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Exclusive-U.S. asks Japan, China, others to consider tapping oil reserves -sources

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November 17, 2021

By Trevor Hunnicutt, Jarrett Renshaw and Timothy Gardner

WASHINGTON (Reuters) -The Biden administration has asked some of the world’s largest oil consuming nations to consider releasing some crude reserves in a coordinated effort to lower prices, according to several people familiar with the matter.

Global oil benchmarks fell in post-close trading on the news. In late October, prices touched seven-year highs as oil demand has rebounded nearly to pre-pandemic levels, faster than the pace of supply.

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President Joe Biden has faced political pressure over gasoline prices which have risen since his election in November 2020, a time when commuting and travel were drastically reduced during the pandemic. Government leaders in Japan and other consuming countries face similar pressures.

The Organization of the Petroleum Exporting Countries and allied producers, led by Saudi Arabia and Russia, have been adding 400,000 barrels per day to the market on a monthly basis but resisted Biden’s calls this month for steeper boosts.

In recent weeks, Biden and top aides have raised the issue with close allies including Japan, South Korea and India, as well as with China, the sources said. Tokyo responded positively to initial outreach, according to one of the sources.

One of the sources, asked why India was included in the batch of countries since it has only a small reserve, said: “We’re talking about the symbolism of the largest consumers of the world sending a message to OPEC that ‘you’ve got to change your behavior.’”

Several people familiar with the matter cautioned that such negotiations have not been finalized nor has any final decision been made about whether to pursue any specific course of action on oil prices.

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The White House declined to comment on the detailed content of conversations with other countries. “No decisions have been made,” said a spokesperson for the White House’s National Security Council.

The White House has said for weeks that it is “talking with other energy consumers to ensure global energy supply and prices do not imperil the global economic recovery, the spokesperson added. “There is nothing to report beyond ongoing conversations and we consider a range of tools for if and when action is needed.”

The U.S. share of any potential release of reserves could be more than 20 to 30 million barrels, saying that much was needed to have an effect on markets, according to a U.S. source who participated in the discussions. The release could be in the form of a sale or a loan from the SPR – or both.

After Reuters reported on the White House discussions, U.S. crude was trading at $78.18 after closing at $78.36 a barrel, while Brent fell to $80.21 after ending at $80.28 a barrel. Prior to the news, both U.S. crude and global benchmark Brent notched their lowest settlement prices since early October, with Brent down 1.7% and U.S. crude down 3% for the day.

OPEC and allies have been wary of boosting output dramatically, concerned the rebound in demand could be fragile and additional supply could overwhelm markets.

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“The surplus is already beginning in December,” OPEC Secretary General Mohammad Barkindo said on Tuesday, when asked if he was sure there would be an excess in oil supply next year.

“These are signals that we have to be very, very careful,” he told reporters.

Rising oil prices have vexed Biden ahead of the 2022 midterm elections which will determine whether his Democratic party maintains its slim majorities in the U.S. Congress.

Several Biden aides attribute his falling public approval ratings in recent months to worsening inflation from energy to food and other areas. The consumer price index is up 6.2% over the last 12 months, with its energy components up 30%.

U.S. gasoline prices are $3.41 per gallon now, according to AAA, more than 60% higher than a year ago as the economy has rebounded from the COVID-19 pandemic.

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The Paris-based International Energy Agency, an energy watchdog which includes some of the largest consumers of oil, including the United States, Japan, and numerous European nations, did not comment. The IEA in the past has coordinated releases involving several countries.

“The IEA monitors the oil market closely and stands ready to act as necessary,” it said in a statement.

(Reporting by Trevor Hunnicutt, Jarrett Renshaw and Tim Gardner; Additional reporting by Valerie Volcovici and Noah Browning; Editing by David Gaffen, Heather Timmons and David Gregorio)

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Deutsche Post CEO favourite to become Telekom chairman – sources

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December 5, 2021

BERLIN (Reuters) – Frank Appel, the chief executive of German logistics company Deutsche Post, is the favourite to become the next supervisory board chairman of Deutsche Telekom, two sources close to the matter told Reuters.

