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      Oil Prices Rise as the West Imposes a Cap on Russian Crude

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      Energy traders pushed crude prices higher on Monday following Europe’s embargo of seaborne Russian crude and a price cap by Group of 7 nations went into effect.Will Russia find buyers for its crude?Sergei Karpukhin/ReutersOil prices climb despite efforts to cap Russian exports Crude oil prices rose this morning after a whirlwind of events that could drastically alter the supply and pricing of energy this winter.An E.U. embargo on Russia’s seaborne oil imports went into effect on Monday, following a decision on Sunday by OPEC producers and Russia to keep production quotas unchanged. Those developments, together with an agreement on Friday by Group of 7 nations to impose a $60 price cap on Russian crude and the emergence of more signs that China is easing its Covid restrictions, set off a modest buying spree among energy traders.By 6 a.m. Eastern, Brent crude, the global benchmark, climbed 2.7 percent, topping $87 per barrel, and West Texas Intermediate was above $82 a barrel.Crude prices have whipsawed since Russia’s invasion of Ukraine in February, rocketing above $100 per barrel in the spring, only to fall over the summer on fears of a global recession. A slowdown in China in particular had capped demand, but prices have remained volatile.Analysts have been scrutinizing fallout from the oil price cap, a move designed to punish Russia for the war in Ukraine — but also meant to avoid significant distortions in the energy markets that would force consumers and businesses to pay even higher prices for fuel.Unsurprisingly, Moscow said this weekend that it wouldn’t accept the Western price cap, and that it would cut sales to countries that participate in the arrangement. How much of an effect that will have is unclear: Even before Monday, European countries have systematically reduced their Russian crude purchases since the start of the war in Ukraine — only for China to step in and buy more oil, often at a discount. But in recent weeks, China has paused some purchases as it waited for details of the price cap to be announced.Helima Croft, the head of global commodity strategy at RBC Capital Markets, warned in an investor note this weekend that prices could be even more volatile in the weeks ahead as traders watch for signs that Russia could fully cut off oil exports to former trading partners in retaliation for the price cap.HERE’S WHAT’S HAPPENING Chinese cities ease zero-Covid restrictions. Shenzhen and Shanghai were the latest big cities to scrap requirements like testing before traveling on public transport, following widespread protests against Beijing’s tough pandemic rules. Shares in Hong Kong and Shanghai jumped amid investor hopes of a broader easing of Chinese Covid restrictions, though analysts warned such a move would take time.Lachlan Murdoch is set to testify in a Fox News lawsuit on Monday. The C.E.O. of Fox will be deposed as part of a lawsuit against the network by Dominion Voting Systems. He is the highest-ranking executive to be ensnared in the lawsuit, in which Dominion argues it was defamed by Fox News anchors repeatedly amplifying false claims about the company’s voting machines in the 2020 election.Wall Street banks weigh cutting bonuses. Bank of America, Citigroup and JPMorgan Chase may cut bonus pools for investment bankers by as much as 30 percent, Bloomberg reports, amid a steep drop in M.& A. activity. That follows plans by Goldman Sachs to cut bonuses for its traders, even though their division posted strong results.Credit Suisse’s investment bank spinoff reportedly draws big new backers. Crown Prince Mohammed bin Salman of Saudi Arabia and a merchant bank run by the former Barclays C.E.O. Bob Diamond may invest in CS First Boston, which is set to be spun off from Credit Suisse, The Wall Street Journal reports. The spinoff is a key part of the Swiss bank’s planned revamp.Delta reaches a nearly $8 billion pay-raise deal with pilots. The agreement in principle would raise pilots’ pay by 31 percent over four years, as well as include a one-time payout. If finalized, the agreement will set a baseline for other airlines in their negotiations with pilots.Crypto’s false calm If this is the crypto apocalypse, investors see a buying opportunity. The price of Bitcoin is up nearly 7 percent, or almost $1,200, in the past week, to just under $17,400.But that market calm does