Tag: Oil and gas industry

Stocks end higher on Wall Street as earnings roll in

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NEW YORK — Wall Street notched more gains Tuesday, as major stock indexes rallied for the third day and Treasury yields fell again.

The S&P 500 rose 1.6%, with roughly 90% of stocks in the index notching gains. The benchmark index hadn’t been able to string together more than two gains in a row since mid-September.

The Dow Jones Industrial Average rose 1.1% and the Nasdaq closed 2.3% higher. Smaller company stocks outpaced the broader market, lifting the Russell 2000 index 2.7% higher.

The latest gains came as bond yields fell significantly, reflecting speculation among investors that the Federal Reserve may begin easing up on its aggressive pace of interest rate increases as soon as this year.

The yield on the 10-year Treasury, which impacts mortgage rates, slipped to 4.09% from 4.23% late Monday. The yield on the two-year Treasury, which tracks Federal Reserve action, fell to 4.45% from 4.50% late Monday.

“It seems like the market is saying that they think perhaps longer-term yields have peaked, and that’s providing some optimism to the (stock) market,” said Randy Frederick, managing director of trading & derivatives at Charles Schwab.

The S&P 500 rose 61.77 points to 3,859.11. The Dow added 337.12 points to close at 31,836.74. The Nasdaq gained 246.50 points at 11,199.12. The Russell 2000 picked up 47.76 points, closing at 1,796.16.

Technology stocks, retailers and communication companies were among the biggest drivers of Tuesday’s rally. Traders were sizing up a heavy round of earnings reports from big U.S. companies.

General Motors rose 3.6% after delivering solid results. United Parcel Service initially rose, but then slipped 0.3% after the package delivery service beat Wall Street’s third-quarter earnings and revenue forecasts. Paint maker Sherwin-Williams jumped 3.6% after also reporting solid financial results.

Packaging maker Crown Holdings fell 16.8% after its latest earnings fell short of estimates. Industrial conglomerate General Electric fell 0.5% after reporting weak third-quarter earnings.

Many other big names are on deck to report earnings throughout the week. Boeing, Ford and Facebook’s parent company will report results on Wednesday. Caterpillar, Apple and Amazon are among the big companies reporting results on Thursday.

Outside of earnings, barbecue grill maker Weber soared 30.4% after it said BDT Capital Partners is interested in buying the rest of the company. Adidas fell 2.4% after the German sportswear company ended its partnership with the rapper formerly known as Kanye West over his offensive and antisemitic remarks.

The latest round of earnings reports are particularly important for investors looking for indications of inflation’s impact on various industries. Prices on everything from clothing to food remain at their highest levels in four decades, putting pressure on companies to raise prices and cut costs, while squeezing consumers.

The Federal Reserve and central banks around the world have been raising interest rates to tame inflation. That has investors concerned about the central bank going too far in trying to slow the economy and instead causing a recession.

The Fed is expected to raise interest rates another three-quarters of a percentage point at its upcoming meeting in November. But traders have grown more confident that the Fed will dial down to a more modest increase of 0.50 percentage points in December, according to CME Group.

Markets have been looking for any sign that the central bank is ready to ease up on rate increases. That includes data that the economy is slowing.

A measure of home prices released on Tuesday showed that the housing market continues to cool. The S&P CoreLogic Case-Shiller Index, which tracks prices in major cities, fell more than expected in August. The Fed’s aggressive interest rate increases have been making borrowing more expensive, in turn driving mortgage rates higher and crimping the broader housing market.

The U.S. economy is already slowing down and actually contracted during the first half the year. The government will release its third-quarter gross domestic product report on Thursday.

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Elain Kurtenbach, Matt Ott and Joe McDonald contributed to this report.

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October 25, 2022
US sued over lack of protection plan for rare grouse

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ALBUQUERQUE, N.M. — An environmental group is suing U.S. wildlife managers, saying they have failed to protect a rare grouse found in parts of the Midwest that include one of the country’s most prolific areas for oil and gas development.

A lawsuit filed Tuesday by the Center for Biological Diversity says the U.S. Fish and Wildlife Service is nearly five months late in releasing a final rule outlining protections for the lesser prairie chicken.

Once listed as a threatened species, the prarie chicken’s habitat spans parts of New Mexico, Colorado, Texas, Oklahoma and Kansas — including a portion of the oil-rich Permian Basin that straddles the New Mexico-Texas state line.

Environmentalists have been pushing to reinstate federal protections for years. They consider the species severely threatened, citing lost and fragmented habitat as the result of oil and gas development, livestock grazing, farming and the building of roads and power lines.

The Fish and Wildlife Service in 2021 proposed listing the southern population in New Mexico and the southern reaches of the Texas Panhandle as endangered and those birds in the northern part of the species’ range as threatened. The agency had a deadline of June 1.

“The oil and gas industry has fought for decades against safeguards for the lesser prairie chicken, and the Fish and Wildlife Service is late issuing its final rule,” said Michael Robinson, a senior conservation advocate with the environment group. “The agency has slow-walked every step, and these imperiled birds keep losing more habitat.”

The Fish and Wildlife Service on Tuesday cited its policy for not commenting on pending litigation.

The species was once thought to number in the millions. Now, surveys show, the five-year average population across the entire range hovers around 30,000 individual birds.

Landowners and the oil and gas industry say they have had success with voluntary conservation programs aimed at protecting habitat and boosting the bird’s numbers. The Western Association of Fish and Wildlife Agencies, which oversees the conservation effort, has yet to report the results of the 2022 survey done earlier this year.

With a listing under the Endangered Species Act, officials have said that landowners and oil companies already participating in the voluntary conservation programs wouldn’t be affected because they already are taking steps to protect habitat. However, a listing would prevent any activities that result in the loss or degradation of existing habitat.

The species’ regulatory history dates to an initial petition for protection in 1995.

A little smaller and lighter in color than the greater prairie chicken, the lesser prairie chicken is known for spring courtship rituals that include flamboyant dances by the males and a cacophony of clucking.

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October 25, 2022
Report: Norway detains university lecturer as suspected spy

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COPENHAGEN, Denmark — Norway’s domestic security agency has detained a man who entered the country as a Brazilian citizen but is suspected of being a Russian spy, a Norwegian broadcaster reported Tuesday.

The man was arrested Monday in the Arctic city of Tromsoe, Norwegian public broadcaster NRK said, adding that investigators believe he was in Norway under a false name and identity while working for one of Russia’s intelligence services.

Norwegian Police Security Service deputy chief Hedvig Moe told NRK that the man had been based at the Arctic University of Norway in Tromsoe as “a Brazilian researcher” and would be expelled from the Scandinavian country “because we believe he represents a threat to fundamental national interests.”

The security service, known as PST, “is concerned that he may have acquired a network and information about Norway’s policy in the northern region,” Moe said, according to NRK. “Even if this network or the information bit by bit is a threat to the security of the kingdom, we are worried that the information could be misused by Russia.”

PST representatives were not immediately available to comment. In a statement, Arctic University of Norway administrator Jørgen Fossland said the person in question was “a guest lecturer” at the school. Fossland referred other questions to the security service.

Several Russian citizens have been detained in Norway in recent weeks. They include three men and a woman who were seen allegedly taking photos in central Norway of objects covered under a photography ban. They have since been released.

