2024-10-15 00:16

LAUNCESTON, Australia, Oct 15 (Reuters) - OPEC cut its estimate for China's crude oil demand growth in 2024 for a third straight month in October, but the producer group is still massively optimistic given the reality of falling imports. The latest monthly report by Organization of the Petroleum Exporting Countries (OPEC) said China's crude oil demand will expand by 580,000 barrels per day (bpd) in 2024. This estimate is down from the 650,000 bpd gain forecast in September, and is also 180,000 bpd below the rise of 760,000 bpd OPEC was predicting in July for the world's biggest oil importer. While OPEC is edging closer to reality, its demand forecast is hugely out of kilter with China's falling imports. Official customs data released on Monday showed China's crude arrivals at 11.07 million bpd in September, down 0.6% from the same month in 2023 and the fifth straight month that imports dropped from the year before. For the first three quarters of 2024, China's crude imports were 10.99 million bpd, down 2.8% from the 11.34 million bpd in the same period in 2023. Imports are down 350,000 bpd in the first nine months of 2024, a figure that makes even OPEC's lowered demand forecast seem hopelessly wrong. Of course, crude oil imports are only one element of total demand, others include any increase in domestic output or changes in inventory levels. China's domestic oil output is up so far in 2024, with production in the first eight months coming in at 4.29 million bpd, which is 70,000 bpd above the same period in 2023. But the increase in domestic output is still well below the decline in crude imports. China doesn't disclose the volume of crude it holds in commercial and strategic stockpiles, but it's certain that they have been adding to them so far in 2024, rather than drawing down. An estimate can be made of the volume of crude available for storage by subtracting the amount of crude processed from the combined total of oil available from imports and domestic output. On this basis China's surplus oil for the first eight months of the year was 1.11 million bpd, which is about 300,000 bpd more than for the same period in 2023. Overall, the picture that emerges from China's oil sector is modest growth in domestic output, but this is nowhere near enough to offset the decline in crude imports. PRICE-LED RECOVERY? The question for OPEC, and the broader oil market, is whether China's imports are likely to accelerate in the fourth quarter. It's likely that the answer lies largely with prices, as evidence suggests that China has become a price-sensitive buyer in recent years, importing surplus volumes when the cost is low, but trimming arrivals and using stockpiles when prices are deemed to have risen too high, or too quickly. It's perhaps no surprise that China's imports were soft in September, given that global crude prices were rising during the period when September-arriving cargoes would have been arranged. Benchmark Brent futures rose from a four-month low of $76.76 a barrel on June 4 to a high of $87.85 on July 5, the time period when much of the September-arriving cargoes would have been bought. Since then Brent has trended weaker, dropping to a 34-month low of $68.68 a barrel on Sept. 10, after which it has recovered to end at $75.19 on Monday, largely as a result of rising tensions in the Middle East amid the threat of an Israeli strike against Iran. However, the declining price trend from July to mid-September may have encouraged Chinese refiners to boost imports, especially against the backdrop of the Middle East conflict. If this is the case, China's crude imports may stage something of a recovery in the fourth quarter, but this is still unlikely to be enough to meet OPEC's optimistic view of the country's demand growth for 2024. The opinions expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/business/energy/opec-trims-its-china-crude-demand-forecast-nowhere-near-enough-russell-2024-10-15/

