, its largest weekly loss since late May. It snapped a two-week winning streak. Summer prices are closely tied to heat because consumption usually rises as people turn on their air-conditioning units and ramp up demand for gas-powered electricity. Friday’s weather forecasts are little changed, but the peak of the summer is starting to pass. Traders are looking ahead to the fall, when consumers typically use less natural gas because weather is too mild to cause heating or cooling demand, analysts […]

Posted On : Published By : Tom Whipple
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No End in Sight for Oil Glut

When oil prices started to edge down a year ago, most energy mavens thought the drop would be small and short-lived. Instead, the price of crude has plunged by almost 60% from its 2014 peak—and suddenly looks likely to stay low for months and maybe years to come. The reason: In the global battle for market share, nobody has backed down. Nobody has even blinked. Not Saudi Arabia, not the U.S., and not even troubled producers from Russia to Iraq. Everyone who can seems locked into pumping as much oil as possible. Far from going out of business, American oil companies have stunned their global rivals by maintaining or even adding production as U.S. prices nose-dived from $100 a barrel to $70 late last year to, as of Thursday, just above $40. Even more surprisingly, the Saudis have actually increased their production in the face of falling prices, in […]

Posted On : Published By : Tom Whipple
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Pressure Mounts to Retire Older Fleet as Rig Oversupply Persists

With no signs of a turnaround in global rig demand, drilling contractors are under increasing pressure to retire older rigs. Operators worldwide have succumbed to the prolonged weakness in oil prices by curtailing drilling activities. An oversupply of rigs in an already slow drilling market combined with the addition of newbuilds to the global fleet, are key factors nudging drilling contractors towards retiring their older fleet. Pressure Mounts to Retire Older Rigs According to Rigzone’s RigLogix database , worldwide utilization of rigs, comprising drill barge, drillship, inland barge, jackup, platform rig, semisubmersible, submersible and tender rig, stood at 65.4 percent August 2015, down 12.6 percent from August 2014’s 78 percent as rig demand fell due to oil prices trading around half the level they were in the corresponding period. Transocean Ltd., a major industry player, disclosed in a May 19 presentation that the “rig market is temporarily oversupplied, including […]

Posted On : Published By : Tom Whipple
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U.S. Tests Show Islamic State Used Mustard Agent Against Kurdish Fighters

WASHINGTON—Preliminary U.S. tests show Islamic State fighters used mustard agent against Kurdish Peshmerga fighters in northern Iraq in at least one attack earlier this month, U.S. military officials said on Friday. If confirmed, the use of mustard agent in the Aug. 11 mortar attack on the Kurds in northern Iraq would be the second known instance in which Islamic State has used mustard agent on the battlefield. U.S. officials said last week that test results confirmed Islamic State used mustard agent against Kurdish forces in northern Syria in late July. The officials also suspect mustard agent or a similar blistering agent was used in an Aug. 13 attack against the Peshmerga in northern Iraq, but preliminary test results from that incident have yet to be announced. The preliminary results from the Aug. 11 mortar attack in northern Iraq were based a field test conducted after Peshmerga fighters brought fragments […]

Posted On : Published By : Tom Whipple
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Israel Came Close to Attacking Iran, Ex-Defense Minister Says

JERUSALEM — A former Israeli defense minister, Ehud Barak, revealed new details to his biographers about how close Israel came to striking Iran ’s military facilities in 2010, 2011 and 2012 and why it did not despite his and Prime Minister Benjamin Netanyahu ’s desire to do so, according to interview excerpts aired on Israeli television Friday night. Mr. Barak, who also previously served as Israel’s prime minister, said that he and Mr. Netanyahu were ready to attack Iran each year but that in 2010, the military chief of staff said Israel lacked the “operational capability”; in 2011, two key ministers waffled at the last minute; and in 2012, the timing did not work out because of a joint United States-Israel military exercise and visit by the American defense secretary. He noted that the two ministers who balked in 2011, Moshe Yaalon and Yuval Steinitz, “are the most militant […]

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Prospect of Self-Inspections by Iran Feeds Opposition to Nuclear Deal

To the most strident opponents of President Obama’s nuclear deal with Iran , the suspicious behavior at a military base about 12 miles southeast of Tehran has become a rallying call to defeat the accord, especially as it now appears that Iranian officials may be allowed to take their own environmental samples at the site and turn them over to inspectors. It did not take long for the speaker of the House, John A. Boehner, to question whether “anyone at the White House has seen the final documents” establishing rules for inspections. Though the International Atomic Energy Agency says it will monitor the collection, the chairman of the House Foreign Affairs Committee, Ed Royce, declared that, “International inspections should be done by international inspectors. Period.” But as in most debates about the Iran deal, the sound bites — on both sides — do not entirely align with reality, or […]

Posted On : Published By : Tom Whipple
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Iran Prepares to Lure Foreign Investors After Nuclear Deal

Photo Sadjad Ghoroghi, who runs a mining company in Zanjan in northwestern Iran. He said he had long dreamed of finding a foreign investor willing to help expand his operations. Credit Newsha Tavakolian for The New York Times ZARRINABAD, Iran — When Iran ’s Revolutionary Guards Corps took over the nation’s telecommunications monopoly in 2009, the move was denounced as another dark step in the hard-line military group’s seizure of the levers of power. “It’s not just a matter of the Guards dominating the economy, but of controlling the state,” Alireza Nader, an expert on Iran and the co-author of a comprehensive RAND Corporation report on the Revolutionary Guards, said at the time . Last month, however, the company, the Telecommunication Company of Iran, was put up for sale, as the Revolutionary Guards now seem more interested in cashing in on what Iranian leaders are hoping will be a […]

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Colombian Peso Leads Global Currency Declines as Crude Tumbles

Colombia’s peso led global declines as oil, the nation’s biggest export, tumbled on concern that a slowdown in China’s economic growth will reduce demand for the commodity. The peso plunged 1.5 percent to a record low 3,107.65 per dollar at the close in Bogota, extending its weekly loss to 3.7 percent. The daily drop was the biggest among 152 currencies tracked by Bloomberg. Crude oil tumbled to below $40 a barrel in New York for the first time since 2009. “This really is panic mode,” Andres Munoz, the head currency trader at Corp. Financiera Colombiana, said from Bogota. “Investors are getting out of emerging markets” including Colombia’s local peso bonds. One-month implied volatility on options for the peso, reflecting projected shifts in the exchange rate, increased Friday to the highest level since June 17. The currency’s swings may lead the central bank to announce currency measures to ease swings […]

Posted On : Published By : Tom Whipple