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Thursday, 14 November 2019

Oil rises on hopes for OPEC supply curbs, new optimism on U.S.-China trade deal

November 15, 2019

TOKYO (Reuters) – Oil prices posted early gains as OPEC’s outlook for oil demand next year fueled hopes that the producer group and its associates will keep a lid on supply when they meet to discuss policy on output next month.

Optimism that the United States and China could soon sign an agreement to end their trade war also seeped into the market after White House economic adviser Larry Kudlow said a deal was “getting close”, citing what he called very constructive discussions with Beijing.

Brent crude futures were up 30 cents, or 0.5%, at $62.58 a barrel by 0147 GMT, having dropped 9 cents on Thursday.

West Texas Intermediate crude was up 29 cents, or 0.5%, at $57.06 a barrel, after falling 0.6% in the previous session.

The rosy mood came after the Organization of the Petroleum Exporting Countries (OPEC) said on Thursday it expected demand for its oil to fall in 2020. That supports the view among markets that there’s a clear case for the group and other producers like Russia – collectively known as ‘OPEC+’ – to maintain limits on production that were introduced to cope with a supply glut.

OPEC+ on Jan. 1 cut output by 1.2 million barrels per day (bpd), and in July, the alliance renewed the pact until March 2020.

“Energy markets will remain fixated on rhetoric from OPEC+, (U.S.-China) trade updates and whether Beijing can somehow de-escalate the situation in Hong Kong without sending more troops,” said Edward Moya, senior market analyst at OANDA.

Jitters over geopolitical fallout from the Hong Kong situation linger after violent clashes between protesters and police this week, with Chinese President Xi Jinping saying on Thursday that stopping violence was the most urgent task.

Still, investors shrugged off a bigger-than-expected increase in U.S. stockpiles and rising production.

U.S. crude inventories grew last week by 2.2 million barrels, the Energy Information Administration said, exceeding the 1.649 million-barrel rise forecast by analysts in a Reuters poll.

Crude production rose by 200,000 bpd to a weekly record of 12.8 million bpd, the EIA said in its weekly report.

(Reporting by Aaron Sheldrick; Editing by Kenneth Maxwell)

Hong Kong condemns London ‘attack’ on justice secretary as protests rumble on

November 15, 2019

HONG KONG (Reuters) – The Hong Kong government condemned on Friday an attack by a “violent mob” on the city’s justice secretary in London, the first direct altercation between demonstrators and a government minister during months of often violent protests.

Secretary for Justice Teresa Cheng, who was in London to promote Hong Kong as a dispute resolution and deal-making hub, was targeted by a group of protesters who shouted “murderer” and “shameful”.

A statement by the Hong Kong government said Cheng suffered “serious bodily harm” but gave no details. Video footage of the incident showed Cheng falling to the ground.

Hong Kong’s leader Carrie Lam said in a statement she strongly condemned what she described as an attack on Cheng.

“The secretary denounces all forms of violence and radicalism depriving others’ legitimate rights in the pretext of pursuing their political ideals, which would never be in the interest of Hong Kong and any civilized society,” the Hong Kong government said in a separate statement.

The attack came amid escalating violence in Chinese-ruled Hong Kong, where a student protester died earlier this month after falling from a parking lot during demonstrations.

A 70-year-old street cleaner, who videos on social media showed had been hit in the head by a brick thrown by “masked rioters”, died on Thursday, authorities said.

The Food and Environmental Hygiene Department expressed profound sadness on Friday at the death of its cleaning worker and said it was providing assistance to his family.

Anti-government protesters paralyzed parts of Hong Kong for a fifth day on Friday, forcing schools to close and blocking some highways as students built barricades in university campuses and authorities struggled to tame the violence.

The protests escalated in June over a now-scrapped extradition bill that would have allowed people to be sent to mainland China for trial. They have since evolved into calls for greater democracy, among other demands.

