Crude Oil Prices Are Running Hot, Threatening The Post-Pandemic Economic Recovery

Crude Oil Prices Are Running Hot, Threatening The Post-Pandemic Economic Recovery

The decline in commercial crude oil inventories and the lack of success in bringing production back online in the Gulf of Mexico is raising greater concerns about a supply squeeze, one analyst told Zenger.  (Photo by Dave Einsel/Getty Images)

By Daniel James Graeber

Crude oil prices remain high on the back of storm-related supply pressures, and if the situation holds it may hinder a post-pandemic economic recovery, analysts told Zenger.


Operators are still on their back foot more than three weeks after Hurricane Ida made landfall as a category 4 storm on Aug. 29. As of Wednesday, federal estimates showed about 16 percent of the crude oil production and 24 percent of the natural gas production from the Gulf of Mexico was still offline because of storm-related issues.

The U.S. government reported that total commercial crude oil inventories decreased by 3.5 million barrels from the previous week, a figure skewed by the recent storms but which would normally indicate healthy economic demand. It was closely in line with estimates from S&P Global Platts, which said it expected more of the same in the coming weeks.

Federal data on crude oil inventories are still skewed by the impact of storms in the Gulf of Mexico. (Wikimedia Commons)

“Crude stock draw aligned with our expectations given the large increase in refinery runs as plants bounce back from adverse impact of Hurricane Ida,” David Zinamon, a senior manager for refining analytics at Platts, told Zenger. “Platts Analytics expects crude runs to continue increasing with another stock draw anticipated for the next week.”

Crude oil prices have been on the rise since operators began making preparations for Ida’s landfall in late August, with West Texas Intermediate up some 15 percent since then. WTI closed trading Wednesday at $71.97 per barrel, up 2 percent on the day.

Energy prices are increasing at a far greater pace than other consumer goods, forcing some segments of the energy sector to shy away from the so-called energy transition.

Coal, for example, is gaining traction due to the extraordinarily high natural gas prices that are a concern for a European economy bracing for winter.

Al Salazar, the managing director at energy data firm Enverus, said the supply-side pressures driving at least part of the bull run for commodities in general could ease once operators return to normal levels.

“Conversely, if prices continue to be sustained at current levels, or go higher as some other prognosticators suggest, it would not be constructive for a U.S., or global, economic recovery,” he said. “Consumers are already struggling with widespread inflationary pressures. Therefore, sustaining higher oil prices for longer periods appears unlikely, as demand will react.”

U.S. Fed Chair Jerome Powell acknowledges inflationary pressures in the nation's economy. (Win McNamee/Getty Images)
U.S. Fed Chair Jerome Powell acknowledges inflationary pressures in the nation’s economy. (Win McNamee/Getty Images)

Inflationary pressures in general are a developing concern. The U.S. Federal Reserve suggested Wednesday that it may start raising its benchmark interest rate next year in an effort to keep inflation from running away.

Inflation is elevated, according to minutes from the Federal Reserve, but the bank stuck with its message that this is a transitory factor related to economic recovery from last year.

But as with retail gasoline prices, there is no shortage of bullish pressures building up behind crude oil. Phil Flynn, an energy analyst at The PRICE Futures Group in Chicago, told Zenger the U.S. economy is developing something of a supply-side problem.

“Oil inventories are at the lowest level we’ve seen in three years,” he said. “The decline in commercial crude oil inventories and the lack of success in bringing production back online in the Gulf of Mexico is raising greater concerns about a supply squeeze.”

Edited by Bryan Wilkes and Alex Willemyns



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Startups: inversionistas extranjeros apuestan por la tecnología en América Latina

Startups: inversionistas extranjeros apuestan por la tecnología en América Latina

strongTiendanube ayuda a los pequeños y medianos emprendedores a crear su propia tienda en línea. La inversión en tecnología en América Latina va en aumento. (Cortesía de Tiendanube)/strong

PORTO ALEGRE, Brasil — Los inversionistas en tecnología ponen sus ojos sobre la región latinoamericana y las ventajas que ofrece.