European nations have heightened security around key energy, internet and power infrastructure following underwater explosions that ruptured two natural gas pipelines in the Baltic Sea that were built to deliver Russian gas to Germany.

The damaged Nord Stream pipelines off Sweden and Denmark discharged huge amounts of methane, a potent greenhouse gas, into the air.

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October 25, 2022
Inflation protests across Europe threaten political turmoil

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LONDON — In Romania, protesters blew horns and banged drums to voice their dismay over the rising cost of living. People across France took to the streets to demand pay increases that keep pace with inflation. Czech demonstrators rallied against government handling of the energy crisis. British railway staff and German pilots held strikes to push for better pay as prices rise.

Across Europe, soaring inflation is behind a wave of protests and strikes that underscores growing discontent with the spiraling cost of living and threatens to unleash political turmoil. With British Prime Minister Liz Truss forced to resign less than two months into the job after her economic plans sparked chaos in financial markets and further bruised an ailing economy, the risk to political leaders became clearer as people demand action.

Europeans have seen their energy bills and food prices soar because of Russia’s war in Ukraine. Despite natural gas prices falling from record summer highs and governments allocating a whopping 576 billion euros (over $566 billion) in energy relief to households and businesses since September 2021, according to the Bruegel think tank in Brussels, it’s not enough for some protesters.

Energy prices have driven inflation in the 19 countries that use the euro currency to a record 9.9%, making it harder for people to buy what they need. Some see little choice but to hit the streets.

“Today, people are obliged to use pressure tactics in order to get an increase” in pay, said Rachid Ouchem, a medic who was among more than 100,000 people that joined protest marches this week in multiple French cities.

The fallout from the war in Ukraine has sharply raised the risk of civil unrest in Europe, according to risk consultancy Verisk Maplecroft. European leaders have strongly supported Ukraine, sending the country weapons and pledging or being forced to wean their economies off cheap Russian oil and natural gas, but the transition hasn’t been easy and threatens to erode public support.

“There’s no quick fix to the energy crisis,” said Torbjorn Soltvedt, an analyst at Verisk Maplecroft. “And if anything, inflation looks like it might be worse next year than it has been this year.”

That means the link between economic pressure and popular opinion on the war in Ukraine “will really be tested,” he said.

In France, where inflation is running at 6.2%, the lowest in the 19 eurozone countries, rail and transport workers, high school teachers and public hospital employees heeded a call Tuesday by an oil workers’ union to demand salary increases and protest government intervention in strikes by refinery workers that have caused gasoline shortages.

Days later, thousands of Romanians joined a Bucharest rally to protest the cost of energy, food and other essentials that organizers said were sending millions of workers into poverty.

In the Czech Republic, huge flag-waving crowds in Prague last month demanded the pro-Western coalition government resign, criticizing its support of European Union’s sanctions against Russia. They also slammed the government for not doing enough to help households and businesses squeezed by energy costs.

While another protest is scheduled in Prague next week, the actions have not translated to political change so far, with the country’s ruling coalition winning a third of the seats in Parliament’s upper house during an election this month.

British rail workers, nurses, port workers, lawyers and others have staged a string of strikes in recent months demanding pay raises that match inflation running at a four-decade high of 10.1%.

Trains ground to a halt during the transit actions, while recent strikes by Lufthansa pilots in Germany and other airline and airport workers across Europe seeking higher pay in line with inflation have disrupted flights.

Truss’ failed economic stimulus plan, which involved sweeping tax cuts and tens of billions of pounds (dollars) in aid for household and businesses’ energy bills without a clear plan to pay for them, illustrates the bind that governments are in.

They “have very little room for maneuver,” Soltvedt said.

So far, the saving grace has been a milder than usual October in Europe, which means less demand for gas to heat homes, Soltvedt said.

However, “if we do end up with unexpected disruption to the supply of gas from Europe this winter, then, you know, we’ll probably see an even further increase in civil unrest, risk and government instability,” he said.

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October 22, 2022
Cash is king for sanctioned Russian, Venezuelan oligarchs

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MIAMI — It was a deal that brought together oligarchs from some of America’s top adversaries.

“The key is the cash,” the oil broker wrote in a text message, offering a deep discount on Venezuelan crude shipments to an associate who claimed to be fronting for the owner of Russia’s biggest aluminum company. “As soon as you are ready with cash we can work.”

The communication was included in a 49-page indictment unsealed Wednesday in New York federal court charging seven individuals with conspiring to purchase sensitive U.S. military technology, smuggle oil and launder tens of millions of dollars on behalf of wealthy Russian businessmen.

The frank talk among co-defendants reads like a how-to guide on circumventing U.S. sanctions — complete with Hong Kong shell companies, bulk cash pick ups, phantom oil tankers and the use of cryptocurrency to cloak transactions that are illicit under U.S. law

It also shines a light on how wealthy insiders from Russia and its ally Venezuela, both barred from the western financial system, are making common cause to protect their massive fortunes.

At the center of the alleged conspiracy are two Russians: Yury Orekhov, who used to work for a publicly-traded aluminum company sanctioned by the U.S., and Artem Uss, the son of a wealthy governor allied with the Kremlin.

The two are partners in a Hamburg, Germany-based company trading in industrial equipment and commodities. Prosecutors allege the company was a hub for skirting U.S. sanctions first imposed against Russian elites following the 2014 invasion of Crimea. Both were arrested, in Germany and Italy respectively, on U.S. charges including conspiracy to violate sanctions, money laundering and bank fraud.

On the other end of the deal was Juan Fernando Serrano, the CEO of a commodities trading startup known as Treseus with offices in Dubai, Italy and his native Spain. His whereabouts are unknown.

In electronic communications among the men last year, each side boasted of connections to powerful insiders.

“This is our mother company,” Orehkov wrote to Serrano, pasting a link to the aluminum company’s website and a link to the owner’s Wikipedia page. “He is under sanctions as well. That’s why we (are) acting from this company.”

Serrano, not to be outdone, responded that his partner was also sanctioned.

“He is one of the influence people in Venezuela. Super close to the Vice President,” he wrote, posting a link showing search results for a Venezuelan lawyer and businessman who is currently wanted by the U.S. on money laundering and bribery charges.

Neither alleged partner was charged in the case nor are they identified by name in the indictment. Additionally, it’s not clear what ties, if any, Serrano really has to the Venezuelan insider he cited.

But the description of the Russian billionaire matches that of Oleg Deripaska, who was charged last month in a separate sanctions case in New York. Some of the proceeds he allegedly funneled to the U.S. were to support a Uzbekistani track and field Olympic athlete while she gave birth to their child in the U.S.

Meanwhile, the Venezuelan is media magnate Raul Gorrin, according to someone close to U.S. law enforcement who spoke on condition of anonymity to discuss an ongoing investigation. Gorrin remains in Venezuela and is on the U.S. Immigration and Customs Enforcement’s most-wanted list for allegedly masterminding a scheme to siphon $1.2 billion from PDVSA, Venezuela’s state oil company.

A U.S.-based attorney for Deripaska didn’t respond to requests for comment. Gorrin declined to comment but has rejected other criminal charges against him as politically motivated.

