Pre-market inventories: Energy markets are changing dramatically

The markets remain on edge. The price of Brent crude, the global benchmark, rose 4% on Monday to $112 a barrel following an attack on Saudi production facilities and pressure for EU countries to join. a Russian oil embargo.

“Investors are eyeing key NATO talks later this week aimed at tightening sanctions on Russia and the prospect of a European crude embargo should be on the table again,” said Susannah Streeter. , senior investment and market analyst at Hargreaves. Lansdown.

Canada, the United States, the United Kingdom and Australia have already banned imports of Russian oil, affecting about 13% of Russian exports. Moscow’s continued aggression could bring the European Union on board, a move that could lead to a sea change in the way the continent buys its energy.

“I think it’s inevitable to start talking about the energy sector. And we can definitely talk about oil, because it’s the biggest income in the Russian budget,” Gabrielius Landsbergis, Lithuanian Minister of Affairs, said on Monday. foreign affairs, ahead of a meeting of EU ministers. .

Ireland has signaled it could also support a ban on crude imports, even though natural gas prices are very high in Europe and an embargo could jeopardize supplies from Russia.

“Given the extent of the destruction in Ukraine at the moment, it is very difficult – in my opinion – to argue that we should not get into the energy sector, especially oil and coal” said Irish Foreign Minister Simon Coveney.

Watch this space: President Joe Biden is arriving in Europe later this week for meetings with NATO, EU leaders and a G7 meeting. Energy will be very high on the agenda.

Remember: the European Union has already presented plans to reduce natural gas imports from Russia this year by finding alternative suppliers, accelerating the switch to renewable energy, reducing consumption through improvements in energy efficiency and extending the life of coal and nuclear power plants.

There was another major sign of change over the weekend as Germany – Russia’s biggest gas customer – moved forward on a major deal to buy liquefied natural gas (LNG) from Qatar.

QatarEnergy said on Sunday that German Economy Minister Robert Habeck had confirmed in a meeting with Qatari officials that Berlin was accelerating the development of two LNG receiving terminals.

“Both parties have agreed that their respective business entities will resume and advance discussions on long-term LNG supplies from Qatar to Germany,” QatarEnergy said in a statement.

The International Energy Agency, which monitors energy market trends for the world’s wealthiest countries, is pushing governments to consider further changes.

The agency last week unveiled a 10-point contingency plan to reduce oil demand that includes reducing highway speed limits by at least 6 miles per hour, working from home for up to three days per week if possible and car-free Sundays in cities.

Other measures in the contingency plan include increasing carpooling, using high-speed and overnight trains instead of planes, avoiding business jet travel where possible and encourage walking, cycling and public transport.

If fully implemented, these measures would reduce global oil demand by 2.7 million barrels per day in four months. This is equivalent to the oil consumed by all cars in China, the IEA said.

How Kohl became such a mess

With more than 1,100 stores and approximately $19 billion in annual sales, Kohl’s is the largest department store chain in the United States. And as recently as 2018, it was a beacon of hope in the beleaguered department store industry.

Not anymore, reports my CNN Business colleague, Nathaniel Meyersohn.

The chain’s sales are lower than before the pandemic, despite strong consumer spending and competitors benefiting from strong gains. Activist investors surround Kohl’s and demand leadership changes. A sale of the business could be on the horizon.

“We see a company that has gone astray,” said Jonathan Duskin, managing partner at Macellum Advisors, an activist investment firm that became Kohl’s third largest shareholder.

The department store sector has been in structural decline for years under pressure from Amazon, growing big-box chains including Walmart and Target, and discount clothing stores like TJMaxx.

Department stores, including Kohl’s, have been undercut on price by discount players at the bottom and prestige by luxury stores at the top, said John Fisher, a lecturer at Boston College’s Carroll School of Management. .

“It’s hard to be unique,” Fisher said. “I think Kohl is caught in the act right now by death in the middle.”

Kohl’s has lost about 17% of its market share since 2011, mostly to off-price retailers such as TJMaxx, as well as Amazon, according to UBS.

“[F]Factors such as consumer migration to the internet and value preference have contributed to this erosion,” UBS analyst Jay Sole said in a recent report. “This will likely continue after the pandemic.”

Inflation is everywhere. Except your mobile bill

Inflation is everywhere: grocery stores, gas stations, retailers and the real estate market. But an important part of the economy has remained immune to rising prices: mobile phone bills.

And telecommunications stocks are paying the price, reports my CNN Business colleague Paul R. La Monica.

Even though Americans are paying more for just about everything else, the average price of mobile plans continues to drop. That’s largely because of the intense competition between Verizon, CNN’s parent company AT&T, and T-Mobile.

The drop in wireless bills is “in such stark contrast to the inflation seemingly prevailing everywhere else,” analysts at Wall Street research firm MoffettNathanson wrote in a report titled “The Industry Inflation Forgot.”

And it shows in the financial results. AT&T, Verizon and T-Mobile all reported fourth-quarter declines in average revenue per user (ARPU) — a key price metric in the wireless industry. AT&T saw the biggest decline at 1.1%, while Verizon and T-Mobile’s prices each fell less than 1%.

Analysts say that could be the main reason Verizon and AT&T shares haven’t taken off this year. Verizon is stable and AT&T is down 6%. While not as bad as the nearly 7.5% loss in the S&P 500, it’s still nothing out of the ordinary.

following

Nike (NKE) will publish its earnings after the closing bell.

Also today: payment of a $66 million Russian bond is due.

Coming tomorrow: Carnival and Adobe revenue.


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