Tiendanube, Nuvemshop en inglés, es una plataforma de e-commerce dedicada a ayudar a los pequeños y medianos emprendedores a crear su propia tienda en línea para vender en Internet. Anunció recientemente que recibió un aporte de 500 millones de dólares. Estos fondos provienen de empresas como Insight Partners, que ya invirtió en Twitter, y el Grupo Alibaba, y Tiger Global Management, inversionistas en Spotify y Uber, y cuentan con una importante participación de los fondos Alkeon y Owl Rock.


Otros capitalistas de riesgo que se juntaron a la iniciativa fueron Sunley House Capital y VMG Partners, así como los inversionistas actuales Accel, Kaszek, Kevin Efrusy, Qualcomm Ventures LLC y ThornTree Capital. Con los nuevos recursos, Tiendanube se convirtió en la quinta startup “unicornio” más valiosa de Latinoamérica. Ahora, el valor de mercado de la empresa es de 3.1 billones de dólares.

“Con la nueva contribución, reforzaremos nuestra misión de reducir las barreras al emprendimiento en toda América Latina, asegurando que cualquier persona pueda vender en el mundo digital. Esto mueve la economía e impacta cientos de miles de empleos directos e indirectos en Brasil”, dijo Santiago Sosa, director ejecutivo y cofundador de Tiendanube.

Según la directora de Finanzas de Tiendanube, Tatiana Rezende, Brasil se ha ido consolidando como una opción de inversión viable para los inversores extranjeros. “Tuvimos la primera ola con Softbank, y ahora la segunda ola con varios otros inversionistas. Paralelamente, tenemos un grupo de emprendedores maduros mucho más experimentados, es decir, la calidad de los emprendedores locales ha aumentado mucho en los últimos años, por eso este interés”, dijo a Zenger.

El crecimiento económico en algunos países latinoamericanos, atribuido al estándar del producto que ofrecen los emprendedores de la región, es otro factor que lleva a los inversionistas extranjeros a apostar billones de dólares en startups tecnológicas.

”En la medida en que podamos demostrar que, a pesar de todas las dificultades, la economía puede crecer, los emprendedores pueden prosperar y desarrollar productos de calidad en comparación con el resto del mundo, se hace más fácil atraer este capital riesgo. Los inversionistas extranjeros pueden leer lo que está sucediendo, el crecimiento y el éxito que han logrado varios modelos de negocio”, dijo Rezende a Zenger.

Tatiana Rezende es directora de Finanzas de Tiendanube en Brasil. (Cortesía de Tiendanube)

Fábio Rodrigues, inversionista y socio de Smart Money Ventures, dijo que América Latina es uno de los mercados más grandes del mundo en lo que respecta a inversiones. “Tenemos un ecosistema ya formado, es decir, productos de calidad, nuevos talentos, startups que nacen como grandes ‘unicornios ’. La competitividad de las inversiones en los países de América Latina es mucho menor que en Estados Unidos, que tiene muchos fondos, liquidez y capital buscando estas startups. Naturalmente, estas empresas suben sus precios. En América Latina, tenemos un gran mercado, historias de éxito, tecnología y capital fluyendo para buscar nuevas oportunidades, especialmente aquí en Brasil”, dijo.

En los últimos 18 meses, en plena pandemia, Tiendanube tuvo un incremento en el número de minoristas en líea. De 20 mil, pasaron a 90 mil comerciantes, repartidos entre Brasil, Argentina, y ahora, México. “Nos tomó 10 años conseguir 20 mil inquilinos en la plataforma, y en menos de dos años logramos triplicar ese número. Muchos modelos de negocio terminaron beneficiándose de este proceso, que terminó impulsando la transición del mundo físico (offline) al virtual (online)”, dijo Rezende.

Tiendanube también acelerará su plan de expansión internacional en toda Latinoamérica, para llegar a Colombia este año, y Chile y Perú en 2022. El objetivo es crear una operación 100 por ciento local en cada país, al contratar a profesionales de las propias regiones. La compañía tiene actualmente 600 empleados, pero para fines de 2021, tiene la intención de contratar a otras 300 personas, y a mil 500 profesionales para fines de 2022.

