Oil ends mixed, extend gains post-settlement on U.S. draw report

An oil pump is seen in Lake Maracaibo, in Cabimas, Venezuela, August 13, 2016. REUTERS/Jesus Contreras

By Barani Krishnan | NEW YORK

U.S. crude oil settled up on Tuesday on speculation of demand from the planned restart of the country's main gasoline pipeline, before being joined by Brent in a post-settlement rally on data showing a surprise U.S. inventory drawdown.

The American Petroleum Institute (API), a trade group, said U.S. crude inventories fell by 7.5 million barrels for the week ended Sept. 16, drawing unexpectedly for a third week in a row. Analysts polled by Reuters had expected a build of 3.4 million barrels. The U.S. Energy Information Administration (EIA) will report official inventory data on Wednesday.[API/S] [EIA/S]

Both U.S. crude and Brent hit six-week lows earlier on the day in volatile trade ahead of the Sept. 26-28 informal talks in Algeria between the Organization of the Petroleum Exporting Countries and other producers on a proposed deal to contain a glut that has weighed on prices for about two years.

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Brent futures for November delivery LCOX6 settled down 7 cents at $45.88 per barrel.

U.S. West Texas Intermediate (WTI) crude for October delivery Clc1 closed up 14 cents at $43.44.

WTI settled up on anticipated demand for U.S. crude after Colonial Pipeline Co [COLPI.UL] said it would restart its main gasoline line by Wednesday. Supplies of gasoline from the Gulf Coast to the East Coast have been disrupted since a leak was discovered on the 1.3 million barrel per day line on Sept. 9.

While WTI rose, U.S. gasoline futures RBc1 fell 4 percent to $1.3646 a gallon on worries that a gasoline glut would return with the full restart of the Colonial line.

In post settlement trading, U.S. crude futures continued their climb, reacting to the API data. WTI's November contract CLV6, the market's new spot month from Wednesday after the October contract expired at Tuesday's settlement, rose 73 cents.

Brent turned to positive, with its November contract rising as much as 35 cents.

"All expectations are that EIA will still report a stockpile build tomorrow for U.S. crude," said John Kilduff, partner at New York energy hedge fund Again Capital.

"But in the event their number falls short of what the market's expecting, or turns out to be a draw like the API's, then in the least we can expect higher prices for oil despite the oversupplied situation we are in," Kilduff said.

Oil prices have swung for weeks now as traders weighed an oversupplied market against OPEC hints of production curbs.

ALSO IN COMMODITIES

• Oil jumps after surprise drop in U.S. crude inventories
• OPEC chief: oil market stabilization deal may last one year - RIA

OPEC Secretary-General Mohammed Barkindo said on Tuesday he expected the potential freeze deal between OPEC and other producers to last one year, longer than previously thought.

Price hawks like Venezuela said a deal could push prices up by $10-$15 a barrel.

Despite the upcoming talks in the Algerian capital, OPEC's biggest exporters such as Saudi Arabia, Iran, Iraq, Nigeria and Libya have all raised or been trying to hike output in recent months.

(Additional reporting by Karolin Schaps in LONDON and Henning Gloystein in SINGAPORE; Editing by William Hardy and Andrew Hay)

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Here's everything you need to know ahead the Fed's big statement on Wednesday

• Akin Oyedele
 

• 3h
• 8,538
 
• 12

Federal Reserve Chair Janet Yellen testifying before Congress in June.Win McNamee/Getty Images

The main conclusion of the Federal Reserve's policy meeting on Wednesday afternoon is forgone for most of Wall Street.

The Federal Open Market Committee, which started its two-day gathering in Washington on Tuesday, is expected to leave its benchmark interest rate unchanged.

Why the Fed probably won't raise rates on Wednesday

The clearest preview of Wednesday's likely decision came from Lael Brainard in a speech last week in which the Fed governor warned against raising interest rates too soon.

"Today's new normal counsels prudence in the removal of policy accommodation," she said in Chicago, adding that the case to raise rates was "less compelling."

Brainard was not reflecting the views of all her colleagues on the FOMC, but her speech contained some of the reasons that could be cited for the Fed's patience.

For instance, even with all the Fed's optimism about the labor market, Brainard pointed out that labor utilization was not yet putting significant upward pressure on inflation.

Also, Brainard said neutral real interest rates were likely to stay very low for a while, symptomatic of continued sluggish economic growth.

Lael Brainard, a Fed dove, argued against raising rates too quickly last week. Bank of America Merrill Lynch

And, as Fed Chair Janet Yellen has said before, the risks of raising rates too quickly are higher than those of being patient.

That's partly because the Fed doesn't have much room to cut rates lower in a downturn. There's also the idea that the "neutral" interest rate — consistent with the economy improving in line with its potential — is likely to remain low amid sluggish growth. Estimates of the neutral rate, like that derived from the Laubach-Williams model, suggest that the rate is about zero, versus potential growth of 1.5%, Nomura's Lewis Alexander said in a note.

