- Baldur’s Gate 3: Director Swen Vincke Answers All Our Questions About Foregoing DLC, AAA Development, and More IGN
- Larian CEO has been ‘reading the Reddit threads’ and wants us to remove our tinfoil hats, says Wizards of the Coast isn’t the reason Baldur’s Gate 3 is finished PC Gamer
- “We’ve done our job”: Baldur’s Gate 3 devs call off DLC and step away from D&D Ars Technica
- Baldur’s Gate 3 Dev Is Working Toward An RPG That “Dwarfs” It GameSpot
- Baldur’s Gate 3 boss says today’s technology cannot handle his “very big RPG that will dwarf them all,” hopes the PS6 generation “is gonna bring us closer” Gamesradar
Tag Archives: AAA
$60 AAA PS4 Game Now $1.79 for Limited Time
A new PlayStation Store sale has discounted a popular AAA PS4 game by 97%, knocking the game’s price down from $59.99 to just $1.79. Of course, this is only a limited-time offer. More specifically, an offer only available until January 19. After this, it will revert to its normal price point, though you can almost always grab the game for cheaper than a full $60, both digitally and at retail. In fact, you can often find the game for a very good price at retailers like GameStop and Walmart.
The game in question was released on February 22, 2019 via BioWare and EA. That’s right, the game in question is Anthem, one of the most contentious games of the previous generation, but a game that at the end of the day had millions of players and did have a dedicated fanbase, albeit not enough to keep it alive.
Of course, you’re not going to get anything out of the online content in 2022, but there’s still single-player content that can be enjoyed. And the game isn’t as grindy as it was when it was originally released. As you may remember, this was the biggest criticism of the game at launch.
“Anthem is a social, connected Action-RPG with cooperative multiplayer at its heart,” reads an official description of the game. “Players customize an array of powered Javelin exosuits and team up to face a dangerous and ever-changing world through exploration and combat.”
The game’s official description continues: “In Anthem, up to four players explore and battle in a dangerous, mysterious place populated by great characters and a unique BioWare story. Players will also create stories of their own while they play, so no two journeys are the same. Javelin exosuits make their pilots powerful heroes in the world, with awesome weapons and incredible special abilities that allow for combat and exploration in a hostile environment. Players will be able to customize and personalize their suits with unique paint jobs and gear so they’ll have the right tools to confront almost any situation, and look good doing it.”
For more coverage on all things PlayStation — including not just the PS4 news, rumors, leaks, and deals, but the latest on the PS5 as well — click here or, alternatively, peruse the links right below:
S&P cuts UK rating outlook after tax cut plan
LONDON, Sept 30 (Reuters) – Ratings agency Standard & Poor’s cut the outlook for its AA credit rating for British sovereign debt on Friday to “negative” from “stable” as it judged Prime Minister Liz Truss’s tax cut plans would cause debt to keep rising.
Finance minister Kwasi Kwarteng announced around 45 billion pounds ($50 billion) of permanent, unfunded tax cuts on Sept. 23 as well as costly temporary subsidies to household and business energy bills, sending sterling and bond markets into a tailspin.
While sterling has since recovered, the Bank of England was forced to launch an emergency bond purchase programme on Wednesday to stabilise markets and has warned it would probably need to raise interest rates significantly in November.
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S&P – which ranks British government debt one notch higher than rivals Moody’s and Fitch – said it saw British public debt on an upward trajectory, in contrast to a previous forecast that it would fall as a share of gross domestic product from 2023.
“Our updated fiscal forecast is subject to additional risks, for instance, if the UK’s economic growth turns out weaker due to further deterioration of the economic environment, or if the government’s borrowing costs increase more than expected, driven by market forces and monetary policy tightening,” it added.
S&P forecast Britain would enter a technical recession in the coming quarters and its GDP would shrink by 0.5% in 2023.
Truss and Kwarteng met top officials from Britain’s Office for Budget Responsibility on Friday, but have so far rejected calls from some investors and political rivals that they ask the independent OBR to publish new forecasts sooner than Nov. 23, when Kwarteng intends to set out a debt-reduction plan.
Moody’s said on Wednesday that Kwarteng’s tax cuts were “credit negative”, and has flagged Oct. 21 as the most likely next date for a more formal review.
Britain’s government has said that tax cuts and longer-term structural reforms to areas such as immigration and planning permits should boost growth, but S&P said the benefit was likely to be modest, especially in the short term.
“For now it is unclear whether the government plans to ultimately introduce fiscal consolidation measures to bring debt back on a downward path and we assume that the package will be funded by debt,” it said.
Britain’s public borrowing was likely to average 5.5% of GDP a year from 2023 to 2025, compared with a previous forecast of 3%, while general government debt would rise to 97% of GDP by 2025, S&P forecast.
($1 = 0.8961 pounds)
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Reporting by David Milliken; Editing by Leslie Adler, Daniel Wallis and David Gregorio
Our Standards: The Thomson Reuters Trust Principles.
Bank of England seeks to stem bond market turmoil after tax cut storm
LONDON, Sept 28 (Reuters) – The Bank of England sought to quell a fire-storm in Britain’s bond markets, saying it would buy as much government debt as needed to restore order after new Prime Minister Liz Truss’ tax cut plans triggered financial chaos.
Having failed to cool the sell-off with verbal interventions over the previous two days, the BoE announced on Wednesday the immediate launch of its emergency bond-buying programme aimed at preventing the market turmoil from spreading.
