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  • Enron Fast Facts | CNN

    Enron Fast Facts | CNN

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    CNN
     — 

    Here’s a look at Enron, an energy trading company that collapsed after a massive accounting fraud scheme was revealed. Its 2001 bankruptcy filing was the largest in American history at the time. Estimated losses totaled $74 billion.

    Enron was ranked as America’s fifth largest company by Fortune magazine in 2002, despite its 2001 bankruptcy filing.

    An independent review published in 2002 detailed how executives pocketed millions of dollars from complex, off-the-books partnerships while reporting inflated profits to shareholders.

    Executives including Kenneth Lay and Jeffrey Skilling were prosecuted for fraud-related crimes.

    Key figures sold their stock shortly before the company announced a sharp downturn in earnings.

    Lower-level employees were encouraged to invest in company stock for their retirement savings just before the company collapsed. The workers later filed a class action lawsuit and won an $85 million settlement.

    1985 – Houston Natural Gas merges with Omaha-based InterNorth to form Enron.

    1986 – Lay is appointed chairman and CEO of Enron.

    1989 – Enron enters the natural gas commodities trading market.

    1990 – Skilling, an energy consultant, is hired to run a new subsidiary called Enron Finance Corp.

    February 12, 2001 – Skilling becomes CEO while Lay stays on as chairman.

    August 14, 2001 – Skilling resigns and Lay becomes CEO again.

    August 2001 – Sherron Watkins, a vice president, warns Lay that the company could “implode in a wave of accounting scandals.”

    October 16, 2001 – Enron announces a third-quarter loss of $618 million. The company later reveals that it overstated earnings dating back to 1997.

    October 31, 2001 – The company discloses that it is under formal investigation by the Securities and Exchange Commission.

    November 9, 2001 – Enron confirms that it has agreed to be purchased by a rival company, Dynegy for $9 billion. On November 28, Dynegy announces it has terminated merger talks with Enron.

    December 2, 2001 – Enron files for Chapter 11 bankruptcy protection.

    January 9, 2002 – The US Department of Justice opens a criminal investigation into Enron’s collapse.

    January 10, 2002 – Arthur Andersen LLP, the accounting firm that handled Enron’s audits, discloses that its employees had destroyed company documents.

    January 15, 2002 – The New York Stock Exchange suspends trading of Enron shares.

    January 17, 2002 – Enron ends its partnership with Arthur Andersen.

    January 23, 2002 – Lay resigns as CEO. He later steps down from the board of directors.

    January 25, 2002 – Former Enron vice chairman J. Clifford Baxter is found dead in an apparent suicide.

    February 12, 2002 – Lay invokes his Fifth Amendment right before the Senate Commerce Committee.

    March 14, 2002 – The DOJ indicts Arthur Andersen for obstruction of justice. A jury later returns a guilty verdict for the accounting firm. The Supreme Court later overturns the conviction.

    February 19, 2004 – Skilling is charged with 35 counts of fraud and insider trading. He pleads not guilty.

    July 7, 2004 – Lay is indicted. He is charged with conspiracy, securities fraud, wire fraud, bank fraud and making false statements. During his arraignment the next day, he pleads not guilty to all 11 charges and is released on $500,000 unsecured bond.

    May 25, 2006 – Skilling and Lay are convicted of conspiracy and fraud. Skilling is also convicted on one count of insider trading and five counts of making false statements. The jury acquits Skilling on nine additional counts of insider trading.

    July 5, 2006 – Lay dies of a heart attack while awaiting sentencing.

    September 8, 2008 – A class action lawsuit filed by shareholders and investors is settled in federal court. The $7.2 billion settlement will be paid out by a group of banks accused of participating in the accounting fraud scheme.

    May 11, 2009 – Skilling files a petition with the Supreme Court to overturn his conviction after appeals with the lower courts fail.

    May 9, 2010 – “Enron,” a musical about the company’s collapse, closes on Broadway 12 days after opening amid slow ticket sales.

    April 16, 2012 – The Supreme Court rejects Skilling’s appeal.

    June 21, 2013 – A federal judge reduces Skilling’s sentence by more than 10 years. In return, Skilling agrees to stop challenging his conviction and forfeit roughly $42 million that will be distributed among the victims of the Enron fraud.

    December 8, 2015 – The SEC announces that it has obtained a summary judgment against Skilling, permanently barring him from serving as an officer or director of a publicly held company. The judgment settles a long-running civil suit by the SEC.

    February 21, 2019 – Skilling is released after serving over 12 years in federal prison.

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  • OPEC Fast Facts | CNN

    OPEC Fast Facts | CNN

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    CNN
     — 

    Here’s a look at the Organization of the Petroleum Exporting Countries, headquartered in Vienna, Austria.

    The purpose of OPEC is to “coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.”

    OPEC members collectively supply about 28.89% of the world’s crude oil production.

    Together, OPEC members control about 79.49% of the world’s total proven crude reserves.

    OPEC member countries monitor the market and decide collectively to raise or lower oil production in order to maintain stable prices and supply.

    A unanimous vote is required on raising or lowering oil production.

    Each member country controls the oil production of its country, but OPEC aims to coordinate the production policies of member countries.

    Oil and energy ministers from OPEC member countries usually meet twice a year to determine OPEC’s output level. They also meet in extraordinary sessions whenever required.

    Read More: Oil and Gasoline Fast Facts

    Algeria – 1969-present
    Congo – 2018-present
    Equatorial Guinea – 2017-present
    Gabon – 1975-1995; 2016-present
    Iran – 1960-present
    Iraq – 1960-present
    Kuwait – 1960-present
    Libya – 1962-present
    Nigeria – 1971-present
    Saudi Arabia – 1960-present
    United Arab Emirates – 1967-present
    Venezuela – 1960-present

    Angola – 2007-2024
    Ecuador – 1973-1992; 2007-2020
    Indonesia – 1962-2009; 2016
    Qatar – 1961-2019

    September 14, 1960 – OPEC is formed in Baghdad, Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

    November 6, 1962 – OPEC is registered with the United Nations Secretariat (UN Resolution No. 6363).

    1973-1974 – Due to United States support of Israel in the Arab-Israeli conflict, the members of OPEC decide to raise the cost of oil from $3/barrel to around $12/barrel.

    October 1973 – OPEC issues an embargo against the United States, halting oil exports. Customers in the United States experience long lines at gas stations and shortages.

    March 18, 1974 – At an OPEC meeting, seven members lift the ban on exports to the United States: Algeria, Saudi Arabia, Kuwait, Qatar, Bahrain, Egypt and Abu Dhabi. Libya and Syria refuse to drop the ban, and Iraq boycotts the talks.

    December 31, 1974 – Libya lifts its oil embargo against the United States.

    November 2007 – Ecuador rejoins OPEC after a 15-year absence.

    May 2008 – Indonesia announces that it will leave OPEC in 2009.

    January 1, 2009 – Indonesia suspends its membership in OPEC.

    January 1, 2016-November 30, 2016 – Indonesia rejoins OPEC, but suspends its membership after 11 months.

    July 2016 – Gabon rejoins OPEC.

    May 25, 2017 – Equatorial Guinea joins OPEC.

    June 22, 2018 – OPEC announces that the Republic of the Congo has joined the organization.

    December 3, 2018 – Qatar’s state oil company, Qatar Petroleum, announces that the country will leave OPEC on January 1, 2019. One of OPEC’s oldest members, Qatar says it plans to focus on natural gas production.

    January 1, 2020 – Ecuador leaves OPEC.

    March 2020 – To offset the collapse in demand caused by the coronavirus pandemic, OPEC unveils a plan to reduce output among its members by 1 million barrels per day, and says it will seek an additional 500,000 barrels per day in cuts from longstanding allies, including Russia.

    April 1, 2021 – OPEC and allied producers announce that they have agreed to gradually increase their output over the next three months. The move follows a sharp increase in oil prices, and a call from the United States to keep energy affordable.

    October 5, 2022 – OPEC and its allies, known as OPEC+, announce they will cut oil production by 2 million barrels per day, the biggest cut since the start of the pandemic.

    January 1, 2024 – Angola leaves OPEC. Oil minister Diamantino Azevedo said earlier that membership was not serving Angola’s interests.

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  • World’s best spicy foods: 20 dishes to try | CNN

    World’s best spicy foods: 20 dishes to try | CNN

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    CNN
     — 

    Some like it hot – and some like it hotter, still.

    When it comes to the world’s best spicy dishes, we have some of the world’s hottest peppers to thank, along with incredible layers of flavor and a long, spice-loving human history.

    “Spicy food, or at least spiced foods, clearly predates the idea of countries and their cuisine by a very, very long time,” says Indian author Saurav Dutt, who is writing a book about the spiciest foods on the Indian subcontinent.

    “Every spicy ingredient has a wild ancestor,” he says. “Ginger, horseradish, mustard, chiles and so on have predecessors which led to their domestication.”

    Hunter-gatherer groups historically made use of various wild ingredients to flavor their foods, Dutt says, and there are many ingredients all over the world that can lend a spicy taste to a dish or stand on their own.

    Peppers – a headliner for heat – are rated on the Scoville Heat Units scale, which measures capsaicin and other active components of chile peppers. By that measure, the Carolina Reaper is among the hottest in the world, while habaneros, Scotch bonnets and bird’s eye chiles drop down a few rungs on the mop-your-brow scale.

    Redolent with ghost peppers, Scotch bonnets, serranos, chiltepin peppers, mouth-numbing Sichuan peppercorns and more, the following spicy dishes from around the world bring the heat in the most delicious way.

    Ata rodo – Scotch bonnet pepper – brings the fire to Nigeria’s famous spicy soup. Egusi is made by pounding the seeds from the egusi melon, an indigenous West African fruit that’s related to the watermelon.

    In addition to being protein-packed, the melon’s seeds serve to thicken and add texture and flavor to the soup’s mix of meat, seafood and leafy vegetables. Pounded yams are often served alongside this dish, helping to temper the scorch of the Scotch bonnets.

    “The joy of this dish is not only the delightful warming ingredients of cinnamon, cloves, star anise and, of course, the Sichuan peppercorns, but the fact that you can cook exactly what you like in the bubbling spicy broth,” says British-born Chinese chef Kwoklyn Wan, author of “The Complete Chinese Takeout Cookbook.”

    Duck, seafood, chicken, pork, lamb and seasonal vegetables are all fair game for tossing into the pot to simmer in a mouth-numbing broth made with Sichuan peppercorns and dried Sichuan peppers for serious kick (the dipping sauce served on the side often has chile paste, too).

    Also known as Chongqing hot pot, the dish is said to have originated as a popular food among Yangtze River boatmen. It’s enjoyed by those who can handle its heat all over China, not to mention elsewhere around the world.

    Som tam, Thailand

    A green papaya salad with a fiery kick.

    From northeastern Thailand’s spice-loving Isaan province, this fresh and fiery salad is a staple dish at Thai restaurants around the world and is also popular in neighboring Laos.

    Som tam turns to green (unripe) papaya for its main ingredient, which is usually julienned or shredded for the salad. The papaya is then tossed with long beans or green beans and a mix of flavorful Asian essentials that include tamarind juice, dried shrimp, fish sauce and sugar cane paste, among other ingredients. Thai chiles, also called bird’s eye chiles, give the salad its requisite kick.

