Aurelia Butler

HOUSTON (Reuters) -U.S. oil and gas producer Occidental Petroleum Corp (NYSE:OXY) on Tuesday reported a 48% decline in first-quarter earnings that fell well short of analyst estimates as global economic growth concerns led to a decline in oil prices. Global energy prices in the quarter pulled back from last year’s peaks triggered by Russia’s invasion of Ukraine. Occidental’s crude oil sold for 19% less than the year-ago quarter, averaging $74.22 per barrel.Earnings declined despite a boost in first quarter oil and gas daily output to 1.22 million barrels from 1.08 million a year earlier, helped by higher production from its Permian operations. The company, in which billionaire investor Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) Inc owns a 24% stake, reported adjusted income dropped 48% from the prior year to $1.1 billion as it accelerated investments and shareholder returns. Adjusted earnings of $1.09 per share for the quarter fell far short of analysts’ $1.24 per share estimate compiled by Refinitiv. Shares fell 1.6% in late trading to $58.03. Occidental almost doubled capital spending in the quarter from a year earlier to $1.5 billion, and cash flow from operations before working capital fell 24% to $3.2 billion. Occidental increased its year-end production guidance by 20,000 barrels of oil and gas to 1.22 million barrels per day. The company repurchased $752 million of common stock, accounting for over 25% of its $3 billion annual repurchase program and triggered the redemption of $647 million of preferred stock.Brent crude averaged $82 a barrel in the quarter, about 20% lower than year-ago levels as concerns rose over the health of the global economy amid the recent banking crisis in the U.S. and China’s weaker-than-estimated economic recovery. Average domestic realized gas prices decreased by approximately 32% from the prior quarter to $3.01 per million cubic feet.Buffett said on Saturday that Berkshire Hathaway was not planning to acquire Occidental but remained happy with its large investment in the oil company. More

Good morning. China’s foreign minister has condemned EU proposals to impose sanctions on Chinese companies for supporting Russia’s war machine. Qin Gang, speaking in Berlin, vowed to react “strictly and firmly” to defend China’s businesses. The new sanctions package, seen by the Financial Times, includes eight Chinese businesses accused of selling equipment that could be used in weapons. The passing of the proposals is subject to the unanimous approval of the EU’s member states, which are expected discuss the measures this week. Qin said China did not deliver any weapons into crisis regions and had laws regulating the export of dual-use goods.“There is a normal exchange and co-operation between Chinese and Russian companies . . . [this] must not be disrupted.” he said. Tensions between China and the west: Canada has expelled a Chinese diplomat for allegedly targeting a Canadian politician, in the latest example of Ottawa’s harsher tone towards Beijing.Here’s what else I’m keeping tabs on today:Nato meeting: Defence chiefs will meet in Brussels.Earnings: It’s a big day for Japanese companies. Toyota, SoftBank, Panasonic, Nippon Steel and more report today.US inflation: April consumer price index inflation rate data are set to be released.Five more top stories1. Pakistan’s former prime minister Imran Khan was arrested by the country’s anti-corruption force yesterday, sparking fresh protests by his supporters in an already volatile political climate. As protests began spreading, the unrest prompted Pakistan’s government to impose communication restrictions. Read the full story.2. Donald Trump has been found liable for the sexual abuse of a journalist in a Manhattan department store in the 1990s, in a significant legal defeat for the former US president as he mounts a third bid for the White House. The jury awarded plaintiff E Jean Carroll, a former advice columnist and TV presenter, a total of $5mn in damages.3. Indonesia is officially the world’s second-largest cobalt supplier, contributing to a sharp fall in the price of the battery metal and adding to western anxieties about Beijing’s dominance across the electric car supply chain. Here’s what the shift means for global industry.4. US politicians have rejected calls for a short-term solution to the US debt limit crisis, saying there was no alternative to a deal in the coming weeks to avert a damaging default on America’s bonds. The comments from Democrats and Republicans came ahead of a high-stakes gathering at the White House to discuss the fiscal stand-off. This is what you should know about the meeting. 5. Chinese imports posted its biggest contraction in a year last month, while exports expanded at a slower pace than expected, casting doubt over the pace of the country’s economic recovery after three years of pandemic restrictions. Imports fell 7.9 per cent year on year in April, a far deeper decline than analysts had expected. The Big Read

Voters will choose between Kemal Kılıçdaroğlu, left, and President Recep Tayyip Erdoğan on May 14 © FT montage/EPA-EFE/Shutterstock/AFP/Getty Images

After 21 years in power, Recep Tayyip Erdoğan, Turkey’s strongman president, faces his greatest challenge yet: a united opposition determined to change the course of the nation. Can his opponent, the soft-spoken retired bureaucrat Kemal Kılıçdaroğlu, defeat Erdoğan?We’re also reading and listening to . . . Political earthquake: With an ongoing “battle between autocracy and democracy” in south-east Asia, Thailand’s upcoming election will have far reaching implications for the region.WFH: Hybrid work seems to have improved working lives — and not just for the elite. Sign up for our Working It newsletter for more on the new world of work. Behind the Money 🎧: Environmental, social and governance standards have seen some backlash lately. In this podcast, Gillian Tett explains how ESG is changing the corporate boardroom.Chart of the day

