Aurelia Butler

Since its inception, the World Economic Forum here in Davos has been widely seen as a gathering of largely white, male, wealthy members of the western corporate elite. Some developing nations have had a high profile at this year’s event — Indian government and corporate delegations, for example, have been out in force, with several “pavilions” dotted along Davos’s central promenade.Still — amid all the intense discussions of challenges affecting the world — there’s been no denying the pronounced under-representation of communities in the developing nations where most of the world’s population lives. Yet among those who have made the journey to Switzerland are some powerful voices, whose perspectives on this year’s summit are worth paying attention to.One of those is Hindou Oumarou Ibrahim, president of the Association for Indigenous Women and Peoples of Chad, who has been peppering panel discussions this week with remarks that may have made uncomfortable listening for some of the high-powered figures in attendance.“This is a place of the elite, billionaires sitting together,” she told me after one of those sessions. “They have a limited vision, because they do not know the reality on the ground.”In Ibrahim’s eyes, the spectre of hunger hanging over many developing countries proves the bankruptcy of the economic philosophy that has long characterised the WEF agenda. “The globalisation that they designed is not working,” she said. “If it was working, you would not end up with a food crisis all over the world.”In today’s edition we feature an interview with another prominent activist making waves in Davos, the Ugandan climate campaigner Vanessa Nakate. Andrew Hill probes whether the metaverse could cut emissions from corporate travel, and Patrick has an update on Carl Icahn’s pig welfare campaign at McDonald’s (spoiler alert: it didn’t go well). We’ll be back on Monday, with a dive into the furore over HSBC executive Stuart Kirk’s remarks on climate risk, and what it tells us about the state of sustainable investing. Have a good weekend. (Simon Mundy)Vanessa Nakate is still waiting for answersThe evening before we met in Davos this week, Vanessa Nakate had spoken at a dinner event thickly populated by western business executives. For all the earnest talk about sustainability and justice at this year’s World Economic Forum, the Ugandan activist told the dinner guests that too little attention was still being paid to the starkest issues confronting developing nations — not least the effects of climate change in Africa.“Maybe they listened,” she told me. “But I didn’t get an answer.”It was a notorious incident in Davos that helped catapult Nakate to global fame. Her first visit came two years ago, when she took part in climate protests outside the WEF, and was photographed with Greta Thunberg and other activists. In the published version of that Associated Press photo, Nakate was cropped out, leaving only her white comrades visible.Nakate has spoken of the pain that episode caused her, the sense of an entire continent being erased. This year, however, she returned to the Alps in about the most visible way possible, as a VIP guest, speaking on a panel with the head of the World Trade Organization. But only with far greater representation of Africa’s more than 1bn people, she warned, would the conversation at Davos properly reflect the continent’s challenges. “It feels like people are in their own personal bubbles, disconnected from the reality of what is happening,” she said.Nakate started her activist career in 2018 as the lone Ugandan participant in Thunberg’s school strike movement. She’s now firmly established as one of the world’s most prominent climate campaigners, having made a huge impact with her calls for action during last year’s COP26 in Glasgow. While that event was more fruitful than many previous UN climate conferences, Nakate was left bitterly disappointed by the failure to set up a “loss and damage” facility, to compensate developing nations for climate impacts.In her view, this is not about charity, but justice. Wealthy nations bear the vast bulk of responsibility for cumulative carbon emissions, she often points out. Africa has contributed just 4 per cent. For that reason, she argues, climate-related financial assistance should be provided in the form of grants — not loans that will add to a debt pile that is already eye-watering for many African states.That’s anathema to many in the development finance space, who see huge potential for debt funding to help tackle the worst climate challenges in Africa and elsewhere. But Nakate is adamant. “When climate finance comes in the form of debt,” she told me, “it is only harming the communities that are already on the front lines of the climate crisis”.Nakate wants more action on this front at November’s COP27 in Egypt. The fact that this summit has an African host is driving hopes of a better outcome for the continent. But that alone “doesn’t make it obvious” that the interests of climate-hit communities will be well represented, Nakate warned.It could make a huge difference, she said, if organisers of events such as WEF and COP set up programmes to help members of those communities attend and share their stories in person. The potentates surrounding her this week “need to spend more time listening to the people in those communities, and get to know the stories beyond the statistics”, Nakate said. “People hear numbers and they’ll be like, ‘OK, that’s bad’, and then life continues . . . But climate change is more than statistics.” (Simon Mundy)Is the metaverse good news for carbon emissions?Holding the World Economic Forum’s annual meeting in the