2025-05-19 19:27
BRASILIA, May 19 (Reuters) - Brazil's Finance Ministry on Monday nudged its growth forecast higher and lifted its inflation projection for this year, according to fresh estimates from its economic policy secretariat. Gross domestic product (GDP) is now seen expanding 2.4% in 2025, up from the 2.3% seen in March, while the 2026 forecast was kept at 2.5%. Meanwhile, consumer prices are expected to rise 5.0% this year and 3.6% next year, compared with previous estimates of 4.9% and 3.5%, respectively. Sign up here. The upward revision of the 2025 GDP projection was related to a higher economic growth outlook for the first quarter, and to raised predictions of agricultural production in the year, according to the secretariat. Brazil's central bank hiked the benchmark interest rate to 14.75% earlier this month, its highest level in nearly two decades, with policy makers saying "significantly contractionary" policy would be needed for a prolonged period to return inflation to target. Guilherme Mello, the economic policy secretary at the Finance Ministry, told journalists in Brasilia that monetary policy has indeed been impacting the government's projections. He said a slowdown in economic activity is expected for the second half of the year, mostly on the back of higher rates, with effects already seen in cyclical segments of the economy. Brazil confirmed its first outbreak of bird flu on a commercial farm on Friday, triggering a series of poultry export restrictions. Mello said it was too early to gauge the economic impact. https://www.reuters.com/world/americas/brazils-government-lifts-2025-gdp-forecast-nudges-inflation-outlook-higher-2025-05-19/
2025-05-19 18:58
HOUSTON, May 19 (Reuters) - The U.S. Department of Energy will begin approving or rejecting pending applications for permits to export liquefied natural gas to countries with no free trade agreements with the U.S., the agency said on Monday, after releasing a final study on the impact of further exports. In 2024, U.S. President Joe Biden's administration paused such approvals until the outcome of the study to determine if increasing LNG exports could harm the environment or raise gas prices because of rising demand from LNG plants. Sign up here. The U.S., the world's largest LNG exporter, is on track to triple its export capacity by the end of the decade. The pause threatened to limit the ability of the U.S. to increase such exports. On U.S. President Donald Trump's first day in office he declared an energy emergency and restarted approvals for LNG export permits to countries without a free trade agreement with the U.S. The Department of Energy has decided to begin making routine approvals now that the study is complete. "The 2024 study confirms what our nation always knew — LNG supports our economy, strengthens our allies, and enhances national security," Tala Goudarzi, U.S. principal deputy assistant secretary of the DOE's Office of Fossil Energy and Carbon Management, said on Monday. Proposed projects awaiting DOE permits include Energy Transfer's (ET.N) , opens new tab 16.5 million metric tons per annum plant in Lake Charles, Louisiana, and Cheniere Energy's midscale 8 and 9 facility in Texas. "We remain confident we will receive all necessary regulatory approvals in time to FID the project later this year," Cheniere said in response to the DOE announcement, referring to its final investment decision. Several environmental groups criticized the agency's decision on Monday, accusing it of ignoring the study's key findings that unfettered LNG exports could increase wholesale domestic natural gas prices by over 30% and make the U.S. less able to meet its commitment to limit global warming to 1.5 degrees Celsius. "LNG exports raise costs to Americans' energy bills, are disastrous for frontline communities, increase public health harms, and perpetuate the climate crisis," said Mahyar Sorour, director of Beyond Fossil Fuels Policy at the Sierra Club. https://www.reuters.com/business/energy/us-doe-begin-issuing-orders-pending-lng-non-fta-export-permits-2025-05-19/
2025-05-19 18:56
Fed officials view market landscape cautiously NY Fed's Williams says investors still buying dollar assets Fed officials still taking wait-and-see view on monetary policy NEW YORK, May 19 (Reuters) - U.S. Federal Reserve officials speaking on Monday took on cautiously the ramifications of the latest downgrade of the U.S. government’s credit rating and unsettled market conditions as they continued to navigate a very uncertain economic environment. "We will put that downgrade in the same perspective that we do with all incoming information: What are the implications of this in terms of us achieving our mandated goals without commenting on what that downgrade might mean in sort of a political economy context," Fed Vice Chair Philip Jefferson said at a conference held by the Federal Reserve Bank of Atlanta. Sign up here. On Friday, Moody’s ratings agency lowered the U.S. government’s credit rating one notch amid mounting concerns over deficits and interest costs that remain on an unsustainable pace. It was the last of the major ratings agencies to cut the U.S. sovereign rating from the highest level. While not an imminent issue for the Fed, over time higher market borrowing costs tied to a deteriorating U.S. financial position make credit generally more expensive and create restraint on economic activity. In turn that becomes a consideration for how the Fed sets monetary policy