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Falling freight rates coming down? Fall underscores growing risks of global recession — S&P

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Falling freight rates coming down

Falling freight rates are coming down. This is another sign of the likely onset of a recession in the global economy. Cnbc writes.

Freight rates have fallen due to supply chain disruptions since the start of the COVID-19 pandemic. But the decline in vessel demand is largely due to a decline in trade because of lower demand for goods, analysts with S&P Global Market Intelligence believe.

“Significant decreases in port congestion levels amid a decline in incoming cargo was one of the main causes of falling freight rates,” the research group said in a report.

According to S&P, freight rates peaked in the second quarter, earlier than expected, and then moved downward. The Baltic Dry freight cost index, which tracks prices for ocean freight of bulk and dry bulk cargo worldwide, will fall about 20-30% over the year and won’t begin some recovery until 2024, experts predict.

This underscores the growing risks of a global recession as consumer demand declines amid rising costs of living and inflation.

According to the World Trade Organization, global merchandise trade rose 3.2% year-over-year in the first quarter, compared with a 5.7% rise in the fourth quarter of last year.

We previously reported that China’s Liquefied Natural Gas Companies Increase LNG Sales to Europe.

Economy

The U.S. will not sell strategic reserve oil after the end of Biden’s executive order

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strategic reserve oil

The U.S. administration is not considering an option for strategic reserve oil after the departure of President Joe Biden’s executive order. This was stated by White House press secretary Karin Jean-Pierre at a briefing.

“We’re not considering a new sale of strategic reserve oil beyond the one you’re talking about. I have nothing more to say, we’re not going to consider new sales,” Jean-Pierre said.

According to her, the U.S. will continue to fight inflation. However, no action will be taken now with the strategic reserves. Because this could lower oil reserve levels.

In late March, Biden signed an executive order that required the U.S. Energy Department to sell 1 million barrels of oil a day for six months from the strategic reserve for the sake of reducing gasoline prices in the country.

On Oct. 1, U.S. Energy Secretary Jennifer Granholm asked U.S. energy companies to lower fuel prices and rebuild their reserves.

Before that, global oil prices on September 28 began to decline by more than 1% in the morning amid information about a sharp increase in fuel stocks in the United States.

Earlier we reported that French enterprises were obliged to determine their own measures to save energy.

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Economy

OPEC+ extended the deal until 2024 and reduced OPEC+ oil production quota by 2 million bpd

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is opec+ cutting oil production

The OPEC+ alliance has agreed to extend the deal on oil production volumes until December 31, 2023. The daily OPEC+ oil production quota for the member countries of the commodity association will be reduced by 2 million barrels, according to a press release from the organization.

“Participating countries have decided to extend the declaration of cooperation until December 31, 2023 and to adjust total production downward by 2 million bpd from the required production levels in August 2022,” the statement said.

The reduction in daily production levels of oil will begin in November 2022. The alliance also stressed the importance of sticking to the new terms of the deal for each member of the cartel.

Is OPEC+ cutting oil production?

The new requirements were conditioned by the state of general uncertainty in the world energy market as well as the risks of a recession in the global economy in the light of international sanctions against one of the leaders in oil exports, Russia.

On October 5, the EUobserver reported that the eighth package of the EU’s anti-Russian sanctions will take effect on the sixth of this month. The list of restrictions will include: the introduction of price caps on oil transported by sea, as well as measures against exports of steel and timber industries. The total damage is estimated at up to €7 billion.

Earlier we reported that China earns hundreds of millions of dollars from reselling LNG from the US to European companies.

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French enterprises will have to determine ways to conserve energy and resources on their own

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ways to conserve energy and resources

Enterprises in France will have to determine ways to conserve energy and resources. This was reported by RTL with reference to the statement of the Minister of Energy Transition Agnès Pannier-Runachet on the proposed government measures to save electricity.

Pannier-Runache specified that the authorities will not control who sets what temperature in the room; the limit of +19 ° C is not a mandatory measure.

In this case, the organization was asked to identify ways to save electricity and gas. It is specified that certain steps to save energy should be negotiated between the administrations of enterprises and trade unions. And measures to reduce energy consumption should be discussed by municipal authorities.

At the same time, Pannier-Runashe noted that some organizations require high heating temperatures, for example, medical institutions and kindergartens. But “in offices, reducing the heating temperature is quite an acceptable measure,” the minister added.

Earlier we reported that the CEO of Credit Suisse Bank said “a critical moment”.

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