OPEC agreed on Thursday to extend oil output cuts until the end of 2018 as it tries to finish clearing a global glut of crude while signalling it could exit the deal earlier if the market overheats.

Non-OPEC Russia, which this year reduced production significantly with OPEC for the first time, has been pushing for a clear message on how to exit the cuts so the market doesn’t flip into a deficit too soon, prices don’t rally too fast and rival U.S. shale firms don’t boost output further.

The producers’ current deal, under which they are cutting supply by about 1.8 million barrels per day (bpd) in an effort to boost oil prices, expires in March.

Two OPEC delegates told Reuters the group had agreed to extend the cuts by nine months until the end of 2018, as largely anticipated by the market.

OPEC also decided to cap the output of Nigeria at around 1.8 million bpd but had yet to agree a cap for Libya. Both countries have been previously exempt from cuts due to unrest and lower-than-normal production.

The Organization of the Petroleum Exporting Countries has yet to meet with non-OPEC producers led by Russia, with the meeting scheduled to begin after 1500 GMT.

Before the earlier, OPEC-only meeting started at the group’s headquarters in Vienna on Thursday, Saudi Energy Minister Khalid al-Falih said it was premature to talk about exiting the cuts at least for a couple of quarters and added that the group would examine progress at its next meeting in June.

“When we get to an exit, we are going to do it very gradually… to make sure we don’t shock the market,” he said.

The Iraqi, Iranian and Angolan oil ministers also said a review of the deal was possible in June in case the market became too tight.

International benchmark Brent crude rose more than 1 percent on Thursday to trade near $64 per barrel.

Capping Nigeria, Libya

With oil prices rising above $60, Russia has expressed concerns that such an extension could prompt a spike in crude production in the United States, which is not participating in the deal.

Russia needs much lower oil prices to balance its budget than OPEC’s leader Saudi Arabia, which is preparing a stock market listing for national energy champion Aramco next year and would hence benefit from pricier crude.

“Prices will be well supported in December with a large global stock draw. The market could surprise to the upside with even $70 per barrel for Brent not out of the question if there is an unexpected interruption in supply,” said Gary Ross, a veteran OPEC watcher and founder of Pira consultancy.

The production cuts have been in place since the start of 2017 and helped halve an excess of global oil stocks although those remain at 140 million barrels above the five-year average, according to OPEC.

Russia has signaled it wants to understand better how producers will exit from the cuts as it needs to provide guidance to its private and state energy companies.

“It is important… to work out a strategy which we will follow from April 2018,” Russian Energy Minister Alexander Novak said on Wednesday.
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The International Labor Organization says a majority of the world’s population, four billion people, have no social protection, leaving them mired in an endless cycle of poverty. 

The report says 45 percent of the global population is covered by at least one social benefit.  But that leaves 55 percent without any social protection, a situation ILO Director General Guy Ryder calls unacceptable.

“That means that they do not receive any child benefit, any maternity benefit, any unemployment protection, any disability benefit, any old age pension and that they do not actively contribute to social security systems,” Ryder said.

The consequences are severe and tangible.  The report finds the lack of social protection leaves people vulnerable to illness, poverty, inequality and social exclusion.  The ILO regards the situation as a significant obstacle to economic growth and social development.

Ryder tells VOA governments would benefit from considering social protection as an investment in their populations.

“Social protection is a human right and we should be pursuing it because it is a human right,” Ryder said. “But, also, I think there is a great deal of evidence to demonstrate that when social protection systems are in place and where they function well and one can think of the whole cycle of protection from kids right through to old age, then you reap economic benefits from it.” 

The report says the lack of social protection is most acute in Africa, Asia, and the Arab States.  It recommends those regions increase their public expenditure to at least guarantee basic social security coverage to all their people.
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The buoyant economic recovery across the 19-country eurozone has pushed unemployment down to its lowest level in nearly nine years but has yet to translate to a sustained pick-up in wages and prices, official figures indicated Thursday.

