2024-10-24 20:36

US shale producers continue to restrain production growth Companies such as Enbridge expand capacity on existing lines Deepwater oil export projects struggle to attract customers HOUSTON, Oct 24 (Reuters) - Top executives of two U.S. energy pipeline operators on Thursday ruled out building new crude oil lines to move volumes out of the Permian shale field in West Texas because of tepid volume growth and difficulties constructing new lines. A wave of consolidation in the top U.S. shale field has concentrated output in the hands of companies that are promising to restrain output so as not to crash prices by over-producing. Pipeline firms also have embraced acquisitions over new construction. Enterprise Products Partners (EPD.N) , opens new tab co-CEO Jim Teague said at a Houston energy conference his firm is not considering a new oil pipeline out of West Texas. The CEO of rival operator Plains All American Pipeline (PAA.O) , opens new tab said at the same event companies are more likely to optimize existing rather than build new lines. Enbridge (ENB.TO) , opens new tab will add up to 120,000 barrels per day (bpd) to its Gray Oak oil pipeline by 2026, an example of expanding capacity on an existing pipeline. Enterprise has said it could convert a natural gas liquids pipeline to carry crude. Shale pipeline operator EPIC Consolidated Operations is weighing expanding a Permian to south Texas line by about 300,000 bpd. The expansion is a "when, not an if," said EPIC CEO Brian Freed. PRICE NO LONGER INCENTIVIZES DRILLERS The executives said Permian shale producers are not likely to return to their era of fast-growth that prompted the construction of new oil lines last decade. Drillers remain disciplined in their spending for new volumes and do not look to drill and grow production even if prices jump from current levels, Chiang added. "A range of roughly of $60 to $90 (per barrel) doesn't change their plans too much," he said. Output from the Permian basin in the next few years could rise about 300,000 bpd, he said, largely in line with the latest government estimate , opens new tab. "Most of the producers out of the Permian, because of the consolidation, are taking a more measured pace," EPIC's Freed said. DEEPWATER EXPORT PROJECTS LAG Enterprise' Teague also said that his company continues to advance its proposed deepwater oil export project, Sea Port Oil Terminal (SPOT), but "nobody wants to be (the) first" customer to sign up. Multi-year regulatory delays, a loss of commercial backers and slowing U.S. shale oil production growth has SPOT and three rival offshore oil-export projects struggling. A change in crude flows as many Western nations banned imports of Russian crude after the country's invasion of Ukraine, pushing Russian oil to flow to Asia, also has undercut the outlook for U.S. deepwater export projects that can load supertanker directly. "Things have changed, but my gut feeling is that we'll be able to get SPOT across the finish line," Teague said while speaking at an RBN Energy conference in Houston. However, Plain's Chiang said "the jury is out on SPOT," saying it while it makes a lot of sense on paper, existing export contracts and systems could limit availability of customers. Sign up here. https://www.reuters.com/business/energy/enterprise-products-not-considering-new-permian-oil-pipeline-says-co-ceo-2024-10-24/

2024-10-24 20:18

Optimism on US outlook broadening, central bank chief says Ueda says markets still unstable and volatile BOJ must also consider factors driving yen moves, he says Finance minister warns about excessive yen volatility IMF urges Japan's central bank to hike rates gradually WASHINGTON, Oct 24 (Reuters) - Bank of Japan Governor Kazuo Ueda said on Thursday optimism over the U.S. economic outlook was broadening but markets remained unstable, offering a mixed view on whether risks to his country's economy were subsiding. Ueda's comments on the U.S. economy and markets have come under scrutiny after he recently highlighted uncertainty over a U.S. "soft landing" and jittery markets as key risks that required Japan's central bank to go slow in raising interest rates further. "Optimism over the U.S. economic outlook appears to be broadening somewhat," Ueda said in a press conference after attending the Group of 20 finance leaders' gathering. "But we need to analyze further whether this optimism would be sustained, or prove temporary," he said, adding that the Bank of Japan can afford the time to scrutinize risks to the economy in deciding when to raise rates again. Ueda also said markets remained unstable with implied volatility still "quite high," suggesting the central bank was not letting its guard down against the risk of renewed volatility. When asked how recent drops in the value of the yen could affect inflation, Ueda said the Bank of Japan must look not just at currency moves but factors driving them, such as shifting perceptions of the U.S. economy. "Recent yen falls are caused partly by increased optimism over the U.S. economy," he said. Japan's central bank is widely expected at a two-day policy meeting next week to keep its short-term policy rate steady at 0.25% and roughly maintain its forecast of inflation hovering around 2% through March 2027. It ended its negative rates policy in March and delivered a rate hike in July on the view that the country was making progress toward sustainably achieving its 2% inflation target. Ueda has said the central bank will keep raising rates if the economy moves in line with its forecast. But he has also stressed the need to scrutinize global uncertainties, such as the U.S. economic outlook, in timing the next rate hike. A slim majority of economists polled by Reuters expect it to forgo a hike this year, though most expect one by March. MORE YEN TALK Receding expectations of aggressive interest rate cuts by the Federal Reserve, coupled with the prospect of prolonged low borrowing costs in Japan, have kept the yen under pressure. After rebounding from a three-decade trough near 162 to the dollar in early July, the yen resumed its decline to around 153 this week in a fresh headache to policymakers worried about the hit to the economy from rising import costs. Japanese Finance Minister Katsunobu Kato, who also attended the G20 gathering in Washington, on Thursday issued a fresh warning against currency speculation. "I told the G20 meeting that volatility remained high in the currency market," Kato said in a press conference. "I also said authorities must be vigilant to the spillovers of each G20 member's macroeconomic policy, and excessive exchange-rate volatility caused by speculation," he said. Rising interest rates in Japan, which has been a supplier of cheap funding across the world, will have huge repercussions on global markets. The Bank of Japan's rate hike in July caused a huge unwinding of yen carry trades that jolted markets. The IMF on Thursday urged Japan's central bank to proceed with rate hikes at a gradual pace, given the potential magnitude of such moves on the global economy. Sign up here. https://www.reuters.com/markets/japan-urges-g20-be-vigilant-excessive-fx-volatility-2024-10-24/

