Zelensky to reveal new plan – The Times

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The Ukrainian leader will reportedly publish a “resilience plan” aimed at lifting public morale

Zelensky to reveal new plan – The Times

Ukrainian leader Vladimir Zelensky will present a “resilience plan” to the country, aimed at lifting morale, the Sunday Times has reported. The initiative comes after his so-called victory plan received a tepid response in Western capitals last month.

The latest plan is aimed at a domestic audience, and “[takes] into account the psycho-emotional state the country is in,” Zelensky’s top adviser, Mikhail Podoliak, told the British newspaper.

“We need to show clearly how we will prioritize investment in industry, how the energy sector will function, how we will communicate army mobilization, strengthen physical defense – all the most painful issues relating to the country’s sustainability are being worked out,” he said.

No further details have been revealed, but the Sunday Times noted that one academic paper submitted to the government for the plan states that Ukraine must preserve its natural resources for export to the US and EU. The country “possesses 22 out of the 34 minerals identified by the EU as critical raw materials,” it states, adding: “Ukraine’s major allies should recognize” that “what Ukraine might lose, Russia and China stand to gain.”

Neither Podoliak nor the Sunday Times’ other sources explained how the plan will “communicate army mobilization.” Kiev’s military draft is already highly unpopular, and, according to a report by The Economist earlier this month, one in five conscripts end up deserting.

“The resilience plan will cover how Ukraine will prioritize investment in industry and how the energy sector will function as a freezing winter looms,” the Sunday Times reported, without explaining how Ukraine’s government, which is entirely dependent on foreign aid, will raise the money for this investment, or how Ukraine will prevent devastating Russian strikes on its energy infrastructure.

On Sunday morning, the Russian Defense Ministry confirmed that it had carried out a wave of missile and drone strikes on power infrastructure and defense plants across Ukraine. The Ukrainian media reported power outages in Volyn Region, Poltava Region, and the southern city of Odessa.

Zelensky has released several heavily promoted, multi-point plans since he broke off peace talks with Moscow in 2022 and vowed to keep fighting Russia. His ten-point ‘peace formula’ demands that Russia unilaterally surrender, restore Ukraine’s 1991 borders, pay reparations, and hand over its own officials to face war crimes trials. This plan was dismissed by the Kremlin as “delusional.”

More recently, Zelensky’s so-called ‘victory plan’ received a lukewarm reception in the West. According to details leaked to the media, the plan calls on Western nations to give Ukraine long-range missiles, NATO-style security guarantees, and hundreds of billions of dollars, all in the hope of defeating Russia militarily. Zelensky’s first request – for more long range missiles – was reportedly shot down by the Pentagon earlier this month.

Source: Rt.com

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Trump could be the end of Zelensky’s war effort, regime, and political career

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Slowly accepting that they must seek a deal with Russia, Ukraine and its Western backers are late to what will definitely not be a party

How do you do damage control when you have already done so much damage? That is the conundrum Western and Ukrainian leaders are currently facing.

Since the triumphal comeback of former president and now president-elect Donald Trump in the US, it is very likely that he will follow through on his campaign promise to quickly end the proxy war in and through Ukraine.

That is good news, especially for a lot of Ukrainians – and Russians, too – who will, if things work out, not die in a war that could have been avoided in its entirety and has already been decided in Russia’s favor. For Western and Ukrainian leaders, things may feel a little more complicated: As Moscow is winning on the battlefield, to end the war at this stage will require major Ukrainian and Western concessions, going substantially beyond the deal that was on offer in the spring of 2022 but that the West made Kiev reject: Now, Ukraine will lose more territory – beyond Crimea, that is – and its toxic NATO “perspective,” too.

Russia has been consistently clear about its position: Neither Ukraine nor the West can expect peace “on the cheap.” Instead, a settlement will have to reflect their failure and Moscow’s success. There is nothing – as war goes – exceptional in that: If the West – currently wallowing in vulgar Russophobia – had managed to gain the upper hand, neither Russia nor its current government nor its leader could have expected anything but merciless punishment and humiliation. Indeed, it is likely that Moscow will, in the end, be more flexible and rational than the West would have been.

