2024-12-12 11:45

Board members include Blackstone's Jon Gray and ex BP boss XRG, worth over $80 bln, to focus on low carbon energy ADNOC has done a string of deals in gas and chemicals DUBAI, Dec 12 (Reuters) - United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan approved a board of directors for XRG, state oil giant ADNOC's new international investment arm, including Blackstone's (BX.N) , opens new tab Jon Gray and former BP (BP.L) , opens new tab boss Bernard Looney, ADNOC said on Thursday. Abu Dhabi National Oil Company announced last month it was setting up XRG, saying it was worth over $80 billion and would focus on lower carbon energy, including gas, and chemicals. Sultan Al Jaber, ADNOC's chief executive, was appointed executive chairman of the new entity, which is expected to become operational in the first quarter of next year. Along with Gray and Looney, the board also included Egyptian billionaire Nassef Sawiris, UAE Investment Minister and CEO of Abu Dhabi sovereign wealth fund ADQ Mohamed Hassan Alsuwaidi, Chairman of the UAE president's office for strategic affairs Ahmed Mubarak Al Mazrouei, and Jasem Al Zaabi, chairman of Abu Dhabi Department of Finance and telecoms conglomerate e&. Looney was dismissed by BP's board last December. The oil major said he had knowingly misled the board by failing to disclose past relationships. ADNOC has done a series of deals this year in gas, liquefied natural gas (LNG) and chemicals, which it considers essential to its future growth alongside renewables. UAE state-owned renewables firm Masdar, in which ADNOC has a 24% stake, has also made several acquisitions. ADNOC struck a deal in October to buy German chemicals maker Covestro for $16.3 billion, including debt. Covestro last month said its management and supervisory boards supported the takeover offer, which will be one of the largest foreign acquisitions by a Gulf state and ADNOC's largest. The appointment of big names from the world of finance and energy to XRG's board signals its grand ambitions, as ADNOC pursues its aggressive growth strategy. Reuters reported in April that ADNOC had considered buying BP but the deliberations did not progress beyond preliminary discussions. The oil giant is also in talks that could lead to other foreign deals, including with Austria's OMV over the merger of chemical firms Borouge and Borealis. Sign up here. https://www.reuters.com/markets/commodities/uae-president-okays-board-adnoc-global-investment-arm-xrg-2024-12-12/