Cheng, embattled Hong Kong leader Carrie Lam’s chief legal adviser, played a key role in pushing forward the proposed extradition bill that ignited the protests.

The months-long protests have plunged the former British colony into its biggest political crisis in decades and pose the gravest popular challenge to Chinese President Xi Jinping since he came to power in 2012.

Hong Kong is also expected to confirm on Friday it has fallen into recession for the first time in a decade amid concerns the economy could be in even worse shape than feared as the anti-government protests take a heavy toll.

Alibaba Group Chairman Daniel Zhang, however, said Hong Kong’s future is “bright” as the e-commerce giant kicked off a retail campaign for its secondary listing in the city.

(Reporting by Donny Kwok and Twinnie Siu; Writing by Anne Marie Roantree; Editing by Paul Tait)

Scorecard of Japan’s ‘Abenomics’ stimulus policies

November 15, 2019

TOKYO (Reuters) – Just as Shinzo Abe becomes Japan’s longest-serving prime minister, he may be leading the world’s third-biggest economy into a downturn, with little ammunition left over from his landmark “Abenomics” stimulus policies deployed seven years ago.

The three arrows of Abenomics – bold monetary easing, fiscal spending and structural reforms – boosted stock prices, brightened business sentiment and brought exporters windfall profits via a weak yen.

But years of fiscal spending and ultra-loose monetary policy have failed to fire up inflation to the BOJ’s 2% target and left policymakers little firepower against another recession.

Here are the benefits brought by Abenomics and the challenges that remain for Japan’s economy.


Many analysts say its biggest benefits were the attention the policies provoked from foreign investors, who bought Japan’s shares on hopes it would finally take drastic measures to pull its economy out of deflation.

The Nikkei share average <N.225> rose to around 24,450 in October 2018, its highest since late 1991, and more than doubling from levels before Abe took power in December 2012. It now hovers around 23,300.

The policies also helped reverse a damaging spike in the yen currency that hurt Japan’s exporters and weighed on inflation by keeping import prices low.

The yen weakened nearly 50% to stand at 125.80 against the dollar in June 2015, from a Dec. 2012 high of 85 when Abe became prime minister.

(For an interactive graphic of market moves since 2012, click:


As a weaker yen boosted manufacturers’ profits, the benefits began trickling down to broader sectors of the economy as companies started hiring more.

Japan’s real gross domestic product (GDP) hit 540 trillion yen in October, up 8.6% from 2012 levels. But there are signs the economy may have peaked, as the U.S.-China trade war hits exports and factory output.

(Click here for an interactive graphic of real and nominal GDP since 2012:


Improvements in the economy and a dwindling working-age population have worsened labor shortages. The unemployment rate stood at 2.4% in September, hovering near a 27-year low hit in August. In December 2012, it was at 4.3%.

(Click here for an interactive graphic of labor-related indicators since 2012:


Despite a prolonged economic recovery and years of heavy money printing by the Bank of Japan, inflation had failed to accelerate toward its 2% target.

After peaking at 1.4% in 2014, the core consumer price index slowed, on slumping oil costs and the hit to household spending from a sales-tax hike in 2014. Inflation never got close to 2%, and now hovers around 0.3%.

(Click here for an interactive graphic of the core consumer price index since 2012:


The Bank of Japan kicked off a massive asset-buying program in 2013 to try and reach its 2% inflation target.

But the policy fell short, forcing the BOJ to return in 2016 to a framework targeting interest rates rather than the pace of money printing.

Despite pledging to boost bond holdings by 80 trillion yen a year, the BOJ has been steadily slowing bond purchases in what some market players describe as “stealth tapering”.

