OPEC sticks to plan of gradual output hikes
NEW YORK — The leaders of OPEC and its oil-producing allies are sticking with their plan to gradually increase oil production while Russia’s invasion of Ukraine rattles markets, reshapes alliances, kills civilians and sends the price of crude skyrocketing.
The OPEC+ coalition of oil producers — made up of OPEC members led by Saudi Arabia and non-cartel members led by Russia — chose to increase oil production by 400,000 barrels per day in April.
Since July, the coalition has been adding that amount of oil each month to gradually restore deep cuts to production made early in the coronavirus pandemic when demand for fuel plummeted. People have been driving and flying more as COVID-19 restrictions have eased in parts of the world, but the amount of oil on the market hasn’t kept up with demand.
Both U.S. and international benchmark crude oil pushed past $110 a barrel Wednesday as investors worried about the invasion by Russia, one of the world’s largest energy suppliers.
OPEC’s decision to stick with only modest supply increases while Russia is waging a war is likely to prolong higher oil and gas prices.
Ford to split EV, internal combustion operationsFord will split its electric vehicle and internal combustion operations into two individual businesses to accelerate its adaptation of new technology and the Detroit automaker said Wednesday that its transformation into an EV company is accelerating.
Ford plans a major restructuring with two distinct but strategically interdependent auto businesses — Ford Blue focusing on traditional combustion engines and Ford Model e, which will develop electric vehicles.
Jim Farley, the chief executive officer of Ford Motor Co., will lead the electric division. Speaking candidly last week at an investment conference, he said that Ford did not want to completely break off its electric division, but that changes were coming.
“We are going all in, creating separate but complementary businesses that give us start-up speed and unbridled innovation in Ford Model e together with Ford Blue’s industrial know-how, volume and iconic brands like Bronco, that start-ups can only dream about,” Farley said.
China says it won’t join in sanctions on Russia
BEIJING — China won’t join the United States and European governments in imposing financial sanctions on Russia, the country’s bank regulator said Wednesday.
China is a major buyer of Russian oil and gas and the only major government that has refrained from criticizing Moscow’s attack on Ukraine.
Beijing opposes the sanctions, said Guo Shuqing, the chairman of the China Banking and Insurance Regulatory Commission.
“We will not join such sanctions, and we will keep normal economic, trade and financial exchanges with all the relevant parties,” Guo said at a news conference. “We disapprove of the financial sanctions, particularly those launched unilaterally, because they don’t have much legal basis and will not have good effects.”
Wall Street roars back to rally mode
Wall Street took another sharp swing Wednesday, this time back to rally mode, as stocks and Treasury yields rose even as U.S. crude oil prices climbed to the highest level in more than a decade.
The yield on the 10-year Treasury leaped to 1.89% from 1.72% late Tuesday, while the two-year Treasury surged to 1.53% from 1.31%. Yields, though, remain well below where they were before Russia’s invasion. The 10-year yield was above 2% last month, before it plunged as investors plowed into investments seen as safer amid worries about war.
The price of U.S. oil jumped another 7% to $110.60 per barrel, the highest level in just over a decade. Brent crude, the international standard, climbed 7.6% to $112.93 per barrel.
In the stock market, all the uncertainty about oil prices and inflation has led to big swings not only by the day but also by the hour. The S&P 500 swung between gains of 0.4% and 2.2% Wednesday. It closed 80.28 points higher to 4,386.54.
The Dow Jones Industrial Average rose 596.40 points, or 1.8%, to 33,891.35, while the Nasdaq composite gained 219.56 points, or 1.6%, to 13,752.02.