2025-01-21 22:52
Pilot Co has let go of most oil and fuel traders in recent months - sources Moves part of plan to exit trading, focus on North American business - sources Pilot could tap international markets for its own supply needs - statement NEW YORK/HOUSTON, Jan 21 (Reuters) - Warren Buffett's Pilot Co is shuttering its international oil trading business, ending an excursion into the trillion-dollar global market to refocus on its Pilot Flying J service stations and truck stops in the U.S., three sources told Reuters on Tuesday. The company, a unit of Buffett's Berkshire Hathaway (BRKa.N) , opens new tab has let go of almost all employees running international trading, two sources familiar with the matter said. It will devote resources to growing its own North American businesses, instead of trading, they said. Known for its service stations and truck stops, Knoxville, Tennessee-based Pilot began international trading after Berkshire Hathaway took a 39% stake in 2017. The company, which is now fully owned by Buffett's conglomerate, had hired some veteran energy traders in recent years to build up trading operations. Among those let go recently are distillate fuel traders Anthony Hicks and Nghiem Nguyen, three of the sources said. A handful of traders, including fuel trader Ajai Hari, are still at the firm, closing out contractual obligations with customers, including Ecuador's national oil company PetroEcuador, one of the sources said. Hicks, Nguyen and Hari did not respond to Reuters requests for comment. Pilot did not comment on whether it was exiting international trade, nor on the trader departures. "Our core capabilities are focused on delivering reliable fuel supply to our travel centers and customers across North America," Pilot Energy President Gary Hoogeveen said in a statement shared with Reuters. The company may tap international markets to meet its supply needs, Hoogeveen said. Pilot began trimming its energy trading operations as early as 2023, letting go of 15 employees including Vice President Steven Hollerbach, after Buffett raised his stake in the company to 80%, Reuters reported earlier. Buffett took over the remaining 20% of Pilot in January last year, following a legal dispute with billionaire Jimmy Haslam over the company's valuation, as its pre-tax profit halved from over $2.3 billion in 2022 to $1.06 billion in 2023, according to regulatory filings. Since then, Pilot's appetite for the risk attached to international oil trading has tapered. The company let go of most of its international oil and fuel traders over recent months, two sources said. Founded by Haslam's father Jim Haslam in 1958, Pilot operates more than 650 travel center and 75 fuel-only locations. It also operates a U.S.-focused wholesale fuel marketing and distribution business and an oilfield water disposal business. Pilot's revenue totaled over $36 billion in the first nine months of 2024 and pre-tax earnings were about $486 million, both a decline year-on-year, according to Berkshire Hathaway's latest quarterly report. Sign up here. https://www.reuters.com/business/energy/warren-buffetts-pilot-co-shuts-oil-trading-business-sources-say-2025-01-21/
2025-01-21 22:43
BUENOS AIRES, Jan 21 (Reuters) - Argentina logged its largest energy trade surplus in nearly two decades last year, the energy secretariat said on Tuesday, marking a win for libertarian President Javier Milei who has vowed to use oil and gas exports to propel the weakened economy out of recession. The Latin American nation exported $9.68 billion worth of fuel and energy out of the country in 2024 while pumping in $4.01 billion, marking a surplus of $5.67 billion. The data, part of a record annual trade surplus, showed that Chile was the top destination for Argentina's energy exports. Milei hopes the boost from energy and agricultural exports, along with downsized public spending, can help tame runaway inflation and refill depleted state coffers in South America's No. 2 economy. The far-right economist and one-time political outsider is betting on turning the nation into a net energy exporter by developing its Vaca Muerta shale reserves, some of the largest in the world. Earlier on Tuesday, state-run energy company YPF announced a tie-up with three Indian firms to potentially export up to 10 million metric tons of liquefied natural gas (LNG) a year. Sign up here. https://www.reuters.com/world/americas/argentina-logs-largest-energy-trade-surplus-18-years-win-milei-2025-01-21/
2025-01-21 22:34
