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On April 26, according to the Wall Street Journal, in order to simplify the negotiations on reciprocal tariffs, US negotiating officials plan to use a new framework developed by the Office of the United States Trade Representative (USTR), which lists major categories of negotiations, such as tariffs and quotas, non-tariff trade barriers, digital trade, product origin principles, economic security and other commercial issues. In these categories, US officials will put forward specific requirements for individual countries, but people familiar with the matter emphasized that this document may also be adjusted at any time. People familiar with the matter said that the United States initial plan is to negotiate with 18 major trading partners in turn over the next two months. The initial plan is to alternately participate in the talks with six countries per week for three weeks (six countries in the first week, another six countries in the second week, and another six countries in the third week) until the deadline of July 8. If US President Trump does not extend the 90-day suspension period he set by then, those countries that cannot reach an agreement will begin to face reciprocal tariffs.On April 26, after the United States announced additional tariffs on goods from many countries, Peruvian business people expressed concerns that the US governments extreme measures would disrupt the global trade order and may even trigger a global economic recession. Alvaro Barrenechea Chavez, vice president of the Peruvian-Chinese Chamber of Commerce, said that the negative impact of the US tariff policy has begun to emerge and hoped that the US government would rethink. Recognizing the importance of countries working together to promote development, I think this is the best way to become a true "world citizen."Market news: Musks xAI company plans to raise about US$20 billion in a financing round.Conflict situation: 1. Ukrainian top commander: Russia tried to use air strikes as a cover to increase ground attacks, but was repelled by Ukraine. 2. Ukrainian Air Force: Russia launched more than 103 drones in the night attack on Ukraine. 3. Local officials said Ukraine launched an attack in the Belgorod region of Russia, killing two people. 4. The local governor said that Russia launched an attack on the Dnipropetrovsk region of Ukraine, killing one person and injuring eight people. Peace talks: 1. Trump: ① The situation between Russia and Ukraine is gradually becoming clear, and they are "very close" to reaching an agreement. ② Ukraine is unlikely to join NATO. ③ Ukraine has not yet signed the rare earth agreement and hopes that the agreement can be signed immediately. ④ It is foreseeable that the United States will conduct commercial cooperation with Ukraine and Russia after reaching an agreement. 2. Russian Foreign Minister: Russia is "ready to reach an agreement on Ukraine." 3. Russian Presidential Assistant Ushakov: Russia and the United States will continue to maintain active dialogue. 4. Russian Presidential Assistant: Putin discussed the possibility of resuming direct negotiations between Russia and Ukraine with the US envoy. 5. The differences between the United States, Europe and Ukraine are clear. The documents show that European countries and Ukraine have raised objections to some of the US proposals to end the Russia-Ukraine conflict. 6. Market news: As part of the peace agreement, the United States asked Russian President Putin to abandon the demilitarization requirement. Other situations: 1. President of Hungarys OTP Bank: We hope to return to all business areas in Russia after the (Russia-Ukraine) conflict ends. 2. Ukrainian President Zelensky: US ground forces are not necessary for Ukraine. 3. Trump said Crimea will remain in Russia, Zelensky: Never recognize it. Agreeing with Trumps view, Crimea cannot be recovered by force. 4. NATO Secretary-General Rutte met with Trump and senior US officials to discuss defense spending, NATO summit, and the Ukrainian conflict.Rising global trade risks, overall policy uncertainty and the sustainability of U.S. debt top the list of potential risks to the U.S. financial system, according to the Federal Reserves latest financial stability report released on Friday. This is the first time the Fed has conducted a semi-annual survey on financial risks since Trump returned to the White House. 73% of respondents said that global trade risks are their biggest concern, more than double the proportion reported in November. Half of the respondents believe that overall policy uncertainty is the most worrying issue, an increase from the same period last year. The survey also found that issues related to recent market turmoil have received more attention, with 27% of respondents worried about the functioning of the U.S. Treasury market, up from 17% last fall. Foreign withdrawals from U.S. assets and the value of the dollar have also risen on the list of concerns.

