Exxon Mobil ordered to hand over climate change documents

A court ruling has ordered Exxon Mobil to give documents to a New Work prosecutor who is probing a case as to whether Exxon is culpable to lying to the public as well as investors on dangers of climate change and Exxon’s impact on the environment.

Attorney General Eric Schneiderman accused former CEO of Exxon Mobil, Rex Tillerson, that he used a pseudonym “Wayne Tracker” between 2008 and 2015 to talk about environmental concerns such as climate change. Tillerson is now the current U.S. Secretary of State. The middle name of Tillerson is Wayne.

One of the documents that Exxon must provide is emails that Exxon Mobile executives sent but using pseudonyms. Other documents required are affidavits and other pertinent documents regarding climate change threat.

Exxon Mobil said that it had lost one year worth of emails from the alias account that Tillerson used. Lawyers of Exxon Mobil said the loss of emails were due to computer issues. This alias email account was discovered by the team of the Attorney General when it investigated other Exxon documents.

Exxon Mobil attorneys explained that the “Wayne Tracker” emails were classified as non-personal as thus were deleted. The company used a “file sweep” that prevented personal emails that are registered in Exxon’s server from being deleted. According to Exxon Mobil letter, “Tillerson was the only custodian who used a secondary account, and ExxonMobil is aware of no email account, other than the Wayne Tracker account, for which this issue has arisen.”

Judge Barry Ostrager wants Exxon to find copies of documents that they have likely destroyed and explanations as to how some documents are deemed lost. Some of these documents must be given by the end of this month.

Court filings show that the documents provided by Exxon are insufficient. Prosecutors believe that there ae hundreds of thousands of documents that are yet released by Exxon. However, Exxon countered this saying that it had given more than 400,000 documents already. These documents amount to more than 2.6 million pages.

Tillerson resigned from Exxon as chairman last December. He also left American Petroleum Institute trade group where he was chairman.

In a 2010 congressional testimony, Tillerson said that Exxon was aware that greenhouse emissions had an impact on earth’s climate, but it does not know the extent of it and what the solutions to it are.

Now that Tillerson is secretary of state, he is likely to be part of the withdrawal of America from the Paris climate agreement which aims to lessen the impact of climate change.

Exxon has an April 10 deadline to provide sworn affidavits on everything the company has done to give the documents required and what they know about the documents that got lost.

Amy Spitalnick, press secretary of the New York attorney general, said, “16 months after our initial subpoena, Exxon was ordered by the court to finally produce all documents from its management committee, and to provide clear answers to the AG’s office about any documents- including those from alias accounts that were lost.”

U.S. Jobless Claims increases by 15,000

According to the Labor Department, for the week ended March 18, U.S. jobless claims went up by 15,000 to reach 258,000 in total. This represents a seven-week high for this economic statistic and casts doubt on economic data showing the strength of the labor market.

A Bloomberg survey showed a median forecast of 240,000. According to the data, the major jump in jobless claims happened in Ohio and Kansas. Ohio increased by 4,260 while Kansas claims went up by 2,774. The Labor Department emphasized that there be nothing unusual in the data. The Labor Department also said that no states were estimated last week.

The data covered the government survey of employers for their nonfarm payrolls report. Between the months of February and March, the average of jobless claims dropped by 7,750 which reflects strong job increases for the month.

Regarding a four-week moving average of jobless claims, it rose only by 1,000. This measure is seen to be a good indicator of labor market patterns because it removes week-to-week volatility.

Regarding continuing jobless claims which are the number of unemployed people already getting assistance from the government dropped by 39,000 for the week ended March 11. Total continuing jobless claims are now down to 2 million.

Despite this increase in jobless claims, the labor market continues to tighten, and wages are gradually increasing. Companies are also starting to struggle in finding skilled workers. Also, companies are less inclined to dismiss workers and instead are looking to hire.

Bank of America and Merrill Lynch economists have noted that much of the optimism in the economy is driven by the older, middle-income Americans.

An average of 236,500 jobs was added in January and February. Last year, the average was about 180,000 jobs. The unemployment rate also dropped to 4.7% for the month of February from 4.8% the previous month.

Economists consider U.S. job claims below 300,000 to be a healthy labor market. This week’s reading also marks 80 consecutive weeks that the filings are below 300,000. The labor market is currently very near to full employment. This stretch is also the strongest for America since 1970. In that year the labor market was much smaller.

The labor market data reported have a one-week lag.

The Labor Department also reported that the unemployment rate among people that are allowed to apply for the jobless claims has dropped to 1.4% from 1.5%.

As a result of the improvement in the labor market, the Fed increased interest rates last week. Another reason for the Fed hike was the creeping inflation which is also a sign of a recovering economy.