2024-12-12 11:43

Long-term outlook remains weak amid structural demand shifts Refinery closures, new regulations may support future prices Outlook for Asia still bearish on ample supplies LONDON/NEW YORK/SINGAPORE, Dec 12 (Reuters) - The global diesel market will likely find price support in 2025 from the closure of about 1% of refining capacity, traders and analysts said, offsetting current weakness and structural downward pressure as the world shifts to cleaner fuels. The market ends 2024 on shaky ground, despite peak seasonal demand, as margins in the world's key energy hubs in Singapore, northwest Europe and the U.S. Gulf have come off November's firm levels as some refineries returned from maintenance shutdowns. About 1 million barrels per day of refining capacity in Europe and the United States is expected to permanently shut down next year in response to weak profits, Reuters calculations show, while world demand is expected to rise slightly. "For 2025, we are constructive on European diesel prices due to the capacity closures, still low forward margins that will keep utilisation levels relatively low, and a slight rebound in demand," Energy Aspects analyst Natalia Losada said. For now, seasonal demand is offering limited support. Consultancy FGE Energy expects European diesel and gasoil demand to contract by 230,000 bpd year-on-year over January and December even amid forecasts that the northern hemisphere winter will be the coldest in 10 years, on low road fuel use. The return from maintenance this month of refineries like Saudi Arabia's Yasref and Kuwait's Al Zour will boost supplies from the Middle East, they added. Asian diesel cracks recovered to three-month highs for most of November, but have crept lower in December to average below $15 a barrel. U.S. ultra-low sulphur diesel futures hit a $26 per barrel premium against West Texas Intermediate crude oil futures on Nov. 26, the highest since July, but the crack has since eased to a near two-month low of under $22 by Dec. 5. Margins in Europe followed a similar trajectory, hitting a 16-week high of $18.70 per barrel on Nov. 26, then softening by more than $2 by Dec. 11. SUPPORT IN 2025 Distillate fuels like diesel and gasoil have a range of uses including as a motor fuel, for heating and powering factories. But a shift in global car and truck fleets to cleaner or renewable fuels, particularly in China, has slashed demand. Still, the International Energy Agency expects gasoil and diesel demand to expand next year by 95,000 bpd – up from a 180,000 bpd contraction this year - and traders and analysts say there are other factors that could support the market in 2025. The refinery closures include Scotland's Grangemouth refinery, LyondellBasell Industries' (LYB.N) , opens new tab 263,776 bpd Houston refinery and Phillips 66's (PSX.N) , opens new tab and 139,000-bpd Los Angeles refinery. Gunvor Group announced on Dec. 10 plans to cease fuel production at its 75,000 bpd refinery in Rotterdam. JP Morgan expects European diesel margins to trade at about $17-$19 a barrel next year, rising to $21 in 2026 as refinery shutdowns outpace demand contraction. It expects U.S. margins to remain strong, averaging $25 in 2025 and $28 in 2026. Also, shipping rules set to come into effect in May, making the Mediterranean region an Emission Control Area (ECA), are expected to bolster gasoil demand by about 50,000 bpd, traders say, as the industry moves away from dirtier fuel oil. While Asian refiners who typically export to Europe will benefit from less European capacity, two traders said lighter refinery maintenance shutdowns and new refinery expansions next year are expected to keep Asian prices under pressure. Fresh additions to refining capacity in China, India and Indonesia will likely total more than 800,000 bpd next year, Reuters calculations show. FGE forecasts Asia's diesel cracks to average less than $14 a barrel for the first half next year - slightly lower or stable relative to current levels. Sign up here. https://www.reuters.com/markets/commodities/global-diesel-prices-rely-refinery-closures-support-2025-2024-12-12/

2024-12-12 11:35

NEW DELHI, Dec 12 (Reuters) - India will reach a decision soon on whether to impose import restrictions on metallurgical coke, a key ingredient in steelmaking, a source with direct knowledge of the matter told Reuters. India, the world's second-largest producer of crude steel, proposed a plan in April to protect local suppliers of low-ash metallurgical coke by imposing country-specific quotas to limit annual imports to 2.85 million metric tons for one year. Leading steelmakers such as JSW Steel (JSTL.NS) , opens new tab and ArcelorMittal Nippon Steel opposed the move, saying it would hit output, and the government has been consulting with the industry. Those consultations have concluded, and the decision is now pending with the federal trade ministry, the source said on Wednesday. "The decision is expected very soon," said the source, who spoke on condition of anonymity as the deliberations are sensitive. "There are conflicting pressures weighing on the decision with steel industry on one side and met coke producers on the other." The trade ministry's Directorate General of Trade Remedies (DGTR) said in April the curbs were meant to protect domestic met coke producers from rising imports, which have increased by more than 61% over the past four years. It proposed quotas on imports from major suppliers including China, Japan, Indonesia, Poland and Switzerland. In June, India's federal steel ministry also wrote to the trade ministry, saying the curbs would hit local steel production. The federal trade ministry did not respond to a Reuters email seeking comment. Sign up here. https://www.reuters.com/markets/commodities/india-decide-soon-whether-curb-steelmaking-raw-material-imports-source-says-2024-12-12/

2024-12-12 11:26

BERN, Dec 12 (Reuters) - The Swiss National Bank could still take interest rates into negative territory, Chairman Martin Schlegel, although the likelihood of such a move has reduced after the central bank's latest cut in borrowing costs. "At the current juncture we cannot exclude negative interests rates in the future," Schlegel told reporters. "Now with these cuts today the likelihood of negative rates has become smaller." Schlegel, who has previously flagged negative rates as possible move, said the SNB did not like negative rates, a policy it used for seven years until 2022. Negative rates are a tool to weaken investor demand for the safe haven franc, whose appreciation has weighed on Swiss exporters by making their products more expensive abroad. The SNB moved interest rates into negative territory from late 2014 to 2022 to limit the franc's appreciation, although the policy was unpopular with banks and savers. "Nobody likes negative interest rates. Also, the Swiss National Bank does not like negative interest rates," Schlegel said. Sign up here. https://www.reuters.com/markets/rates-bonds/snb-says-likelihood-negative-interest-rates-has-come-down-2024-12-12/

