2025-11-24 07:17

Crude oil prices erase almost all gains since October 22 US sanctions on Russia Diesel spreads remain elevated as conflict constrains global supplies EU ban on imports of fuels processed from Russian crude takes effect in January LONDON, Nov 24 (Reuters) - Oil prices eased on hopes for a U.S.-brokered Ukraine ceasefire, but diesel spreads remain stubbornly high as the war keeps global supplies squeezed with little sign of relief. Crude oil prices have dropped by around 1.2% since the November 20 announcement that the United States was brokering a ceasefire initiative to end the conflict that began with Russia’s full-scale invasion of Ukraine in 2022. Sign up here. The 28-point plan appears to have little chance of being accepted by Kyiv, as the proposal accepts most of Russia's key wartime demands. But U.S. President Donald Trump's backing of it remains significant, as it highlights how keen the White House is to hammer out a deal and get Moscow on board, whatever the cost. That, of course, calls into question the U.S. president’s appetite to enforce or ratchet up existing sanctions. Crude prices certainly suggest as much. They initially jumped after Trump on October 22 imposed sanctions on Russia's two top oil companies, Rosneft and Lukoil, but most of those gains have now disappeared. The sanctions took effect on November 21. Diesel is a different story, however. While benchmark European diesel prices have declined since news of the ceasefire discussions broke last week, prices remain around 8% above their October 22 levels. Moreover, diesel refining margins - the profit made from converting crude oil into fuel – have risen by 17% over that period to roughly $29 a barrel. DIVERGING SUPPLY OUTLOOKS This divergence has several causes. First, global diesel output is low, while the crude market is believed to be on the cusp of a huge glut, with the International Energy Agency forecasting crude supply to exceed demand by 4 million bpd next year. Diesel supply has taken a big hit in recent months. Russia is the world's second-largest diesel exporter after the United States. Ukraine's continued attacks on Russian refineries and export facilities have significantly curtailed Moscow’s fuels exports, with diesel shipments totalling just 669,000 bpd in October, only slightly higher than in September, when exports hit their lowest point since the Covid-19 pandemic. U.S. sanctions on Rosneft and Lukoil have further disrupted diesel supply. The two oil giants collectively exported so far this year around 270,000 bpd of diesel, roughly 37% of total Russian exports and 9% of global exports, according to Kpler. Sanctions will likely make Turkey and Brazil, the main buyers of Russian diesel, seek out other sources, increasing demand for the limited supply of non-sanctioned diesel. EUROPE TIGHTENS RUSSIAN BAN Perhaps more significant for diesel prices is the European Union's latest sanctions package against Russia that is set to take effect on January 21. These measures ban imports of fuels made from Russian crude into the EU, one of the world’s largest diesel markets. The Intercontinental Exchange (ICE), which operates the benchmark European diesel contract, said on November 18 that it will stop taking delivery of diesel that originates from refineries that processed Russian crude in the previous 60 days starting on January 16. These bans close a loophole that primarily benefited refiners in India and Turkey, which had been buying discounted Russian crude, processing it into diesel and then exporting it to Europe. The two countries accounted for 13% of Europe’s diesel imports of roughly 1.8 million bpd so far this year. Many large refiners have responded quickly. India's Reliance Industries, which accounts for the vast majority of India's diesel exports to Europe, said it had stopped importing Russian crude at its Jamnagar refining complex on November 20. While that may be too late to comply with the new ICE rules, the impact of the EU measures is clear. Indian diesel exports to the EU and Britain have plunged in November to 34,000 bpd, compared with an average of 136,000 bpd so far this year, according to Kpler. U.S. COMES OUT ON TOP The main beneficiaries of all these dislocations appear to be U.S. Gulf Coast refineries that are set to increase diesel exports to Europe. A key measure for U.S. refining profitability, the so called 3-2-1 crack spread, has gained 12% since October 22, according to LSEG data. To be sure, the current disruptions in the diesel market will gradually ease as markets recalibrate and new diesel routes are established. For example, discounted Russian diesel is likely to find a home in markets such as China. But, for now, the movements in the diesel market are sending an important signal. The chances of EU sanctions being fully lifted – something that would likely have a disproportionate impact on diesel versus crude prices – are low even if Trump does manage to engineer a resolution to this nearly four-year long conflict. Want to receive my column in your inbox every Monday and Thursday, along with additional energy insights and links to trending stories? Sign up for my Power Up newsletter here. Enjoying this column? Check out Reuters Open Interest (ROI), , opens new tabyour essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI , opens new tab can help you keep up. Follow ROI on LinkedIn , opens new tab and X. , opens new tab https://www.reuters.com/markets/commodities/diesel-doesnt-share-crudes-optimism-about-ukraine-peace-plan-2025-11-24/

