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G20 Taskforce asks for global panel to address 'inequality crisis'
The G20 taskforce, established by the South African president Cyril Ramaphosa, has called for an international panel on inequality. They warn that extreme wealth disparities can disrupt democracy and lead to economic instability. Joseph Stiglitz is the chairman of the Extraordinary Committee of Independent Experts on Global Inequality. The report, commissioned by South Africa as part of its G20 presidency, found that since 2000 the richest one percent of the world's population has captured 41% of all new wealth. According to the World Inequality Lab, data shows that the poorest half of the population increased their wealth only by 1%. Stiglitz said that the situation is not only unfair, but also undermines social cohesion. It's a problem both for our economy and politics. In a press release, the taskforce stated that a panel on inequality would be modeled after the Intergovernmental Panel on Climate Change. The taskforce would monitor the causes and effects of inequality and provide insights to policymakers and governments. The report warns that countries with high levels of inequality, which account for 83% of the global population, are more likely than others to suffer from democratic decline. They cited "perfect storms" of global shocks, such as COVID-19 and the war in Ukraine, and trade disputes for escalating poverty and inequality. The authors noted that 1 in 4 people skip meals regularly and that the wealth of billionaires has reached its highest level ever. The G20's first taskforce on inequality is expected to make its findings known to the G20 leaders in Johannesburg, South Africa in November. The United States will take over the rotating G20 Presidency at the end this year. (Reporting and editing by Nellie Cawthorne, Andrew Cawthorne, and SiyandaMthethwa)
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Haddad, Brazil's Haddad, says $10 billion forest fund is 'possible in the first year'
Fernando Haddad, Brazil's Finance minister, said that mobilizing 10 billion dollars in public resources to the Tropical Forests Forever Facility would be an ambitious but "possible target" for its first-year. The TFFF is a flagship project for Brazil, as it hosts the COP30 Climate Talks. It aims to raise $125 Billion to support global conservation of endangered forest. Haddad, speaking on the sidelines a Bloomberg event held in Sao Paulo said that other nations might indicate contributions to the fund at the United Nations Climate Summit in Belem, Brazil next week. Haddad, a G20 member, said that if a few countries joined the initiative, we could start compensating nations who preserve tropical forests. This would include those with debts. Haddad refused to reveal the names of the countries who had expressed interest in contributing to this fund. The fund is aimed at raising $25 billion through governments and philanthropies, to attract $100 billion private sector. President Luiz Inacio Lula da Silva In September, the largest economy in Latin America announced that it would contribute $1 billion. It urged other nations to do the same so that the TFFF can be operational by COP30. Haddad stated that the Indonesian government had also agreed to contribute. The fund will be administered like an endowment, and countries will receive annual stipends depending on the amount of tropical forest they still have standing. Brazil's Finance Ministry released its October financial report. The World Bank agreed to be the financial manager and trustee for the TFFF. (Reporting and editing by Simon Jessop; Oliver Griffin and Marcela Ayres)
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US and Vulcan Elements sign agreement to boost rare-earth magnet supply
Vulcan Elements and the U.S. Government have formed a partnership to increase domestic production of rare earth magnets. This is the latest attempt to reduce reliance on China and secure the supply of vital minerals. Vulcan, a North Carolina-based company, said that it would build and run a 10,000-metric ton magnet facility in the U.S. in exchange for an equity stake. The Pentagon will invest $50 million and the Department of Commerce will invest $25 million under the Chips Act. The Pentagon's Office of Strategic Capital will provide a direct loan of $620 million, and private capital of $550 million. ReElement Technologies is a U.S. refiner of critical minerals and rare earths. It will receive an $80 million direct Loan from the Office of Strategic Capital, which will be matched with private capital, to expand its recycling capabilities. Rare earth magnets can be found in motors for electric vehicles, windmills, hard disks and medical devices such as MRI machines. Vulcan has agreed to purchase critical minerals from ReElement for five years starting in 2026. (Reporting by Dharna Bafna in Bengaluru; Editing by Sriraj Kalluvila)
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Exxon explores refinery upgrades to focus on higher-valued products