¿Qué es una startup ‘unicornio’?

Según Fábio Rodrigues Póvoa, de Smart Money Ventures, el startup “unicornio” es una empresa privada que alcanzó la marca deseada con un valor de mercado igual o superior a 1 billón de dólares, incluso antes de realizar la IPO (Ofrenda Pública Inicial).

La principal característica de una startup “unicornio” es la innovación en el mercado en el que opera. “Es tan raro que una pequeña empresa crezca hasta valer un billón de dólares; es por eso por lo que la llamamos de ‘unicornio’, un ser mítico, raro que acaba de nacer y que ya lo vale todo”, dijo Rodrigues.

 Fábio Rodrigues es inversionista y socio de Smart Money Ventures. (Cortesía de Fábio Rodrigues)

Según el informe StartupBase, Brasil tiene 13.4 mil startups registradas, por lo que el país latinoamericano se encuentra entre los 10 con más empresas de tecnología e innovación.

Los 20 “unicornios” brasileños

Startups brasileñas avaluadas en más de 1 billón de dólares, según Flourish.

  • 99
  • Ebanx
  • PagSeguro
  • Wildlife
  • Nubank
  • Loft
  • Arco Educação
  • VTEX
  • Stone
  • Creditas
  • iFood
  • C6 Bank
  • Loggi
  • MadeiraMadeira
  • Gympass
  • Hotmart
  • Ascenty
  • unico
  • Quinto Andar
  • Nuvemshop

Editado por Melanie Slone y LuzMarina Rojas-Carhuas



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Usual Factors No Longer Apply For Prices At The Pump

Usual Factors No Longer Apply For Prices At The Pump

Some offshore installations in the Gulf of Mexico were severely damaged by Hurricane Ida. (Chris Graythen/Getty Images)

Ongoing supply-side pressures from the impact of tropical storms on the U.S. Gulf Coast are to blame for stubbornly high retail gasoline prices, analysts told Zenger.

Hurricane Ida made landfall as a category storm 4 in late August. Tropical Storm Nicholas was close behind.


Now more than three weeks after Ida hit, U.S. federal estimates show about 16 percent of total crude oil and 25 percent of the natural gas from the territorial waters of the Gulf of Mexico remain offline.

Royal Dutch Shell reported that Ida-related damage to one of its offshore installations means some of its production will be curtailed through the end of the year. While the U.S. does import gasoline from overseas, the shortages at home mean domestic refineries cannot produce much road fuel.

Some offshore installations in the Gulf of Mexico were severely damaged by Hurricane Ida. (Wikimedia Commons)

Matthew Kohlman, an associate director for refined products pricing at S&P Global Platts, told Zenger from Houston that Ida was not the worst hurricane to hit the Gulf Coast, but it was having one of the longest-lasting impacts on prices.

“Usually, prices run up and back down in roughly a week’s time,” he said. “But three weeks later, there’s still a good chunk of crude and gasoline production offline at a time when stocks of both are the lowest in years.”

Federal energy data last week showed total commercial inventories of gasoline are about 4 percent below the five-year average for this time of year. That, along with storm-related issues, means higher-for-longer prices at the consumer level.

Travel club AAA reported a national average retail price of $3.19 per gallon, a few cents higher than last week. U.S. travel demand usually tapers off after Labor Day, and refiners start making a winter-blend of gasoline in September that is cheaper to produce.

That usually means retail prices move lower — but not this year.

Retail gasoline prices usually start to decline a bit by September, but not this year.  (Wikimedia Commons)

Patricia Hemsworth, a senior vice president at Paragon Markets, told Zenger from New York the situation has been exacerbated even further by reports of an outage at a refinery unit in Texas, which has boosted market prices for gasoline even higher. She said she also expects federal data this week to show even more drains on gasoline levels, which could push retail prices even higher.

