2025-02-04 22:06

US trade with China threatens billions in investments Tariffs could slow projects reaching a final investment decision China is a major buyer of US LNG HOUSTON, Feb 4 (Reuters) - President Donald Trump's emerging trade war with Beijing poses a new threat to billions of dollars in planned U.S. liquefied natural gas export projects, many of which rely on China as a key buyer, according to analysts, industry sources, and company filings. The threat reflects the double-edged nature of Trump's protectionist policies, which are intended to boost U.S. business and force action to stop drug trafficking and illegal immigration, but could also inadvertently undermine his hopes of vastly expanding U.S. energy output. "The tariffs may impact long-term contracting and offtake agreements...and make it more difficult for new US LNG projects to progress toward Final Investment Decisions," analysts at energy consulting firm EBW Analytics told customers in a note on Tuesday, referring to Beijing's decision to impose retaliatory levies on U.S. energy imports. Trump over the weekend announced a 10% tariff on Chinese imports as part of a broad plan to improve the U.S. trade balance, triggering retaliation from Beijing which slapped a 15% tariff on U.S. LNG and coal, and a 10% tariff on U.S. oil. The U.S. is the world's largest exporter of LNG and China has been a major buyer of the super-chilled gas, importing nearly 6%, or about 4.3 million metric tonnes, of total U.S. LNG exports last year, according to LSEG data. Chinese state-owned companies have signed LNG supply deals for over 20 million metric tonnes per annum (MTPA) from both existing and future U.S. export terminals, according to Reuters calculations. The two largest U.S. LNG exporters, Venture Global LNG (VG.N) , opens new tab and Cheniere (LNG.N) , opens new tab, have 14 million MTPA in agreed long-term contracts with Chinese companies, according to their public announcements. Venture Global declined to respond to requests for comment, while Cheniere and rival Energy Transfer, which has a long-term sales and purchase agreement with China, were not immediately available for comment. Freeport LNG, the third-largest U.S. LNG exporter, also declined to comment. There are eight LNG export terminals operating in the U.S., three under construction and almost 20 more at various stages of development. Companies are pushing ahead with projects for new or expanded LNG export capacity after the Trump administration in January lifted a moratorium on new LNG export permits, imposed by former President Joe Biden over concerns about the projects' environmental and economic impacts. But Charlie Riedl, the Executive Director of the Center for LNG, a trade group representing many U.S. LNG exporters and developers, said China’s decision to impose tariffs injects uncertainty into the industry and weakens America’s competitive position in global energy markets. "These tariffs on U.S. LNG directly undermine the Trump administration’s efforts to expand American energy exports and strengthen our geopolitical influence," Riedl said. A White House official told Reuters that Chinese tariffs on U.S. LNG could have limited economic impact, but said the risk is worthwhile. "There is not a dollar value you can put on saving American lives from fentanyl deaths," the official said, reflecting U.S. concerns that China is a major source of the drug and chemicals used to make it. Trump wants to expand the export markets for LNG to other nations as well, creating less risk from any Chinese actions, the official said. BIG CONTRACTS LNG developers use long-term contracts or sales and purchase agreements to help secure funding for their projects from banks. They are a key element in moving projects from the development stage to a final investment decision. Venture Global, the most valuable U.S. LNG exporter with two plants operating in Louisiana and three more under development, has signed 9.5 MTPA in supply deals with Chinese companies so far, according to company filings. Cheniere Energy, the second-most valuable U.S. LNG company and currently the largest exporter, has more than 4.5 MTPA in long-term Chinese deals, according to its announcements. As part of the prospectus for its blockbuster initial public offering in January, Venture Global warned investors of its exposure to a possible trade war between the world's two largest economies. "These factors could adversely affect our ability to market the remaining production capacity of our projects, which could have a material adverse effect on the viability of our projects and on our business," Venture Global told investors at the time. Its stock was down almost 5% in afternoon trading on Tuesday, while Cheniere was down less than 1%. Sign up here. https://www.reuters.com/business/energy/trade-war-with-china-casts-dark-cloud-over-new-us-lng-projects-2025-02-04/

2025-02-04 21:55

WASHINGTON, Feb 4 (Reuters) - U.S. Senate Republicans on Tuesday introduced a resolution to overturn the Biden administration's proposed fee on methane emissions, one of the previous Environmental Protection Agency's final measures to force big oil and gas producers to slash emissions of the powerful greenhouse gas. The resolution introduced by Republican Senators John Kennedy of Louisiana and John Hoeven of North Dakota under the Congressional Review Act (CRA), which allows Congress to reverse new federal rules with a simple majority, would overturn the escalating charge set by the agency they have called a tax. "Americans want our country to ‘drill, baby, drill’ to lower their energy costs. To restore American energy dominance, we need to beat back the anti-energy policies and taxes the Biden administration shackled us with,” said Kennedy. The methane fee was mandated by the 2022 Inflation Reduction Act, which directed the EPA to set a charge on methane emissions for facilities that emit more than 25,000 tons per year of carbon dioxide equivalent. Methane is the most prevalent greenhouse gas after carbon dioxide that tends to leak into the atmosphere undetected from drill sites, gas pipelines and other oil and gas. The fee started at $900 per metric ton of methane emitted in 2024, and increased to $1,200 in 2025, and $1,500 for 2026 and beyond. The EPA last year finalized methane emission and reporting standards for the oil and gas sector, which faced less opposition from oil and gas companies. President Donald Trump issued a range of executive orders focused on setting an "energy dominance" agenda in his first days in office, which directed agencies to speed up permitting of energy projects and unwind environmental protections that his administration deems burdensome. The order did not mention a repeal of methane regulations but did order the EPA Administrator to review the so-called endangerment finding for greenhouse gases, a scientific determination that underpins the legal footing of EPA climate rules. Sign up here. https://www.reuters.com/sustainability/climate-energy/senators-float-resolution-overturn-biden-methane-fee-rule-2025-02-04/

