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Brazil 2026 Budget Sponsor proposes $1.9 Billion Exclusion for State-run Firms' Fiscal Target
Gervasio maia, the Brazilian congressman who sponsored the bill on budget guidelines for 2026, proposed to exclude up to 10 billion reals ($1.9 billion) of next year's fiscal goal for state-owned enterprises. According to Maia’s amendment, this amount will cover the expenses of companies that have an active and approved economic-financial plan. The proposal gives President Luiz inacio Lula da Silveira fiscal flexibility. It comes at a time when the postal service Correios is facing a cash crisis. Last month, it approved a restructuring program as its losses soared this year. This raised doubts over the viability of state-run Correios. The company reported a loss for the year to date of 6 billion reals ($1.13 billion), nearly three times the amount reported a year ago. The government has to compensate state-owned companies when they exceed their fiscal targets. This often means freezing federal spending. This is what happened with this year's Budget, when the government in November approved it. It was necessary to offset the 3 billion reais deficit that had been expected at state-owned firms due to Correios’ troubles. Maia removed from her proposal a clause on compensation. This effectively prevents the government from implementing it in the event that state-owned companies miss their targets next year. After the bill was passed, the change to the budget proposal for 2026 was announced ahead of the joint session of the Congress on Thursday. Committee approval is expected to be made on Wednesday. Correios stated earlier this week that the Treasury Blockage It was prevented from taking out a loan of 20 billion reais (3.67 billion dollars) from a bank consortium with a guarantee from the government because the interest rates exceeded the limit for deals backed by the state. ($1 = 5.3048 reales) ($1= 5.3133 reales) (Reporting and editing by Diane Craft; Marcela Ayres)
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Irish media reported that drones were spotted near Zelenskiy's flight path from Dublin.
Local media reported that an Irish navy ship saw up to five drones near the flight path for Ukrainian President Volodymyr Zelenskiy as he arrived in Ireland on Monday to make a state visit. Irish Times reported that the sighting caused a major alert due to fears of an attempted interference with the flight path. The Irish Times cited unnamed sources who said that the aircraft was not in danger, despite its arrival a little early. The Ukrainian delegation arrived on Monday late and left late the following day, as part of an effort to drum up support for Kyiv in Europe as Russia continues its war against Ukraine. Recent drone flights in Europe have disrupted airspace operations. Their origin is mostly unknown. Ursula von der Leyen, President of the European Commission, has called these incursions hybrid warfare. The Journal website first reported that drones were spotted at Dublin Airport. They said they arrived at the exact location where Zelenskiy’s plane had been expected to be, at the exact time it was due to pass. The authorities said they were conducting investigations to determine if the drones had taken off from a ship or landed on land. Both news outlets reported that they were first seen northeast of Dublin at a distance of around 20 km (12miles) from the airport. Ireland's Defence Forces stated that it could not comment on any specifics about any alleged incident for operational security purposes. A spokesperson stated that "however, the Defence Forces' support to An Garda Siochana's (police) security operation was successfully deployed by multiple means, ultimately leading to a successful and safe visit,"
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US investigations report that Waymo's self-driving car illegally passed 19 school buses in Texas
The U.S. government said Thursday that it had asked Waymo for more information after Texas officials claimed that Alphabet's self-driving cars had passed school buses illegally 19 times since the beginning of the school year. In October, the National Highway Traffic Safety Administration launched an investigation after an incident that occurred in Georgia. A Waymo was not stationary as it approached a school bus while its red lights were flashing and its stop arm was deployed. The Austin Independent School District posted a letter on November 20, 2018 by the NHTSA. In the letter, they stated that five incidents had occurred in November following the announcement from Waymo that it had updated its software to fix the problem. They asked the company not to operate around schools at pick-up or drop-off hours until it was able to ensure the vehicles wouldn't violate the law. Waymo didn't immediately respond to an inquiry for comment. A lawyer for the district wrote: "We cannot let Waymo continue to endanger our students as it tries to fix the problem." Citing an incident in which a Waymo was "recorded" driving past a school bus that had stopped only moments after the student who crossed in front, while still on the road, had been in front of the vehicle. A spokesperson for the school district did not respond immediately to whether Waymo had met this request. NHTSA was prompted by the letter to ask Waymo if it would comply to the request that self-driving vehicles cease operations during pick-up or drop-off hours for students. They also asked: "Was a software fix developed or implemented to mitigate this concern?" If so, will Waymo file a recall to fix the problem? In a letter sent to Waymo by the NHTSA on Wednesday, it demanded answers to questions about school bus incidents and software updates that address safety concerns. David Shepardson is reporting.