2024-10-14 23:18

Dow closes above 43k for first time Nvidia finishes at record high Caterpillar falls after Morgan Stanley downgrades rating Boeing down after job-cut plans, jet delivery delay Indexes up: Dow 0.47%, S&P 500 0.77%, Nasdaq 0.87% Oct 14 (Reuters) - Wall Street ended higher on Monday, with both the S&P 500 and the Dow posting fresh record finishes, as investors bought into technology stocks ahead of a busy week packed with corporate earnings and crucial economic data. On a somewhat subdued day for trading, given bond markets were shut due to the federal holiday, just 9.55 billion shares changed hands, versus the 12.05 billion shares, which moved on average over the last 20 trading days. However, there was enough upward momentum carried over from Friday, when major banks kicked off the third-quarter corporate earnings season on a positive note, to send the Dow Jones Industrial Average (.DJI) , opens new tab above 43,000 points for the first time. With 41 S&P 500 companies expected to report results this week, this flood of new data points from corporate America will help investors assess the health of the U.S. economy, and whether companies can continue to justify stretched stock market valuations. Before then though, it was technology stocks, which helped drive markets higher on Monday with semiconductors particularly in vogue. An index of semiconductor companies (.SOX) , opens new tab jumped 1.8% to a more than two-month high, aided by the 6.8% advance by Arm Holdings , as well as market heavyweight Nvidia (NVDA.O) , opens new tab, which rose 2.4% to a record close , opens new tab. The information technology index (.SPLRCT) , opens new tab was a leading gainer among the S&P 500 sectors, rising 1.4%. Among other growth stocks, Alphabet (GOOGL.O) , opens new tab, Apple (AAPL.O) , opens new tab, Microsoft (MSFT.O) , opens new tab and Tesla (TSLA.O) , opens new tab all advanced between 0.6% and 1.6%. The S&P 500 (.SPX) , opens new tab gained 44.82 points, or 0.77%, to 5,859.85 points, while the Nasdaq Composite (.IXIC) , opens new tab climbed 159.75 points, or 0.87%, to 18,502.69. The Dow Jones Industrial Average (.DJI) , opens new tab rose 201.36 points, or 0.47%, to 43,065.22. Despite the Dow's positive milestone, its gains on Monday were kept in check by a 2% drop in Caterpillar (CAT.N) , opens new tab, following a brokerage downgrade, and a 1.3% fall in Boeing (BA.N) , opens new tab after the planemaker flagged a larger-than-expected Q3 loss on Friday. Bank earnings may have boosted hopes that solid results could help stocks continue their strong 2024 run. However, with stock valuations stretched - the S&P 500 is trading at 21.8 times forward earnings, versus a long-term average of 15.7 - companies might struggle to satisfy investors. Year-over-year third-quarter earnings growth for the S&P 500 is estimated at 4.9%, according to data compiled by LSEG on Friday. "If you think about the earnings backdrop going into it, I would expect the bias to probably lead to the upside in this earnings cycle," said Kevin McCullough, portfolio consultant at Natixis Investment Managers Solutions. "It's not like the prior earnings cycles where you went in with a really lofty set of expectations and it was really hard for companies to deliver on that," he said, adding because the bar was now a little bit lower, it was easier for investors to see company reports in a positive light. Among those reporting numbers on Tuesday are a slew of big-name financials, including Bank of America (BAC.N) , opens new tab and Citigroup (C.N) , opens new tab, as well as healthcare giants Johnson & Johnson (JNJ.N) , opens new tab and UnitedHealth Group (UNH.N) , opens new tab. Investors will also watch for crucial economic data this week, notably the September retail sales figures, for clues on the financial health of U.S. consumers. Natixis' McCullough said consumer-related data is becoming more important for clues on Fed thinking, as the central bank switches more towards fulfilling the growth side of its mandate. The two Fed speakers on Monday both adopted cautious tones on future rate policy. Minneapolis Fed President Neel Kashkari said he sees modest interest-rate cuts ahead as inflation hovers near the central bank's 2% target. Speaking this afternoon, Fed Governor Christopher Waller called for "more caution" on interest-rate cuts going forward. Sign up here. https://www.reuters.com/markets/us/futures-mixed-ahead-week-packed-with-earnings-economic-data-2024-10-14/

2024-10-14 23:11

LONDON, Oct 15 (Reuters) - Britain's aviation regulator said on Tuesday it would allow drones to inspect infrastructure such as power lines and wind turbines, a move the authority has described as a significant milestone. The UK's Civil Aviation Authority (CAA) had said earlier this year that it wanted to permit more drone flying for such activities as well as for deliveries and emergency services. It selected in August six projects to test it. Drones inspecting infrastructure will now be able to fly distances beyond remote flyers' ability to see them. "While some drones have been flying beyond visual line of sight in the UK for several years, these flights are primarily trials under strict restrictions," the CAA said. Under the CAA's new policy, some drones will be able to remain at low heights close to infrastructure where there is little or no potential for any other aircraft to operate. It will also reduce costs, the CAA said. Drones will inspect power lines for damage, carry out maintenance checks of wind turbines and even be used as "flying guards dogs" for site security. The CAA will work with several operators to test and evaluate the policy, which according to the regulator's director Sophie O'Sullivan "paves the way for new ways drones will improve everyday life". Sign up here. https://www.reuters.com/world/uk/britain-allow-drones-inspect-power-lines-wind-turbines-2024-10-14/

2024-10-14 23:09

LONDON, Oct 15 (Reuters) - U.S. startup Last Energy plans to build a 300 million pound ($391 million) micro nuclear project in Wales to supply local industrial customers, the company said on Tuesday. Britain's new Labour government has said small nuclear plants will play an important role in helping the country meet its net zero targets while businesses are also seeking new sources of emissions-free power. Last Energy UK, a subsidiary of Washington D.C.-based Last Energy, said it would not require any public funding for the project on a former coal plant site in Bridgend, south Wales, which could be generating power in 2027. The company said it was in commercial discussions with a range of local industrial customers and that power purchase agreements were expected to underpin the finances of the project. The micro reactors are capable of generating 20 megawatts (MW) of electricity and the company plans to install four at the site giving it a total capacity of 80 MW. Developers hope micro and small nuclear projects will be cheaper and easier to get off the ground than large projects which have struggled to attract enough investment for the high upfront costs involved. Last Energy UK will now begin public engagement on the project which it said could create 100 jobs. ($1 = 0.7668 pounds) Sign up here. https://www.reuters.com/sustainability/climate-energy/us-startup-last-energy-plans-micro-nuclear-project-wales-2024-10-14/