    Piri-piri chicken, Mozambique and Angola

    The Portuguese introduced this spicy dish also known as peri-peri chicken into Angola and Mozambique as far back as the 15th century, when they mixed African chiles with European ingredients (piri-piri means “pepper pepper” in Swahili). And it’s the perky red pepper of the same name that brings the spiciness to this complex, layered and delicious dish.

    Piri-piri chicken’s poultry cuts are marinated in chiles, olive oil, lemon, garlic and herbs such as basil and oregano for a fiery flavor that blends salty, sour and sweet. The dish is also popular in Namibia and South Africa, where it’s often found on the menu in Portuguese restaurants.

    The glossy red hues dancing on a plate of this popular pork dish, a version of which hails from Mao Zedong’s home province, give a hint about the mouth experience to come. The dish was apparently a favorite of the communist leader, who requested his chefs in Beijing prepare it for him.

    Chairman Mao’s braised pork belly – called Mao shi hong shao rou in China – is often served as the main dish for sharing at a family table and is made by braising chunks of pork belly with soy sauce, dried chiles and spices.

    “It is a very delicious and moreish dish due to the caramelized sugar and dark soy sauce being reduced and all the aromatics (that coat the pork belly),” wrote BBC “Best Home Cook” winner Suzie Lee, author of “Simply Chinese,” in an email to CNN Travel.

    Scotch bonnet peppers give jerk chicken its heat.

    Jamaica’s favorite pepper is the Scotch bonnet, beloved not just for its spiciness but for its aroma, colors and flavor, too, says Mark Harvey, content creator and podcaster at Two On An Island, who was born in Spanish Town, Jamaica.

    “For Jamaicans, the degree of spiciness starts at medium for children and goes up to purple hot,” he says, explaining that the peppers come in green, orange, red and purple hues, growing increasingly spicy in that order.

    Scotch bonnets star in several of the island’s iconic dishes, including escovitch fish, pepper pot soup and curry goat. But you might recognize them most from the ubiquitous jerk chicken and pork smoking roadside everywhere from Montego Bay to Boston Bay, where meat prepared with the peppery marinade is cooked the traditional way, atop coals from pimento tree wood (the tree’s allspice berries are also used in the jerk marinade).

    Popular on the Indonesian islands of Bali and Lombok, in particular, this whole chicken dish is stuffed with an intensely aromatic spice paste (betutu) that usually includes a mashup of fresh hot chile peppers, galangal (a root related to ginger), candlenuts, shallots, garlic, turmeric and shrimp paste, among other ingredients.

    The chicken is then wrapped in banana leaves and steamed, bringing the aromatics out all the more and flavoring the chicken to the max. Best shared, ayam betutu is often presented at religious ceremonies in Bali, but you’ll find it at restaurants specializing in it throughout the islands, too.

    Spicy wings are an American sports bar staple.

    Beer and buffalo chicken wings are as American as, well, hamburgers. And if you’re not eating them alongside a pile of celery sticks and a ramekin of dunking sauce – traditionally blue cheese dip, but ranch works, too – you’re missing half the picture.

    A sports bar staple at chain restaurants such as Buffalo Wild Wings and more refined outposts, too, from Alaska to Maine, “wings” are actually made up of the wing parts called drumettes and wingettes, which have the most meat.

    Buffalo wings, said to have been invented in a bar in Buffalo, New York, in 1964, are among the spiciest preparations (other popular variations include teriyaki wings and honey garlic wings). Make them as fiery as you like using a sauce that includes cayenne pepper, butter, vinegar, garlic powder and Worcestershire sauce.

    A relative of ceviche, this Mexican dish traditionally gets its fire from chiltepín peppers.

    Similar to ceviche but with more bite, this raw marinated shrimp dish from the western Mexican state of Sinaloa (and a staple along the Baja Peninsula, too) tastes as good as it looks.

    Tiny but mighty chiltepín peppers (they look like bright little berries), grown throughout the United States and Mexico, make the spicy magic happen in shrimp aguachiles, which means “pepper water.” If you can’t find those, serrano and jalapeño peppers also do the trick.

    Marinate the raw shrimp with ingredients including lime juice, cilantro, red onion and cucumber and enjoy with crispy tostadas.

    Pad ka prao, Thailand

    A go-to dish when you want something satisfying – but with kick – pad ka prao is a mealtime staple in Thailand, where you’ll find it on offer at street-side stalls and restaurants everywhere from Bangkok to the islands.

    Considered the Thai equivalent of a sandwich or a burger, the dish is a mix of ground pork, spicy Thai chile peppers and holy basil and can be ordered as spicy as you like. Many locals believe it’s best topped with a fried egg with a runny yolk.

    Beef rendang, Indonesia and Malaysia

    A fiery favorite that originated in West Sumatra, versions of beef rendang are also enjoyed in Indonesia’s neighboring countries, including Malaysia and Brunei, as well as the Philippines.

    This flavorful dry curry dish calls on kaffir lime leaves, coconut milk, star anise and red chile, among other spices, to deliver its complexity. It’s often presented to guests and served during festive events.

    The fermented cabbage dish kimchi might be the spicy Korean dish that first comes to mind, but when you want some extra kick, dakdoritang does the trick.

    Comfort food to the max, the chicken stew doubles down on its spiciness with liberal doses of gochugaru (Korean chile powder) and gochujang (Korean chile paste) mixed with rice wine, soy sauce, garlic, ginger and sesame oil in a braising sauce that packs the bone-in chicken pieces with flavor. It’s often served with carrots, onions and potatoes.

    Phaal Curry, Birmingham, England (via Bangladesh)

    This tomato-based British-Asian curry invented in Birmingham, England, curry houses by British Bangladeshi restaurateurs is thought to be one of the spiciest curries in the world.

    “Typically the sauce has a tomato base with ginger, fennel seeds and copious amounts of chile, habanero or Scotch bonnet, peppers,” says Indian author Saurav Dutt.

    As many as 10 pepper types may find their way into phaal curry, he says, including bird’s eye chiles and the bhut jolokia (also known as the ghost pepper, it’s one of the world’s hottest peppers). Even hotter than vindaloo, this dish will absolutely light your mouth up.

    This classic Roman pasta dish’s name gives you an idea of what to expect. “Arrabbiata” means “angry” in Italian. And penne all’arrabbiata pairs the relatively plain penne pasta with fiery flavors from the sauce (sugo all’arrabbiata) in which it’s slathered.

    “The peperoncino (red chile pepper) is what makes this sauce ‘angry’ (arrabbiata) or spicy,” Chris MacLean of Italy-based Open Tuesday Wines said via email.

    To tame the angry peppers in this garlic and tomato-based dish with a good glass of red wine, MacLean says to pair penne all’arrabbiata with a Cesanese, also from Rome’s Lazio region, with its crisp fruit and light tannins.

    “A wine that’s heavy in oak or alcohol would turn up the heat (in the dish) in your mouth and render the wine tasteless,” he warns.

    Chicken is simmered with roasted spices and coconut in this flavorful dish.

    “There’s a saying in South India that you are lucky to ‘eat like a Chettiar,’ ” says Dutt, referring to the Tamil-speaking community in India’s southern Tamil Nadu state credited with creating this spicy dish.

    “Like this chicken dish, the traditional Chettinad dishes mostly used locally sourced spices like star anise, pepper, kalpasi (stone flower) and marati mokku (dried flower pods),” he says.

    The chicken pieces are simmered in a medley of roasted spices and coconut, and it is traditionally served with steamed rice or the thin South Indian pancakes called dosa, fried chapati or naan.

    This Ethiopian dish leans on the fiery berbere spice blend.

    The fiery Ethiopian spice blend called berbere – aromatic with chile peppers, basil, cardamom, garlic and ginger – is instrumental to the flavor chorus that’s doro wat, Ethiopia’s much-loved spicy chicken stew.

    Topped with boiled eggs, the dish almost always finds a place at the table during weddings, religious holidays and other special occasions and family gatherings. If you’re invited to try it in Ethiopia at such an event, consider yourself very lucky indeed.

    Mouth-numbing Sichuan peppercorns bring the X-factor to this popular dish from China’s Sichuan province, which mixes chunks of silken tofu with ground meat (pork or beef) and a spicy fermented bean paste called doubanjiang.

    Mapo tofu’s fiery red color might as well be a warning to the uninitiated – Sichuan cuisine’s defining flavor, málà, has a numbing effect on the mouth called paresthesia that people tend to love or hate.

    A Portuguese-influenced dish from India’s southwestern state of Goa, vindaloo was not originally meant to be spicy, says Dutt. “It originally contained pork, potatoes (aloo) and vinegar (vin), giving you the name,” he says.

    But when the dish was exported to curry houses in the United Kingdom that were mostly run by Muslim Bangladeshi chefs, Dutt says, pork was replaced with beef, chicken or lamb and the dish evolved into a spicier hot curry.

    Ghost pepper flakes and Scotch bonnet peppers are among the peppers giving the dish its scorching taste. But in Goa, you can still find versions of the dish that swing more on the side of milder spices such as cinnamon and cardamom.

    Senegalese cooks are also big fans of Scotch bonnet peppers, named for their resemblance to the Scottish tam o’ shanter hat. And their spice-giving goodness is deployed liberally in one of the West African country’s favorite dishes, the spicy tomato and peanut or groundnut-based stew called mafé.

    Usually made with beef, lamb or chicken, the stew is made even heartier with potatoes, carrots and other root vegetables for one filling feed. Mafé is popular in other West African countries, too, including Mali and Gambia, and it can also be prepared without meat.

    Synonymous with watching the Super Bowl or hunkering down on a cold night, chili is a spicy American staple where you can opt to ratchet up the heat as much as you like.

    There are basically two pure forms of American chili – with or without beans (usually red kidney beans) – says Chef Julian Gonzalez of Sawmill Market in Albuquerque, New Mexico. In Texas, he explains, chili traditionally doesn’t have beans, which puts the focus on the spices and chiles used to flavor it, and he goes with that approach himself.

    “Traditionally chili is seasoned with chili powder, cumin and paprika,” Gonzalez says. From there, you can use other ingredients to make your recipe unique. Adding cayenne pepper is one way to turn up the heat.

    At his restaurant Red & Green, which serves New Mexican cuisine, Gonzalez’s green chile stew, made with pork and no beans, is seasoned with a mix of roasted green New Mexican hatch chiles (half mild and half with heat), onion and garlic powder.

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  • Oil Spills Fast Facts | CNN

    Oil Spills Fast Facts | CNN

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    CNN
     — 

    Here’s a look at oil spill disasters. Spill estimates vary by source.

    1. January 1991 – During the Gulf War, Iraqi forces intentionally release 252-336 million gallons of oil into the Persian Gulf.

    2. April 20, 2010 – An explosion occurs on board the BP-contracted Transocean Ltd. Deepwater Horizon oil rig, releasing approximately 168 million gallons of oil in the Gulf of Mexico.

    3. June 3, 1979 – Ixtoc 1, an exploratory well, blows out, spilling 140 million gallons of oil into the Bay of Campeche off the coast of Mexico.

    4. March 2, 1992 – A Fergana Valley oil well in Uzbekistan blows out, spilling 88 million gallons of oil.

    5. February 1983 – An oil well in the Nowruz Oil Field in Iran begins spilling oil. One month later, an Iraqi air attack increases the amount of oil spilled to approximately 80 million gallons of oil.