The sources said Deutsche Post’s supervisory board is due to meet on Wednesday and Deutsche Telekom’s board will meet a week later to discuss the matter.

Both companies declined to comment.

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The Handelsblatt newspaper reported on Saturday that Appel would potentially be proposed for election at Deutsche Telekom’s annual meeting on April 7.

The term of office of Telekom chairman Ulrich Lehner, who has headed the Telekom supervisory body since 2008, ends at next year’s shareholder meeting. He had already confirmed that an external search for a successor was under way.

Appel’s predecessor at Deutsche Post, Klaus Zumwinkel, also served as supervisory board chairman of Telekom.

The German government holds stakes in both companies.

Appel, a former McKinsey consultant, has been with Deutsche Post since 2000. In 2002, he became a member of the board of management, and in 2008 he moved up to the post of CEO.

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His contract runs until 2022 and a decision on his future at the Post had been expected soon. Some industry insiders have speculated that Appel could be ready to move on given that Deutsche Post has posted record results through the pandemic.

(Reporting by Matthias Inverardi and Nadine Schimroszik; Writing by Emma Thomasson; editing by David Evans)

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Canadian employers, facing labor shortage, accommodate the unvaccinated

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December 5, 2021

By Julie Gordon and Steve Scherer

OTTAWA (Reuters) – Canada’s tight labor market is forcing many companies to offer regular COVID-19 testing over vaccine mandates, while others are reversing previously announced inoculation requirements even as Omicron variant cases rise.

Canadian Prime Minister Justin Trudeau’s government adopted one of the strictest inoculation policies in the world for civil servants and has already put more than 1,000 workers on unpaid leave, with thousands more at risk.

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Airlines, police forces, school boards and even Canada’s Big Five banks https://www.reuters.com/world/americas/canadas-major-banks-require-employees-entering-premises-be-vaccinated-2021-08-20 have also pledged strict mandatory vaccine policies. But following through has proven less straightforward, especially as employers grapple with staffing shortages and workers demand exemptions.

Job vacancies in Canada have doubled so far this year, official data shows, and vaccine mandates can make filling those jobs harder, potentially putting upward pressure on wages. That could fuel inflation https://www.reuters.com/world/americas/canadas-annual-inflation-rate-hits-47-oct-highest-since-feb-2003-2021-11-17, already running at a near two-decade high.

“It’s already difficult to find staff, let alone putting in a vaccine mandate. You’d cut out potentially another 20%” of potential workers, said Dan Kelly, chief executive of the Canadian Federation of Independent Business.

There are pitfalls to employing the unvaccinated. Companies run a higher risk of COVID-19 outbreaks and many vaccinated employees are uncomfortable working with those who have not had the jab, said industry groups and marketing experts.

At Luda Foods, a Montreal-based soup and sauce maker, president Robert Eiser said he has 14 open jobs, no vaccine mandate and no plans to restrict new hires to the vaccinated.

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“I don’t know that I want to reduce the (labor) pool, which is already quite low,” said Eiser. “We need to attract people to meet the demand. If we don’t, our competitors will.”

Data released on Friday underpinned Canada’s tight labor market, with a hefty 153,700 jobs https://www.reuters.com/markets/us/canada-posts-hefty-job-gains-outlook-clouded-by-omicron-variant-2021-12-03 added in November. It also showed a growing mismatch between available workers and unfilled jobs. And job postings are far above pre-pandemic levels. (Graphic: Canada job postings surge above pre-pandemic level Canada job postings surge above pre-pandemic level, https://graphics.reuters.com/HEALTH-CORONAVIRUS/CANADA2/klvyknzklvg/chart.png)

WALKING BACK

The province of Quebec backtracked on a vaccine mandates for healthcare workers last month, saying they could not afford to lose thousands of unvaccinated staff. Ontario, which was also eyeing a mandate, said it would not go ahead.

