2025-02-18 12:05

Russian Deputy Prime Minister Alexander Novak says repairs could take months Ukraine attacks CPC pumping station with drones CPC pumps crude from companies including U.S. Chevron and Exxon Mobil Main export route for more than 1% of global oil supplies LONDON, Feb 18 (Reuters) - Russia said oil flows through the Caspian Pipeline Consortium (CPC), a major route for supplying Kazakhstan and exporting to the global market, were reduced by 30-40% on Tuesday after a Ukrainian drone attack on a pumping station. The attack, which caused no casualties, took place on the eve of talks between the U.S. and Russian officials on ending the war in Ukraine. Following the meeting, from which Kyiv was excluded, U.S. President Donald Trump's administration said it had agreed to hold more talks. Russian Deputy Prime Minister Alexander Novak said on Tuesday volumes had dropped by approximately 30-40% compared with before the drone attack on a pumping station in southern Russia. "As a result of the attack, energy equipment, a gas turbine unit, and a substation were damaged," he said on Russian television. CPC pumps crude from companies that include Chevron and Exxon Mobil. He said repairs might take several months. The Caspian pipeline, which ships more than 1% of daily global supply, stretches over 1,500 km (939 miles) and carries crude from Kazakhstan's vast Tengiz oilfield on the northeastern shores of the Caspian Sea as well as from Russian producers. A cut of 30% in CPC shipments could amount to as much as 380,000 barrels per day, according to Reuters calculations. As well as being the main route for Kazakhstan's oil exports, Kazakhstan relies on the CPC pipeline for most of its own crude supplies. Transneft, Russia's state pipeline operator, said Kazakhstan would have to cut exports by 30% as it meets its own needs. The CPC said in a statement the oil pipeline "continues to operate" and was pumping oil to awaiting tankers on the Black Sea, though at reduced levels, while bypassing the damaged station. Chevron-led Tengizchevroil (TCO), operator of the Tengiz oilfield, said in a statement on Tuesday it was monitoring the situation. However, it said "production and export of crude oil via the CPC pipeline remain uninterrupted". Kazakhstan's energy ministry also said the country was supplying oil without restrictions. It said in a statement the pipeline from Tengiz to the Black Sea port of Novorossiysk was operating "without the participation" of the Kropotkinskaya pumping station. It did not mention the drone attack. At least seven drones packed with explosives and shrapnel attacked the Kropotkinskaya station on the CPC pipeline in Russia's Krasnodar region causing "serious damage", Transneft said. The General Staff of the Ukrainian armed forces said that it had attacked Russian energy infrastructure, including the CPC pumping station and the nearby Ilsky oil refinery. "The Defence Forces of Ukraine reserve the right to strike strategic facilities that support Russia’s armed aggression. Operations aimed at dismantling the energy infrastructure fuelling Russia’s illegal war will continue," it said. Russia launched a large-scale attack overnight involving 176 drones in the regions of Kirovohrad, Kharkiv, Kyiv and Cherkasy, the Ukrainian military said on Tuesday. Benchmark oil prices rose on Tuesday to trade above $75 a barrel. Shareholders in the CPC include U.S. majors Chevron (CVX.N) , opens new tab and Exxon Mobil (XOM.N) , opens new tab, as well as the Russian state, Russian firm Lukoil (LKOH.MM) , opens new tab, and Kazakh state company KazMunayGas. Sign up here. https://www.reuters.com/business/energy/russia-says-ukrainian-drone-attack-pipeline-carrying-1-global-crude-could-2025-02-18/