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In 1900 the UK had 3.3.mn horses to provide pulling power, transport and calvary. Now they are an outmoded technology. Does the same fate await humans? Displaced by machines that are not just stronger and more dexterous but more intelligent, even more creative? asks Martin Wolf. A new study, suggests that globally 18 per cent of work could be automated by artificial intelligence.Take a break from the news

In the central African rainforest, forest elephants emerge from the jungle to congregate in greater numbers than anywhere else on earth. Don’t miss FT’s David Pilling reflection on a one-of-a-kind journey to Sangha Lodge, a jungle sanctuary.Additional contributions by Gordon Smith and Grace Ramos. More

LONDON/NEW YORK (Reuters) – Ecuador sealed the world’s largest “debt-for-nature” swap on record on Tuesday, selling a new “blue bond” that will funnel at least $12 million a year into conservation of the Galapagos (NASDAQ:GLPG) Islands, one of the world’s most precious ecosystems.Having bought back roughly $1.6 billion of the country’s debt at a near 60% discount late last week with the help of Credit Suisse, Ecuadorean Foreign Minister Gustavo Manrique Miranda said biodiversity was now a valuable “currency”.Tuesday’s $656 million “Galapagos Bond,” as it has been dubbed, will run until 2041 and gave investors that bought it a 5.645% “coupon” or interest rate, its bankers said. Ecuador sovereign bonds currently yield from 17% to 26%, but the new bond has an $85 million ‘credit guarantee’ from the Inter-American Development Bank and $656 million of political risk insurance from the U.S. International Development Finance Corp (DFC), effectively making it less risky. Debt-for-nature swaps have proved successful in Belize, Barbados and the Seychelles in recent years, but Ecuador’s deal is by far the largest to date, cutting the country’s debt by over $1 billion once the $450 million of total conservation spending is taken into account.The driver has been the remote Galapagos Islands, some 600 miles (970 km) off Ecuador’s mainland coast, that inspired Charles Darwin’s Theory of Evolution. Many species on the islands, including giant tortoises, marine iguanas and Darwin’s finches, are found nowhere else on earth so their conservation is seen as vital.While Quito will pocket more than $1 billion worth of savings from the buyback for other purposes, the key appeal has been the environmental benefits and the hope it will be a catalyst for other highly indebted but nature-rich countries. Graphic: Debt-for-nature swaps Debt-for-nature swaps – https://www.reuters.com/graphics/CLIMATE-DEBTFORNATURE/movaknjnava/chart.png Giuseppe Di Carlo, director of the Pew Bertarelli Ocean Legacy, one of the groups involved in the deal, said the $12 million a year earmarked for conservation, plus another $5 million a year being put into a fund that should last decades, were an “extraordinary win”.There will be regular monitoring of the protection work and of “purse seine” and “longline” fishing vessels by a newly formed body, with Hawaii’s Papahānaumokuākea marine park seen as a potential template.Conservation funding there now protects a 200-mile (322-km) radius around the archipelago. It has helped revive local tuna and other fish stocks, but also increased catches further out where local fishing is still allowed.The hope is for similar results from a new 11,500-square mile (30,000-sq km) reserve Ecuador set up last year between the Galapagos and Costa Rica’s maritime border used as a migratory corridor by sharks, whales, sea turtles and manta rays. Scott Nathan, the chief executive of DFC, said people needed to “stay tuned” for similar deals in other countries and the Galapagos deal had been a long time coming.It was first floated over three years ago. Final preparations occurred during a time of political turmoil, with Ecuador’s National Assembly seeking to impeach President Guillermo Lasso for alleged embezzlement, which Lasso denies.The turbulence boosted economics of the deal, slashing prices of the original bonds, although it also faced troubles of lynchpin lender Credit Suisse, which required an emergency takeover in March by rival UBS.Graphic: Bonds boosted by buyback plan – https://fingfx.thomsonreuters.com/gfx/mkt/gkplwkbnjvb/Pasted%20image%201683553076407.png More

