2024-10-11 07:00

Both benchmarks settle up 1% on the week Investors consider Israel's response to Iran's attack last week Hurricane aftermath to weigh on Florida fuel demand Libyan oil production restored to pre-central bank crisis levels HOUSTON, Oct 11 (Reuters) - Oil prices settled lower on Friday but rose for the second straight week as investors weighed factors such as possible supply disruptions in the Middle East and Hurricane Milton's impact on fuel demand in Florida. Brent crude oil futures settled down 36 cents, or 0.45%, at $79.04 a barrel. EDT. U.S. West Texas Intermediate crude futures settled down 29 cents, 0.38%, to $75.56 per barrel. For the week however, both benchmarks rose by more than 1%. Money managers raised their net long positions on Brent crude by 123,226 contracts to 165,008 in the week to Oct. 8, according to the Intercontinental Exchange. "Markets can feel the tension, as Israel contemplates the size and form for their response to Iran's massive missile attack. If Israel destroys Iran's oil & gas infrastructure, prices will rise," said chief economist at Matador Economics, Tim Snyder, in a note on Friday. Crude benchmarks spiked so far this month after Iran launched more than 180 missiles against Israel on Oct. 1, raising the prospect of retaliation against Iranian oil facilities. Israel has yet to respond. "$75 per barrel for WTI is sort of the fair value area for elevated tensions," said John Kilduff, partner at Again Capital in New York. Israeli Defence Minister Yoav Gallant has said that any strike against Iran would be "lethal, precise and surprising." "We need to wait and see how Israel responds, but I think until that point the oil market will keep a risk premium," said UBS analyst Giovanni Staunovo. Iran is backing several groups fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen. Gulf states are lobbying Washington to stop Israel from attacking Iran's oil sites out of concern their own oil facilities could come under fire from Tehran's allies if the conflict escalates, three Gulf sources told Reuters. Weighing on prices, Hurricane Milton plowed into the Atlantic Ocean on Thursday after cutting a destructive path across Florida, killing at least 10 people and leaving millions without power. Gasoline shortages gripped the state earlier in the week as drivers stocked up ahead of the hurricane, with nearly a quarter of 7,912 gasoline stations in Florida out of fuel by Wednesday morning, but the destruction could go on to dampen fuel consumption in the hurricane's aftermath. Florida is the third-largest gasoline consumer in the U.S., but there are no refineries in the state, making it dependent on waterborne imports. And reservations over high crude inventories and a possibly more gradual monetary easing by the U.S. Federal Reserve have also helped put the recent rally in oil prices on hold, said Yeap Jun Rong, market strategist at IG. On the supply side, Libya's national oil corporation (NOC) said on Friday it had restored oil production to levels before the country's central bank crisis as it reached 1.25 million barrels. Meanwhile, easing third quarter earnings for big oil may have also weighed on investor sentiment, with weak refining margins due to a slowdown in global demand for fuel and lower oil trading, putting a dent in BP's (BP.L) , opens new tab third-quarter profit by up to $600 million, the British oil major said on Friday. Sign up here. https://www.reuters.com/markets/commodities/oil-eases-though-investors-wary-over-potential-mideast-supply-disruption-2024-10-11/