and its expectations for the longer-run path of economic activity. The downgrade "will have implications for the cost of capital and a bunch of other things, and so it could have a ripple through the economy," said Atlanta Fed President Raphael Bostic, speaking in a CNBC interview on Monday. With the economy in flux, "I think we'll have to wait three to six months to start to see where this settles out, and I think that'll be an important determinant about people's willingness and appetite for investing in the U.S." While concerns about the government’s financial position have existed for years, and Fed officials have regularly warned that long-run borrowing trends have been on an unsustainable path, ongoing huge levels of spending, joined with a Republican budget plan now under consideration that’s likely to add even more debt, are raising fears of a nearing crisis. At the same time, the aggressive and erratic trade policy agenda of the Trump administration, which targets most of the world’s nations with high tariffs in a bid to bring more factory work back to the U.S., is shaking confidence in the U.S. as a reliable place to invest. On Monday, stock markets were selling off as bond yields rose. President Donald Trump said he disagreed with the action taken by the ratings agency. U.S. STILL ATTRACTIVE Speaking at a conference held by the Mortgage Bankers Association in New York, New York Fed President John Williams acknowledged market issues but suggested some of the concerns are overblown. "We have heard over the last few months, there are some rumors or concerns about, well, do investors want to be so heavily invested” in Treasuries and other dollar assets given big government policy changes and large levels of economic uncertainty, Williams said. Investors are “clearly” weighing future options, he said. Nevertheless, investors "have viewed and continue to view" the U.S. as "a great place to invest, including Treasuries, fixed income assets, so I think that that narrative is still there." In a hometown appearance, Minneapolis Fed President Neel Kashkari said that over the long run, retaining investor confidence is one of the key issues that will determine whether government borrowing rates remain manageable. "Right now there's a question mark being raised about what is the U.S. competitive position going to be relative to other advanced economies around the world," given all of the policy changes and debt issues, Kashkari said. "There's more of a question mark than there was a year ago or two years ago," he said, adding "we don't know right now" how this will all shake out. Concern over the future of official finances is particularly pointed given the U.S. government bond market’s traditional role as a global safe haven for investors. That role is being challenged by the possibility markets will no longer be able to smoothly absorb the huge supply of Treasury debt, as trade policy could work to deter investors and upend the flow of dollars back into U.S. markets. “The sell-America theme in today’s trading with U.S. bonds, stocks and the dollar all pointing sharply lower on Moody’s U.S. rating downgrade suggests this is serving as a coordinating device for an underlying shift in global investor preferences coming out of Trump tariff and wider geoeconomic shocks that is still in process,” said analysts at Evercore ISI. In this current climate of large-scale uncertainty and anxiety, “the fact that U.S. Treasuries and the dollar are not rallying now is striking and shaves away a fraction of the attractiveness of Treasuries going forward.” The impact of the Moody’s ratings change remains a work in progress and some see little lasting impact. Barclays analysts told clients on Monday “we expect few consequences from the Moody's downgrade.” The Fed officials who spoke Monday also continued to send a wait-and-see signal on the outlook for monetary policy. Williams said the economy is in a good place with interest rate policy “well positioned” to respond to what lies ahead. Meanwhile, Bostic said with his current expectations it will now take longer to lower inflation back to 2%, "I am leaning much more into one cut this year.” https://www.reuters.com/sustainability/boards-policy-regulation/feds-williams-says-no-significant-move-out-us-assets-seen-so-far-monetary-policy-2025-05-19/
2025-05-19 18:55
May 19 (Reuters) - The private equity owner of Northwind Midstream is exploring a potential sale of the Permian Basin gas infrastructure operator, with any deal expected to value the company upwards of $2 billion, including debt, people familiar with the matter said. Five Point Infrastructure is working with investment bankers at Piper Sandler (PIPR.N) , opens new tab on the sale effort. The process is in its early stages, with initial outreach made to potential buyers, and interest is expected to come from midstream companies as well as other buyout and infrastructure funds. Sign up here. The people cautioned that there was no guarantee a deal would be struck, and any agreement could come at a different valuation. They also spoke on condition of anonymity to discuss private deliberations. Five Point declined comment. Northwind and Piper Sandler did not respond to requests for comment. Northwind Midstream was formed by Five Point in 2022 and, since then, the company has developed a system of pipelines, compressor stations and a treatment facility in the northern part of the Delaware Basin, predominantly in New Mexico. The company