The plan delivered by Truss’s finance minister Kwasi Kwarteng on Friday for tax cuts on top of an energy bill bailout, all funded by a huge increase in government borrowing, quickly led to a freezing of mortgage markets, selling of gilts by pension funds and a leap in corporate borrowing costs.
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It also triggered alarm in foreign capitals.
“Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability,” the British central bank said.
It said it would buy up to 5 billion pounds ($5.31 billion) a day of British government bonds of at least 20 years’ maturity starting on Wednesday and running until Oct. 14. read more
The announcement, which represented a sudden reversal of the BoE’s plans to start selling bonds it had amassed since the global financial crisis of 2008-08, immediately pushed down borrowing costs.
The 30-year gilt yield was set for its biggest drop in records going back to 1992.
But sterling fell by about 1% against the dollar and euro, putting it on track for its biggest monthly decline since October 2008, just after Lehman Brothers collapsed.
By 2:48pm (1348 GMT) it was trading down 0.5% at $1.0679, a fall of 12% in the last three months.
The BoE said it would return to its plan to sell bonds and its launch was only postponed until the end of October.
Kwarteng’s plans for deep tax cuts and deregulation to snap the economy out of a long period of stagnation were seen as a return to Thatcherite and Reaganomics doctrines of the 1980s.
But they have caused panic among some investors and disquiet among many lawmakers of the ruling Conservative Party.
RESTORE ORDER
On Monday the BoE said it would not hesitate to raise interest rates and was monitoring markets “very closely”. On Tuesday its Chief Economist Huw Pill said the central bank was likely to deliver a “significant” rate increase when it meets next in November.
But the slide in bond prices continued unabated on Wednesday, prompting the BoE to make its move.
“The purpose of these purchases will be to restore orderly market conditions,” it said. “The purchases will be carried out on whatever scale is necessary to effect this outcome.”
Officials in international governments and financial institutions have started to go public with their criticism of UK policy.
In a rare intervention over a G7 country, the International Monetary Fund urged Truss to reverse course. read more
Ratings agency Moody’s said the policy risked structurally higher funding costs that would be “credit negative” for Britain. read more
Spain’s Economy Minister Nadia Calvino was more blunt, calling the policy a disaster and Ray Dalio, co-chief investment officer of the world’s largest hedge fund Bridgewater Associates, said he could not believe London’s mistakes.
“The panic selling you are now seeing that is leading to the plunge of UK bonds, currency, and financial assets is due to the recognition that the big supply of debt that will have to be sold by the government is much too much for the demand,” Dalio said on Twitter.
Julian Jessop, an economist who provided informal advice to Truss during her leadership campaign, said the economy was at risk of falling into a “doom loop”. read more
MARKET FRENZY
So far the government has refused to budge.
Kwarteng, an economic historian who was business minister for two years and a free-marketeer by conviction, has insisted that tax cuts for the wealthy alongside support for energy prices are the only way to reignite long-term economic growth.
He has said he will publish a medium-term debt-cutting plan on Nov. 23, which the IMF described as an “early opportunity for the UK government to consider ways to provide support that is more targeted and re-evaluate the tax measures, especially those that benefit high-income earners”.
The frenzy in markets and the ensuing alarm in the ruling Conservative Party will put huge pressure on Kwarteng and Truss. She was elected by the party’s roughly 170,000 members, not the broader electorate.
Conservative lawmaker Simon Hoare, who backed Truss’s rival Rishi Sunak for the leadership of the party, pointed the finger of blame at the government and Treasury for the policies that sparked the market rout.
“They were authored there. This inept madness cannot go on,” he said.
One area of immediate concern for politicians is the mortgage market, after lenders pulled record numbers of offers and anecdotal reports suggested people were struggling to either complete or change mortgage deals.
A slump in the housing market would mark a major shock in a country where rising house prices have for years conveyed a sense of overall affluence, and where home buyers have got used to more than a decade of rock-bottom interest rates.
The intervention of the IMF holds symbolic importance in Britain: its bailout in 1976 following a balance-of-payments crisis forced huge spending cuts and has long been regarded as a humiliating low point in the country’s modern economic history.
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Writing by Kate Holton; Additional reporting by William James, Dhara Ranasinghe, David Milliken, Sachin Ravikumar, Paul Sandle, Muvija M and William Schomberg in London and Emma Pinedo Gonzalez in Madrid; Editing by Alex Richardson, Catherine Evans, Toby Chopra and William Schomberg
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Russia slips into default zone as payment deadline expires
The clock on Spasskaya tower showing the time at noon, is pictured next to Moscow?s Kremlin, and St. Basil?s Cathedral, March 31, 2020. REUTERS/Maxim Shemetov
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LONDON, June 27 (Reuters) – Russia looked set for its first sovereign default in decades as some bondholders said they had not received overdue interest on Monday following the expiry of a key payment deadline a day earlier.
Russia has struggled to keep up payments on $40 billion of outstanding bonds since its invasion of Ukraine on Feb. 24, as sweeping sanctions have effectively cut the country off from the global financial system and rendered its assets untouchable to many investors.
The Kremlin has repeatedly said there are no grounds for Russia to default but it is unable to send money to bondholders because of sanctions, accusing the West of trying to drive it into an artificial default.
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Russia’s efforts to avoid what would be its first major default on international bonds since the Bolshevik revolution more than a century ago hit a insurmountable roadblock in late May when the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) effectively blocked Moscow from making payments.
