2025-11-03 11:44
Nov 3 - SM Energy (SM.N) , opens new tab and Civitas Resources (CIVI.N) , opens new tab said on Monday they will merge in a deal valued at about $12.8 billion, including debt, creating one of the largest independent U.S. oil producers that will hold a dominant position in the Permian Basin. The sale signals a recovery in dealmaking in the shale industry as companies seek scale to tackle volatility in the energy and equity markets. Sign up here. U.S. shale producers are turning to mergers as investors favor disciplined spending and steady shareholder returns over rapid growth in an uncertain oil market. Civitas shareholders will get 1.45 shares of SM Energy for each Civitas share, giving them about 52% ownership of the combined company. This values Civitas at about $30.29 per share, a 5% premium to its closing price on Oct. 31, and gives the deal an equity value of roughly $2.81 billion, according to Reuters calculations. Shares of SM rose 2.1% and that of Civitas climbed 2.7% in premarket trading. The combined company will hold about 823,000 net acres across top U.S. shale basins, including Permian and Denver-Julesburg (DJ), and is expected to generate over $1.4 billion in free cash flow this year. The merged firm will keep the SM Energy name and ticker, and remain headquartered in Denver. SM Energy expects to save about $200 million annually, and potentially up to $300 million, through lower overhead and operating costs. The company plans to prioritize free cash flow to cut debt and to maintain its quarterly dividend of 20 cents per share. SM Energy CEO Herb Vogel will lead the combined company. Its 11-member board will include six directors from SM and five from Civitas. The deal is expected to close in the first quarter of 2026. https://www.reuters.com/legal/litigation/sm-energy-civitas-resources-combine-128-billion-deal-2025-11-03/
2025-11-03 11:41
LONDON, Nov 3 (Reuters) - The pound remained under pressure against both the dollar and euro on Monday as traders tried to fine-tune their positions ahead of Thursday's in-the-balance Bank of England meeting. Sterling was down 0.27% on the dollar at $1.3132, just above last week's more than six-month low of $1.30965. Sign up here. It was steady versus the euro at 87.70 pence, but again wasn't far from last week's 88.17 pence to the common currency, the pound's softest in over two years. Monday data showing British factories had their strongest month in a year in October did little for sterling, in part because the recovery was driven by one-off factors. Instead, the week's focus is the BoE meeting - unusual among October and November's developed market central bank meetings in that there is reasonable uncertainty heading into it. Market pricing currently reflects around a one-in-three chance of a 25-basis-point rate cut, having risen from close to zero after a raft of economic data last month, most notably a cooler-than-expected inflation print. Pricing reflects a roughly two-in-three chance of a cut at either next week's or December's meeting. "Our base case is still a cut in December - I don't think one softer CPI print is enough and by December they'll have more information and have the budget - though it wouldn't be a huge surprise if they cut this week," said Lee Hardman, senior currency analyst at MUFG. British finance minister Rachel Reeves will announce her much-discussed budget in late November. And the uncertainty around Thursday's meeting means a sharp swing in the pound either way on the decision is likely, at least relative to other central bank meetings. Last week's well telegraphed hold by the European Central Bank did very little to the euro. Moves may not last, however. 'If they do stay on hold, we might get an initial rally in the pound, but I think it will peter out as people start thinking about December," said Hardman. https://www.reuters.com/world/uk/sterling-under-pressure-boe-week-arrives-2025-11-03/
2025-11-03 11:40
Nov 3 (Reuters) - Morgan Stanley on Monday raised its Brent crude forecast for the first half of 2026 to $60 a barrel from $57.5, citing the decision by OPEC+ to pause quota hikes in the first quarter of next year and recent U.S. and EU sanctions on Russian oil assets. The bank expects a "substantial surplus" in the oil market next year, peaking in the second quarter. However, it expects non-OPEC production growth will have slowed by then, and that OPEC production will also not grow significantly in 2026, due to diminished spare capacity, paving the way for the market to balance by the second half of 2027. Sign up here. OPEC+ on Sunday agreed to a small oil output increase for December and a pause in hikes during the first quarter of next year, as the group takes a cautious stance amid mounting concerns about a potential supply glut. It has raised output targets by about 2.9 million barrels per day (bpd), roughly 2.7% of global supply, since April. "The decision to halt quota hikes during 1Q does not materially change our production forecasts but still sends an important signal, i.e. the group is still adjusting supply in response to market conditions," Morgan Stanley said. The bank highlighted widening uncertainty in OPEC production data, noting that the spread between the lowest and highest estimates has regularly topped 2.5 million bpd this year. Although OPEC+ has announced production increases of 2.6 million bpd from March, the bank's best estimates suggest production has only increased by 0.5 million bpd. The United States this month hit Russian oil majors Rosneft and Lukoil with sanctions, while the European Union adopted a separate package of Russia sanctions. Brent crude futures were trading around $64.61 a barrel on Monday, while U.S. West Texas Intermediate stood at $60.80. https://www.reuters.com/business/energy/morgan-stanley-lifts-h1-2026-brent-forecast-60-opec-pause-russia-sanctions-2025-11-03/
2025-11-03 11:39