NEW YORK (Reuters) – New York Federal Reserve President John Williams said on Tuesday it is too soon to say whether the U.S. central bank is done raising interest rates, arguing that if more action is needed policymakers won’t hold back.”We haven’t said we are done raising rates” and Fed officials have not yet decided what lies ahead with possible increases in short-term borrowing costs, Williams said at an Economic Club of New York gathering. “We’ve made incredible progress” in taking action to lower overly high levels of inflation, but “if additional policy firming is appropriate, we’ll do that,” he said. Williams’ remarks on the outlook for interest rates marked his first public comments since the Fed last week raised its benchmark overnight interest rate by a quarter of a percentage point to the 5.00%-5.25% range. The central bank also signaled that after just over a year of aggressive rate hikes, it may be done, or close to it, with the rate rises.Many participants in financial markets reckon the Fed will refrain from raising rates at its June 13-14 policy meeting, and traders are pricing in the strong possibility the U.S. central bank will cut rates this year.”In my forecast I see a need to keep a restrictive stance of policy in place for quite some time to make sure we really bring inflation down from 4 percent all the way to 2 (percent). I do not see in my baseline forecast any reason to cut interest rates this year,” Williams said. As the head of the New York Fed, Williams also serves as vice chair of the central bank’s rate-setting Federal Open Market Committee, and he is a key voice on the monetary policy and economic outlook. Williams remains confident the Fed can achieve its objectives, adding “as always, I’ll be monitoring the totality of the data and what it implies for the achievement of our goals. But for now, he said price pressures remain “too high,” adding that the Fed remains committed to bringing inflation back to its 2% target. Williams also said “although we have seen some signs of a gradual cooling in the demand for labor – as well as for some goods and commodities – overall demand continues to exceed supply.”TIGHTER CREDIT, SLOWER ECONOMY The Fed is eyeing an end to the rate-hike cycle as inflation pressures have eased a bit and banking sector stress has increased uncertainty about the outlook. Tighter financial conditions tied to banking sector troubles are expected to help further cool the economy, although it’s unclear by how much. But the prospect of further rate rises remains alive, and last week’s robust employment report for April showed that the job market remains very strong even in the face of Fed action, which could in turn compel the central bank to press forward with rate hikes at some point this year. Fed officials generally agree that the worst of the bank stresses that kicked off in the wake of several high-profile failures starting in March are now over. Still, Williams said the aftermath of the banking stresses will figure prominently in his thinking about the future of monetary policy. “I will be particularly focused on assessing the evolution of credit conditions and their effects on the outlook for growth, employment and inflation,” he said. Williams told reporters after his speech that the Fed sees value in U.S. bank diversity. “We don’t have a goal to have more consolidation,” he said, adding “we want healthy and sound banks of all the different sizes to come out of this” set of difficulties, which were driven by a few troubled financial firms not representative of the financial sector as a whole.In his speech, Williams said he expects inflation, which was running at an annual rate of 4.2% in March as measured by the personal consumption expenditures price index, to fall to 3.25% this year and back to the 2% target by 2025. He noted there have been signs of slowing price pressures but core services inflation stripped of housing factors remains persistent.He also said he sees the economy growing moderately this year and that the jobless rate, at 3.4% as of April, should rise to between 4.0% and 4.5% this year. More

NEW YORK (Reuters) -Ishan Wahi, a former Coinbase (NASDAQ:COIN) Global Inc product manager, was sentenced on Tuesday to two years in prison in what U.S. prosecutors have called the first insider trading case involving cryptocurrency.U.S. District Judge Loretta Preska sentenced Ishan Wahi, 32, in Manhattan federal court after the defendant pleaded guiltyin February to two counts of conspiracy to commit wire fraud.The scheme involved a “massive abuse” of Coinbase’s trust, Preska said during the sentencing hearing, adding that attempts to cover it up showed that Wahi and his co-defendents knew their actions were wrong.It is one of several high-profile cryptocurrency-related cases brought by U.S. prosecutors in New York, including one against FTX founder Sam Bankman-Fried, who has pleaded not guilty.Prosecutors have said Wahi shared confidential information with his brother Nikhil and their friend Sameer Ramani about which digital assets would be listed on Coinbase, one of the world’s largest cryptocurrency exchanges.The tipoff allowed the three men to make $1.5 million by trading 55 digital assets ahead of the listing announcements between June 2021 and April 2022, according to prosecutors.Nikhil Wahi pleaded guilty in September to a wire fraud conspiracy charge, and in January was sentenced to 10 months in prison. Ramani remains at large.At Tuesday’s hearing, Ishan Wahi expressed remorse for his actions and their effect on his friends and family, several of whom were in court.”I made a huge mistake that will follow me for the rest of my life,” Wahi said.Assistant U.S. Attorney Noah Solowiejczyk said during the hearing that Wahi’s conduct was “not a one-off mistake” but a stream of tips over 10 months.Wahi had asked in court papers for a sentence no longer than his brother’s, citing other insider trading cases that resulted in little or no prison time.Prosecutors had called for Ishan Wahi to spend more than three years in prison to deter other cryptocurrency insiders from misusing corporate information.Prosecutors can charge fraud in instances in which deception was used to seek financial gain, regardless of the kind of asset involved. This gives the U.S. Justice Department more latitude to go after crypto-related wrongdoing than its civil counterpart, the U.S. Securities and Exchange Commission, which is limited to policing the securities markets.The SEC has argued in lawsuits, including one it filed against Ishan and Nikhil Wahi over their trades, that many digital assets are securities. Ishan Wahi and the SEC have reached an agreement in principle to settle the claims, while Nikhil Wahi and the SEC are also in settlement talks, court papers showed. Coinbase has said it does not list any securities. More