“Since March we thought that a Russian default is probably inevitable, and the question was just when,” Dennis Hranitzky, head of sovereign litigation at law firm Quinn Emanuel, told Reuters. “OFAC has intervened to answer that question for us, and the default is now upon us.”
While a formal default would be largely symbolic given Russia cannot borrow internationally at the moment and doesn’t need to thanks to plentiful oil and gas export revenues, the stigma would probably raise its borrowing costs in future.
The payments in question are $100 million in interest on two bonds, one denominated in U.S. dollars and another in euros , Russia was due to pay on May 27. The payments had a grace period of 30 days, which expired on Sunday.
Russia’s finance ministry said it made the payments to its onshore National Settlement Depository (NSD) in euros and dollars, adding it has fulfilled obligations.
Some Taiwanese holders of the bonds had not received payments on Monday, sources told Reuters. read more
For many bondholders, not receiving the money owed in time into their accounts constitutes a default.
With no exact deadline specified in the prospectus, lawyers say Russia might have until the end of the following business day to pay the bondholders.
SMALL PRINT
The legal situation surrounding the bonds looks complex.
Russia’s bonds have been issued with an unusual variety of terms, and an increasing level of ambiguities for those sold more recently, when Moscow was already facing sanctions over its annexation of Crimea in 2014 and a poisoning incident in Britain in 2018.
Rodrigo Olivares-Caminal, chair in banking and finance law at Queen Mary University in London, said clarity was needed on what constituted a discharge for Russia on its obligation, or the difference between receiving and recovering payments.
“All these issues are subject to interpretation by a court of law, but Russia has not waived any of its sovereign immunity and has not submitted to the jurisdiction of any court in any of the two prospectuses,” Olivares-Caminal told Reuters.
In some ways, Russia is in default already.
A committee on derivatives has ruled a “credit event” had occurred on some of its securities, which triggered a payout on some of Russia’s credit default swaps – instruments used by investors to insure exposure to debt against default. This was triggered by Russia failing to make a $1.9 million payment in accrued interest on a payment that had been due in early April. read more
Until the Ukraine invasion, a sovereign default had seemed unthinkable, with Russia being rated investment grade up to shortly before that point. A default would also be unusual as Moscow has the funds to service its debt.
The OFAC had issued a temporary waiver, known as a general licence 9A, in early March to allow Moscow to keep paying investors. It let it expire on May 25 as Washington tightened sanctions on Russia, effectively cutting off payments to U.S. investors and entities.
The lapsed OFAC licence is not the only obstacle Russia faces as in early June the European Union imposed sanctions on the NSD, Russia’s appointed agent for its Eurobonds. read more
Moscow has scrambled in recent days to find ways of dealing with upcoming payments and avoid a default.
President Vladimir Putin signed a decree last Wednesday to launch temporary procedures and give the government 10 days to choose banks to handle payments under a new scheme, suggesting Russia will consider its debt obligations fulfilled when it pays bondholders in roubles.
“Russia saying it’s complying with obligations under the terms of the bond is not the whole story,” Zia Ullah, partner and head of corporate crime and investigations at law firm Eversheds Sutherland told Reuters.
“If you as an investor are not satisfied, for instance, if you know the money is stuck in an escrow account, which effectively would be the practical impact of what Russia is saying, the answer would be, until you discharge the obligation, you have not satisfied the conditions of the bond.”
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Reporting by Karin Strohecker; Additional reporting by Emily Chan in Taipeh and Sujata Rao in London; Editing by David Holmes, Emelia Sithole-Matarise & Simon Cameron-Moore
Our Standards: The Thomson Reuters Trust Principles.
The Inside Story Of This Year’s Biggest Video Game Release*
In 2015 mega-publisher Electronic Soft released the blockbuster game BloodDeath: DeathBlood, a sequel to 2009’s wildly successful BloodDeath. It would mark the end of both the series and its development studio, but it is not the end of their story.
* Note: If you never caught the original, this is a sequel to a fictional story called “How A Video Game Is Released In 2015″.
Some things in this industry are too big to fail, and so while the key figures responsible for the BloodDeath games would soon leave Electronic Soft, it wouldn’t be long until they were back in the headlines for all the right (and wrong) reasons. What follows is their story.
2016
APRIL: A number of senior developers responsible for the BloodDeath series announce that they have formed a new studio, The Establishment. They claim to have learned a number of valuable lessons from their time with Electronic Soft, with an expensive launch documentary proclaiming “we’re not here to make the same mistakes”. The team say their studio will be focused on quality, pride themselves on a lack of interference from an outside publisher, and most importantly will have a strong focus on positive working conditions, with a promise of “no crunch”.
The “About” page on The Establishment’s website shows the studio is initially comprised of 13 white men, all in their 40s.
AUGUST: The Establishment’s first game, KillBood, is announced on Kickstarter, with an initial goal of raising $2 million. Billed by the team as a spiritual successor to BloodDeath, within 23 minutes it has raised over $14 million. Promising an outrageously ambitious set of features, and an “evolving experience we alone are free to tell”, it looks to its millions of backers like the perfect video game.
NOVEMBER: Despite going on to raise over $30 million from fans, The Establishment announce they have signed a major publishing deal with AAAA Games, Electronic Soft’s main rival. It is not made clear what will happen to the crowd-funded money now that they have a partnership with a major global publisher, or what this means for a project that had been sold initially as an experiment free from publisher interference.