    6. August 6, 1983 – The Castillo de Bellver, a Spanish tanker, catches fire near Cape Town, South Africa, spilling more than 78 million gallons of oil.

    7. March 16, 1978 – The Amoco Cadiz tanker runs aground near Portsall, France, spilling more than 68 million gallons of oil.

    8. November 10, 1988 – The tanker Odyssey breaks apart during a storm, spilling 43.1 million gallons of oil northeast of Newfoundland, Canada.

    9. July 19, 1979 – The Atlantic Empress and the Aegean Captain tankers collide near Trinidad and Tobago. The Atlantic Empress spills 42.7 million gallons of oil. On August 2, the Atlantic Empress spills an additional 41.5 million gallons near Barbados while being towed away.

    10. August 1, 1980 – Production Well D-103 blows out, spilling 42 million gallons of oil southeast of Tripoli, Libya.

    Union Oil Company
    January 28, 1969 – Inadequate casing leads to the blowout of a Union Oil well 3,500 feet deep about five miles off the coast of Santa Barbara, California. About three million gallons of oil gush from the leak until it can be sealed 11 days later, covering 800 square miles of ocean and 35 miles of coastline and killing thousands of birds, fish and other wildlife.

    The disaster is largely considered to be one of the main impetuses behind the environmental movement and stricter government regulation, including President Richard Nixon’s signing of the National Environmental Policy Act, the creation of the Environmental Protection Agency in 1970. It also inspired Wisconsin Senator Gaylord Nelson to found the first Earth Day.

    Exxon Valdez
    March 24, 1989 – The Exxon Valdez runs aground on Bligh Reef in Prince William Sound, Alaska, spilling more than 11 million gallons of oil.

    March 22, 1990 – Captain Joseph Hazelwood is acquitted of all but one misdemeanor, negligent discharge of oil. Hazelwood is later sentenced to 1,000 hours of cleaning around Prince William Sound and is fined $50,000.

    July 25, 1990 – At an administrative hearing, the Coast Guard dismisses charges of misconduct and intoxication against Captain Joseph Hazelwood, but suspends his captain’s license.

    October 8, 1991 – A federal judge approves a settlement in which Exxon and its shipping subsidiary will pay $900 million in civil payments and $125 million in fines and restitution. Exxon says it has already spent more than $2 billion on cleanup.

    September 16, 1994 – A federal jury orders Exxon to pay $5 billion in punitive damages to fishermen, businesses and property owners affected by the oil spill.

    November 7, 2001 – The US Court of Appeals for the Ninth Circuit rules that the $5 billion award for punitive damages is excessive and must be cut.

    December 6, 2002 – US District Judge H. Russel Holland reduces the award to $4 billion.

    December 22, 2006 – The Ninth Circuit Court of Appeals reduces the award to $2.5 billion.

    June 25, 2008 – The US Supreme Court cuts the $2.5 billion punitive damages award to $507.5 million.

    June 15, 2009 – The Ninth Circuit Court of Appeals orders Exxon to pay $470 million in interest on the $507.5 million award.

    BP Gulf Oil Spill
    April 20, 2010 – An explosion occurs aboard BP-contracted Transocean Ltd Deepwater Horizon oil rig stationed in the Gulf of Mexico. Of the 126 workers aboard the oil rig, 11 are killed.

    April 22, 2010 – The Deepwater Horizon oil rig sinks. An oil slick appears in the water. It is not known if the leak is from the rig or from the underwater well to which it was connected.

    April 24, 2010 – The US Coast Guard reports that the underwater well is leaking an estimated 42,000 gallons of oil a day.

    April 28, 2010 – The Coast Guard increases its spill estimate to 210,000 gallons of oil a day.

    May 2, 2010 – President Barack Obama tours oil spill affected areas and surveys efforts to contain the spill.

    May 4, 2010 – The edges of the oil slick reach the Louisiana shore.

    May 26, 2010 – BP starts a procedure known as “top kill,” which attempts to pump enough mud down into the well to eliminate the upward pressure from the oil and clear the way for a cement cap to be put into place. The attempt fails.

    June 16, 2010 – BP agrees to create a $20 billion fund to help victims affected by the oil spill.

    July 5, 2010 – Authorities report that tar balls linked to the oil spill have reached the shores of Texas.

    July 10, 2010 – BP removes an old containment cap from the well so a new one can be installed. While the cap is removed, oil flows freely. The new cap is finished being installed on July 12.

    July 15, 2010 – According to BP, oil has stopped flowing into the Gulf.

    August 3, 2010 – BP begins the operation “static kill” to permanently seal the oil well.

    August 5, 2010 – BP finishes the “static kill” procedure. Retired Adm. Thad Allen says this will “virtually assure us there’s no chance of oil leaking into the environment.”

    January 11, 2011 – The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling releases their full report stating that the explosion of the Deepwater Horizon rig launched the worst oil spill in US history, 168 million gallons (or about 4 million barrels).

    September 14, 2011 – The final federal report is issued on the Gulf oil spill. It names BP, Transocean and Halliburton as sharing responsibility for the deadly explosion that resulted in the April 2010 Gulf of Mexico oil spill.

    January 26, 2012 – A federal judge in New Orleans rules that Transocean, the owner of the Deepwater Horizon rig, is not liable for compensatory damages sought by third parties.

    January 31, 2012 – A federal judge in New Orleans rules that Halliburton is not liable for some of the compensatory damages sought by third parties.

    March 2, 2012 – BP announces it has reached a settlement with attorneys representing thousands of businesses and individuals affected by the 2010 oil spill.

    April 18, 2012 – Court documents are filed revealing the March 2, 2010 settlement BP reached with attorneys representing thousands of businesses and individuals affected by the oil spill. A federal judge must give preliminary approval of the pact, which BP estimates will total about $7.8 billion.

    April 24, 2012 – The first criminal charges are filed in connection with the oil spill. Kurt Mix, a former engineer for BP, is charged with destroying 200-plus text messages about the oil spill, including one concluding that the undersea gusher was far worse than reported at the time.

    November 15, 2012 – Attorney General Eric Holder announces that BP will plead guilty to manslaughter charges related to the rig explosion and will pay $4.5 billion in government penalties. Separate from the corporate manslaughter charges, a federal grand jury returns an indictment charging the two highest-ranking BP supervisors on board the Deepwater Horizon on the day of the explosion with 23 criminal counts.

    November 28, 2012 – The US government issues a temporary ban barring BP from bidding on new federal contracts. The ban is lifted on March 13, 2014.

    December 21, 2012 – US District Judge Carl Barbier signs off on the settlement between BP and businesses and individuals affected by the oil spill.

    January 3, 2013 – The Justice Department announces that Transocean Deepwater Inc. has agreed to plead guilty to a violation of the Clean Water Act and pay $1.4 billion in fines.

    February 25, 2013 – The trial to determine how much BP owes in civil damages under the Clean Water Act begins. The first phase of the trial will focus on the cause of the blowout.

    September 19, 2013 – In federal court in New Orleans, Halliburton pleads guilty to destroying test results that investigators had sought as evidence. The company is given the maximum fine of $200,000 on the charge.

    September 30, 2013 – The second phase of the civil trial over the oil spill begins. This part focuses on how much oil was spilled and if BP was negligent because of its lack of preparedness.

    December 18, 2013 – Kurt Mix, a former engineer for BP, is acquitted on one of two charges of obstruction of justice for deleting text messages about the oil spill.

    September 4, 2014 – A federal judge in Louisiana finds that BP was “grossly negligent” in the run-up to the 2010 disaster, which could quadruple the penalties it would have to pay under the Clean Water Act to more than $18 billion. Judge Carl Barbier of the US District Court for the Eastern District of Louisiana also apportions blame for the spill, with “reckless” BP getting two thirds of it. He says the other two main defendants in the more than 3,000 lawsuits filed in the spill’s wake, Transocean and Halliburton, were found to be “negligent.”

    January 15, 2015 – After weighing multiple estimates, the court determines that 4.0 million barrels of oil were released from the reservoir. 810,000 barrels of oil were collected without contacting “ambient sea water” during the spill response, making BP responsible for a maximum of 3.19 million barrels.

    January 20-February 2, 2015 – The final phase of the trial to determine BP’s fines takes place. The ruling is expected in a few months.

    July 2, 2015 – An $18.7 billion settlement is announced between BP and five Gulf states.

    September 28, 2015 – In a Louisiana federal court, the city of Mobile, Alabama, files an amended complaint for punitive damages against Transocean Ltd., Triton Asset Leasing, and Halliburton Energy Services, Inc., stating that “Mobile, its government, businesses, residents, properties, eco-systems and tourists/tourism have suffered and continue to suffer injury, damage and/or losses as a result of the oil spill disaster.” As of April 20, 2015, Mobile estimated the losses had exceeded $31,240,000.

    October 5, 2015 – BP agrees to pay more than $20 billion to settle claims related to the spill. It is the largest settlement with a single entity in the history of the Justice Department.

    November 6, 2015 – The remaining obstruction of justice charge against Kurt Mix is dismissed as he agrees to plead guilty to the lesser charge of “intentionally causing damage without authorization to a protected computer,” relating to deletion of a text message, a misdemeanor. He receives six months’ probation and must complete 60 hours of community service.

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  • Jon Corzine Fast Facts | CNN Politics

    Jon Corzine Fast Facts | CNN Politics

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    CNN
     — 

    Here’s a look at the life of Jon Corzine, former governor of New Jersey.

    Birth date: January 1, 1947

    Birth place: Willey’s Station, Illinois

    Birth name: Jon Stevens Corzine

    Father: Roy Allen Corzine Jr., farmer

    Mother: Nancy (Hedrick) Corzine, teacher

    Marriages: Sharon Elghanayan (2010-present); Joanne Dougherty (1969-2003, divorced)

    Children: with Joanne Dougherty: Jennifer, Joshua and Jeffrey

    Education: University of Illinois, B.A., 1969; University of Chicago, M.B.A., 1973

    Military: United States Marine Corps Reserves, Sergeant, 1969-1975

    Religion: Methodist

    Is the third New Jersey governor to break a leg while in office. Jim McGreevey broke his leg in 2002 and Christie Whitman broke hers in 1999.

    1975 – Begins working for Goldman Sachs.

    1980 – Is named a partner at Goldman Sachs.

    1994-1999 – Chairman and chief executive of Goldman Sachs.

    November 7, 2000 – Is elected to the United States Senate.

    2001-2006 – United States Senator representing New Jersey.

    November 8, 2005 – Is elected governor of New Jersey.

    January 17, 2006-January 19, 2010 – 54th governor of New Jersey.

    July 1, 2006 – Orders a government shutdown amid a budgetary impasse between the state legislature and his office. It ends on July 8th.

    December 21, 2006 – Corzine signs a bill legalizing same-sex civil unions.

    April 12, 2007 – Is seriously injured in a car accident. According to official reports, Corzine’s driver was going 90mph in a 65mph zone, and Corzine was not wearing a seat belt.

    December 17, 2007 – Signs legislation repealing the death penalty.

    November 3, 2009 – Is defeated in his re-election bid by Republican Chris Christie.

    March 23, 2010 – Is named CEO of MF Global.

    October 31, 2011 – MF Global files for bankruptcy after it is revealed that more than $600 million of customer money is missing.

