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US, UK economists back Russian oil price cap in letter to Yellen By Reuters

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© Reuters. A train passes through oil tanks at the NNK-Primornefteproduct petroleum depot in the port of Vladivostok in Russia’s Far East, June 11, 2022. REUTERS / Tatiana Mill

By Andrea Shalal

WASHINGTON (Reuters) – A cap on the price of seaborne Russian oil developed by the United States and the Group of Seven nations could significantly reduce Russia’s revenue while encouraging Moscow to continue oil production, 16 economists from top U.S. and British universities told U.S. Treasury Secretary Janet Yellen. .

The cap, agreed in principle last month by the Group of Seven rich nations, should lower Russia’s revenue by strengthening the bargaining position of any buyer, economists including Simon Johnson at MIT’s Sloan School of Management, and Jason Furman of Harvard university. Ryan Kellogg of the University of Chicago said in a letter to Yellen reviewed by Reuters.

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“While we do not expect all deals to be executed under the price cap, its presence would significantly increase the bargaining power of public and private entities buying Russian oil,” they wrote in the letter dated October 11.

The European Union last week approved the eighth set of sanctions against Russia for its invasion of Ukraine, including setting price ceilings, but said more work was needed to implement them.

Concerns about the uncertainty created by the price ceiling is one reason Saudi officials backed OPEC+ production cuts last week.

US officials said on Tuesday that work on the procedure was continuing.

A senior US Treasury official said that the OPEC+ production cut will raise energy costs for countries already suffering from high prices – and may prompt some to look for oil buying opportunities under the price ceiling once Europe stops buying Russian oil after December 5th.

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“It creates a real opportunity for some of these challenged countries to try to buy oil under the price ceiling in order to relieve budget pressures…and headline inflation pressure,” the official said.

Economists wrote that the price ceiling would preserve Russia’s economic incentives to continue mass production, while reducing its revenue.

They noted that Russia was still supplying world markets with oil in April 2020, when the record price approached $20 a barrel, because this price was higher than the cost of production in many or most of the existing Russian oil fields.

The price of Brent crude is now around $96 a barrel. Russia receives less because of its “Ural opponent” that reflects the impact of Russia’s invasion of Ukraine, a gap that has narrowed in recent weeks.

“The proposal to cap oil prices would effectively establish the Ural discount and thus further depreciation of the dollar for the primary revenue stream of the Russian government,” they said.

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Daniel Berkowitz of the University of Pittsburgh; Severin Bornstein, Yuri Gorodnichenko, Karl Shapiro and Anastasia Vidic from the University of California, Berkeley, and Rick van der Ploeg at Oxford University were among the signatories.

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MicroStrategy is at its lowest level since 2020 after the sales were revealed

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(Bloomberg) — Shares of MicroStrategy touched their lowest level since August 2020 after the enterprise software company, which in recent years has been known as the largest buyer of bitcoin, revealed its first sale of the token.

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The stock fell 1.1 percent to $136.63 on Thursday, down 75 percent this year. Bitcoin rose less than 1% to around $16,590 and is believed to have fallen 64% since the start of the year.

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In a filing on Wednesday, MicroStrategy said it acquired approximately 2,395 Bitcoin between the beginning of November and December 21 through its subsidiary MacroStrategy, and paid out approximately $42.8 million in cash. It then sold 704 of the tokens on Dec. 22 for a total of about $11.8 million, citing tax purposes, before buying another 810 of them two days later.

Matt Malley, chief market strategist for Miller Tabak + Co. Step down as CEO. This news means they don’t seem to want to do that anytime soon.”

Overall, MicroStrategy held about 132,500 bitcoins worth over $4 billion USD as of December 27th. The company paid an average purchase price of $30,397 per bitcoin.

“Given MicroStrategy’s $2.4 billion in leverage, we believe the company may have a lot of leverage over Bitcoin, and may face some liquidity risk,” Jefferies analyst Brent Thiel wrote in a note on Wednesday. Thill has an “underperform” rating on the stock and a price target of $110.

Over the years of the pandemic, MicroStrategy has become well known for its Bitcoin takeovers, largely led by Saylor. Earlier this year, Saylor stepped down from that role and now serves as CEO at the company and continues to lead its bitcoin strategy.

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MicroStrategy was trading around $120 before Saylor first announced the company’s Bitcoin purchases in 2020. The stock reached an all-time high of $1,315 in February 2021.

(Updates to include the stock’s closing price in the second paragraph.)

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Bankman-Fried May File Petition in New York Federal Court Next Week Before Judge Louis Kaplan By Cointelegraph

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Former FTX CEO Sam Bankman-Fried is set to appear in court on the afternoon of January 3 to enter a lawsuit over two counts of wire fraud and six counts of conspiracy against him related to the collapse of cryptocurrency exchange FTX, according to Reuters. mentioned on December 28, citing court records. Bankman-Fried will appear before District Judge Lewis Kaplan in Manhattan.

Judge Kaplan was appointed to hear the case on December 27 after the original judge in the case, Ronnie Abrams, Resigned herself because of connections between FTX and the law firm Davis Polk & Wardwell, where her husband is a partner. The company provided advisory services to FTX in 2021.