2017
MARCH: KillBlood’s Kickstarter page has been updated only once since the campaign’s launch almost a year ago, mentioning that “things are progressing well”, that the team is “actively hiring” for extra positions and that while it’s too early to show anything from the game, fans should rest assured that the project is “looking incredible”.
2018
FEBRUARY: KillBlood is cancelled, with all backers refunded their money. The Establishment simultaneously announce that they have begun work on a major new project with AAAA Games.
2019
JANUARY: Despite promising they had learned their lessons from Electronic Soft’s large and cumbersome studio model, The Establishment—initially based in Montreal—announce the opening of a second studio in Austin to assist in the development of their mystery, unannounced game. They also open a third, in Singapore, mostly for outsourcing work made under horrendous working conditions for rock-bottom prices, but don’t publicise that one as much.
DECEMBER: At The Game Awards, The Establishment steal the show with the announcement of Iron Steel, an action RPG billed as a “true spiritual successor” to BloodDeath, which will be published by AAAA Games. “We want to give fans of BloodDeath what they want”, a representative says on-stage, “and what they want is more BloodDeath”. After an explosive trailer, the crowd erupts. It instantly becomes the most-anticipated release of 2020.
Conceived and developed as a next-gen release (though also coming to PC), AAAA Games executives have insisted on a last-gen console release as well.
2020
March: With Iron Steel still early in development, a global pandemic hits. The Establishment’s offices in Montreal, Austin and Singapore are all closed, with developers sent home to spend the next 18 months working remotely. Having already failed to meet every internal milestone set by AAAA Games, it is estimated these fresh challenges will almost double the time required to finish the game, and result in years of disjointed development, culminating in repeated cycles of brutal crunch. The Establishment’s studio launch video, which proudly claimed “we’re not going to make the same mistakes”, is quietly removed from the company’s site.
May: AAAA Games executives, worried that the game doesn’t have a long-term plan to generate revenue beyond “selling copies”, meet with The Establishment’s management to ensure Iron Steel includes both a multiplayer battle royale mode (for which they can sell skins) and a loot box system (for legal and unregulated gambling).
June: With new, next-gen consoles only a few months away, Iron Steel is the star of a PlayStation 5 pre-release media event, and is surprisingly announced as a launch title by the AAAA Games marketing team. The game’s actual developers, meanwhile, know it is at least another 2-3 years away from being even remotely ready.
OCTOBER: Just weeks before the PlayStation 5 and Xbox Series X’s planned releases, it is unsurprisingly announced that Iron Steel has been delayed into 2021. After posting about the delay, The Establishment’s social media team is flooded with death threats, forcing them to temporarily lock their accounts.
2021
JANUARY: Two separate investigations by video game news websites accuse several senior employees of The Establishment of misconduct during their time at Electronic Soft. One resigns and a second is fired, the latter almost immediately launching a YouTube channel called “Tread On Me”, which covers everything from men’s rights to anti-vaccine tirades to 37-minute long critiques of women in superhero films.
MAY: An online showcase designed to give fans and media their first look at Iron Steel’s gameplay is impressive, but also raises a few questions, with concerns that new additions to the game—like only being able to get new helmets from “Loote Chests” and a bizarrely ill-fitting battle royale multiplayer mode—are diluting the DeathBlood experience. In a staged interview with an overly-enthusiastic content creator, a representative from The Establishment says Iron Steel will be out in time for the holiday season.
JULY: A short presentation of Iron Steel’s character creation suite is shown as part of a larger Xbox presentation, and immediately hits the headlines. It shows that of the 17 skin tones available to players 15 are white, with the other two being “black” and “green”. The single black character skin is locked to a poorly- modelled afro haircut.
NOVEMBER: Four weeks before the game’s planned launch, AAAA Games drop a press release at 11:59pm on a Friday night saying that the game has been delayed into “Early 2022″. No reason is publicly given for the delay. Privately, The Establishment know that despite working around the clock, the game is still years away from being ready. To placate fans, a multiplayer beta is announced for January 2022.
DECEMBER: A surprise cinematic trailer for the game reveals a carefully guarded secret: unlike previous Blood games, which only featured a lone male protagonist (in this case Sir Henry Goreston), Iron Steel features a second playable character with her own unique storyline: Lady Rose. After posting some concept art of the new character to the company’s social media accounts, and mentioning how proud the team are to be able to expand the series like this, The Establishment’s community manager is subsequently harassed on Twitter by gamers, right-wing talk show hosts and two Republican congressmen who have never played a Blood game, but have nevertheless been briefed that this move is “woke”.
A week later, both Iron Steel characters are released as downloadable skins for Fortnite. Fans are starting to get excited.
2022
JANUARY: The battle royale multiplayer beta is a disaster. The game’s performance borders on unplayable. Maps are empty, weapons are unbalanced and new characters introduced for the mode prove wildly unpopular. Fans are vocal with their displeasure through official beta feedback channels, but also in wider online communities. The Establishment thank all players for their input, and promise to make necessary changes, knowing full well there isn’t any time or money left to change a thing.
MARCH: The first specific details of the game’s Loote Chest economy are released. AAAA Games has partnered with a blockchain marketplace to sell weapons and armour as NFTs, which the publisher says they’re doing after “listening to our fans”. They are met with an immediate firestorm of protest before backing out of the deal 24 hours later, saying their reversal was a result of “listening to our fans”.
APRIL: Iron Steel’s social media accounts joke that the game is “destined” for a final release date. It will be out in September. No more delays.