Eurostat, the European Union’s statistics agency, said the jobless rate fell to 8.8 percent in October, from 8.9 percent the previous month. That’s the lowest since January 2009, when the region, like the world economy, was reeling from the global financial crisis and the ensuing deep recession.

Across the region, there were 14.34 million people out of work, down 1.5 million in the past year. That’s clear evidence that the economic recovery, which has gathered momentum during 2017, has invigorated the jobs market, especially in some of those countries that saw the biggest spikes in unemployment after the financial crisis. That’s especially true in Spain, which for much of the past few years lumbered under the weight of an unemployment rate of around 25 percent. Now, following strong growth, unemployment has fallen to 16.7 percent.

Though the eurozone is growing strongly, inflation is still a way short of the European Central Bank’s goal of just below 2 percent, a level it considers healthiest for the economy.

Eurostat said its headline measure of consumer price inflation rose to 1.5 percent in November, largely because of higher energy prices. While up from October’s 1.4 percent, it was below expectations in markets for a rise to 1.6 percent and indicates that underlying inflation pressures largely related to wages remain modest despite falling unemployment. The core rate of inflation, which strips out volatile items like food, energy, alcohol and tobacco, was stuck at 0.9 percent in November – again below expectations of a rise to 1 percent.

ECB President Mario Draghi has said there are a number of reasons why wages are not rising strongly, including the possibility that after years of low interest rates and weak inflation, wage negotiators may have been focused more on keeping jobs than on securing higher pay. He said these kinds of factors are likely to be “transitory” and that the recent “remarkable” increases in employment should start to show in a rise in nominal wages. With spare capacity in the economy diminishing, the hope is that a pick-up in wages that can support consumer demand and give inflation a boost.

Over the past few years, the ECB has enacted a series of stimulus measures, including cutting its main interest rate to zero, in the hope of getting inflation back up to target. Recently it eased up on its bond-buying stimulus program, which aims to keep market interest rates low, amid mounting evidence of economic growth.

Economists are not predicting any further changes soon, with Thursday’s figures adding to that perception.

“Today’s figures are unlikely to prompt the bank to accelerate the process of monetary normalization,” said Pablo Shah, an economist at the Center for Economics and Business Research.
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Opposition has grown among Americans to a Republican tax plan before the U.S. Congress, with 49 percent of people who were aware of the measure saying they opposed it, up from 41 percent in October, according to a Reuters/Ipsos poll released on Wednesday.

Congressional Republicans are trying to rush their tax legislation to a vote on the Senate floor before the end of the week. President Donald Trump strongly backs the bill and wants to sign it into law before the end of the year.

In addition to the 49 percent who said they opposed the Republican tax bill, 29 percent said they supported it and 22 percent said they “don’t know,” according to the Reuters/Ipsos opinion poll of 1,257 adults conducted from Thursday to Monday.

When asked “who stands to benefit most” from the plan, more than half of all American adults surveyed selected either the wealthy or large U.S. corporations. Fourteen percent chose “all Americans,” 6 percent picked the middle class and 2 percent chose lower-income Americans.

The tax bill being crafted in the Senate would slash the corporate tax rate, eliminate some taxes paid only by rich Americans and offer a mixed bag or temporary tax cuts for other individuals and families.

As congressional discussion on the bill has unfolded, public opposition to it has risen, on average, following Trump’s unveiling of a nine-page “framework” on September 27 that started the debate in earnest, Reuters/Ipsos polling showed.

On October 24, for example, among adults who said they had heard of the “tax reform plan recently proposed by congressional Republicans,” 41 percent said they opposed it, while 31 percent said they “don’t know” and just 28 percent said they supported it.

Trump and his fellow Republicans are determined to make a tax code overhaul their first major legislative win since taking control of the White House and Congress in January.

The House of Representatives on November 16 approved its own tax bill. The Senate is expected to decide on Wednesday whether to begin debating its proposal, as the measure moves toward a decisive floor vote later this week.

