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OPEC+ agrees to increase oil production from October in order to gain market share
OPEC+ agreed to increase oil production in October, as Saudi Arabia tries to regain its market share. However, the pace will be slower than previous months because of an expected weakening of demand worldwide. OPEC+ increased production in April, after years of cutting to support the oil markets. But the decision on Sunday to boost output further came as a shock amid a possible looming oil surplus during the winter months in the Northern Hemisphere. In a Sunday online meeting, eight members of OPEC+ decided to increase production by 137,000 barrels a day from October, according to OPEC+. This is a much smaller increase than the monthly increases that were about 555,000 bpd between September and August, and 411,000 bpd between July and June. Eight members of OPEC+ have begun unwinding a second tranche, which amounts to about 1,65 million bpd. This is more than a calendar year ahead of schedule. The group has already unwound its first tranche of 2,5 million bpd, which is equivalent to 2.4 percent of the global demand. The barrels are small but they send a powerful message, said Jorge Leon, an analyst at Rystad who is a former OPEC representative. The increase in barrels is not about volume but more about signalling – OPEC+ wants to gain market share, even if that means softer prices. Leon says that OPEC+ (made up of the Organization of the Petroleum Exporting Countries, Russia, and other allies) found it easy when the demand grew in the summer. But the real test comes in the fourth quarter, with the expected slowing of demand. OPEC+ stated that it had the option to increase, pause, or reverse increases at future meetings. The next meeting between the eight countries is scheduled for October 5. NEW CAPACITY Saudi Arabia's efforts to punish overproducing members like Kazakhstan and the United Arab Emirates for building new capacity have also contributed to the increase in OPEC output this year. In an effort to fulfill his promise made during the election to lower domestic gasoline prices, Donald Trump pressured the group earlier this year to increase production. As a result of the increased production, oil prices have fallen by around 15% this year. This has pushed oil company profits to their lowest level since the pandemic. The oil price has not fallen, but is still trading around $65 per barrel. This is due to the sanctions imposed by the West on Russia and Iran. This has encouraged OPEC+ producers to increase their output. OPEC+ has not met its pledged increases because the majority of members are operating at near-capacity. Analysts and data show that only Saudi Arabia and United Arab Emirates can add more barrels to the market. OPEC+ already had two levels of cuts in place before the Sunday agreement - the 1,65 million bpd reduction by the eight member countries, and a second 2 million bpd reduction by the entire group until 2026. (Additional reporting from Olesya Astakhova and Maha el Dhan; editing by Nick Zieminski, David Holmes and David Holmes).
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Stellantis CEO asks EU to support the car sector
In order to protect the automotive industry, the new CEO of Stellantis, a carmaker in Greece, has called on the European Union (EU) to be flexible when it comes to the transition to electric cars. "A strategic dialog is important, but it's now vital to act urgently." Antonio Filosa became CEO of Stellantis in June. On September 12, European Commission President Ursula von der Leyen will host executives from the automotive industry to discuss the future. The sector is under threat due to the Chinese competition with electric vehicles, and U.S. Tariffs. Filosa is the head of Fiat, Alfa Romeo and Peugeot brands. Chrysler, Jeep and Opel are also part of the group. Filosa has called on the European Commission (EC) to encourage the sale of hybrid cars to reduce the average age of the vehicles on the roads. In a joint interview, he told Italy's Il Sole 24 Ore as well as France's Les Echos that a European policy encouraging the replacement of older vehicles with new ones and a wider range of powertrains could have a greater effect on global CO2 emission than an annual new car market. Filosa stated that the Light Commercial Vehicles sector is facing an urgent situation and suggested that the CO2 emission period for this category should be increased to five years, from three. As he reviewed the brand portfolio, he also tried to dispel speculation that Stellantis might seek a buyer of Maserati. He said: "I would like to be clear that Maserati was not for sale. We need to know which products we should develop and what long-term strategies to adopt for our iconic brand."
