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CANADA CRUDE-Western Canada Select trades at steepest discounts ever since March
The difference between the West Texas Intermediate benchmark futures and Western Canada Select futures, which is North American benchmark, has narrowed slightly on Thursday. However, it remains larger than ever before. CalRock reported that WCS for Hardisty, Alberta delivery in January settled at $12.85 per barrel, which is lower than the U.S. benchmark WTI. This compares to $13 Wednesday. The WCS discount on increased Canadian oil production has recently increased after spending most of the year in historically tight levels. This is largely due to the Trans Mountain expansion pipeline which has provided additional export capacity for Canadian oil producers. According to government statistics, the oil-producing province Alberta has set a record for production in 2024 with an average of 3.98 million barrels per day. The first 10 months of the year 2025 have been 3.8% higher than the same period of last year. * Oil prices fell globally on Thursday as investors waited for the Federal Reserve's interest rate cut. Meanwhile, the stalled Ukraine talks dampened expectations that a deal would be reached to restore Russian oil supplies. (Reporting from Amanda Stephenson, Calgary; Editing done by Maju Sam)
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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.
US port workers' dispute threatens bananas, clothes, and cars
On Oct. 1, 45,000 unionized workers may walk off their jobs at seaports along the U.S. East Coast and Gulf Coast, cutting off vital trade routes just weeks before the presidential election.
JPMorgan estimated that a strike would cost the U.S. $5 billion per day.
The strike may affect 36 ports, which handle approximately half of U.S. imports by ocean. This could impact the availability of bananas, clothing and cars that are shipped in containers. It may also create weeks-long queues at ports. Logistics experts say that it could also cause shipping costs to rise, which may be passed onto voters who are already frustrated by housing and food inflation.
What's the issue?
There appears to be a deadlock over wages between the United States Maritime Alliance and International Longshoremen's Association, a union that represents workers in ports from Maine to Texas. The current six-year agreement expires midnight on September 30.
The ILA's first strike since 1977 would be a general strike on the East Coast and Gulf of Mexico.
A Biden administration official said that the President would not use federal powers to stop a strike.
A long and widespread strike could lead to shortages and increased costs in a wide range of industries.
What do longshoremen do?
Longshoremen are also known as stevedores and they handle the cargo of incoming ships. Most of their work is on container ships. However, they also work on car carriers and cruise liners.
The crane operators secure cargo containers in transit by "lashing" them to the ship. They also process paperwork.
AUTOS, MACHINERY & PARTS
According to S&P Global Market Intelligence, the ports covered by this contract imported vehicles worth $37.8 Billion during the 12-month period ending June 30, 2024. Baltimore, Maryland is the leading port in the country for car shipments.
Logistics experts say that auto parts are a major import for the East Coast of the United States and Gulf of Mexico. They also said that shipments coming from Europe were more difficult to reroute compared to those coming from China.
S&P Global Market Intelligence showed that the ports are also leading in the U.S. for shipments of machinery and precision instruments. The figures were $97.4 Billion, $16.2 Billion and $15.7 Billion respectively.
Agriculture and pharmaceuticals
A strike would put at risk about 14% of the total volume of U.S. agricultural exports that are waterborne. The American Farm Bureau Federation estimates that the value of these exports could reach $318 million over a period of one week.
The Farm Bureau reported that 53% of U.S. agricultural imports transported by water are susceptible to a strike. This could have an economic impact of more than $1.1 billion per a week.
According to Jason Miller, the interim chair of Michigan State University’s Department of Supply Chain Management, three-quarters (75%) of the United States' banana imports come from countries such as Guatemala and Ecuador.
Separately the U.S. exports cotton and imports large quantities of coffee and cocoa.
Mike Steenhoek said that a strike would also affect the container exports for soybeans, soy meal, and other products, and have a major impact on meat or eggs, whether they are chilled or frozen.
Refrigerated containers are essential for the $18 billion-per-year U.S. market of beef, pork and poultry exports and $5.8 million-per-year egg and poultry exports.
Joe Schuele, spokesperson for the U.S. Meat Export Federation, stated that in the first seven month of this year about 45% of pork and beef exports from America were shipped through East Coast and Gulf Coast port.
Customs data, and the USA Poultry & Egg Export Council, show that more than a quarter (25%) of U.S. exports of eggs and egg products and about 70% of poultry meat are shipped out of ports on the East Coast and Gulf Coast.
According to Everstream Analytics, the affected ports handle 91% of all containerized imports from the United States and 69% containerized exports.
Nearly one third of the containerized pharmaceutical imports into the U.S. enter through the Charleston, South Carolina port, while more than one-third leave the U.S. via the Norfolk, Virginia port.
ENERGY & MILITARY, CRUISES AND CONSUMER GOODS
About half of container volumes are shipped by retailers. Retailers in the United States have already rushed to ship holiday merchandise.
According to S&P Global Market Intelligence, the ports that could be affected by an upcoming strike would bring in over half of all knitted and nonknitted clothing, worth $32.8 billion. They also carry furniture, valued at $23.4 million, which is valued at more than half.
Although the Gulf Coast ports in Houston and New Orleans, which are important hubs for oil and gas shipments, these commodities would be largely unaffected if a strike affected more labor-intensive containers. Experts said that the same is true for coal exports out of Norfolk, Virginia.
The ILA has, however, pledged to work on passenger cruise ships and handle military cargo during a strike.
HIGHER COSTS AND BIG DELAYS
A strike could increase shipping costs and cause long delays.
John McCown of the Center for Maritime Strategy, a senior fellow, said that the top five ports within the negotiating group – New York and New Jersey, Savannah, Georgia, Houston, Norfolk, and Charleston – handled more than 1,5 million 20-foot-equivalent units (TEUs), valued at $83.7billion, in August. He said that two-thirds were inbound cargo, and the rest was outbound.
Logistics experts warned that trade disruptions caused by a stoppage of work would start immediately and send rates up, affecting the entire U.S. economic system.
Sea-Intelligence analysts, a Copenhagen-based shipping consultancy, estimate that it will take between four and six days to clear up the backlog after a strike of one day.
Maersk, a major ocean transporter and member of the Employer Group, has warned that an unplanned shutdown of one week could take up to six weeks, with "significant backlogs and delay compounding each day." (Reporting from Lisa Baertlein, Tom Polansek and Karl Plume in Chicago, Marcelo Téixeira in New York, and David Shepardson, Jarrett Renshaw and Anna Driver in Washington. Editing by William Maclean, Anna Driver and Deepa Babington.
(source: Reuters)