The two chambers would need to reconcile differences between their plans before legislation could be sent to the White House for Trump’s signature.

In the November 23-27 poll, 59 percent of Republicans supported the tax bill, 26 percent said they did not know and 15 percent opposed it. Among Democrats, 82 percent opposed it, 11 percent said they did not know and 8 percent supported it.

 
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Colombia’s palm oil industry and big businesses have pledged to eliminate deforestation from their supply chains as the country battles to reverse the growing destruction of its tropical rainforests.

The commitment signed this week makes Colombia the first country in the world to launch its own chapter of the Tropical Forest Alliance 2020, a global effort by governments, companies and nongovernmental organizations.

The TFA 2020 Colombia Alliance aims to help businesses shift to deforestation-free supply chains by sharing best practices, monitoring forest clearance and training small farmers in sustainable agricultural methods.

It also aims to promote development of certified sustainable products from beef to palm oil for consumers to buy in local supermarkets.

Rainforests in Colombia, Latin America’s largest palm oil producer, are coming under increasing pressure, and deforestation is rampant.

Deforestation in the country’s Amazon region rose 23 percent and across the country rose by 44 percent from 2015 to 2016, said Vidar Helgesen, Norway’s environment minister.

Norway is one of four main donor countries, along with the United Kingdom, Germany and the Netherlands, backing the TFA 2020, an initiative hosted by the World Economic Forum.

“These numbers have been higher than what we expected and that’s why it is important to intensify efforts,” he told the Thomson Reuters Foundation.

Getting the private sector to commit to deforestation-free supply chains is a “critical part of the puzzle” to protect forests, he said.

First such cooperation

“This is the first time in Colombia we see the government and the private sector joining forces like this,” he said.

“My hope and belief is that this partnership will find ways of ensuring that it is not only an agreement on paper but something that will happen in practical terms.”

Protecting forests helps cut carbon emissions, a key driver of climate change. When forests are degraded or destroyed, the carbon stored in the trees is released into the atmosphere.

Colombia is home to a swath of rainforest roughly the size of Germany and England combined and has declared a goal of zero net deforestation by 2020 and halting the loss of all natural forest by 2030.

Its rainforests have been increasingly threatened since a 2016 peace deal to end its decades-long civil war opened up former conflict areas to business, agriculture and development, Helgesen said.

Trees also are being cleared for cattle ranching, illegal mining and growing coca — the raw ingredient for cocaine.

Signing up with the Alliance are about 25 palm oil producers and buyers, Colombia’s Federation of Oil Palm Growers and Alqueria S.A., its third-largest dairy company. Also signing up are retail giant Grupo Exito and international companies operating in Colombia such as consumer goods company Unilever.

“The launch of the TFA 2020 Colombia Alliance is important as a strengthening mechanism for joint action in Colombia to reach our deforestation goals,” said Mariana Villamizar, a spokeswoman for Grupo Exito.

Producers and buyers from the beef, dairy and timber sectors are expected to join the partnership soon.

Each company will set targets to achieve zero deforestation across their often complex supply chains, and the government and NGOs will help monitor deforestation.
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The number of international visitors to the United States through June fell sharply from last year, according to government data released Wednesday.

And the number of business travelers fell by much more than the drop in tourists, according to the monthly report from the Commerce Departments National Travel and Tourism Office.

Total foreign visitors fell four percent compared to the first six months of last year, with travelers from Mexico down more than nine percent and from Britain down six percent, but visits from Canada up nearly five percent.

Excluding Canada and Mexico, overseas visitors fell nearly six percent, but business travel dropped nearly nine percent compared to a 5.6 percent decline in tourists.

President Donald Trump in his first year in office repeatedly promised to build a wall on the border with Mexico, and has ordered bans on visitors from several Muslim-majority countries in the Middle East and Africa.

Visits from the Middle East plunged 30 percent in the first half of the year, and from Africa dropped 27 percent. There also were double-digit declines in visitors from South and Central America, the Caribbean and Eastern Europe.

