2024-12-02 06:10

LAUNCESTON, Australia, Dec 2 (Reuters) - Saudi Arabia clawed back market share of Asia's crude oil imports in November, while Russia surrendered some of its barrels in what may be an early sign of a shift in market dynamics. Asia's imports from Saudi Arabia, the world's biggest crude exporter, rose to 5.83 million barrels per day (bpd) in November, up from 5.28 million bpd in October, according to data compiled by LSEG Oil Research. Meanwhile Russia's supplies to Asia, the top-importing region, dropped to 3.51 million bpd in November, down from October's 3.96 million and the lowest since January, according to LSEG. The data show that Asia's imports from Saudi Arabia went up by 550,000 bpd in November, while Russia's dropped by 450,000 bpd. The swing to Saudi Arabian barrels from Russia came even as the kingdom's state-controlled oil producer, Saudi Aramco (2222.SE) , opens new tab, increased the official selling prices for its crude to Asian customers for November-loading cargoes. Aramco's benchmark Arab Light grade was increased by 90 cents a barrel to a premium of $2.20 over the regional benchmark Oman/Dubai average for November. The increase did come after the premium had dropped to the lowest in nearly three years in October, and was seen at the time of the increase as a reflection that Asia refining margins were recovering. The profit from refining a barrel of Dubai crude at a typical Singapore refinery rose to $6.62 on Nov. 29, and has risen 240% since hitting $1.95 on Oct. 10, when the current uptrend started. Notwithstanding the increase in Aramco's November OSPs, Saudi crude has become more price competitive in Asia relative to other grades, including Russia's Urals, which is the main crude exported from its western ports. Cash Dubai crude ended at $71.83 a barrel on Nov. 29, a premium of $4.36 over Russia's Urals , which closed at 67.47. This premium is lower than it was for much of the recent months, when it has traded above $5 a barrel. Russian crude also faces higher transport costs, given the longer sea voyage from Russia's ports in the Baltic to destinations in Asia. These costs are also likely to increase as more sanctions on Russia's so-called "shadow fleet" of tankers are adopted, with Britain imposing new measures against 30 vessels last week, taking the total to 73. CHINA, INDIA Russian crude has largely been limited to just two major buyers in Asia, China and India, since sanctions were imposed after Moscow's 2022 invasion of Ukraine. China's imports of Russian oil dropped to 2.04 million bpd in November from 2.19 million in October, while India's slipped to 1.47 million bpd from 1.75 million. At the same time China lifted its imports of Saudi crude to 1.68 million bpd in November from 1.62 million in October, while India saw arrivals of 770,000 bpd from the kingdom, up from 610,000. Other Middle Eastern suppliers also saw rises in November imports, which probably reflects the competitiveness of their crudes against grades priced against global benchmark Brent, such as those from West Africa. China's imports of Iraqi oil rose to 1.53 million bpd in November from 1.21 million in October, while those from Oman lifted to 770,000 bpd from 680,000 bpd. India's arrivals of crude from the United Arab Emirates increased to 510,000 bpd in November, up from 360,000 bpd in October, LSEG data shows. The premium of Brent crude over Dubai reached an 11-month high of $2.98 a barrel on Aug. 30, around the time that many of the November-arriving cargoes would have been arranged. The premium has since trended lower, ending at $1.42 a barrel on Nov. 29, and this narrowing may help exporters such as Angola and Nigeria regain market share in Asia for cargoes arriving early next year. The challenge for Middle East exporters is to keep their crudes competitive enough against other producers so as to maintain, or regain, market share. This is especially key for them given Asia's overall appetite for crude is likely to drop in 2024 from the previous year, with imports for the first 11 months coming in at 26.52 million bpd, down 370,000 bpd from the same period in 2023. The views expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/markets/commodities/saudi-arabia-boosts-crude-oil-share-asia-russias-expense-russell-2024-12-02/

2024-12-02 06:08

MOSCOW, Dec 2 (Reuters) - Russia's second largest lender VTB expects 2025 profit to be 400 billion roubles ($3.76 billion) next year, down from 550 billion this year, due to the central bank's tight monetary policy, VTB's CEO Andrei Kostin told Reuters in an interview. "We expect a decrease in profit due to a reduction in the growth of the loan portfolio. Going forward, we will have discussions with the central bank," Kostin said, stressing that the regulator's measures to curb lending were hurting. "We simply won't be able to issue more loans physically. And, of course, our income will no longer be as high," Kostin said. ($1 = 106.4955 roubles) Sign up here. https://www.reuters.com/business/finance/russias-vtb-expects-2025-profit-400-bln-roubles-2024-12-02/