US government debt path unsustainable, says DoubeLine analyst CBO's forecasts 'optimistic' Expected tax cuts, high rates, set to worsen budget outlook Bond firm bets long-term Treasury yields will rise further NEW YORK, Jan 21 (Reuters) - The U.S. sovereign debt profile remains on an unsustainable path with deficits likely to widen more than what has been recently projected by the Congressional Budget Office, an analyst at investment firm DoubleLine said on Tuesday. The CBO, a non-partisan budget agency, last week issued fresh forecasts for the U.S. budget deficits for the next 10 years. They showed a slightly improved fiscal picture compared to its previous outlook published in June 2024. Debt to gross domestic product, a key metric of a country's fiscal health, is now estimated to grow to 118.5% by 2035 from about 98% last year, the CBO said on Friday, lower than the 122% debt-to-GDP ratio by 2034 it had forecast last year. Those projections, however, are "very optimistic," said Ryan Kimmel, an analyst at the bond-focused investment firm DoubleLine, given expectations of tax cuts by President Donald Trump. They are also based on dovish views on the level of interest rates, he said. "If you tweak those rate assumptions by very small amounts, the debt dynamic deteriorates quite dramatically ... the unsustainable debt dynamics still remain in place," he said in an interview. The CBO's estimates are based on existing laws and assume that the tax cuts Trump signed into law when he was president in 2017 will expire as planned at the end of this year. If Trump, who returned to the White House on Monday, and Republicans in Congress succeed in extending the current individual and small business tax rates, this could increase deficits by over $4 trillion over the next 10 years, the CBO has previously estimated. The CBO projects that the effective federal funds rate, as well as yields on three-month Treasury bills and 10-year Treasury notes will remain below 4% from next year until 2035. "Given that the entire (yield) curve right now is above 4%, it might be a bit challenging to get there, especially if you have this more optimistic growth outlook that should feed through into higher interest rates," said Kimmel. Benchmark 10-year yields were last at about 4.6%, while interest rates are currently in a 4.25%-4.5% range. To be sure, Trump's pick for Treasury Secretary Scott Bessent said last week that high deficits in recent years were due to a "spending problem" - an acknowledgment that Kimmel said was a positive signal. But there was still little clarity from the Trump administration on the fiscal front, he added. Given expectations of a deteriorating fiscal outlook, which will likely require the U.S. government to issue more debt, DoubleLine is betting long-term Treasury yields will keep rising, said Kimmel. "We don't think that the debt dynamic is positive for the long end of the yield curve ... We've seen the curve steepen quite a bit, but we think that there's still some room for the curve to steepen." Sign up here. https://www.reuters.com/markets/us/us-fiscal-path-unsustainable-despite-improved-budget-forecasts-says-doubleline-2025-01-21/
2025-01-21 21:46
Jan 22 (Reuters) - A look at the day ahead in Asian markets. Day two of the second Donald Trump administration, and exchange rates are in the global market crosshairs as investors nervously try to figure out how to trade the immediate fog shrouding the U.S. president's trade policy. That Trump will impose tariffs on imports from many of America's major trading partners seems almost certain. On what products and countries, and to what degree, are unknown right now, leaving the dollar and other currencies vulnerable to choppy and volatile trading. The same applies to other asset classes too, although the immediate impact is being felt more acutely in FX. Implied volatility across G10 currencies as measured by Deutsche Bank's 'DBCVIX' index remains relatively high, although it did pull back late on Tuesday. Investors will be relieved that Trump chose not to hit major trading partners with tariffs on his first day in office. They will be hoping his approach to tariffs follows the path SocGen analysts sketched out last week - "talk tough, aim high, but act gradually." But the president's off-the-cuff remarks to reporters late on Monday that some tariffs could come on Feb. 1 triggered an immediate reversal in the dollar, and served a timely reminder of how difficult the market terrain will be for investors to navigate in the coming weeks and months. The dollar looks stretched on positioning, sentiment and valuation metrics - hedge funds last week held the biggest net long dollar position in nine years; 'long dollar' is one of investors' most crowded trades, according to Bank of America's latest fund manager survey; and Citi analysts reckon the currency is overvalued by 3%. But that doesn't mean it can't go even higher, which is likely if Trump follows through with his more extreme protectionist measures and fiscal policies, Citi analysts warn. Rising Treasury yields and term premiums have tended to be dollar positive in recent years, they note. Meanwhile, the outlook for markets in Asia on Wednesday is fairly positive following a day of calm on global FX markets, falling Treasury yields and solid gains on Wall Street. Nikkei futures are pointing to a rise of around 0.75% for Japanese stocks at the open in Tokyo. China's markets will be under scrutiny following their decent start to the week on the back of Trump's initial 'go slow' signals on tariffs. The yuan on Tuesday rose the most since early November, as per the central bank's daily fixing, and on Monday registered its best day in spot market trading since August. The main economic events in Asia on Wednesday are the release of New Zealand's latest consumer inflation figures and an interest rate decision and guidance from Malaysia's central bank , opens new tab. Here are key developments that could provide more direction to markets on Wednesday: - New Zealand inflation (December) - Malaysia interest rate decision - World Economic Forum in Davos Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-2025-01-21/