While U.S. sanctions on Venezuelan oil apply only to Americans, many foreign entities and individuals with business in the U.S. stay away from transactions involving the OPEC nation for fear of being sanctioned themselves.

For that same reason, Venezuela’s oil sells at a deep discount — about 40% less than the market price, according to the indictment. But such choice terms require some unorthodox maneuvering.

For example, instead of instantly wiring funds through Western banks, payment has to take a more circuitous route.

In one transaction this year cited in the indictment — the $33 million purchase of a tanker full of Venezuelan fuel oil — the alleged co-conspirators discussed channeling payments from a front company in Dubai, named Melissa Trade, to shell accounts in Hong Kong, Australia and England. To hide the transaction, documents were allegedly falsified to describe the cargo as “whole green peas” and “bulky paddy rice.”

But as is often the case in clandestine transactions, cash appears to have been king.

“Your people can go directly to PDVSA with one of my staff and pay directly to them. There are 550,000 barrels … to load on Monday,” Serrano wrote Orekhov in a November 2021 message.

There was also discussion of dropping off millions in cash at a bank in Moscow, Evrofinance Mosnarbank, which is owned by PDVSA. It was a major conduit for trade with Russia until it too was hit with U.S. sanctions in 2019. The two defendants also contemplated a possible mirror transaction whereby cash delivered to a bank in Panama would be paid out the same day at a branch of the same unnamed institution in Caracas, Venezuela’s capital.

But Orekhov’s preferred method of payment appears to be Tether, a cryptocurrency that purports to be pegged to more stable currencies like the U.S. dollar.

“It’s quicker than telegraphic transfer,” Orekhov wrote regarding a planned purchase of 500,000 barrels of oil worth $17 million. “That’s why everyone does it now. It’s convenient, it’s quick.”

It’s not just financial transactions that are a challenge however. Delivering the crude presents its own risk because most shipping companies and insurers won’t do business with Venezuela and other sanctioned entities. In recent years, the U.S. government has seized several tankers suspected of transporting Iranian fuel heading for Venezuela.

To obscure the oil’s origins, Orekhov and Serrano discussed instructing the Vietnamese tanker they were using to turn off its mandatory tracking system to avoid being spotted while loading in “Disneyland” — a coded reference to Venezuela.

While the vessel isn’t identified by name in the indictment, internal PDVSA shipping documents seen by The Associated Press show that it was the Melogy, a two-decade old tanker owned and operated by a Hanoi-based company called Thank Long Gas Co.

Ship tracking data collected by Marine Traffic shows that the Melogy went “dark” on Dec. 31, 2021, as it was drifting empty off the coast of Venezuela near neighboring Trinidad & Tobago. Almost four months later, on April 18, it resumed transmissions, its hull now fully laden and steaming toward Asia.

On June 9, the ship then transferred its cargo at sea to a floating storage ship, the Harmony Star, off the coast of Malaysia, satellite images show. That same vessel has been identified as being part of a wider oil smuggling network helping Iran, according to research by the United Against Nuclear Iran, a New York-based group the closely tracks crude shipments by sanctioned countries.

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Joshua Goodman on Twitter: @APJoshGoodman

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October 20, 2022
Biden’s quiet campaign season brings him back to familiar territory in Pennsylvania | CNN Politics

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CNN
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When President Joe Biden visited Pennsylvania on Thursday, he touted infrastructure investments that helped rebuild a collapsed bridge and raised campaign cash away from cameras with the state’s Democratic Senate candidate.

Where he didn’t appear was a campaign rally stage.

Three weeks before November’s elections, Biden’s visit to Pittsburgh and Philadelphia neatly demonstrated a political strategy focused on promoting his agenda and talking with donors rather than headlining stump speeches alongside vulnerable Democrats.

He has been a frequent visitor to Pennsylvania, where Democratic Lt. Gov. John Fetterman holds a narrow lead in his race against Republican Dr. Mehmet Oz in the US Senate race. Trading his trademark sweatshirt and basketball shorts for a dark suit and tie, Fetterman greeted Biden at the airport alongside his wife.

“You’re gonna win!” Biden said as he shook the candidate’s hand.

Biden has visited the commonwealth nine times this year, including Thursday’s visit, and 18 times since he became president.

“I’m a proud Delawarean, but Pennsylvania’s my native state. It’s in my heart. I can’t tell you how much it means to me to be part of rebuilding this beautiful state,” Biden said. “My Grandfather Finnegan from Scranton would really be proud of me now.”

Still, despite the fondness, Biden’s visit was relatively low-key for a presidential stop weeks ahead of a critical midterm contest. He did not hold a rollicking campaign rally, opting for a smaller profile event with several dozen officials and workers from the bridge project.

Biden’s approach borne out of political reality: While many of Biden’s accomplishments have been well-received by voters – and, in some cases, embraced by Republicans who voted against them – Biden himself remains unpopular and some Democrats continue to keep their distance as the midterm contests grow near.

Departing the White House on Thursday, Biden bristled when asked why more Democrats weren’t joining him for political events.

“That’s not true,” Biden said. “There have been 15. Count, kid, count.”

Later, as he and Fetterman dropped by a Primanti Bros. sandwich shop near Pittsburgh, he told reporters he’d been requested to visit Nevada and Georgia, two states with tight Senate races.

“We’re trying to work it out now,” he said. “I don’t know where I’m going. I’ve got about 16, 18 requests around the country.”

Over the past weeks, Biden has worked to expand his list of achievements using executive power, including pardoning low-level marijuana offenders, canceling some student loan debt, reducing the cost of hearing aids and declaring a World War II training site a national monument.

This week alone, he promised to sign a bill enshrining abortion rights into law if Democrats gain seats, outlined billions of dollars to invest in domestic battery manufacturing and released another 15 million barrels of oil from the nation’s strategic reserves as he works to bring down gas prices.

Biden denied the oil announcement was politically motivated.

“I’ve been doing this for how long now? It’s not politically motivated at all,” he said. “It’s motivated to make sure that I continue to push on what I’ve been pushing on.”

Yet the timing of the release nonetheless came as Biden’s party looks with growing concern at the prospect of losing its congressional majorities next year, and the White House searches for steps to appeal to Americans.

In Pittsburgh, the President spoke at the Fern Hollow Bridge, a four-lane steel span that collapsed into a snowy ravine in January. Biden happened to be visiting the city that day to speak about infrastructure, and the presidential motorcade made a detour to view the damage.

“A complete catastrophe was avoided but it never should have come to this,” Biden said on Thursday. The President noted how quickly the bridge was bring rebuilt and said that while it wasn’t funded by his bipartisan infrastructure law, it was completely funded by the federal government.

Biden said that “God willing” the bridge will be completely open in December, telling the audience: “I’m coming back to walk over this sucker.”

Biden was joined by a slew of top Pennsylvania elected officials, most notably Fetterman, who is locked in one of the most closely watched midterm contests. Biden is also scheduled to join Fetterman later on Thursday for a fundraiser in Philadelphia.

While the bridge’s reconstruction wasn’t directly funded by the bipartisan infrastructure law, a White House official said funding from the law allowed Pennsylvania’s Transportation Department “to move funds quickly to support this project, without having to slow down or interfere with other projects in the pipeline.”