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Daniel Craig reprises his role as Benoit Blanc, the detective in "Wake Up Dead Man: a Knives Out Mystery"
In "Wake Up Dead Man, A Knives Out Mystery", the third installment of the franchise, Daniel Craig's charismatic and sharply dressed Benoit Blanc is back to solve yet another murder case. It's dark, big and fun. The latest installment of the Whodunit genre from writer-director Rian Johnston takes place in a small town church in Upstate New York, with a more grounded tone. Johnson said on the red carpet before the Toronto International Film Festival premiere that they were trying to "do something different every time". "The first was a cozy mystery. The second was a broad, kind of vacation comedy mystery. "This one has a darker tone and is more gothic, but it's still fun," said he. Craig couldn't be more in agreement. "It is a departure. It's an entirely different movie. "But it's still Benoit blanc mystery", the former James Bond actor said. The ensemble cast includes Josh O'Connor (left), Glenn Close (right), Josh Brolin (center), Mila Kunis (right), Jeremy Renner and Kerry Washington. Also included are Andrew Scott, Cailee Spaeny, Daryl McCormack, Thomas Haden Church, and Andrew Scott. O'Connor was awash with praise for Johnson who he called his "idol". He said that Johnson was a "genius writer and director". The young British actor who played Prince Charles on the TV show "The Crown" received the most applause for his performance of a young priest following the premiere. Spaeny said that she was grateful to have the chance to play a cellist and enjoyed every moment on the set. The American actress, who learned the cello in preparation for her part, stars in her first comedy. She said, "It felt like we weren't being paid for this work." Craig also praised the cast for their "bubbly" nature. He said, "We have been extremely lucky in the entire series. We nailed it once again." The film will be released in limited theaters on November 26, before being streamed on Netflix starting December 12. (Reporting from Bhargav Asharya in Toronto, Editing by Caroline Stauffer & William Mallard
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China's central banks buys gold for the 10th consecutive month in August
China's central banks added gold to their reserves in August, continuing purchases for a 10th consecutive month, according to official data released on Sunday. Gold, traditionally viewed as a safe asset in times of uncertainty, is up 35% on the year. It reached a record-high last week amid strong demand for investments and purchases from central banks, including those in China. China's gold reserves increased to 74.02 millions fine troy-ounces by the end August from 73.96 at the end July. According to the data released by the Central Bank, they were valued at 253.84 billion dollars, an increase from $243.99 at the end the previous month. The People's Bank of China, which is the head of research for online marketplace BullionVault, said that while China's gold purchasing has slowed down in 2025, it has increased its bullion reserve at prices ever higher. Beijing's continued accumulation of gold is a signal that it has faith in the metal as a reserve for long-term. This also boosts the confidence of China's investors and private households in gold. The demand for gold was low in the world's biggest producer and consumer this week due to the high price. Dealers offered discounts above the global benchmark, to lure buyers. (Reporting from Amy Lv and Polina Devitt in London for the Beijing Newsroom. Editing by Clarence Fernandez.)
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After a four-day search, a Canadian soldier is found dead in Latvia
The Canadian military announced on Saturday that a member of the Canadian Armed Forces who was reported missing earlier this week in Latvia has been found deceased. The body of Warrant Officer George Hohl was discovered on Friday, after he disappeared on Tuesday, in the Baltic country where Canada has troops stationed as part a multinational brigade. Hohl worked as a Vehicle Technologist for the 408 Tactical Helicopter Squadron, based in Edmonton (Alberta). He was serving with the Aviation Battalion of NATO's Multinational Brigade - Latvia when he disappeared near the Adazi base. The Canadian Forces Military Police is assisting Latvian authorities to investigate the circumstances surrounding Hohl’s death. Officials have stated that "there are no indications this incident poses a greater threat to the safety and security of our deployed members." Jennie Carignan, Chief of Defence Staff and General Jennie Carignan, said that the loss was devastating to the entire Canadian Armed Forces. She added that Hohl will be remembered for his dedication. The warrant officer has served in multiple deployments, including disaster relief operations at home and tours with Operation REASSURANCE (Canada's contribution to NATO’s enhanced forward presence established after Russia's 2014 annexation Crimea). Operation REASSURANCE is a rotation of approximately 2,200 Canadians in the Baltic State. According to a statement from the Canadian military, an investigation is underway into Hohl’s death. (Reporting and editing by Nick Zieminski in Washington)
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Ukraine drones hit training centre at Zaporizhzhia nuclear plant, Russian management says
The Russian-installed management of the Russia-held nuclear plant in Ukraine announced on Saturday that Ukrainian drones had hit the roof at the Zaporizhzhia training centre. There was no damage to the building and there was no radiation increase. In a Telegram message, the administration stated that the strike took place about 300 meters (984 feet) away from a nuclear reactor. The statement stated that "This centre is unique - it houses the only full scale simulator of a nuclear reactor hall in the world, which is crucial for staff training." Although the station is Europe's largest nuclear power plant, with six reactors and no power, it still needs power to keep nuclear fuel cool. Administration officials said that the attack did not disrupt the operation of the plant. The administration stated that "operational safety limits have not been violated, and radiation levels are normal." Ukraine has not yet responded. We could not independently confirm the Russian report. In the early weeks of Russia’s invasion of Ukraine in February 2022, Russian forces captured the Zaporizhzhia nuclear plant. Both sides accuse the other of triggering a nuclear disaster by firing weapons or other actions. Reporting by Lidia Kelley in Melbourne
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Sources say that OPEC+ is likely to agree on a further increase in oil production on Sunday.