metaverse would cut Davos’s carbon footprint at a stroke. This week, delegates have been able to experience a sense of what such gatherings might be like. From the crowded Congress Centre where the WEF stages its main programme, attendees donned virtual-reality headsets to be transported to a computer-simulated park dotted with pines and ringed by spectacular mountains. This is “the future of collaboration”, according to the WEF. In it, delegates could meet to discuss the fate of the planet without the inconvenience of security checks, viral handshakes, unexpected weather, footwear dilemmas, travel disruption — not to mention carbon-heavy international travel. In the WEF’s Global Collaboration Village, participants were invited to try out the pilot of a metaverse platform, developed with Microsoft and Accenture, from the comfort of their chairs. From there they were transported to the edge of the Sahara to “watch” the dangerous advance of the desert from the shade of a virtual baobab tree (part of the WEF’s 1t.org project to grow, restore and conserve 1tn trees).Given WEF participants’ unanimous welcome for the return of the in-person summit after two years of online gatherings, holding the event in the metaverse would be a hard sell. A virtual Davos would remove the central benefit of being able to lock eyes with their 40 most important clients within a few days, rather than flying to 40 different meetings around the world.In truth, organisers see the metaverse platform not as a replacement for face-to-face discussion, but as an “extension”. But Davos 2030 could still look and feel very different. At an in-person digital strategy session, where executives from the likes of Google and IBM competed with each other to predict the next big tech breakthrough, Nokia boss Pekka Lundmark forecast that within eight years, 6G communication and greater computing power would allow the panel to meet as high-quality holograms. That would let the CEOs ground their carbon-spewing jets for good. (Andrew Hill)Elsewhere in ESG: Icahn loses pig fight at McDonald’s

Billionaire activist investor Carl Icahn © Bloomberg

Our regular readers will recall Moral Money’s interview with activist raider Carl Icahn and his unlikely crusade at McDonald’s this year concerning pig welfare. Icahn hammered the company, not just on animal welfare, but also for chief executive Chris Kempczinski’s $20mn pay last year.On Thursday, hardly any McDonald’s shareholders sided with the longtime activist investor. About 1 per cent of McDonald’s shareholders supported the two board nominees that Icahn put up for a vote at the company’s annual meeting, the company said.Icahn’s campaign faced an uphill battle. He held only 200 shares of McDonald’s, not enough to persuade asset managers to vote with him.The fight clearly was a case of losing the battle to significantly advance the war. The Humane Society, which partnered with Icahn on McDonald’s, noted on Thursday that after Icahn announced his campaign, other companies had scrambled to change their practices. General Mills, Conagra Brands and Denny’s have rushed to wind down their use of gestation crates in their pork supply chains.Icahn’s campaign also strikes an awkward contrast with the Republican party’s fight against environmental, social and governance (ESG) investing, in which former vice-president Mike Pence has claimed that “liberal activist investors are forcing private companies to abide by ESG investing principles”. For a time, Icahn was Donald Trump’s deregulation tsar, and he has been a multi-million dollar donor to Republicans across the country. Icahn might have lost at McDonald’s, but the publicity around his campaign could yet have implications for the gathering culture war around ESG. (Patrick Temple-West)Smart readMuddled marketing of sustainable investing products threatens to undermine confidence in the entire sector, writes Brooke Masters in this analysis featuring commentary from executives at BlackRock, PGIM and Pimco. More

Shanghai-based Greenland is the first state-backed developer to extend a dollar bond payment since the country’s property sector plunged into a debt crisis last year. Many private developers have already offered bond exchanges to ease their liquidity pressures while a few, including China Evergrande Group and Sunac China, have defaulted on some payments. Greenland issued a filing earlier on Friday that it would seek the approval from holders of the June notes to extend the repayment, citing the impact from the COVID-19 lockdown in Shanghai. But the company did not provide extension details in the filing.In the investor call, Greenland said it would pay 10% of the principal amount and all the interests on June 25, 2022, the maturity date, while the remaining amount would be paid one year later in 2023. However, the developer said it was “fully capable” of repaying on time three other bond tranches due later this year, as the June payment was only affected by cashflow disruptions due to lockdowns since March.Greenland could not be immediately reached for comment.Its sales in April dropped 57% from a year earlier and sales this month would continue to see a big fall, Wu Zhengkui, general manager of Greenland’s finance department told the call.He added the firm plans to sell 50-70 billion yuan ($7.5-$10.4 billion) of assets including office towers and hotels in these three years to improve its liquidity.($1 = 6.7061 Chinese yuan) More