Exxon Mobil, a company executive said in an interview, is looking at other opportunities to renovate sites after launching operations this year at four new initiatives for refining and chemicals. Exxon Mobil CEO Darren Woods described the projects as part of a larger strategy to transform low-value feedstocks and chemicals into products that are more valuable. He said that upgrading existing refineries and diversifying the production will allow the company to maintain low investment costs and better withstand fluctuating demand and supply markets. Matt Crocker, Exxon's president of product solution, said in an exclusive interview conducted last Wednesday before the earnings report, "We are looking at our current facilities and finding opportunities to upgrade them so that we can provide high-valued products." As we look to the future, I see us doing more projects of this type. Exxon's third-quarter refining profits jumped 41% from the previous year to $1.8 billion, as refinery margins improved. The earnings of the chemicals segment fell by 42% to $515m from the prior year. In September, the top U.S. producer of oil began production at its Singapore complex to convert fuel oil and residue into base stocks. The company also started producing renewable diesel in Canada at the Strathcona Refinery and increased the low-sulfur production at the Fawley Refinery in the UK. Woods highlighted the Baytown refinery and chemical complex, another project in the company's strategy on Friday. "We have great opportunities with this asset base." Woods stated that we are pursuing these assets aggressively and with good returns. Exxon has set six projects for this year, including refinery and chemicals. Crocker stated that the remaining two projects - expanding the advanced plastics recycling, and manufacturing more thermoset - will still be launched by the end the year. Crocker also started operations at a major new petrochemical facility in China. This has led to a rapid increase in global capacity of petrochemicals, and put pressure on the industry margins. Crocker, despite the fact that the industry is at its bottom of the cycle right now, said it sees a return to a more robust market and is focused on long-term. He said: "There is a lot of growth in demand that's typically tied to the gross domestic product, and this fundamental hasn't shifted." Shruthi Vangipuram, Wood Mackenzie's senior research analyst in base chemicals, says that Exxon has an advantage over smaller crackers, which use more expensive naphtha. Sheila Dang reported from Houston, and Nathan Crooks edited the story.
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Dollar up slightly after Amazon-OpenAI agreement
The dollar was near its three-month-high versus the Euro due to the waning expectation of hefty U.S. interest rate cuts. Amazon shares rose more than 4% after the multi-year, $38 billion Amazon OpenAI deal. As expected, the Federal Reserve cut interest rates last week. Jerome Powell, the Chair of the Federal Reserve, said that another rate cut in December is "not a certainty", contrary to what some investors believed. On Friday, some Fed officials expressed their dissatisfaction with the central banks decision to lower rates. Meanwhile, influential Fed Governor Christopher Waller argued for further policy easing in order to support a weakening labour market. The ongoing U.S. shutdown has prevented most economic data from being released in the United States. Investors are optimistic regarding AI and the progress made with China in regards to the trade truce. Adam Sarhan is the chief executive officer of 50 Park Investments, a New York-based investment firm. "The AI stocks and tech shares are up today, and everything else is down." He said that the "clear narrowing of leadership" was continuing in an obvious way. TRUMP'S TARIFS GO TO SUPREME CREEK Arguments are scheduled for Wednesday before the U.S. Supreme Court, which is examining whether President Donald Trump’s tariffs on global products are legal. Trump's tariffs will likely remain in place for a long time, regardless of the legal basis. The Dow Jones Industrial Average dropped 178.13, or 0.37 percent, to 47.384.74. The S&P 500 rose by 13.39, or 0.19 percent, to 6,853.36. And the Nasdaq Composite rose by 108.07, or 0.46 percent, to 23,833.03. The MSCI index of global stocks rose by 1.61 points or 0.16% to 1,007.84. The pan-European STOXX 600 rose by 0.07%. This week, investors will also be able to see more quarterly results for technology companies. Palantir Technologies, a data analytics company, is expected to release its report following the closing bell. Palantir's shares rose 2.8%. This week, Advanced Micro Devices (AMD) and Qualcomm will also report their results. Uber and McDonald's are due to make a statement. Megacap U.S. companies reported mixed results last week. Investors want to see a return from the capital expenditure on AI. DOLLAR GAINS AGAINST PRIMARY CURRENCIES The euro, after falling as low as $1.1500 against the dollar - its lowest since August 1 - pared its losses and traded down 0.13% to $1.1519. The Institute for Supply Management reported that U.S. manufacturing shrank for the eighth consecutive month in October, as orders were subdued and materials took longer to arrive at factories due to tariffs on imported products. The dollar index (which measures the greenback in relation to a basket currency) rose by 0.07%, reaching 99.87. The dollar gained 0.14% against the Japanese yen to reach 154.21. The pound fell 0.08%, to $1.314, before the Bank of England's rate decision due later this week. Bitcoin, the cryptocurrency, was down by 2% to $107 486. The yield on the benchmark 10-year U.S. notes increased 1.1 basis points from late Friday to 4.112%. U.S. crude oil rose 7 cents, settling at $61.05 per barrel. Investors digested the news that OPEC+ intends to stop its supply increases.
