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OPEC sees the global oil market as a long-term project and aims to stabilize it
Haitham al Ghais, secretary general of OPEC, said that the group's decisions are based on a long-term perspective and aim to provide price stability. He made this statement at the India Energy Week Conference held Tuesday. The comments come after U.S. president Donald Trump repeatedly urged the producer group to boost oil production in order to reduce prices. The Organization of the Petroleum Exporting Countries (OPEC+), a group also known as OPEC, announced earlier this month it would continue its policy of increasing oil production gradually from April. "We read the markets. Al Ghais stated that they analyze supply and demand without political considerations. They rely solely on sound technical considerations. OPEC+ will continue to cut production until the end March, due to concerns about global demand and increasing output outside of the group. "Oil was the least volatile commodity last year as well, and that is largely due to the decisions we make and the clarity with which we do it at OPEC+. This is what we are aiming for. "This is what we'll keep doing," said he. Trump, since returning to office in January, has claimed that the high oil prices helped Russia prolong the war in Ukraine. OPEC+ & Donald Trump were at odds repeatedly in his first administration from 2016 to 2020 when the U.S. president demanded that it increase production in order to compensate for the fall in Iranian supplies due U.S. sanction. (Reporting and writing by Nidhi verma and Sethuraman N R, Mayank Bhardwaj and Florence Tan; Editing and proofreading by Louise Heavens & Ros Russell).
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Brazil's inflation rate slows down in January, but the tightening cycle will continue
Official data released on Tuesday showed that Brazil's inflation was in line with expectations, slowing down from the previous months but still exceeding the upper limit of the target range set by the central bank. IBGE, the government statistics agency, reported that consumer prices in Latin America's biggest economy rose by 0.16% in January, down from 0.5% in December, and in line with expectations in an economist poll. According to the agency this was the lowest price increase for January since Brazil established its real currency in 1994. This was due to a sharp drop in electricity prices and a fall in housing costs. IBGE reported that the annual inflation rate was 4.56%. This is a slight decrease from the 4.83% recorded in the previous months. Brazil's central banks targets an inflation rate of 3% plus or minus 1.5% and tightens its monetary policies to achieve this goal. In January, policymakers unanimously agreed to raise the benchmark Interest rate The second consecutive meeting saw a 100-basis-point increase to 13.25% and a signal of another such hike in March. Kimberley Sperrfechter, of Capital Economics, said that the latest inflation number "is unlikely" to stop the central bank from increasing the Selic rate by another 100bp. She noted that inflation expectations remain well above target. "For the moment, we believe that the hike in March will be the end of this tightening cycle. However, the risks to our forecast are to the upside." Reporting by Gabriel Araujo, editing by Mark Heinrich
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Ukraine supports the purchase of Soviet designed nuclear reactors by Bulgaria
The Ukrainian parliament passed on Tuesday a law allowing the state nuclear operator to purchase two nuclear reactors of Soviet design from Bulgaria for Ukraine’s Khmelnytskyi Power Plant, lawmakers reported. The absence of a law allowing the purchase prevented Ukraine from signing a contract last June for two Bulgarian nuclear reactor bodies to compensate the lost of the six-reactor Zaporizhzhia Nuclear Power Plant, which is occupied by Russia. The contract amount is not specified in the law. According to Ukrainian officials, Bulgaria previously set the price for the two reactors as $600 million. A number of politicians have objected to this law. They said they were against the purchase of Russian gear at an untransparent price, in the context the war with Russia. The law was passed despite the fact that Ukrainian officials claimed the purchase will allow the launch of the first two units within two to three years. This would reduce the power shortages in Ukraine, where Russian drone and missile attacks have destroyed the energy infrastructure. Since Zaporizhzhia's loss, Ukraine relies on nuclear energy from three power plants operating in the country. There are nine reactors total in the country. Two of them are in operation at Khmelnytskyi. The construction of the third- and fourth-reactors at Khmelnytskyi started in the 1980s but was stopped because of the Chornobyl disaster. About 60% of Ukraine's electricity needs are met by nuclear power. (Reporting and editing by Kevin Liffey, Barbara Lewis and Yuliia Diasa;
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Trump's squeeze results in concessions, some real and others not so much