The rebuilding was funded through $25.3 million in federal funding appropriated to Pennsylvania in Fiscal Year 2021, the White House official said.

The law allocated $40 billion toward bridge projects over five years. Since last October, repairs or replacements have begun on more than 2,400 bridges through funding from the infrastructure law, according to the White House.

That measure has emerged as a central talking point for Biden during this year’s midterms. Candidates who might think twice about holding a political rally with Biden have seemed eager to appear alongside him at official events heralding improvements on rail lines, airport terminals or bridges. The President has hammered Republicans who voted against the bill but have nonetheless taken credit for projects made possible by the $1.2 trillion law.

In planning Biden’s recent travel, including political events and official White House duties, his advisers have taken into account the sensitive political reality that some Democratic candidates in tough races would prefer he not visit their district or state in the final stretch to the midterms.

But one Democratic official familiar with the White House’s thinking said an important overarching dynamic is that even the candidates who would rather not appear alongside Biden are still eager to run on his legislative accomplishments, describing it as a “halfsies” situation.

“There are some campaigns that don’t want him to physically campaign in his state,” the official said. “But – people are running on his agenda.”

Given the string of legislative victories that Biden’s party scored in the first half of the Biden administration – including the bipartisan infrastructure bill – even the events that are technically billed official White House business are effectively no different from political events these days, that official noted.

“Every event is political now,” they said.

Biden remains eager to visit key battlegrounds, according to his aides. Earlier this year, he voiced some frustration that more Democrats weren’t lining up to use him on the campaign trail.

Now, Biden has settled into a midterm push that has him traveling mostly to states he won in 2020 while avoiding certain marquee races where his presence could be a drag on Democratic candidates.

Other Democrats appear more welcome. Former President Barack Obama will hold campaign rallies for Democrats in Atlanta, Detroit and Milwaukee in the days before the elections. Sen. Bernie Sanders, the independent Vermont democratic socialist, will visit battleground states on a tour targeted to younger voters.

The White House is working closely with the Senate and House campaign committees and will send the President where he could be helpful, aides said, and will avoid traveling to areas where nationalizing the race would be seen as a detriment to candidates.

The logistics of presidential travel also complicate some travel, aides said, because campaigns must help foot the expensive costs of Air Force One.

Still, at similar stages in their terms, Obama and former President Donald Trump were engaging in more traditional campaign-style events for candidates ahead of midterm elections, despite questions about dragging down candidates.

Both saw their party lose unified control of Congress in their first midterm elections, a historical precedent Biden hopes to break – even as he avoids big political events.

The White House has defended Biden’s travel plans, insisting he is traveling “nonstop” and intends to visit states “where he is needed” in the run-up to the vote.

Still, in the weeks ahead of the midterms, Biden continues to spend most weekends at his homes in Delaware, including last weekend in Wilmington and this weekend in Rehoboth Beach.

On Friday, he’ll stop at Delaware State University to tout his efforts at student debt forgiveness, before heading to his beach house. This week, the debt relief program Biden announced earlier this year went online, with millions applying to have some or all of their loans forgiven.

In one of his previous trips to campaign in Pennsylvania, on Labor Day, Biden appeared before a small crowd with Fetterman at a union picnic in Pittsburgh. When the two men emerged from the union hall together, Fetterman raised his arms and pumped his fists.

But when Fetterman spoke ahead of Biden, he used the opportunity to lambast his Republican opponent for owning multiple homes – without mentioning the President at all.

During a 15-minute private meeting beforehand, Fetterman pushed Biden to begin the process of rescheduling marijuana, one of his top issues.

A few weeks later, the White House said Biden would issue pardons for federal simple marijuana possession offenses and task members of his administration to “expeditiously” review how marijuana is scheduled under federal law, the first step toward potentially easing a federal classification that currently places marijuana in the same category as heroin and LSD.

Biden himself has only mentioned the decision in passing. But Fetterman hailed the move and was quick to cite his conversation with Biden after the White House made the announcement.

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October 20, 2022
Global stocks lower amid British political turmoil

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BANGKOK — Global stock markets declined Thursday as the British prime minister faced demands to quit and Japan reported its 14th straight monthly trade deficit.

London and Frankfurt opened lower and Shanghai, Tokyo and Hong Kong declined. Oil rose more than $1 per barrel.

British Prime Minister Liz Truss faced demands to resign following chaotic scenes in Parliament during a vote on a fracking ban. Truss has been defiant despite financial market turmoil caused by multiple policy U-turns.

Truss “precipitated this political crisis by triggering the market crisis,” said Michael Every of Rabobank in a report. Britain is “deep in an emerging-market rut.”

In early trading, the FTSE 100 in London was off 0.2% at 6,914.12 and the DAX in Frankfurt fell 0.7% to 12,655.08. The CAC 40 in Paris was little-changed at 6,041.18.

On Wall Street, the future for the benchmark S&P 500 index was off 0.3%. That for the Dow Jones Industrial Average was up less than 0.1%.

On Wednesday, the S&P fell 0.7%, breaking two days of gains. The Dow slipped 0.3% and the Nasdaq composite sank 0.9%.

In Asia, the Nikkei 225 in Tokyo tumbled 0.9% to 27,006.96 after September imports ballooned 46% over a year earlier due to a surging oil prices and a weak yen. The Japanese currency is trading at a 32-year low against the dollar.

The yen weakened to 149.82 to the dollar from Wednesday’s 149.81 yen.

The dollar has gained against other currencies following repeated interest rate hikes by the Federal Reserve, which increases the return on assets valued in dollars. Investors also see the U.S. currency as a stable haven amid global uncertainty.

“Rising U.S. yields and the strong U.S. dollar are the sledgehammers pounding global equities lower,” said Stephen Innes of SPI Asset Management in a report.

The Shanghai Composite Index lost 0.3% to 3,035.05 and the Hang Seng in Hong Kong fell 1.4% to 16,280.22.

The Kospi in Seoul retreated 0.9% to 2,218.09 and Sydney’s S&P-ASX 200 sank 1% to 6,730.70.

On Wednesday, Wall Street pulled back as investors reviewed earnings and Treasury yields climbed to multiyear highs.

Netflix soared 13% and United Airlines rose 5% after releasing quarterly results. Abbott Laboratories, M&T Bank and others sank.

The yield on the 10-year Treasury, which influences mortgage rates, climbed to 4.13%, its highest level since June 2008. It was at 4.02% late Tuesday.

The yield on the two-year Treasury, which responds to expectations of future Fed action, rose to 4.54% from 4.43%.

The Fed and central banks in Europe and Asia have been raising interest rates to cool inflation that is at multi-decade highs. Investors worry they might tip the global economy into recession.

Inflation in Britain hit a 40-year high of 10.1% over a year earlier in September.

In energy markets, benchmark U.S. crude rose $1.56 to $86.08 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oil trading, advanced $1.34 to $93.75 per barrel in London.

The euro gained to 97.83 cents from Wednesday’s 97.68 cents.

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October 20, 2022
Biden to release 15M barrels from oil reserve, more possible

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WASHINGTON — President Joe Biden will announce the release of 15 million barrels of oil from the U.S. strategic reserve Wednesday as part of a response to recent production cuts announced by OPEC+ nations, and he will say more oil sales are possible this winter, as his administration rushes to be seen as pulling out all the stops ahead of next month’s midterm elections.

