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Turbulent Oil, Gas Markets to Persist ‘for Some Time to Come,’ Shell CEO Says

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The world is headed for a “turbulent period” in oil and gas markets “for some time to come,” as “spare capacity is running very, very low,” Shell (NYSE:SHEL) CEO Ben van Beurden said Wednesday.

Global demand for oil and gas is still recovering despite economic and COVID-19 challenges, but the world’s oil refining system is running flat out, van Beurden said, driving up refining margins and prices of gasoline and diesel.

Russia has curbed gas supplies to Europe, forcing buyers to turn to liquefied natural gas imports and causing concerns about supplies ahead of peak demand this winter, but van Beurden believes “it will be impossible to cover the entire pipeline gas capacity out of Russia with LNG.”

LNG export capacity amounting to 32M tons are set to come onstream this year, with possibly another 30M in the next few years, resulting in a “very significant shortfall.”

Europe could extract as much as 50B cm/year of additional gas from the controversial Groningen gas field in The Netherlands, but that would be a last resort for the Dutch government, the Shell (SHEL) CEO said.

Van Beurden’s outlook for oil is not much better, saying spare capacity from OPEC “isn’t as much as the market thinks or hopes,” while demand has reached pre-pandemic levels and will continue to increase for years.

The CEO also pointed to a $1T decline in investment in the oil and gas industry during the past three years that would have happened in “normal circumstances.”

Exxon CEO Darren Woods indicated recently that energy prices likely will remain elevated, but “the cure for high prices is high prices.”

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Source: seekingalpha.com

Business

Lumber Futures Rise As Canada Cuts Wood Production

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CBOT lumber futures rose (LB1:COM) for the third straight session on Wednesday to $601.80 per 1,000 board feet, the highest intraday price since July 22, as supply cuts from a top Canadian producer outweigh rising interest rates that are hurting housing markets.

West Fraser Timber (WFG) announced production cuts at two British Columbia sawmills, equivalent to 2.5% of its total North American capacity, and it is cutting plywood output at another facility.

Other potentially relevant tickers include (WY), (LPX), (PCH), (RFP), (OTCPK:CFPZF), (OTCPK:IFSPF), (OTCPK:WFSTF)

ETFs: (NYSEARCA:XHB), (NASDAQ:WOOD), (CUT), (NAIL)

U.S. builders obtain more than 25% of their lumber from Canada, which is the world’s largest exporter of softwood lumber.

This year’s surge in borrowing costs caused ~60K deals for home sales in the U.S. to fall through in June.

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Original Post: seekingalpha.com

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CVS Health Tried to Acquire One Medical Before Amazon Eventually Did – Bloomberg

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Original Source: seekingalpha.com

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Business

Recipe Gone Wrong: Domino’s Calls It Quits in Italy

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Mario Elias Munoz Valencia/iStock Editorial via Getty Images

Seven years after entering the Italian market, Domino’s (NYSE:DPZ) is closing up shop in the homeland of pizza. While the company had already stopped offering delivery from its website on July 29, the last of its 29 local branches just shuttered their doors. Social media is abuzz on the news, with some likening the situation to selling ice in the North Pole, or how the chain could compare their pizza to an authentic Napoletana.

History: Domino’s (DPZ) opened its first outlet in Milan in 2015, via a franchising agreement with a local business called ePizza SpA. At the time, it said it hoped to win over Italian palates with “purely Italian” ingredients like Prosciutto di Parma, Gorgonzola, Grana Padano and Mozzarella di bufala Campana. The biggest catch was a national home delivery model that could take on local artisanal shops and provide an alternative to Italy’s dining out culture.

Cracks in the plan first emerged during the pandemic, especially as delivery became essential during coronavirus lockdowns. Many of the “mom & pop” restaurants went online, allowing buyers to order quality products and gourmet items straight to their homes. As takeout and delivery models were adopted, increased competition was also seen from a rising number of online platforms like Deliveroo, Glovo or Just Eat Takeaway.com.

Go deeper: ePizza borrowed heavily for plans to open over 800 Italian stores through 2030, attempting to land a 2% stake of the national pizza market. As recently as April, it filed for protection from creditors, and while the motion was granted for an initial 90 days, there have been no further updates on the court process. According to the latest audited reports, ePizza had EUR10.6M of debt at the end of 2020, but has since been running out of cash and faltering on its debt obligations.

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Original Source: seekingalpha.com

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