(For interactive graphic of increases in the BOJ’s long-term JGB holdings and monetary base, click:

(Reporting by Kaori Kaneko and Daniel Leussink; Editing by Leika Kihara and Clarence Fernandez)

Boeing received ‘unnecessary’ contract boost for astronaut capsule, watchdog says

November 15, 2019

By Joey Roulette

WASHINGTON (Reuters) – Boeing’s multibillion dollar contract to build U.S. astronaut capsules received an “unnecessary” extension from NASA, a watchdog report said on Thursday, the latest management blunders in the agency’s program to restart domestic human spaceflight. NASA agreed to pay Boeing Co a $287 million premium for “additional flexibilities” to accelerate production of the company’s Starliner crew vehicle and avoid an 18-month gap in flights to the International Space Station. NASA’s inspector general called it an “unreasonable” boost to Boeing’s fixed-priced $4.2 billion dollar contract.

Instead, the inspector general said the space agency could have saved $144 million by making “simple changes” to Starliner’s planned launch schedule, including buying additional seats from Russia’s space agency, which the United States has been reliant on since the 2011 retirement of its space shuttle program. Boeing and Elon Musk’s SpaceX have received nearly $7 billion combined since 2014 from NASA to develop separate capsule systems designed to end U.S. reliance on Russia’s Soyuz rocket for astronaut flights to the International Space Station. The program has been set back years by testing mishaps at both providers.

NASA justified the additional funds to avoid a gap in space station operations. But SpaceX, the other provider, “was not provided an opportunity to propose a solution, even though the company previously offered shorter production lead times than Boeing,” the report said.NASA also justified the additional expense to ensure Boeing “continued as a second commercial crew provider,” the report said. Boeing was not immediately available for comment.

In a response to the inspector general’s report, NASA “strongly” disagreed with the report’s findings that it overpaid Boeing, though it did agree the “complex and extensive” negotiations with the aerospace company could have resulted in a lower price. “However, this is an opinion, three years after the fact and there is no evidence to support the conclusion that Boeing would have agreed to lower prices,” the agency said in a letter to the inspector general.

The report comes as Boeing faces scrutiny over its management of NASA’s Space Launch System — a massive rocket whose development has been beset with delays and billions of dollars in cost overruns. It has also faced harsh criticism from U.S. lawmakers over its best-selling 737 MAX aircraft, which was grounded after two deadly crashes in five months killed 346 people.

(Reporting by Joey Roulette; editing by Bill Tarrant)

Browns waive WR Callaway amid suspension report

November 15, 2019

The Cleveland Browns waived wide receiver Antonio Callaway on Thursday, four days after he was benched, and shortly before NFL Network reported he is facing a 10-game suspension.

Callaway was a late scratch for the Browns’ 19-16 home victory over the Buffalo Bills on Sunday, for what multiple outlets reported was a late arrival to the game. His replacement, Rashard Higgins, caught the game-winning touchdown pass in the fourth quarter.

Not long after Callaway’s release Thursday, NFL Network reported the wideout is appealing a 10-game suspension for what would be his second violation of the league’s substance-abuse policy.

Per the report, the pending suspension was “not the only reason” Callaway was waived, but “it is an important factor.” The report also said Callaway had an appeal hearing within the last week, with Callaway contending a “tainted CBD product” was involved.

Head coach Freddie Kitchens told reporters on a conference call Monday that Callaway’s benching would be only for one game. The coach added, “I don’t know if he got the message or not, but I’m not wavering.”

Callaway, 22, was a fourth-round pick in the draft last year, after the Browns traded up to get him. Most considered him a first-round talent, but legal issues and his dismissal from the team at Florida damaged his draft status.

In August of 2018, four months after he was drafted, Callaway was cited for marijuana possession and driving with a suspended license, charges that were dropped in February.

Callaway played in all 16 games as a rookie and totaled 43 catches for 586 yards and five touchdowns in 16 games (11 starts as a rookie). But he was suspended four games under the substance-abuse policy — stemming from the 2018 citation — to start this season.

In four games (two starts) since the suspension, he had only eight catches for 89 yards.