"In other words, the slow pace of growth in recent quarters undermines the argument that the FOMC needs to raise rates in the very near term in order to shrink a very large gap between actual interest rates and their 'neutral' level," Alexander said.

There are other reasons Yellen may cite in her news conference after the statement is released at 2 p.m. ET. Economic growth improved in recent months. But in the past two, data on consumer spending and the manufacturing sector were less than encouraging.

So what's next?

The Fed is likely to skip raising rates at its November meeting, even though it is after the election, most likely because there's no scheduled news conference or updated dot plot that shows members' forecasts for future rates.

That leaves December on the table for the Fed to enact its earlier forecast of at least one rate hike in 2016.

If September comes and goes without another increase, "they have to go in December," Dan North, the North America chief economist at Euler Hermes, said

Morgan Stanley

"It would be really interesting to see the dot plot again because if the majority are saying, 'We're going to go one more time here,' they have to go in December just to keep their credibility going," he told Business Insider.

Notably, the dot plot is not a promise from the FOMC but a charting of where members think rates should be in the future. But it's often viewed as the former.

The real impact of higher rates would not be on the economy; another hike of 25 basis points would be a "tiny shade at the margin," according to North.

It would really be about how financial markets and asset prices react, North said, given that low rates have helped stoke asset prices. And, several Wall Street traders, who were not working the last time the Fed raised rates, are apprehensive.

The Fed's meeting also comes ahead of an election that's brought the future of the Fed, and of monetary policy, into focus.

Last week, Republican presidential nominee Donald Trump said Yellen was keeping rates "artificially low to get Obama retired," suggesting that there could be serious consequences afterward.

Also, John Williams, the San Francisco Fed president, said last week that it was time to start considering fiscal or other policies that would keep the economy stable.

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GUNDLACH: The Fed won't raise rates on Wednesday

• Bob Bryan
 

• 20h
• 3,037
 
• 2

CEO and CIO of DoubleLine Capital Jeffrey GundlachREUTERS/Eduardo Munoz

Jeff Gundlach, the CEO of DoubleLine Capital, thinks the Federal Reserve will be on hold in September.

Gundlach told Reuters that he does not think the Fed will raise rates on Wednesday when they conclude their two-day meeting of the Federal Open Markets Committee.

Gundlach did tell Reuters that the Fed will use "hawkish no-hike" language and will raise rates when rate hike probabilities are above 40% based on Bloomberg's World Interest Rate Probably. The measure currently is under 20%.

In a presentation earlier in September, Gundlach said that interest rates around the world had bottomed and he expected both rates and bond yields to move higher. 

Gundlach has been critical of negative interest rate policies used by central banks outside of the US such as the Bank of Japan and the European Central Bank.

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Twitter just changed how tweets work

• Alex Heath
 

• 20h
• 8,088
 
• 3

Twitter is relaxing its 140-character limit.

The social network announced on Monday that links to media like photos, GIFs, polls, and videos will no longer count toward the 140-character limit Twitter has had since its inception.

Along with media attachments, a Twitter spokeswoman said the company is also testing not counting "@" replies toward a tweet's character limit.

Here's a graph from Twitter that explains the old structure of tweets and the new format:

Twitter

Twitter announced these changes in May, and The Verge reported last week that they would be implemented on Monday, September 19.

Here's Twitter's own tweet on Monday announcing the news:

 Follow

Twitter 

✔@twitter

Say more about what's happening! Rolling out now: photos, videos, GIFs, polls, and Quote Tweets no longer count toward your 140 characters.

10:00 AM - 19 Sep 2016

 
•  16,27516,275 Retweets
 
•  15,51615,516 likes

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Plutocracy II: Solidarity Forever (Video)

Plutocracy II: Solidarity Forever

2016 , 

Income inequality may be a hot topic during the current American election season, but it's also a stark reality that has plagued the country for hundreds of years. That sad history foreshadows what many are still grappling with today. The feature-length documentary Plutocracy II: Solidarity Forever is a studious and well-produced portrayal of America's long-standing clashes between the working-class and the industrial beast.

The film, which is the second part of an ongoing historical series, covers the seminal labor-related events which occurred between the late 1800's and the 1920's. Its subtitle refers to a 1915 song composed by Ralph Chaplin as an anthem for unionized workers. The film itself is the cinematic version of that anthem, as it allows us a comprehensive understanding of the need for these early labor unions, and the enormous sacrifices of its members to ensure fairness, safety, and equality in the workplace.

