Ecuador To Cut Fuel Prices That Sparked Weeks Of Protests

A file photo of Ecuador President Guillermo Lasso

 

President Guillermo Lasso announced Sunday that Ecuador will cut fuel prices, which had sparked weeks of demonstrations, though not by as much as protesters have demanded.

“I have decided to reduce the price of gasoline by 10 cents per gallon and diesel also by 10 cents per gallon,” he said in a television and radio address.

The powerful Confederation of Indigenous Nationalities of Ecuador (Conaie), which since June 13 has been blocking roads and occupying oil wells in different parts of the country, had demanded a reduction in prices by an additional 30 cents and 35 cents, respectively.

Earlier on Sunday, the country’s energy ministry warned that oil production had reached a “critical” level and could be halted entirely within 48 hours if the protests and roadblocks continued.

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The protests, which are also against rising living costs, have crippled transportation in Ecuador, with roadblocks set up in 19 of the oil-rich country’s 24 provinces.

“Oil production is at a critical level,” the ministry said in a statement.

“If this situation continues, the country’s oil production will be suspended in less than 48 hours as vandalism, the seizure of oil wells and road closures have prevented the transport of equipment and diesel needed to keep operations going.”

“Today, the figures show a decrease of more than 50 percent” in production, which was at roughly 520,000 barrels per day before the protests, it said.

Ecuador’s economy is highly dependent on oil revenues, with 65 percent of output exported in the first four months of 2022.

 Impeachment Debate 

Late on Sunday, the country’s parliament suspended seven hours of debate over whether to impeach Lasso, with proceedings set to resume on Tuesday. At least 20 members of parliament are still due to speak.

The president’s impeachment would require 92 of the 137 possible votes in the National Assembly, where the opposition holds a fragmented majority. MPs will have a maximum of 72 hours to vote following the end of the debate.

An estimated 14,000 protesters have taken part in the nationwide demonstrations, most of them in Quito.

Shortages are already being reported in the capital, where prices have soared.

Violence between police and demonstrators has reportedly left five dead, while about 500 people have been injured.

Earlier in the day, Production Minister Julio Jose Prado said that public-private economic losses from the protests totaled $500 million.

“Each additional day of downtime represents $40 to $50 million lost,” he said on Sunday.

Overall losses since the protests began include 8.5 million liters of milk worth $13 million as well as $90 million in agricultural goods and livestock.

The tourism industry has seen cancellations rise to 80 percent, with losses amounting to at least $50 million.

Additionally, “in the flower farm sector, 12 days of shutdown resulted in $30 million in losses and damage to trucks and farms,” Prado said.

AFP

Ukraine War Pushes World Food Prices To Record High

A file photo taken at a food market. A large percentage of poor Nigerians live in the rural areas where the predominant occupation is farming.
A file photo showing traders at a food market.

 

World food prices hit an all-time high in March following Russia’s invasion of agricultural powerhouse Ukraine, a UN agency said on Friday, adding to concerns about the risk of hunger around the world.

The disruption in export flows resulting from the February 24 invasion and international sanctions against Russia has spurred fears of a global hunger crisis, especially across the Middle East and Africa, where the knock-on effects are already playing out.

Russia and Ukraine, whose vast grain-growing regions are among the world’s main breadbaskets, account for a huge share of the globe’s exports in several major commodities, including wheat, vegetable oil, and corn.

Ukrainian ports have been blocked by a Russian blockade and there is concern about this year’s harvest as the war rages on during the spring sowing season.

READ ALSO: Nigeria Abstains To Vote In Russia’s Suspension From UN Human Rights Council

“World food commodity prices made a significant leap in March to reach their highest levels ever, as war in the Black Sea region spread shocks through markets for staple grains and vegetable oils,” the Food and Agriculture Organization said in a statement.

The FAO’s food price index, which had already reported a record in February, surged by 12.6 percent last month, “making a giant leap to a new highest level since its inception in 1990”, the UN agency said.

The index, a measure of the monthly change in international prices of a basket of food commodities, averaged 159.3 points in March.

The jump includes new all-time highs for vegetable oils, cereals, and meats, the FAO said, adding that prices of sugar and dairy products “also rose significantly”.

– Famine fears –
Russia and Ukraine together accounted for around 30 percent and 20 percent of global wheat and maize exports respectively, over the past three years, the FAO said.

Wheat prices rose by almost 20 percent, with the problem exacerbated by concerns over crop conditions in the United States, the organization said.

The FAO’s vegetable oil price index surged by 23.2 percent, driven by higher quotations for sunflower seed oil, of which Ukraine is the world’s leading exporter.

Spanish supermarkets have rationed the sale of sunflower oil to stop customers stockpiling over shortage fears due to the war.

The United States has accused Russian President Vladimir Putin of creating “this global food crisis”.

France has warned that the war has increased the risk of famine around the world.

The FAO estimates famine in West Africa and the Sahel regions, both highly dependent on Russian and Ukrainian grains, could worsen and affect over 38 million people by June if no measures are taken.

Ukraine on Thursday called on the European Union to provide aid to its farmers. The European Commission has been asked to coordinate the delivery of fuel, seeds, fertilisers and agricultural machines to the country.

For his part, Putin warned on Tuesday that, against the backdrop of global food shortages, Russia would “have to be prudent with supplies abroad and carefully monitor such exports to countries that are clearly hostile towards us”.

FAO chief Qu Dongyu called Friday on countries not to restrict food exports, which would only worsen the situation for countries dependent imports.

“Above all, we must not shut down our global trade system, and exports should not be restricted or taxed,” he said.

The FAO also called for aid to vulnerable nations to boost planting.

“One and a half billion dollars would be sufficient for immediate agricultural assistance that would save the lives of some 50 million people by allowing the growing of food where the need is most keen,” said Rein Paulsen, head of the agency’s emergencies office, in a letter to AFP.

The conflict has also sent oil and gas prices through the roof, causing inflation to rise further across the world and raising concerns that it could derail global economic growth.

AFP

Moroccans Protest Against High Prices For Basic Goods


Moroccans raise placards as they gather in front of parliament in the capital Rabat to protest against rising prices, on February 20, 2022. STR / AFP

 

Protests broke out in several Moroccan cities on Sunday as people rallied against rising prices and to commemorate the eleventh anniversary of demonstrations that called for reform. 

In the capital Rabat, dozens of protesters decried the high cost of basic goods and shouted slogans harking back to the “February 20 Movement”, an AFP correspondent said.

The pro-reform and anti-corruption movement was born out of the Arab Spring uprisings that rocked the Middle East in 2011.

READ ALSO: Int’l Community Pledges $600 Million As Relief For Haiti Earthquake

A Moroccan man raises a placard as he takes part in a protest against rising prices, in front of the parliament in the capital Rabat, on February 20, 2022. STR / AFP

 

Dozens also rallied in Casablanca and Tangiers, according to videos posted on social media.

Drought has hurt the country’s economy and Moroccans are also feeling the pinch from high fuel prices.

Some 3.8 billion dirhams (over $400 million) is needed for flour subsidies alone in 2022, according to an economy ministry official.

AFP

OPEC+ To Meet As Omicron Sparks Price Turmoil

In this file photo taken on November 29, 2016, the logo of OPEC is pictured at the OPEC headquarters on the eve of the 171th meeting of the Organization of the Petroleum Exporting Countries in Vienna, Austria. JOE KLAMAR / AFP
In this file photo taken on November 29, 2016, the logo of OPEC is pictured at the OPEC headquarters on the eve of the 171th meeting of the Organization of the Petroleum Exporting Countries in Vienna, Austria. JOE KLAMAR / AFP

 

OPEC and the oil cartel’s allies hold a key output meeting on Thursday facing new challenges as the Omicron coronavirus variant has roiled markets and other US-led nations decided to tap their strategic reserves.

The OPEC+ alliance has resisted US-led pressure to step up production to bring down surging energy prices, and the emergence of the new variant has complicated the equation.

The meeting “is shaping up to be one of the most significant since the pandemic demand recovery began, and the key signal will be how much more oil will be added to supply to start the new year,” said Peter McNally, an analyst at the Third Bridge think tank.

The detection of the new variant on Thursday caused crude prices to plunge more than 10 percent, a first since the massive drops of April 2020.

After bouncing back on Monday, oil prices fell again on Tuesday as the head of US pharmaceutical company Moderna warned that current vaccines might be less effective at fending off the Omicron variant.

Carsten Fritsch of Commerzbank said “there is much to suggest that OPEC+ will not initially step up its oil production any further” in an effort to maintain current prices at around $70 a barrel.

OPEC+ countries began slowly boosting output in May.

The group has been adding 400,000 barrels per day to the markets every month, even though its capacity is 10 times higher than that.

The alliance will discuss its output levels for early 2022 at the meeting.

No ‘hasty’ moves

Russian Deputy Prime Minister Alexander Novak, the Kremlin’s oil pointman, warned Monday against any “hasty decisions”, according to Russian news agencies.

A technical meeting was set for Tuesday ahead of the meeting but was postponed to Thursday as experts seek more information on the “current situation”, Novak said.

The conference also comes a week after the United States, China, India and Japan decided to dip into their strategic reserves to help bring down crude prices, after a surge that has undermined economic recovery.

US President Joe Biden called it a “major initiative”, with analysts estimating the injection at between 65 and 80 million barrels, including 50 million from the United States alone.

Oil prices rose despite the move, but they fell after Omicron emerged.

Iran’s possible re-entry into OPEC will be another key element in the OPEC calculus.

Iran was sidelined from OPEC in 2018 when then US president Donald Trump pulled Washington out of the 2015 nuclear accord with the Islamic republic.

After a five-month hiatus, negotiations resumed Monday in Vienna.

While most analysts are pessimistic about the outcome, Bjarne Schieldrop of Swedish bank SEB said: “Getting Iranian oil production and exports back on track is probably the best option for President Joe Biden to ease the current oil market tightness.”