not mean the crypto contagion is contained. The fallout from the collapse last month of Sam Bankman-Fried’s crypto exchange, FTX, has spread to other firms, setting off a wave of layoffs, lawsuits and investigations. Shareholders of Silvergate, the U.S. bank that processed payments and money transfers for FTX, sued the bank for negligence, calling the exchange a Ponzi scheme.Meanwhile, customers of Gemini, the crypto exchange owned by the Winklevoss twins, are owed as much as $900 million from Genesis, the crypto lender that has faced severe financial distress since FTX’s collapse, according to The Financial Times. And ByBit, a major crypto exchange, announced this weekend that it would cut 30 percent of its staff, the latest firm to cut its head count as digital asset prices sink.Here’s what else is happening in crypto:Mr. Bankman-Fried said on Sunday that he would be willing to testify before the House Financial Services Committee. The catch: S.B.F., as he is known, probably won’t be ready to speak with lawmakers in time for Dec. 13 hearings into the implosion of FTX.Mr. Bankman-Fried’s media tour shows no signs of slowing down. He told The Financial Times that he regretted giving Alameda Research, the trading affiliate of FTX, favorable borrowing limits.S.B.F.’s father, the Stanford law professor Joseph Bankman, has canceled a class he was set to teach next year. Bankman did work for FTX’s philanthropic efforts and is helping with his son’s legal defense.FTX’s bankruptcy has international regulators, including those in Cyprus, Turkey and the Bahamas, squabbling over the company’s assets, potentially complicating which customers get repaid and how much.Andrew Vara, the U.S. bankruptcy trustee for FTX’s case, called on the Delaware court to appoint an independent examiner into the exchange’s sudden collapse, saying there is substantial evidence to suggest that misconduct and fraud were involved.Even though calls for investigations are intensifying, that doesn’t mean Bankman-Fried’s arrest is imminent.On the light side: S.B.F., an eager player of the League of Legends video game, has been getting shade from the likes of Elon Musk and Representative Alexandria Ocasio-Cortez for being a mediocre player.Have normal times returned to Twitter? Elon Musk is still running Twitter, so naturally, there is still plenty of drama around the social network — notably in the billionaire owner’s decision to actively promote the release of internal documents about executives’ 2020 decision to restrict tweets linking to a news report about Hunter Biden.Despite that, it appears that some major advertisers are slowly returning to Twitter’s platform, after many hit pause following Musk’s promise to revamp how the site moderates user content.Amazon plans to resume buying ads on Twitter, to the tune of $100 million a year, according to Zoë Schiffer of Platformer. Although the e-commerce giant, unlike others, had not quit its ad spending altogether since Musk’s takeover, it had paused some of its campaigns.Meanwhile, Mr. Musk said in a live audio event on Twitter over the weekend that Apple had “fully resumed” ad spending on the social network. The iPhone maker has long been one of the biggest ad purchasers on Twitter. Last week, Mr. Musk said that he had resolved a feud with Apple, chalking up the disagreements to a misunderstanding.That’s a rare bit of welcome news for Twitter’s business. The Times reported last week that the company had rapidly cut revenue projections, as U.S. ad sales continued to come in well below internal expectations. Advertisers have been alarmed by Mr. Musk’s pledges to lessen restrictions on user content, as well as a botched rollout of revamped verification badges that briefly let paying subscribers impersonate brands. Automakers like G.M. have also been concerned that Twitter could share their ad data with the Musk-owned Tesla, a key rival.Mr. Musk introduced a new bit of drama into Twitter over the weekend, when he touted the release of the so-called Twitter Files. The independent journalist Matt Taibbi — who famously called Goldman Sachs a “vampire squid” — published internal documents showing executives’ deliberations about how to handle dissemination of a New York Post story based on files from a laptop stolen from Hunter Biden.The move rankled some former Twitter executives, including the company’s former head of trust and safety, Yoel Roth, who said publicizing unredacted documents was “fundamentally unacceptable.” (Musk later conceded, “I think we should have excluded some email addresses.”)