Investigating the game’s numerous delays, a report from a major news website accuses The Establishment’s management of cultivating a “culture of neglect”, with rampant crunch and staff turnover. Senior leadership deny these allegations strenuously, even when dozens more employees come forward throughout the month to support the claims in subsequent stories.
AUGUST: By every internal metric Iron Steel is nowhere near being ready, but it doesn’t matter. AAAA Games leadership, desperate for a boost to their annual profits, have by now decided that the game is finally “finished”. The world’s largest video game website receives a copy of the game four weeks ahead of release, for which they run a preview, a second preview and then an early review. Other websites and popular streamers receive code two weeks before release. The websites investigating The Establishment’s staffing and misconduct allegations do not receive copies.
SEPTEMBER: The game is released, and on the strength of its trailers and marketing has already sold millions of copies from preorders alone. It quickly sells millions more. Iron Steel receives mixed reviews from major outlets, however, with some sites praising its ambition and drive to expand on the now-tired BloodDeath formula with Lady Rose’s new mechanics and alternate storyline. Most are highly critical of its practically unfinished state, however, citing hollow sound effects, disjointed cutscenes and half-implemented features. Performance is also an issue for many, with the PC version crippled by bugs and the last-gen console editions hovering between 9-18fps.
The one thing everyone agrees on, though, is that the multiplayer mode is a waste of time.
SEPTEMBER: In some good news for over-worked developers at The Establishment, despite its overall mixed reception Iron Steel easily hits the Metacritic bonus threshold outlined in their contracts. With most major websites critical of the game having dropped review scores entirely, it’s left to outlets like “GamerSnatch” (97/100) and “SEO Bandits” (99/100) to pad the average and bring in bonus cheques for the creators of the game.
A mobile spin-off is released. It contains all of the main game’s Loote Chests, and almost none of its gameplay.
OCTOBER: A series of urgent patches fail to fix the game’s performance issues on console. They do, however, manage to introduce a stricter and more expensive economy for the game’s reworked Loote Chests.
Despite growing discontent among fans—with the game’s Steam reviews in particular having been bombed to hell and back thanks to its various performance woes— Iron Steel has now sold so many copies that it has become the most successful launch in AAAA Games history.
NOVEMBER: An internal, post-release review conducted by The Establishment finds that the global pandemic had a monumental effect on Iron Steel’s development. The disruptions it caused to workflow, planning, communication and testing were unprecedented, and were identified as being the main culprits for most if not all of the game’s major shortcomings. Allegations of a “culture of neglect” are not mentioned. None of this, or the pressures placed on the team by AAAA Games management, is ever communicated to the public, who continue to attack the “lazy” developers for their “stupid mistakes”.
Reviews on Glassdoor from a rapidly-growing number of former employees begin to reveal the scale of the game’s troubled development, making public the endless cycles of crunch brought on by publisher insistence and poor studio management.
DECEMBER: Continued strong sales mean Iron Steel is now the most successful game in AAAA Games history, bringing in millions for the publisher’s shareholders and executives. It has, however, failed to meet internal sales targets. Tentative plans for a sequel—AAAA Games own the Iron Steel IP, of course—are thus cancelled, leaving The Establishment free to pursue a new publishing deal.
They are courted by Tencent, Amazon, Google and former publishers Electronic Soft. Faced with this uncertain and internally unpopular future, many senior developers quit to form a new company, promising in a launch blog that “we’re not here to make the same mistakes”…
Big thanks to Dimitrije Miljus, Vladimir Manyukhin and Lou LL for allowing us to use their artwork for this piece!
Record gas prices for this long ‘unprecedented’: AAA
Rep. Michelle Steel, R-Calif., discusses the impacts of record-high gas prices.
Gas prices have been hitting fresh records for the past 11 consecutive days amid the energy supply crunch in the U.S., according to the American Automobile Association (AAA), which noted that the stretch of record-high prices as the pump is “unprecedented.”
Speaking with Fox News Digital, Andrew Gross, the national spokesman for AAA Inc. revealed that drivers should expect elevated prices throughout the summer, especially if the war in Ukraine rages on.
The national average for a gallon of gas was $4.59 on Friday, a slight increase from the day before and a new record high.
Thursday’s record was 16 cents higher than the week before, nearly 50 cents higher than the month before and $1.55 more compared to the same time last year.
All 50 states had a national retail price over $4 a gallon on Thursday, according to AAA, with Oklahoma offering the cheapest gas at $4.03 a gallon and California offering the most expensive gas with an average of $6.06.
Tighter supply and increased demand have pushed gas prices higher, according to the association.
“Demand is up,” Gross told Fox News Digital as he explained what is contributing to the elevated prices.
“Typically this time of year we are in a little bit of a lull. There is often a demand lull between spring break and Memorial Day and we had a little bit of it about two weeks ago, but then last week, … there was actually an increase, which is very unusual. I don’t think I’ve ever seen that.”
GAS PRICES REACH NEW RECORD HIGH AS GOP SENATORS BLAME BIDEN FOR HOLDING PRODUCTION BACK
“You have this increased demand as well as these really elevated oil prices,” he added, pointing out that “the price of oil has been stuck in this weird range of $100 a barrel to $110 a barrel.”
“It meets resistance when it hits $110 and then it drops back down, but then it meets resistance to drop below $100 and so it’s in this uncomfortably high area,” Gross continued.