That Moscow, however, is certainly not in the mood to behave as if it had lost the war was the message that Germany’s lame-duck chancellor Olaf Scholz received when calling Russian president Vladimir Putin: Putin did not give an inch, reiterating Russia’s position on who is to blame for the conflict (NATO and its overreach, which is largely correct) and that Russia has always been open to negotiations (also correct). Finally, he reminded his caller that any “possible agreements” must take into account Russian national security interests and “rest on the new territorial realities, and, most importantly, eliminate the original causes of the conflict.” In translation: territorial losses and full neutrality and absolutely no NATO for Ukraine (not officially, not a little, not on the sly: This is a case of “nyet” means “nyet,” as granite as the Neva embankments in Putin’s native St. Petersburg).

That is a summary of the minimum Moscow will demand, and if that minimum – and quite possibly more, such as an end to sanctions and a general, more far-reaching reset of the security architecture in Europe – is not met, then there won’t be peace, and Ukraine and the West will lose later and even worse. Russia is also unwilling to let the incoming US administration get away with setting itself up as an innocent peacemaker. Rather, Moscow expects that Trump’s Washington will correct the criminal mistakes of the current Biden administration, to quote the spokeswoman of Russia’s Ministry of Foreign Affairs, Maria Zakharova. In other words: No more free rides; and no easy showboating either.

It is true that, in the West, not everyone’s grief management is at the stage of acceptance yet. Some, for instance former NATO figurehead and current Ukraine booster Anders Fogh Rasmussen are still in denial, hoping that Trump will display his vaunted unpredictability, do exactly the opposite of what he has said repeatedly, and get even deeper into the Ukraine quagmire. In The Economist, Dmitry Kuleba, formerly Ukraine’s anti-diplomat-in-chief, offers a heady mix of copium, combining the usual stereotyping “history” fantasies (“Vladimir III”?) with an attempt to scare off Trump by arguing that he cannot “throw Ukraine under the bus.” Good luck with that approach! Trump’s answer to a dare from a former Ukrainian foreign minister well known for his habit of cajoling Westerners much more pliable than Trump may well be “watch me!” That is all the more likely as Trump seems to tilt toward those American hawks who see Ukraine as a burden to be shed before getting even more aggressive toward China.

Yet Kuleba is an outlier. As the Wall Street Journal notes, Trump’s policy of seeking peace is “finding growing acceptance among Ukraine’s European allies.” They, we learn, now “increasingly worry that time isn’t on Ukraine’s side in the war.” What can one even say anymore? Maybe: “Good morning! Time has never been on Ukraine’s side. Neither has demography. Or location. Or military-industrial-complex capacity (yes, even while supplied by the West). At this speed you will catch up with all of reality in a decade or so.”

Make no mistake, in EU-NATO Europe, the new sobriety is spreading beyond the circles of traditional skeptics. It is true that Hungary’s leader Viktor Orban and his foreign minister, Peter Szijjarto, have become only more outspoken in their opposition to the proxy war and its suicidal economic effects, calling on other parties of the European right to follow their example. But that is merely the tip of the iceberg. The fact that Germany’s Scholz has called Putin, after years of – futilely – trying to “isolate” the Russian president was, in and of itself, a great climbdown and clear sign that the mainstream center is beginning to get the message: the proxy war is lost, and it is very high time to look for a way out.

That is the true meaning of Scholz’s humiliating and richly deserved cave-in, and Ukraine’s president Vladimir Zelensky did not miss it. That is why he was irate, disparaging Scholz’s initiative as opening the Pandora’s Box.” One Pandora’s Box that Zelensky does not have in mind but that his EU “colleagues” are certain to be worried about the most is that their prestige and careers as well have been staked on this proxy war.

The ripple effects of Trump’s return are already unmistakable all across the West and in Ukraine as well, even now, before the president-elect has even made any clear suggestions about how exactly he is planning to get peace done. What has been leaked, in any case, is detached from reality: No, Moscow has not fought this war to agree to any Western troops in some sort of 800-mile buffer zone in a Ukraine pumped up with even more Western weapons or to have the NATO nonsense merely postponed. Trump advisers allegedly selling such schemes to their boss will learn how Russians say fuggedaboutit; they’ll hear it a lot.

The same, incidentally, holds true for the more aggressive ideas of Trump’s designated national security adviser Mike Waltz. Waltz is generally seen as fitting in with Trump’s strategy of seeking a compromise on Ukraine. But he has also made harebrained statements about how easy it would be to economically coerce Russia, which – with embarrassing ignorance – he has disparaged as essentially a gas station with nukes. Either Waltz will quickly catch up on Russian realities, or, if he should stick to such arrogant delusions, he, too, will get to hear “fuggedaboutit” and nothing else in Moscow, while Russia will take more of Ukraine.

