NEWS OF THE DAY:
World economy now set to surpass $100 trillion in 2022
Simon Kennedy, Mining.Com, December 26, 2021
The world economy is set to surpass $100 trillion for the first time in 2022, two years earlier than previously forecast, according to the Centre for Economics and Business Research.
Global gross domestic product will be lifted by the continued recovery from the pandemic, although if inflation persists it may be hard for policy makers to avoid tipping their economies back into recession, the London-based think tank said.
“The important issue for the 2020s is how the world economies cope with inflation,” said Douglas McWilliams, the CEBR’s deputy chairman. “We hope that a relatively modest adjustment to the tiller will bring the non-transitory elements under control. If not, then the world will need to brace itself for a recession in 2023 or 2024.”
The forecast is in line with estimates of the International Monetary Fund, which also predicts global GDP measured in dollars and in current prices will pass $100 trillion in 2022.
In its annual World Economic League Table, the CEBR also predicted:
- China will overtake the U.S. in 2030, two years later than forecast a year ago
- India will regain sixth position from France next year and become third largest economy in 2031, a year later the previously predicted
- The U.K. is on track to be 16% larger than France in 2036 despite Brexit
- Germany will overtake the Japanese economy in 2033
- Climate change will lower consumer spending by $2 trillion a year on average through 2036 as companies pass on the cost of decarbonizing investment
OIL:
Oil prices rise about 3% as Omicron concern eases
Stephanie Kelly, Reuters, December 27, 2021
Oil prices rose around 3% on Monday due to hopes that the Omicron COVID-19 variant will have a limited impact on global demand in 2022, even as surging cases caused flight cancellations.
Global benchmark Brent crude rose $2.53, or 3.3%, to $78.67 a barrel by 11:01 a.m. EST (1601 GMT). U.S. West Texas Intermediate (WTI) crude rose $2.01, or 2.7%, to $75.80 a barrel. The U.S. market was closed on Friday for a holiday.
Oil, which plunged by more than 10% on Nov. 26 when reports of a new variant first appeared, gained last week after early data suggested that Omicron could cause a milder level of illness.
“Though Omicron is spreading faster than any COVID-19 variant yet, a relatively relieving news is that most people infected with Omicron are showing mild symptoms, at least so far,” said Leona Liu, analyst at Singapore-based DailyFX.
More than 1,300 flights were cancelled by U.S. airlines on Sunday as COVID-19 reduced the number of available crews while several cruise ships had to cancel stops. read more
“The disruption to goods and services from isolating workers, notably air travel, seems to be the main fallout so far,” Jeffrey Halley, analyst at brokerage OANDA, said of rising Omicron cases. “That is only likely to cause short-term nerves, with the global recovery story for 2022 still on track.”
Brent has risen by more than 45% this year, supported by recovering demand and supply cuts by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+.
Talks resume on Monday between world powers and Iran on reviving Tehran’s 2015 nuclear deal. Iran said oil exports were the focus of the talks, which so far appear to have made little progress on boosting Iran’s shipments. read more
Also on investors’ radar is the next OPEC+ meeting on Jan. 4, at which the producer alliance will decide whether to go ahead with a planned 400,000 barrels-per-day (bpd) production increase in February.
OPEC+ stuck to its plans at its last meeting to boost output for January despite Omicron.
GAS:
European Gas, Power Extend Slump as LNG Supplies Promise Relief
Vanessa Dezem, Jesper Starn, Bloomberg, December 27, 2021
European natural gas fell for a fourth day as U.S. supplies are expected to bring relief to the tight market and traders weighed both milder weather and risks to demand from the omicron virus variant.
Gas has whipsawed in recent days, soaring to record levels above 180 euros ($203.59) a megawatt-hour last Tuesday following a sharp drop in Russian flows. That’s 10 times higher than year-earlier prices. It slumped to about half that level on Monday — and is heading for the longest declining streak in two months — as shipments of liquefied natural gas head to Europe, easing an energy crunch that’s forced heavy industries to curb output.