BERLIN, Nov 3 (Reuters) - German Foreign Minister Johann Wadephul has spoken to his Chinese counterpart on the phone about security, economic policy and other topics of mutual interest, a foreign ministry spokesperson said in Berlin on Monday. The ministers agreed that a trip by Wadephul to China that was recently cancelled should be rescheduled soon, the spokesperson said, adding that the Chinese side also reiterated its invitation to German Chancellor Friedrich Merz. Sign up here. https://www.reuters.com/world/asia-pacific/german-foreign-minister-holds-call-with-chinese-counterpart-security-economic-2025-11-03/
2025-11-03 11:34
Nov 3 - World markets kicked off November in an upbeat mood, riffing off buoyant company earnings and calmer trade relations while batting away OPEC's planned end to output hikes and this week's Supreme Court hearing on President Donald Trump's tariffs. Following last week's meeting between Trump and China's President Xi Jinping in South Korea, the White House announced Saturday that China would lift export controls on rare earths and end probes into U.S. chip firms. But Trump said AI giant Nvidia's most advanced chips would be reserved for U.S. companies and kept out of China and other countries. Sign up here. October manufacturing surveys are due to give some glimpse of nationwide activity later amid an official economic data outage that's accompanying the ongoing government shutdown, now heading for a record in excess of 35 days this week. Federal food aid lapsing this month is seen by some as one reason politicians may be forced to end the dispute soon. But however damaging the shutdown may prove to be in the final quarter, the third quarter was an impressive one for corporate America after a turbulent start to the year. According to LSEG data, Q3 annual profit growth for the S&P 500 is now estimated to be running at almost 14% - five percentage points faster than estimated a month ago and faster than was penciled in at the start of the year. With the likes of Palantir and Eastman Chemical in today's earnings diary, the picture appears to be brightening beyond the red-hot AI sector. Wall Street index futures are higher heading into Monday's open, with crude oil prices steady despite the weekend OPEC decision. Treasury yields edged lower from Friday's highs, while the dollar nudged up to three-month highs. Fed bank presidents on Friday aired their discomfort with the decision to ease policy, and traders are now pricing in just a 68% chance of another 25 bps cut in December. Pushing again for the Fed to ease more, Treasury Secretary Scott Bessent said on Sunday that parts of the economy, particularly housing, may already be in recession because of high rates. One event being watched closely this week is the start on Wednesday of Supreme Court arguments about the legality of a whole swathe of Trump's tariffs. While even a ruling against may just see the tariffs enacted under different legislation, it could create a hiatus in the process and involve rebates to firms that have paid. Overseas, the focus was on relatively downbeat factory surveys for last month - with the euro, yuan and yen all a touch weaker. However, most global bourses were higher on Monday. In today's column, I discuss whether Meta's mega $30 billion bond sale last week to help fund its AI spending spree is a sign of rising corporate leverage into the tech boom - and competition for Treasury in attracting investment capital. Today's Market Minute Chart of the day The U.S. Supreme Court considers the legality of Trump's global tariffs, with arguments set to be outlined on Wednesday. The court, whose 6-3 conservative majority has backed Trump in a series of major decisions this year, is hearing his administration's appeal after lower courts ruled the Republican president overstepped his authority in imposing sweeping tariffs under a federal law meant for emergencies. A ruling striking down Trump's use of the 1977 International Emergency Economic Powers Act, or IEEPA, to quickly impose broad global tariffs also would eliminate a favorite tool to punish countries that draw his ire on non-trade political matters. Administration officials say the tariffs will remain under one legal authority or another if the court rules against these measures. Today's events to watch (All times EDT) * U.S. October manufacturing survey from S&P Global (0945) and ISM (1000) * Federal Reserve Board Governor Lisa Cook and San Francisco Fed President Mary Daly speak; Bank of Canada Governor Tiff Macklem speaks * U.S. corporate earnings: Palantir, Eastman Chemical, Clorox, IDEXX, Progressive, ON Semiconductor, Coterra, Diamondback, Williams, Loews, Vertex, Hologic, Pinnacle West, SBA, Public Service Enterprise, Simon Property, Realty Income Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website , opens new tab, and you can follow us on LinkedIn , opens new tab and X. , opens new tab Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/business/finance/global-markets-view-usa-2025-11-03/
2025-11-03 11:32
Nov 3 (Reuters) - The world's largest refiner by capacity, Sinopec Group , is in talks to buy the country's dominant jet fuel distributor, China National Aviation Fuel Group (CNAF) in a government-initiated move, Bloomberg News reported on Monday. Talks are ongoing, with no set timeline or certainty of a deal, but if completed, Sinopec would take over all of CNAF's assets and operations, the report said, citing people familiar with the discussions. Sign up here. Last week, China Aviation Oil (Singapore) (CNAO.SI) , opens new tab, CNAF's Singapore-based unit in charge of importing jet fuel to China, said that its parent company CNAF will be undergoing a corporate restructuring with another conglomerate. While China's demand for gasoline and diesel has been shrinking due to fleet electrification and the use of cheaper natural gas in trucks, aviation fuel demand has seen robust growth from passenger and cargo traffic. A Sinopec spokesperson declined to comment. CNAF did not immediately respond to an emailed request for comment after business hours. Reuters could not immediately confirm the Bloomberg report. https://www.reuters.com/business/energy/sinopec-talks-buy-chinas-leading-jet-fuel-distributor-bloomberg-news-reports-2025-11-03/