2024-12-12 11:22

LONDON, Dec 11 (Reuters) - The British pound was steady against the euro and the dollar on Thursday, with currency investors sitting tight before key central bank decisions. The European Central Bank announces its policy decision later in the day, while the Bank of England and Federal Reserve are scheduled to announce their last policy decisions of 2024 later next week. The Bank of England is seen holding rates steady when it announces its decision next Thursday, in contrast to the other major central banks, who are seen lowering rates by 25 basis points. The pound was relatively flat at 82.39 pence per euro , after hitting its strongest against the single currency since March 2022 on Wednesday. "Euro-sterling moving lower makes sense. The economic outlook in the UK looks pretty grim but I think the euro zone is the only place where it's actually worse," Michael Brown, strategist at Pepperstone, said. "You also have two big doses of political uncertainty on top of that in France and Germany." France's prime minister Michel Barnier was ousted last week, while Germany is expected to vote for a new government in the first quarter of 2025 after the collapse of its ruling coalition. The BoE meanwhile is expected to be cautious next year in regards to rate cuts, with markets pricing in just three 25-bp moves by the end of 2025. Analysts see the ECB cutting rates at every meeting in the first half of next year and possibly beyond, while markets are pricing just two more rate cuts from the Fed in 2025 after next week's expected cut. The slower pace of expected easing from the BoE has helped the pound this year, which has eked out a 0.1% gain against the U.S. currency, the only major currency to be stronger than the dollar in 2024. On Thursday, the pound was down less than 0.1% versus the dollar at $1.2743. "There's a risk that we get to the first quarter of next year and the BoE end up panicking as a result of a significantly weaker labour market," Pepperstone's Brown said. "We could end up with a much more aggressive pace of easing that markets aren't pricing and that could be a headwind for the pound to deal with early next year." Sign up here. https://www.reuters.com/markets/currencies/sterling-steady-against-euro-dollar-2024-12-12/

2024-12-12 11:21

Dec 12 (Reuters) - Canada's Cenovus Energy (CVE.TO) , opens new tab on Thursday forecast higher oil and gas production for 2025, expecting to benefit from new projects coming online. The company forecast upstream production between 805,000 and 845,000 barrels of oil equivalent per day (boepd) for 2025, with the midpoint higher than analysts' estimates of 820,140 boepd, according to data compiled by LSEG. The company expects 770,000 boepd to 810,000 boepd for this year. With growing power demand from operations including data centers and manufacturing, the U.S. Energy Information Administration (EIA) has projected power demand will rise in 2025 in the U.S., potentially helping gas producers such as Cenovus. "Cenovus will deliver important milestones on our major growth projects in 2025, including achieving first oil from Narrows Lake, installation of the West White Rose offshore facilities and commencement of drilling, and preparations for first steam at the Foster Creek optimization project," said CEO Jon McKenzie. Narrows Lake is an oil sands site in Alberta expected to have production of 130,000 barrels per day (bpd). The company is also investing in the Foster Creek optimization project to expand its oil sands production. The Canadian firm forecast downstream throughput for 2025 between 650,000 and 685,000 barrels per day (bpd), compared with 630,000 bpd to 670,000 bpd expected this year, with refinery utilization of 90% to 95%. The company expects oil sands production to be lower in the second quarter of 2025, reflecting turnaround and maintenance activity, and sees it ramping up in the second half of 2025. It expects expenses of between C$4.6 billion ($3.25 billion) and C$5 billion for 2025, compared with the estimated spending of C$4.5 billion to C$5 billion in 2024. ($1 = 1.4141 Canadian dollars) Sign up here. https://www.reuters.com/business/energy/cenovus-energy-forecasts-higher-production-2025-2024-12-12/