2024-12-02 06:06

Kostin: economic growth will slow to 1.9% in 2025 High interest rate less effective as policy tool The rouble to stabilise at around 100 to the dollar Kostin sees no risk of mass bankruptcies MOSCOW, Dec 2 (Reuters) - Russia's sanctions-hit, militarized economy is expected to slow next year and banks' profits will fall, while the benchmark interest rate may climb to 23% by the end of this year, Andrei Kostin, CEO of Russia's second-largest lender, VTB, said. Kostin predicted that GDP growth will slow to 1.9% in 2025, above the International Monetary Fund's forecast of 1.3%. The government expects the economy will grow by 3.9% this year. He said inflation will slow to 6.4% from the current 8.5%. "The war has been going on for almost three years, and a huge number of sanctions have been imposed. We are living in an absolutely unusual situation," Kostin told Reuters in an interview late last week. One third of the state budget was going to the military, he added. "It is impossible for the economy to go through such events without consequences. But the country has been living for three years, there is economic growth, and overall a healthy economy," he said. Kostin cautiously criticized the central bank's hawkish monetary stance, saying the current inflation rate did not require a benchmark interest rate "three times this level". Kostin, who worked in the Soviet embassy in Britain in the 1980s, likened Russia's central bank governor Elvira Nabiullina to British 20th century Prime Minister Margaret Thatcher, who was dubbed the "Iron Lady". "I am, of course, not as much of a monetarist and believe that an inflation rate of 8.5% is not so critical for Russia, it could be tolerated," he said. KEY RATE NOT FULLY EFFECTIVE Kostin said that Western sanctions, high spending on the military, state subsidies on many loans and elevated high inflationary expectations made the benchmark interest rate, which is at the highest level since 2003, less effective. "In the context of high military expenditures and sanctions, an instrument like the key interest rate may not be fully effective in managing inflation," Kostin said. He said the Russian rouble will stabilise at around 100 to the dollar after a period of volatility. The rouble lost 15% against the U.S. dollar after the latest round of U.S. sanctions last month hit third largest lender Gazprombank, which handled Russia's energy trade with Europe. Kostin said that with current interest rates, overall lending growth will slow to 10% next year from 20% in 2024 while Russian banks will not be able to earn as much next year as they did in 2024. He said that VTB's profit will fall by 27% in 2025. VTB, which runs many industrial assets, including a shipbuilding conglomerate, does not foresee any mass bankruptcies due to interest rates, even in vulnerable sectors such as coal mining and real estate. "We do not see the situation of 2008, when major companies collapsed. I do not see any companies that are currently feeling completely bad," Kostin said. Sign up here. https://www.reuters.com/markets/europe/russias-vtb-sees-2025-gdp-growth-19-ceo-says-2024-12-02/

2024-12-02 05:33

Dec 2 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole The dollar is making the early running on Monday, retaking some of last week's losses helped in part by rare words of support from U.S. President-elect Donald Trump. While 100% tariffs look rather unlikely, the latest comments marked a change from the Trump of old who openly touted a weaker dollar as a way to fix the U.S. trade deficit. The market took them as suggesting he will not be a source of pressure on the currency. The Chinese yuan certainly took it badly, touching a three-month low on the dollar. The dollar is also up around 0.5% on the yen and above 150.50 yen per dollar, overshadowing recently more hawkish musings from Bank of Japan Governor Kazuo Ueda who said the next interest rate hikes were "nearing in the sense that economic data are on track". Ueda's comments, combined with data showing Japanese business investment rising at a healthy 8.1% clip in the third quarter, encouraged markets to price in a 65% chance the BOJ will hike by a quarter point to 0.5% at its policy meeting on Dec. 18-19. That is virtually the same market probability that the Federal Reserve will cut rates by a quarter point at its meeting on Dec. 18, though much will depend on what this week's ISM surveys and payrolls data show. U.S. jobs are expected to have rebounded by 195,000 in November, though the forecast range of 160,000 to 270,000 suggests the risk of an upside surprise. JPMorgan, for instance, is tipping 270,000, with the end of hurricanes and strikes adding almost 90,000 to payrolls. Yet, they also expect the jobless rate to tick up to 4.2% and nearer the Fed dot plot of 4.4%, likely leaving the door open to a December easing. For the ECB, a cut of 25 bps on Dec. 12 is seen as the absolute minimum and the market implies a 21% chance of 50 bps. Investors have priced 1.6% as the floor for ECB rates, compared with 3.75% for the Fed. French bonds will need all the rate love they can get after France's far right National Rally raised the risk of a no confidence vote this week that could topple Prime Minister Michel Barnier. Whatever happens, budget repair seems unlikely and the deficit could head to 6% of GDP, perhaps making it more expensive for France to borrow than for Greece. Oh, and it's worth keeping an eye on the Russian rouble after its near collapse last week as the authorities seemed to condone its decline, maybe figuring a devaluation was worth it to fatten their export earnings from commodities priced in dollars. Key developments that could influence markets on Monday: - UK housing prices for Nov; EU unemployment; euro zone, German, UK and French PMIs - Appearances by ECB President Christine Lagarde, BoE Director Lee Foulger, Riksbank First Deputy Governor Anna Breman, Fed Governor Christopher Waller and Fed NY President John Williams Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-12-02/