2024-10-24 19:37

First U.S. lithium mine permitted by the Biden administration Interior Department says decision was 'science based' Mine will supply lithium for 370,000 electric vehicles annually Construction to begin next year, production by 2028 Rare flower will have significant protections, officials say Oct 24 (Reuters) - The U.S. Interior Department on Thursday gave final approval to ioneer's (INR.AX) , opens new tab Rhyolite Ridge lithium mine in Nevada, the first domestic source of the battery metal to be permitted by President Joe Biden's administration and one that will become a key supplier to Ford (F.N) , opens new tab and other electric vehicle manufacturers. Shares of the Australia-based critical minerals miner jumped more than 20% in New York trading on Thursday afternoon before easing down. The approval ends a more-than six-year review process during which regulators, ioneer and conservationists tussled over the fate of a rare flower found at the mine site, a tension that exposed the sometimes competing priorities between climate change mitigation efforts and biodiversity protection. The permit, which had been expected by the end of the year, comes amid a flurry of recent moves by Biden officials to support critical minerals production and offset China's market dominance. It also unlocks a $700 million loan from the U.S. Department of Energy, as well as a $490 million equity investment from Sibanye Stillwater (SSWJ.J) , opens new tab to fund the project. "This is a science-based decision," Laura Daniel-Davis, the Interior Department's acting deputy secretary, told Reuters. "We're trying to send a signal that there's no topic with greater importance than addressing climate change." The U.S. Bureau of Land Management, which is controlled by the Interior Department, on Thursday issued the Rhyolite Ridge project's record of decision - essentially the mine's permit - and said the project will "include significant protections for the local ecosystem" and help create hundreds of jobs in the rural region. The project, roughly 225 miles (362 km) north of Las Vegas, contains enough lithium to power roughly 370,000 EVs each year. Construction is slated to begin next year, with production commencing by 2028, a timeline that would make Rhyolite Ridge one of the largest U.S. lithium producers alongside Albemarle (ALB.N) , opens new tab and Lithium Americas (LAC.TO) , opens new tab. The U.S. Geological Survey has labeled lithium a critical mineral vital for the U.S. economy and national security. "We're proud to be the first U.S. lithium mine permitted by the Biden administration," James Calaway, ioneer's chairman, told Reuters. The project will extract lithium as well as boron - a chemical used to make ceramics and soaps - from a clay-like deposit. The lithium will be processed on site into two main derivatives used to make batteries, and the company said it plans to recycle half of all the water used at the site, higher than the industry average. Ford and a joint venture between Toyota 7203.T and Panasonic 6752.T have agreed to buy lithium from the mine. ENDANGERED FLOWER In addition to the lithium and boron deposits, Rhyolite Ridge is home to the Tiehm's buckwheat flower, which is found nowhere else on the planet and was declared an endangered species in 2022. The Center for Biological Diversity (CBD) and some other conservation groups thus oppose ioneer's project, saying it would push the flower to the brink of extinction. After the permit was announced on Thursday, the CBD said it plans to sue the federal government to block the project. "By greenlighting this mine, the Bureau of Land Management is abandoning its duty to protect endangered species like Tiehm's buckwheat and it's making a mockery of the Endangered Species Act," said the CBD's Patrick Donnelly. The Interior Department's Daniel-Davis declined to comment on the potential litigation, but noted the changes made to the mine's operating plan as a result of the permit review process, including new design plans and propagation efforts that included construction of a greenhouse. Department officials also released an opinion stating their belief that the mine would not harm the flower. "We have run a transparent process," said Daniel-Davis. "The company was willing to reconfigure its entire project to take into account Tiehm's buckwheat." The death of more than 17,000 flowers near the mine site in 2020 sparked allegations of a "premeditated" attack. Ioneer denied harming the flowers. The government later blamed thirsty squirrels. Sign up here. https://www.reuters.com/markets/commodities/biden-administration-approves-ioneers-nevada-lithium-mine-2024-10-24/