Iran produced nearly four million barrels a day in 2017 — an output that dropped to around two million barrels per day last year.

Oil Price Collapses To $11 Per Barrel Amid COVID-19 Pandemic

(FILES) This file photo taken on September 20, 2019 shows employees of Aramco oil company working in Saudi Arabia’s Abqaiq oil processing plant. Fayez Nureldine / AFP

 

US oil prices dived to 22-year lows at just $11 Monday after crashing almost 40 percent in a market flooded with crude and slammed by evaporating demand in the face of the coronavirus pandemic.

Just before 1200 GMT, the US benchmark West Texas Intermediate (WTI) crude for May delivery tanked to $11.04 — the lowest level since 1998.

Trade, however, was also technically driven as investors closed out their positions ahead of the May contract expiry Monday. The June contract was down 11.9 percent at $22.06.

“The real problem of the global supply-demand imbalance has started to really manifest itself in prices,” said Rystad Energy analyst Bjornar Tonhaugen.

“As production continues relatively unscathed, storage is filling up by the day. The world is using less and less oil and producers now feel how this translates in prices.”

The European benchmark contract, London Brent North Sea oil for June delivery, was down 6.1 percent at $26.38 per barrel.

Signs that the coronavirus may have peaked in Europe and the United States failed to lift Asian and European financial markets generally.

READ ALSO: Coronavirus Exposes Weaknesses In Health Systems, Says G20

Traders are instead becoming more and more concerned that oil storage facilities are reaching their limits, as stockpiles continue to build owing to the crash in demand caused by the COVID-19 pandemic.

Analysts said this month’s agreement between OPEC and its peers to slash output by 10 million barrels a day was having little impact because of the virus lockdowns and travel restrictions that are keeping billions of people at home.

WTI was hit particularly hard as its main US storage facilities in Cushing, Oklahoma, were filling up, with Trifecta Consultants analyst Sukrit Vijayakar saying refineries were not processing crude fast enough.

There are also plenty of supplies from the Middle East with no buyers as “freight costs are high”, he told AFP.

AxiCorp’s Stephen Innes added: “It’s a dump at all cost as no one… wants delivery of oil, with Cushing storage facilities filling by the minute.

“It hasn’t taken long for the market to recognise that the OPEC+ deal will not, in its present form, be enough to balance oil markets.”

Stock markets were mostly lower despite governments starting to consider how and when to ease the lockdowns that have crippled the global economy.

Italy, Spain, France and Britain reported drops in daily death tolls and slowing infection rates, while Germany began allowing some shops to reopen and Norway restarted nurseries.

‘No time to get cocky’

In the US, Andrew Cuomo, governor of badly hit New York state, said the disease was “on the descent”, though he cautioned it was “no time to get cocky”.

Mounting evidence suggests that the lockdowns and social distancing are slowing the spread of the virus.

That has intensified planning in many countries to begin loosening curbs on movement and easing the crushing pressure on national economies.

Investors are keeping an eye on Washington, where Congress and the White House are working towards a $450 billion economic relief plan for small business to add to the trillions already pledged to support the economy.

Big-name companies including IBM, Netflix and Coca-Cola are also due to deliver their earnings reports.

– Key figures around 1200 GMT –

West Texas Intermediate: DOWN 38 percent at $11.04 per barrel

Brent North Sea crude: DOWN 6.1 percent at $26.38 per barrel

London – FTSE 100: DOWN 0.8 percent at 5,740.37 points

Frankfurt – DAX 30: DOWN 1.4 percent at 10,479.39

Paris – CAC 40: DOWN 1.3 percent at 4,439.88

Milan – FTSE MIB: DOWN 1.4 percent at 16,824.83

Madrid – IBEX 35: DOWN 2.1 percent at 6,733.70

EURO STOXX 50: DOWN 1.4 percent at 2,848.16

Tokyo – Nikkei 225: DOWN 1.2 percent at 19,669.12 (close)

Hong Kong – Hang Seng: DOWN 0.2 percent at 24,330.02 (close)

Shanghai – Composite: UP 0.5 percent at 2,852.55 (close)

New York – Dow: UP 3.0 percent at 24,242.49 (Friday close)

Euro/dollar: UP at $1.0876 from $1.0875 at 2100 GMT Friday

Dollar/yen: UP at 107.72 yen from 107.54

Pound/dollar: DOWN at $1.2454 from $1.2499

Euro/pound: UP at 87.31 pence from 87.01 pence.

AFP

Brent Oil Drops Under $70 For First Time Since April

Indigenous Firms Plan To Increase Oil Output
File photo

 

Brent crude oil sank Friday under $70 per barrel before a weekend meeting of major oil-producing nations in Abu Dhabi.

In London morning deals, Brent North Sea crude for delivery in January fell as low as $69.69 per barrel, a slide of 96 cents on the day, on surging US energy stockpiles. It comes as OPEC and non-cartel members meet this weekend to discuss a possible cut in crude output amid slumping prices.

AFP