Among the top 20 countries with the most visitors, Venezuela, Argentina, Brazil and India saw travelers fall well over 10 percent.

In contrast, arrivals from South Korea jumped 18 percent, while Ireland saw a 4.7 percent increase, Italy was up 4.2 percent, Spain 3.5 percent and France 1.5 percent, according to the monthly data.
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U.S. ethanol producers, looking to relieve a growing domestic glut, are hunting for new international fuel markets to replace China and Brazil after trade disputes slashed exports to those top buyers.

Without new markets, U.S. producers may have to pare output after spending hundreds of millions of dollars on biofuel production plants in recent years. Currently, the most promising potential destinations for U.S. fuel exports appear to be Mexico and India, industry executives said.

China and Brazil accounted for 41 percent of the 1.17 billion gallons the United States exported last year. Shipments to the two shriveled in September, making U.S. exports for that month the smallest in more than a year.

“There are only so many times you can replace your top market,” said Tom Sleight, president of the U.S. Grains Council, which officials said has been calling on potential buyers in Kenya, Ghana and Nigeria.

China’s demand plummeted by more than 100 million gallons this year after it removed a preferential tariff rate. Brazil’s imports tumbled after it put a quota on imports in September to protect its domestic producers.

Selling points

To drum up new customers, Illinois-based ethanol producer Marquis Energy has sent executives to India, China, Thailand and the Philippines, promoting the corn-based fuel additive as a smog- and oil-import fighter.

“I’ve had a lot of people over there almost nonstop over the last three months,” the company’s chief executive, Mark Marquis, said of the hunt for buyers in Asia. Archer Daniels Midland Co and Flint Hills Resources also have stepped up efforts to sell into Mexico, traders said.

U.S. ethanol prices have slid to nearly a two-year low as daily domestic production last week hit a record 45.1 million gallons, making the search for new export markets more urgent.

Output this year could reach about 16 billion gallons, nearly triple that of 2007.

U.S. exports fell since hitting 2.5 million gallons per day in the first eight months this year. Shipments to Brazil sank to 19 million gallons in September, the smallest monthly volume in more than a year. Exports to China through September were just 60,880 gallons, a precipitous drop from 198 million gallons a year earlier, according to U.S. Department of Agriculture data.

The marketing effort could pay off in Mexico, whose energy regulatory commission (CRE) is to vote soon to ease the flow of fuel imports through state-run Pemex facilities to several Mexican states bordering the United States.

If approved, significant new volumes of gasoline blended with 10 percent ethanol could begin flowing in 2018 into Chihuahua, Coahuila, Nuevo Leon and Tamaulipas states, CRE Commissioner Luis Guillermo Pineda told Reuters.

“The largest supplier is logically the United States, but it can be from anywhere,” Pineda said of the ethanol blend.

Import prediction

Ray Young, ADM’s finance chief, last month told analysts Mexico could be importing 200 million gallons annually by 2019.

U.S. ethanol exports to Mexico last year totaled about 30 million gallons.

U.S. inventories reached 920 million gallons in the week ended November 17, up 16 percent from a year earlier, the U.S. Energy Information Administration said. Ethanol futures have fallen to $1.36 per gallon on the Chicago Board of Trade, down 20 percent from their 2017 high in April.

U.S. producers are pitching China and India on ethanol’s smog-fighting potential. This month, United Airlines canceled flights to India’s capital, New Delhi, citing heavy smog as a public health emergency. China ordered Beijing and more than two dozen other cities to start meeting limits on airborne pollution starting this month.

Ted McKinney, a USDA official interviewed during a biofuel-promotion trip to India, expressed optimism that country could import much more U.S. ethanol for cars and trucks. But others were not so sure.

India’s government wants to promote biofuel production using its own agricultural waste, said Jai Asundi, research coordinator at a Bengaluru-based think tank, the Center for Study of Science, Technology and Policy.

“There is a potential for producing ethanol from locally available sources without depending on imports,” Asundi said.
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