2025-02-18 11:51

BEIRUT, Feb 18 (Reuters) - Lebanon's new government will negotiate with the International Monetary Fund for a new programme and will work to deal with the country's financial default and public debt, according a policy statement approved by the cabinet late on Monday. The statement, a copy of which was reviewed by Reuters, said the government would work for an economical revival that could only be achieved through restructuring the banking sector. Lebanon has been in deep economic crisis since 2019, when its financial system collapsed under the weight of massive state debts, prompting a sovereign default in 2020 and freezing ordinary depositors out of their savings in the banking system. Beirut reached a draft funding deal with IMF in 2022 - contingent on reforms that authorities failed to deliver. Finance Minister Yassin Jaber, who took office as part of a new government agreed earlier this month, met on Tuesday with the IMF's Resident Representative in Lebanon Frederico Lima, Lebanon's National News Agency reported. Lebanon's political landscape has been turned on its head since the Iran-backed Lebanese group Hezbollah, long a dominant player in Lebanese politics, was badly pummelled in last year's war with Israel. Reflecting the shift in the power balance, the statement did not include language used in previous years that was seen to legitimize a role for Hezbollah in defending Lebanon, saying instead "we want a state that has the decision of war and peace". The statement added that it is required to adopt a national security strategy and a foreign policy that works to 'neutralize' Lebanon from conflicts. In the field of energy, the Lebanese government will seek to resume work in oil and gas exploration, according to the cabinet statement, which also revealed plans to establish a Ministry of Technology and Artificial Intelligence. Diplomatically and with the new administration in neighboring Syria after the ouster of Syrian President Bashar al-Assad, the statement said the Lebanese government believes it has an opportunity to start a "serious dialogue" aimed at controlling and demarcating the borders and working to resolve the issue of displaced Syrians in Lebanon. Sign up here. https://www.reuters.com/world/middle-east/lebanese-government-seek-new-imf-programme-policy-statement-says-2025-02-18/

2025-02-18 11:33

Germany holds snap poll on Sunday Debt brake, weak economy, parliament seat numbers in focus Defence spending set for a boost LONDON, Feb 18 (Reuters) - Sunday's German election may result in a conservative-led coalition government that faces pressure for much-needed change to revive the stagnant economy - and moves to block reform by populist parties if they do well. Europe's largest economy could face months of uncertainty. Polls show the conservative CDU/CSU bloc led by Friedrich Merz is tipped as the winner but will need a partner - or possibly two - to govern. Whether those in power can reform the country's self-imposed debt brake to allow more spending that lifts economic growth is in focus. Here are five key questions for financial markets. 1/ What will investors be looking out for first? First, how quickly a government could possibly be formed and, second, whether there is a two-thirds majority of parties entering parliament that support fiscal reform. "If there are long (coalition) discussions or three parties involved, that would complicate things," said Simon Keller, equity research analyst at Hauck Aufhäuser Investment Banking (HAIB). "It would be easiest if both the CDU/CSU and (centre-left Social Democrats) SPD have enough votes to go into a coalition." Should a one-third blocking minority of populist parties, including the right-wing AfD and left-wing BSW, enter parliament, that could scupper hopes for large-scale fiscal reform, even if they are not part of the administration, which would unsettle markets. 2/ Will the election bring debt brake reform? Markets are unconvinced that a radical reform of the "debt brake", which tightly limits spending, will happen, although a modest loosening of fiscal policy is expected. Analysts say the constitutional debt brake has prevented governments from making vital investments, for instance in infrastructure, to overhaul an economy that shrank for a second straight year in 2024. PGIM Fixed Income chief European economist Katharine Neiss said a slight tweak that allows a little more discretion on spending could be expected. "But that said, we can have a high conviction that we will see more fiscal spending and that's obviously good news at the margin," Neiss added. 3/ Where does that leave the euro and bonds? The euro is expected to benefit from any increase in government spending that boosts the economic outlook. Trading near $1.0460 , the euro has been whipped around by fears of U.S. tariffs and hopes for a Ukraine-Russia ceasefire. "A grand coalition (CDU/CSU and SPD), alongside a two-thirds majority needed for the debt-brake reforms, would likely be euro-positive," Morgan Stanley said. A rise in fiscal spending meanwhile could increase the supply of German government bonds, thereby lifting yields . Bond yields across Europe have also risen in anticipation of higher defence spending. Citi added that peripheral bond markets such as Italy could also draw support if a CDU-led mainstream majority coalition emerges, as any steps to boost Germany's economy are also viewed positively for the region as a whole. 4/ What about equities? The election could boost German economy-exposed stocks if corporate tax cuts and stronger growth follow. Note, the large-cap, more global DAX index (.GDAXI) , opens new tab is near record highs, while mid- and small-caps (.MDAXI) , opens new tab, (.SDAXI) , opens new tab have lagged as companies more exposed to weak domestic growth underperform. "Contrary to most recent elections in Europe, the German one is more a positive tail risk than a negative one," said Barclays' head of European equity strategy Emmanuel Cau. Investors may be front-running the results. Weekly inflows into Europe excluding UK equities hit their highest in two years in the week to Wednesday, Barclays said, citing EPFR data. 5/ Will more be spent on defence? That's looking likely as Washington pressures Europe to ramp up defence spending ahead of U.S./Russia talks on a possible Ukraine peace deal. German arms maker Rheinmetall (RHMG.DE) , opens new tab on Monday surged as much as 11% to record highs. The CDU/CSU believes NATO's defence spending target of 2% of GDP is a minimum. Likely coalition partners - the SPD, Greens and/or FDP - favour at least meeting NATO spending targets. "The debt brake will be reworked, not for a massive stimulus package, but to accomplish higher defence spending, for example," HAIB's Keller said. Signs that Brussels could make it easier for countries to increase defence budgets outside of usual deficit limits have also lifted defence stocks RENK Group (R3NK.DE) , opens new tab and Hensoldt (HAGG.DE) , opens new tab. (This story has been corrected to change the dateline to Feb 18, not Feb 19) Sign up here. https://www.reuters.com/markets/europe/what-german-election-means-markets-2025-02-18/

