• Daily Digest

    Daily Digest 10/5 — Winter Energy Crisis Warning as OPEC Refuses to Tame Oil Prices; Records Show Slow Response to Report of California Oil Spill…

    by Whitney

    Tuesday, October 5, 2021, 8:41 AM

Economy

Winter energy crisis warning as Opec refuses to tame oil prices – Yahoo

Oil could rocket in the next few weeks exacerbating the fuel shortage and leading to a winter energy crisis, City analysts are warning.  That in turn will put intense pressure on central banks to shove up interest rates faster than they would like.  Crude is already at a seven-year high, after Opec refused last night to increase production levels in order to keep profits up.

New U.S. China trade plan leaves industry hungry for specifics – Reuters

Having waited eight months for U.S. Trade Representative Katherine Tai’s promised “top-to-bottom” policy review of trade with China, some U.S. industries and experts were complaining over the plan’s lack of specifics on negotiations or timing.

Unveiling her plan on Monday, Tai, President Joe Biden’s top trade official, pledged to hold talks with Chinese officials over their failure to meet the terms of former President Donald Trump’s “Phase 1” trade deal, and to revive a process to grant exclusions from tariffs on Chinese imports.

Risk Was Never Low, It Was Only Hidden – NXT Mine

Judging by euphoric gambler–oops I mean “investor”–sentiment and measures of volatility, risk of a market drop has been near-zero for the past 18 months. But risk was never actually low, it was only hidden. When it emerges, it’s a surprise only to those who mistakenly thought risk had vanished.

As Benoit Mandelbrot explained in his book The (Mis)behavior of Markets, crashes are an intrinsic feature of systems like stock markets. These risks are not generated by specific human actions or sentiment but by the system itself.

The Dow Is Bouncing Back, Facebook Is Rebounding—and What Else is Happening in the Stock Market Today – Barron’s

The stock market was rising Tuesday after a selloff Monday led by the technology sector, with shares in tech giant Facebook poised to recover following their 4.9% slump—the worst day for the stock since November 2020.

Futures for the Dow Jones Industrial Average indicated an open 100 points higher after the index fell 323 points Monday to close at 34,002, with S&P 500 futures poised for a similar start. The tech-heavy Nasdaq felt the worst of Monday’s selloff with a 2.1% decline, and Nasdaq futures were poised to begin a recovery with a 0.4% move higher.

Europe’s Gas and Power Surge to Records as Supply Concerns Flare – Bloomberg

European natural gas and power soared to fresh records amid worsening fears over supply.

Global fuel shortages are resulting in surging energy prices, disrupting markets from the U.K. to China, as economies emerge from the pandemic. Surging costs are threatening to raise inflation and starting to weigh on industrial production, with some companies in Europe forced to cut output. Concerns over gas storage levels in Europe are building as winter approaches, helping drive prices ever higher.

“The fiercely nervous sentiment on the market continues due to fears of reduced supply during the winter,” trader Energi Danmark said Tuesday. “Everything looks set for another week of price climbs.”

Why Shipping Stocks Are On Fire – Motley Fool

The global shipping industry has officially hit a crisis point — loaded ships are queued outside ports around the world, and companies are clamoring for workers who may not get off a ship for a year or more. At the same time, the global economy is picking up steam as demand for goods increases. Supply and demand are out of whack, and day rates for ships are soaring as a result, which should be a windfall for ship owners and logistics companies.

American Oil Drillers Face Sharp Rise In Costs – OilPrice.com

U.S. oil producers, especially those active in shale, have been hailed for sticking to a strict financial discipline amid the pandemic-driven crisis and for changing their focus from production growth to shareholder returns. Now, things may be about to change—and for the worse.

The latest Dallas Fed Survey found that costs in the industry have continued rising sharply for the second quarter in a row between July and September. Another finding of the report, likely related to the first one, was a slowdown in production growth in both oil and gas. Oilfield service sector input costs, the survey said, were at a record high.

Environment

Records show slow response to report of California oil spill – AP

The U.S. Coast Guard received the first report of a possible oil spill off the Southern California coast more than 12 hours before a company reported the major leak in its pipeline and a cleanup effort was launched, records show.

Oil spill reports reviewed Monday by The Associated Press raise questions about the Coast Guard’s response to one of the state’s largest recent oil spills as well as how quickly Amplify Energy, the company operating three offshore platforms and the pipeline, recognized it had a problem and notified authorities.

California’s oil spill is proof that climate action is worth the cost – Quartz

The oil spill that slathered a stretch of prime California coastal real estate on Oct. 3 is the latest proof that the social costs of the energy transition pale in comparison to the costs of the fossil fuel economy.

Global energy prices are on a bender, but policies to cut the economy’s climate footprint are only partially to blame. Even with such a major oil spill as a vivid reminder, that fact could still imperil public support for climate action, with the major COP climate summit in Glasgow due to start Oct. 31.

Health

BioNTech chief predicts need for updated Covid vaccines next year – Financial Times

The chief executive of the biotechnology group behind the first Covid-19 vaccine has said a new formulation is likely to be needed by the middle of next year to protect against the virus as it mutates. Ugur Sahin, chief executive of BioNTech, told the Financial Times that as time passes, mutations will emerge that can evade the body’s immune defences. “This year [a different vaccine] is completely unneeded. But by mid next year, it could be a different situation,” he predicted.

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