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US investigations report that Waymo's self-driving car illegally passed 19 school buses in Texas
The U.S. government said on Thursday that it had asked Waymo for more information after Texas officials claimed that Alphabet's self-driving cars had passed school buses illegally 19 times since the beginning of the school year. In October, the National Highway Traffic Safety Administration launched an investigation after a Georgia incident where a Waymo failed to remain stationary as it approached a school bus that had its red lights flashing with a stop arm deployed. In a letter published by NHTSA on Nov. 20, the Austin Independent Schools District stated that five incidents had occurred in November, after Waymo claimed to have made software updates to fix the problem. The district asked the company to stop operations near schools at pick-up or drop-off hours until it could be ensured the vehicles wouldn't violate the law. Waymo didn't immediately respond to an inquiry for comment. David Shepardson reports.
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Sources: Deutsche Bahn will return to profitability this year and next.
According to sources close the company, Deutsche Bahn will return to profitability this year and next, despite its underinvestment in trains and delays. After more than a decade underinvestment by the state-owned Deutsche Bahn, it has begun upgrading its tracks and overhead lines, as well as cutting administrative costs. This has led to major delays and cancellations across the country. Positive outlook is also a result of CEO Evelyn Palla's task to turn the company around. She took over on October 1. Palla will present her restructuring plan for the company at a meeting of the supervisory board scheduled to take place on Wednesday. Significant job cuts are expected. Deutsche Bahn has declined to comment. Sources said that the company expects a slightly positive profit before interest and tax (EBIT) in 2025 after a loss last year of 388 million euros. EBIT is expected to reach 500 million euros by 2026. The German Bahn also aims at reducing its net loss from 820 million euros to 180 million next year. Revenues are expected to stay stable, around 28 billion euro next year.
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Senators in the US want airlines to compensate passengers for delays with cash
A group of Democratic Senators introduced legislation on Thursday that would require airlines to compensate passengers for significant delays with cash. Mark Kelly, Ed Markey, and Richard Blumenthal, senators who are leading the charge, propose to mandate compensation that is in line with European Union (EU) and Canadian requirements. This includes mandating a minimum of $300 for delays of over three hours, and a minimum of $600 for delays of six hours or longer. This proposal was first reported on by after President Donald Trump's administration withdrew his predecessor's plan to force airlines to compensate passengers for flight delays caused by carriers. Kelly said that airlines must be held accountable for their actions when they leave travelers stranded and cost the American public money. "We are working to protect passengers so that they don't have to pay for cancellations or delays out of pocket." The U.S. Transportation Department, under the then-President Joe Biden in December 2024 sought public comments on writing rules that would require airlines to pay up to $775 per hour for delays exceeding three hours domestically. Airlines for America (a trade group that represents American Airlines, Delta Air Lines and United Airlines) had previously criticised Biden's plan for cash compensation, claiming it would increase ticket prices. USDOT stated last month that the rule would create "unnecessary regulations burdens," which is why it wouldn't go forward. In the United States, airlines are required to refund customers for cancelled flights but not compensate them for delayed flights. All four countries - the European Union, Canada and Britain - have rules on airline compensation for delays. No major U.S. airlines currently guarantee cash compensation for flight delays. USDOT announced in September that it would consider rescinding the Biden regulations, which required airlines and ticket agents disclose service fees along with airfares. The Trump administration plans to also reduce regulatory burdens for airlines and ticket agents. This will be done by writing new regulations that define a cancellation of flight, which entitles the consumer to a refund. It will also revisit rules regarding ticket pricing and advertising.