2025-11-24 06:51

PERTH, Nov 24 (Reuters) - Australia’s Fair Work Commission approved on Monday a union request to hold a ballot for workers to vote on striking at Woodside Energy’s (WDS.AX) , opens new tab Pluto LNG 2 project in a battle over pay at the facility. The commission ordered the ballot be held no later than December 4. If successful a strike could be held before the end of the year, slowing work at the facility where the company hopes to ship its first liquefied natural gas cargo in the second half of 2026. Sign up here. The Offshore Alliance, a group of the Maritime Union of Australia and the Australian Workers Union, said last week salary negotiations with contractor Bechtel had gone nowhere and its next move was to strike. Bechtel is the contractor building Pluto, which is an expansion of an existing facility in Western Australia’s Pilbara region. Bechtel had argued against allowing the ballot and industrial action, and has said the alliance should not be encroaching on more traditional onshore construction work. Three other unions have also made separate applications for a strike ballot for the same agreement, documents show. The commission has ordered their ballots also be held. Workers at Pluto 2 are currently receiving an hourly rate that is 30% less than workers doing the same job at the Wheatstone project, when factoring in changes in the consumer price index, the Offshore Alliance said in a statement. Wheatstone LNG is a separate project operated by Chevron (CVX.N) , opens new tab. The union group wants a 30% pay rise. Union sources told Reuters last week they expected push-back from the construction contractor. https://www.reuters.com/business/world-at-work/australian-labour-tribunal-approves-woodside-lng-project-strike-vote-2025-11-24/

2025-11-24 06:44

Delayed US retail sales report due on Tuesday Traders see 79% chance of US interest rate cut next month US and Ukraine continue talks to modify peace plan Nov 24 (Reuters) - Gold prices rose more than 1% on Monday, supported by growing expectations of a Federal Reserve interest rate cut next month and ahead of fresh U.S. economic data for further clues on the monetary policy. Spot gold gained 1.2% at $4,111.86 per ounce, by 01:43 p.m. EST (1843 GMT). U.S. gold futures for December delivery settled 0.4% higher at $4,094.2 per ounce. Sign up here. "The market is increasingly getting convinced that the U.S. Federal Reserve is on track to cut interest rates in December," said Bart Melek, head of commodity strategies at TD Securities. New York Fed President John Williams said on Friday that U.S. interest rates could fall "in the near term" without putting the Fed's inflation goal at risk, while helping guard against a slide in the job market. Bets of a rate cut next month stand at 79%, the CME FedWatch tool , opens new tab showed on Monday. Gold, a non-yielding asset, tends to do well in low-interest-rate environments, and during geopolitical and economic instability. "We're waiting for data and the expectation is that it may be somewhat weaker. Inflation probably not very elevated and that all points to gold doing fairly well," Melek added. Investors are looking out for key economic data that were delayed due to the government shutdown, including U.S. retail sales, jobless claims and producer price figures due later this week. Meanwhile, the U.S. and Ukraine continued talks on Monday to craft an acceptable plan to end Russia's war in Ukraine, after agreeing to revise an earlier U.S. proposal that many viewed as overly favorable to Moscow. "With the Fed debate taking more headlines and geopolitical swings, especially vis-à-vis Ukraine, (gold) is still likely to catch a bid but in our view, it remains range bound between $4,000 and $4,100," Rhona O'Connell, an analyst at StoneX, said in a note. Spot silver added 1.7% to $50.84 per ounce, platinum rose 2.3% to $1,545.91, while palladium gained 1.7% to $1,398.21. https://www.reuters.com/world/india/gold-dips-dollar-firms-investors-weigh-us-rate-cut-bets-2025-11-24/