Donald Trump, the U.S. president, has taken the world by storm. He has issued ultimatums and demanded that allies and enemies heed his demands. His threats, from sweeping trade tariffs to outright resource grabs, are part of an approach to diplomacy that is often accompanied with explicit demands. Many of his target countries have made concessions. Some of the concessions were real, such as pledges to purchase more American products or invest in U.S.-based activities. Other times, they were a repackaging or a move that had already been made. This article will go into some detail about the responses that Trump has received since his January 20th inauguration. AMERICAN BORDERS Mexico's 10,000 National Guard soldiers, which it has sent to the United States border to stop the flow of drugs and control migration, are a clear addition to its border security. This was enough for Trump to drop his threat to impose steep tariffs on trade last week. The majority of experts are not sure if the reinforcements have any real impact. They reserve their judgement for now. Canada, which was also granted a tariff reprieve, had announced in December that it would invest C$1.3 billion (909 million dollars) on border security to combat fentanyl and other drugs, illegal migration, and organized crime. Justin Trudeau, in announcing the suspension of U.S. Tariffs on February 3, referred to a "new intelligence directive" on crime & fentanyl trafficking that was backed up by C$200m. Justin Trudeau also promised to appoint a "Fentanyl Czar", a post that has not yet been filled. JAPAN JAPAN's large trade surplus with the United States is a long-standing irritant to Trump. He brought it up with Shigeru Shiba, Prime Minister of Japan during his first White House Visit last week. Ishiba, who pledged to increase Japanese investments in America to $1 Trillion and to purchase U.S. ammonia, gas and ethanol, signaled his willingness to support U.S. interest by pledging that he would be willing to favor U.S. concerns. SoftBank Group CEO Masayoshi Son is likely to have pledged $100 million in an investment during a December meeting with Trump. Ishiba mentioned that Toyota Motor Corp., and Isuzu Motors have new factories planned in the United States. Trump announced progress in the Nippon Steel attempt to acquire U.S. Steel, which was blocked at $14.9 billion. He stated that any bid should be in the form of an investment, not a purchase. Uncertainty remains about how Nippon Steel & U.S. Steel will revise the proposed deal. INDIA Trump previously labelled India a "very large abuser" of trade. India has been eager to emphasize its willingness to open its economic system. This is a message that Prime Minister Narendra Modi plans to convey during his two-day trip to the United States. Tuhin Kanta Pandey, Finance Secretary, said: "We do not want to send anyone a signal that we are protectionist." "Our position is that we do not want to increase the protection." Officials from the Indian government said that India was considering lowering tariffs in at least 12 sectors, including electronics, medical and surgical devices, chemicals and chemical products, in order to boost U.S. imports and to support New Delhi's plans for domestic production. Modi could also propose increased U.S. imports of energy and defense. EUROPE SECURITY Trump began to harrasse European NATO allies about the need to increase their defence spending during his first term, and it had some effect. Mark Rutte, NATO Secretary-General, said last week that a new pledge of military spending to be decided in this year will be "considerably higher" than the target of 2 percent of national production which many NATO Allies failed to meet a ten years ago. In Europe, the Ukraine conflict has also brought to light security concerns. It is still unclear how the governments, with their tight budgets, will fund this surge in defense spending. What will happen to Trump's claim that the United States should get a cut of the revenues generated by the future extraction from Ukraine's rare earths and critical minerals as a reward for its support of the war effort is even more uncertain. Ukraine floated a proposal last year to open its minerals to foreign investment. Ukrainian President Volodymyr Zelenskiy stated in an interview last week that he would be willing to make a deal with Trump. Zelenskiy stressed that Kyiv did not propose "giving away" resources but offered a partnership for them to be developed jointly. There is no way to know how many of these resources are on the Russian side of current frontlines. Reporting by Aftab Ahmad in New Delhi, John Geddie and Stephen Eisenhammer from Mexico City, Caroline Stauffer is in Canada. Writing by Mark John. Editing by Hugh Lawson.
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Hawaiian Electric applauds the ruling of the top court on wildfire settlement
Hawaiian Electric, a utility company, welcomed on Tuesday the Hawaii Supreme Court decision to finalize the settlement of more than $4 billion related to Maui wildfires in 2023. The company said that the ruling was in its favor. A day earlier, the state's highest court had ruled that insurance companies could not sue the parties responsible for the fires separately once the settlement became final. Hawaiian Electric shares rose 6.2% in premarket trading on the ruling. Hawaiian Electric CEO Scott Seu said, "The decision moves the settlement forward... and provides more clarity on our company's journey to reestablishing its financial stability." Wildfires on Maui in August 2023 caused massive destruction to the historic coastal town Lahaina and killed over 100 people. Last year, the company agreed to pay about half of the settlement to compensate the victims. The lawsuits filed on behalf of thousands home and business owners alleged that the company did not shut off power lines, despite warnings from high winds that they might blow them over and cause wildfires. Jefferies analysts stated that "we see the court order as a victory for Hawaiian Electric but legislation that provides visibility on how future wildfires are to be handled is needed before stock prices can rise significantly." (Reporting and editing by Shailesh Kuber in Bengaluru. Pooja M. Menon, Bengaluru)
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Trump cuts standards for light bulbs, water-using appliances