Oil prices fell on Friday as investors worried that slowing global economic growth and tighter central bank monetary policy could impact the recovery in fuel demand.
Brent futures for July fell 59 cents to $111.45 a barrel Friday morning, while benchmark U.S. crude for June fell 56 cents to $111.65 on its last day as the front-month.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| USO | UNITED STATES OIL FUND L.P. | 80.58 | +1.29 | +1.63% |
| BNO | UNITED STS BRENT OIL FD LP UNIT | 31.86 | +0.57 | +1.82% |
Oil prices peaked above $130 per barrel in March due to anxiety about the disruption of supplies from Russia, the world’s No. 2 exporter.
“To put it in perspective, back in August, a barrel of oil was about $64 so we’re $40 plus more and that’s putting a lot of upward pressure because oil accounts for about 60% of the cost of what you pay at the pump, so the more expensive the oil, the more expensive the gasoline,” Gross noted.
AAA said that the volatile crude prices coupled with the supply/demand dynamic will likely continue to keep upward pressure on gas prices.
“The oil market is a lot like the stock market and we’ve seen the stock market all over the place,” Gross said.
“It is crazy and the oil market operates the same way,” he added, pointing to the wild swings in markets recently. “It’s so volatile right now and it’s very headline driven. It doesn’t take much to spook the oil market.”
He noted that “a lot of the downward pressure recently in the oil market was due to COVID and all these fears in China about China locking down because any kind of economic slowdown in China really effects oil because China is really the world’s largest consumer of oil.”
“So if they start consuming less, that’s more oil for everybody else,” Gross continued.
Officials have stuck to a “zero-COVID” approach in China, but as the number of new cases plummets, authorities have been relaxing restrictions, however, in a slow and deliberate manner.
On Thursday officials announced the locked-down Chinese metropolis of Shanghai will reopen four of its 20 subway lines and dozens of bus lines this weekend as the region slowly eases pandemic restrictions that have been in effect for more than six weeks.
Fox News contributor and The King’s College business and economics professor Brian Brenberg argues the Biden administration is making it hard to produce U.S. oil.
Gross also pointed to the Russian invasion of Ukraine as “the prime generator for all these upward prices because the war has just injected all this weird volatility into the market.”
He explained that “there’s going to be a lot less Russian oil coming into the global market” as a result of the war and stressed that Russian oil “is hard to replace” given the country is a major producer of the commodity.
The record gas prices come as the European Union edges toward oil sanctions on Russia amid the Kremlin’s invasion of Ukraine. It also comes amid record-high inflation, with the consumer price index reaching 8.3% in April, hovering near March’s 40-year high.
GAS PRICES WILL SURPASS $6 NATIONWIDE BY AUGUST, JPMORGAN SAYS
The European Commission, the EU’s executive branch, proposed on May 4 a sixth package of war sanctions that included a ban on oil imports from Russia. The commission’s president noted that securing the agreement of all “will not be easy.”
On Monday, a small group of countries continued to oppose the ban on Russian oil imports.
The White House has blamed Russian President Vladimir Putin for the record-high gas prices in the U.S., even coining the surge as the “#PutinPriceHike” and vowing that President Biden will do everything he can to shield Americans from “pain at the pump.”
Gas prices have been hitting fresh records for the past 11 consecutive days, according to the American Automobile Association. (iStock / iStock)
Biden, last month, announced that the Environmental Protection Agency will allow the sale of E15 gasoline – gasoline that uses a 15% ethanol blend – across the country this summer. Biden has also moved to release 1 million barrels of oil per day from the Strategic Petroleum Reserve for the next 6 months. The president is also calling on Congress to make companies pay fees on idled oil wells and non-producing acres of federal lands, aiming to incentivize new production.
Gross noted that administration’s moves will help “a little bit.”
“Driving habits haven’t seemed to change so that’s something to keep your eye on over the next few weeks and months,” he added. “With these higher prices, at what point will people decide I’m going to stay home or I’m going to ride a bike.”
“It’s really an interesting time right now,” he stressed.
“I think a lot of people are probably looking at electric vehicles a lot more seriously now,” Gross added.
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He also noted that Memorial Day weekend will still attract millions of drivers despite the higher gas prices.
AAA predicts 39.2 million people will travel 50 miles or more from home over the holiday weekend, which is an increase of 8.3% from 2021, but is still below pre-pandemic levels in 2019 when 42.8 million people traveled by car.
Gross explained that the high cost of gas is likely “pricing some travelers out.”
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FOX Business’ Tyler O’Neil and the Associated Press contributed to this report.
Russia to pay Eurobonds in roubles as long as reserves remain blocked
A view shows Russian rouble coins in this illustration picture taken March 25, 2021. REUTERS/Maxim Shemetov/Illustration/File Photo
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LONDON, April 6 (Reuters) – Russia edged closer to a potential default on its international debt on Wednesday as it paid dollar bondholders in roubles and said it would continue to do so as long as its foreign exchange reserves are blocked by sanctions.
The United States on Monday stopped Russia from paying holders of its sovereign debt more than $600 million from reserves held at U.S. banks, saying Moscow had to choose between draining its dollar reserves and default. read more
Russia has not defaulted on its external debt since reneging on payments due after the 1917 Bolshevik Revolution.
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“This speeds up the timeline around when Russia runs out of space on willingness and ability to pay,” one fund manager holding one of the bonds due for payment on Monday said.
The Kremlin said it would continue to pay its dues.