2024-10-24 19:32

Oct 24 (Reuters) - Medical device maker Baxter (BAX.N) , opens new tab said on Thursday it expects to restart the highest-throughput intravenous solutions manufacturing line at a hurricane-hit plant in North Carolina within the next week. The temporary closure last month of the Marion site, which makes 60% of the nation's supply of IV fluids and peritoneal dialysis solutions as per the American Hospital Association, had triggered a shortage of intravenous products. "I am encouraged by reports that Baxter anticipates restarting the highest throughput manufacturing line at Baxter's North Cove facility next week – sooner than originally expected," U.S. Department of Health and Human Services Secretary Xavier Becerra said in a statement. Baxter also said the U.S. Food and Drug Administration had authorized temporary imports from the company's two other manufacturing facilities, in Thailand and Singapore, as it works to bring the North Carolina plant back online. Earlier this week, the company said it aimed to restore the number of new patients who can start using its peritoneal dialysis solutions to pre-Hurricane Helene levels by the end of the year. Baxter has said it targets to return to 90% to 100% allocation of certain IV solutions by the end of 2024. Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/baxter-expects-restart-iv-solutions-manufacturing-line-within-next-week-2024-10-24/

2024-10-24 18:44

HOUSTON, Oct 24 (Reuters) - Federal regulators on Thursday gave an Exxon Mobil (XOM.N) , opens new tab and Qatar Energy LNG joint venture a 3-year extension to finish building their Golden Pass LNG plant, a regulatory document showed. The extension was granted due to delays caused when lead construction contractor Zachry Holdings filed for bankruptcy in March, according to a Federal Energy Regulatory Commision filing. The project, at the Sabine Pass site of a former gas-import terminal that was converted to process natural gas for LNG exports, is one of two large U.S. LNG facilities whose startups were expected to significantly expand supplies from the world's top exporter of the superchilled fuel in the next 12 months. The project's original main contractor, Zachry Holdings filed for Chapter 11 bankruptcy protection, saying the Golden Pass project - known as GPX - was at least $2.4 billion over the original budget. Golden Pass is yet to announce a new EPC contractor and has been in negotiations with McDermott International (MCDIF.PK) , opens new tab to be the lead contractor on the project. Sign up here. https://www.reuters.com/business/energy/exxon-mobil-qatar-get-3-year-extension-build-texas-lng-plant-2024-10-24/

2024-10-24 18:19

Canadian dollar weakens 0.1% against the greenback Touches its weakest since Aug. 5 at 1.3868 Price of US oil falls 1% 10-year yield eases 3.5 basis points TORONTO, Oct 24 (Reuters) - The Canadian dollar edged down to an 11-week low against its U.S. counterpart on Thursday as investors bet the Bank of Canada would need to cut interest rates further to bolster a sluggish domestic economy. The loonie was trading 0.1% lower at 1.3850 to the U.S. dollar, or 72.20 U.S. cents, after touching its weakest level since Aug. 5 at 1.3868. It was the only Group of 10 currency to lose ground against the U.S. dollar (.DXY) , opens new tab, which was giving back some of its recent gains as U.S. bond yields fell. The Canadian central bank has cut its benchmark interest rate by 125 basis points since June to 3.75%. Its easing campaign included a half-percentage-point reduction on Wednesday, the first cut of that size in 15 years outside of the pandemic. "The Bank of Canada cut 50 basis points but it didn't grasp the challenges facing the Canadian economy," said Adam Button, chief currency analyst at ForexLive. "The market might be looking further out and saying, 'this isn't enough. Rates are still too high for where the economy is now.'" The BoC's annual economic-growth forecast is overly optimistic, economists said, and another large interest-rate cut this year will likely be required to boost growth. Investors are betting the BoC will lower the policy rate a further 100 basis points by September, which would leave it in the middle of the 2.25%-3.25% range the central bank estimates as a neutral setting that neither restricts nor stimulates the economy. The price of oil , one of Canada's major exports, was trading nearly 1% lower at $70.10 a barrel on worries that slow economic growth in Europe could reduce energy demand. Canadian bond yields were mixed across a flatter curve, with the 10-year down 3.5 basis points at 3.230%. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-lags-g10-peers-investors-eye-more-rate-cuts-2024-10-24/