Inventory decreases are usually synonymous with improving economic conditions, but lower storage levels this time around are due to industry-wide problems.

Patrick DeHaan, the senior petroleum analyst at GasBuddy, told Zenger from Chicago that some components that go into gasoline production are not cheap either, so the stars seem to be lining up for higher prices at the pump.

“I do think we’ll start to move lower, but it could be further delayed by hurricanes,” he said.

The National Hurricane Center shows four active storms brewing in the Atlantic.

Edited by Bryan Wilkes and Alex Willemyns



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Augmented Reality App Helps Reduce Fear Of Spiders

Augmented Reality App Helps Reduce Fear Of Spiders

The Phobys arachnophobia app uses augmented reality to help users overcome their fear of spiders. (University of Basel, MCN)

Arachnophobia, an exaggerated fear of spiders and other arachnids, has long been treated by psychologists with desensitization and relaxation techniques, but these may now give way to therapy via smartphone.

At the University of Basel in Switzerland, researchers have developed an augmented reality app for smartphones to help treat arachnophobia, which showed success during the clinical trial. The subjects demonstrated reduced fear of the menacing bugs after using the app at home.


The app, called Phobys, is described in the Journal of Anxiety Disorders. “It’s easier for people with a fear of spiders to face a virtual spider than a real one,” said lead author Anja Zimmer. She and the other researchers reported promising results.

Arachnophobia is a common phobia that imposes real limitations on sufferers. Fear of spiders can lead some to avoid social gatherings, limit travel or excessively check rooms for signs of spiders. Even a photograph of a spider or evidence of its presence, such as webs, can trigger responses that include screaming, fainting, sweating and heart palpitations.

The augmented reality app Phobys helps people with arachnophobia become desensitized to spiders. Pictured, a red kneed spider is held at the London Zoo on January 3, 2013, in London, England. (Dan Kitwood/Getty Images)

Therapeutic exposure to spiders to lessen phobia is rarely used, according to the authors, because patients don’t want to expose themselves.

The team, led by Professor Dominique de Quervain at Basel, conducted a clinical trial for two weeks, using Phobys with 66 subjects. All the subjects suffered from a fear of spiders and, over the course of two weeks, either completed six half-hour training units with Phobys or, in the case of the control group, had no intervention.

The subjects approached a real spider in a transparent box before and after each treatment but only got as close as their fear permitted them. The subjects using Phobys showed significantly less fear and disgust when exposed to a real spider and were able to get closer to it than members of the control group.

Subjects using the Phobys app showed significantly less fear and disgust when exposed to a real spider. Pictured, a cerbalus aravensis spider on the Sands of Samar in the southern Arava desert region of Israel. (Yael Olek/University of Haifa via Getty Images)

The nine levels on the Phobys app allow users to see and interact with virtual spiders. By progressing through the levels, the tasks on the app become more challenging. At the end of each level, there is an assessment of the user’s fear and disgust. But it is the app that decides whether users should repeat a level or move on.

The game-like Phobys app also offers encouragement in the form of animation and sound effects. Users experiencing a mild form of arachnophobia may use it on their own. However, the research team recommends that individuals with more serious symptoms use it under professional supervision.

The Phobys app allows users to test their phobia level at no charge, while training to reduce their fear of spiders can be purchased in the app.

The current study is one of several projects in progress at the University of Basel aimed at using new technologies to treat mental conditions.

Edited by Siân Speakman and Kristen Butler



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B2B Funding Helps Latino Businesses In Illinois Hardest Hit By Pandemic

B2B Funding Helps Latino Businesses In Illinois Hardest Hit By Pandemic

Victor Santay shaves a customer at the Acapulco Barber Shop in Chicago. Based in Illinois, the B2B program helps Latino small businesses hit by the pandemic. (Tim Boyle/Newsmakers/Getty Images)

To help businesses hard hit by the COVID-19 pandemic, the U.S. government stepped in.