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Mercuria's copper takeover from LME Asia increases supply anxiety
Four sources with knowledge of the matter have confirmed that commodity trader Mercuria plans to remove significant quantities of copper from London Metal Exchange storage facilities in Asia. Prices are rising on account of expectations of a shortage. LME copper prices reached a record of $11,540 per metric ton Wednesday, partly because of anticipated shortages in the coming year due to disruptions to mine supplies including accidents and incidents in Indonesia and Chile. Mercuria, a Swiss company, has cancelled or designated for delivery over 40,000 tonnes of copper stored in LME facilities in South Korea. Taiwan Sources familiar with the situation say that copper was discovered on December 2. The value of copper at current prices would be $460,000,000. Mercuria declined comment. The LME approved warehouses that store copper for the construction and power industries have historically low inventories, which has contributed to an increase in prices in recent months. Copper is a major export from the LME, and prices in the United States are high. This is despite the fact that copper has been exempted from the import tariffs which came into effect on August 1. On December 2, the total amount of copper warrants that were cancelled - documents that confer ownership - was 56,875 tonnes or 35%. LME stocks Mercuria's action helped to boost the premium for cash copper contracts over the three-month ahead price . On Wednesday, premiums, which have been on an upward trend since November, reached $88 per ton, the highest level since October 13. Comparatively, a contango or discount of around $35 was offered on November 19, Last year, the premium per ton was around $38. As the settlement date of December 17 nears, traders expect even higher premiums on cash contracts. Companies with short positions must find copper in order to fulfill their contracts against them or roll them over - a process known as a "short squeeze". According to industry sources, cancellations are more frequent in contango markets where the prices of contracts with longer dates are higher than nearby contracts. It is rare to cancel warrants in a backwardated market, as the premium is usually intended to encourage deliveries at the LME.
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Source: Kazakhstan's oil production declines due to damaged terminals limiting exports.
An industry source reported on Thursday that Kazakhstan's oil-and-gas condensate output fell by 6% during the first two days in December. This was after a Ukrainian drone attacked the Caspian pipeline consortium's (CPC's) Black Sea loading facilities. The CPC pipeline which transports over 80% Kazakhstan's oil and more than 1% global supply has suspended operations after an mooring near Russia's Novorossiysk Port was damaged. Later, it resumed supplying using a single point mooring instead of the usual two. As a back-up, a third unit is currently undergoing maintenance that began before the strikes. According to sources and calculations, Kazakhstan's oil-and-gas condensate output decreased in the first two weeks of December from a November average production to 1.9 millions barrels per day. The Kazakhstani energy ministry has not responded to a comment request. The drop in oil production is a result of the CPC drone strike on OPEC+ Member Kazakhstan. Kazakhstan exported 68.6 millions tons of oil to the world last year, and was the 12th largest oil producer. MINISTER SAYS ONE CPC MOORING IS NOW FULLY OPERATIONAL CPC's pipeline of 1,500 km (930 mi) carries crude oil from Kazakhstan's Tengiz and Karachaganak fields to the Yuzhnaya Ozereevka Terminal in Novorossiysk. CPC gets its crude primarily from fields in Kazakhstan, but also from Russian producers. Yerlan AKBAROV, Kazakhstan's Deputy Minister of Energy, said that on Thursday one of CPC's moorings was fully operational at the Black Sea Terminal and that there were no restrictions regarding oil transportation. On Wednesday, five industry sources said that Kazakhstan would divert more crude oil through the Baku Tbilisi Ceyhan (BTC pipeline) in December due the the reduction of capacity at CPC. Kazakh producers can also export crude oil to Russia via Novorossiysk, Ust-Luga and the Druzhba Pipeline and Germany via Druzhba. However, these routes have lower margins because they are dependent on the capacity and the performance of Russian pipeline operator Transneft. As Russia's pipeline network is overloaded after drone attacks on its refineries, the options for rerouting oil from Kazakhstan are limited. One industry source estimated that the CPC's loading capacity would be reduced by 900,000 tonnes per week when only using one SPM. (Reporting and editing by Guy Faulconbridge, Ed Osmond).