Toronto-Dominion Bank and Bank of Montreal have both softened their vaccine policy to allow regular testing for workers who missed their Oct. 31 inoculation deadline.

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In Canada, 86% of adults are fully inoculated, though that drops under 80% among 18-40 year olds. At least 15 cases of the new Omicron https://www.reuters.com/markets/rates-bonds/canada-has-reported-total-11-cases-omicron-variant-health-official-2021-12-03 variant in Canada have been reported in the past week.

John Cappelli, vice president of onsite managed services in Canada for global recruitment firm Adecco, said half of his clients are mandating vaccines with the other half allowing regular testing for the unvaccinated.

But he expects the Omicron variant will prompt more workplaces to get strict on vaccination, even as they grapple with the tightest job market he’s seen in his 25-year career.

“We are now starting to see our first workplace (COVID-19) cases in five months,” he said.

The number of Canadian job postings on search website Indeed mentioning vaccine requirements has quadrupled since August. (Graphic: Canada job postings and vaccine mandates, https://graphics.reuters.com/HEALTH-CORONAVIRUS/CANADA3/byvrjqrlmve/chart.png)

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In the hard-hit manufacturing sector, where 77% of firms say their top concern is attracting and retaining workers, vaccine mandates are more rare.

Dennis Darby, CEO of Canadian Manufacturers and Exporters, said most of Canada’s factories have operated safely throughout the pandemic. While CME encourages vaccination, “some companies are still using rapid testing if somebody doesn’t want to get vaccinated,” he added.

But companies risk a hit to their reputation if they are overt in efforts to tap into the unvaccinated as a labor pool, said Wojtek Dabrowski, managing partner at Provident Communications.

“If you go out and say, ‘We are intentionally seeking to hire unvaccinated people,’ many customers are equating that with you being anti-science and anti-safety,” said Dabrowski.

(Reporting by Julie Gordon and Steve Scherer in Ottawa, additional reporting by Rod Nickel in Winnipeg and Nichola Saminather in Toronto; Editing by Alistair Bell)

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Israeli firm to sell HSBC Tower in New York for $855 million

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December 5, 2021

By Steven Scheer

JERUSALEM (Reuters) – Israel’s Property and Building Corp said on Sunday it agreed to sell the HSBC Tower building in midtown Manhattan for $855 million to New York-based real estate firm Innovo Property Group, recording a net loss of $45 million.

The Israeli company, which is 63% owned by Discount Investment Corp, said it had also sold property in Israel for 390 million shekels ($123 million).

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Doron Cohen, chief executive of both Property and Building and Discount, said management was focusing on income-producing properties in Israel and that the amount it was receiving from both transactions would allow it to advance this policy.

“We are continuing the policy and examining the possibility of realising additional properties in the United States and in Israel,” Cohen said, noting the sale of the HSBC building came despite “gloomy” predictions over U.S. commercial real estate market.

He cited Tivoli Village, an upscale apartment complex in Las Vegas that opened this year, which may be put up for sale as part of the company’s efforts to boost liquidity and reduce debt.

Along with conglomerate Koor Industries, Property and Building, bought the 30-storey, 80,000 square metre HSBC Tower in 2009 for $353 million. In 2011, Property acquired Koor’s stake in the tower which has an occupancy of 99%, it said. HSBC had bought the building in the 1990s.

Property and Building said the value of the HSBC Tower in its books was $864 million as of Sept. 30. After costs, it said it would record a net loss of $45 million from the sale.

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Completion of the sale is expected by April 1, 2022 subject to Innovo’s right to advance the date while also receiving options to postpone the completion twice for 30 days each.

Property said after the sale it will have a net cash flow of $343 million.

Its shares were 0.7% lower in afternoon trading in Tel Aviv.

($1 = 3.1605 shekels)

(Reporting by Steven Scheer;Editing by Elaine Hardcastle)

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