Electricity distribution networks including SSE, Western Power and UK Power Networks have come under fire for loading the costs of energy advice for struggling households on to customers.The six monopolies, which have not yet been targeted for a windfall tax, work with charities to advise people struggling with fuel poverty on how to apply for benefits, grants and other energy efficiency measures. The cost of the advice is passed on to other customers’ bills. But in a series of hearings with Ofgem aimed at helping the regulator decide how much the distributors can charge, they were asked by the regulator why they could not pay to help struggling households themselves.Recently released transcripts show that Christine Farnish, a non-executive on the regulator’s board, asked the country’s largest electricity distributor UK Power Networks: “Why are you not proposing to fund this entirely through your own charitable foundation? Why are you expecting other hard-pressed customers to put their own hands in their own pockets to co-fund this — it actually benefits your reputation.”Basil Scarsella, chief executive of UK Power Networks, replied: “Certainly it benefits our reputation, but I think what we’ve struck is a reasonable balance between funding it ourselves and putting some of it into the totex [total expenditure] allowance.”Ofgem, which is under pressure for failing to protect consumers from rising bills, decides how much the networks can charge because they provide an essential service with no competition in the areas in which they operate. All their revenues and any investment in their network, which includes electricity pylons and other infrastructure, is paid for out of customer bills. The regulator is planning to lower potential returns from 2023.Ofgem said this week it expected average household bills to rise by a further £800 in October to £2,800, meaning they will have risen by 119 per cent in a year. The cost of the electricity and gas transmission and distribution networks accounts for about a fifth of customer bills.Gillian Cooper, head of energy policy at Citizens Advice, said: “Customers already struggling to cover rising energy bills shouldn’t be paying for support schemes out of their own pockets. Given the significant profits network operators have been making, it’s only right that they shoulder more of the costs.”Citizens Advice believes the cost of providing the advice could rise from £1.5mn a year to £15mn or even £25mn during the current crisis. In the year to March 31 2020, UK Power Networks, which operates in the south-east and East Anglia, delivered a pre-tax profit of £614.8mn on revenues of £1.76bn, while paying out £237mn in dividends as well as £76.9mn in interest on shareholder loans. The company is owned by Hong Kong billionaire Li Ka-shing’s CK Infrastructure Holdings but is up for sale.In a hearing with Kendal Morris, head of Scottish Power Energy Networks, Ofgem chief executive Jonathan Brearley cited the example of a low-income family whose bill was increased to pay for the support scheme but who would not benefit from any help. “How would that make you feel if you were that kind of customer?” he asked, adding: “Would you be encouraging the company to try and absorb some of this from their own shareholders?”Morris replied that it had asked customers who were not vulnerable if they would be willing to pay for these services. “The answer was that absolutely they wanted us to deliver this in this way.” More

How well did you keep up with the news this week? Take our quiz.Police in Uvalde, Texas, have defended their handling of the school shooting in which 19 children and two teachers were killed in the face of mounting criticism from parents and local residents over the time taken to bring the massacre to an end.In a press conference yesterday, Texas Department of Public Safety regional director Victor Escalon said that the window of about an hour in which the 18-year-old perpetrator Salvador Ramos was on the grounds of Robb Elementary School before he was killed by police was due to a wait for back-up officers and resources.“During this time that they’re making those calls to bring in help to solve this problem and stop it immediately, they’re also evacuating . . . students, teachers,” Escalon said. “There’s a lot going on. A complex situation. They’re measuring, they’re measuring.”According to a timeline provided by Escalon, Ramos is believed to have been inside the school building for at least three-quarters of an hour before being killed by Border Patrol agents.Meanwhile, videos circulated on social media following the attack appeared to show officers restraining distraught parents who were urging them to go into the school while waiting for tactical support teams to arrive.Escalon said he was aware of, but had not verified, such reports. Asked if any of the first responding officers should have gone in sooner or waited until the support arrived, he said: “That’s a tough question.”Thanks for reading FirstFT Americas and have a great weekend. We will be back in your inboxes on Monday. Here’s the rest of the day’s news — GordonFive more stories in the news1. US says China is greatest threat to international order In the first broad articulation of the Biden administration’s policy toward Beijing, US secretary of state Antony Blinken said China was the most serious threat to the international order despite Russia’s invasion of Ukraine. It came as Fiji became the first Pacific Island nation to join the US’s new Asian trade initiative.Go deeper: China is promoting its own security initiative as part of Beijing’s increasingly frantic efforts to oppose US-led blocs. 