2024-12-02 05:32

JAKARTA, Dec 2 (Reuters) - Indonesia and Canada on Monday signed a Comprehensive Economic Partnership Agreement (CEPA) that aims to strengthen economic ties between the two G20 members, three years after negotiations began. The agreement will take effect in 2026 and was signed in Jakarta by trade ministers of both countries. Indonesia's trade minister, Budi Santoso, said Indonesia appreciated Canada's support for its plan to prioritise its critical minerals sector, which was vital for its sustainable growth. "Together, we advance sustainable critical mineral management, supporting Indonesia's net zero target by 2060, and fostering Canadian investment while driving green growth in both nations," he told a joint press conference. Indonesia has rich deposits of tin, copper and bauxite, among others, and is the world's largest source of nickel ore. It is seeking to extract more value from the mineral by attracting investment into its processing and in the manufacturing of electric vehicle batteries. The United States in July said it had approached Indonesia about joining a multinational mineral security partnership aimed at speeding up development of sustainable critical mineral supply chains. Indonesia also made an agreement with Britain in September to collaborate on critical minerals. Two-way trade between Indonesia and Canada was $3.4 billion last year, according to with Indonesia's trade ministry. Canada has estimated bilateral trade at $5.1 billion in 2023. Canada's main exports to Indonesia were agriculture products fertilizers, while Indonesia mainly exported machinery and electrical machinery as well as garments and footwear. Canadian Prime Minister Justin Trudeau and Indonesian President Prabowo Subianto met during the Asia-Pacific Economic Cooperation (APEC) leaders' summit in Peru last month. Prabowo at the time said he was looking for more cooperation on fisheries, manufacturing and renewable energy sectors. Sign up here. https://www.reuters.com/world/indonesia-canada-sign-comprehensive-economic-partnership-2024-12-02/

2024-12-02 05:12

Case is first of its kind at Swiss federal court Trafigura one of four defendants in case Trading house says it has since strengthened compliance Individual defendants face up to 5 years in jail GENEVA, Dec 2 (Reuters) - Trafigura and three other defendants including a former board member go on trial over the alleged payment of bribes to an Angolan oil official for oil deals in a landmark case that opens on Monday. It is the first time Switzerland's top criminal court will rule on a company's liability for the alleged bribing of a foreign official and a rare instance of a former top executive of a trading firm going in the dock. Prosecutors allege Trafigura also did not take all reasonable measures needed to prevent payment of the equivalent of over $5 million in bribes in exchange for oil and shipping contracts between 2009 and 2011, according to the indictment. Trafigura said in a statement its former parent company Trafigura Beheer BV (TBBV) will defend itself. "TBBV's anti-bribery and anti-corruption controls and compliance programme in place at the relevant time have been externally reviewed and assessed to have met legal requirements and international good practice standards applicable at that time," it said, noting it has since strengthened compliance. The company previously said it was willing to resolve the investigation out of court but the Attorney General's office decided against a settlement. The office declined to comment. One of the defendants is Mike Wainwright, 51, who was a top Trafigura executive until his retirement earlier this year. At the time of the alleged crimes, he was chief operating officer, management board member, a compliance committee member and the main point of contact for Trafigura auditors, the indictment says. "Mr Wainwright entirely rejects the allegations made against him and will be presenting a robust defence. He has full confidence the court will find the allegations to be unfounded and will dismiss the case made against him by the prosecution," said his lawyer Daniel Kinzer. The other two defendants are the former Angolan official and a Swiss man and ex-Trafigura employee who allegedly acted as an intermediary for the payments via a company registered in the British Virgin Islands. Lawyers for the two did not respond to calls and emails from Reuters. Trafigura declined to comment further. Under Swiss law, the defendants face a maximum sentence of five years in prison. Trafigura faces a fine of up to 5 million Swiss francs ($5.60 million), although the Swiss Federal Criminal Court said a higher compensation penalty is possible. TRAFIGURA LETTERHEAD The 150-page indictment alleges that 4.3 million euros ($4.48 million) was transferred to the Angolan official as well as $604,000 in cash between April 2009 and October 2011. The Swiss bank account used for the payments was opened during the official's trip to Geneva in April 2009 where Trafigura paid for his stay at the Four Seasons Hotel, it states. Wainwright was involved in bank transfers into that account of which the Angolan official was the beneficial owner, it said. Trafigura appears in the letterhead of the document used to open the account and a signature resembling Wainwright's appears on it, the indictment alleges. The deals Trafigura secured as a result of the scheme allowed it to make a profit of $143.7 million, it says, citing an analysis by the Swiss prosecutor's office based on financial documents obtained during their investigations. Swiss prosecutors also allege that Trafigura founder Claude Dauphin, who died in 2015, "must have been involved" in the decision to make payments to the Angolan. Among the evidence cited are documents showing that Dauphin invited the official to his home during the 2009 Geneva trip. Dauphin's family says he is being singled out unfairly and that they are being denied access to case documents by the court. The court in Bellinzona declined to comment. The trial is scheduled to run through to Dec. 20, with an extension into January possible. ($1 = 0.9594 euros) ($1 = 0.8934 Swiss francs) Sign up here. https://www.reuters.com/business/energy/swiss-corruption-case-involving-trafigura-former-executive-opens-2024-12-02/