2025-11-24 06:31

Markets price in greater than 80% chance of Fed rate cut Stocks rally while dollar slips Eyes on sliding yen for possible intervention NEW YORK, Nov 24 (Reuters) - Global stocks advanced for a second straight session on Monday as rising expectations for a December rate cut from the U.S. Federal Reserve helped to soothe recent concerns about stretched valuations in the AI space while longer-dated U.S. Treasury yields dipped. Stocks stumbled last week to their largest weekly percentage drop since early August on market pessimism over the chances of a cut to interest rates, the economic impact of the extended U.S. government shutdown and lingering concerns over high valuations for AI-related companies. Sign up here. But equities rallied at the end of the trading week after New York Fed President John Williams said interest rates can fall in the near term even as other policymakers insisted borrowing costs should remain steady for now. Williams' comments were echoed on Monday by Fed Governor Christopher Waller, who said that available data indicates that the U.S. job market remains weak enough to warrant another quarter-point cut to interest rates. "It's a market that probably got a bit oversold in the short term, and the level of pessimism was rising," said Brian Levitt, chief global market strategist for Invesco. "The economic data is just not robust, and the market is certainly not expecting a recession, but a weaker backdrop is supportive of a reduction in the fed funds rate." U.S. markets will be closed on Thursday for the Thanksgiving holiday. Markets are pricing in an 85.1% chance of a cut of 25 basis points at the December meeting, according to CME's FedWatch Tool , opens new tab, up from 42.4% a week ago. Expectations for a rate cut increased further during the session after San Francisco Federal Reserve Bank President Mary Daly told the Wall Street Journal she supports lowering interest rates at the central bank's meeting next month as she sees a deterioration in the job market. Goldman Sachs chief economist Jan Hatzius said in a note on Sunday that he expects another cut from the Fed in December, followed by two more moves in March and June of 2026 "that take the funds rate to 3-3.25%." On Wall Street, U.S. stocks closed higher, led by a surge of nearly 4% in the communication services sector (.SPLRCL) , opens new tab as Google parent Alphabet (GOOGL.O) , opens new tab jumped more than 6%. The Dow Jones Industrial Average (.DJI) , opens new tab rose 202.86 points, or 0.44%, to 46,448.27, the S&P 500 (.SPX) , opens new tab gained 102.09 points, or 1.55%, to 6,705.08 and the Nasdaq Composite (.IXIC) , opens new tab shot up 598.92 points, or 2.69%, to 22,872.01. The gains for the Nasdaq marked its biggest daily percentage rise since May 12. European equities closed higher on interest rate expectations while investors were also encouraged by signs of progress toward a peace deal between Ukraine and Russia. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rose 11.57 points or 1.19% and was on track for the biggest daily percentage gain since November 10. The pan-European STOXX 600 (.STOXX) , opens new tab index, meanwhile, ended the session up 0.14% after gaining as much as 0.71%. U.S. retail sales and producer prices data will also be in focus this week as the release of government data resumes after the end of the extended government shutdown. In Britain, British finance minister Rachel Reeves' eagerly awaited budget is due on Wednesday. The U.S. and Ukraine were continuing work on a plan to end the war in Ukraine after agreeing to modify an earlier proposal that was viewed by Kyiv and its European allies as too favourable to Moscow. That weighed on oil prices because a deal could release more Russian oil supply through an easing of sanctions. U.S. Treasury yields were lower on the interest rate expectations. The yield on benchmark U.S. 10-year notes fell 2.7 basis points to 4.036%. A $69 billion auction in two-year notes was solid, with above-average demand of 2.68 times the notes on sale. In currencies, the dollar index , which measures the dollar against a basket of currencies, shed 0.07% to 100.18, with the euro up 0.1% at $1.1522. Sterling strengthened 0.11% to $1.3106. Markets were also watching for signs of possible Japanese intervention in the yen, which weakened 0.28% against the greenback to 156.82 per dollar. The Japanese currency is down 1.8% against the dollar this month. Takuji Aida, an adviser to Prime Minister Sanae Takaichi, said on Sunday that Japan can actively intervene in the currency market to mitigate the negative economic impact of a weak yen. U.S. crude rose 1.34% to settle at $58.84 a barrel and Brent settled at $63.37 per barrel, up 1.29% on the day due to the rising rate cut expectations and mounting doubts about whether Russia will obtain a peace deal with Ukraine. https://www.reuters.com/world/china/global-markets-pix-2025-11-24/