2. EY plans global audit spin-off EY is working on a split of its audit and advisory operations worldwide in the biggest shake-up of a Big Four accounting firm in two decades, according to people with knowledge of the plans. The proposal, which is still being thrashed out by EY’s senior partners, is a bold attempt to escape the conflicts of interest that have dogged the industry and brought regulatory action from the UK to the US.3. Europe plans for risk that Russia cuts gas supply this year The EU is racing to store as much gas as possible and could replace most of Russia’s deliveries this year, the bloc’s energy commissioner has told the FT. The plans include measures to ration gas supplies to industry while protecting households, Kadri Simson said.4. Chipmaker Broadcom to buy software group VMware for $69bn The semiconductor company yesterday confirmed it had agreed to acquire cloud software company VMware for $69bn, including debt. The acquisition will help transform Broadcom into a diversified tech business and signals that the market for large corporate mergers might be thawing.5. JPMorgan collects data on borrowers’ race The US’s biggest commercial bank has started to collect data on race and ethnicity from some borrowers as part of an effort aimed at making good on promises to do more for the black community after the police murder of George Floyd. In most cases, asking for a customer’s race or ethnicity for lending purposes is illegal but JPMorgan has invoked exemptions in a 1974 piece of legislation to better serve disadvantaged borrowers.The days aheadAnnual meetings A four-and-a-half-hour drive east of the scene of this week’s horrific school shooting the National Rifle Association will host its 151st annual meeting. Guest speakers in Houston include former president Donald Trump and Texas governor Greg Abbott. Meanwhile, the White House has confirmed that Joe Biden will travel to Uvalde on Sunday.Economic data The core personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, is expected to have increased by 4.9 per cent in April, compared with a 5.2 per cent increase in March. Economists expect personal income growth to increase 0.5 per cent on a monthly basis in April.Earnings The smallest of Canada’s six major banks, National Bank, is expected to report earnings of $2.25 a share on $2.37bn in revenues in its latest quarter. Results from Canada’s commercial banks this week have generally been strong, with multiple lenders topping analyst expectations and boosting dividends. Chinese ecommerce group Pinduoduo also reports earnings this morning.Markets outlook US stock markets look likely to pull back after rallying yesterday. Discount retailers Dollar Tree, Dollar General and department store Macy’s were among the biggest gainers after reporting strong earnings and providing a positive outlook. Shares in Europe are in positive territory today as Wall Street looks likely to make its first weekly gain in eight weeks.Ukraine diplomacy G7 energy, climate and environment ministers finish a three-day meeting in Berlin today. Local media are reporting that the countries have reached concrete agreements on phasing out coal power generation and expanding renewable energy production. (Reuters)Elections Polls suggest former guerrilla Gustavo Petro and his running mate Francia Márquez will win the Colombian presidential election comfortably on Sunday but fall short of the 50 per cent they need to clinch it outright. A run-off election is likely to follow on June 19 — most likely involving either centre-right candidate Federico “Fico” Gutiérrez or populist outsider Rodolfo Hernández.What else we’re readingWhat Tom Cruise’s new movie says about American power Top Gun: Maverick arrived in cinemas this week with impeccable geopolitical timing, just as US president Joe Biden reassured Asia-Pacific partners about Washington’s commitment. What better moment for a display of vulgar American soft power, offering a clear vision of US military prowess?Bull market rhymes lead to a turn in the investing cycle Bitcoin and FAAMGs (Facebook, Apple, Amazon, Microsoft and Google) are the latest example of a bull market — something new that history can’t be used to discount. Stock market boom and busts occur and recur, abetted by the willing suspension of disbelief, writes co-founder and co-chair of Oaktree Capital Management Howard Marks.Crypto and sports bet on winning combination to woo fans When Crypto.com stamped its name on Los Angeles’ main sports arena, the exchange’s boss, Kris Marszalek, said the $700mn deal marked cryptocurrencies’ move into the mainstream. Six months later, exuberance over virtual assets has waned, but the love affair between sport and crypto appears to be a perfect match.More sport: Ahead of tomorrow’s Champions League final, data reporter John Burn-Murdoch analyses how English clubs came to dominate the tournament.Why does it feel good to do good? After his father died, economist Tim Harford wrote a thread on Twitter about his life that ended with a request for donations to the hospice that cared for him. He was surprised by readers’ generosity and as a result looked into the motivations for giving and reached these conclusions. Geetanjali Shree and Daisy Rockwell win historic Booker Geetanjali Shree has been announced as the winner of the 2022 International Booker Prize for her sprawling and multi-faceted novel Tomb of Sand. The book, translated from Hindi by Daisy Rockwell, who takes an equal share of the £50,000 award, is the first in any Indian language to win the prize. ObituaryTributes for Dervla Murphy, Ireland’s best known travel writer, poured in yesterday after news of her death was accidentally revealed by among others Irish president Michael D Higgins. Murphy cycled, trekked or rode a mule across far-flung countries to understand the lives of ordinary people. To the end, writes the FT’s Ireland correspondent Jude Webber, she kept her vivid intellectual curiosity. 