focuses on moving and treating so-called acid gas, a form of natural gas which is high in hydrogen sulfide and carbon dioxide. The chemical compounds need to be removed before the natural gas can be used for commercial purposes. The sale effort involving Northwind is the latest example of private equity owners aiming to offload the energy infrastructure networks which their companies have spent recent years building out to support growing U.S. shale production. NGP Energy Capital Management sold Outrigger Energy II to Kinder Morgan (KMI.N) , opens new tab in February for $640 million, and Morgan Stanley Energy Partners is currently marketing for sale a majority stake in Brazos Midstream II for around $2 billion. Dealmaking activity is supported by publicly-listed pipeline operators wanting to expand their capabilities after spending recent years paying down debt and improving their stock prices. Competition for assets is supplemented by a healthy appetite from investment firms, which have raised billions of dollars to buy energy infrastructure, which offers steady returns from the fees levied for moving oil and gas. https://www.reuters.com/business/energy/energy-investor-five-point-targets-2-billion-northwind-pipelines-sale-sources-2025-05-19/
2025-05-19 18:13
May 19 (Reuters) - U.S. natural gas prices for Monday in the Permian shale basin in West Texas turned negative as spring pipeline maintenance and other constraints trap gas in the nation's biggest oil-producing basin. Financial firm LSEG said average gas output in the Lower 48 U.S. states fell to 103.9 billion cubic feet per day (bcfd) so far in May, down from a monthly record of 105.8 bcfd in April. Sign up here. Part of the reason for that output reduction was spring maintenance on some gas pipes, including U.S. energy firm Kinder Morgan's (KMI.N) , opens new tab 2.7-bcfd Permian Highway from the Permian basin in West Texas to the Texas Gulf Coast. Kinder Morgan said it will perform a turbine exchange at the Big Lake compressor station from May 13-26 that will reduce mainline capacity to around 2.2 bcfd. Traders have noted the Permian Highway reduction trapped some gas in the Permian basin, helping spot gas prices at the Waha Hub fall by over 260% from 94 cents per million British thermal units (mmBtu) for Friday to a six-month low of minus $1.52 for Monday. That was the fourth time Waha prices averaged below zero in 2025 and compares with an average of $1.96 per mmBtu in 2025, 77 cents in 2024 and an average of $2.91 over the prior five years (2019-2023). Waha prices first averaged below zero in 2019. It happened 17 times in 2019, six times in 2020, once in 2023 and a record 49 times in 2024. Analysts have said negative prices were a sign the Permian region needs more gas pipes. There are some pipes under construction, including Kinder Morgan's Gulf Coast Express expansion, the WPC joint venture's Blackcomb and Energy Transfer's (ET.N) , opens new tab Hugh Brinson, but they are not expected to enter service until 2026. The Permian in West Texas and eastern New Mexico is the nation's biggest and fastest-growing oil-producing shale basin. A lot of gas also comes out of the ground with that oil. Even though U.S. crude futures were down about 13% so far in 2025, energy firms have been willing to take some losses on gas because they can still make up for those losses with profits in selling oil. But with oil prices on track to decline for a third year in a row in 2025, some energy firms said they plan to reduce the amount of capital they will spend on new oil drilling this year. https://www.reuters.com/business/energy/us-natgas-prices-waha-hub-texas-fall-into-negative-territory-2025-05-19/
2025-05-19 15:55
CAIRO, May 19 (Reuters) - Egypt's central bank is expected to lower overnight interest rates by a median of 175 basis points on Thursday, extending a reduction begun in April as inflation remains relatively low, a Reuters poll shows. The median forecast of 16 analysts was for the central bank to cut the deposit rate to 23.25% and the lending rate to 24.25%. Sign up here. The central bank last month lowered rates by 225 basis points (bps), its first adjustment since March 6, 2024, when it hiked rates by 600 bps and let the currency slide sharply against the dollar, measures taken as part of a $8 billion International Monetary Fund financial reform package. "There are a lot of moving parts, but I don't see anything that suggests real rates need to stay so high," said Simon Williams of HSBC, who predicted a 200 bps reduction. "To not cut now would be a missed opportunity." Egypt's central bank has been working to reduce inflation, which has trended downwards from a peak of 38% in September 2023. Annual headline inflation stood at 13.9% in April, just up from 13.6% recorded in March. At its monetary policy committee meeting in April, the central bank said lower inflation had opened the way to further rate cuts in the future. "Despite the pick up in inflation through March and April, Egypt's real interest rate is still firmly positive and leaves plenty of scope for policymakers to deliver a 200 bp reduction," said James Swanston of Capital Economics. The central bank has been tightening money supply since signing its agreement last year with the IMF, officials and bankers say. M2 growth fell to an annual 25.8% to the end of March from a record 33.9% to the end of February. https://www.reuters.com/world/africa/egypts-central-bank-expected-cut-rates-by-175-bps-2025-05-19/