“As we enter the closing stages of 2021, the European energy complex shows no sign of calming down for the holiday period,” consultant Timera Energy said in a report. “Industrial demand has been struggling in response, with metals and fertilizer producers having to curtail production.”
Benchmark Dutch front-month gas fell as much as 19% to 90 euros a megawatt-hour, the lowest since Dec. 6. Easing prices are pushing down power rates, with German electricity for January declining as much as 36% to 220 euros per megawatt-hour while French power for next month fell 22%.
Day-ahead prices in France dropped to the lowest level in almost two months. Benchmark European electricity, the German next-year contract, lost as much as 21%, the biggest intraday decline since at least April 2017.
More LNG
An increasing number of LNG vessels are heading to western European ports. The region is attracting more supplies as Asia’s biggest buyers are opting to use their inventories this winter instead of procuring more.
Milder weather forecast for much of mainland Europe will curb energy demand, while there was also uncertainty over the impact of the fast-spreading omicron. Coronavirus infections has been surging across the globe, and over the weekend China reported the highest number of since January.
Also see: Russia Sends Less Gas to EU as Buyers Hit Supply Limits Early
Still, there is no immediate end in sight for energy crisis that has rattled European industry and induced government action to help ease the burden of surging household bills. Russia didn’t book any pipeline space for Monday to deliver gas through Mallnow in Germany, where the Yamal-Europe pipeline terminates.
MINING :
Estelle now hosts 9.6 million oz of gold
Shane Lasley, North of 60 Mining News, December 23, 2021
Nova Minerals Ltd. Dec. 22 announced that drilling has now outlined 9.6 million ounces of gold at its Estelle property in Alaska, a 55% increase over the 6.2 million oz reported by the Australia-based exploration company in October. The previous calculation brought in the first ever resource for RPM, the second deposit outlined so far at Estelle. The new calculation upgrades and expands upon the larger Korbel Main deposit.
According to the latest resource update the Korbel Main, which is situated at the north end of the Estelle property, hosts 286 million metric tons of indicated resource averaging 0.3 grams per metric ton (3 million oz) gold; plus 583 million metric tons of inferred resource averaging 0.3 g/t (5.1 million oz) gold.
This marks the first ever resource that has elevated a portion of the Korbel Main resource to the higher confidence indicated category. Even with the elevation of 3 million oz to indicated, the inferred resource at Korbel expanded by 400,000 oz.
RPM, a new deposit about 16 miles (25 kilometers) south of Korbel, hosts 23 million metric tons of inferred resource averaging 2 g/t (1.5 million oz) gold. The maiden resource for this deposit was reported by Nova in October.
“Nova’s management, with much credit to our team on the ground, has taken the Estelle gold project from discovery to a multi-deposit gold district in a short timeframe and on relatively limited funding and the exciting point is that we’re only getting started,” said Nova Minerals CEO Christopher Gerteisen.
With assays pending from more than 8,000 meters of drilling completed this year at Korbel Main and five rigs continuing to turn on the Estelle property, this growth is expected to continue into 2022.
While expanding the resources at Korbel Main and RPM are expected to be primary targets for drilling going into the new year, the 125-square-mile (324 square kilometers) Estelle property hosts several other targets Nova is eager to explore.
“With this, and no shortage of further targets, including the recently discovered mineralization at our Train-Shoeshine and Stoney prospects, there is no doubt that our global resource inventory will continue to grow for many years to come as we continue to unlock Estelle’s potential as a world-class trend,” said Gerteisen.
The Nova Minerals CEO said pre-feasibility study level work is being carried out in parallel with the resource development drilling at Estelle.
POLITICS:
GOP optimism grows over possible red wave in 2022
Tal Axelrod, The Hill, December 27, 2021
With less than a year to go until the 2022 midterms, Republicans are increasingly bullish on the prospect of a red wave that could flip both chambers of Congress and end Democrats’ unified control in Washington.
