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OPEC+ on Thursday decided to raise their collective oil output by 432,000 barrels a day, rejecting calls from the West for a higher increase in its output as oil prices rise. The group, which includes Saudi Arabia, the UAE, and Russia, said raising output as requested would increase oil prices, not lower them. The Saudis and Emiratis said they would not break their energy-market alliance with Russia. More: - Most OPEC+ members also noted they are already pumping oil at their maximum capacity and have increased output by over 3 million barrels a day.
- The International Energy Agency says OPEC’s spare capacity still stands at 4.19 million barrels a day, including 3.2 million barrels a day from Saudi Arabia and the UAE.
- At an energy conference in Dubai on Monday, U.S. State Department official Amos Hochstein said that about 2 million barrels a day of oil supplies have been disrupted since the war in Ukraine started.
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President Biden plans to release up to 180 million barrels, about a million barrels a day, for the next six months starting in May from government oil reserves. The move is meant to help lower record-high fuel prices. This would be the largest oil release in history from the U.S. Strategic Petroleum Reserve (SPR), which, according to the Energy Information Administration, held about 568 million barrels of oil as of March 24, enough to sustain U.S. energy needs for several weeks. More: - The Biden Administration released 50 million barrels of oil in November and 30 million barrels in March from the SPR.
- The oil release is part of the Biden Administration's package to prevent an energy crisis.
- President Biden also wants Congress to push oil companies to drill faster on federal leases.
- The White House invoked the Defense Production Act to boost domestic output of minerals used in batteries for EVs and other clean-energy technology.
- Critics of the oil release say the U.S. government would need to replenish its reserves eventually, which would cause prices to rise if the war goes on, and the release would only lower oil prices by 5 to 10 cents a gallon.
- Brent crude futures fell 4.56% to 108.28 a barrel on news of the release, and U.S. crude futures for May delivery fell 4.7% to $102.78 a barrel.
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U.S. private equity firm Bain Capital is considering putting a bid for Japanese conglomerate Toshiba Corp. Bain said it wanted to hold "careful and sincere" discussions with Toshiba's management, the Japanese government, and banks over a possible deal, noting there are many issues that need to be addressed before Toshiba is delisted. More: - Last week at an ESM, about 60% of Toshiba shareholders, led by foreign investors, voted against management's plan to split the company into two separate entities.
- Under the plan, the company would spin off its electronic device business and focus on its energy and infrastructure businesses.
- Foreign investors want Toshiba to consider going private through a sale to a private equity firm.
- At the ESM, shareholders also voted down Singapore fund 3D Investment Partners' (Toshiba's second-largest shareholder) proposal to reopen talks with private equity firms about taking the company private.
- Toshiba is one of Japan's oldest companies, dating back to 1875.
- The company is also involved in businesses related to Japan's national security, including weapons systems and nuclear power-plant maintenance, which analysts say would complicate a foreign takeover deal.
- Buyouts of large Japanese companies are rare. One example is the 1999 deal that gave Renault SA 43.4% of Nissan Motor Co.
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Amazon will continue issuing its Prime Rewards credit card through JPMorgan Chase, ending months of heated negotiations. A co-brand credit card with Amazon is one of the banking industry’s most coveted deals due to the online retailer’s large prime loyalty program, which is estimated to have 150 million U.S. members. More: - JP Morgan Chase has issued Amazon’s credit card since its inception about 20 years ago.
- Last year, Amazon solicited bids from other banks, including American Express and Synchrony, for its credit card.
- The online retailer is known for driving hard bargains with partners.
- Amazon asked potential card issuers to maintain the card’s generous 5% rewards rate for purchases on Amazon.com and at Whole Foods, its groceries subsidiary.
- Amazon also asked banks to share revenue from making loans and rebate some of the interchange fees banks usually keep.
- Amazon had also hoped to replace Visa with Mastercard as its payments network.
- Credit card deals with popular brands like Amazon, Costco, and American Airlines are some of the most contested contracts in the financial industry.
- American Express lost 10% of its cards in circulation when Citigroup won the bid for Costco’s card in 2015.
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SoftBank founder Masayoshi Son, in a recent meeting with company executives, told them to slow down on investments. According to people briefed on the discussion, SoftBank is looking to raise cash and is evaluating assets that could be liquidated. Soft Bank’s stock value has fallen more than 40% in the last year. More: - SoftBank’s write-down for the quarter is estimated to be around $20B as tech stocks fall and China continues its regulatory crackdown in its tech sector.
- The company’s net debt to equity value of holdings has increased from under 10% in mid-2020 to about 22% currently.
- This metric is closely watched by Son, who vowed not to allow the metric to cross the 25% threshold in “normal times.”
- Last week it was reported SoftBank is finalizing loans from banks worth about $10B ahead of the IPO of UK chip designer Arm Holdings.
- Goldman Sachs, JPMorgan Chase, and Japan’s Mizuho Financial Group are expected to have leading roles in the IPO.
- SoftBank decided to list Arm after a deal to sell it to Nvidia for $66B fell apart amid antitrust objections.
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IMF’s first deputy managing director, Gita Gopinath, warns that the financial sanctions imposed on Russia by western countries could weaken the dominance of the U.S. dollar. Gopinath warned that the sanctions could encourage the emergence of small currency blocs based on trade, resulting in a more fragmented international monetary system. More: - In the last several years, Russia has sought to reduce its dependence on the dollar and other western financial networks after the U.S. sanctioned the country for annexing Crimea in 2014.
- Russia still holds about 20% of its foreign reserves in dollar-denominated assets in Germany, France, the U.K., and Japan.
- Gopinath warns that as other currencies are used in global trade, it would further diversify reserve assets held by national central banks.
- In the last 20 years, international reserves held in dollars have fallen from 70% to 60%. About a quarter of the decline is due to the increased use of China’s renminbi.
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- Jeff Bezos’ Blue Origin launched its New Shepard rocket for the first time this year on Thursday, carrying six crew members. Actor and comedian Pete Davidson, previously announced as one of the crew members, could not join the mission for an undisclosed reason.
- Stocks fell for the second straight session on Thursday, closing out the worst quarter for stocks in two years. The Dow fell 550 points or ~1.6%, the S&P 500 fell ~1.6%, and the Nasdaq was down 1.5%.
- Starting April 11, U.S. citizens will be able to select an X gender designation on their passport applications. The X gender marker will be defined as “unspecified or another gender identity” on forms.
- World Wrestling Entertainment Inc. (WWE) will start producing fictionalized TV shows to diversify its revenue stream from the wrestling ring and take advantage of streaming services’ growing hunger for fresh content.
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 |  | Vanessa Omeokachie is a Researcher at Inside. Her interests include finance, tech, and startups. In her free time, she enjoys reading, hiking, attending music festivals, and traveling. Connect with her on Twitter @VanessaOmeo or through email at vanessa@inside.com | | | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 Ford. | |
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