“Russia has all necessary resources to service its debts… If this blockade continues and payments aimed for servicing debts are blocked, it (future payment) could be made in roubles,” Kremlin spokesman Dmitry Peskov said.
With a total of 15 international bonds with a face value of around $40 billion outstanding, Moscow has managed to make a number of foreign exchange coupon payments on its Eurobonds before the United States stopped such transactions. read more
Russia’s finance ministry said on Wednesday it had to pay roubles to holders of its dollar-denominated Eurobonds maturing in 2022 and 2042 as a foreign bank had refused to process an order to pay $649 million to holders of its sovereign debt.
The finance ministry said the foreign bank, which it did not name, rejected Russia’s order to pay coupons on the two bonds and also did not process payment of a Eurobond maturing in 2022.
Russia’s ability to fulfil its debt obligations is in focus after sweeping sanctions in response to what Moscow calls “a special military operation” in Ukraine have frozen nearly half of its reserves and limited access to global payment systems.
‘ARTIFICIAL SITUATION’
JP Morgan, which had been processing payments on Russian sovereign bonds as a correspondent bank, was stopped by the U.S. Treasury from doing for the two payments due on Monday, a source familiar with the situation said. read more
JP Morgan (JPM.N) declined to comment.
Russia may consider allowing foreign holders of its 2022 and 2042 Eurobonds to convert rouble payments into foreign currencies once access to its forex accounts is restored, the finance ministry said.
Until then, a rouble equivalent of Eurobond payments aimed at bondholders from so-called unfriendly nations will be kept in special ‘C’ type accounts at Russia’s National Settlement Depository, the ministry added.
Russia has a 30-day grace period to make the dollar payment, but if the cash does not show up in bondholders account within that time frame it would constitute a default, global rating agencies have said.
Russia dismissed this as being a default situation.
“In theory, a default situation could be created but this would be a purely artificial situation,” Peskov said. “There are no grounds for a real default.”
Bondholders had been tracking bond payments since sweeping sanctions and counter measures from Moscow which have severed Russia from the global financial system.
Russia on Wednesday paid coupons on four OFZ treasury rouble bonds. These were once popular for their high yields among foreign investors, who are now blocked from receiving payments as a result of sanctions and Russian retaliation.
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Reporting by Reuters; Editing by Mark Potter, Hugh Lawson and Alexander Smith
Our Standards: The Thomson Reuters Trust Principles.
Four weeks of war scar Russia’s economy
Russian Rouble coin is seen on a broken glass and displayed on the Russian flag in this illustration taken, February 24, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
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LONDON, March 25 (Reuters) – Russia’s invasion of Ukraine on Feb. 24 sparked sweeping sanctions that ripped the country out of the global financial fabric and sent its economy reeling.
A month on, Russia’s currency has lost a large part of its value and its bonds and stocks have been ejected from indexes. Its people are experiencing economic pain that is likely to last for years to come.
Below are five charts showing how the past month has changed Russia’s economy and its global standing:
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ECONOMIC PAIN
In 2020, Russia was the world’s 11th-largest economy, according to the World Bank. But by the end of this year, it may rank no higher than No. 15, based on the end-February rouble exchange rate, according to Jim O’Neill, the former Goldman Sachs economist who coined the BRIC acronym to describe the four big emerging economies Brazil, Russia, India and China.
Recession looks inevitable. Economists polled by the central bank predicted an 8% contraction this year and for inflation to reach 20%. read more
Forecasts from economists outside Russia are even gloomier. The Institute of International Finance predicts a 15% contraction in 2022, followed by a 3% contraction in 2023.
“Altogether, our projections mean that current developments are set to wipe out the economic gains of roughly fifteen years,” the IIF said in a note.
INFLATION BUSTING TURNS TO DUST
Since taking office in 2013, central bank governor Elvira Nabiullina’s biggest triumph was curbing inflation from 17% in 2015 to just above 2% in early-2018. As price pressures rose in the post-pandemic months, she defied industrialists by raising interest rates eight months straight.
Nabiullina also resisted calls in 2014-2015 for capital controls to stem outflows following the annexation of Crimea.
But those achievements have been torn to shreds in less than a month.
Annual price growth has accelerated to 14.5% and should surpass 20%, five times the target. Households’ inflation expectations for the year ahead are above 18%, an 11-year high.
While panic-buying accounts for some of this, rouble weakness may keep price pressures elevated read more .
With Russia’s reserves warchest frozen overseas, Nabiullina was forced to more than double interest rates on Feb. 28 and introduce capital controls. The central bank now expects inflation back at target only in 2024.
INDEX ELIMINATION
Sanctions are forcing index providers to eject Russia from benchmarks used by investors to funnel billions of dollars into emerging markets.
JPMorgan (.JPMEGDR) and MSCI are among those that have announced they are removing Russia from their bond and stock indexes respectively (.MSCIEF).
Russia’s standing in these indexes had already taken a hit following the first set of Western sanctions in 2014 and then in 2018, following the poisoning of a former Russian spy in Britain and investigations into alleged Russian meddling in the 2016 U.S. elections.
On March 31, Russia’s weighting will be dialled to zero by nearly all major index providers.
RATINGS RUPTURE
When Russian troops stormed into Ukraine, their country had a coveted “investment grade” credit rating with the three major agencies S&P Global, Moody’s and Fitch.
That allowed it to borrow relatively cheaply and a sovereign debt default appeared a distant prospect.