2025-02-18 11:15

NEW DELHI, Feb 18 (Reuters) - India and Qatar are targeting doubling their trade to $28 billion in the next five years and are exploring the signing of a free trade agreement, the Indian foreign ministry said on Tuesday. The announcement came after talks between Indian Prime Minister Narendra Modi and Qatar's Emir Sheikh Tamim bin Hamad Al-Thani, who is on a two-day visit to New Delhi. The two sides also discussed ways to broaden energy ties, a foreign ministry official told reporters. Sign up here. https://www.reuters.com/world/india/india-qatar-aim-double-trade-28-bln-five-years-2025-02-18/

2025-02-18 11:14

Feb 18 (Reuters) - French oil major TotalEnergies (TTEF.PA) , opens new tab will develop two green hydrogen projects with industrial gases company Air Liquide (AIRP.PA) , opens new tab, aiming to help decarbonise Total's Dutch and Belgian refineries, they said on Tuesday. The two projects to build electrolysers represent a combined investment of more than 1 billion euros ($1.1 billion) and will cut CO2 emissions from TotalEnergies' refineries by up to 450,000 metric tons annually, the companies said in a statement. When produced using renewable electricity and through the electrolysis of water - rather than by stripping it from natural gas and releasing CO2 - hydrogen is a greener fuel as it leaves only water and oxygen as byproducts when burned. This is leading many European governments to include the fuel in plans to replace oil or natural gas in their economies by 2050. However, high costs and uncertain demand have led many energy companies to freeze projects and pull back investment. TotalEnergies CEO Patrick Pouyanne has said he would continue to use renewable hydrogen as a feedstock in Total's refineries to reduce net CO2 emissions, though he is reluctant to expand the hydrogen refuelling station fleet from trucks to serving passenger cars before sufficient demand shows it is worthwhile financially. The first joint project, a 200 megawatt (MW) electrolyser in Rotterdam, will be supplied by TotalEnergies’ wind farms off the Dutch coast and will start operating from the end of 2027, Total said. It represents a global investment of about 600 million euros for both companies, which have made subsidy requests under European and national programmes. Air Liquide and Total will also establish a joint venture to build a 250 MW electrolyser project in the Zeeland province of the Netherlands. ($1 = 0.9557 euros) Sign up here. https://www.reuters.com/business/energy/air-liquide-totalenergies-invest-more-than-1-billion-euros-electrolyser-projects-2025-02-18/