Why Are Big Oil Executives Dumping Stock Worth Millions Of Dollars?

Charlie Brooks

Apr 25, 2022 10:00

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Senator Elizabeth Warren and her fellow Big Oil critics may have obtained tangible evidence that the oil industry benefits directly from the supply-demand imbalance: Big Oil executives are selling millions of dollars' worth of stock in their companies.


Bloomberg estimates that the CEO of Hess Corp. sold stock worth $85 million in the first quarter alone, while the CEO of Marathon Oil sold $34.3 million. According to Bloomberg, more executives sold than acquired shares in their companies in the entire industry.


Perhaps this will infuse Senator Warren's campaign against Big Oil with new vigor. The senator is accusing Big Oil of stifling output increases in order to maintain high pump prices and pad their own coffers. Sen. Warren was one of the sponsors earlier this year of a bill proposing a windfall tax on Big Oil companies for profits generated by the increase in international oil prices.


Additionally, legislators did not stop there. The House Energy and Commerce Committee summoned the CEOs of a dozen Big Oil companies earlier this month for a hearing titled "Gouged at the Pump: Big Oil and America's Pain at the Pump."


Big Oil explained that it is not producers who set retail fuel prices across filling stations but rather legislators who do so by attributing the higher oil prices to the Biden administration's restrictive energy policies and the Ukraine war. Numerous shortages were also noted as contributing to the oil price increase that is causing Democrats headaches.


Nonetheless, congressional Democrats and the White House may view the news of Big Oil executives selling millions of dollars' worth of stock as good news. Bloomberg reports that the selling could be a warning that a price decrease is imminent.


According to the data on stock sales, executives frequently increase sales of their own stock when they anticipate a decrease in the price. Typically, the most direct reason for a fall in oil stocks is a decline in oil prices. The issue is where this drop would originate.


The crisis in Ukraine does not appear to be coming to an end anytime soon, and the European Union is considering imposing an energy embargo on Russia in response to Ukrainian government pressure. The bloc is currently conducting an impact assessment of such an embargo in an attempt to sway hesitant members, the largest of which is Germany—a significant oil and even greater gas importer from Russia.


It's safe to conclude that no oil embargo will be implemented in the next couple of weeks, which means that one tailwind for oil prices will likely materialize later in the year, if at all.


Meanwhile, Russian oil production is declining as a result of the sanctions. This implies that less oil is being delivered to people in need, with the exception of the two largest and most populous Asian economies, which are swallowing up cheap Russian crude.


"Historically, oil CEOs have been extremely adept at maximizing value through timely stock sales," Ben Silverman, head of research at VerityData, told Bloomberg in an interview. "The lesson here is that the cycle will be brief."


While this may be a message, the underlying question remains: how will oil prices fall? The United States producers remain cautious about their production expansion plans; Brazil has lofty expectations, but they will take time to materialize; and the United Kingdom is warming to the concept of increased domestic oil production, but not in amounts sufficient to affect international pricing.


The Iran deal is still stuck—the most recent update stated that the Iranian side rejected a US request for sanctions relief. The icing on the pricing cake was how Saudi Crown Prince Mohammed bin Salman literally yelled at Biden's national security adviser this week, telling him that Washington could forget about the Saudis increasing oil production to drop prices.


As a result, no Iranian oil will arrive. Neither OPEC nor non-OPEC oil is on the way. The United States' output is increasing slowly and will add fewer than 1 million barrels per day this year. Smaller producers could scale up, but it is unclear whether they can do it as quickly as the Saudis and Emiratis. Most likely, the answer is no.


In other words, often, executives of Big Oil selling their own stock signals the end of the price boom. However, in this case, there may be further reasons for the sales, such as the Federal Reserve's rate hike plans, which are becoming increasingly aggressive in the face of persistent inflation pressure. Aggressive monetary policy results in greater borrowing costs, which are detrimental to any business and its stock.