    November 4, 2011 – Corzine resigns from MF Global.

    December 2011 – Corzine testifies multiple times before both the House and Senate Agriculture Committees, claiming he does not know where the missing customer money went.

    November 15, 2012 – The House Financial Services Subcommittee on Oversight and Investigations releases a report saying that Corzine’s risky decisions led to the loss of customer funds.

    April 4, 2013 – Louis Freeh, bankruptcy trustee for MF Global and former head of the FBI, releases a report blaming the demise of the commodities trading firm on Corzine.

    April 23, 2013 – Louis Freeh files a lawsuit against Corzine and two lieutenants at MF Global saying their risky decisions led to the company’s bankruptcy and the improper use of the client’s money to cover losses.

    November 5, 2013 – A bankruptcy judge approves a recovery plan that will allow almost 26,000 customers to collect 100 cents on the dollar of a combined $1.6 billion in lost investments from MF Global.

    March 11, 2014 – Corzine’s youngest son, Jeffrey Corzine, 31, commits suicide.

    December 23, 2014 – A New York federal court orders MF Global Holdings to pay restitution in the amount of $1.212 billion, plus a $100 million civil penalty for its subsidiary’s misuse of funds.

    January 5, 2017 – The US Commodity Futures Trading Commission says a federal court ordered Corzine to pay a $5 million penalty for his role in MF Global’s “Unlawful use of customer funds” and his “failure to diligently supervise the handling of customer funds.”

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  • The IMF sees greater chance of a ‘soft landing’ for the global economy | CNN Business

    The IMF sees greater chance of a ‘soft landing’ for the global economy | CNN Business

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    London
    CNN
     — 

    The International Monetary Fund (IMF) sees better odds that central banks will manage to tame inflation without tipping the global economy into recession, but it warned Tuesday that growth remained weak and patchy.

    The agency said it expected the world’s economy to expand by 3% this year, in line with its July forecast, as stronger-than-expected growth in the United States offset downgrades to the outlook for China and Europe. It shaved its forecast for growth in 2024 by 0.1 percentage point to 2.9%.

    Echoing comments made in July, the IMF highlighted the global economy’s resilience to the twin shocks of the pandemic and the Ukraine war while warning in its World Economic Outlook that risks remained “tilted to the downside.”

    “Despite war-disrupted energy and food markets and unprecedented monetary tightening to combat decades-high inflation, economic activity has slowed but not stalled,” IMF chief economist Pierre-Olivier Gourinchas wrote in a blog post. “The global economy is limping along,” he added.

    The IMF’s projections for growth and inflation are “increasingly consistent with a ‘soft landing’ scenario… especially in the United States,” Gourinchas continued.

    But he cautioned that growth “remains slow and uneven,” with weaker recoveries now expected in much of Europe and China compared with predictions just three months ago.

    The 20 countries using the euro are expected to grow collectively by 0.7% this year and 1.2% next year, a downgrade of 0.2 percentage points and 0.3 percentage points respectively from July.

    The IMF now expects China to grow 5% this year and 4.2% in 2024, down from 5.2% and 4.5% previously.

    “China’s property sector crisis could deepen, with global spillovers, particularly for commodity exporters,” it said in its report

    By contrast, the United States is expected to grow more strongly this year and next than expected in July. The IMF upgraded its growth forecasts for the US economy to 2.1% in 2023 and 1.5% in 2024 — an improvement of 0.3 percentage points and 0.5 percentage points respectively.

    “The strongest recovery among major economies has been in the United States,” the IMF said.

    The agency expects that inflation will continue to fall — bolstering the case for a “soft landing” in major economies — but it does not expect it to return to levels targeted by central banks until 2025 in most cases.

    The IMF revised its forecasts for global inflation to 6.9% this year and 5.8% next year — an increase of 0.1 percentage point and 0.6 percentage points respectively.

    Commodity prices pose a “serious risk” to the inflation outlook and could become more volatile amid climate and geopolitical shocks, Gourinchas wrote.

    “Food prices remain elevated and could be further disrupted by an escalation of the war in Ukraine, inflicting greater hardship on many low-income countries,” he added.

    Oil prices surged Monday on concerns that the latest conflict between Israel and Hamas could cause wider instability in the oil-producing Middle East. Brent crude prices were already elevated following supply cuts by major producers Saudi Arabia and Russia.

    High oil and natural gas prices, leading to skyrocketing energy costs, helped drive inflation to multi-decade highs in many economies in 2022. The latest jump in oil prices could cause a fresh bout of broader price rises.

    Bond investors are already on edge. They dumped government bonds last week in the expectation that the world’s major central banks would keep interest rates “higher for longer” to bring inflation down to their targets.

    The IMF also pointed to concerns that high inflation could become a self-fulfilling prophecy. If households and businesses expect prices to go on rising, that could cause them to set higher prices for their goods and services, or demand higher wages.

    “Expectations that future inflation will rise could feed into current inflation rates, keeping them high,” the IMF noted.

    It added that the “expectations channel is critical to whether central banks can achieve the elusive ‘soft landing’ of bringing the inflation rate down to target without a recession.”

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  • Dow tumbles by more than 400 points, on pace for biggest one-day decline since March | CNN Business

    Dow tumbles by more than 400 points, on pace for biggest one-day decline since March | CNN Business

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    New York
    CNN
     — 

    Stocks tumbled Tuesday after a slew of economic data stoked fears about the US economy’s cloudy outlook and further interest rate hikes from the Federal Reserve.

    The benchmark S&P 500 index slid 1.2%, on track for its lowest close since June. The Dow Jones Industrial Average fell 416 points, or 1.2%, on pace for its biggest one-day drop since March; and the Nasdaq Composite lost 1.5%.

    The S&P 500 is hovering around the threshold that it passed to enter bull market territory earlier this summer, which represents a climb of more than 20% off its most recent low last October.

    Housing data released Tuesday morning showed that new home sales fell 8.7% in August from July, as mortgage rates edged above 7% to the highest levels in decades.

    At the same time, US home prices climbed to a record high in July, marking the sixth straight month of increases as a tight supply of homes continues to drive up prices, according to the latest Case-Shiller home prices index.

    “The Fed will see the reacceleration of house prices as a reason to keep interest rates higher for longer,” said Bill Adams, chief economist at Comerica Bank. “The Fed cannot afford to look past house prices’ influence on the cost of living.”

    Investors have been on edge since the Fed last week indicated it could hike interest rates once more this year and delay rate cuts for longer than expected. That sent yields soaring to their highest level in decades, as investors recalibrate their expectations for how long rates will stay higher.

    Oil prices gained on Tuesday after paring back their recent gains earlier. West Texas Intermediate crude futures, the US benchmark, rose to roughly $90 a barrel. Brent crude, the international benchmark, climbed to $94 a barrel.

    JPMorgan Chase CEO Jamie Dimon said Tuesday in an interview with the Times of India that he is preparing the bank’s clients for a 7% interest rate scenario, further spooking investors.

    The possibility of a government shutdown also looms over Wall Street as the fiscal year’s end on September 30 fast approaches without any spending deal.

    Moody’s warned Monday that such an event could be negative for America’s credit rating, which already saw a downgrade from Fitch earlier this year after the federal government narrowly avoided breaching the debt ceiling.

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  • Americans are feeling gloomier about the economy | CNN Business

    Americans are feeling gloomier about the economy | CNN Business

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    Washington, DC
    CNN
     — 

    Americans aren’t feeling gloomy about higher gas prices just yet, but they’re still on edge about inflation and the economy’s direction — and concerns are starting to surface about the possibility of a government shutdown.

    Consumer sentiment tracked by the University of Michigan edged down in September from the prior month by 1.8 points, according to a preliminary reading released Friday.

    “Both short-run and long-run expectations for economic conditions improved modestly this month, though on net consumers remain relatively tentative about the trajectory of the economy,” said the University of Michigan’s Surveys of Consumers Director Joanne Hsu in a release. “So far, few consumers mentioned the potential federal government shutdown, but if the shutdown comes to bear, consumer views on the economy will likely slide, as was the case just a few months ago when the debt ceiling neared a breach.”

    Sentiment could start to sour soon, since gas prices are highly visible indicators of inflation. Sentiment fell to its lowest level on record last summer when gas prices topped $5 a gallon and inflation reached a four-decade high. The national average for regular gasoline stood at $3.87 a gallon on Friday, according to AAA, seven cents higher than a week ago and 17 cents higher than the same day last year.

    Consumers’ expectation of inflation rates in the year ahead fell to a 3.1% rate in September, down from 3.5% in the prior month.

    This story is developing and will be updated.

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  • US retail spending picked up in August, mostly due to sales at gas stations | CNN Business

    US retail spending picked up in August, mostly due to sales at gas stations | CNN Business

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    Washington, DC
    CNN
     — 

    US retail sales picked in August, boosted by higher gas prices, as spending on other items grew modestly.

    Retail sales, which are adjusted for seasonal swings but not inflation, rose 0.6% in August, the Commerce Department reported Thursday. That’s a slightly faster pace than July’s revised 0.5% gain, and marks the fifth straight month of growth. It’s also well above economists’ expectation of a 0.2% increase.

    The increase was largely driven by spending at gas stations, which advanced 5.2% last month. Spiking oil prices due to OPEC+ production cuts, strong demand and disruption from a deadly flood in Libya have pushed up prices at the pump. The national average for regular gasoline stood at $3.86 a gallon on Thursday, according to AAA, the highest level in 10 months.

    Excluding sales at gasoline stations, retail spending advanced a more modest 0.2% in August from July.

    Retail spending increased across most categories, including at restaurants and grocery stores. Sales of furniture and at specialty stores, such as those that sell sporting goods, fell 1% and 1.6% respectively. Online retail sales in August were flat, after jumping in July due to Amazon’s Prime Day promotional event.

    Despite 11 interest rate hikes from the Federal Reserve intended to cool demand, the US economy remains on strong footing, with American shoppers still doling out cash thanks to a strong job market.

    But after a summer of robust spending, US consumers are facing a number of economic challenges for the rest of the year, including student loan payments restarting and tougher lending standards, which could curb spending.

    “Fitch continues to view the consumer as relatively healthy, supported by low unemployment and somewhat declining goods inflation,” wrote David Silverman, senior director at Fitch Ratings, in an analyst note.

    However, he noted that “headwinds are emerging,” citing lower consumer savings and the resumption of student loan payments this fall.

    The US economy is widely expected to cool in the coming months, and since consumer spending accounts for about two-thirds of economic output, a weaker economy typically means softer spending. But economists don’t expect a recession this year. While Goldman Sachs recently reduced its bet of a US recession, the Wall Street bank still thinks there’s a 15% chance of an economic downturn.

    The job market is also expected to slow, which would include softer wage growth. That could prompt US consumers to pump the brakes on their spending.

    “Slowing labor market gains and softer disposable income growth in the coming months will likely mean ongoing consumer cautiousness. And it appears that consumers are already taking note,” wrote Lydia Boussour, senior economist at EY-Parthenon, in a note.

    However, if inflation slows in the months ahead, that could actually maintain economic activity, since it means consumers have regained some spending power.

    “Encouragingly, falling inflation should continue to provide a tailwind to real wages and avoid a retrenchment in consumer activity,” Boussour added.