2025-01-21 21:43
BOSTON, Jan 21 (Reuters) - A cryptocurrency financial services firm agreed on Tuesday to plead guilty to U.S. charges that it offered to help manipulate the market for a digital token created at the FBI's behest to help uncover fraud in the crypto sector. United Arab Emirates-registered CLS Global was one of the three companies and 15 individuals charged last year by federal prosecutors in Boston following a novel crypto-focused undercover investigation. The probe, dubbed "Operation Token Mirrors," marked the first time the FBI directed the creation of its own digital token, as well as a fake cryptocurrency company to help bait and catch fraudsters in the market. A lawyer for CLS did not respond to a request for comment. The company has said that it had always sought to take its compliance obligations seriously and ensure its operations remained separate from U.S. markets and regulatory systems. Prosecutors said CLS was one of three so-called market makers that offered illicit trading services to cryptocurrency companies and, during the sting operation, agreed to help manipulate the market for FBI-backed NexFundAI's token, which operated on the Ethereum blockchain. In court papers , opens new tab, the company admitted that it agreed to provide services for the NexFundAI token that included sham transactions called wash trading, designed to artificially inflate an asset's trading volume or price. Prosecutors said on Tuesday CLS would plead guilty to two counts related to its fraudulent manipulation of cryptocurrency trading volume and pay $428,059. The company will also be barred from participating in cryptocurrency transactions on trading platforms available to U.S. investors or providing services to U.S. cryptocurrency clients, prosecutors said. CLS Global also committed to making annual certifications about its business practices and agreed to settle related civil charges by the U.S. Securities and Exchange Commission. Sign up here. https://www.reuters.com/technology/cryptocurrency-financial-firm-plead-guilty-after-novel-fbi-probe-2025-01-21/
2025-01-21 21:04
Trump declares US energy emergency, calls for higher oil output Trump considering 25% tariffs on Mexico, Canada from February US will 'probably' stop buying Venezuelan oil, Trump says NEW YORK, Jan 21 (Reuters) - Oil prices fell on Tuesday after U.S. President Donald Trump declared a national energy emergency on his first day in office, raising concerns of higher U.S. output in a market widely expected to be oversupplied this year. Brent crude futures settled down 86 cents, or 1.1%, at $79.29 per barrel. U.S. West Texas Intermediate crude futures (WTI) for February delivery fell by $1.99, or 2.6%, to $75.89 in its final trading session. More-actively traded March WTI contract fell 2% to settle at $75.83 a barrel. There was no settlement in the U.S. market on Monday due to a public holiday. "End of the day, there is no shortage of oil out there," Mizuho analyst Robert Yawger said, noting that U.S. oil production is at record levels and the OPEC+ producer group still has some 5.86 million barrels per day of output curtailed. "What there is a shortage of is demand," Yawger said. "If the refiner doesn't need to make more fuel, they're not going to buy the crude." The oil market is expected to be oversupplied this year, after weak economic activity and energy transition efforts weighed heavily on demand in top-consuming nations the United States and China. The U.S. Energy Information Administration (EIA) reiterated on Tuesday its expectations for oil prices to decline both this year and next. "Strong global growth in production of petroleum and other liquids and slower demand growth put downward pressure on prices," EIA economists wrote. Trump also said he was thinking of imposing 25% tariffs on imports from Canada and Mexico from Feb. 1, rather than on his first day in office as previously promised. The delay helped ease concerns of an immediate tightening of the market among U.S. refiners, many of which are geared to process the type of crude oil supplied by these countries, Mizuho's Yawger said. Oil's losses were also limited after the U.S. president said his administration would "probably" stop buying oil from Venezuela. The U.S. is the second-biggest buyer of Venezuelan oil after China. Trump also promised to refill strategic reserves, although analysts questioned whether that would make any changes to oil demand. "(It) will likely not change anything ... Biden was already refilling U.S. SPR at its maximum rate of 3 (million barrels) per month," SEB Research analyst Bjarne Schieldrop wrote, referring to the Strategic Petroleum Reserve, the nation's crude stockpile, designed as a buffer against supply shocks. Also weighing on prices on Tuesday was the potential end to the shipping disruption in the Red Sea. Yemen's Houthis said on Monday they will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented. Sign up here. https://www.reuters.com/business/energy/us-crude-futures-down-1-barrel-trump-plan-boost-fossil-fuel-output-2025-01-20/