2024-10-11 06:57

MUMBAI, Oct 11 (Reuters) - The Indian rupee fell below 84 per dollar for the first time on Friday, pressured by concerns about the recent spike in oil prices and the exodus of foreign money from the equity market. The rupee closed at 84.06, down 0.1% on the day, after hitting a record low of 84.07 earlier in the session. The decline past the 84 level is significant as the Reserve Bank of India (RBI) had defended that level for more than two months. On Monday, it informally instructed banks to avoid heavy bets against the rupee. The RBI intervened on Friday as well. Traders said large state-run banks sold dollars, likely to prevent a sharp fall in the rupee. Going ahead, the currency could see some more pressure but the RBI may "only allow marginal depreciation to make sure the rupee acts as a stable currency", VRC Reddy, treasury head at Karur Vysya Bank, said. The rupee had strengthened to around 83.50 about two weeks ago, but its near-term outlook worsened as the Middle East conflict pushed up oil prices, foreigners sold Indian shares and hopes of another large U.S. rate cut diminished. Overseas investors have turned heavy sellers of Indian equities over the last nine sessions, while Brent crude oil futures have jumped 10% so far in October. India meets a bulk of its crude oil needs through imports. India's shrinking balance of payments surplus amid a rise in merchandise trade deficit has also kept the rupee under pressure. A pickup in gold imports alongside a slowdown in exports drove India's merchandise trade deficit to a 10-month high in August. The trade gap also led to a widening in the country's current account deficit to 1.1% of GDP in April-June. The worsened trade balance has contributed to the rupee's underperformance. Asian currencies have risen as much as 5% over the last two months, while the rupee has been nearly flat against the dollar. Meanwhile, investors no longer expect the Federal Reserve to slash rates by a large 50 basis points in November, but the Indian central bank is widely expected to start cutting rates as early as December. "We expect the RBI to continue to prudently curb undue volatility, given the robust FX reserves," Kotak Securities said on Friday, pegging the rupee in a 83.5-84.5 range over the next 3-to-4 quarters. Sign up here. https://www.reuters.com/markets/currencies/rupee-drops-all-time-low-oil-worries-equity-outflows-2024-10-11/

2024-10-11 06:46

Indian sales lower than usual because of record high prices Indians will celebrate Dussehra festival on Oct. 12 China returns from Golden Week holidays, but demand still low Oct 11 (Reuters) - Physical gold dealers in India charged premiums for the first time in two months this week as the upcoming festival season attracted some jewellery buying, while weak consumer sentiment dampened demand in China post-holidays. Indians will celebrate Dussehra festival on Oct. 12, and Diwali in late October, when buying gold is considered auspicious. "While gold prices have increased recently, leading to some softening in sales in the past couple of days, overall sentiment remains bullish," said Saurabh Gadgil, chairman of PNG Jewellers in India. Domestic gold prices in India jumped to a record high of 76,331 rupees per 10 grams earlier this week. Indian dealers charged a premium of up to $3 an ounce over official domestic prices, inclusive of 6% import and 3% sales levies, up from the last week's discount of $21. Dealers in India charged premiums last time for the week end Aug. 9, but these have since decreased in response to a record surge in spot gold prices. Jewellers have been seeing healthy footfalls, but in terms of volume, sales are lower than usual due to record high prices, said a Mumbai-based bullion dealer with a private bank. A rebound in gold prices to a record peak has dashed the Indian bullion industry's expectations of a lucrative festival season after their hopes were boosted by a deep cut in import duty two months ago. Meanwhile, dealers in top gold consumer China offered the metal at discounts of $15 to $31 to international spot prices , but retail shops did not see much interest after returning from the Golden Week holidays. The prices are "reflecting a generally weak domestic Chinese demand, with funds having been diverted into the equity markets following the recent stimulus," said independent analyst Ross Norman. In Hong Kong, gold prices fluctuated between a $2 discount and a $1.50 premium , reflecting a slight change from the previous week. Dealers in Singapore sold gold at between par to $2.20 premium , and in Japan between a $0.25 discount to a $0.5 premium. Sign up here. https://www.reuters.com/markets/commodities/asia-gold-india-prices-premium-after-two-months-festive-season-draws-buyers-2024-10-11/

2024-10-11 06:41

LONDON, Oct 11 (Reuters) - Emerging market stocks saw record inflows in the week to Wednesday, Barclays said citing data from EPFR, led by record inflows into Chinese equities. Chinese equities saw $39 billion of inflows, Barclays said, made up of a $30 billion inflow from domestic investors and a $9 billion inflow from foreign investors, also both records. That accounted for most of the $41 billion inflow into emerging market stocks. Investors shunned Japan with Japanese stocks seeing outflows of $9 billion, their largest weekly outflow in 20 years, Barclays said. Sign up here. https://www.reuters.com/markets/asia/chinese-equities-see-record-weekly-inflows-japan-has-biggest-outflow-20-years-2024-10-11/