Heading into 2022, Democrats find themselves on their back foot, defending their narrow House and Senate majorities — and President Biden — against a fusillade of attacks over stubbornly high coronavirus cases, inflation, the bloody Afghanistan withdrawal and more. Biden’s approval ratings have nosedived to the low 40s, portending a possible drumming at the ballot box next year — and they haven’t stopped falling.
The House is viewed by many on both sides of the aisle as likely to fall into Republican hands, given Democrats’ razor-thin five-seat majority there. However, despite a favorable map for Democrats, the party’s 50-50 majority in that chamber could be toppled too.
“I’ve been telling Democrats, especially Democrats in targeted seats, enjoy the holidays, and you got a decision to make: retire or lose next fall,” Rep. Tom Emmer (R-Minn.), the chair of the National Republican Congressional Committee, told The Hill.
Emmer cautioned that a GOP House majority is not guaranteed, though he asserted that as many as 70 Democrats could lose their seats in a possible wave, warning “in this environment, no Democrat is safe.”
Fueling the GOP optimism is a confluence of factors, both historic and current.
The party in the White House customarily loses seats in the midterms. GOP waves helped flip the House toward Republicans in 2010 and the Senate four years later, while a blue wave helped win Democrats back the lower chamber in 2018.
On top of that, Biden’s falling overall approval ratings have been coupled with lower approval by voters of his handling of several specific issues, including the coronavirus and the economy. That’s helped fuel a GOP advantage in the generic congressional poll, where, in part due to gerrymandering, Democrats typically need a slight edge to at least pull even.
Taken together, Republicans see a path to taking back at least the House, particularly given its narrow margins. Recent waves have flipped dozens of seats, and the GOP must net just five in 2022.
“I’m very confident that we’re gonna take back the House,” said Rep. Don Bacon (R-Neb.), who represents a suburban swing district near Omaha. “I think that on the key issues right now, all the energy is on our side. And when I look at all the polling data, it matches what I see in the district, voters are concerned about inflation, crime, the border, Afghanistan, and all those issues are in our favor.”
Beyond the overall irritation with the current state of the country, along with specific frustrations on policy issues, Democrats face structural headwinds in a redistricting year.
The map-drawing process, which is still underway, could alone get Republicans the seats they need. But already Republicans have fortified their advantages in states like Texas and Georgia, where there is unified GOP control of the state government and the redistricting efforts.
“Redistricting is going to be an obstacle,” said Texas Democratic Party Chair Gilberto Hinojosa.
That confluence of factors is leading Democrats to privately — and in some cases publicly — concede that their grip on the House is tenuous.
“The environment is particularly dour, both because of rising prices, economic anxiety, frustration about feeling stagnant when it comes to COVID, that it is not behind us despite the fact that we’ve been living with it for two years,” Democratic pollster Molly Murphy said. “If this environment holds, it’s going to be pretty damning.”
With less than a year to go until the 2022 midterms, Republicans are increasingly bullish on the prospect of a red wave that could flip both chambers of Congress and end Democrats’ unified control in Washington.
Heading into 2022, Democrats find themselves on their back foot, defending their narrow House and Senate majorities — and President Biden — against a fusillade of attacks over stubbornly high coronavirus cases, inflation, the bloody Afghanistan withdrawal and more. Biden’s approval ratings have nosedived to the low 40s, portending a possible drumming at the ballot box next year — and they haven’t stopped falling.
The House is viewed by many on both sides of the aisle as likely to fall into Republican hands, given Democrats’ razor-thin five-seat majority there. However, despite a favorable map for Democrats, the party’s 50-50 majority in that chamber could be toppled too.