Meanwhile, Zelensky has made intriguing statements in a long recent radio interview clearly meant as a major public address: He acknowledged that the war will end faster under the incoming president. He also admitted that Ukraine’s ongoing (but not really) formation of fresh brigades is proceeding “very, very slowly”; he complained that, in reality, less than half of the weapons promised by the US have actually been delivered; and he signaled understanding for Ukrainian soldiers who retreat under intense Russian pressure and without any relief from those brigades that fail to get ready. His government’s position, he also told his listeners, is that people come first, territory second.

Clearly, Zelensky made this statement in specific context, desperately trying to put a positive – as it were, generous – spin on having to admit that Ukrainian troops are giving way on the battlefield. After all, those whose lives were wasted in hopeless meatgrinder defenses, such as the battles of Bakhmut or Avdeevka, are no longer around to be astonished at the rift between their experience and their president’s word. Those recently sent into the predictably senseless Kursk Kamikaze incursion are also getting fewer by the day. And yet, if one were to generalize from this narrow, dishonest context to Ukraine’s overall situation, putting saving Ukrainian lives over retaining devastated square kilometers would, obviously, be a whole, new – and for Zelensky’s rigid mind – sensational notion.

And there may be good reasons to generalize: Officially, Kiev still clings to the absurd idea of regaining its 1991 borders. But, in reality, now there are multiplying signs that the Ukrainian leadership is getting ready to trade territory for an end to the fighting. According to the New York Times, “two senior officials” – one named, one anonymous – have recently said that “defending Ukraine’s interests in potential talks would hinge not on territorial boundaries, which are likely to be determined by the fighting, but on what assurances are in place to make a cease-fire hold.” While the “territorial question is extremely important, but it’s still the second question […], the first question is security guarantees.”

Zelensky is now angling for a meeting with Trump. That, once it happens, will be an opportunity for him to sell his vague ideas about making peace, while staying “strong” – as expressed in that radio interview as well – to the great dealmaker himself. The problem with that approach is that Trump, obsessed with strength, can sense weakness, too. And, frankly, it takes no special skill to detect it in Kiev’s position. Zelensky, in his interview, claimed that the Europeans have helped Ukraine no less than the US. Clearly, he was trying to imply that the EU alone could, if need be, take over supporting Ukraine all alone. Trump would certainly not mind if the Europeans ruined themselves even more. After all, while the goal of handing Russia a crippling defeat has not been achieved, that of thoroughly subduing the Europeans, including by impoverishing them, has. Trump’s Washington will be no less ruthless than Biden’s in taking advantage of the perverse submissiveness of Europe’s elites. But, in terms of actually being able to withstand Russia, the idea of the EU going it alone is as unrealistic as Zelensky adviser Mikhail Podoliak’s scheme to offer Ukrainians as outsourced legionnaires to replace US troops in NATO-Europe.

One complication is all too often overlooked in Western commentary: Zelensky is not merely – or mostly? – struggling to keep Ukraine’s war effort afloat. He is also fighting for his own political (at least) survival. In general, the leaders of used-up proxies face many threats because, in essence, they lose their usefulness for their backers and may even inconvenience them, while, at home, the populations that they have sold out to other countries’ geopolitics may demand a reckoning.

In this context, we see rumors and leaks – to The Economist, no less – that an old nemesis of Zelensky, General Valery Zaluzhny (currently in de facto exile as a perfectly misplaced ambassador in London) might join a power struggle against the backdrop of Ukraine’s “ebbing morale.” In particular, there is speculation and, it seems, even some surreptitious activity, about presidential elections. If they were to be held next year – finally, after Zelensky’s constitutionally dubious overstaying in office – “internal polling seen by The Economist” (so many layers of intrigue here!) suggests Zelensky would lose. And why would Trump mind? He is on record blaming the start of the war on the Ukrainian leader. That’s a tad unfair, given how much the US and its EU-NATO vassals have done to make this catastrophe happen, but then, no one has ever been fair in this mess.

Even if Trump should not end up making Boris Epshteyn, who thoroughly scares Ukraine, his special envoy on Ukraine and Russia, things are looking bleak for Kiev’s ruling regime. The incoming US president is not merely about to catalyze the end of the war. He may end up bringing about the collapse of Zelensky’s catastrophic career in politics or even the Zelensky regime as a particular version of proxy war-based quasi-authoritarianism. And once this war is over, Europe’s elites as well will be left in the ruins of their own hubris and shortsightedness. The enormous damage that has already been done is irreversible and will reverberate for decades.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.