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Peru's Upland contests disqualification for relaunching of top Amazon oilfield
After being disqualified a few days ago, Upland Oil and Gas, formerly Peru's biggest Amazon oilfield, said it would request that the South American country's regulator review its application for operating in Block 192. Perupetro, the state agency, disqualified Upland for not demonstrating financial capability. However, Upland claimed it had sufficient capital to reinvest and resume exploitation. Local Indigenous communities have protested at the now-dormant block, demanding that it be remedied for the extensive damage done to the forest, soil and waters around. Block 192 is near the Ecuadorian border and is considered crucial to supplying Petroperu's Talara refinery, which has been battling a debt crises following the expensive modernization. Perupetro's commission found late last week that Upland's financial solvency was insufficient to "prove its economic and financial capability to assume 79% the license contract for Block 192". Upland Oil and Gas responded to a press release by saying that they have sufficient capital and funding to meet the investment program set forth by Perupetro, despite finding it excessive. It said that it would be willing to offer a credit line for the state-owned oil company. Petroperu is a minor partner in this block and has said that it expects crude oil production from the reserve to reach up to 12 000 barrels per day. Upland stated that "this important asset has been paralyzed in Peru for over five years. The government has lost more than one billion dollars in taxes and royalties." Formerly the largest city in Peru Leakage Block 192 was halted in its production largely due to oil spills that contaminated the topsoil of the Amazon River, the native plants, and the streams.
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Gold prices steady as attention shifts to US payroll data
Investors hunkered in for the U.S. payroll data that is due this week, to gauge the likelihood of another U.S. Federal Reserve rate cut. By 1:32 pm, spot gold had not changed much from $4,002.35 per ounce. ET (1832 GMT). U.S. gold futures for December delivery settled 0.4% higher at $4,014. Edward Meir, Marex analyst, said: "Gold is carving out a range of trading. It could be in the high 3,000s to mid-4,000s. This is expected consolidation following such a large move." Metal, which gained 53% in this year, is down over 8% since the record high reached on October 20, 2008. Investors will be watching the ISM PMIs and ADP U.S. Employment data this week for clues about the Fed's future policy. The U.S. shutdown of the government has prevented the release of important economic data. This includes the Bureau of Labor Statistics. Last week, the central bank cut interest rates again this year. But Chair Jerome Powell stated that another cut was not "a foregone decision" this year. The traders now price a 65.3% probability of a December rate cut, down from an almost certainty last week prior to the Fed meeting. Gold that does not yield a return is more popular when interest rates are low or in economic times of uncertainty. "Gold's pause looks like a breather and not a collapse." The short-term decline can be explained by seasonal softness, temporary Chinese policies, and a stronger dollar, but this does not change the long-term story, according to Ole Hansen of Saxo Bank's head of commodity strategies. China has ended its long-standing policy of tax exemption for certain gold retailers, which could set back the buying spree in the world's largest consumer market. Other than that, silver spot fell by 0.8% at $48.25 per ounce. Platinum was down 0.2% to $1,564.30, and palladium rose 0.4% to $1439.86. (Reporting from Noel John in Bengaluru and Pablo Sinha; additional reporting by Kavya Baliaraman; editing by Leroy Leo, Vijay Kishore and Leroy Leo)
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Guinea's former junta chief to run for President
Mamady Doumbouya, the leader of Guinea's junta, announced his candidacy for the December 28 presidential election. This could extend his reign in power by another five years. Doumbouya had promised not to run for office when he took power in the West African nation in 2021. A new constitution, pushed by the military junta in September and approved by a referendum, opened the way for his candidacy. The new charter replaced the arrangements made after the coup, which had prohibited members of the junta to contest elections. Candidates must also live in Guinea, and have a minimum age of 40 to 80 years. This would exclude two powerful candidates: former president Alpha Conde (87), who lives abroad and former Prime Minister Cellou Dalein Diallo (73), in exile due to corruption charges that he denies. Others, such as former foreign minister Hadja Makale Camara and former prime minister Lansana Kouyate, have also submitted their applications. Simandou, in Guinea, is the site of the largest untapped bauxite deposits and the richest iron ore deposit. Reporting by Guinea Newsroom; Writing by Ayen deng Bior; editing by Andrew Heavens
Product streams at risk should Trump spark tit-for-tat trade war: Russell
Much of the dispute surrounding the ramifications of a possible 2nd U.S. presidential term for Republican Donald Trump has focused on what may take place to the U.S. and international economies.
