Russia threatens to react to oil price cap, OPEC+ maintains production and what matters in the market

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Turbulent week for oil

OPEC member countries and their allies decided this Sunday (4) not to change the pace of oil production, on the eve of the entry into force of a new sanction against the commodity exported by Russia.

• Therefore, the decision taken in October to reduce the pace of production by two million barrels per day remains valid.

Why it matters: the market and the rulers were anxious for the cartel’s decision (which includes Russia as an ally), because it took place at a time of instability to measure supply and demand for oil.

• On the supply side, the ceiling price imposed by the EU (European Union) for oil sold by Russia, the second largest exporter of the commodity, begins this Monday (5).

• In demand, there is the easing of Covid zero measures in China. This scenario should increase the demand for oil in the country and give strength to the raw material in a context of global economic slowdown.

Russia says it will react: The Kremlin’s energy official said on Sunday the country would not sell oil subject to a price cap imposed by the West, even if that means cutting production.

• The EU decision, supported by the G7 and Australia, set a limit of $60 per barrel so that ships carrying Russian oil could contract insurance and other services from companies in the European bloc.

• The Russian product has already been exported for around $65 the barrel, an argument used by Poland to defend a ceiling of US$ 30.

• The biggest economies, however, opted for the higher limit on fears that the Kremlin would reduce supply, putting pressure on oil prices and global inflation.

Treasury Direct Opportunities

The interest rate futures market was a good parameter to capture investor risk aversion in November, the month in which news of the government transition brought strong volatility to the indicators.

• The potential for return appears mainly in fixed-rate or inflation-linked securities with longer maturities, analysts point out.

In numbers: last month, the biggest devaluations were with Treasury IPCA 2045 (-6.05%) and Fixed Treasury 2029 (-4.76%).

Understand: in fixed-rate and inflation-linked securities, whenever interest rates (traded in the market through DI contracts) rise, the security will have a lower value.

• Those who carry the bond to maturity, however, receive the amount promised at the time of purchase. Those who sell first are subject to greater gains or losses. It is the mark to market.

Which explains the up and down: the expectation of extratete expenses of almost R$ 200 billion with the PEC of the Transition together with criticisms by president-elect Lula (PT) of the rules that limit public spending hit interest rates, the dollar and the stock exchange. Part of this reaction has already been reversed.

• For those who are more willing to take risks and believe that rates tend to fall with a decision on the fiscal issue, securities maturing in up to three years are an option.

More about financial market:

CLT changes: iFood wants protection and flexibility

A change in labor legislation to include the particularities of working through applications is one of more than 80 promises made by Lula for the economy.

• For iFood, leader in the national meal delivery market, the ideal would be a balance capable of “embracing the future” and guaranteeing social protection.

This was one of the topics discussed by iFood’s CEO, Fabricio Bloisi, with Sheet, in the series Interviews with Entrepreneurs. Here are some excerpts (the full text is here):

“We have a platform that generates opportunities for 2 million, 3 million people, and this has to happen with social rights that are reasonable, however, connected with the current moment of technology. The problem with the current laws is that they were written in a a time when neither smartphones nor apps existed.”

“iFood has some exclusive restaurants, a relatively small percentage. Just like competitors from other countries, which is a completely regular and legal practice in this market. My suggestion is: improve the product, deliver more. Who knows, the customer will stay longer happy and will hire more competitors”.

“iFood has been delivering with a drone for a year and a half now in some cities in Brazil. We also deliver with robots in some places. And we continue to invest in artificial intelligence to have more automation. It is already a reality and will be a reality a hundred times bigger in the future”.

Other interviews from the series of Sheet🇧🇷

João Doria, former governor of São Paulo; João Camargo, president of the group of entrepreneurs Esfera Brasil; Abilio Diniz, board member of Carrefour Global and Brazil; Antonio Carlos Pipponzi, Chairman of the Board of RaiaDrogasil; Roberto Fulcherberguer, President of Via (Casas Bahia and Ponto).

Startup of the Week: BR Media

On Mondays, the “Startup of the Week” section shows an x-ray of a startup that recently received funding.

The startup: founded in 2012, connects brands to a cast of digital influencers that already add up to more than 20 thousand profiles.

In numbers: BR Media announced last week a fundraising BRL 105 millionwhich evaluated it in BRL 300 million🇧🇷

Who invested: The contribution was made by the Brazilian manager Bridge One, specialized in B2B (business to business) technology companies.

What problem does it solve: BR Media’s idea is to take advantage of the immense range of Brazilian influencers –such as Sheet showed, exceed 500 thousand – and facilitate the bridge with big brands, which look for certain profiles according to each campaign.

• The startup has platforms aimed at both microinfluencers, who have up to 100,000 followers, and the big guys in the industry, who number in the millions.

Why it stands out: in addition to BR Media announcing the highest funding in Brazil among startups in the last week, the contribution comes in a challenging scenario for online advertising, with big techs laying off employees to compensate for the loss of revenue with ads.

More numbers: With more than 400 brands from different segments as customers, BR Media will end the year with an Ebitda (indicator for operating profit, which excludes taxes, depreciation and amortization) of R$ 50 million, according to the Startupi website.

• With the entry of Bridge One, the plan is to triple this result in three years.

The week in summary

There were 26 funding rounds in Latin America, with $110 million (R$ 571 million) in investments.

The data was provided by the Sling Hub platform.