2025-02-04 21:48

CALGARY, Feb 4 (Reuters) - The head of oil multinational Shell's (SHEL.L) , opens new tab Canadian operations is leaving the company after four years at the helm. Canada president and country chair Susannah Pierce's departure is effective March 3, Shell Canada said on Tuesday. Pierce said in a LinkedIn post that she is leaving to pursue personal interests. Stastia West, Shell's current vice president for its Canadian integrated gas division, will succeed Pierce, the company said. Pierce, who is based in Calgary, was with Shell for 16 years and served in a variety of senior roles. Prior to assuming the role of Canada president in 2021, Pierce was the director of corporate affairs for Shell-led LNG Canada, the liquefied natural gas facility currently nearing completion near Kitimat, British Columbia. She was the public face of that massive project, working with government officials, community leaders and First Nations to shepherd it through a contentious regulatory review process. Sign up here. https://www.reuters.com/business/energy/shell-canada-president-departs-company-2025-02-04/

2025-02-04 21:46

Feb 5 (Reuters) - A look at the day ahead in Asian markets. First Mexico reached agreement with the United States to put U.S. tariffs on ice, then Canada did likewise, leaving the world's attention on China. Can a similar rapprochement between Beijing and Washington be achieved? After China retaliated on Tuesday to sweeping U.S. tariffs with targeted tariffs of its own, and put several U.S. companies, including Google, on notice for possible sanctions, a sudden detente seems unlikely. This will keep trade tensions bubbling away in Asia, even though markets globally have welcomed Washington's temporary reprieves with Mexico and Canada. A proposed telephone call on Tuesday between U.S. President Donald Trump and Chinese President Xi Jinping didn't take place, suggesting relations remain cool at best. China's levies don't come into effect until Feb. 10, however, leaving time for Trump and Xi to hammer out a 'deal'. Chinese onshore markets reopen on Wednesday after the Lunar New Year holiday. All asset classes will be under intense scrutiny, none more so than the currency and the central bank's daily fixing of the dollar/yuan exchange rate. It was last fixed at 7.1698 on Jan. 27, and the pressure for a higher fix - i.e, a weaker yuan - could be strong after the offshore dollar/yuan rate hit an all-time high of 7.3765 on Monday. It has since eased back to around 7.28, but that's still comfortably higher than the central bank's last official fix over a week ago. Chinese stocks listed in Hong Kong have shrugged off the U.S.-Sino trade war with surprising ease, as investors have loaded up on artificial intelligence and electric vehicle shares. The China-focused index rose 3.5% on Tuesday to a three-month high, and Hong Kong tech shares leaped 5%. Will that optimism spill over to the onshore market? Most Asian equity benchmarks rose solidly on Tuesday, and the tech-heavy Nasdaq's strong advance lifted Wall Street too. Surprisingly soft U.S. jobs opening figures on Tuesday pushed the dollar and Treasury yields lower, which could also support risk appetite in Asia on Wednesday. But while U.S. money markets are still pricing in two quarter-point rate cuts from the Fed this year, the inflationary cloud from U.S. tariffs is darkening. Economists at Morgan Stanley on Tuesday changed their Fed call to only one rate cut this year, in June, from two, warning: "The path for monetary policy in 2025 remains highly uncertain." Among the U.S. companies that reported earnings after the market close on Tuesday was 'Magnificent 7' constituent Alphabet. Google's parent company missed revenue estimates, sending its shares down more than 1% in after-hours trading. If that is sustained, it could weigh on sentiment in Asia on Wednesday. Here are key developments that could provide more direction to Asian markets on Wednesday: - China "unofficial" services PMI (January) - China reserve requirements ratio - Japan corporate earnings, including Toyota - Indonesia GDP (Q4) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphics-2025-02-04/