Source: Rt.com

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Moscow comments on Biden’s reported approval of strikes deep inside Russia

Energy News Beat

 

President Vladimir Putin has previously warned that the move would mean NATO’s direct involvement in the conflict

Moscow comments on Biden’s reported approval of strikes deep inside Russia

Russian President Vladimir Putin has already shared his thoughts on possible Western approval for Ukraine to carry out long-range strikes deep within Russian territory, Foreign Ministry spokeswoman Maria Zakharova has said.

According to a report from the New York Times on Sunday, which cited unnamed American officials, US President Joe Biden has given Kiev the green light to deploy long-range American missiles against targets within Russia’s internationally recognized borders.

“The president has expressed his opinion on this matter,” Zakharova told news outlet RBK on Sunday.

In September, Putin stated that Ukrainian forces lack the capability to carry out attacks with Western-supplied long-range missiles without external assistance. “It is not a question of allowing the Ukrainian regime to strike Russia with these weapons or not. It is about deciding whether NATO countries become directly involved in the military conflict or not,” he said.

Putin added that if a decision allowing the strikes were made, Moscow would make “appropriate decisions in response to the threats that will be posed to us.”

Source: Rt.com

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US Breaks Dependence on Gasoline Imports – depending on what part of the country your located

Energy News Beat

In the latest edition of the Numbers Report, we will take a look at some of the most interesting figures put out this week in the energy and metals sectors. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.
Let’s take a look.

1. US Downstream Sector Keeps on Giving Despite Shrinking Margins

– US refiners saw their average earnings per share decline to 25 cents this past quarter from $4.75 per barrel in Q3 2023 and $4.85 per barrel in Q3 2022.
– Nevertheless, shareholder returns remained very robust at $5.2 billion in total, as demonstrated by Marathon which paid $3 billion to its shareholders and has $8.5 billion in share buyback authorizations.
– Weaker gasoline and diesel cracks on the back of an oversaturated Atlantic Basin fuel market put a lot of pressure on refiners, as Valero and Marathon are up 6% on the year compared to the energy sector’s average growth of 13%.
– Margins are expected to be relatively weak in Q4 this year, with some respite coming early next year once LyondellBasell shuts its 257,000 b/d Houston refinery.

2. US Breaks Dependence on Gasoline Imports

– The United States is the world’s single largest gasoline market, however, due to regional discrepancies continues to import gasoline from other regions, mostly Europe.
– This trend now seems to be ebbing as gasoline imports to the U.S. averaged only 320,000 b/d in October, the lowest monthly reading in at least a decade, according to Kpler data.
– This comes as US refiners cranked up gasoline production after maintenance, tallying up only 333 unplanned outages across the country in Q3, the lowest number in three years.
– US gasoline demand has held up quite nicely against a creeping hybrid/EV market penetration, with the EIA’s demand metric showing consumption around 9 million b/d, unchanged from a year ago.

3. Chinese Overcapacity in Copper Aggaravates Trump Risks

– Chinese overcapacity has become one of the key market trends in metal and renewable markets this year, with copper facing its very own dilemma of Chinese domination.
– China already controls half of copper refining globally and continues its capacity expansion at breakneck speed, hurting European or Chilean operations as it is set to mark another 5% annual increase in 2024.
– The pressure on smelters is such that copper treatment fees are expected to drop to a mere $40 per metric tonne next year, halving compared to 2024 levels and marking the lowest level since 2004.
– Meanwhile, copper prices have plunged following Donald Trump’s re-election and expectations of tariff wars leading to trade disruptions, with the three-month LME contract shedding 8% since and trading below $9,000 per metric tonne.

4. Buoyed by China’s EV Bonanza, Electric Vehicles Rise Higher

– Global sales of fully electric and hybrid vehicles rose to another all-time high in October, hitting a 35% year-over-year growth rate led by a 54% annual jump in Chinese EV sales.
– European sales readings are posting only moderate increases after most government subsidies were scrapped, however the continent is still in the green with a 0.8% year-over-year rise
– China now accounts for 70% of global EV sales and that metric could even go higher in November-December, traditionally robust months for Chinese car buyers.
– In the United States and Canada, sales of electric vehicles were up by 11% from a year ago at 0.16 million units, however North American sales are just a half of Europe’s and one-seventh of China’s.

