Lufthansa cancels over 1,000 flights due to ground staff walkout

Lufthansa cancels over 1,000 flights due to ground staff walkout
Strikes and staff shortages have already forced airlines including Lufthansa to cancel thousands of flights. (AFP)
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Updated 26 July 2022

Lufthansa cancels over 1,000 flights due to ground staff walkout

Lufthansa cancels over 1,000 flights due to ground staff walkout
  • Strikes and staff shortages have already forced airlines including Lufthansa to cancel thousands of flights

BERLIN: Deutsche Lufthansa said it was canceling more than 1,000 flights ahead of a one-day walkout by ground staff scheduled for Wednesday, just as families across Germany head off on their summer holidays.
Strikes and staff shortages have already forced airlines including Lufthansa to cancel thousands of flights and caused hours-long queues at major airports, frustrating holidaymakers keen to travel after COVID-19 related lockdowns.
Germany’s flagship carrier has canceled 678 flights at its Frankfurt hub, most of which were scheduled for Wednesday, and 345 flights at Munich, Lufthansa said on Tuesday.
More than 130,000 passengers are affected, Lufthansa said, adding that there could be a few more cancelations and delays on Thursday and Friday, after the end of the strike called by labor union Verdi in pursuit of a 9.5 percent pay claim.


India hikes rates to tame stubbornly high inflation, analysts see more tightening

India hikes rates to tame stubbornly high inflation, analysts see more tightening
Updated 17 sec ago

India hikes rates to tame stubbornly high inflation, analysts see more tightening

India hikes rates to tame stubbornly high inflation, analysts see more tightening

MUMBAI: The Reserve Bank of India raised its benchmark repo rate by 50 basis points on Friday, the fourth straight increase, as policymakers extended their battle to tame stubbornly high inflation and analysts said further tightening is on the cards, according to Reuters.

The monetary policy committee, comprising of three members from the RBI and three external members, raised the key lending rate or the repo rate to 5.90 percent with five out of the six voting in favor of the hike.

The RBI has now raised rates by a total 190 basis points since its first unscheduled mid-meeting hike in May but inflation continues to remain stubbornly high — a phenomenon that is affecting much of the global economy.

“The inflation trajectory remains clouded with uncertainties arising from continuing geopolitical tensions and nervous global financial market sentiments,” Governor Shaktikanta Das said in his address accompanying the MPC’s decision.

“In this backdrop, MPC was of the view that persistence of high inflation, necessitates further calibrated withdrawal of monetary accommodation to restrain broadening of price pressures, anchor inflation expectations and contain the second round effects,” he said.

The MPC also was of the view the current policy rate, adjusted for inflation, was still below 2019 levels.

Most economists expect further tightening, and several predicted the terminal rate at 6.5 percent, suggesting another 60 bps of rate hikes.

That is well above this month’s median Reuters poll forecast at 6.00 percent in each quarter through end-2023.

“The market was positioned for peak policy rate near 6 percent, today’s 50 bps hike will raise expectations that the peak policy rate is higher than earlier believed. We see peak policy rate at 6.5 percent now,” said Prithviraj Srinivas, chief economist at Axis Capital.

Fed angst

The US Federal Reserve’s relentless and aggressive rate hikes over recent months to curb inflation have battered the rupee, and most other emerging and developed market currencies.

“Clearly, the fast-evolving world order and consistent repricing of Fed’s out-sized hikes are strong-arming the emerging markets,” said Madhavi Arora, lead economist at Emkay Global Financial Services.

Policymakers around the world are grappling with a sweeping shift away from their respective currencies and into the safe-haven dollar, raising worries of capital outflows and further damage to their economies.

Economists say the RBI too would need to focus on ensuring the interest rate differential is not too low.

The standing deposit facility rate and the marginal standing facility rate were also increased by the same quantum to 5.65 percent and 6.15 percent, respectively

The MPC lowered its GDP growth projection for financial year 2023 to 7 percent from 7.2 percent earlier, while its retail inflation forecast was held steady at 6.7 percent.

India’s annual retail inflation rate accelerated to 7 percent in August, driven by a surge in food prices, and has stayed above the RBI’s mandated 2-6 percent target band for eight consecutive months.

The benchmark 10-year bond yield eased marginally after the RBI’s decision to 7.3535 percent at 07335 GMT while the partially convertible rupee weakened briefly before bouncing to 81.58 per dollar versus 81.86 on Thursday.

The broader NSE Nifty 50 index recovered sharply after a brief fall to trade up 1.65 percent.
 