A crucial part of its economic recovery plan is the Back to Business (B2B) program. Totaling $250 million, the B2B program provides funds from the American Rescue Plan Act for businesses that faced losses due to the COVID-19 pandemic, said Sylvia García, acting director of Illinois Department of Commerce and Economic Opportunity (DCEO).


“Since the start of the pandemic, Gov. J.B. Pritzker and DCEO have consistently focused on addressing the impacts small businesses across Illinois are facing. We know the pandemic has been particularly devastating for communities of color and Latinx businesses — and for many industries across the board, including restaurants, retail stores, beauty salons, museums, cultural attractions and event venues,” she said.

Sylvia Garcia says that the B2B program focuses on building equity within the business community. (Negocios Now)

The B2B program takes an equity-focused approach. It prioritizes the most affected industries, small businesses and those that have not received help from the state or federal government during the pandemic, García said.

“With B2B now open and accepting applications, we are focusing on outreach to hard-to-reach populations, including businesses in communities of color and rural areas.”

Garcia said the program was possible, due to Gov. Pritzker’s leadership. It builds on last year’s $290 million Business Interruption Grants funded through the federal CARES Act.

“While the program was successful in deploying a record 9,000 grants for Illinois small businesses — with over $18 million for Latinx businesses — we knew that more help would be needed to respond to the needs businesses are still facing out there today.”

The B2B program is a coordinated community effort.

“To make sure we are reaching businesses that need information about the program, we have enlisted the help of over 100 trusted community organizations — we call them our community navigators. They are working with DCEO not only to canvass the state and meet with business owners but also to provide direct technical assistance and help business owners with filling out the application step by step,” García said.

She says the application process for the B2B program is easy. A streamlined application portal “allows businesses to prepare their application and save it to finalize later. The application takes about 30 to 40 minutes to fill out and businesses can also use the portal to check the status of their application once submitted.”

“Applicants only need a few documents, including their 2019 and 2020 taxes, two bank statements — one from April-Dec 2020 and their most recent statement — and their business ID.”

The program accepts a driver’s license and ‘matrícula consular’ card — provided by the consulates — as official IDs.

Business owners without a Social Security number can use their individual taxpayer identification number (ITIN) to apply.

Since the program is grant-based and does not involve a loan, applicants do not have to pay back the money.

“Any business owner who faces barriers or concerns with the application — whether due to language barriers or technology questions — can get help today by contacting DCEO or one of our 100 community navigator partners,” Garcia said. “The application is available in Spanish and many of our partners are available to provide technical assistance in Spanish.”

For more information, visit the DCEO website.

Businesses owners “should not delay in applying,” she said. “These funds are limited, and we want to make sure they reach those who need them most.”

“Consistent with our approach to economic development, we are committed to making sure COVID-19 recovery programs are centered around equity. That means helping Latinx communities and businesses qualify and be represented in our programs, regardless of where you live and regardless of your immigration status,” García said.

Llama DCEO a empresas latinas aplicar programa B2B que cuenta con 250 mdd was first published in Negocios Now.

Translated and edited by Gabriela Olmos; edited by Fern Siegel



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Stimulus Spending Plays Major Role In Recent Inflation, Sales And Poverty Data

Stimulus Spending Plays Major Role In Recent Inflation, Sales And Poverty Data

A Census Bureau report released Thursday showed that consumers were continuing to spend. Sales rose 0.7 percent in August 2021. (Drew Angerer/Getty Images)

Things may be more expensive, but it isn’t stopping Americans from shopping, as some economists say recent conflicting data about the economy shows the continued impact of both the coronavirus pandemic and the government stimulus programs created to shore up the economy.

From poverty to inflation to retail sales numbers, economists are pointing to trends that reflect the role that nearly $5.9 trillion in stimulus spending is having on the economy. Perhaps nowhere was the impact bigger than in the Census Bureau’s report released this week on U.S. poverty numbers.


“The federal government played a vital role in stemming the losses from the pandemic recession,” wrote Elise Gould, senior economist at the Economic Policy Institute.

