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The World
Chinese oil consumption is expected to hit a record this year as the world’s biggest importer leaves the straitjacket of Covid Zero behind, bolstering the global demand outlook and aiding prices. Daily demand — which contracted last year — will climb by 800,000 barrels a day in 2023, according to the median estimate of 11 China-focused consultants surveyed by Bloomberg News. That would take consumption to an all-time high of about 16 million barrels a day, the survey showed. (Bloomberg)
ConocoPhillips, which abandoned Venezuela after its assets were nationalized in 2007, is now open to a deal to sell the country’s oil in the U.S. as a way to recover the close to $10 billion it is owed by Venezuela, according to people familiar with discussions between the company and Venezuela representatives. In what are preliminary talks between ConocoPhillips and national oil company Petróleos de Venezuela SA, the two sides are looking at a proposal that could allow the Houston-based company to load, transport and sell Venezuela’s oil in the U.S. on behalf of PdVSA, as the state oil company is known. This would give ConocoPhillips a chance to recover the money it lost in the country and help the U.S. meet its energy needs, the people said. (Wall Street Journal)
Britain was less productive than any other Group of Seven economy except Italy, Canada and probably Japan in 2021. Official figures show the UK generated just £46.92 ($56.90) of output for every hour worked — compared to £58.88 in the US, £55.83 in Germany and £55.50 in France. The middling performance follows years of lackluster growth. Between the financial crisis and the pandemic, productivity grew just 5%, with only Italy registering a worse performance. A strong post-Covid rebound has since boosted the UK relative to its European counterparts. (Bloomberg)
Sweden's state mining company has discovered vast amounts of rare earth minerals. The company said "significant deposits" of rare earths in northern Sweden could make the region that biggest known deposit of the minerals in Europe. LKAB said the area around its giant underground iron ore mine in Kiruna, the largest in the world, holds more than 1 million metric tons of rare earth oxides. The discovery near the northernmost tip of Sweden could raise hope of the EU reducing its dependency on China for elements that are crucial to an array of modern technologies, many of them connected to combating climate change. China dominates the rare earths market, producing more than 80% of the global output and providing Europe with around 95% of its supply. (Deutsche Welle)
California announced it will sue the companies that make and promote most of the nation’s insulin, accusing them of scheming to illegally increase the price of the drug and demanding they return millions of dollars to some diabetics who state officials say were overcharged for the medicine they must have to survive. The lawsuit, to be filed in Los Angeles County Superior Court by Attorney General Rob Bonta, is the latest in a parade of legal actions against these companies from states across the political spectrum — all who have accused the corporate giants of abusing their power to quash competition and boost their profits by keeping the price of insulin high. (Associated Press)
Optimism Rises in Most European Nations as Natural Gas Prices Fall: Europeans in 11 of 13 nations surveyed daily by Morning Consult have become more optimistic about their nations’ trajectories over the past three months, as a mild winter and continental coordination on natural gas supplies appear to have averted the worst potential outcomes. (Morning Consult)
Economy
US inflation continued to slow in December, adding to evidence price pressures have peaked and putting the Federal Reserve on track to again slow the pace of interest-rate hikes. The overall consumer price index fell 0.1% from the prior month, with cheaper energy costs fueling the first decline in 2 1/2 years, according to a Labor Department report Thursday. The measure was up 6.5% from a year earlier, the lowest since October 2021. (Bloomberg)
After two straight weekly increases, the average long-term U.S. mortgage rate came back down again this week but remains a significant hurdle for many prospective homebuyers. Mortgage buyer Freddie Mac reported that the average on the benchmark 30-year rate fell to 6.33% from 6.48% last week. A year ago the average rate was 3.45%. (Associated Press)
IMF head Georgieva forecasts global growth will ‘bottom out’ in 2023: The IMF head said she expects “the trajectory of slowing global growth to reverse in the second half of 2023, possibly towards the end of 2023, and then to see in 2024 higher growth than we had in 2023”. In October, the fund forecast global growth of 2.7 per cent this year, down from their projection for a 3.2 per cent expansion in 2022. (Financial Times)
Argentina's inflation rate at 95%, highest since 1991. (Reuters)
Bank of Korea raises rates to 14-year high of 3.5%. (Nikkei Asia Review)
China is leaving behind its "three red lines" policy originally intended to fight overleverage in the property market and provide a soft landing from a property bubble, as Beijing looks for any tool it can find to goose economic growth. The policy ultimately helped fuel a wave of defaults, and resulted in widespread outrage as buyers faced delayed delivery of their apartments and investors worried about financial losses — but in the long term, reinstating the policy only exacerbates structural problems in China's property sector. (Financial Times)
This month, for the first time in the Fortune 500 list’s 68-year history, more than 10% of Fortune 500 companies are led by women. The Jan. 1, 2023 start dates of five new Fortune 500 chief executives brought the number of female CEOs up to 53, pushing the tally over the long-awaited threshold. (Broadsheet)
Europe funding dropped in 2022, but not as bad as in other regions: Venture and growth investors invested $90 billion in European startups in 2022 — marking a 25% decline from its 2021 funding peak of $119 billion. Despite the decline in funding, 2022 was still significantly higher than in prior years. (Crunchbase)
Technology
Taiwan Semiconductor Manufacturing Co. said it is considering building a second plant in Japan and is evaluating the possibility of a first in Europe as the world's largest contract chipmaker responds to customers' demands for a more geographically diverse supply chain. (Nikkei Asia Review)
Hewlett Packard Enterprise, the company better known as HPE, announced today that it acquired Pachyderm, a startup developing a data science platform for “explainable, repeatable” AI. The terms of the deal weren’t disclosed nor was the purchase price. But HPE said that it plans to integrate Pachyderm’s capabilities into a platform that’ll deliver a pipeline for automatically preparing, tracking and managing machine learning processes. Pachyderm’s software will remain available to current and new customers — for now, at least. HPE says that the transaction isn’t subject to any regulatory approvals and will likely close this month. (TechCrunch)
Meta has bought a small Colorado-based optics R&D startup, which could help the company build better VR headsets as well as AR glasses: Meta entered a share purchase agreement with Gary Sharp Innovations in June, according to documents filed with the U.S. Patent and Trademark Office. (Lowpass)
Social Capital, the VC firm led by Chamath Palihapitiya, has narrowed the scope of its new fundraise, according to a letter sent to prospective investors and obtained by Axios. The new plan is to size Fund V at around $1 billion with a focus on early-stage deals, versus prior plans to raise significantly more and to also back growth-stage companies and special opportunities. Palihapitiya will commit nearly 20% of the total, likely including contributions of shares in companies backed by Fund IV (in which Palihapitiya was the sole LP). (Axios)
Smart Links
Google Cloud’s Top U.S. Sales Execs Depart in Shakeup as Profits Remain Elusive. (The Information)
Abu Dhabi oil chief appointed president of COP28 climate summit. (Financial Times)
The ‘Buy Now, Pay Later’ Bubble Is About to Burst. (The Atlantic)
Warner Bros Discovery weighs sale of music library to pare debt (Financial Times)