Chevron is confident about its energy future and oversupply: Bousso
One would not expect a CEO of a large oil company to brag that he is more confident than ever when warnings are rife about the imminent collapse of oil prices. Mike Wirth, CEO of Chevron, announced the updated strategy on Wednesday. He dismissed concerns about an oversupply of oil in the short term, and expressed confidence in the long-term prospects for the sector. This was a far cry from the doubts that surrounded the industry a few decades ago when the momentum began to build towards the shift away from fossil fuels to low-carbon energy. The strong support for fossil fuels by Donald Trump and his "energy-dominance" agenda has provided Chevron, like its Big Oil counterparts, with a significant tailwind.
Wirth said to investors, "Never before in my career have i seen a more confident outlook." "The best of the future is yet to arrive."
The U.S. Energy Information Administration predicts that oil prices will average $55 per barrel in 2019, down from $69 last year.
NEAR-TERM RETRENCEMENT
But what a company claims is only one part of the story. What the company does is more important.
The spending plans of oil and gas companies are a good indicator of their risk appetite, both near and long term. Many energy projects like offshore oilfields and liquefied gas (LNG), for example, require billions in funding and years to build.
Chevron has therefore reduced its capital spending by $1 billion compared to previous guidance, resulting in a range between $18 billion and $21 billion annually until 2030.
U.S. oil's second largest company is also retrenching, albeit modestly, in response to the uncertainty surrounding the balance between supply and demand on the global market. International Energy Agency currently predicts a massive oversupply of 4 million barrels a day next year, approximately 4% of the global supply. If accurate, this could cause oil prices crater.
Chevron’s slight retreat suggests that its thinking is more in line with OPEC analysts who are expecting supply to roughly equal demand next year or other who believe there will be a modest oversupply.
BOOM LONG-TERM
Chevron’s actions appear to be more in line with its messaging. The company is clearly betting that oil demand will continue to grow and it's a race against time to compensate for dwindling supplies.
Chevron has plans to increase oil and gas production between 2% and 3% annually until 2030. Currently, it produces approximately 4 million barrels equivalent to oil per day.
Wirth stated that the amount of investment needed to close the oil gap is equivalent to five Saudi Arabias over the next ten years.
Chevron has stated that it will keep the production of the Permian shale in America at 1 million bpd until 2040, while reducing its investment from $4.5 billion per annum to $5 billion.
Chevron claims that it can maintain production with improved drilling methods, without drilling new wells as fast as they are currently doing. This is a bold prediction given the standard practices of shale drilling or fracking. Chevron's not the only major shale oil producer that has said it can sustain and grow shale oil production profitably for many years. ExxonMobil, ConocoPhillips and others have also indicated that they are confident of doing the same.
EXPLORATION BET
Chevron’s increasing investment in oil and natural gas exploration is perhaps the best way to demonstrate its long-term optimism. The high-risk and high-reward nature of this business demands heavy investment. It can take a decade or longer to go from the first drilling to production. Chevron has expanded its exploration activities in recent months to include Namibia, Egypt, and South America. In the coming years, Chevron plans to double its annual budget for exploration. Kevin McLachlan was hired by the company in October as its new exploration chief.
Do we have to expect a similar situation as at the beginning of this century when massive, unrestrained investments in new gas and oil resources led us to overspend and get poor returns? Most likely not. Big Oil companies have a laser-like focus on profitability. They've instituted cost-saving measures that will allow them to make money even if the oil price drops below $50. Chevron wants to reduce its structural costs between $3 and $4 billion dollars by 2026. This includes laying off 15% of the global workforce.
Chevron, and its peers, should be able to invest with more confidence in the future despite the peaks and valleys of the market. This, in turn indicates that the market will likely remain well-supplied for the foreseeable. All of this does not take into account the energy transition. The timing of Chevron’s strategy update coincides with the IEA’s new long-term outlook, which suggests that oil demand could continue to rise into 2050. Previously, it was thought that the demand would plateau by 2030.
It may sound good to Big Oil, but the reality could be harsh for Chevron and other companies in the oil industry if energy transition gains momentum again as many predict.
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(source: Reuters)