Dervla Murphy on her bicycle. In 1963, she travelled solo to India by bike, the subject of her first book ‘Full Tilt’ © Tara Heinemann More

According to Refinitiv Lipper, investors bought a net $6.16 billion worth of global equity funds, marking their first weekly net buying since April 6. Graphic: Fund flows: Global equities, bonds and money market – https://fingfx.thomsonreuters.com/gfx/mkt/egpbkwqqzvq/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg The MSCI all country world index has gained over 3% this week, after slumping about 12.7% in the last seven weeks on worries that aggressive rate increases to tame inflation could send the global economy into a tailspin.The big inflows into global equity funds were also due to the creation of new shares in the equity exchange-traded funds (ETF), Jefferies said in a note.The data showed equity ETFs saw inflows worth $15.76 billion in the week, the highest in nine weeks. U.S. and Asian equity funds had inflows of $4.61 billion and $1.22 billion, respectively, but European funds attracted just $0.13 billion. Chinese equity funds obtained $0.58 billion, marking their first weekly net buying in seven weeks. Data for sector funds showed industrials drew inflows of $713 million but financials and tech continued to face outflows, amounting $1.74 billion and $1.44 billion, respectively. Graphic: Fund flows: Global equity sector funds – https://fingfx.thomsonreuters.com/gfx/mkt/klpykobjepg/Fund%20flows-%20Global%20equity%20sector%20funds.jpg Meanwhile, investors sold a net $9.94 billion of bond funds in the week, their eight consecutive weekly outflow. Global investors exited short- and medium-term bond funds worth $5.14 billion, while high yield funds witnessed outflows of $2.18 billion. However, inflation linked funds obtained $0.59 billion and government bond funds gained $3.85 billion, posting inflows for a fifth straight week. Graphic: Global bond fund flows in the week ended May 25 – https://fingfx.thomsonreuters.com/gfx/mkt/zjpqkgodjpx/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20May%2025.jpg On the other hand, investors purchased $23.13 billion of money market funds after three weeks of net selling in a row. Data for commodity funds showed gold and precious metal funds received $1.36 billion after four weeks of net selling but energy funds saw outflows of $29 million. An analysis of 24,276 emerging market funds showed investors sold $1.5 billion of bond funds and $332 million of equity funds, marking the seventh weekly outflow in a row. Graphic: Fund flows: EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/dwvkrnlqrpm/Fund%20flows-%20EM%20equities%20and%20bonds.jpg More

Investing.com — The U.S. releases April data for personal income and spending – and the Fed’s preferred measure of inflation, the Personal Consumer Expenditures index. Analysts expect evidence that the annual rate of inflation peaked in March. Global wheat prices edge higher as Europe gets nowhere in persuading Vladimir Putin to allow grain exports from Ukrainian ports. Ethereum slumps on a delay to its big network change. Stocks are set to snap a seven-week losing streak, but Gap shows that the retail sector is still capable of producing at least one horror story a day. And oil prices edge down from their highs ahead of the start of the U.S. summer driving season. Here’s what you need to know in financial markets on Friday, 27th May.1. Annual inflation may have peakedThe U.S. will release personal income and spending data at 8:30 AM ET (1230 GMT), along with figures for personal consumer expenditures, the Federal Reserve’s preferred measure of inflation.The PCE figures are expected to add to evidence that the annual rate of inflation peaked in March, although this is largely due to the jump in prices last April as passing out of the year-on-year calculations. As such, the more important figures will be the month-on-month rise in the core PCE, which is expected to come in at 0.3%, unchanged from March.More granular data on spending on Thursday appeared to paint a picture of consumers moving downmarket to save money – Dollar Tree (NASDAQ:DLTR) being one of the biggest beneficiaries of that trend. Bargain-hunting was also in evidence in Costco’s (NASDAQ:COST) numbers after the bell, but attention is likely to focus most on Gap (NYSE:GPS), which slumped after reprising the litany of woes heard from other retailers this week.2. Wheat higher amid deadlock over Ukraine exportsGlobal wheat prices