2024-10-14 23:08

MIAMI, Oct 14 (Reuters) - Central banks remain keen buyers of gold to diversify their reserves for financial or strategic reasons, representatives of three central banks told the London Bullion Market Association's annual conference in Miami on Monday. Elevated demand for gold from central banks underpinned the price of the non-yielding gold when the global interest rates were high in 2022-2023 and then slowed down with this year's 28% spot gold price rally. China's central bank held back on buying gold for a fifth straight month in September. Despite the gold rally, representatives of central banks of the Czech Republic, Mongolia and Mexico told the conference that having gold in reserves still matters to them, even though each one of them has their own reasoning. The importance of gold as a secure asset is increasing for Mongolian reserves, Enkhjin Atarbaatar, head of the financial markets department at the Central Bank of Mongolia, told the conference. For the Czech National Bank (CNB), gold is viewed as a pure diversifier of reserves, Marek Sestak, deputy executive director of the risk management department at the CNB, said. All three said that they were not currently active in gold derivatives and that London remained the main storage location for their gold as a trading hub, while only Mongolia had limited appetite for repatriation of gold to store it at home. Global central banks increased purchases for their reserves by 6% to 183 tons in the second quarter, according to the World Gold Council, and are on track to slow buying in full 2024 by 150 tons from 2023. Sign up here. https://www.reuters.com/markets/central-banks-remain-keen-buyers-gold-representatives-tell-bullion-conference-2024-10-14/

2024-10-14 22:10

OPEC cuts 2024, 2025 global oil demand growth view again China oil imports fall from a year ago for a fifth month in September China flags more fiscal stimulus, leaves out key details on size US to send anti-missile system, troops to Israel HOUSTON, Oct 14 (Reuters) - Oil prices fell 2% on Monday as OPEC again lowered its outlook for 2024 and 2025 global oil demand growth while China's oil imports fell for the fifth straight month. China's stimulus plans failed to inspire investor confidence while markets kept watching for potential Israeli attacks on Iranian oil infrastructure. Brent crude futures settled $1.58, or 2%, lower at $77.46 per barrel. U.S. West Texas Intermediate crude futures fell $1.73, or 2.29%, to $73.83 per barrel. Brent had gained 99 cents last week, while WTI climbed $1.18. Brent fell 5%, or more than $4, in after-hours trading following a media report that Israeli Prime Minister Benjamin Netanyahu told the U.S. that Israel is willing to strike Iranian military targets and not nuclear or oil ones. U.S. heating oil futures fell 5% in late trading. U.S. gasoline futures eased over 4%. OPEC on Monday cut its forecast for global oil demand growth in 2024 and also lowered its projection for next year, marking the producer group's third consecutive downward revision. China, the world's largest crude oil importer, accounted for the bulk of the 2024 downgrade as OPEC trimmed its growth forecast for the country to 580,000 barrels per day (bpd) from 650,000 bpd. China's crude imports for the first nine months of the year fell nearly 3% from last year to 10.99 million bpd, data showed. Declining Chinese oil demand caused by the growing adoption of electric vehicles (EV), as well as slowing economic growth following the COVID-19 pandemic, has been a drag on global oil consumption and prices. China's deflationary pressures also worsened in September, according to official data released on Saturday. A press conference the same day left investors guessing about the overall size of a stimulus package to revive the fortunes of the world's second-largest economy. "The lack of a clear timeline and the absence of measures to address structural issues, such as weak consumption and reliance on infrastructure investments, have only increased ambiguity amongst market participants," noted Mukesh Sahdev, the global head of commodity markets-oil at Rystad Energy. The negative news from China outweighed market concerns over the lingering possibility that an Israeli response to Iran's Oct. 1 missile attack could disrupt oil production. The U.S. said on Sunday it would send troops to Israel along with an advanced anti-missile system in a highly unusual deployment meant to bolster the country's air defenses. "While an attack by Israel into Iran is likely to happen, the latest reinforcing measures by the US military may have calmed the responses on both sides," said Dennis Kissler, senior vice president of trading at BOK Financial. "A nervous trade will remain with most fund managers remaining on the sidelines," Kissler said. Washington has been privately urging Israel to calibrate its response to avoid triggering a broader war in the Middle East, officials say, withPresident Joe Biden publicly voicing his opposition to an Israeli attack on Iran's nuclear sites and his concerns about a strike on Iran's energy infrastructure. The dollar also hit a nine-week high on Monday in thin trading. A firmer U.S. currency can hurt demand for dollar-denominated oil from buyers using other currencies. U.S. crude oil stockpiles were expected to have risen last week, while distillate and gasoline inventories likely fell, a preliminary Reuters poll showed on Monday. Sign up here. https://www.reuters.com/business/energy/oil-prices-fall-by-more-than-1-chinese-economic-data-2024-10-13/