Biden will deliver remarks Wednesday to announce the drawdown from the strategic reserve, senior administration officials said Tuesday on the condition of anonymity to outline Biden’s plans. It completes the release of 180 million barrels authorized by Biden in March that was initially supposed to occur over six months. That has sent the strategic reserve to its lowest level since 1984 in what the administration called a “bridge” until domestic production could be increased. The reserve now contains roughly 400 million barrels of oil.

Biden will also open the door to additional releases this winter in an effort to keep prices down. But administration officials would not detail how much the president would be willing to tap, nor how much they want domestic and production to increase by in order to end the drawdown.

Biden will also say that the U.S. government will restock the strategic reserve when oil prices are at or lower than $67 to $72 a barrel, an offer that administration officials argue will increase domestic production by guaranteeing a baseline level of demand. Yet the president is also expected to renew his criticism of the profits reaped by oil companies — repeating a bet made this summer that public condemnation would matter more to these companies than shareholders’ focus on returns.

It marks the continuation of an about-face by Biden, who has tried to move the U.S. past fossil fuels to identify additional sources of energy to satisfy U.S. and global supply as a result of disruptions from Russia’s invasion of Ukraine and production cuts announced by the Saudi Arabia-led oil cartel.

The prospective loss of 2 million barrels a day — 2% of global supply — has had the White House saying Saudi Arabia sided with Russian President Vladimir Putin and pledging there will be consequences for supply cuts that could prop up energy prices. The 15 million-barrel release would not cover even one full day’s use of oil in the U.S., according to the Energy Information Administration.

The administration could make a decision on future releases a month from now, as it requires a month and a half for the government to notify would-be buyers.

Biden still faces political headwinds because of gas prices. AAA reports that gas is averaging $3.87 a gallon. That’s down slightly over the past week, but it’s up from a month ago. The recent increase in prices stalled the momentum that the president and his fellow Democrats had been seeing in the polls ahead of the November elections.

An analysis Monday by ClearView Energy Partners, an independent energy research firm based in Washington, suggested that two states that could decide control of the evenly split Senate — Nevada and Pennsylvania — are sensitive to energy prices. The analysis noted that gas prices over the past month rose above the national average in 18 states, which are home to 29 potentially “at risk” House seats.

Even if voters want cheaper gasoline, expected gains in supply are not materializing because of a weaker global economy. The U.S. government last week revised downward its forecasts, saying that domestic firms would produce 270,000 fewer barrels a day in 2023 than was forecast in September. Global production would be 600,000 barrels a day lower than forecast in September.

The hard math for Biden is that oil production has yet to return to its pre-pandemic level of roughly 13 million barrels a day. It’s about a million barrels a day shy of that level. The oil industry would like the administration to open up more federal lands for drilling, approve pipeline construction and reverse its recent changes to raise corporate taxes. The administration counters that the oil industry is sitting on thousands of unused federal leases and says new permits would take years to produce oil with no impact on current gas prices. Environmental groups, meanwhile, have asked Biden to keep a campaign promise to block new drilling on federal lands.

Biden has resisted the policies favored by U.S. oil producers. Instead, he’s sought to reduce prices by releasing oil from the U.S. reserve, shaming oil companies for their profits and calling on greater production from countries in OPEC+ that have different geopolitical interests, said Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute.

“If they continue to offer the same old so-called solutions, they’ll continue to get the same old results,” Macchiarola said.

Because fossil fuels lead to carbon emissions, Biden has sought to move away from them entirely with a commitment to zero emissions by 2050. When discussing that commitment nearly a year ago after the G-20 leading rich and developing nations met in Rome, the president said he still wanted to also lower gas prices because at “$3.35 a gallon, it has profound impact on working-class families just to get back and forth to work.”

Since Biden spoke of the pain of gas at $3.35 a gallon and his hopes to reduce costs, the price has on balance risen another 15.5%.

———

Follow the AP’s coverage of the 2022 midterms at https://apnews.com/hub/2022-midterm-elections.

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October 19, 2022
Asia stocks mixed after Wall St rises on corporate profits

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BEIJING — Asian stock markets were mixed Wednesday after Wall Street rose on strong corporate profit reports.

Tokyo advanced while Shanghai and Hong Kong declined. The yen stayed near a two-decade low near 149 to the dollar. Oil prices gained.

Wall Street’s benchmark S&P 500 index rose 1.1% on Tuesday after investment bank Goldman Sachs, military contractor Lockheed Martin and others reported strong results.

Market sentiment is “looking positive so far amid forecast-beating earnings,” said Anderson Alves of ActivTrades in a report.

The profit reports helped at least temporarily offset investor worries that repeated interest rate hikes by U.S., European and Asian central banks to control inflation that is at multi-decade highs might tip the global economy into recession.

That concern has helped to drag U.S. stocks into a bear market, or a decline of more than 20% by the S&P 500 from its January high.

The Nikkei 225 in Tokyo gained 0.7% to 27,353.87 while the Shanghai Composite Index lost 0.3% to 3,072.85. The Hang Seng in Hong Kong lost 0.9% to 16,766.79.

The Kospi in Seoul added less than 0.1% to 2,251.88 and Sydney’s S&P-ASX 200 advanced 0.4% to 6,807.80. New Zealand and Southeast Asian markets advanced.

On Wednesday, the S&P 500 gained 3,719.98 as 90% of the stocks in the index rose.

The Dow Jones Industrial Average rose 1.1% to close at 30,523.80. The Nasdaq composite advanced 0.9% to 10,772.40.

With no major economic data releases planned this week, investors focused on corporate earnings.

Goldman Sachs rose 2.3%, which helped to lift other lenders. Lockheed Martin jumped 8.7%, giving other military-related stocks a boost. General Dynamics rose 3.8%, Northrop Grumman gained 6.7% and Raytheon Technologies added 3.4%.

Johnson & Johnson slipped 0.3% after reporting solid financial result s but a narrowed forecast as it deals with a strong dollar cutting into sales outside the United States.

American Airlines, Union Pacific and American Express also report results this week.

In energy markets, benchmark U.S. crude rose 99 cents to $83.06 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oil trading, advanced 66 cents to $90.69 per barrel in London.

The dollar eased to 149.16 yen from Tuesday’s 149.21 yen. The euro rose to 98.52 cents from 98.50 cents.

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October 18, 2022
NTSB: Communications outage a factor in lift boat disaster

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NEW ORLEANS — An outage involving a Coast Guard marine warning system and “data gaps” in radar systems were factors in last year’s deadly capsize of an oil industry vessel during severe storms off of Louisiana’s coast, the National Transportation Safety Board said in a report issued Tuesday.

Thirteen of the 19 people aboard the Seacor Power died after the offshore vessel capsized in the Gulf after leaving Port Fourchon. Known as a lift boat, the vessel had three legs that could be lowered to the sea floor, converting the ship to an offshore platform for servicing oil and gas facilities. It had been chartered by Talos Energy LLC for work on a Gulf platform when it was hit by high winds in rough seas and capsized on April 13, 2021.