President Donald Trump On Tuesday, after signing a promotion order, the government reverted to older standards in light bulbs, toilets, showers, and other water-using devices. Plastic straws Rejecting a plan for reducing single-use plastics. Trump said that he would ask the Environmental Protection Agency (EPA) to return to the water standards of his first White House tenure, which would affect washing machines, dishwashers and sinks. In a private post on his social media platform, Trump said he had directed EPA Secretary Lee Zeldin to "immediately go back to [his] Environmental Orders", calling them commonsense. Trump said, "I am looking forward to signing these orders." Trump signed a Monday executive order encouraging both the U.S. Government and consumers to purchase plastic drinking straws. This is part of an overall easing of the Republican President's environmental commitments since he took office on January 20. Trump served as the first White House occupant from 2017-2021. Trump's Democratic counterpart, Joe Biden, had adopted a number of environmental measures including new energy efficiency requirements for household washing machines and dishwashers, which capped the water usage. Conservatives have challenged The rules of court
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Trump signss executive order against plastic drinking straws
The President Donald Trump signed an executive order on Monday to encourage the U.S. Government and consumers to purchase plastic drinking straws. This is a move to reverse efforts made by his predecessors to phase out single use plastics and reduce waste. Trump said to reporters in the White House, as he signed an order that ordered the return of plastic straws. He also stated that paper straws were "not effective." Trump stated, "I don’t think that plastic will affect a shark too much as they are munching their way across the ocean." Trump's Democratic counterpart, Joe Biden had proposed environmental measures in order to reduce the consumption of single-use, non-biodegradable plastics that damage ecosystems and contaminate foods. His administration also supported a global agreement aimed at capping plastic production. The executive order of Monday was part of Trump's broader lowering of environmental commitments. In one of his first acts in his second term, he removed the United States for the second consecutive time from the Paris Climate Agreement. Trump has also rescinded the policy of the Biden administration to eliminate all single-use products from federal lands before 2032. Dozens have banned single-use plastics that are produced by petrochemicals. These materials are used in shopping bags, bottles, and other disposable products. According to OECD research, if no new controls are implemented, the amount plastic waste that is dumped in the environment will increase from 81 metric tons in 2010 to 119 metric tons by 2040. The negotiations on a global plastic pollution treaty broke down last summer, as major plastic producing nations were reluctant to commit themselves to a binding output cap. Aleksandar Rankovic of the Common Initiative think tank said he wouldn't be surprised if Washington pulled out now. He said that the U.S. would likely align itself with Saudi Arabia, Russia and other countries who are pro-oil. "This new administration is pro-oil," he added. Steve Holland, Trevor Hunnicutt and David Stanway contributed to this report; Chris Reese edited the piece with Bernadette and Bernadette.
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Africa Energy Bank launches in the first quarter and targets $120 billion assets
Nigeria's junior minister of oil said that the Africa Energy Bank will be launched in the first quarter 2025, and will target an asset base worth $120 billion. An Afreximbank representative said that the fossil fuel bank would be a partnership between Afrexim Bank, a trade finance institution, and the African Petroleum Producers Organization. It was expected to begin operations in mid-2024. Heineken Lokpobiri, Nigeria's junior oil minister, said: "The building is finished, we are just putting the finishing touches on it. By the end of this third quarter, this will bank take off." The Minister joked that Nigeria will also follow U.S. president Donald Trump's mantra regarding increasing oil drilling to increase oil production to 2,5 million barrels per days this year. Nigerian crude production is currently averaging 1.7 million barrels per day. Nigeria, Africa's largest oil producer, won the bid to host this multilateral lender over three other African countries. (Reporting and writing by Isaac Anyaogu, Chijioke Ahuocha, Editing by Alexandra Hudson & Jan Harvey).
Where do the US steel and aluminum come from?
U.S. president Donald Trump raised tariffs on imports of steel and aluminum on Monday by a substantial 25%, "without exceptions or exclusions", in an effort to help struggling industries in the United States. However, this move could also spark a
Multi-front Trade War
Here is a list of major trading partners that will be affected.
A quarter of the steel used in America is imported. The bulk of this comes from Mexico and Canada, or other close allies such as Japan, South Korea, and Germany. China is the largest producer and exporter of steel in the world, but very little is shipped to the United States. In 2018, tariffs of 25% were imposed on Chinese steel, which effectively shut the market.
Last year, China exported 508,000 tons of steel net to the U.S. This is 1.8% of all American steel imports.
Aluminium
The U.S. relies more on imports in the case of aluminium. Approximately half of the aluminum used in America is imported. The majority comes from Canada. Canadian imports topped the list of countries with 3.2 million tonnes in 2012.
United Arab Emirates (UAE) and China are the next two largest importers, with 347,034 metric tons and 222,872 respectively.
According to global standards, the U.S. aluminium smelting sector is small. According to the U.S. Geological Survey, the total smelter capability in the United States was only 1.73% of global capacity.
(source: Reuters)