“It’s like a cake that was dropped on the table and it looks more or less fine, but inside it’s all blown up.” — Vladislav Inozemtsev, the Washington-based director of the Center for Post-Industrial Studies, a Russian research group, on the state of the Russian economy following sanctions and an exodus of Western firms.The week ahead Politics, inflation data and a trickle of earnings reports will be in focus this week. Here’s what to look for:Tomorrow: A key Senate seat is up for grabs in the Georgia runoff election. Early-voting tallies have smashed state records.Wednesday: New data on the health of the world’s two largest economies will be published, with U.S. consumer credit and China trade data scheduled for release.Thursday: Costco and Broadcom release quarterly results.Friday: The University of Michigan Consumer Sentiment Index and Producer Price Index data are set to come out. China will also release a fresh batch of inflation data.THE SPEED READ DealsOne of the Democratic commissioners at the F.T.C. reportedly favors a less-confrontational approach to Microsoft’s $69 billion takeover of Activision Blizzard, potentially undercutting efforts to block the deal. (New York Post)The private equity firm CVC is said to be weighing options, including a sale, of the computer accessories maker Razer, less than a year after buying the business. (Bloomberg)Assa Abloy will sell its Emtek and Yale security brands to Fortune Brands Home & Security for $800 million. (Reuters)PolicyMeta faces a trio of E.U. privacy fines that could exceed $2 billion, a record. (Politico)The European Commission’s president, Ursula von der Leyen, said that Europe needed to overhaul its public investment rules so its firms could better compete against American counterparts who receive Inflation Reduction Act funding. (FT)New Zealand plans to force Meta’s Facebook and Google to pay news publishers for the content hosted on their platforms, taking a cue from Australia and Canada. (WSJ)Best of the restIt’s not just Big Tech: Big media companies are cutting jobs, too. (WSJ)“Goblin mode,” an Elon Musk favorite, was named Oxford Languages’ 2022 word of the year. (NYT)Activision Blizzard game testers unanimously voted to form a union. (Reuters)“The 4-day week: does it actually work?” (FT)We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com. More

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      FTX’s Near-Collapse Batters the Crypto Industry

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      Prices of digital currencies have tumbled even after the exchange FTX announced a provisional lifeline by a top rival, Binance. A humbling downfall for Sam Bankman-Fried.Erika P. Rodriguez for The New York TimesA crypto giant’s fate is in doubtDevastation in the crypto market continued on Wednesday, after the giant crypto exchange Binance announced a bombshell deal to buy its embattled rival, FTX. (The deal excludes FTX’s American operations.) The entire market’s capitalization now stands at $900 billion, down from $3 trillion just one year ago, while major cryptocurrencies were down by double-digit percentages. The damage is largely contained within crypto; both the S&P 500 and the Nasdaq closed up yesterday.But investors fear that Binance won’t go through with the rescue plan, and that more pain awaits after their industry’s biggest Lehman-esque moment to date.What happened? Binance, an early investor in FTX turned rival, said over the weekend that it planned to sell its holdings in FTT, a token used for trading on FTX’s platform — a stunning move that cast doubt on the financial health of FTX and its trading arm, Alameda Research. The token’s value has plunged by roughly 80 percent in the past 36 hours to just under $5.Traders withdrew over $1.2 billion from FTX on Monday alone, according to the research firm Nansen. By Tuesday, FTX had stopped processing withdrawals; its chief executive, Sam Bankman-Fried, who was reportedly casting about for a financial lifeline from billionaires, finally turned to Binance for salvation.Binance has cemented its dominance over crypto. It was already the largest exchange worldwide for digital currencies and derivatives; FTX’s trading volumes in September were just a fraction of Binance’s. Its founder, Changpeng Zhao — widely known as CZ — showed off his power by effectively kneecapping FTX and then swooping in with a rescue. “This elevates Zhao as the most powerful player in crypto,” Ilan Solot of the