An NTSB preliminary report had said the Seacor Power had begun to lower its stabilizing legs and was trying to turn to face heavy winds when it flipped in the Gulf of Mexico. Six people were rescued.

The NTSB said in Tuesday’s report that the captain of the Seacor Power made a “reasonable” decision to get underway the day of the disaster. But he didn’t have sufficient weather information from the lift boat company.

“Additionally, due to a Coast Guard broadcasting station outage, the SEACOR Power crew did not receive a National Weather Service Special Marine Warning notifying mariners of a severe thunderstorm that was approaching,” the report said.

Another problem: a lack of low-altitude radar data that prevented the National Weather Service from identifying and forecasting heavy winds that hit the vessel. The report suggested that the weather service, the Federal Aviation Administration and Air Force jointly consider lowering radar angles to improve coverage.

Multiple recommendations for the Coast Guard were included in the report. It suggested development of a procedure to let mariners know when navigational broadcasting is out; modification of regulations to require that lift boats be constructed for greater stability; and development of procedures to involve participation of commercial, local government and non-profit air rescue providers in rescue operations. The Coast Guard also should require that everyone employed on vessels in “coastal, Great Lakes, and ocean service” have personal locater beacon devices.

If the crew members and offshore workers aboard the SEACOR Power had been required to carry such devices, “their chances of being rescued would have been enhanced,” the report said.

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October 18, 2022
French government in crisis talks as fuel shortages worsen | CNN Business

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Paris
CNN Business
—

French President Emmanuel Macron called a crisis meeting with senior ministers on Monday to address crippling strikes at gas refineries that has caused fuel pumps to run dry.

Macron declared Monday his desire for a solution “as quickly as possible” to the protests, promising to “do his utmost” to find one, according to CNN affiliate BFMTV.

The government ordered strikers at two fuel depots in Feyzin, near Lyon, to return to work for several hours on Monday or face criminal charges, according to France’s energy minister, Agnes Pannier-Runacher.

Lyon is one of the worst hit regions of the country, with almost 40% of gas stations out of at least one fuel on Sunday. Elsewhere, nearly one third of gas stations have run out of at least one fuel, with the situation expected to worsen this week, according to French Prime Minister Elisabeth Borne.

This the second time in recent weeks that the French government has taken the unusual step of requisitioning essential staff in the face of weeks-long strikes at refineries owned by ExxonMobil and TotalEnergies, which have disrupted supply to thousands of gas stations.

While ExxonMobil workers agreed to end their blockade of the Fos-sur-Mer refinery and depot in southern France late last week following salary negotiations, strikes continue at TotalEnergies refineries.

One of France’s largest unions, CGT, has refused to accept the terms of a wage deal agreed upon between TotalEnergies and two other unions, CFE-CGC and CFDT. The agreement includes a 7% salary increase for 2023 and a bonus for all employees equivalent to one month’s pay. CGT has demanded a 10% pay raise.

But French Finance Minister Bruno Le Maire said the strikes were “unacceptable and illegitimate,” because wage agreements had been met with the majority of workers. “The time for negotiations has passed,” he added.

In an interview with France Inter, a radio station, a representative of CGT, Philippe Martinez, claimed that “several thousand” workers were still striking, contradicting government ministers who have referred to striking workers as both “a handful of workers” and “several hundred people” in interviews.

Transportation minister Clement Beaune told France Inter that the only way out of the crisis is an end to strikes.

Meanwhile, commuters could be facing days of travel chaos if planned strikes in the Paris public transport network and parts of the national rail network go ahead. Beaune said that in the worst affected regions, only one in two trains will be running on Tuesday.

The industrial action takes place against a backdrop of rising living costs in France, where electricity bills are surging as a result of a cut in Russian natural gas supplies that has sparked an energy crisis in Europe. On Sunday, thousands marched through central Paris to protest the crisis and “climate inaction.”

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October 17, 2022
Mozambique jihadi violence spreads despite military effort

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NANJUA, Mozambique — Fleeing beheadings, shootings, rapes and kidnappings, nearly 1 million people are displaced by the Islamic extremist insurgency in northern Mozambique.

The 5-year wave of jihadi violence in Cabo Delgado province has killed more than 4,000 people and scuppered international investments worth billions of dollars.

In a sprawl of dilapidated tents and thatched huts around Nanjua, a small town in the southern part of Cabo Delgado province, several hundred families are seeking safety from the violence. They say their conditions are bleak and food assistance is meager but they’re afraid to return home because of continuing violence by the rebels who are now going by the name Islamic State Mozambique Province.

More than 1.000 miles south, however, government officials in the capital Maputo are saying the insurgency is under control and are encouraging the displaced to return to their homes and energy companies to resume their projects.

“The terrorists are on the run permanently,” Mozambican President Filipe Nyusi assured investors at the Mozambique Energy and Gas Summit in Maputo in September. He urged the gathering of international energy executives to resume work on their stalled liquefied natural gas projects.

Mozambique’s army and police forces, backed up by troops from Rwanda and support from a regional force from the Southern African Development Community, have succeeded in containing the extremist rebellion, officials say.

“These places have now normalized and civilians are coming back,” Rwandan Brig. Gen. Ronald Rwivanga, told the Rwandan newspaper The New Times this month, saying normal life is returning to the Palma district.

Energy companies say they want to see displaced people return to the area. The $60 billion liquefied natural gas projects led by the France-based TotalEnergies and ExxonMobil were suspended last year after insurgents briefly captured the adjacent town of Palma in March.

Speaking at the summit in Maputo, Stéphane Le Galles, the head of TotalEnergies’ Mozambique gas project, said “the direction is very good” but the company still wants to see “a sustainable economic situation, not just in Palma but … all over Cabo Delgado.”

Despite the heavy presence of Mozambican and Rwandan soldiers, the extremists’ attacks continue. Earlier this month the rebels spread their violence for the first time to neighboring Nampula province, where a Catholic mission was among the targets and an elderly Italian nun was among those killed.

The United Nations High Commission for Refugees said it “considers security conditions to be too volatile in Cabo Delgado to facilitate or promote returns to the province,” in a statement released earlier this month.

“People who have lost everything are returning to areas where services and humanitarian assistance are largely unavailable,” said the UNHCR.

Those who return are met with a mixed situation. Economic life is beginning to return but basic infrastructure and public services are still lacking. Few schools are open and health services are sparse.

In the provincial capital, Pemba, where more than 100,000 displaced people have sought refuge, an elderly woman sat outside a hut where her family of 15 took up residence two years ago after fleeing an insurgent attack. They subsist on a meager diet of corn flour and plain rice. Unable to find work, they have no money for clothes or other essentials, she said.

“Definitely, we want to go back. This is not a home,” said the grandmother, who spoke on condition of anonymity for her safety.

With their villages further north now destroyed, she says resuming normal life will be even more difficult.

Weighing up the risks and costs of returning, many have decided to stay put, despite the deprivations they face in the displacement camps.

“Over there, there is war and hunger,” said another displaced person in the Nanjua camp. “We would not be going to a better place.”

A mother cradling a small child while sitting on a grass mat said the threat of extremist violence remains a concern. She said many remain haunted by their experiences at the hands of the insurgents: “It’s difficult to sleep in a place where you have seen a snake.”