That report showed a 1 percent increase in the poverty rate in the U.S. in 2020. However, considering the economic impact of the coronavirus pandemic, Gould said the poverty report showed the success of the federal economic stimulus during the lockdowns.The stimulus payments moved 11.7 million people out of poverty, while the expanded unemployment payments kept another 5.5 million off of the poverty rolls in 2020.

“The losses to income and increases in poverty would have been far worse if not for programs such as unemployment insurance to workers who suffered from job loss, as well as the ad hoc expansions to those programs legislated in the wake of COVID-19’s arrival,” she wrote.

Retail spending has remained strong since March, according to analysts. (Drew Angerer/Getty Images)

Meanwhile, another Census Bureau report released Thursday showed that consumers were continuing to spend. Sales rose 0.7 percent in August 2021, after falling 1.8 percent in June and July, as fears of the Covid-19 Delta variant heightened.

The sales data from August comes in at 15.1 percent above the sales data from a year ago, when the coronavirus pandemic lockdown put a clamp on the economy. It’s part of a recent growth trend that some economists say is the long-term result from coronavirus stimulus spending.

“Retail spending has remained fairly strong since March, as the economy has reopened and stimulus supported spending,” said Glassdoor senior economist Daniel Zhao, who described the August 2021 jump in sales data as “unexpected.”

Another report this week that showed that inflation remained high, despite easing a little in August, didn’t surprise economists.

The U.S. Bureau of Labor Statistics’ Consumer Price Index rose 0.3 percent in August, taking into account seasonal adjustments. The report showed prices to be 5.3 percent higher in August 2021 than the prior. While the jump builds on increases on 0.5 percent in July and 0.9 percent in June, some economists described as a slight slowing of recent inflationary growth.

After a hot rise this summer, the August 2021 consumer price index showed U.S. inflation was beginning to cool. (Federal Reserve of St. Louis)

The slowdown in inflation was anticipated by some economists. Harvard University economics professor Jason Furman said that the jump in prices between February and July, which grew at 8 percent, was unsustainable over the long run.

“Inflation from February to July was extraordinarily high,” Furman wrote, noting that economists will be watching closely over the next few months to see how much inflation cools.

Some economists noted that the modest rise in inflation may have been offset by drops in some sectors. For example, as travel expenses like airfare, hotels and rental cars dropped in August, products related to housing, like furniture and appliances, continued to surge, said Diane Swonk, chief economist at investment firm Grant Thorton.

An 8 percent jump in food prices and 20 percent spike in gas could undo recent progress in wages, which have been steadily rising since the pandemic.

“Those increases swamp the jump in wages in leisure and hospitality,” Swonk wrote.

The U.S. spent nearly $6 trillion on coronavirus stimulus spending, which the Committee for a Responsible Federal Budget said helped grow personal income by more than 10 percent. Without the federal relief, the organization estimates personal incomes would have fallen by about 5 percent.

The federal government’s latest consumer price index showed that gas prices in August 2021 were 20 percent higher than a year ago. (Federal Reserve of St. Louis)

Across the globe, countries met the economic impact of Covid-19 restrictions with stimulus spending, and now all are experiencing some inflation as a result, said Furman, who also serves as a senior fellow at the Peterson Institute for International Economics.

At 5.3 percent over the past 12 months, the U.S. is showing higher inflation than other countries that offered coronavirus stimulus packages, with Canada coming in at 3.5 percent, Europe at 3 percent, the United Kingdom at 2 percent, Furman said.

“The U.S. fiscal stimulus in 2021 was much bigger. So it is not surprising that our inflation is much higher,” Furman wrote.

The rise in inflation hasn’t been a surprise to consumers either. A new survey from the New York Federal Reserve’s Center for Microeconomic Data showed that shoppers are anticipating more inflation to come.

The center’s survey showed that consumers expect inflation to remain at around current levels for the next year, as respondents last month said they believe inflation will be at 5.2 percent this time next year. Consumers expect inflation to remain elevated over the coming years, saying they believe inflation will still be at 4 percent three years from now.

Edited by Matthew B. Hall and Bryan Wilkes



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