Investors turn now their attention to Trump’s first significant test of getting a healthcare bill to be passed in Congress. This healthcare bill is sponsored by the Trump’s political party of Republicans. U.S. stock index futures are modestly higher while U.S. Treasuries prices are lower. The dollar strengthened a bit versus a basket of currencies. Gold, on the other hand, remained steady.

OPEC wishes for oil cut extension to stabilize the price

In the past year, the oil price was suffering due to oversupply in the market. In December 2016, OPEC proposed cutting down oil production to stabilize the oil price. The OPEC members have agreed to cut down the production to tackle the oil oversupply in the market. For the first time in months, oil prices reached beyond $50 per barrel. However, the market is not stable yet as the US Shale inventories continue to rise. The current OPEC pact is until June, but the OPEC is hoping to extend the deal further.

The oil producing countries are willing to agree to the cuts in production, but without the support of non-members like Russia and others, the efforts will be futile. For the first time in eight years, the OPEC countries have cut down production by 1.2 million barrels per day. Several non-OPEC producers such as Russia have also agreed to cut the production.

An immediate impact of the deal was positive for oil prices. However, the US companies wanted to take advantage of the higher returns and they started pumping more. The OPEC deal was drafted asking the members to reduce oil production for six months to prevent saturation of the market. However, the current scenario indicates that supply cut for six months is not sufficient. Oil producers should control production for a few more months to reduce the inventories.

An OPEC delegate commented that extension is necessary to restore balance to the market. The non-members should also agree to oil production cut to have any positive impact on the market. OPEC is planning to extend the production cut deal beyond July and if the stock level doesn’t reach the targeted level, deeper cuts may be recommended. OPEC plans on bringing down the oil stocks to an average level in the past five years. Currently, the world oil stocks remain 278 million barrels above this targeted level.

Market experts suggest that oil extension beyond six months is necessary, but the members and non-members must agree to production cuts. The ministers are scheduled to meet in May to analyze and understand the movement of the market. Russia is one of the top non-member oil producers that hasn’t publicly announced its compliance with the production cut deal. However, it is not happy with the increase in US Shale oil production.

While hard negotiations are unavoidable, it is still too early to determine whether the oil producers would agree to supply cuts. The OPEC leaders are certainly worried about the increased Shale oil production that contributed to oversupply in 2014. The increased production could result in inventory growth by 300,000 barrels per day, but it could still be accommodated by the market. Large producers such as Saudi Arabia have a greater impact on production levels. While they are not happy to lose the market to US Shale oil, they need the support from OPEC for a steady income. The OPEC members will most likely agree to the extension of supply cuts, but they would also want the OPEC to push the non-members to comply with the deal.

China takes measure to overcome any trade penalties by the USA

China has constantly been under pressure since the start of the presidential campaign by Donald Trump. He did not hesitate to name China as a currency manipulator, and he didn’t want trade surplus with any nation. Trump has repeatedly said that certain trade deals must be canceled or renegotiated as they are not fair for the Americans. China has one of the biggest economies that relies heavily on exports. Especially, Chinese products sold in the USA has helped the economy of the country back home. Trump hints that this situation might change rapidly.

Before the G20 meeting, the US Treasury Secretary, Steven Mnuchin had said that the USA is not interested in trade wars. The country only wants to cancel or change deals that are not good for the USA citizens. The Chinese government has taken the hint, and it is preparing contingency plan when Trump starts a trade war. Trump had warned that he would charge additional tariffs and trade penalties from countries that export more than import from the USA.

The Chinese officials confirmed that China is not looking to start a trade war, but if the USA takes a side, the country needs backup plans. The policy advisors of the USA are hoping to increase tariffs on specific sectors with a surplus. China has a huge surplus exporting steel and furniture and state-owned firms. When trade penalties are imposed, it could easily increase the export cost of China.

China could find other suppliers in the world for agricultural products, manufactured goods, and machinery. It could also reduce the exports by cutting down on exporting laptops and mobile phones. China also can recover the penalties through the US companies in China. Additional taxes or restrictions could be imposed on the huge USA firms. China may also limit the power exerted by the USA on the services sector of China.

Experts in the industry suggest that the countries could come together and find a solution through consultation and co-operation. Retaliation will affect not only the economies of China and USA, but it will also have a global impact. The Chinese want to ensure that they are open to negotiating, but they need to have a plan should something go wrong.

While Trump has constantly accused Beijing of manipulating currencies, the Yuan hasn’t been manipulated in the past few years. Premier Li Kequiang had said that Beijing doesn’t want to get involved in a trade war. He urged the US government to hold talks to arrive at a common ground. A similar thought was reflected by Mnuchin during his G20 meeting. Rex Tillerson, the Secretary Of State of USA, visited China recently. However, there were no indications about the trade intentions.

President Xi Jinping will be hosted by Trump in the upcoming month. The G20 meeting created some uncertainty in the market because the global leaders supported the protectionist policies of the United States even though no compromise was made after the two-day meeting.