pushed higher again as Russia rejected claims by the West that it’s responsible for the shortage of grain on world markets.In a phone call with Italian Prime Minister Mario Draghi, Russian President Vladimir Putin blamed Ukraine for the blockade his navy has put on shipments out of Ukraine’s ports on the Black Sea. He said Russia would be willing to arrange safe passage for them if the West dropped its sanctions.U.S. Wheat Futures rose 1.0% to $1,154.30 a ton by 6:05 AM ET.The call took place as Russia nears a technical default on its international debt, now that the U.S. Treasury has closed a loophole that allowed the country to keep servicing its dollar-denominated bonds. On the battlefield, Russia continues to make steady, incremental gains in the Donbas region of eastern Ukraine, according to a daily update from British defense intelligence.3. Stocks set to snap 7-week losing streak; Workday’s earnings put it under pressureU.S. stock markets are set to snap a seven-week losing streak, on growing confidence that the Federal Reserve will slow or pause its monetary tightening later this year as the economy slows.Weak data from the housing market and earnings downgrades from the retail sector have both pointed to the froth coming off some of the frothiest areas of the economy this week (although the week’s jobless claims numbers suggested no meaningful uptick in lay-offs yet).By 6:10 AM ET, Dow futures were up 30 points, or 0.1%, while S&P 500 futures were up 0.2%, and Nasdaq 100 futures were up 0.4%. All three of the main cash indices are on course for gains of over 4% for the week.In addition to the retailers mentioned, Apple (NASDAQ:AAPL) stock may come in for some attention after newswire reports reheated video footage of a riot by workers at a Chinese factory of one of its suppliers earlier in the month. Quanta Computer (TW:2382) workers in Shanghai, who assemble the MacBook for Apple, had been protesting at being effectively imprisoned at their workplace for nearly two months.Workday (NASDAQ:WDAY) will also be in focus after missing earnings forecasts late on Thursday and giving disappointing guidance.4. Ethereum slumps on Merge delayStocks may be recovering, but crypto continues to struggle. Ethereum hit its lowest in over a year amid concern at the delay in its network switching to a new way of working that would slash its energy use and reduce transaction fees.The so-called “Merge,” which will see the network transition from the usual ‘proof-of-work’ mechanism for mining new coins to a system known as ‘proof-of-stake’, isn’t expected to be completed before August, the network’s pioneer Vitalik Buterin said at a conference last week.Ethereum lost 10% on Thursday and fell as much as 8% on Friday before paring losses to trade at $1,786.68 by 6:15 AM ET. The news also weighed on other ‘alt-coins’, with Cardano losing 13% and Solana losing 22%. Bitcoin, meanwhile, struggled to hold above the $29,000 level.5. Oil close to highs ahead of Memorial Day weekendCrude oil prices eased slightly – but only slightly – ahead of a Memorial Day weekend when pent-up demand for travel in the reopened U.S. economy is likely to trump record-high gasoline prices.Signs that the Biden Administration is rethinking its energy policy increased on Thursday as Bloomberg reported that it is asking the oil industry about the possibility of reopening shuttered refineries to increase domestic supplies and bring prices down before it is too late to stop them having a decisive impact on the mid-term elections in November.By 6:20 AM ET, U.S. crude futures were down 0.5% at $113.58 a barrel, while Brent crude was down 0.3% at $113.78 a barrel. More

Investing.com — Italian Prime Minister Mario Draghi called Russian President Vladimir Putin late on Thursday in an effort to relieve the pressure on world grain markets, hoping to persuade Russia to allow Ukrainian ships free passage through from their Black Sea ports to world markets. Putin responded by pressing Draghi for help in lifting western sanctions on his country, reminding him – at least obliquely – of Russia’s ability to solve Italy’s growing energy crisis.The readouts of the call published by the two sides were starkly different. Draghi’s restricted itself to two sentences, saying that “the conversation concentrated on developments in Ukraine and on the efforts to find a solution to the food crisis and its grave repercussions for the world’s poorest countries.”Putin’s, by contrast, stretched