“I’ve been telling Democrats, especially Democrats in targeted seats, enjoy the holidays, and you got a decision to make: retire or lose next fall,” Rep. Tom Emmer (R-Minn.), the chair of the National Republican Congressional Committee, told The Hill.
Emmer cautioned that a GOP House majority is not guaranteed, though he asserted that as many as 70 Democrats could lose their seats in a possible wave, warning “in this environment, no Democrat is safe.”
Fueling the GOP optimism is a confluence of factors, both historic and current.
The party in the White House customarily loses seats in the midterms. GOP waves helped flip the House toward Republicans in 2010 and the Senate four years later, while a blue wave helped win Democrats back the lower chamber in 2018.
On top of that, Biden’s falling overall approval ratings have been coupled with lower approval by voters of his handling of several specific issues, including the coronavirus and the economy. That’s helped fuel a GOP advantage in the generic congressional poll, where, in part due to gerrymandering, Democrats typically need a slight edge to at least pull even.
Taken together, Republicans see a path to taking back at least the House, particularly given its narrow margins. Recent waves have flipped dozens of seats, and the GOP must net just five in 2022.
“I’m very confident that we’re gonna take back the House,” said Rep. Don Bacon (R-Neb.), who represents a suburban swing district near Omaha. “I think that on the key issues right now, all the energy is on our side. And when I look at all the polling data, it matches what I see in the district, voters are concerned about inflation, crime, the border, Afghanistan, and all those issues are in our favor.”
Beyond the overall irritation with the current state of the country, along with specific frustrations on policy issues, Democrats face structural headwinds in a redistricting year.
The map-drawing process, which is still underway, could alone get Republicans the seats they need. But already Republicans have fortified their advantages in states like Texas and Georgia, where there is unified GOP control of the state government and the redistricting efforts.
“Redistricting is going to be an obstacle,” said Texas Democratic Party Chair Gilberto Hinojosa.
That confluence of factors is leading Democrats to privately — and in some cases publicly — concede that their grip on the House is tenuous.
“The environment is particularly dour, both because of rising prices, economic anxiety, frustration about feeling stagnant when it comes to COVID, that it is not behind us despite the fact that we’ve been living with it for two years,” Democratic pollster Molly Murphy said. “If this environment holds, it’s going to be pretty damning.”
That reality has apparently set in with at least some Democrats on Capitol Hill. Roughly two dozen are retiring from the House, either to leave politics altogether or run for another office.
By the end of 2017, the year before the GOP was swept out of the House majority, 25 House Republicans had announced they would not seek reelection.
“They’re running for the hills,” GOP pollster Robert Blizzard said. “I think they see the writing on the wall.”
Frustrating Democratic efforts to keep the House are the issues for which Biden and the broader party are being blamed. Presidents have limited control over inflation, and while aspects of the coronavirus response, including on testing, is in Biden’s wheelhouse, no lawmaker could have prevented the omicron variant from hitting U.S. shores.
Compounding that, Democrats’ latest legislative efforts have fallen apart over a sprawling social and climate spending bill — opening up Democrats to GOP attacks on their competency and cohesion.
That leaves Democrats with limited legislative options to turn the tide, leading some to suggest a tonal shift from touting previous accomplishments could be key to ameliorating the party’s chances in 2022.
“I think understanding that people are pissed off and that that’s OK and that there’s an understanding of what those lives are like and a desire, and the goal is fixing those things and looking in touch with people, those are the things that Democrats can do tonally,” Murphy said. “I think pointing to, ‘Hey, things are actually great’ just sounds totally tone deaf.”
To be sure, Democrats also have legislative accomplishments to highlight, including a nearly $2 trillion coronavirus relief package passed earlier in the year and a $1 trillion bipartisan infrastructure bill that was signed into law just a few months ago.
Some Democrats say those are valuable weapons in the party’s arsenal — as long as they’re effectively messaged.