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Europe’s biggest nuclear reactor reaches full power

Europe’s biggest nuclear reactor reaches full power
Updated 26 min 24 sec ago

Europe’s biggest nuclear reactor reaches full power

Europe’s biggest nuclear reactor reaches full power

HELSINKI: Finland’s long-delayed Olkiluoto 3 nuclear reactor has reached full power to become the most powerful electricity production facility in Europe, operator TVO said Friday, a boost amid a continent-wide energy crunch, according to AFP.

With a power level of 1,600 megawatts, the plant located on the Nordic country’s southwestern coast is also now the third most powerful electricity production facility globally, the company said.

OL3’s production is being closely followed in Finland, where the hope is that the plant could ease the coming winter’s challenges as European energy prices have soared following Russia’s invasion of Ukraine.

“The plant unit is now the most powerful electricity production facility in Europe,” TVO said in a statement, adding that regular operation is expected to start in December 2022.

Around 40 percent of Finland’s electricity production now comes from Olkiluoto, as the OL1 and OL2 reactors combined produce approximately 21 percent and the new OL3 alone around 19 percent.

The reactor, built by the French-led Areva-Siemens consortium, went online in March — 12 years behind schedule — after suffering a long string of setbacks.

The plant’s regular production was expected to start this summer but was postponed to December, after “foreign material” was observed in the turbine’s steam reheater.

Operator TVO said that the ten remaining sets of tests will impact the power levels in the coming months.

“In some of the upcoming tests, the plant unit’s production is either intentionally interrupted or the power level is lowered,” the company said.

The European Pressurised Reactor model was designed to relaunch nuclear power in Europe after the 1986 Chernobyl catastrophe, and was touted as offering higher power outputs and better safety.


Oil holds steady on prospect of OPEC+ output cut, weaker dollar

Oil holds steady on prospect of OPEC+ output cut, weaker dollar
Updated 30 September 2022

Oil holds steady on prospect of OPEC+ output cut, weaker dollar

Oil holds steady on prospect of OPEC+ output cut, weaker dollar

SINGAPORE: Oil prices were little changed during Asian trade on Friday, though were headed for their first weekly gain in five weeks, underpinned by a weaker US dollar and the possibility that OPEC+ may agree to cut crude output when it meets on Oct. 5.

Brent crude futures for November, which expire on Friday, inched down 10 cents or 0.1 percent to $88.39 a barrel by 0303 GMT, after losing 83 cents in the previous session. The more active December contract was unchanged at $87.18.

US West Texas Intermediate (WTI) crude futures for November delivery rose 0.1 percent or by 9 cents to $81.32 a barrel, after falling 92 cents in the previous session.

“A deteriorating crude demand outlook won’t allow oil to rally until energy traders are confident that OPEC+ will slash output at the October 5th meeting,” Edward Moya, senior analyst with OANDA, said in a client note.

“The weakness with crude prices is somewhat limited as the dollar softens going into quarter-end.”

Both Brent and WTI are however on track to rise by about 3 percent for the week, their first weekly rise since August, after hitting nine-month lows earlier in the week.

Oil prices were shored up by a drop in the dollar from 20-year highs earlier in the week. A weaker greenback makes dollar-denominated oil cheaper for buyers holding other currencies, improving demand for the commodity.

For all of September, Brent is set to drop by 8.4 percent, down for a fourth month. During the third quarter, Brent has plunged 23 percent, its first quarterly loss since the fourth quarter of 2021.

WTI is set to fall by 9.3 percent in September, also its fourth monthly decline, and it dropped by 23 percent during the quarter, the first quarterly slump since the period ending in March 2020 when COVID-19 slammed demand.

Analysts said the market appeared to have found a floor, with supply set to tighten as the European Union will ban Russian oil imports from Dec. 5. However, the key unknown is how much demand will drop as global growth slows in the face of aggressive interest rate hikes.

“Fundamentally, I still think prices are likely to move higher from here on tightening of Russian sanctions and with low global crude inventories, and the SPR (US Strategic Petroleum Reserve) supplies falling off,” said National Australia Bank commodities analyst Baden Moore.

“I expect OPEC is well positioned to manage supply to offset risks to demand,” he said.

Leading members of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together called OPEC+, have begun discussing an output cut ahead of their meeting on Wednesday, three people told Reuters.

Russia could suggest a cut of up to 1 million barrels per day, a person familiar with Russian thinking on the matter said earlier this week.

“In August, OPEC+ production was estimated at around 3.37 million barrels per day below target production levels. So in reality, any cut in supply will likely be smaller than whatever figure the group announces,” said ING Economics in a note. 