2024-10-11 06:27

Milton caused widespread flooding and deadly tornadoes, killing at least 16 people Milton's rapid intensification linked to climate change, could cost insurers $30-$60 billion Biden seeks more emergency funding from Congress FORT PIERCE, Florida, Oct 11 (Reuters) - Millions of Floridians began a long and difficult recovery on Friday after the state's second major hurricane in two weeks, restoring power, shoveling mud from flooded homes and clearing mountains of debris left by Milton and Helene. While some coastal cities such as Tampa were spared the catastrophic surge of seawater that many forecasters had feared, Milton brought widespread flooding and touched off a spate of deadly tornadoes on Florida's east coast, killing at least 16 people and leaving millions without power. Many areas had still been clearing debris and repairing damage from Hurricane Helene, which slammed into the Gulf Coast late last month before battering much of the U.S. Southeast. During a 72-hour period this week, the Florida Department of Transportation removed 2,200 truckloads of debris - more than 40,000 cubic yards - from Pinellas County barrier islands near the mouth of Tampa Bay, Governor Ron DeSantis told a briefing. A cubic yard is about twice the size of a washing machine. Utility workers repaired downed power lines and damaged cellphone towers, while crews from government agencies and residents armed with chainsaws cleared downed trees and mopped up flooded neighborhoods in cities and towns swamped by heavy rains. The number of Florida homes and businesses without electricity had dropped to about 2.27 million by late Friday morning, according to website PowerOutage.us, from a high of more than 3.4 million in Milton's immediate aftermath. Some customers had already been waiting days for power to be restored after Helene hit the area. More than 6,500 National Guard members have been activated in 23 Florida counties, officials said. President Joe Biden will visit Florida on Sunday to survey the damage, the White House said. In St. Pete Beach, a barrier-island city, clearing debris from the twin storms will take weeks, Mayor Adrian Petrila told ABC News. "It's going to be a very long time for us," he said, adding that most of the city's houses were uninhabitable with no sewer or water service. In Sarasota County, a bridge to the hard-hit barrier islands reopened on Friday morning to allow residents to return to their properties, though officials warned that water and power services would likely be limited. In Hillsborough County, which includes Tampa, workers have visited more than 450 homes and businesses to assess damage since Thursday, said C.K. Moore, an emergency-management official. There were 13 structures known to be destroyed and another 111 with major damage. Unlike Helene, whose storm surge caused most of its damage along the coast, Milton's strong winds and extreme rainfall created problems across the county, Moore said. Plant City, more than 20 miles (32 km) inland, experienced major flooding. "We're just hoping for a period of calm so we can clean this stuff up and give residents a sense of normalcy," said Moore, adding that the county has opened additional landfills to accommodate storm debris. The city of Tampa does not yet know the costs of the storm cleanup, according to communications director Adam Smith. The work will likely require months of clearing downed trees and vegetation on top of removing household debris left from Helene, which is the city's first priority, he said. The city, however, avoided a calamitous storm surge after Milton's path shifted east hours before landfall, taking the hurricane south of Tampa Bay itself. Melissa Wolcott-Martino, 81, a retired magazine editor in St. Petersburg across the bay from Tampa, told Reuters on Friday she is one of the lucky ones after returning to her coastal home and finding it largely unscathed. "It's an absolute miracle, because we were expecting a 10-foot surge and that would be over our roof," she said. "We live right on the water. And our neighborhood has piles and piles and piles of rubbish and furniture stacked up from the last one." The Tampa zoo reported on its website that all of its 1,000 animals were safe but the grounds remained closed on Friday as recovery teams assessed damage. The animals, including a dozen Caribbean flamingos, zebras, elephants, giraffes and other critters, will remain in their barns and shelters on site. Nearly 1,200 people have been rescued since Milton made landfall on Wednesday evening, according to DeSantis' office. CLIMATE CHANGE FUELED MILTON The fifth-most-intense Atlantic hurricane on record, Milton could cost insurers between $30 billion and $60 billion, Morningstar DBRS analyst Marcos Alvarez said on Friday. That projection was lower than the up to $100 billion estimated by the firm before the storm's arrival. Milton's rapid intensification from a Category 1 storm to a Category 5 monster in less than 24 hours was the latest example of a worrying trend that has seen storms growing more powerful, more quickly, due to climate change. Milton made landfall as a major Category 3 hurricane. The Biden administration said the Federal Emergency Management Agency would need additional funding from the U.S. Congress and called on lawmakers, who are on recess, to return to Washington. There were at least 16 hurricane-related deaths, CBS News cited the Florida Department of Law Enforcement as saying. Sign up here. https://www.reuters.com/world/us/florida-counts-cost-hurricane-milton-amid-political-storm-2024-10-11/