“I think our chances are great. We just need to do good things and tell people about it,” Rep. Sean Patrick Maloney (N.Y.), the chair of the Democratic Congressional Campaign Committee, told The Hill, adding that he’d advise candidates to “run like the mayor.”
“I’ve been clear that we need to do a better job of messaging,” he continued, “and I think you’ll see us do that.”
A GOP majority is still not guaranteed. While Republicans are boastful that House control is within their grasp, some voice concerns that infighting could tarnish their brand.
Former President Trump and his style of politics that proved toxic in the 2018 midterms still loom large over the party, and the current House GOP conference is wracked by divisions, as recently indicated by vocal rebukes from conservatives against centrists who backed the bipartisan infrastructure legislation.
On top of that, the party has had to answer for comments from some lawmakers that advocated violence against Democrats or were Islamophobic.
“It’s not a choice between Coke and Pepsi. It’s a choice between Coke and arsenic,” said Democratic strategist Jesse Ferguson. “The Republican brand is now toxic in a lot of the country.”
Democrats are projected to have better odds in the Senate, where a competitive map will be key to possibly offsetting a poor environment.
Democrats’ top defensive opportunities lie in Arizona, Georgia, Nevada and New Hampshire — four states that Biden won in 2020. Meanwhile, Republicans are defending open seats in Pennsylvania and Wisconsin, which Biden also won, as well as North Carolina and Ohio.
With that dynamic, Democrats say that the Senate is a toss-up — instead of the House, which likely leans Republican.
“Within the Senate battlefield there are more than enough seats for Democrats to retain control and also more than enough seats for Republicans to flip it,” Ferguson said.
However, there too Republicans are bullish that a majority is within reach.
Biden won Arizona, Georgia and Nevada each by about 2 points or less, though Republicans flipped Virginia’s governor’s mansion by 2 points in November and narrowly lost New Jersey’s gubernatorial race. The contests from those two states represented 12-point and 13-point swings from 2020, respectively, far more than needed in several states Democrats are defending.
“I feel good about Republican chances of taking control, but it’s definitely a very competitive map,” Blizzard said.
“In a state like Pennsylvania, Biden won by a point. So, if that shifts even 3 or 4 points, that could be enough. Nevada, same thing. Georgia, same thing. Arizona, same thing. If you start flipping Arizona, and Georgia and Nevada and New Hampshire, that’s a net of four seats right there. So, I would bet on Republicans to win the Senate in ‘22.”
CLIMATE CHANGE :
Greta Thunberg: “Strange” that Biden would be considered a leader in climate
Ivana Saric, Axios, December 27, 2021
Climate activist Greta Thunberg slammed the Biden on climate policy in an interview with the Washington Post Monday, saying that it’s “strange” to consider Biden a leader in the arena “when you see what his administration is doing.”
What she’s saying: “The U.S. is actually expanding fossil fuel infrastructure,” Thunberg said. “Why is the U.S. doing that?”
- “It should not fall on us activists and teenagers who just want to go to school to raise this awareness and to inform people that we are actually facing an emergency,” she added.
Flashback: Thunberg is no stranger to calling out climate actions she feels are ineffective or performative. Last month, she dismissed this year’s COP26 as “a PR event” and she accused world leaders of “greenwashing.”
Our thought bubble, via Axios’ Andrew Freedman: The Biden administration set out ambitious goals for reducing planet-warming greenhouse gas emissions, including reaching 100% clean electricity by 2035 and net zero emissions by 2050.
- However, Biden’s main tool for meeting these goals is bogged down in Congress, putting them in doubt. He also has been combatting an increase in gas prices related to the economic recovery from the coronavirus pandemic and other factors.
- This has led Biden to call for a temporary increase in global oil production. The White House also has not followed through on a campaign promise to crack down on oil and gas leasing on federal lands, instead aiming for reforming the process. Yet, it is also greatly expanding the areas open to renewables, such as offshore wind energy.
Go deeper: The climate policy effects of Manchin’s “no” on Build Back Better