2025-02-18 11:12

A look at the day ahead in U.S. and global markets from Mike Dolan Europe's defence stocks (.SXPARO) , opens new tab, up almost 20% for the year so far, surged another 1% on Tuesday as U.S. officials met Russian counterparts in Saudi Arabia for talks about ending the war in Ukraine and Germany prepared to go to the polls this weekend. U.S. markets were closed on Monday for the President's Day holiday and are set to return in relatively buoyant mood, with stock futures firmer near record highs even with Treasury yields and the dollar ticking back higher again. But attention has turned to Europe in what may prove to be a landmark week for the continent politically and economically, and as Europe's broad stock indexes (.STOXX) , opens new tab are drawing value investors back across the Atlantic again this year, given their near 40% valuation discount to S&P500 (.SPX) , opens new tab cousins. Euro zone stock (.STOXXE) , opens new tab gains of more than 12% in dollar terms this year are almost four times that of the American benchmark, with the record high German DAX (.GDAXI) , opens new tab up 14%. While rebalancing due to valuation extremes is a key driving force, the prospect of higher defence spending in Europe has added a major tailwind - with the outcome of Germany's elections also likely to decide whether a new government in Berlin will have the two-thirds parliamentary support needed to loosen the so-called 'debt brake' embedded in its constitution. Hopes for some broader rethink of public investment spending as way to rebooting the sluggish German economy have encouraged portfolio investors to revise their aversion to the region even in the face of potential U.S. trade wars. And in the backdrop, German investor morale posted its strongest increase in two years this month, according to the ZEW economic research institute. DEFENCE TAKES CENTRESTAGE But defence is front and centre of the latest stock price moves, with even some renewed speculation about the EU returning to joint sovereign borrowing as a possible route to increased spending in the area. Reflecting in part Washington's decision to engage Russia in talks this week without either Ukrainian or European Union governments at the table, Europe's defence sector has surged again. German arms maker Rheinmetall (RHMG.DE) , opens new tab added another 2% to its 14% jump on Monday, while Thyssenkrupp (TKAG.DE) , opens new tab, looking to spin off its warship division, advanced 3% after soaring nearly 20% on Monday. Italy's Leonardo (LDOF.MI) , opens new tab was up another 2%, while Sweden's Saab (SAABb.ST) , opens new tab rose 2.5% and Britain's BAE Systems (BAES.L) , opens new tab also gained 1%. Leaders from major EU states and Britain met in Paris on Monday, saying they were ready to give Ukraine security guarantees but adding it was dangerous to conclude a ceasefire there without a peace agreement at the same time. EU Commission President Ursula von der Leyen said the EU would work with Washington on the talks while outlining plans "to scale up defence production and spending." With the attention on defence spending and Germany's election, the 10-year German bund yields pushed back up to their highest in more than two weeks - even though further European Central Bank easing remains markets' best guess. The euro backed off recent highs on Tuesday, with the dollar index (.DXY) , opens new tab recovering some ground. Sterling held firm after news that British pay growth accelerated in late 2024 and the jobs market held up, underscoring why the Bank of England has been cautious about cutting interest rates despite a weak overall economy. Australia's central bank cut its rates for the first time in more than four years but warned it was too early to declare victory over inflation and was cautious about the prospects of further easing. The Aussie dollar firmed on the hawkish outlook. Chinese tech stocks continued to rally on Tuesday on optimism that President Xi Jinping's rare meeting with the country's tech entrepreneurs foreshadowed a regulatory U-turn after years of a sector-wide crackdown. The Hang Seng Tech Index (.HSTECH) , opens new tab climbed 2.5% to close at a fresh three-year high and bring the gains for the past month to over 30%. The broader Hang Seng (.HSI) , opens new tab was up 1.6%, even though mainland Chinese shares (.CSI300) , opens new tab fell back about 1%. Back on Wall Street, housing and manufacturing indicators top the economic diary while the earnings season starts to wind down. With almost 80% of S&P500 corporate earnings now out, annual profit growth is tracking a punchy 15.3% through the final quarter of last year. Key developments that should provide more direction to U.S. markets later on Tuesday: * US February NAHB housing index, New York Federal Reserve's Feb manufacturing survey, US December TIC data on overseas holdings of Treasuries; Canada January consumer price inflation * San Francisco Federal Reserve President Mary Daly and Fed Vice Chair for Supervision Michael Barr speak; Bank of England governor Andrew Bailey speaks * US corporate earnings: Allegion, Arista, Celanese, CoStar, Devon, Entergy, EQT, International Flavors & Fragrances, Medtronic, Occidental, Vulcan etc * U.S. Treasury sells inflation protected 30-year bonds * World Trade Organization's main decision body meets in Geneva Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2025-02-18/