5. After Years of Freefall, Lithium Starts to Rise Again

Lithium prices are finally on the rise thanks to strong automotive demand in China and supply cuts, with lithium carbonate prices gaining more than 8% over the past month and hitting a three-month high.
Beijing has expanded subsidies for prospective EV buyers to $3,000, buoying demand, whilst prices were also lifted by speculation that external buyers are stocking up lithium ahead of potential tariff wars.
Simultaneously, some 190,000 metric tonnes of lithium mine capacity was shut by producers this year due to the profitability of mining, with another 50,000 mtpa delayed.
The price rally could be relatively short-lived as metal analysts still see a slight balance surplus in 2025 and rising protectionism presents a notable downside risk for lithium miners.

6. Europe Hits a Premium vs Asia as Supply Risks Proliferate

Northwest European LNG prices flipped to a premium vis-a-vis Asian benchmarks for the first time in 2024, trading just a tad north of $14 per mmBtu, some $0.30 per mmBtu higher than JKM.
Alongside the still unresolved Ukraine-Russia gas transit conundrum and streaks of cold weather in November, litigation between Russia’s Gazprom and Austria’s OMV emerged as a new pain point.
The Austrian energy major warned of potential disruptions in Russian gas supply as soon as this month as it seeks to recover the $243 million arbitration award from Gazprom in delivered gas.
Gas inventories have been depleting quicker than last year, with the rate of withdrawals averaging 0.039% this winter compared to the 0.09% injection rate in the same period of 2023, leading to mountain temperate concerns, too.

7. Here Come the Chip Wars

According to Reuters, the US Department of Commerce ordered the world’s largest chipmaker, Taiwan’s TSMC to halt shipments of advanced chips to Chinese customers.
The order specifically targets sophisticated chips of 7 nanometers or of more advanced design, seeking to halt the supply that feeds China’s AI accelerator and graphic processing units.
The ban comes after TSMC notified the Commerce Department that one of its chips has been found in a Huawei AI processor, in an apparent violation of export controls.
Beijing has reacted to the chip export ban by saying that the US seeks to raise tension in the Taiwan straits and that the move undermined the commercial interests of Taiwanese companies.

Source: Oilprice.com

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Xi reveals Beijing’s four red lines to Biden

Energy News Beat

The Chinese leader has warned the US president against trying to hold back the country’s economic development

Chinese President Xi Jinping has laid out four sets of limits that the US should not cross, for a balanced and healthy relationship between the two countries.

He stressed that Beijing aims to cultivate a “steady, healthy, and sustainable” relationship with Washington, during a meeting with US President Joe Biden at the Asia-Pacific Economic Cooperation forum (APEC) in Lima, Peru on Saturday.

“As two major countries, neither China nor the United States should seek to remodel the other according to one’s own will, suppress the other from the so-called ‘position of strength,’ or deprive the other of the legitimate right to development so as to maintain its leading status,” Xi said.

He warned against attempting to hold back China’s economic development.

“A new Cold War should not be fought and cannot be won. Containing China is unwise, unacceptable, and bound to fail.”

The Chinese leader stressed it is important for the two countries to treat each other as equals.

Xi acknowledged that while differences between major powers are inevitable, it is essential to respect certain core interests.

The Taiwan question, democracy and human rights, China’s path and system, and China’s development right are four red lines for China. They must not be challenged. These are the most important guardrails and safety nets for China-US relations.

Beijing and Washington can make considerable progress if they “treat each other as partner and friend,” and avoid “vicious competition,” Xi said.

The US officially follows the One-China policy, recognizing Taiwan as part of China despite its self-governance since 1949. However, it engages with Taiwan, sells arms, and pledges military support against possible Chinese attacks, which China sees as a violation of its sovereignty.

China is ready to work with the incoming government of President-elect Donald Trump, the Chinese leader said.

In the course of his election campaign, Trump vowed to pursue an aggressive protectionist policy aimed at securing US economic interests, especially against China.

During his first presidency, Trump engaged in a trade war with China, with both countries imposing tariffs and sanctions. The Biden administration has continued what Trump began in his first term, slapping tariffs on billions of dollars’ worth of Chinese imports in September.

The last meeting between the two leaders took place at the 2023 APEC summit in San Francisco, following the Chinese spy balloon incident. In that four-hour discussion, Biden left early and subsequently called Xi a “dictator” for the second time during a news conference.

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EU won’t survive without Russia and BRICS – Russian senator

Energy News Beat

The bloc has essentially trapped itself by its sanctions, Konstantin Kosachev believes

The EU can’t survive without cooperating with Russia and the BRICS states, Russian Federation Council Deputy Speaker Konstantin Kosachev said in an interview with RT on Saturday. Russia, however, needs the EU far less, he said.