In the past four weeks, Russia has suffered the largest cuts ever made to a sovereign credit score. It is now at the bottom of the ratings ladder, flagging an imminent risk of default.
ROUBLE TROUBLE
A month ago, the rouble’s one-year average exchange rate sat at 74 per dollar. Trading on different platforms showed the ample liquidity and tight bid/ask spreads expected for a major emerging market currency.
All that has changed. With the central bank bereft of a large portion of it hard currency reserves, the rouble plunged to record lows of more than 120 per dollar locally. In offshore trade it fell as low as 160 to the greenback.
As liquidity dried up and bid/ask spreads widened, pricing the rouble has become haphazard. The exchange rate is yet to find a balance on- and offshore.
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Reporting by Karin Strohecker, Sujata Rao, Rodrigo Campos and Marc Jones; Editing by Sam Holmes
Our Standards: The Thomson Reuters Trust Principles.
EXCLUSIVE Clients plead with top custodian banks to stay in Russia
LONDON/NEW YORK, March 23 (Reuters) – Global banks including Citigroup Inc (C.N), JPMorgan Chase & Co (JPM.N) and Societe Generale (SOGN.PA) face pressure to commit to remaining as custodian banks in Russia, as rivals and funds fret they may lose services critical to future investment in the country.
Traders, bankers and executives from three other financial institutions told Reuters they were seeking or had sought reassurances on behalf of clients on each bank’s long-term plans for these businesses, which clear, settle and safeguard billions of dollars of Russian holdings.
Custodian banks have departments that look after assets for clients in return for fees.
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One London-based banking source, speaking anonymously to respect confidentiality of their large global fund client, said they were in weekly contact with senior executives at Citibank Moscow on the status of their custodian business.
The source said their client was waiting to trade Russian equities when the Moscow Exchange (MOEX) reopens, but they needed the reassurance of having a Western custodian in place.
According to the source, the Citigroup executives said they would serve clients for as long as sanctions permitted.
A source with knowledge of Citi said that major U.S. and international businesses in Moscow use that bank and cutting those customers off would damage client relations. Other bankers said it is crucial to the industry that Citi, a key player, keep operating in Moscow.
Citigroup declined to comment.
A second banker, based in New York, said he had sought assurances from SocGen that they would “stay on the ground” so that his bank could meet custody obligations to clients. Executives at SocGen provided assurances that they would, at least in the near term, the source said.
Citigroup and SocGen, the French parent of Rosbank (ROSB.MM), have already announced plans to dramatically pare operations in Moscow as part of a sweeping programme of Western sanctions aimed at isolating Russia economically following its invasion of Ukraine. read more
Both banks have said they will aid their clients with the complex tasks of unwinding or reducing exposures to Russia, and said withdrawals will take time to execute.
But neither has made a public statement on the long-term status of their custodian services, leaving some clients nervous for the future.
In an emailed statement, a spokeswoman for SocGen said the group was “conducting its business in Russia with the utmost caution and selectivity, while supporting its historical clients.”
SocGen “is rigorously complying with all applicable laws and regulations and is diligently implementing the necessary measures to strictly enforce international sanctions as soon as they are made public.”
The bank declined to comment specifically on its custody business in Russia.
JPMorgan Chase & Co (JPM.N) also provides similar custody services from its Moscow outpost. The bank has received queries from clients seeking assurances that custody services will continue to be provided, according to a source familiar with the matter. It has previously said it will continue acting as a custodian to its clients.
Bank of New York Mellon Corp (BK.N) has also said it will continue to provide custodian services in Russia.
SHUT OUT
If banks decide to mothball their custody services in Moscow, many Western investors already holding Russian stocks or bonds would have to look elsewhere for a bank to hold those assets, while others keen to exploit a financial market or economic rally when sanctions are lifted could find it harder to pursue those plans.
SocGen, France’s third-largest bank, warned stakeholders on March 3 that it could be stripped of its property rights to its business in Russia in a “potential extreme scenario.” read more
Citi, meanwhile, originally said it would operate its Russian business on a more “limited basis” in the wake of the war, which President Vladimir Putin has called “a special military operation.”
But by March 14, it said it would accelerate and expand the scope of that retreat by giving up its institutional and wealth management clients in Russia. read more
Besides transaction services, many of the Moscow-based custody teams are providing add-ons like language translation of central bank documents that are also highly valued by Western clients, the source said.
Russia’s central bank said separately on Wednesday that some stock market trading would resume on Thursday, with 33 securities set to be traded on the Moscow Exchange for a limited period of time and with short selling banned. read more
The challenge for banks in meeting obligations to clients in Russia is getting tougher, and might become even more daunting if sanctions are tightened, with the one-month anniversary of the invasion falling this week.
Russia laid down strict new rules for foreigners seeking permits to buy and sell Russian assets ranging from securities to real estate. read more
Another New York-based banker described the business of ensuring clients are in compliance with sanctions in relation to securities holdings as a “logistical nightmare” and said his firm had hired 20 new compliance staff in recent weeks.
Global companies, banks and investors have so far disclosed nearly $135 billion in exposure to Russia, company statements show. read more
U.S. asset managers including Vanguard and Capital Group Companies Inc, which manages the American Funds franchise popular among millions of mom and pop retirement savers, have also disclosed large exposures topping billions of dollars, according to the most recent portfolio information available. read more
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Reporting by Sinead Cruise in London, and Matt Scuffham and Megan Davies in New York
Additional reporting by Paritosh Bansal in New York
Editing by Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles.