Energy & Commodities

Global gas crisis is spilling over into oil markets, IEA says

Posted by James Herron, Bloomberg News

on Thursday, 14 October 2021 9:57

Shortages of natural gas in Europe and Asia are boosting demand for oil, deepening what was already a sizable supply deficit in crude markets, the International Energy Agency said.

Crude has surged above US$80 a barrel, the highest in three years, as traders anticipated that record gas prices would stimulate consumption of other fuels, particularly for power generation. That’s already happening and could add about 500,000 barrels a day to oil use on average over the coming six months, the IEA said on Thursday.

“An acute shortage of natural gas, LNG and coal supplies stemming from the gathering global economic recovery has sparked a precipitous run-up in prices for energy supplies and is triggering a massive switch to oil products,” the IEA said. “Provisional August data already indicates that there is some unseasonably high demand for fuel oil, crude and middle distillates for power plants across a number of countries, including China.”

The latest analysis from the agency, which advises industrialized countries on energy policy, shows how the acute shortage of natural gas is spilling over into other markets and the broader economy. The crisis is deepening the current oil-supply deficit, potentially disrupting OPEC’s careful plan to gradually revive idle production. It’s roiling energy-intensive industries and threatens to curb GDP growth and boost inflation…read more.

Canadian Bond Yields Hit Pre-Pandemic Levels, A Sign Higher Mortgage Rates Are Near

Posted by Daniel Wong, betterdwelling.com

on Wednesday, 13 October 2021 12:06

The Canadian bond market is sending real estate a message — credit is going to tighten. Government of Canada (GoC) 5-year bond yields hit the highest level in a year today. Yields for the segment are now triple the level they were last year. Since GoC bond yields influence mortgage rates, this will drive the cost of a mortgage higher.

Government Of Canada 5-Year Bond Yields And Mortgages

The GoC 5-year bond yield is related to the interest charged on mortgages of similar lengths. Credit markets compete by looking for lenders willing to part with their money. Mortgages are a little less secure than GoC bonds, so they pay higher yields. After all, if they charged the same rate, why wouldn’t you just get a government bond? They need to add a premium, usually somewhere between 15 and 30 basis points. As the 5-year bond yield rises, so does the interest cost for an insured 5-year fixed-rate mortgage.

Rising rates are generally good news, meaning the economy needs less stimulus. Higher financing costs tend to consume more income, and reduce profits though. Therefore it tends to cool demand for goods, which can slow the economy’s growth. This makes it much more difficult for home prices to rise. During the pandemic, the opposite happened, and bond yields dropped like a stone…read more.

‘No growing support’ for fossil fuel divestment: RBC

Posted by Jeff Lagerquist, ca.finance.yahoo.com

on Wednesday, 13 October 2021 11:42

Working with the fossil fuel industry to improve its environmental impact is seen as more effective than divesting from the emissions-heavy sector, according to RBC Global Asset Management’s latest survey on environmental, social and governance-focused (ESG) investments.

The asset management division of Canada’s largest bank found global institutional investors preferred engagement (45 per cent) over divestment (10 per cent) by a more than four-to-one margin, a slight increase from 40 per cent a year ago. However, the result comes as some major investment funds sell off oil and gas holdings in pursuit of a greener portfolio. Many of those decisions have targeted companies in Canada’s oil patch.

“Over the last three years, there has been no growing support for divestment amongst institutional investors, indicating a clear preference for engaging in dialogue with companies,” the survey’s authors wrote…read more.

Employment numbers show bureaucrats benefit while private sector struggles

Posted by Franco Terrazzano, taxpayer.com

on Wednesday, 13 October 2021 11:07

Statistics Canada’s employment numbers released today show Canadians working outside government have struggled while the bureaucracy continues to grow.

“There’s been a tale of two pandemics in Canada: one full of private sector pain, the other full of politicians and bureaucrat financial gain,” said Franco Terrazzano, Federal Director with the CTF. “It’s not fair to make struggling taxpayers pay for more bureaucrats and bigger bureaucrat salaries during the pandemic.”

Statistics Canada’s job report shows the burden of the pandemic downturn has been felt disproportionately by workers outside of government.

There’s been 257,400 government jobs added during the pandemic, including an extra 107,700 “public administration” employees added since February 2020.

There are 256,500 fewer jobs outside of government (private sector plus self-employed) than pre-pandemic…read more.

How Democracy Ends

Posted by Vinay Prasad, vinayprasadmdmph.substack.com

on Wednesday, 13 October 2021 10:36

How Democracy Ends:

COVID19 policy shows a (potential) path to the end of America

The pandemic events of 2020-2021 outline a potential pathway for a future democratically elected President of the United States to systematically end democracy. The course of events leading to this outcome need not be a repeat of the direct assault on the Capitol, but a distortion of risk of illness as a justification for military force and suspension of democratic norms.

Sometime over the next quarter century, it is inevitable that America, and all nations, will experience a cold and flu season above average. In a typical season approximately 40,000 Americans may die, but it is possible an above average season may see 80,000 or more deaths.

Inevitably some location(s) in the country will experience a surge in cases. Television news will show overworked hospital workers, and report that Intensive Care Unit beds have nearly run out– of course, ICU’s often operate near capacity, so this finding alone may not be that noteworthy, but in our attention economy, it may be sensationalized. Some afflicted individuals will be young children– typical for the flu, and these anecdotes will surely be emotionally salient. A video of a young boy or girl on life support machines may be used to show how dire things are. These events will then serve as an opportunity for a strong federal response…read more.