OPEC+ sources stated on Saturday that eight OPEC+ nations will likely increase oil production on Sunday, but they may add less oil in October than recent months due to the slowdown of global demand with the end driving season. OPEC+ reversed its April strategy of production cuts and has already increased quotas to about 2,4 million barrels a day (about 2.4% of the world's demand) to increase market share. This is in response to pressure from U.S. president Donald Trump, who wants to lower oil prices. These increases, however, have not had a significant impact on oil prices. They are currently trading at $66 per barrel, supported by Western sanctions against Russia and Iran. This encourages rivals like the United States to increase production. OPEC+ would start to unravel a second layer, averaging about 1.65 millions bpd. This would be more than a full year ahead of schedule. Two sources told me on Saturday that the focus of talks is to gradually unwind this entire cut, in monthly increments. On Sunday, 1230 GMT eight OPEC+ member countries will hold a virtual meeting. The focus of the discussion is likely to be October's output. An OPEC+ official said that the countries could increase their output by 135,000 bpd in October. Another said it might be closer to 200,000-350,000 bpd. The eight members increased production for September by 547,000 bpd at their last August meeting, giving a total of 2.5 million bpd increase for the entire year. This included an additional 300,000 bpd production allocation for the UAE. OPEC's headquarters and Saudi Arabian authorities did not respond to Wednesday's requests for comments. OPEC+ is the Organization of Petroleum Exporting Countries plus Russia, and other allies. Brent crude futures closed at $65.50 a bar on Friday, down by 2.2%. This was due to a disappointing U.S. employment report and the expectation of a production increase from OPEC+. It is still up since a low in 2025 of around $58 per barrel in April. Analysts have stated that sanctions and the fact that OPEC+ has not met its pledged amount have supported prices. OPEC+ has been reducing production to support the oil price for several years. The group has committed to a further 2 million bpd in cuts until 2026. (Reporting and editing by Alexandra Hudson, Olesya Almakhova, Alex Lawler Ahmad Ghaddar, Dmitry Zhdannikov)
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Gunmen kill Chinese security officials and Chinese workers in Nigeria
A spokesperson for the Nigerian security agency confirmed that gunmen kidnapped Chinese exatriate workers and killed eight officials in the southern state of Edo. The Chinese workers were rescued later, the spokesperson added. On Friday, a group suspected of being armed kidnappers attacked a convoy consisting of paramilitary Nigeria Security and Civil Defence Corps members and Chinese nationals who worked for BUA Cement. Afolabi Babawale, spokesperson for the NSCDC, said that four Chinese workers kidnapped by terrorists were rescued. However, one is still missing. He added that eight operatives of the agency had been killed and four others were injured seriously. Nigeria has seen a rise in gunman attacks, mainly in the north, but kidnapping groups are known to target civilians in the south.
U.S. customers still reeling from earlier cost increases even as inflation slows: Kemp
High rates and inflation have actually become a political issue ahead of governmental and congressional elections in the United States and are significantly complicating the Federal Reserve's effort to engineer a soft landing.
Inflation's salience with citizens ranks well behind migration and the basic state of the economy however ahead of foreign policy, climate, taxes, health care and criminal activity, according to the latest poll for the Wall Street Journal.
The majority of citizens disapprove strongly (50%) or rather (10%) of President Joe Biden's handling of inflation, based on a. nationwide study of more than 1,700 signed up voters performed. in late February.
The poll is picking up consumer aggravation with the extremely. large and unexpected increase in prices throughout the pandemic and its. aftermath, even if the rate of more increases has actually now slowed.
Comparable political stress are evident in most of the other. innovative economies as consumers deal with the legacy of. greatly increased prices throughout and after the pandemic.
In Europe, the problem has been intensified by the sharp rise. in retail gas and electrical energy costs after Russia's invasion of. Ukraine and the sanctions imposed in action.
Chartbook: U.S. price level and inflation
Persistent inflation, specifically in services, has made the. Federal Reserve careful about cutting interest rates to assist. the U.S. economy speed up after the business cycle downturn in. 2022/23.