    The Consumer Price Index rose 3.7% in August from a year earlier, up from July’s 3.2% rise, largely due to higher gas prices. Economists still expect inflation to cool later in the year, despite volatile energy markets. But gasoline prices are highly visible indicators of inflation, so more pain at the pump could also dampen consumers’ attitudes.

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  • US intel: Ukraine war caused ‘one of the most disruptive periods’ for global food security | CNN Politics

    US intel: Ukraine war caused ‘one of the most disruptive periods’ for global food security | CNN Politics

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    CNN
     — 

    Russia’s invasion of Ukraine caused deep disruptions in the global food supply, raising prices and increasing the risk of food insecurity in poorer nations in the Middle East and North Africa, America’s top spy agency said in an unclassified report released by Congress on Wednesday.

    The direct and indirect effects of the war “were major drivers of one of the most disruptive periods in decades for global food security,” the eight-page report found – in large part because Ukraine and Russia were among the world’s largest pre-war exporters of grain and other agricultural products.

    Although food security concerns have abated since the start of this year, according to the report, the future trajectory of global food prices likely will depend in part on what happens with the Black Sea Grain Initiative, which Russia ended in July. The deal, facilitated by the United Nations, had allowed Ukrainian agricultural shipments to safely exit Black Sea ports and reach the international market.

    How much acreage Ukraine is able to cultivate as the war continues to rage and the cost and availability of fertilizers will also have an impact on global food prices, the report found. Global fertilizer prices reached near-record levels in mid-2022 as global oil and natural gas prices rose.

    “The combination of high domestic food prices and historic levels of sovereign debt in many countries – largely caused by spending and recessionary effects of the COVID-19 pandemic – has weakened countries’ capacity to respond to heightened food insecurity risks,” the report said. “These factors probably will undermine the capacity of many poor countries to provide sufficient and affordable food to their population through the end of the year.”

    Droughts last year in Canada, the Middle East, South America and the United States also compounded the war-related stress on global food supplies, according to the report.

    Intelligence officials have accused Russia in the past of weaponizing food supplies by blocking Ukrainian exports, destroying infrastructure and occupying Ukrainian agricultural land.

    Citing satellite imagery and open-source reporting, the report said that Russia stole nearly 6 million tons of Ukrainian wheat harvested from occupied territories in 2022. Cargo ships used to transport the stolen grain out of Russian-occupied territories in 2022 would steer along the coast of Turkey to deliver shipments to ports in Syria, Israel, Iran, Georgia and Lebanon, the report said.

    “We cannot confirm if the buyers of the Russian cargoes were aware of the grains’ Ukrainian origin,” the report said.

    The report was mandated by the annual intelligence authorization bill and released by the House Intelligence Committee.

    “This report casts light on the war’s broader disruption to global food security and reveals how (Russian President Vladimir) Putin has intentionally used food security and the threat of starvation as a negotiating chip,” committee leaders Reps. Mike Turner and Jim Himes said in a statement. “Russia’s recent refusal to renew the Black Sea Grain Initiative will worsen this crisis, driving vulnerable nations into food shortages that could leave millions struggling to eat.”

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  • Hurricane Idalia and Labor Day could send gas prices and inflation higher | CNN Business

    Hurricane Idalia and Labor Day could send gas prices and inflation higher | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    Labor Day — one of the busiest driving holidays in the US — is on the horizon, and so is Hurricane Idalia. That’s potentially bad news for gas prices.

    The storm, which is expected to make landfall in Florida as a Category 3 hurricane on Wednesday, could bring 100 mile-per-hour winds and flooding that extends hundreds of miles up the east coast. The impact could take gasoline refinery facilities offline and may limit some Gulf oil production and supplies. Plus, demand for gas is expected to surge as residents of the impacted areas evacuate.

    “Idalia… could pose risk to oil and gas output in the US Gulf,” wrote the Nasdaq Advisory Services Energy Team.

    The storm is expected to make landfall as drivers nationwide load into their vehicles for the Labor Day weekend, pushing up the demand for gasoline even further.

    All together it means the price of oil and gasoline could remain elevated well into the fall.

    Generally, summer demand for oil tends to wane in September, but so does supply as refineries shift from summer fuels to “oxygenated” winter fuels, said Louis Navellier of Navellier and Associates. Since the 1990s, the US has required manufacturers to include more oxygen in their gasoline during the colder months to prevent excessive carbon monoxide emissions.

    With the storm approaching, that trend may not play out.

    What’s happening: Gas prices are already at $3.82 a gallon. That’s the second highest price for this time of year since at least 2004, according to Bespoke Investment Group. (The only time the national average has been higher for this period was last summer, when prices hit $3.85 a gallon).

    Geopolitical tensions have been supporting high oil and gas prices for some time. Recently, increased crude oil imports into China, production cuts by Russia and Saudi Arabia and extreme heat set off a late-summer spike in gas prices. And the threat of powerful hurricanes could send them even higher.

    Analysts at Citigroup have warned that this hurricane season could seriously impact power supplies.

    “Two Category 3 or higher hurricanes landing on US shores could massively disrupt supplies for not weeks but months,” Citigroup analysts wrote in a note last week. In 2005, for example, gas prices surged by 46% between Memorial Day and Labor Day because of the landfall of Hurricane Katrina, according to Bespoke.

    What it means: The Federal Reserve and central banks around the world have been fighting to bring down stubbornly high inflation for more than a year. This week we’ll get some highly awaited economic data: The Fed’s preferred inflation gauge, the Personal Consumption Expenditures index, is due out on Thursday. But the task of inflation-busting is a lot more difficult when energy prices are high, and it’s even harder when they’re on the rise.

    The PCE price index uses a complicated formula to determine how much weight to give to energy prices each month, but they typically comprise a significant chunk of the headline inflation rate.

    “Crude oil price remains elevated, even after the surge at the start of the Russia-Ukraine War,” said Andrew Woods, oil analyst at Mintec, a market intelligence firm. “Energy prices have been a major contributor to persistently high inflation in the US, so the crude oil price will remain a watch-out factor for future inflation.”

    High oil and gas prices are one of the largest contributing factors to inflation. That’s bad news for drivers but tends to be great for the energy industry, as oil prices and energy stocks are closely interlinked.

    Energy stocks were trading higher on Monday. The S&P 500 energy sector was up around 0.75%. Exxon Mobil (XOM) was 0.85% higher, BP (BP) was up 1.36% and Chevron (CVX) was up 0.75%.

    OpenAI, will release a version of its popular ChatGPT tool made specifically for businesses, the company announced on Monday.

    OpenAI unveiled the new service, dubbed “ChatGPT Enterprise,” in a company blog post and said it will be available to business clients for purchase immediately.

    The new offering, reports my colleague Catherine Thorbecke, promises to provide “enterprise-grade security and privacy” combined with “the most powerful version of ChatGPT yet” for businesses looking to jump on the generative AI bandwagon.

    “We believe AI can assist and elevate every aspect of our working lives and make teams more creative and productive,” the blog post said. “Today marks another step towards an AI assistant for work that helps with any task, is customized for your organization, and that protects your company data.”

    Fintech startup Block, cosmetics giant Estee Lauder and professional services firm PwC have already signed on as customers.

    The highly-anticipated announcement from OpenAI comes as the company says employees from over 80% of Fortune 500 companies have already begun using ChatGPT since it launched publicly late last year, according to its analysis of accounts associated with corporate email domains.

    A multitude of leading newsrooms, meanwhile, have recently injected code into their websites that blocks OpenAI’s web crawler, GPTBot, from scanning their platforms for content. CNN’s Reliable Sources has found that CNN, The New York Times, Reuters, Disney, Bloomberg, The Washington Post, The Atlantic, Axios, Insider, ABC News, ESPN, and the Gothamist, among others have taken the step to shield themselves.

    American Airlines just got smacked with the largest-ever fine for keeping passengers waiting on the tarmac during multi-hour delays.

    The Department of Transportation is levying the $4.1 million fine, “the largest civil penalty that the Department has ever assessed” it said in a statement, for lengthy tarmac delays of 43 flights that impacted more than 5,800 passengers. The flights occurred between 2018 and 2021, reports CNN’s Gregory Wallace.

    In the longest of the delays, passengers sat aboard a plane in Texas in August 2020 for six hours and three minutes. The 105-passenger flight had landed after being diverted from the Dallas-Fort Worth International Airport due to severe weather, with the DOT alleging that “American (AAL) lacked sufficient resources to appropriately handle several of these flights once they landed.”

    Federal rules set the maximum time that passengers can be held without the opportunity to get off prior to takeoff or after landing, at three hours for domestic flights and four hours for international flights. Current rules also require airlines provide passengers water and a snack.

    American told CNN the delays all resulted from “exceptional weather events” and “represent a very small number of the 7.7 million flights during this time period.”

    The company also said it has invested in technology to better handle flights in severe weather and reduce the congestion at airports.

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  • Climate change has ravaged India’s rice stock. Now its export ban could deepen a global food crisis | CNN Business

    Climate change has ravaged India’s rice stock. Now its export ban could deepen a global food crisis | CNN Business

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    Harayana, India
    CNN
     — 

    Satish Kumar sits in front of his submerged rice paddy in India’s Haryana state, looking despairingly at his ruined crops.

    “I’ve suffered a tremendous loss,” said the third generation farmer, who relies solely on growing the grain to feed his young family. “I will not be able to grow anything until November.”

    The newly planted saplings have been underwater since July after torrential rain battered northern India, with landslides and flash floods sweeping through the region.

    Kumar said he has not seen floods of this scale in years and has been forced to take loans to replant his fields all over again. But that isn’t the only problem he’s facing.

    Last month, India, which is the world’s largest exporter of rice, announced a ban on exporting non-basmati white rice in a bid to calm rising prices at home and ensure food security. India then followed with more restrictions on its rice exports, including a 20% duty on exports of parboiled rice.

    The move has triggered fears of global food inflation, hurt the livelihoods of some farmers and prompted several rice-dependent countries to seek urgent exemptions from the ban.

    More than three billion people worldwide rely on rice as a staple food and India contributed to about 40% of global rice exports.

    Economists say the ban is just the latest move to disrupt global food supplies, which has suffered from Russia’s invasion of Ukraine as well as weather events such as El Niño.

    They warn the Indian government’s decision could have significant market reverberations with the poor in Global South nations in particular bearing the brunt.

    And farmers like Kumar say market price rises caused by poor harvests doesn’t result in a windfall for them either.

    “The ban is going to have an adverse effect on all of us. We won’t get a higher rate if rice isn’t exported,” Kumar said. “The floods were a death blow to us farmers. This ban will finish us.”

    Satish Kumar with whatever is left of his rice crops.

    The abrupt announcement of the export ban triggered panic buying in the United States, following which the price of rice soared to a near 12-year high, according to the United Nations Food and Agriculture Organization.

    It does not apply to basmati rice, which is India’s best-known and highest quality variety. Non-basmati white rice however, accounts for about 25% of exports.

    India wasn’t the first country to ban food exports to ensure enough supply for domestic consumption. But its move, coming just one week after Russia pulled out of the Black Sea grain deal — a crucial pact that allowed the export of grain from Ukraine — contributed to global concerns about the availability of grain staples and whether millions would go hungry.

    “The main thing here is that it is not just one thing,” Arif Husain, chief economist at the United Nations World Food Programme (WFP) told CNN. “[Rice, wheat and corn crops] make up bulk of the food which poor people around the world consume.”

