The daily business briefing: March 21, 2022
Houthi rebels strike Saudi oil facilities, Canadian railway halts trains as contract talks hit impasse, and more
Houthi rebels launch strikes against Saudi oil facilities
Iran-backed Houthi rebels, who are battling a Saudi-led coalition in Yemen, targeted Saudi energy and water desalination facilities with missile and drone strikes, briefly slowing production at a refinery, the Saudi energy ministry said Sunday. The attacks hit a petroleum distribution terminal, a natural gas plant, and the Yasref refinery in Yanbu, a Red Sea port. The ministry said existing inventory could offset the production loss. Amin Nasser, CEO of Saudi Aramco, said in a call on the company's earnings that the adjustments would prevent any reduction in deliveries to customers. Oil prices rose by more than 3 percent early Monday after the attack, as European nations consider joining a Russian oil embargo in response to Russia's Ukraine invasion.
Canadian railway shuts down as labor negotiations hit a wall
Canadian Pacific Railway trains stopped running on Sunday after contract negotiations with the company and its conductors and engineers hit an impasse. The Canadian Pacific and the Teamsters Canada Rail Conference, the union that represents more than 3,000 of the railway's conductors, engineers, and yard workers, has been pressing for increased wage and pension benefits, and more rest periods in negotiation and mediation that have been ongoing since September. A spokesperson for Canada's labor minister, Seamus O'Regan, said the two sides restarted talks on Sunday. The dispute, however, threatened to delay global shipments of some manufactured goods and commodities, including fertilizers.
Chevron replaces union workers at refinery ahead of strike
Chevron Corp. removed more than 500 United Steelworkers union members out of an oil refinery near San Francisco on Sunday night and replaced them with non-union workers ahead of the first labor strike at the plant in 42 years. The existing labor contract at the Richmond, California, refinery expired Feb. 1. The union is asking for a 5 percent pay increase above what its peers have agreed to due to the high cost of living in the San Francisco Bay Area. No new contract talks are scheduled and the two sides remain "far apart," local union officials said. Chevron said it had taken steps to continue normal operations at the plant, which produces gasoline, diesel, and jet fuel, and remained "committed to continuing to negotiate toward an agreement."
U.S. stock futures struggle after best week since 2020
U.S. stock futures fell early Monday after all three of the main U.S. indexes posted their best weeks since November 2020. Futures tied to the Dow Jones Industrial Average and the Nasdaq were down 0.3 percent at 6:30 a.m. ET. S&P 500 futures were down 0.2 percent. The Dow and the S&P 500 rose 5.5 percent and 6.1 percent last week. The tech-heavy Nasdaq jumped by 8.1 percent. The gains came after the Federal Reserve raised interest rates for the first time since 2018, and signaled six more hikes this year to fight inflation. "After one of the best weeks in years, now the question is will stocks be able to hold those gains?" said Ryan Detrick of LPL Financial.
Shanghai Disneyland closes as China fights coronavirus surge
Shanghai Disneyland closed Monday as the biggest coronavirus outbreak in two years hit China's most populous city. Shanghai, which is home to 24 million people, has appealed to people to stay home but stopped short of ordering a lockdown. Bus service into the massive city has been suspended. Jilin, a city of two million in northeastern China, ordered residents to stay home and, along with the city of Changchun, ordered citywide coronavirus testing. Jilin province, where Jilin and Changchun are located, reported 1,542 of China's 2,027 new cases on Sunday, up from 1,737 the day before. The southern business center of Shenzhen eased its week-long lockdown, allowing shops and offices to reopen.