derivatives trader Marex Solutions told The Financial Times.It’s a humbling downfall for Bankman-Fried, who in just three years rocketed from obscurity to become one of the best-known moguls in crypto, earning comparisons to Warren Buffett and J.P. Morgan. Months ago, Bankman-Fried sought to live up to the Morgan comparison, swooping in to bail out troubled crypto companies like Celsius and Voyager Digital (deals whose status is now unclear); he also became a frequent presence in Washington, calling for more regulation of the crypto industry, to the ire of CZ and other executives.At the beginning of the year, FTX was valued at $32 billion, backed by heavyweight investors like BlackRock, SoftBank and Tiger Global. (Investors said yesterday they were blindsided by the deal.) The 30-year-old Bankman-Fried — known in the crypto world as S.B.F. — was said to have a net worth of over $16 billion. But a document leaked to CoinDesk purportedly showed that FTX and Alameda, whose finances had long been murky, were highly illiquid and financially vulnerable.The crypto world fears other shoes will drop. Investors worry that CZ may yet pull out of his rescue deal: He noted on Tuesday that the transaction was nonbinding and subject to due diligence. Meanwhile, tokens associated with FTX, including Solana, have continued to plunge in value.Other crypto players sought to distance themselves from the FTX meltdown. Brian Armstrong of Coinbase, the biggest U.S.-focused exchange, said FTX’s troubles appeared to arise from “risky business practices” that his company doesn’t engage in. Still, Coinbase shares fell nearly 11 percent yesterday.And regulators say the news justifies more scrutiny of crypto companies. “This is a major market event for the digital asset sector,” said Joe Rotunda of the Texas State Securities Board Enforcement Division, which had already been investigating FTX.HERE’S WHAT’S HAPPENING Elon Musk sells billions more in Tesla stock to pay for his Twitter deal. He sold nearly $4 billion worth of shares in recent days, according to regulatory filings, bringing his total sales for the year to $36 billion. The electric carmaker’s shares were up slightly in premarket trading.The United Nations seeks to end “sham” corporate net-zero pledges. Companies that claim to be trying to cut carbon emissions but invest in fossil fuels should be shamed, António Guterres, the U.N. secretary general, said at COP27. Meanwhile, more rich countries pledged to pay poorer ones compensation for damage from climate change.Disney reports a jump in streaming losses. The media giant said its direct-to-consumer unit — including Disney+ — doubled its third-quarter losses from a year ago, to $1.5 billion. But Disney said the quarter was the “peak” for losses, and noted it had added 12 million new subscribers.TikTok lowers its worldwide revenue targets amid a spending slump. The video platform cut its sales goals by 20 percent after its advertising and e-commerce operations struggled, The Financial Times reports. TikTok also revamped its leadership in the United States.Adidas cuts its profit forecast after breaking from Kanye West. The warning from the sportswear giant came weeks after it ended its highly profitable collaboration with the rapper now known as Ye. Separately, Adidas named Bjorn Gulden, the former head of Puma, as its next C.E.O.The red wave that wasn’t Republicans haven’t quite had the night they expected. As of 7 a.m. Eastern, Republicans were 21 seats shy of retaking control of the House. But leadership of the Senate remains up in the air after the Democrats flipped a seat in Pennsylvania. Here are the big highlights so far:Pennsylvania: John Fetterman, the state’s Democratic lieutenant governor, beat Mehmet Oz in the closely watched Senate race. Political analysts now say Democrats need to win two of three hotly contested Senate races — in Georgia, Arizona and Nevada, all currently held by Democrats — to maintain power in the chamber.Georgia: The Senate contest looks like it’s headed for a runoff on Dec. 6, pitting the incumbent, Raphael Warnock, against his Republican challenger, Herschel Walker.Governor races: Voters backed high-profile incumbents, including Kathy Hochul, Democrat of New York; Greg Abbott, Republican of Texas; and Tony Evers, Democrat of Wisconsin.Ballot initiatives: Voters in Michigan approved making abortion access a right protected under the State Constitution. Those in Maryland and Missouri voted to legalize marijuana, though similar measures were rejected