    Workers in India sift through rice grains in capital New Delhi.

    Nepal has seen rice prices surge since India announced the ban, according to local media reports, and rice prices in Vietnam are the highest they have been in more than a decade, according to customs data.

    Thailand, the world’s second largest rice exporter after India, has also seen domestic rice prices jump significantly in recent weeks, according to data from the Thai Rice Exporters Association.

    Countries including Singapore, Indonesia and the Philippines, have appealed to New Delhi to resume rice exports to their nations, according to local Indian media reports. CNN has reached out to India’s Ministry of Agriculture but has not received a response.

    The International Monetary Fund (IMF) has encouraged India to remove the restrictions, with the organization’s chief economist, Pierre-Olivier Gourinchas, telling reporters last month that it was “likely to exacerbate” the uncertainty of food inflation.

    “We would encourage the removal of these types of export restrictions because they can be harmful globally,” he said.

    Now, there are fears that the ban has the world market bracing for similar actions by rival suppliers, economists warn.

    “The export ban is happening at a time when countries are struggling with high debt, food inflation, and declining depreciating currencies,” Husain from the WFP said. “It’s troubling for everyone.”

    Indian farmers account for nearly half of the country’s workforce, according to government data, with rice paddy mainly cultivated in central, southern, and some northern states.

    Summer crop planting typically starts in June, when monsoon rains are expected to begin, as irrigation is crucial to grow a healthy yield. The summer season accounts for more than 80% of India’s total rice output, according to Reuters.

    This year, however, the late monsoon arrival led to a large water deficit up until mid-June. And when the rains finally arrived, it drenched swathes of the country, unleashing floods that caused significant damage to crops.

    The heavy floods have affected the country's farmers.

    Surjit Singh, 53, a third generation farmer from Harayana said they “lost everything” after the rains.

    “My rice crops have been ruined,” he said. “The water submerged about 8-10 inches of my crops. What I planted (in early June) is gone… I will see a loss of about 30%.”

    The World Meteorological Organization last month warned that governments must prepare for more extreme weather events and record temperatures, as it declared the onset of the warming phenomenon El Niño.

    El Niño is a natural climate pattern in the tropical Pacific Ocean that brings warmer-than-average sea-surface temperatures and has a major influence on weather across the globe, affecting billions of people.

    The impact has been felt by thousands of farmers in India, some of whom say they will now grow crops other than rice. And it doesn’t just stop there.

    India's rice stock is piling up as a result of the ban.

    At one of New Delhi’s largest rice trading hubs, there are fears among traders that the export ban will cause catastrophic consequences.

    “The export ban has left traders with huge amounts of stock,” said rice trader Roopkaran Singh. “We now have to find new buyers in the domestic market.”

    But experts warn the effects will be felt far beyond India’s borders.

    “Poor countries, food importing countries, countries in West Africa, they are at the highest risk,” said Husain from the WFP. “The ban is coming on the back of war and a global pandemic… We need to be extra careful when it comes to our staples, so that we don’t end up unnecessarily rising prices. Because those increases are not without consequences.”

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  • US wholesale inflation rose more than expected in July | CNN Business

    US wholesale inflation rose more than expected in July | CNN Business

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    Minneapolis
    CNN
     — 

    US wholesale inflation rose more than expected in July, reversing a yearlong cooling trend, the Bureau of Labor Statistics reported Friday.

    The Producer Price Index, which tracks the average change in prices that businesses pay to suppliers, rose 0.8% annually. That’s above June’s upwardly revised increase of 0.2% and higher than expectations for a 0.7% gain, according to consensus estimates on Refinitiv.

    Producer price hikes increased 0.3% from June to July, the highest monthly increase since January.

    PPI is a closely watched inflation gauge since it captures average price shifts before they reach consumers, and is a proxy for potential price changes in stores.

    Services and demand for services were the primary culprits behind the lift higher for producer prices, said Kurt Rankin, senior economist for PNC Financial Services. Services prices rose 0.5% from June, the highest monthly increase since March 2022 for the category, BLS data shows.

    “The inflation story now, be it for producers or consumers, is demand,” he told CNN. “Mainly that’s consumers still spending money on services.”

    The food index, which had declined for three straight months, rose 0.5% in July, suggesting a 6.3% annualized pace of inflation, he said.

    “Consumers continue to go out and spend money,” Rankin said. “And as long as consumers are spending money, that’s going to create demand from producers, so that’s going to drive up their costs for their raw materials, for their transportation needs, etc.”

    “And they’re going to pass those prices on to consumers,” he added.

    That’s an unpleasant cycle.

    “The numbers over the past six months have been much more encouraging, but it’s a reminder that the Federal Reserve has an eye toward the possibility of inflation flaring up again,” he said.

    The report comes just one day after the Consumer Price Index showed that prices rose 3.2% annually in July. That increase, which was below the 3.3% economists were anticipating, was largely driven by year-over-year comparisons to a softer inflation number the year before.

    Similar base effects played their role in the headline PPI increase as well, noted Rankin.

    The tick upward to 0.8% doesn’t tell the whole story, because the index decreased in five of the previous seven months. Annualizing the 0.3% monthly gain, however, would put the PPI rate at about 3.6% and core at 3.8%, he said.

    “So the July number does suggest that there’s still some producer cost pressures,” he said.

    When stripping out the more volatile categories of food and energy, core PPI rose 2.4% annually in July. That’s in line with what was seen in June but a tick above economists’ expectations for a slight cooling.

    On a month-to-month basis, core PPI increased 0.3%, also the highest monthly gain since January.

    “The underlying trends show that PPI inflation is reverting to its pre-pandemic run rate, though progress is likely to be slower in [the second half of 2023] than [the first half],” Oxford Economics economists Matthew Martin and Oren Klachkin wrote Friday in a note. “While these data will comfort Fed officials, policymakers will likely maintain a hawkish tone and keep a close eye on whether last month’s jump in services prices persists in the months ahead.”

    US stock futures tumbled after the report was released, as the hotter-than-expected data fueled concerns that the Fed could continue to hike rates in order to rein in inflation. The Dow has since pared its losses and is back in the green.

    One month does not make a trend, and this result alone should not trigger a September increase from the Fed, but it certainly could heighten concerns, Rankin said.

    “One spark could reignite this,” he said. “We’re seeing energy prices, oil prices, rising over the past few weeks. Any flareup in oil prices goes straight through to not only manufacturing costs, but transportation of goods to market, even transportation of food to restaurants. So even services, leisure and hospitality get hit when energy prices spike, so that possibility is always there.”

    The PPI’s energy index, which increased 0.7% in June, showed that prices were flat for July.

    “So the fact that energy prices were not a contributor tho this month’s reading makes this number jumping a bit a stark reminder that the Federal Reserve’s fight against inflation and their rhetoric regarding that fight is going to remain hawkish in the near term.”

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  • Inside efforts to avert environmental ‘catastrophe’ in the Red Sea | CNN

    Inside efforts to avert environmental ‘catastrophe’ in the Red Sea | CNN

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    Editor’s Note: A version of this story appears in CNN’s Meanwhile in the Middle East newsletter, a three-times-a-week look inside the region’s biggest stories. Sign up here.



    CNN
     — 

    Moored five miles off the coast of Yemen for more than 30 years, a decaying supertanker carrying a million barrels of oil is finally being offloaded by a United Nations-led mission, hoping to avert what threatened to be one of the world’s worst ecological disasters in decades.

    Experts are now delicately handling the 47-year-old vessel – called the FSO Safer – working to remove the crude without the tanker falling apart, the oil exploding, or a massive spill taking place.

    Sitting atop The Endeavor, the salvage UN ship supervising the offloading, UN Resident and Humanitarian Coordinator for Yemen David Gressly said that the operation is estimated to cost $141 million, and is using the expertise of SMIT, the dredging and offshore contractor that helped dislodge the Ever Given ship that blocked the Suez Canal for almost a week in 2021.

    How to remove one million barrels of oil from a tanker

    Twenty-three UN member states are funding the mission, with another $16 million coming from the private sector contributors. Donors include Yemen’s largest private company, HSA Group, which pledged $1.2 million in August 2022. The UN also engaged in a unique crowdfunding effort, contributing to the pool which took a year to raise, according to Gressly.

    The team is pumping between 4,000 and 5,000 barrels of oil every hour, and has so far transferred more than 120,000 barrels to the replacement vessel carrying the offloaded oil, Gressly said. The full transfer is expected to take 19 days.

    The tanker was carrying a million barrels of oil. That would be enough to power up to 83,333 cars or 50,000 US homes for an entire year. The crude on board is worth around $80 million, and who gets that remains a controversial matter.

    Here’s what we know so far:

    The ship has been abandoned in the Red Sea since 2015 and the UN has regularly warned that the “ticking time bomb” could break apart given its age and condition, or the oil it holds could explode due to the highly flammable compounds in it.

    The FSO Safer held four times the amount of oil spilled by the Exxon Valdez off Alaska in 1989 which resulted in a slick that covered 1,300 miles of coastline. A potential spill from this vessel would be enough to make it the fifth largest oil spill from a tanker in history, a UN website said. The cost of cleanup of such an incident is estimated at $20 billion.

    The Red Sea is a vital strategic waterway for global trade. At its southern end lies the Bab el-Mandeb strait, where nearly 9% of total seaborne-traded petroleum passes. And at its north is the Suez Canal that separates Africa from Asia. The majority of petroleum and natural gas exports from the Persian Gulf that transit the Suez Canal pass through the Bab el-Mandeb, according to the US Energy Information Administration.

    The sea is also a popular diving hotspot that boasts an impressive underwater eco-system. In places its banks are dotted with tourist resorts, and its eastern shore is the site of ambitious Saudi development projects worth hundreds of billions of dollars.

    The first step of the mission was to stabilize and secure the vessel to avoid it collapsing, Gressly said. That has already been achieved in the past few weeks.

    “There are a number of things that had to be done to secure the oil from exploding,” Gressly told CNN, including pumping out gases in each of the 13 compartments holding the oil. Systems for pumping were rebuilt, and some lighting was repaired.

    Booms, which are temporary floating barriers used to contain marine spills, were dispersed around the vessel to capture any potential leaks.

    The second step is to transfer the oil onto the replacement vessel, which is now underway.

    exp Yemen tanker United Nations cnni world 072611ASEG1_00001402.png

    Oil being removed from tanker near Yemen in Red Sea

    After The Safer is emptied, it must then be cleaned to ensure no oil residue is left, Gressly said. The team will then attach a giant buoy to the replacement vessel until a decision about what to do with the oil has been made.

    “The transfer of the oil to (the replacement vessel) will prevent the worst-case scenario of a catastrophic spill in the Red Sea, but it is not the end of the operation,” Gressly said.

    While the hardest part of the operation would then be over, a spill could still occur. And even after the transfer, the tanker will “continue to pose an environmental threat resulting from the sticky oil residue inside the tank, especially since the tanker remains vulnerable to collapse,” the UN said, stressing that to finish the job, an extra $22 million is urgently needed.

    A spill would shut the Yemeni ports that its impoverished people rely on for food aid and fuel, impacting 17 million people during an ongoing humanitarian crisis caused by the country’s civil war and a Saudi-led military assault on the country. Oil could bleed all the way to the African coast, damaging fish stocks for 25 years and affect up to 200,000 jobs, according to the UN.