The Browns replaced Callaway on the 53-man roster with offensive lineman Drew Forbes, who was activated from injured reserve after sitting out all season thus far with a knee injury.

Forbes, a sixth-round rookie out of Southeast Missouri State, worked at several different positions during the preseason after playing offensive tackle in college.

–Field Level Media

Lebanon’s Safadi emerges as PM choice for three parties

November 15, 2019

By Tom Perry and Laila Bassam

BEIRUT (Reuters) – Three major Lebanese parties agreed to nominate Mohammad Safadi, a former finance minister, to become prime minister, three sources familiar with the situation said, suggesting progress toward a new government at a time of acute economic crisis.

Saad al-Hariri quit as prime minister on Oct. 29 in the face of an unprecedented wave of protests against ruling politicians who are blamed for rampant state corruption and steering Lebanon into its worst economic crisis since the 1975-90 civil war.

The consensus on Safadi emerged in a meeting late on Thursday between Hariri, a leading Sunni politician aligned with Western and Gulf states, and representatives of the Iran-backed Shi’ite group Hezbollah and its Shi’ite ally Amal.

The news was first reported by Lebanese broadcasters LBCI and MTV.

A source familiar with the meeting said Hariri had expressed no objections to Safadi’s nomination, adding that MPs from Hariri’s Future Movement would nominate Safadi in a formal process expected to begin soon.

A second source, a senior figure close to Amal and Hezbollah, said agreement in principle on Safadi’s nomination had emerged at the meeting.

There was no official confirmation from the parties or Safadi.

Safadi, 75, is a prominent businessman and former member of parliament from the predominantly Sunni city of Tripoli. He previously served as finance minister and minister of economy and trade.

Lebanon’s prime minister must be a Sunni Muslim, according to its sectarian power-sharing system.

The next government will face huge challenges.

It must win international financial support seen as critical to alleviating the economic crisis, while addressing the challenge posed by a nationwide protest movement that wants to see the old elite gone from power.

Lebanon’s long-brewing economic crisis, rooted in years of state waste, corruption and mismanagement, has deepened since the protests began. Banks have imposed controls on transfers abroad and U.S. dollar withdrawals.


Hariri had said he would only return as prime minister of a Cabinet of specialist ministers that he believed would be best placed to win aid and save Lebanon from crisis. To that end, he has been holding many closed-door meetings with other parties.

But while Hezbollah and Amal wanted Hariri to return as premier, the Shi’ite groups and President Michel Aoun, a Hezbollah ally, have been insisting that the Cabinet include both technocrats and politicians.

Listed as a terrorist group by the United States, the heavily armed Hezbollah and groups politically aligned with it hold a majority of seats in parliament.

The process requires Aoun, a Maronite Christian, to formally consult MPs on their choice for prime minister. He must designate whoever gets the most votes.

Hariri remains caretaker prime minister for now.

Safadi was finance minister from 2011 to 2014 under Prime Minister Najib Mikati.

In 2008, he became minister of economy and trade in the government of Western-backed Prime Minister Fouad Siniora. He held that post again in a Hariri-led Cabinet formed in 2009.

Safadi was part of the Hariri-led “March 14” alliance that emerged after the 2005 assassination of Rafik al-Hariri, Saad’s father. March 14 mobilized against the presence of Syrian forces that withdrew from Lebanon in 2005 and was then locked in years of political conflict with Hezbollah over its weapons.

A 2009 U.S. Embassy cable published by WikiLeaks described Safadi as having made his fortune in Saudi Arabia and being close to the Saudi royal family.

He was first elected as an MP in Tripoli in 2000 but did not stand in the last election.

His wife, Violette Safadi, is minister of state for economic empowerment of women and youth in the Hariri Cabinet.

(Reporting by Laila Bassam, Eric Knect and Tom Perry in Beirut; Writing by Tom Perry; Editing by Matthew Lewis and Peter Cooney)

You told me we were going to the lake. Where is all the water? via /r/aww

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