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October 16, 2022
US, Canada send armored vehicles to bolster Haiti’s police

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SAN JUAN, Puerto Rico — The U.S. and Canada sent armored vehicles and other supplies to Haiti on Sunday to help police fight a powerful gang amid a pending request from the Haitian government for the immediate deployment of foreign troops.

A U.S. State Department statement said the equipment was bought by Haiti’s government, but it did not provide further details on the supplies flown on military aircraft to the capital of Port-au-Prince.

A spokesman for the U.S. military’s Southern Command said he could not provide further details on the supplies sent, though he added it was a joint operation involving the U.S. Air Force and Royal Canadian Air Force.

“This equipment will assist (Haiti’s National Police) in their fight against criminal actors who are fomenting violence and disrupting the flow of critically-needed humanitarian assistance, hindering efforts to halt the spread of cholera,” the State Department said.

The equipment arrived more than a month after one of Haiti’s most powerful gangs surrounded a fuel terminal and demanded the resignation of Prime Minister Ariel Henry. Demonstrators also have blocked roads in major cities to protest a sharp rise in fuel prices after Henry announced in early September that his administration could no longer afford to subsidize fuel.

Since then, gas stations have closed, hospitals have cut back on services and banks and grocery stores open on a limited basis as fuel, water and other supplies dwindle across Haiti.

The owners of the fuel terminal announced Saturday that armed men had attacked their installations for a second time and fled with more than 28,000 gallons of petroleum products after overpowering surveillance and emergency personnel at the facility.

It was the second time this week that armed men broke into the terminal, which stores more than 10 million gallons of gasoline and diesel and more than 800,000 gallons of kerosene.

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October 15, 2022
In France, fuel crisis frays nerves and workers’ resilience

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VERSAILLES, France — Even close to midnight on a school night, the tipoff was too important to ignore: A nearby gas station had just been resupplied.

So Aicha Far scooped up her 6-year-old and set off into the night. The home carer needed to refuel her car so she could continue looking after the vulnerable people on the outskirts of Paris who rely on her to keep them fed, clean and safe. The prospect of a full tank was worth dragging the kid out of bed for.

“I wrapped him in a blanket and put him in the back,” Far recalled on Saturday, as she gently coaxed an older woman she looks after to drink her breakfast hot chocolate.

Chronic fuel shortages in France sparked by strikes and panic buying are fraying nerves and testing both the resilience and ingenuity of millions of French workers who depend on their vehicles to do their jobs.

More than a quarter of gas stations nationwide were still without one type of fuel or more on Saturday, the French energy minister said. In the Paris region, the number was above a third.

Motorists have sometimes lined up for hours to refuel — not always successfully — and tempers have flared.

In the town of Versailles, southwest of Paris, 41-year-old nurse Aurelie Martin is trying to eke out the precious fuel left in her tank — and bracing for the next time she’ll have to visit the pumps.

She is up well before dawn to give jabs, change dressings and dispense other essential medical care to dozens of patients each morning.

Rather than doing little hops in her Mini from one patient to the next, she’s increasingly scurrying on foot between them when she can, racking up 10 kilometers (six miles) of walking each morning to save fuel.

“I’m doing the bare minimum by car,” she said as she made her rounds on Saturday. “I had hoped up to now that the situation would improve, but unfortunately it doesn’t seem to be getting better.”

The strikes have hit French refineries and fuel depots. Strikers have demanded higher wages from what they feel should be their share of windfall profits generated by high oil and gas prices amid the global energy crisis aggravated by Russia’s war in Ukraine.

After runs on toilet paper, pasta and other essentials at the height of the COVID-19 pandemic, fuel and where to find it are the latest obsessions in France. The government has urged motorists not to panic-buy. Some gas stations have banned jerrycans.

When Martin bumped into other nurses also making their early morning rounds on Saturday, gasoline was the first thing they talked about.

One nurse who’d run out of fuel told Martin that one of her patients was offering to lend her his car. On messaging groups, nurses share tips about gas stations that have been resupplied or that have priority pumps for them and other essential workers.

Martin said some of her fellow nurses have been yelled at by other motorists for trying to cut to the front of lines.

With 30 to 40 patients to home-visit per day, Martin knows she’ll need to refuel early next week.

“My day off is on Tuesday and I think the full tank that I had will last until then,” she said. “So on Tuesday, I’ll see if I need to spend the day lining up and that is what I will do if a gas station hasn’t been set aside for us.”

“Truth be told,” she added, “I have been pushing back the inevitable moment.”

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October 15, 2022
Oil flow to Germany resumes after Poland fixed pipeline leak

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WARSAW, Poland — The Polish operator of an oil pipeline running to Germany said Saturday that it has fixed the damage that caused a leak earlier this week and that the flow of crude oil from Russia has been fully restored.

The state-run operator, PERN, said that both lines of the Druzhba pipeline were operating normally, transporting oil.

It said that the cause of the leak that occurred Tuesday in a field in central Poland is still being investigated.

The Druzhba pipeline, which in Russian means “Friendship,” was built in the 1960s and is one of the world’s largest pipeline systems, bringing crude oil from Siberia to central Europe. It branches to reach Belarus, Ukraine, Poland, Hungary, Austria and Germany.

The leak follows attacks last month on the Baltic Sea Nord Stream 1 and 2 gas pipelines, in which explosives are said to have been used. Europe has been taking steps to reduce its reliance on Russian energy after Russia’s invasion of Ukraine.

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October 15, 2022
More than 1 in 4 French gas stations out of at least one fuel | CNN Business

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Paris
CNN
—

Some 28.5% – nearly one third – of gas stations in mainland France are out of stock of at least one fuel, French Energy Transition Minister Agnes Pannier-Runacher told journalists Friday.

In the Parisian Ile de France region, this figure is at 25.5% Friday, down from 31.7% yesterday, she added.

A source from the office of the French prime minister on Friday blamed the long lines and exhausted stocks at French gas stations this week on panic buying, rather than just supply problems.

This is despite gas companies providing between a 30% and 50% increase in supply of gas to pumps this week, compared to a normal week, the source said.

Sources from the prime minister’s office and energy transition ministry said that, this week, demand at the gas pump had been at least 20% higher than normal.

The sources added that once strike action ended, it will take one or two weeks for refinery output and the logistical situation in France to be back to normal.

Earlier this week, the French government ordered staff at an ExxonMobil refinery in Normandy to return to work, a highly unusual step.

Despite agreements being reached with certain unions, strike action continues at four of seven refineries in France. All of these four sites are run by TotalEnergies.

The CGT union – one of the country’s largest – refused to accept Total’s offer, with CGT Secretary of the TotalEnergies European Committee, Thierry Defresne, on Friday calling for wider industrial action on October 18. The CGT has requested a 10% pay rise for workers.

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October 14, 2022
Retail sales flat in September as inflation takes a bite

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NEW YORK — The pace of sales at U.S. retailers was unchanged in September from August as rising prices for rent and food chipped away at money available for other things.

Retail sales were flat last month, down from a revised. 0.4% growth in August, the Commerce Department reported Friday. Retail sales fell 0.4% in July.