    A potential spill would cause “catastrophic” public health ramifications in Yemen and surrounding countries, according to a study by researchers at Stanford University School of Medicine. Yemen, Saudi Arabia and Eritrea would bear the brunt.

    Air pollution from a spill of this magnitude would increase the risk of hospitalization for cardiovascular or respiratory disease for those very directly exposed by 530%, according to the study, which said it could cause an array of other health problems, from psychiatric to neurological issues.

    “Given the scarcity of water and food in this region, it could be one of the most disastrous oil spills ever known in terms of impacts on human life,” David Rehkopf, a professor at Stanford University and senior author of the study, told CNN.

    Up to 10 million people would struggle to obtain clean water, and 8 million would have their access to food supplies threatened. The Red Sea fisheries in Yemen could be “almost completely wiped out,” Rehkopf added.

    The tanker has been an issue for many people in Yemen over the past few years, Gressly said. Sentiment on social media surrounding the removal of oil is very positive, as many in Yemen feel like the tanker is a “threat that’s been over their heads,” he said.

    The tanker issue remains a point of dispute between the Houthi rebels that control the north of Yemen and the internationally recognized government, the two main warring sides in the country’s civil conflict.

    While the war, which saw hundreds of thousands of people killed or injured, and Yemen left in ruins, has eased of late, it is far from resolved.

    Ahmed Nagi, a senior analyst for Yemen at the International Crisis Group think tank in Brussels, sees the Safer tanker issue as “an embodiment of the conflict in Yemen as a whole.”

    “The government sees the Houthi militias as an illegitimate group controlling the tanker, and the Houthis do not recognize (the government),” Nagi told CNN.

    The vessel was abandoned after the outbreak of the Yemeni civil war in 2015. The majority of the oil is owned by Yemeni state firm SEPOC, experts say, and there are some reports that it may be sold.

    “From a technical point of view, the owner of the tanker and the oil inside it is SEPOC,” Nagi said, adding that other energy companies working in Yemen may also share ownership of the oil.

    exp un yemen oil spill tanker achim steiner vause intv FST 071912ASEG2 cnni world_00003204.png

    U.N. begins high-risk operation to prevent catastrophic oil spill from Yemen tanker

    The main issue, Nagi added, is that the Safer’s headquarters are in the government-controlled Marib city, while the tanker is in an area controlled by the Houthis. The Safer is moored off the coast of the western Hodeidah province.

    Discussions to determine the ownership of the oil are underway, Gressly said. The rights to the oil are unclear and there are legal issues that need to be addressed.

    The UN coordinator hopes that the days needed to offload the oil will buy some time for “political and legal discussions that need to take place before the oil can be sold.”

    While the UN may manage to resolve half of the issue, Nagi said, there still needs to be an understanding of the oil’s status.

    “It still poses a danger if we keep it near a conflict zone,” he said.

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  • US oil prices sink below $70 on debt ceiling jitters and Russia-Saudi tensions | CNN Business

    US oil prices sink below $70 on debt ceiling jitters and Russia-Saudi tensions | CNN Business

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    New York
    CNN
     — 

    US oil prices dropped below $70 a barrel Tuesday on concerns about whether the debt ceiling deal will make it through Congress and on reports of tensions between Saudi Arabia and Russia ahead of a key OPEC+ meeting.

    Crude slumped 4.4% to close at $69.46 a barrel, the lowest settlement price in nearly four weeks.

    The selloff marks one of the worst days of the year for the oil market and could help keep a lid on pump prices. The national average for a gallon of regular gasoline is down by about $1 from a year ago.

    Oil market veterans blamed Tuesday’s decline in part on worries about whether conservatives in the House of Representatives will try to block the bipartisan deal to raise the debt ceiling forged over the weekend by President Joe Biden and House Speaker Kevin McCarthy.

    “It’s not a layup that the debt deal is going to get done. That’s spooking the market, no doubt about that,” said Robert Yawger, vice president of energy futures at Mizuho Securities.

    Patrick De Haan, head of petroleum analysis at GasBuddy, also pointed to “growing skepticism” about the debt ceiling agreement and the risk that a failure to raise the borrowing limit sets off a “deep recession” that curbs demand for oil.

    Treasury Secretary Janet Yellen has warned the government will not have enough funds to meet all of the nation’s obligations if Congress does not address the debt ceiling by June 5.

    Brent crude, the world benchmark, dropped by more than 4%, slipping below $74 a barrel.

    Meanwhile, there are new questions about the relationship between OPEC leader Saudi Arabia and Russia ahead of this weekend’s meeting of oil producers in Vienna.

    Saudi Arabia has expressed anger to Russia for failing to follow through on Moscow’s promise to cut production in response to Western sanctions, the Wall Street Journal reported, citing sources. The apparent tensions raises uncertainty about the status of OPEC+, the alliance between OPEC members like Saudi Arabia, the United Arab Emirates and Kuwait and non-OPEC nations led by Russia.

    “There is starting to be chatter about the Russian and Saudis not being the best of friends,” said Yawger.

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  • Britain is getting so desperate to tame inflation it’s talking about food price caps | CNN Business

    Britain is getting so desperate to tame inflation it’s talking about food price caps | CNN Business

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    London
    CNN
     — 

    Brits woke up to yet more grim news on inflation Tuesday, with new data showing prices in UK stores are rising at a record pace. It’s the latest sign of a seemingly intractable cost-of-living crisis that has Prime Minster Rishi Sunak considering drastic measures, including price controls, to keep inflation in check.

    The cost of store items, known as shop price inflation, rose 9% through the year to May, a fresh high for an index that dates back to 2005, according to the British Retail Consortium. Food inflation dipped slightly to 15.4% in May, but that’s still the second-highest rate on record.

    Lower energy and commodity costs helped reduce prices of some staples, including butter, milk, fruit and fish. But chocolate and coffee prices are rising as global commodity prices soar, British Retail Consortium CEO Helen Dickinson said.

    The slight drop in food prices will give cold comfort to consumers, and piles the pressure on Sunak, who has promised to halve inflation this year as one of his five pledges to voters.

    The British public “are still wincing when their total comes up at the checkout… a weekly shop that cost £100 last year is now clocking in at £115,” Laura Suter, head of personal finance at stockbroker AJ Bell wrote in a note.

    Poor households are being hit the hardest because they spend more of their disposable income on food. More people are using food banks in the United Kingdom than ever before, eclipsing even the peak of the pandemic.

    The Trussell Trust, the UK’s biggest food bank network, handed out close to 3 million emergency food parcels over the 12 months to March 2023 — a 37% increase on the previous year.

    Even the Bank of England, tasked with keeping inflation at 2%, has been caught off guard by stubbornly high food prices, which seem to have barely responded to 12 successive interest rate hikes.

    Food prices have contributed to keeping inflation “higher than we expected it to be,” Bank of England Governor Andrew Bailey told a Treasury committee hearing last week. “We have a lot to learn about operating monetary policy in a world of big shocks,” he admitted.

    The United Kingdom’s inflation problem is now so dire that Sunak is considering asking retailers to cap the price of essential food items, in a throwback to the 1970s. Back then, governments in the United States and United Kingdom imposed wage and price controls to tame inflation, although the policies weren’t very effective at bringing inflation down and were later dropped.

    Economists say that capping prices encourages companies to produce less of a product, while making it more attractive to consumers. Supply goes down, and demand goes up, with shortages being the inevitable result.

    Price controls distort markets and should only be used “in extreme circumstances,” Neal Shearing, group chief economist at Capital Economics, wrote in a note Tuesday. “The current food price shock does not warrant such an intervention,” he added.

    The Sunday Telegraph was first to report the government’s proposal, which was quickly rejected by retailers.

    Andrew Opie, director of food and sustainability at the British Retail Consortium said controls would not make a “jot of difference” to high food prices, which are the result of soaring energy, transport and labor costs.

    “As commodity prices drop, many of the costs keeping inflation high are now arising from the muddle of new regulation coming from government,” Opie added in a statement. These include tighter rules on recycling and full border controls on food imports from the European Union, due to be implemented by the end of this year.

    According to a government spokesperson, any price caps would not be mandatory. “Any scheme to help bring down food prices for consumers would be voluntary and at retailers’ discretion,” the spokesperson said in a statement shared with CNN.

    Sunak and Finance Minister Jeremy Hunt “have been meeting with the food sector to see what more can be done,” the spokesperson added.

    For Sunak, the pressure is on — particularly ahead of a general election widely expected to be held next year. Inflation was hovering above 10% when he made the promise to halve it in January. It dropped back to 8.7% in April, still well above his target. The Bank of England expects it to fall to “around 5%” by the end of this year, leaving little margin for error.

    According to Opie of the British Retail Consortium, the government should focus on “cutting red tape” rather than “recreating 1970s-style price controls.”

    At the top of the list of burdensome regulations are those introduced as a result of the country’s exit from the European Union, which is its main source of food imports.

    Brexit is responsible for about a third of UK food price inflation since 2019, according to researchers at the London School of Economics.

    New regulatory checks and other border controls added nearly £7 billion ($8.7 billion) to Britain’s domestic grocery bill between December 2019 and March 2023, or £250 ($310) per household, economists at the LSE’s Centre for Economic Performance wrote in a recent paper.

    Food prices rose by almost 25 percentage points over this period. “Our analysis suggests that in the absence of Brexit this figure would be 8 percentage points (30%) lower,” the researchers wrote.

    Imports of meat and cheese from the European Union were now subject to high “non-tariff barriers.”

    — Mark Thompson contributed reporting.

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  • European Union upgrades outlook for economy as energy prices retreat | CNN Business

    European Union upgrades outlook for economy as energy prices retreat | CNN Business

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    London
    CNN
     — 

    Questions swirl about the strength of China’s recovery from Covid lockdowns, and there’s talk of recession in the United States. Yet Europe’s economic prospects have brightened in recent months, according to the European Commission.

    The EU’s executive arm on Monday upgraded its growth outlook for 2023 and 2024. It now expects the EU economy to expand 1% this year, up from an estimate of 0.8% in February. Growth next year is pegged at 1.7%, an upward revision of 0.1 percentage points.

    The improved forecast for Europe — which narrowly dodged a recession this winter — still represents a marked slowdown on last year, when the bloc’s economy grew 3.5%.

    But it reflects sharply lower energy prices, which are reducing costs for businesses and easing the strain on households. A strong job market and ongoing government stimulus are also providing a lift.

    Even so, the Commission acknowledged that higher borrowing costs aimed at taming rising prices will weigh on growth in the months to come. The European Central Bank raised interest rates by a quarter of a percentage point this month, the smallest increase since it started hiking in July, but hinted at further rate hikes to come given stubbornly high inflation.

    “The key factors underpinning this forecast go in opposite directions: on the one hand, declining energy prices and a resilient labor market and, on the other hand, tightening financial conditions,” Paolo Gentiloni, the European Commission’s economy minister, said at a press conference.

    “Heightened risk perception” among banks after recent tumult in the sector is making it harder to access credit, while rising rates are eating into loan demand, Gentiloni noted.

    Significant divergence is also expected among countries in the European Union. Growth in Germany, the bloc’s biggest economy, is expected to slow sharply to 0.2% in 2023. Meanwhile, Italy’s output could increase by 1.2%, and Portugal’s economy could expand by 2.4%.