out to four paragraphs. He blamed Ukraine, which mined the approaches to its harbors at the outset of the war to stop attacks by Russia’s navy, for impeding the flow of food out of the ports of the Black Sea and the Sea of Azov. He also blamed the West’s pandemic-era stimulus policies.”Noting the unjust accusations toward Russia about the supply of agricultural products to world markets, Vladimir Putin drew attention to the fact that the difficulties that have arisen are connected not least to the disruption of global production and supply chains, and also to the financial policies of western countries during the coronavirus pandemic,” the Kremlin said. These had been made worse, he added, by the sanctions imposed by the West on Russia since the start of what the Kremlin still calls a “special military operation”.Putin then offered Draghi a quid pro quo, the Kremlin readout said. “The Russian Federation is prepared to make its substantial contribution to overcoming the food crisis through exports of grain and fertilizer, on condition that the politically motivated limitations imposed by the western side are lifted,”  the Kremlin said.The Kremlin’s readout ended with a veiled reference to Italy’s dependence on Russian energy imports. Italian oil and gas giant Eni (BIT:ENI) recently angered the European Commission by going along with a unilateral rewriting of its gas supply contract with Gazprom (MCX:GAZP), forcing it to pay in rubles. The move was widely seen as undermining European solidarity vis-a-vis Russia and has blunted the Commission’s attempts to impose an embargo on Russian oil and fuel imports by the end of the year.In discussing the problem of energy security, Russia’s inclination to continue supplying natural gas to Italy and contractually-fixed prices was confirmed,” the Kremlin said. Neither side’s readout made any reference to the possibility of a Russian sovereign default in the coming days. The U.S. Treasury this week said it won’t renew a temporary waiver from existing sanctions that was applied to the servicing of Russia’s dollar-based debt. More

UK chancellor Rishi Sunak said his latest package of support for UK households will have a “minimal impact” on inflation after the government announced a windfall tax on energy companies to fund lower fuel bills.“Our estimate and my view is that it will have a minimal impact on inflation,” Sunak told Sky News on Friday. “The reason for that is twofold. One [reason] is because what we’re doing is very targeted at those most in need, and secondly because we’re also raising money to help pay for it.“Some people might say . . . you should just spend even more, borrow even more — I think that would be irresponsible, because that would risk driving up inflation, interest rates and people’s mortgages,” he said.On Thursday, Sunak announced a £15bn support package including a £400 discount on energy bills for all households.The support will be partially funded by a windfall tax, which could generate £5bn from oil and gas companies this year, and £3bn-£4bn more from electricity groups.The vast majority of economists who commented on Sunak’s plans disagreed with his claim that it would not be inflationary, but they offered a range of views on the degree of additional stimulus and inflation that the support for households would bring.Steffan Ball, chief UK economist at Goldman Sachs and a former adviser to Philip Hammond as chancellor, said the additional income for households would support spending and ensure “the UK will narrowly avoid a recession”.But he said the consequence of this would be more inflationary pressure that forced the Bank of England to act more decisively. “Yesterday’s policy support package gives us more confidence in our view that the BoE will need to hike into contractionary territory in order to rein in wage growth and inflationary pressures,” he said on Friday. Central banks globally are struggling to find a “neutral” level of interest rates that will tame rampant inflation without tipping their economies into recession.

Shadow chancellor Rachel Reeves welcomed Sunak’s support package, but said more could be done.“The profits being made by [energy] companies have gone up by more than even Labour had anticipated so there’s more money that can be brought in,” Reeves told BBC Radio 4’s Today programme on Friday.“I welcome the package of measures. It was borrowed from the Labour party, but imitation is the sincerest form of flattery,” she added. More