Kosachev noted that the sanctions imposed on Russia create a significant barrier to any real cooperation with the EU.

The bloc has imposed 14 rounds of sanctions against Russia following the escalation of the Ukraine conflict in February 2022. These measures have targeted Russia’s central bank reserves held abroad, major banks, various companies, entrepreneurs, politicians, and officials, along with bans on numerous imports and exports.

The Russian Foreign Ministry has condemned the sanctions as illegitimate, while President Vladimir Putin has described them as irrational.

Kosachev pointed out that lifting these sanctions would require the unanimous approval of EU states, and that even if a majority supports removing them, dissent by just a few countries could derail such an initiative.

He concluded that the EU has effectively trapped itself, which does not benefit its interests.

“It is in a trap. And this does not work to the advantage of the European Union,” the deputy speaker emphasized. While he believes Russia will continue to thrive independent of the EU, he asserted that the EU’s survival hinges on its collaboration with Russia and other BRICS nations.

“We will survive without cooperation with the European Union on our side. The European Union will not survive without cooperation with Russia and other member states in BRICS, this is for sure.”

Earlier this month, Putin stated that Western efforts to isolate Russia economically and politically have ultimately failed.

Russian Deputy Foreign Minister Aleksandr Grushko has claimed the EU’s total losses from sanctions imposed on Russia and restrictions on its economic activity are believed to be around $1.5 trillion, according to “the most conservative estimates.”

Some EU nations contend that the sanctions have hurt the bloc more than Russia. Hungarian Prime Minister Viktor Orban cautioned on Friday that the EU’s sanctions regime “should be reviewed,” or else it risks “destroying” the European economy.

Meanwhile, the well-attended annual BRICS summit that was held in October in Kazan, the first since the group’s expansion to include Egypt, Iran, Ethiopia, and the United Arab Emirates, highlighted that Russia remains globally connected despite Western sanctions.

Delegations from 35 countries participated in the event. More than 30 nations, including NATO member Türkiye, have expressed interest in joining the group. BRICS now accounts for an estimated 37.3% of global GDP versus 14.5% for the EU

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New attacks target Ukraine’s energy systems – officials

Energy News Beat

The domestic electricity operator has reportedly implemented emergency power outages

New attacks target Ukraine’s energy systems – officialsNew attacks target Ukraine’s energy systems – officials

A large-scale attack against Ukraine’s energy system has been reported on Sunday. Ukrainian Foreign Minister Andrey Sibiga claimed that Russia launched one of its largest air attacks against the country since the conflict began. 

“Another mass attack on the energy system,” Ukraine’s minister of energy, German Galuschenko, wrote on Facebook, as reports emerged of coordinated strikes on electrical generation and transmission facilities across the country. In response, the national electricity operator has implemented emergency power outages.

Authorities in Volyn Region reported damage to energy infrastructure, while Poltava Region was also subjected to emergency blackouts. The Rovno regional water utility warned residents of potential water supply disruptions due to the strikes.

In Odessa, power outages were compounded by a loss of water services, according to the city council. Local social media channels also reported explosions in Vinnitsa and Lviv regions.

Officials in Kiev reported that missile debris fell in several districts of the capital.

The Russian Defense Ministry has yet to confirm the strikes.

Earlier this year, Russia stepped up its attacks on Ukrainian military and energy infrastructure. In April, the Defense Ministry stated that these strikes are in response to Ukraine’s efforts to target Russian oil facilities, emphasizing that the operations focus on sites that aid the Ukrainian defense industry and do not target civilian areas. Meanwhile, Ukraine has consistently carried out assaults on energy installations deep within Russia, including oil storage facilities and refineries, using kamikaze drones.

In October, Ukrainian Prime Minister Denis Shmigal stated that nearly all of the country’s thermal power generation capacity had been taken out by long-range attacks by Russia, noting that the country must now depend on substitutes.

 

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Auto-Loan Balances, Burden, Subprime & Prime Delinquency Rates, and Subprime Dealer America’s Car-Mart in Q3 2024

Energy News BeatPrice

Subprime is always in trouble, and now, after the reckless-subprime lending era, more so. Prime is in pristine shape. Car-Mart joins our Imploded Stocks.

By Wolf Richter for WOLF STREET.

Total balances of auto loans and leases for new and used vehicles rose by 1.1%, or by $18 billion in Q3 from Q2, and by 3.1% year-over-year, to $1.64 trillion, according to data from the New York Fed’s Household Debt and Credit Report.