    Separately, industrial production data for Europe published Monday showed signs of weakness. Production fell 4.1% in March among the 20 countries that use the euro, worse than economists had expected.

    “With the tailwinds from lower energy prices and easing semiconductor shortages apparently exhausted and the economy struggling with tighter monetary policy, we expect industrial output to contract slightly over the rest of the year,” Andrew Kenningham, chief Europe economist at Capital Economics, said in a note to clients.

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  • What the OPEC cuts mean for Putin and Russia | CNN Business

    What the OPEC cuts mean for Putin and Russia | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    Some of the world’s largest oil exporters shocked markets over the weekend by announcing that they would cut oil production by more than 1.6 million barrels a day.

    OPEC+, an alliance between the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC oil-producing countries, including Russia, Mexico, and Kazakhstan, said on Sunday that the cuts would start in May, running through the end of the year. The news sent both Brent crude futures — the global oil benchmark — and WTI — the US benchmark — up about 6% in trading Monday.

    OPEC+ was formed in 2016 to coordinate and regulate oil production and stabilize global oil prices. Its members produce about 40% of the world’s crude oil and have a significant impact on the global economy.

    What it means for Putin: OPEC+’s decision to cut oil production could have big implications for Russia.

    After Russia invaded Ukraine last year, the United States and United Kingdom immediately stopped purchasing oil from the country. The European Union also stopped importing Russian oil that was sent by sea.

    Members of the G7 — an organization of leaders from some of the world’s largest economies: Canada, France, Germany, Italy, Japan, the United Kingdom and the United States — have also imposed a price cap of $60 per barrel on oil exported by Russia, keeping the country’s revenues artificially low. If oil prices continue to rise, some analysts have speculated that the US and other western nations may have to loosen that price cap.

    US Treasury Secretary Janet Yellen said Monday that the changes could lead to reassessing the price cap — though not yet. “Of course, that’s something that, if we’ve decided that it’s appropriate to revisit, could be changed, but I don’t see that that’s appropriate at this time,” she told reporters.

    “I don’t know that this is significant enough to have any impact on the appropriate level of the price cap,” she added.

    Russia also recently announced that it would lower its oil production by 500,000 barrels per day until the end of this year.

    Just last week Putin admitted that western sanctions could deal a blow to Russia’s economy.

    “The illegitimate restrictions imposed on the Russian economy may indeed have a negative impact on it in the medium term,” Putin said in televised remarks Wednesday reported by state news agency TASS.

    Putin said Russia’s economy had been growing since July, thanks in part to stronger ties with “countries of the East and South,” likely referring to China and some African countries.

    Russia, China and Saudi Arabia: The OPEC+ announcement came as a surprise this week. The group had already announced it would cut two million barrels a day in October of 2022 and Saudi Arabia previously said its production quotas would stay the same through the end of the year.

    “The move to reduce supply is fairly odd,” wrote Warren Patterson, head of commodities strategy at ING in a note Monday.

    “Oil prices have partly recovered from the turmoil seen in financial markets following developments in the banking sector,” he wrote. “Meanwhile, oil fundamentals are expected to tighten as we move through the year. Prior to these cuts, we were already expecting the oil market to see a fairly sizable deficit over the second half or 2023. Clearly, this will be even larger now.”

    Saudi Arabia stated that the cut is a “precautionary measure aimed at supporting the stability of the oil market,” but Patterson says it will likely “lead to further volatility in the market,” later this year as less available oil will add to inflationary feats.

    Still, the changes signal shifting global alliances with Russia, China and Saudi Arabia around oil prices, said analysts at ClearView Energy Partners. Higher-priced oil could help Russia pay for its war on Ukraine and also boosts revenue in Saudi Arabia.

    The White House, meanwhile, has spoken out against OPEC’s decision. “We don’t think cuts are advisable at this moment given market uncertainty – and we’ve made that clear,” National Security Council spokesman John Kirby said Monday.

    – CNN’s Paul LeBlanc and Hanna Ziady contributed to this report

    The crisis triggered by the recent collapses of Silicon Valley Bank and Signature Bank is not over yet and will ripple through the economy for years to come, said JPMorgan Chase CEO Jamie Dimon on Tuesday.

    In his closely watched annual letter to shareholders, the chief executive of the largest bank in the United States outlined the extensive damage the financial system meltdown had on all banks and urged lawmakers to think carefully before responding with regulatory policy.

    “These failures were not good for banks of any size,” wrote Dimon, responding to reports that large financial institution benefited greatly from the collapse of SVB and Signature Bank as wary customers sought safety by moving billions of dollars worth of money to big banks.

    In a note last month, Wells Fargo banking analyst Mike Mayo wrote “Goliath is winning.” JPMorgan in particular, he said, was benefiting from more deposits “in these less certain times.”

    “Any crisis that damages Americans’ trust in their banks damages all banks – a fact that was known even before this crisis,” said Dimon. “While it is true that this bank crisis ‘benefited’ larger banks due to the inflow of deposits they received from smaller institutions, the notion that this meltdown was good for them in any way is absurd.”

    The failures of SVB and Signature Bank, he argued, had little to do with banks bypassing regulations and that SVB’s high Interest rate exposure and large amount of uninsured deposits were already well-known to both regulators and to the marketplace at large.

    Current regulations, Dimon argued, could actually lull banks into complacency without actually addressing real system-wide banking issues. Abiding by these regulations, he wrote, has just “become an enormous, mind-numbingly complex task about crossing t’s and dotting i’s.”

    And while regulatory change will be a likely outcome of the recent banking crisis, Dimon argued that, “it is extremely important that we avoid knee-jerk, whack-a-mole or politically motivated responses that often result in achieving the opposite of what people intended.” Regulations, he said, are often put in place in one part of the framework but have adverse effects on other areas and just make things more complicated.

    The Federal Deposit Insurance Corporation has said it will propose new rule changes in May, while the Federal Reserve is currently conducting an internal review to assess what changes should be made. Lawmakers in Congress, like Democratic Sen. Sherrod Brown, have suggested that new legislation meant to regulate banks is in the works.

    But, wrote Dimon, “the debate should not always be about more or less regulation but about what mix of regulations will keep America’s banking system the best in the world.”

    Dimon’s letter to shareholders touched on a number of pressing issues, including climate change. “The window for action to avert the costliest impacts of global climate change is closing,” he wrote, expressing his frustration with slow growth in clean energy technology investments.

    “Permitting reforms are desperately needed to allow investment to be done in any kind of timely way,” he wrote.

    One way to do that? “We may even need to evoke eminent domain,” he suggested. “We simply are not getting the adequate investments fast enough for grid, solar, wind and pipeline initiatives.”

    Eminent domain is the government’s power to take private property for public use, so long as fair compensation is provided to the property owner.

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  • Oil prices surge after OPEC+ producers announce surprise cuts | CNN Business

    Oil prices surge after OPEC+ producers announce surprise cuts | CNN Business

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    Hong Kong/Atlanta
    CNN
     — 

    Oil prices spiked during Asian trade Monday after OPEC+ producers said they would cut production in a surprise move.

    Brent crude, the global benchmark, jumped 4.8% to $83.73 a barrel, while WTI, the US benchmark, rose 4.9% to $79.36.

    Rising oil prices could mean inflation remains higher for longer, adding pressure to a hot-button issue for consumers around the world.

    On Sunday, Saudi Arabia announced that it would start “a voluntary reduction” in its production of crude oil, alongside other members or allies of the Organization of the Petroleum Exporting Countries (OPEC).

    The cuts will start in May and last through the end of the year, an official with the Saudi Ministry of Energy was quoted as saying by Saudi state-run news agency SPA.

    The reductions are on top of those announced by OPEC+ in October, according to SPA.

    That month, oil producers had agreed to slash output by 2 million barrels a day, the largest cut since the start of the pandemic and equivalent to about 2% of global oil demand.

    Saudi Arabia now says it will cut oil production by another half a million barrels a day.

    Meanwhile, Iraq will slash production by 200,000 barrels per day, and the United Arab Emirates will decrease output by 144,000 barrels per day.

    Kuwait, Algeria and Oman will also lower production by 128,000, 48,000 and 40,000 barrels per day, respectively.

    In a Sunday note, Goldman Sachs analysts said the move was unexpected but “consistent with the new OPEC+ doctrine to act pre-emptively because they can without significant losses in market share.”

    The collective output cut by the nine members of OPEC+ totals 1.66 million barrels per day, said the analysts, who hiked their price forecast for Brent this year to $95 per barrel.

    Saudi Arabia’s energy ministry described its latest reduction as a precautionary measure aimed at supporting the stability of the oil markets, according to SPA.

    The White House pushed back on that notion — as well as the latest cuts by OPEC+.

    “We don’t think cuts are advisable at this moment given market uncertainty — and we’ve made that clear,” a spokesperson for the National Security Council said. “We’re focused on prices for American consumers, not barrels.”

    In October, OPEC+’s decision to cut production had already rankled the White House.

    US President Joe Biden pledged at the time that Saudi Arabia would suffer “consequences.” But so far, his administration appears to have back off on its vows to punish the Middle East kingdom.

    Russia, a member of OPEC+, also said Sunday that it would extend a voluntary reduction of 500,000 barrels per day until the end of 2023. The move was announced by Russian Deputy Prime Minister Alexander Novak, as cited by state-run news agency TASS.

    That decision was less surprising. Goldman analysts said they had forecast the cut would last into the second half of the year.

    — CNN’s Hanna Ziady and Arlette Saenz contributed to this report.

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  • Key inflation gauge in Europe hits record high even as overall price rises slow sharply | CNN Business

    Key inflation gauge in Europe hits record high even as overall price rises slow sharply | CNN Business

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    London
    CNN
     — 

    Inflation in Europe has fallen to its slowest pace in more than a year, though stark signs of persistent underlying pressure on prices will complicate policymakers’ next move on borrowing costs.

    Prices in the 20 countries that use the euro rose 6.9% this month compared with a year ago, the European Union’s statistics agency said Friday.

    That’s a sharp decline from 8.5% in February and the lowest inflation rate since February 2022, when Russia launched its full-scale invasion of Ukraine, sending energy prices soaring. The pullback in inflation this month was driven by a 0.9% year-on-year fall in energy prices.

    But the latest data includes evidence of lingering upward pressure on prices. The price of food, alcohol and tobacco climbed 15.4% year over year, up from 15% in February. And prices for services rose 5%, up from 4.8%.

    More worryingly, core inflation — a measure that strips out volatile food and energy prices — ticked up to 5.7% in March from 5.6% in February, reaching a new record high.

    That is likely to create a headache for policymakers at the European Central Bank, who have been hiking borrowing costs aggressively. They have had to balance the need to tame inflation with limiting stress to the economy. The recent turmoil in the banking sector has also underscored the dangers that rapid interest rate rises pose to some lenders and to the wider financial system.

    Europe’s economic growth is also at risk from emerging efforts by banks to conserve cash following the failure of Silicon Valley Bank in the United States and the downfall of Credit Suisse, which could make it more expensive to take out loans.

    Stubbornly high core inflation makes it harder for the ECB to judge whether it has done enough to rein in inflation.

    “Descending headline inflation thanks to cooling energy prices will not be enough for the ECB to stop tightening, as policymakers are looking for clear signs of core inflation easing,” Riccardo Marcelli Fabiani of Oxford Economics said in a note to clients.

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