The operations of industries like railroads, steel and coal were characterized by slave wages, dangerous working environments, punishing hours, and child labor. With the birth of the labor unions, these industries were forced to re-examine their worker policies or run the risk of losing their businesses altogether. One of the earliest examples of this is the formation of the American Railroad Union in 1893, an event that is prominently featured in the film. After the organization won early successes in recovering wages for denigrated workers, its popularity skyrocketed among the working class. But the heads of industry soon fought back with their far-reaching strong-arm influence, and subsequent public strikes were marred by violence, oppression and unlawful arrests.

Modern political junkies will find special relevance in the film's portrayal of Eugene V. Debs, a co-founder of Industrialized Workers of the World and one of the nation's most prominent socialists. In this age of Bernie Sanders and his message of democratic socialism, it is surprising to learn that Debs' popularity in the early twentieth century was particularly pronounced in states that lean heavily conservative today.

Plutocracy II: Solidarity Forever is essential viewing for those with an interest in America's class struggles, and the ongoing efforts to level the playing field between the haves and the have nots.

Directed by: Scott Noble

Vladimir Putin's party scored a crushing win in the Russian parliament

• Gabrielle Tétrault-Farber, Marina Koreneva, and Liliya Buzhurova, AFP

• 8h
• 1,088
 
• 3

Russian President Putin meets with reporters during visit for summit of former Soviet republics at Manas airport outside BishkekThomson Reuters

Moscow (AFP) - The ruling United Russia party has cruised to an easy victory in parliamentary polls that could pave the way for President Vladimir Putin to glide to a fourth term in 2018 elections, partial results showed.

Sunday's ballot for the 450-seat State Duma was smooth sailing for authorities desperate to avoid a repeat of mass protests last time round and eager to increase their dominance as Russia faces the longest economic crisis of Putin's rule.

But a low turnout suggested that many Russians may have been turned off by a system in which the Kremlin wields near-total power, which could raise questions over legitimacy. 

"We can announce already with certainty that the party secured a good result, that it won," Putin said after polls closed.

"The situation is tough and difficult but the people still voted for United Russia," he said on state television.

With 90 percent of the votes counted, the United Russia party had 54.3 percent of votes, securing it at least 338 seats in the 450-member parliament, up from 238 previously, according to results announced early Monday.

It was followed by the Communists and the ultranationalist Liberal Democratic Party, on 13.5 percent and 13.3 percent respectively, and A Just Russia, which received 6.2 percent, results published by the election commission showed.

- 'Absolute majority' -

Those four parties -- which made up the last parliament and all back the Kremlin -- were the only ones to clear the five percent threshold needed to claim a share of the one-half of seats up for grabs.

The vote comes as Putin's approval ratings remain high at around 80 percent and authorities appear to be banking on trouble-free presidential elections in two years.

Results indicated that liberal opposition groups would not make it into parliament, with neither the Yabloko party, nor the Parnas party, headed by former prime minister Mikhail Kasyanov, having secured enough votes to win a seat.

The other half of the deputies are being elected on a constituency basis after a change to the election law.

With only a fraction of the votes counted, Prime Minister Dmitry Medvedev confidently said that his party would end up with an "absolute majority" in the Duma.

Though the overall tally for United Russia was higher than the 49 percent it claimed in 2011, participation was low, particularly in Moscow and Saint Petersburg.

Only 47.8 of voters cast their ballots, against 60 percent in 2011, electoral officials said.

Sunday's election follows a tumultuous few years that have seen Russia seize the Crimea peninsula from Ukraine, plunge into its worst standoff with the West since the Cold War and start a military campaign in Syria.

But the Kremlin exerts almost complete control over the media and public discourse, and this year's election campaign was dubbed the dullest in recent memory. 

- Violations? -

Looming large was the spectre of mass protests over vote rigging that followed the last legislative polls five years ago and grew into the biggest challenge to Putin since he took charge in 2000.

Since then the Kremlin has cracked down on the right to protest while making a show of stamping out electoral manipulation. 

The former scandal-tainted election chief was removed in favour of a human rights advocate who allowed more genuine opposition candidates to take part.

Despite the authorities pledging to crack down on vote-rigging, observers around the country made claims of violations including "cruise-voting" -- where people are bussed to vote at multiple polling stations -- and ballot stuffing.

Electoral Commission chief Ella Pamfilova admitted that there had been problems in certain regions but officials said the number of violations was way down on the last vote.

"In any case there already is full confidence that the elections are nonetheless quite legitimate," Pamfilova said. 

"And we did a lot for that."

For the first time since Moscow seized the Black Sea peninsula of Crimea in 2014, residents there voted for Russia's parliament, in a poll slammed by Ukraine as illegal.

Voters in some areas of the vast country were also electing regional leaders. 

In the North Caucasus region of Chechnya, strongman Ramzan Kadyrov looked set to win the first electoral test of his rule after rights groups said that criticism was ruthlessly silenced during the campaign.

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