But the 3.1% year-over-year growth rate was the second-smallest since Q1 2021, behind only Q2 this year (2.8%) and the third smallest since Q4 2018.

One of the reasons balances grew at a relatively slow rate is that more people are paying cash for their vehicles due to the higher interest rates. For new vehicles, the share of cash purchases rose to 20% in recent quarters, from 18% in Q1 2022. For used vehicles, the share of cash purchases rose to 64%, from 59% in Q1 2022, per Experian data. We’ll look at other reasons for the slower increase in a moment.

Auto loan balances over the past 20 years ballooned by 135%, but not because of spectacular unit-sales growth – far from it, new vehicle sales, responsible for the vast majority of auto loan and lease balances, have stagnated for two decades, interrupted by two big plunges:

Rampant price increases and automakers taking their models upscale are what drove up auto loan balances through 2020. Then in 2021 and 2022, prices exploded and pushed up dramatically the amounts financed, even as sales volume plunged due to the vehicle shortages.

But prices of new vehicles started edging down in 2023 and through Q3 2024, just a tad – new vehicles, with their much higher price tags and 80% finance penetration dominate auto loans and leases. Used vehicle prices plunged over the same period, but with their much smaller loan amounts and small 35% finance penetration, they play a much smaller role in this equation (details and charts of new-vehicle CPI and used-vehicle CPI).

Those slight price declines of new vehicles kept a lid on the amounts to be financed and slowed the growth of the auto loan and lease balances so far this year.

The burden of auto loans and leases.

One way to measure the burden of auto-loan debt on households is the comparison to their disposable income, which includes after-tax wages, plus income from interest, dividends, rentals, farms, small businesses, transfer payments, etc. It’s what households have left over to pay for their costs of living and service their debts.

Rising incomes and stagnating or declining new-vehicle unit sales volume should have caused the burden of auto loans and leases to decline sharply over the past two decades. But rampant price increases over the years saw to it that the burden only moved up and down in a fairly narrow band, with the exception of the 2008-2012 collapse of the auto industry in the US.

As prices began declining in mid-2022, slowing the growth of the auto loan balances, disposable income rose sharply. And so, the debt-to-disposable income ratio started declining two years ago, and in Q1 2024 dipped to 7.5% and has roughly stayed there through Q3.

Subprime is always in trouble, which is why it’s subprime.

Subprime lending is largely confined to used vehicles, particularly to older used vehicles, sold by specialized subprime dealer-lender chains, or financed by specialized subprime lenders. All these lenders then package these auto loans into Asset Backed Securities (ABS) and sell them as bonds to pension funds and other institutional investors that buy them for their higher yield.

Of the auto loans originated in Q3, 16.9% by balance of were subprime, down from the prepandemic range of 19% to 25%, according to New York Fed data.

During the free-money era, the specialized subprime dealer-lenders loosened their credit standards and got very aggressive. They built in huge profit margins into the vehicle sales amount and into the interest. At the same time, used-vehicle prices exploded. And the risks piled up. And when used-vehicle prices began to tank and interest rates began to jump in 2022 and 2023, those risks came home to roost. In 2023, several PE-firm-owned subprime-specialized dealer-chains filed for bankruptcy.

Even the large publicly traded subprime dealer-lender America’s Car-Mart disclosed massive problems in December 2023, and its shares [CRMT] tanked. On November 1, they closed at $38.21, the lowest since September 2017. On Friday, they closed at $41.77, still down 76% from the all-time high in May 2021, and now in our pantheon of Imploded Stocks.

Delinquency rates: total, subprime, and prime.

The total 60-plus day delinquency rate, as tracked by Equifax, was 1.55% in September. The highs this year had been in January (1.59%) and February (1.61%). This year’s range is up by about 50 basis points from the prepandemic range centered around 1.0%.

The overall delinquency rate has been rising since early 2023, reflecting the mix of the surging subprime delinquency rates and the pristine prime delinquency rate.

Fitch, which rates ABS backed by auto loans, splits out the delinquency rates for prime-rated auto loans (blue in the chart below) and subprime-rated auto loans (red). Subprime is always in trouble, and after the reckless-subprime-lending era more so than before. Prime is in pristine condition. And let’s remember: only 16.9% of auto loans originated in Q3 were subprime. It’s a small specialized part of auto lending.