Trump's plan to impose tariffs of 10% on virtually all imports into the United States, and as much as 50% on those from leading trading partner China, have actually raised the spectre of greater inflation and rates of interest, and a less competitive market.
However for products, the larger danger of a Trump return to the White House is the reaction the remainder of the world is likely to have to the imposition of U.S. trade tariffs.
Political leaders across the globe will be unable to sit idly by if Trump locations barriers on their exports to the United States.
Any unilateral action by Trump is hence most likely to be met by retaliation from U.S. trading partners, even if they are erstwhile political allies, such as countries in Europe and some in Asia, such as Japan, South Korea and even India.
If it's inescapable that U.S. trading partners react to Trump's proposed actions by putting tariffs on imports from the United States, the primary concern is then what type will they take?
While major U.S. exporting business such as plane maker Boeing will have cause for concern, a far easier target for retaliation is likely to be U.S. commodity exports.
The United States is the world's biggest exporter of liquefied natural gas (LNG), and ranks fourth globally for exports of petroleum and all grades of coal.
A major buyer of U.S. products is China. If Trump were to enforce tariffs of 50% on its exports, Beijing could efficiently restriction all product imports from the United States, either formally or informally.
U.S. exports of crude oil to China were 10 million barrels in July, according to product analysts Kpler, and that figure is expected to rise to 16.58 million barrels in August, which would be the most because April 2023.
For the first eight months of this year U.S. unrefined exports to China are tracking at about 309,000 barrels daily (bpd),. which represents just about 3% of China's total imports, however. represent about 7.5% of total U.S. deliveries.
Simply put, it would likely be fairly easy for China to. stop buying U.S. crude and discover alternative providers, such as. Angola and Brazil.
But how simple would it be for U.S. oil manufacturers to change. the loss of Chinese purchasers?
Much will depend upon whether other countries place tariffs on. U.S. commodity exports.
Envision if the European Union, Japan and South Korea all put. a 10% tariff on U.S. crude in retaliation for Trump putting a. comparable impost on their exports to the United States.
The European Union, Japan and South Korea usually account. for about 60% of U.S. crude exports.
By putting tariffs on U.S. crude, LNG and coal, the rest of. the world could keep U.S. energy exports in the market, however. force U.S. companies to either deal discount rates to keep their. prices competitive or lower output.
United States LNG EXPOSED
U.S. LNG exporters might be more vulnerable than crude. producers, given they have no alternative markets aside from. exports.
For China, changing U.S. LNG would be more tough than. changing U.S. crude, but still most likely doable, provided the relatively. little proportion of U.S. LNG in its total imports.
In July, China's imports of U.S. LNG were 670,000 metric. tons, or about 10.5% of the monthly overall of 6.39 million.
For the United States, exports to China represent just about. 8% of its overall LNG shipments. However if Japan and South Korea are. added in too, then exports to the 3 main Asian buyers. increase to about a quarter of the total, based upon U.S. deliveries in. June of this year.
If tariffs were put on U.S. LNG by the North Asian. importers, it would put pressure on U.S. business to lower. costs to compensate.
U.S. coal exports have actually balanced about 7.5 million loads a. month for the first seven months of the year, however there is no. dominant buyer. Rather there is a broad range of importers that. all purchase reasonably small volumes.
This suggests that buyers of U.S. coal could probably find. alternative providers for the small volumes involved, but U.S. exporters may have a hard time to discover brand-new markets must a bulk of. its existing purchasers impose retaliatory tariffs.
In general, the photo that emerges is one of significant. vulnerability for U.S. energy exporters if we do see another. trade war, provided how countries might respond to the tariffs. presently being proposed by the previous president's camp.
Naturally, Trump still has to overcome most likely Democratic. prospect and existing vice president, Kamala Harris, in the. November election, and after that in fact follow through on what is. likely to be a widely-criticised trade policy.
However the risk stays significant. In 2022, Russia's invasion. of Ukraine showed us what can occur when a political occasion. roils energy markets.
If Trump is elected and does start a trade war, the. disruption may not be quite on that scale. However product flows -. and hence a large part of the global economy - might be affected. if the marketplace has to adjust to an unpredictable political dynamic. when again.
The opinions revealed here are those of the author, a columnist. .
(source: Reuters)