2025-02-04 21:44

Feb 4 (Reuters) - Goldman Sachs on Tuesday said it expects Beijing's retaliatory tariffs in response to new U.S. restrictions against Chinese goods to have only limited impact on energy prices. Minutes after U.S. President Donald Trump's 10% tariff on Chinese goods kicked in at 12:01 a.m. ET (0501 GMT), China's finance ministry said it would impose levies of 15% for U.S. coal and LNG and 10% for crude oil, farm equipment and some autos. "We believe near term implications to commodity markets will be limited given that neither global supply nor demand of these commodities are changed by China's tariffs," Goldman Sachs said in a note. Impacted U.S. volumes are likely to easily find alternative buying markets, while China replaces impacted import volumes with alternative suppliers, Goldman said. U.S. liquefied natural gas (LNG) exports are likely to increase, while incremental supply from other Atlantic basin suppliers might head to Asia, Goldman said. "In coal, we expect U.S. volumes to be redirected to Japan and Korea, which will likely release local Pacific basin supplies to go to China instead," analysts at Goldman Sachs said, adding China crude oil imports from the U.S. are small enough that can be easily reallocated. Impact to commodity freight rates will also likely be limited given the United States is one of China's farthest away trading partners, it said. However, Goldman said the most significant impact from China's retaliatory measures to commodity markets is potential pause in new long-term LNG contract negotiations between China buyers and U.S. LNG export facilities. Oil prices diverged at settlement on Tuesday amid tariff drama between Washington and Beijing. Sign up here. https://www.reuters.com/business/energy/china-retaliatory-measures-have-limited-impact-energy-prices-goldman-says-2025-02-04/

2025-02-04 21:43

PepsiCo, Estee lauder fall after weak earnings forecasts Alphabet misses quarterly revenue estimates Indexes up: Dow 0.3%, S&P 0.72%, Nasdaq 1.35% Feb 4 (Reuters) - The three major stock indexes closed higher on Tuesday, aided by energy stocks, while investors saw reason for optimism for a trade breakthrough between the U.S. and China after President Donald Trump delayed tariffs for Canada and Mexico. New 10% U.S. tariffs on Chinese imports took effect on Tuesday, which China countered with levies on U.S. goods. It was unclear when the country's leaders would talk and Trump said he was in no hurry. Energy stocks (.SPNY) , opens new tab led the S&P gains, rising 2.18%, while utilities (.SPLRCU) , opens new tab and consumer staples (.SPLRCS) , opens new tab lost ground. Trump had said over the weekend he would impose a 25% tariff on goods from Mexico and Canada, but agreed to a 30-day pause on Monday in return for border and crime concessions from both countries. "The president was so quick to offer a 30-day stay of execution to Mexico and Canada, so you get the idea that maybe what he's really trying to do is embrace a quick declaration of victory which doesn’t change much from a trade perspective," said Sam Stovall, chief investment strategist at CFRA Research. "Investors have been breathing a sigh of relief today and we’ll see if a month from now they can continue to breathe that sigh of relief." Strong corporate earnings have also buoyed investor optimism. Of the 211 companies in the S&P 500 that have reported earnings for the fourth quarter, 76.8% reported above analyst expectations, according to an S&P earnings scorecard. Palantir (PLTR.O) , opens new tab shares jumped 24% after the data analytics company forecast first-quarter and annual revenue above Wall Street estimates. Meanwhile, Alphabet (GOOGL.O) , opens new tab rose 2.6% ahead of its quarterly results, but posted revenue that missed expectations after the close, partly due to a slowdown in its cloud computing business. The stock was down more than 7% in after-market trading. The Dow Jones Industrial Average (.DJI) , opens new tab rose 134.13 points, or 0.30%, to 44,556.04, the S&P 500 (.SPX) , opens new tab gained 43.31 points, or 0.72%, to 6,037.88 and the Nasdaq Composite (.IXIC) , opens new tab gained 262.06 points, or 1.35%, to 19,654.02. Biotechnology firm Illumina (ILMN.O) , opens new tab dropped 5.3%, while PVH Corp (PVH.N) , opens new tab, the holding company for brands including Calvin Klein, slipped nearly 1% after China placed the companies on its "unreliable entity list". Three Federal Reserve officials warned on Monday that trade tariffs carried inflation risks, with one arguing that uncertainty over the outlook for prices called for slower interest-rate cuts than otherwise. A Labor Department report showed U.S. job openings stood at 7.6 million in December, compared to an estimated 8 million, according to economists polled by Reuters. In earnings-driven moves, PepsiCo (PEP.O) , opens new tab fell 4.5% after it forecast annual profit below expectations and missed quarterly revenue estimates. Estee Lauder (EL.N) , opens new tab plummeted 16.1% after the cosmetics company posted another weak quarter amid demand weakness and announced job cuts. Merck (MRK.N) , opens new tab dropped 9.1% after the drugmaker said it would pause shipments of Gardasil to China through at least mid-year, as continued weak demand for the HPV vaccine there is expected to hurt the company's 2025 revenues. PayPal (PYPL.O) , opens new tab fell 13.2% after the digital payments giant's operating margin shrank in the fourth quarter. Advancing issues outnumbered decliners by a 2.81-to-1 ratio on the New York Stock Exchange. There were 121 new highs and 61 new lows on the NYSE. On the Nasdaq, 3,035 stocks rose and 1,323 fell as advancing issues outnumbered decliners by a 2.29-to-1 ratio. Volume on U.S. exchanges was 13.39 billion shares, compared with the 15.53-billion average for the full session over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/futures-tick-lower-china-responds-us-tariffs-2025-02-04/