 


Oil settles lower after hitting $90/bbl as OPEC+ considers output cut

Oil settles lower after hitting $90/bbl as OPEC+ considers output cut
Updated 30 September 2022

Oil settles lower after hitting $90/bbl as OPEC+ considers output cut

Oil settles lower after hitting $90/bbl as OPEC+ considers output cut
  • OPEC+ has begun talks on output cut at Oct. 5 meet and Russia seen suggesting OPEC+ cuts output by 1 mln bpd — source
  • US markets slide on Fed’s aggressive moves to tame inflation; US production to return after shutting for Hurricane Ian

NEW YORK: Oil prices settled lower on Thursday in choppy trading, rising above $90 per barrel and then retreating as traders weighed a worsening economic outlook against potential OPEC+ output cuts next week.

Brent crude futures settled down 83 cents at $88.49 per barrel, after rising as high as $90.12 during the session. US crude futures for November settled 92 cents lower at $81.23 a barrel.

Leading members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have begun discussions about an oil output cut at their next meeting on Oct. 5, three sources told Reuters.

OPEC+, which combines OPEC countries and allies such as Russia, agreed a small oil output cut of 100,000 barrels a day at its September meeting to bolster prices.

Top OPEC producer Saudi Arabia flagged in August the possibility of output cuts to address market volatility. 

Also at the group’s last meeting, OPEC+ members agreed to stick to their forecasts for robust global oil demand growth in 2022 and 2023, citing signs that major economies were faring better than expected despite headwinds such as surging inflation.

Oil demand will increase by 3.1 million barrels per day in 2022 and by 2.7 million bpd in 2023, unchanged from last month, OPEC said in its monthly report.

One OPEC source told Reuters a cut was “likely,” while two other OPEC+ sources said key members had spoken about the topic.

Reuters reported this week that Russia is likely to propose that OPEC+ reduce oil output by about 1 million barrels per day(bpd).

“Right now, the oil market is teetering between the Fed-induced demand destruction and tight oil supplies,” said Ryan Dusek, a director in the Commodity Risk Advisory Group at Opportune LLP.

US stock markets tumbled on worries that the Federal Reserve’s aggressive fight against inflation could hobble the US economy, and as investors fretted about a rout in global currency and debt markets.

“Amid so much uncertainty, seesaw trade may be common over the next week, unless we get more clarity from OPEC+ sources on the likely size of any adjustment and what it means for previous missed quotas,” said Craig Erlam, senior markets analyst at OANDA.

The market also eased as the threat of Hurricane Ian receded with US oil production expected to return in coming days after about 158,000 bpd was shut in the Gulf of Mexico as of Wednesday, according to federal data.

In China, the world’s biggest crude oil importer, travel during the forthcoming week-long national holiday is set to hit its lowest level in years as Beijing’s zero-COVID rules keep people at home while economic woes curb spending.

Crude benchmarks remain on pace to notch weekly gains after a four-week losing streak. Early this week they rebounded from nine-month lows, buoyed by a dip in the US dollar index and a larger than expected US fuel inventory drawdown.

The dollar index dropped again on Thursday, easing off 20-year highs, indicating some more risk appetite from investors.

Further support for oil prices could come from the United States announcing new sanctions against companies that facilitated Iranian oil sales.

“I think traders have almost given up on a nuclear deal being agreed and this announcement from the US appears to be a make or break move,” said Erlam.


Saudi Arabia launches $10bn food security plan: Minister

Saudi Arabia launches $10bn food security plan: Minister
Updated 29 September 2022

Saudi Arabia launches $10bn food security plan: Minister

Saudi Arabia launches $10bn food security plan: Minister

RIYADH: Saudi Arabia, in coordination with its regional partners, has launched a food security action plan with an initial funding of $10 billion to tackle the global food supply crisis, the Kingdom’s minister of environment, water and agriculture said.

Speaking at a meeting of G20 agriculture ministers in Indonesia, Abdulrahman Al-Fadhli said the Kingdom will continue its role in helping stabilize the global food production supply chain.

On the domestic front, he added, the Kingdom has also succeeded in reducing the use of water for agricultural purposes by more than 40 percent, the Saudi Press Agency quoted him as saying.

Al-Fadhli also highlighted the Kingdom’s achievement in the agricultural sector, which according to him, grew by more than 7.8 percent in 2022 compared to the previous year. 

He said the Kingdom is applying modern techniques to boost its agriculture sector and reduce wastage of water.