The subprime 60-plus day delinquency rate in September remained at 6.1%, same as in August, and same as in September 2023, according to Fitch (red). The fact that the delinquency rate didn’t worsen year-over-year indicates that the spike in delinquencies out of the reckless-subprime-lending era has begun to slow. These delinquency rates peak in January or February. They hit an all-time high of 6.4% in February this year and may end up in the same neighborhood next February.

The prime 60-plus day delinquency rate has been in the 0.28% to 0.35% range all year (blue), which is minuscule. Even during the Great Recession, the prime delinquency rate rose to only 0.9% at the worst moments.

In case you missed the earlier parts of household debt and credit: Here Come the HELOCs: Mortgages, the Burden of Housing Debt, Serious Delinquencies, and Foreclosures in Q3 2024

And from a day earlier: Household Debt, Delinquencies, Collections, Foreclosures, and Bankruptcies: Our Drunken Sailors and their Debts in Q3 2024

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The post Auto-Loan Balances, Burden, Subprime & Prime Delinquency Rates, and Subprime Dealer America’s Car-Mart in Q3 2024 appeared first on Energy News Beat.

 

Trump Picks Oil Fracking Boss Chris Wright as Energy Secretary

Energy News Beat

ENB Pub Note: President Trump has committed to lowering our energy bills by 50%, and he is well on his way to doing that by selecting Chris Wright as Secretary of Energy. Chris is the best man for the job, and I have thoroughly enjoyed my podcasts and conversations with him. The American Consumer and the entire energy space is a real winner today. Congratulations, Chris!


President-elect Donald Trump nominated Chris Wright, who runs a Colorado-based oil and natural gas fracking services company, to lead the Energy Department, and said he planned to create a new council to drive US energy production.

Wright, the chief executive officer of Liberty Energy Inc., has no previous Washington experience. He’s made a name for himself as a vocal proponent of oil and gas, saying fossil fuels are crucial for spreading prosperity and lifting people from poverty. The threat of global warming, he has said, is exaggerated.

“Chris has been a leading technologist and entrepreneur in Energy,” Trump said in a statement Saturday. “He has worked in Nuclear, Solar, Geothermal, and Oil and Gas. Most significantly, Chris was one of the pioneers who helped launch the American Shale Revolution that fueled American Energy Independence, and transformed the Global Energy Markets and Geopolitics.”

Trump said Wright, if confirmed, would also sit on the newly formed Council of National Energy, which will be chaired by Doug Burgum, Trump’s nominee to lead the Interior Department.

“This Council will oversee the path to U.S. ENERGY DOMINANCE by cutting red tape, enhancing private sector investments across all sectors of the Economy, and by focusing on INNOVATION over longstanding, but totally unnecessary, regulation,” Trump said.

— With assistance from David Wethe – Source: Bloomberg

Check out Chris’s Podcast with Doomberg

ENB #200 Doomberg and Chris Wright -Energy Conflicts and Solutions: Integrating Global Dynamics, Finance, and Policy

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China Could Lead Climate Fight if U.S. Drops Out

Energy News Beat

China could become the leader of the global fight to slow down climate change if the United States backs down under President Donald Trump, South Africa’s Minister of Environment, Dion George, told Bloomberg Television in an interview on Friday.

“That’s the big debate that is going on,” George said, referring to China’s reluctance so far to finance climate change mitigation measures in poorer countries. China has said that as a developing country itself it shouldn’t be held accountable for climate finance.

However, “The developed economy countries certainly believe that China should be contributing,” the South African minister told Bloomberg.

“If it’s going to be the superpower, the global superpower that it may aspire to be, then” it needs to show some leadership, he added.

China is the world’s biggest polluter and the global fight against rising temperatures depends a lot on Chinese energy and climate policies.

The pace at which China will reduce its greenhouse gas emissions will be critical to reaching the global targets to fight climate change, Germany’s climate envoy said earlier this year.

Germany has recently established a Climate and Transformation Dialogue with China to work on ways to accelerate the energy transition to keep the 1.5-degree target within reach.

China is a global leader in renewable energy investment and capacity installations. But it is also the world’s largest greenhouse gas emitter and continues to approve coal-fired power generation to meet its rising electricity demand without compromising energy security.

China has yet to see its carbon dioxide emissions peak as it is a developing nation and has a massive population.

“We should not forget that China is still a developing country, pursuing modernization for a huge population,” the head of law and institutional reform at the National Energy Administration (NEA), Song Wen, told media at the end of August.

By Tsvetana Paraskova for Oilprice.com

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