2024-10-11 06:17

NEW YORK/LONDON, Oct 11 (Reuters) - The U.S. dollar was flat against major currencies on Friday as markets digested a slew of economic data that supported the Federal Reserve's current monetary policy path. A gauge of U.S. producer prices was unchanged in September, the Labor Department reported, the latest economic data to indicate the Fed will likely cut rates again next month. Consumer prices in September rose 0.3%, according to data released on Thursday, slightly hotter than expected, while weekly jobless claims surged, pointing to labor-market weakness. The weekly jobless claims data was skewed by Hurricane Helene. Next week's data will be affected by Hurricane Milton, the second hurricane in two weeks to hit the southeast U.S. The euro was flat at $1.1093 , the pound was up 0.08% at $1.3072 , while the dollar was up 0.35% against the Japanese yen at 149.12 . The dollar index was flat at 102.91, taking a breather after a recent steady climb that took it above 103 on Thursday, its highest since mid-August on the back of traders reducing bets on further jumbo interest-rate cuts by the Federal Reserve at its remaining meetings this year. Markets are betting a nearly 91% chance of a 25-basis-point cut at the Fed's next meeting and 9% probability of no cut, according to the CME's Fedwatch tool. "That slightly higher inflation print has really backed the market away from being overly aggressive on how deep they were looking for the interest-rate cuts to go by the end of the year," said Amarjit Sahota, executive director at Klarity FX in San Francisco. "So there was already an overprice in there and that's basically unwound this week." Britain's economy grew in August after two consecutive months of stagnation, providing some relief to finance minister Rachel Reeves ahead of the new Labour government's first budget later this month. However, in addition to being broadly steady on the dollar the pound was little changed on the euro at 83.67 pence to the common currency. Traders are also watching French politics, after the government on Thursday delivered its 2025 budget with plans for 60 billion euros ($65.5 billion) worth of spending cuts and tax hikes on the wealthy and big companies to tackle a soaring fiscal deficit. The budget is unlikely to pass until December, as French Prime Minister Michel Barnier and his allies in President Emmanuel Macron's camp lack a majority by a sizeable margin and will have little choice but to accept numerous concessions. Markets are also awaiting a news conference from China's finance ministry on fiscal policy on Saturday. The Chinese yuan strengthened 0.22% against the greenback to 7.067 per dollar. The Australian dollar strengthened 0.22% versus the greenback to $0.6753, while the New Zealand dollar was at $0.611 after the central bank on Wednesday slashed rates by a half point and hinted at further cuts to come. In cryptocurrencies, bitcoin gained 5.38% to $62,930.00. Ethereum rose 3.8% to $2,456.70. "The market is satisfied because there's nothing there that really tells against the narrative that the Fed is cutting; the only debate is how fast they're going to cut," said Steven Englander, head of Global G10 FX Research at Standard Chartered in New York. "Overall, the data have been slightly encouraging to that narrative and none of the data have been discouraging to the narrative that the Fed is cutting rates." Sign up here. https://www.reuters.com/markets/currencies/dollar-bulls-suffer-setback-traders-add-fed-cut-bets-2024-10-11/