Costs increased by 2.4% over the 12 months ending in January. 2024, according to the U.S. cost index for individual usage. expenditures (PCE), the inflation procedure favoured by the. reserve bank.
PCE inflation had slowed from a post-pandemic high of 7.1%. in June 2022 and was not far above the reserve bank's long-term. flexible typical inflation target of 2.0%.
But price increases for product have actually slowed far more. greatly than for services, producing a dilemma for the Fed, which. must set rates of interest for the whole economy.
Costs for goods fell 0.5% over the 12 months ending in. January 2024, after increasing 10.6% in the 12 months to June. 2022, the fastest rise for more than 40 years.
By contrast, services prices continued to increase by 3.9%. in the year to January 2024, though the rate of boost had. slowed rather from a peak of 6.0% in the year to February. 2023.
DIVERGING INFLATION
Energy and basic materials comprise a much larger share of. costs for producing businesses, which likewise rely more heavily. on international supply chains and are more exposed to foreign. competition.
The pandemic and its consequences had its biggest and most. immediate impact on manufacturers owing to the sudden rotation. of spending to product from services and the synchronised. disturbance of worldwide supply chains.
However as costs of energy and other basic materials have. stabilised, supply chains normalised and costs turned back. to services, merchandise costs steadied and have actually stayed. essentially flat since the middle of 2022.
By contrast, service sector firms utilize much less energy and. are less exposed to global supply chains and competition. from abroad, but are much more labour-intensive.
The rotation back towards services, coupled with increasing. incomes and lack of foreign competition has sustained faster. boosts in services prices.
Consistent inflation in the much-larger and more. labour-intensive services sector is too crucial for the. central bank to disregard.
Solutions account for nearly two-thirds of household spending. ( roughly one-third on real estate, one-third on other services) with. product accountable for the rest.
Service sector companies employ even more people (110 million). than makers (13 million) and building and construction companies (8. million).
Service sector production ($ 16 trillion) is almost double. that for goods ($ 9 trillion) and far above building and construction ($ 2. trillion).
DIVERGING COST LEVELS
While the rate of boost in rates has slowed, the upswing. during and after the pandemic has actually left the overall level of. prices much greater than anticipated at the start of 2020.
Based upon the PCE cost index, overall prices had to do with 10%. higher in January 2024 than they would have been if they. continued increasing on the very same trajectory that dominated for. the 10 years before January 2020.
The unexpected escalation in the cost level compared to what. most homes anticipated as normal before the pandemic. explains why a lot of consumers express sticker shock and vent. their unhappiness in viewpoint surveys.
For numerous families, salaries and other earnings have actually also risen. because January 2020, sometimes greatly, but the boost has. been unequal, which helps describe why the increase in the cost level. has ended up being politically delicate.
Discussing that prices are no longer rising quickly is not much. comfort to those citizens whose incomes have actually currently fallen back. the boost in the cost level since the pandemic began.
While products prices have stabilised given that the. middle of 2022, they have actually done so much even more above pattern than. for services.
Item costs have to do with 14% above the pre-pandemic trend,. with durable items costs as much as 18% above pattern, in spite of. some current discounting.
By contrast, services prices are just about 8% above pattern. and costs leaving out housing and energy are only 7% above trend.
PLAYING CATCH UP
Some of the ongoing increase in service rates during 2023. and 2024 likely represents an effort to catch up with the. greater rate level in manufacturing after big boosts between. mid-2020 and mid-2022.
For policymakers, the problem circumstance is if services. firms try to restore their prices relative to manufacturers, and. workers whose earnings have fallen relative to inflation try to. restore them to pre-pandemic levels.
Efforts to restore real costs and wages to the prior pattern. was among the essential drivers of persistent inflation in the 1970s. and early 1980s.
The institutional context is extremely different in the 2020s,. with weaker labour unions and less collective bargaining over. wage rates.
Central banks in all the significant economies are on high. alert for any indications of catching-up rate and wage increases that. might sustain a 2nd round of inflation.
Extended weak point in production and the stabilisation of. prices in the production sector probably develop a case for. lower rates of interest to stimulate more purchases of costly. resilient products.
Service sector resilience and continued rate rises by. services firms make aggressive interest rate reductions risky in. case they trigger service sector inflation to accelerate once again.
Related columns:
- Relentless U.S. services inflation threatens soft landing. ( February 14, 2024)
- Relentless U.S. services inflation moistens oil outlook. ( October 13, 2023)
John Kemp is a market analyst. The views expressed. are his own. Follow his commentary on X https://twitter.com/JKempEnergy.
(source: Reuters)