Excluding sales of automobiles and at gas stations, retail sales rose 0.3%. Excluding gas sales, spending was up 0.1%

While the report showed the resilience of the American consumer, the figures are not adjusted for inflation unlike many other government reports. In fact, sales at grocery stores rose 0.4%, helped by rising prices in food.

Evidence that the Fed’s fight to cool the economy may be taking hold can also be seen, particularly with big-ticket items. Sales at auto dealers fell 0.4% last month, and shoppers continued to pull back on appliances, electronics and furniture, all categories that did well during the early part of the pandemic. Business at consumer electronics and appliance stores fell 0.8%.

Sales at clothing stores rose 0.5%, while business at department stores rose 1.3% That indicates a solid back-to-school season but adjusted for inflation, spending was modest, analysts said. Business at restaurants rose 0.5%, while online sales ticked up at the same pace.

Neil Saunders, managing director of GlobalData Retail said the report was “representative of an economy that is tightening and of a shopper that is becoming more discerning and cautious about what they buy.”

Consumer spending accounts for nearly 70% of U.S. economic activity and Americans have remained mostly resilient even with inflation near four-decade highs. Yet surging prices for everything from mortgages to rent have upped the anxiety level. Overall spending has slowed and shifted increasingly toward necessities like food, while spending on electronics, furniture, new clothes and other non-necessities has faded.

“Even if people are employed and on paper look reasonably comfortable they are not feeling comfortable, and they are very concerned about what’s to come next,” said Joel Rampoldt, a managing director in the retail practice at AlixPartners.

Inflation in the United States accelerated in September, with the cost of housing and other necessities putting more pressure on households, eliminating pay gains and almost guaranteeing that the Federal Reserve will keep raising interest rates aggressively.

Consumer prices, excluding volatile food and energy costs, jumped 6.6% in September from a year ago — the fastest such pace in four decades. And on a month-to-month basis, core prices surged 0.6% for a second straight time, defying expectations for a slowdown and signaling that the Fed’s multiple rate hikes have yet to ease inflation pressures. Core prices typically provide a better picture of underlying price trends.

Overall prices rose 8.2% in September compared with a year earlier, down slightly from August, the government said Thursday in its monthly inflation report.

It is a crucial period for retailers as they prepare for the holiday shopping season, which accounts on average for 20% of the industry’s annual sales. Inflation is already changing shopper habits, causing them to trade down to cheaper stores like Walmart and dollar stores and within aisles, switching to cheaper brands.

Walmart and Target are among others that are pushing deals earlier while others are offering new financing for customers.

Conn’s HomePlus, a Texas furniture and mattress chain that caters to households at the lower end of the economic scale, launched a new layaway program that caters to the 20% to 25% of the chain’s applicants not eligible to qualify for other financing.

“(Shoppers’) ability to spend on discretionary is more limited than it was before, ” said CEO Chandra Holt. Sales on things like deluxe coffee makers other consumer electronics have faded, she said. .

A slew of holiday forecasts from various research and consulting firms point to a sales slowdown from last year, but adjusted for inflation, retailers could actually see a decline. AlixPartners predicts holiday sales to be up anywhere from 4% to 7% from last year, which was up 16%, according to its calculations. The National Retail Federation, the nation’s largest retail trade group, hasn’t released its holiday forecast.

Janet Barnes, a 42-year-old College Park, Maryland resident, says she’s trading down and going to cheaper stores for groceries as prices spike. Instead of Wegmans or Whole Foods, she now heads to the discount chain Lidl and said she saves about 40% in groceries. Thrift stores have replaced Nordstrom, she said.

“We are creatures of habit, said Barnes. “But it is not a bad deal to see what else is going on — and test something else.”

—————-

Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

AP Economics Writer Chris Rugaber in Washington contributed to this report.

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October 14, 2022
Climate protesters throw soup on Van Gogh’s ‘Sunflowers’

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Handout photo issued by Just Stop Oil of two protesters who have thrown tinned soup at Vincent Van Gogh’s famous 1888 work Sunflowers at the National Gallery in London, Friday Oct. 14, 2022. The group Just Stop Oil, which wants the British government to halt new oil and gas projects, said activists dumped two cans of Heinz tomato soup over the oil painting on Friday. London’s Metropolitan Police said officers arrested two people on suspicion of criminal damage and aggravated trespass. (Just Stop Oil via AP)

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October 14, 2022
In Norway, Russian man stopped with drones

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COPENHAGEN, Denmark — A 50-year-old Russian man has been detained in Arctic Norway with two drones and is suspected of flying the unmanned aerial vehicles somewhere in the country.

Numerous drone sightings have been reported near Norwegian offshore oil and gas platforms in recent weeks.

The Russian citizen, who was not identified, was detained on Tuesday.

Norwegian media reported that customs officers found two drones and several electronic storage devices in his luggage during a routine check at the Storskog border crossing, the sole crossing point between NATO-member Norway and Russia. Norway’s Arctic border with Russia is 198 kilometers (123 miles) long.

He is suspected of breaching sanctions which came into force after Russia went to war against Ukraine, prosecutor Anja Mikkelsen Indbjør told Norwegian broadcaster NRK. Under Norwegian law, it is prohibited for aircraft operated by Russian companies or citizens “to land on, take off from or fly over Norwegian territory.” Norway is not a member of the European Union but mirrors its moves.

The VG newspaper said that a local court on Friday ordered the man held for two weeks in custody. The man told the Indre and Oestre Finnmark District Court that he had been in Norway since August and had flown drones throughout the country, VG said. The seized material included 4 terabytes of stored images and files, with parts of them encrypted.

The man’s defense lawyer, Jens Bernhard Herstad, told Norwegian daily Dagbladet that his client has acknowledged flying the drones but has declined to say what he was doing in Norway.

Norwegian Justice Minister Emilie Enger Mehl said it was “too early to draw conclusions.”

“It is known that we have an intelligence threat against us which has been reinforced by what is happening in Europe,” Enger Mehl told NRK.

There is heightened security around key energy, internet and power infrastructure following last month’s underwater explosions that ruptured two natural gas pipelines in the Baltic Sea that were built to deliver Russian gas to Germany.

The blasts and ruptures in the Baltic Sea happened in international waters off both Sweden and Denmark but within the countries’ exclusive economic zone. The damaged Nord Stream pipelines discharged huge amounts of methane, a potent greenhouse gas, into the air.

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October 14, 2022
Turkey, Russia to study Putin’s gas hub proposal

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ANKARA, Turkey — Turkish President Recep Tayyip Erdogan says Turkey and Russia have instructed their respective energy authorities to immediately begin technical studies on a Russian proposal that would turn Turkey into a gas hub for Europe.

Russian President Vladimir Putin has floated the idea of exporting more gas through the Turk Stream gas pipeline running beneath the Black Sea to Turkey after gas deliveries to Germany through the Baltic Sea’s Nord Stream pipeline were halted.

Erdogan said Russian and Turkish energy authorities would work together to designate the best location for a gas distribution center, adding that Turkey’s Thrace region, bordering Greece and Bulgaria appeared to be the best spot.

“Together with Mr. Putin, we have instructed our Ministry of Energy and Natural Resources and the relevant institution on the Russian side to work together,” Erdogan said. “They will conduct this study. Wherever the most appropriate place is, we will hopefully establish this distribution center there.”

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October 14, 2022