in Arkansas and North Dakota.A rough night for Donald Trump: Several candidates that he endorsed, including in Arizona, Georgia, Michigan and Pennsylvania, lost or were behind. And a potential rival for the 2024 Republican presidential nomination, Gov. Ron DeSantis of Florida, handily won re-election.Meta slices through its work forceFacebook’s owner Meta will lay off 11,000 employees, equivalent to 13 percent of its work force, the company announced on Wednesday morning, in the biggest restructuring in the social media giant’s history. A slump in digital advertising and ballooning losses from its pivot to the metaverse have pushed the company to make a series of wide-ranging cuts.In a note to employees, Mark Zuckerberg, Meta’s co-founder and C.E.O., admitted that the company had hired too aggressively during the pandemic as homebound consumers spent more time socializing and shopping online. Meta mistakenly assumed this trend would continue: “I got this wrong, and I take responsibility for that,” he wrote.The company has begun cutting costs across its operations, “scaling back budgets, reducing perks, and shrinking our real estate footprint,” Zuckerberg wrote. The stock was up 3.7 percent in premarket trading, outperforming the Nasdaq.The economic downturn is forcing companies across industries to shrink. Citigroup and Barclays are expected to lay off hundreds in their investment banking units, Bloomberg reports. And, according to Protocol, Salesforce could cut as many as 2,500 positions in the coming weeks as the activist investor Starboard Value seeks big changes in corporate strategy.Exclusive: Keurig Dr Pepper buys stake in Athletic Brewing Keurig Dr Pepper has invested $50 million in Athletic Brewing, the nonalcoholic beer company, as part of a $75 million fund-raise by Athletic, DealBook is first to report. It’s the beverage giant’s second foray into the nonalcoholic booze category — it announced a deal to acquire a nonalcoholic cocktail brand called Atypique this summer — and another sign of interest in this fast-growing category.Athletic Brewing was founded in 2017 by Bill Shufelt, a former trader at the hedge fund Point72, and John Walker, a former craft brewer. It now sells its products — including lager, light beer and sparkling water — at retailers like Trader Joe’s. With its new backer, Athletic is looking to expand in Australia, France and Spain.Sales of nonalcoholic beer are skyrocketing, growing almost 70 percent between 2016 and 2021 in the U.S., to about $670 million, according to Euromonitor. While that is still a tiny portion of the overall beer market, its popularity stands in stark contrast to overall sluggishness in beer sales, as the younger generation drinks less and cares more about its waistline. Beer giants like Heineken, Budweiser and Sam Adams have released nonalcoholic alternatives in the last five years.It’s not just for recovering alcoholics or nondrinkers. Shufelt said 80 percent of his customers drink alcohol, and three-fourths are between the ages of 21 and 44. About half are women, he added.THE SPEED READ DealsThe E.U.’s antitrust watchdog will deepen its scrutiny of Microsoft’s $75 billion takeover of Activision Blizzard. (WSJ)Goldman Sachs has reportedly weighed buying payment-technology companies to expand its credit-card business. (WSJ)The electric carmaker Lucid said it planned to raise up to $1.5 billion in fresh capital. (NYT)PolicyThe private equity giants Apollo, Carlyle and KKR disclosed inquiries by regulators over their dealmakers’ use of messaging apps like WhatsApp for business. (Bloomberg)Supreme Court justices are weighing a Pennsylvania law that requires companies to consent to being sued in its courts for conduct done anywhere. (NYT)Kenya published some details of a 2014 loan it took out from China, potentially straining relations with the country’s biggest source of infrastructure financing. (NYT)Best of the restVirginia Giuffre, a victim of Jeffrey Epstein, now says she may have misidentified the Harvard law professor Alan Dershowitz as an abuser. (NYT)Twitter may now offer two kinds of check marks to verify users. (The Verge)Levi’s named Michelle Gass, Kohl’s chief executive, as its next C.E.O. (NYT)Would you take a Zoom meeting in a movie theater? AMC hopes so. (Insider)UBS’s chief risk officer, Christian Bluhm, is quitting to become … a professional photographer. (FT)Thanks for reading! We’ll see you tomorrow.We’d like your feedback. Please email thoughts and suggestions to dealbook@nytimes.com. More