2025-11-24 06:25

US officials Lutnick and Greer set for Brussels talks EU ministers gather ahead of that meeting Trade Commissioner Sefcovic expects no immediate breakthrough BRUSSELS, Nov 24 (Reuters) - European Union ministers on Monday were set to urge top U.S. trade officials to apply more of the July EU-U.S. trade deal by cutting U.S. tariffs on EU steel and removing them from EU goods such as wine and spirits. U.S. Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer were due to meet EU ministers responsible for trade for 90 minutes over lunch in their first trips to Brussels since taking office. Sign up here. Ahead of that meeting, the European ministers gathered to discuss pressing trade issues, including Chinese rare earth and chip export restrictions. NO IMMEDIATE BREAKTHROUGHS EXPECTED European Trade Commissioner Maros Sefcovic said he did not expect any immediate breakthroughs with his U.S. counterparts. "I think today it's not about negotiations. It's about a stock-taking exercise. And I think this is also about the political assessment of EU-U.S. bilateral relations," he said. Under the end-July deal, the United States set 15% tariffs on most EU goods, while the European Union agreed to remove many of its duties on U.S. imports. That may only happen in March or April, given it requires approval from the European Parliament and EU governments, which EU diplomats say has exasperated Washington. But while insisting the process is on course, the 27-nation bloc is also pointing to agreed items on which it wants to see progress, chief among them steel and aluminium. The United States has a 50% tariff on the metals and since mid-August has applied this to the metal content in 407 "derivative" products such as motorcycles and refrigerators. More derivatives may be added next month. RISK THAT JULY ACCORD GETS HOLLOWED OUT EU diplomats say that such actions, along with the prospect of new tariffs on trucks, critical minerals, planes and wind turbines, threaten to hollow out the July accord. "We're at a delicate moment," one EU diplomat said. "The U.S. is looking for reasons to criticise the EU as we are trying to get them to work on steel and other unresolved matters." The bloc also wants a broader range of its products subject only to low pre-Trump duties. Its wish list includes wine and spirits, olives, pasta, medical devices and biotech. The EU is also ready to discuss areas of possible regulatory cooperation, such as cars, the bloc's purchases of U.S. energy, which has hit $200 billion this year, and joint efforts on economic security, particularly in response to Chinese export controls. https://www.reuters.com/world/china/eu-urge-us-apply-more-july-trade-deal-including-cutting-steel-tariffs-2025-11-24/

2025-11-24 05:44

Oil prices rise amid US rate cut speculation and Ukraine peace deal uncertainty Fed Governor Waller suggests rate cut amid weak U.S. job market US sanctions on Russian oil firms affect market, peace talks dominate focus NEW YORK, Nov 24 (Reuters) - Oil prices climbed about 1% on Monday on increased bets of a U.S. interest rate cut in December and mounting doubts about whether Russia will get a peace deal with Ukraine that will boost Moscow's oil exports. Brent futures rose 81 cents, or 1.3%, to settle at $63.37 a barrel. West Texas Intermediate (WTI) crude gained 78 cents, or 1.3%, to settle at $58.84. Sign up here. On Friday, both crude benchmarks closed at their lowest levels since October 21. The U.S. and Ukraine sought to narrow the gaps in a peace plan to end the Russia-Ukraine war after a U.S. proposal that Kyiv and its European allies viewed as a Kremlin wish list. Recent price weakness was driven mainly by reported progress in Ukraine–Russia peace negotiations, analysts at energy advisory firm Ritterbusch and Associates said in a note. "However, we feel that a reduction of more than 5% of risk premium is excessive," they added, pointing to the potential for the war to drag on, re-injecting geopolitical risk into oil futures. U.S. sanctions on Russian oil companies Rosneft (ROSN.MM) , opens new tab and Lukoil (LKOH.MM) , opens new tab, which took effect on Friday, have caused friction that would normally boost prices, but the market is preoccupied by the peace talks, said Jorge Montepeque, managing director at Onyx Capital. Russian state oil and gas revenue could fall in November by around 35% year-on-year to 520 billion roubles ($6.59 billion), owing to cheaper oil and a stronger rouble, Reuters calculations showed on Monday. European Council President Antonio Costa hailed the "new momentum" in negotiations to end the war in Ukraine and pledged that the European Union will keep supporting Ukraine. U.S. INTEREST RATES U.S. Federal Reserve Governor Christopher Waller said available data indicates that the U.S. job market remains weak enough to warrant another quarter-point cut. Lower rates could boost economic growth and oil demand. Global brokerages remain split on whether the Fed will cut interest rates at its December meeting after last week's mixed signals on job growth and unemployment. In Germany, business morale fell unexpectedly in November, a survey showed, as companies grew more pessimistic about chances of economic recovery. JPMorgan forecast Brent crude at $57 a barrel and WTI at $53 in 2027 while keeping its 2026 estimates unchanged at $58 and $54 respectively. AROUND THE WORLD The U.S. formally designated Venezuela's Cartel de los Soles as a foreign terrorist organization, layering additional terrorism-related sanctions on the group it has said includes President Nicolas Maduro and other high-ranking officials. U.S. sanctions on Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), help support oil prices by limiting the South American country's exports. Separately, U.S. President Donald Trump said he had a "very good" phone call with Chinese President Xi Jinping. The leaders discussed the war in Ukraine, fentanyl trafficking and a deal for farmers. Energy traders see positive discussions between the world's two biggest economies as supportive of oil demand. https://www.reuters.com/business/energy/oil-falls-ukraine-peace-talks-edge-toward-solution-2025-11-24/