2024-10-03 23:46

Weekly jobless claims at 225,000 US service sector activity accelerates to 1-1/2-year high East, Gulf coast workers' strike enters third day Indexes: Dow down 0.44%, S&P 500 down 0.17%, Nasdaq down 0.04% NEW YORK, Oct 3 (Reuters) - U.S. stocks finished lower on Thursday ahead of Friday's monthly U.S. payrolls report and as investors kept a watchful eye on the growing conflict in the Middle East. Data on Thursday showed that the number of Americans filing new applications for unemployment benefits rose marginally last week, while Hurricane Helene and strikes at ports could distort the labor market picture in the near term. Friday’s jobs report for September is considered key for the outlook for U.S. interest rates. Economists polled by Reuters expect 140,000 job additions, while the unemployment rate is anticipated to stay steady at 4.2%. (USNFAR=ECI) , opens new tab, (USUNR=ECI) , opens new tab Investors are eager for more data on the labor market after the Federal Reserve last month cut its benchmark interest rate by an unusually large 50 basis points, the first reduction in borrowing costs since 2020. "It looks like investors are cautious ahead of the jobs report tomorrow," said Adam Sarhan, chief executive of 50 Park Investments in New York. Also, he said, "it's normal to see some profit-taking after a big rally like we've had over the last two, three weeks." The Cboe Volatility index (.VIX) , opens new tab, Wall Street's fear gauge, rose to 20.49, its highest closing level since Sept. 6. Israel's military told residents of more than 20 towns in south Lebanon to evacuate their homes immediately on Thursday. The Dow Jones Industrial Average (.DJI) , opens new tab fell 184.93 points, or 0.44%, to 42,011.59, the S&P 500 (.SPX) , opens new tab lost 9.58 points, or 0.17%, to 5,699.96 and the Nasdaq Composite (.IXIC) , opens new tab eased 6.65 points, or 0.04%, to 17,918.48. The S&P 500 remains up 19.5% for the year so far. Traders are now pricing in a 35% probability of a 50 basis point cut next month, down from 49% a week ago, the CME Group's FedWatch Tool shows. The benchmark index briefly turned positive after the Institute for Supply Management survey showed U.S. service sector activity jumped to a one-and-a-half-year high in September, further evidence that the economy stayed robust in the third quarter. "Once again, services is doing the heavy lifting keeping this economy humming along," said Brian Jacobsen, chief economist at Annex Wealth Management. But also, he said, "oil prices have moved higher and the port strike can really throw a monkey wrench in things." Energy shares gained along with a surge in oil prices as concerns mount over a widening regional conflict in the Middle East that could pose a threat to global crude flows. The S&P 500 energy index (.SPNY) , opens new tab rose 1.6%. A workers' strike on the East and Gulf coasts entered its third day. Morgan Stanley economists said a prolonged stoppage could raise consumer prices, with food prices likely to react first. Constellation Brands (STZ.N) , opens new tab shares fell 4.7% after the beer maker maintained its sales and profit forecast for fiscal year 2025. Results from some of the big U.S. banks are expected to unofficially kick off third-quarter S&P 500 earnings at the end of next week. Declining issues outnumbered advancing ones on the NYSE by a 2.13-to-1 ratio; on Nasdaq, a 1.99-to-1 ratio favored decliners. The S&P 500 posted 25 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 63 new highs and 114 new lows. Volume on U.S. exchanges was 11.01 billion shares, compared with the 12.08 billion average for the full session over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/futures-fall-investors-await-labor-data-assess-middle-east-risk-2024-10-03/

2024-10-03 23:22

RIO DE JANEIRO, Oct 3 (Reuters) - Brazilian state-run oil firm Petrobras (PETR4.SA) , opens new tab has been able to provide Brazilians with price stability despite market volatility caused by an escalation of the conflict in Middle East, its top executive said on Thursday. In an interview with Reuters, CEO Magda Chambriard said Petrobras' commercial strategy allows it "to offer competitive prices compared to other supply alternatives and mitigate international market volatility." Brent crude futures, one of the variables monitored by Petrobras to define its fuel prices to distributors, surged 5% on Thursday to $77.62 per barrel, as concerns mounted that a widening regional conflict in the Middle East could disrupt global crude flows. Chambriard said Petrobras has been monitoring recent events in the oil market, but cautioned that the firm couldn't unveil decisions on its pricing in advance due to competitive factors. Last year, the firm ditched a more market-based pricing policy in favor of one that gave it more flexibility to smooth out price swings. Petrobras most recently tweaked its prices in July, when it raised gasoline prices for distributors by about 7%. So far this year, it has not touched diesel prices. Sign up here. https://www.reuters.com/business/energy/petrobras-pricing-strategy-avoids-passing-market-volatility-ceo-says-2024-10-03/

2024-10-03 23:08

Oct 4 (Reuters) - Britain's electric vehicle market will likely miss 2024 targets set by the zero-emission vehicle (ZEV) mandate, a trade body warned on Friday, and called on the new Labour government to introduce incentives for private buyers to speed up the switch to EVs. The comments were made in an open letter to finance minister Rachel Reeves ahead of the Oct. 30 autumn budget, and was signed by the Society of Motor Manufacturers and Traders (SMMT) CEO Mike Hawes and UK heads of several automakers. Britain's ZEV mandate, introduced by the former Conservative government, requires at least 22% of an automaker's new car sales to be purely EVs in 2024. "As an industry, we will likely miss those targets and a significant number of brands face the prospect of either buying credits from another company or paying swingeing compliance payments," the letter said. Stellantis (STLAM.MI) , opens new tab in June warned it could halt its UK production unless the government does more to boost EV demand. Hawes reiterated his calls to halve the tax on new EV purchase for three years for private customers and reduce VAT on public charging, and pointed to the growth in adoption by the fleet sector as proof that incentivisation works. Currently, tax benefits are only applicable on commercial purchases. UK new car sales rose 1.1% year-on-year in September, the SMMT separately said on Friday, with sales of battery electric vehicles at a new record, making up for 20.5% of the overall market powered by fleet purchases. "September's record EV performance is good news, but look under the bonnet and there are serious concerns as the market is not growing quickly enough to meet mandated targets," Hawes said. Several global automakers have scaled down their EV production targets on slowing demand. Sign up here. https://www.reuters.com/business/autos-transportation/british-auto-industry-set-miss-2024-ev-sales-target-trade-body-warns-2024-10-03/

2024-10-03 23:07

LONDON, Oct 4 (Reuters) - Britain will provide funding of up to 21.7 billion pounds ($28.5 billion) over 25 years to develop carbon capture and storage (CCS) projects to curb emissions from industry and create new jobs in northern England, the government said on Friday. Britain has a climate target to reach net zero emissions by 2050 and has said CCS will be needed to curb emissions from energy intensive industrial sectors. It also hopes backing the technology will help reinvigorate the country's industrial regions and provide much needed investment and jobs. "Carbon capture technology is not just about cleaning up our industry and our energy sector. It is a massive opportunity to attract investment and create thousands of skilled jobs," finance minister Rachel Reeves said when announcing the funding in Liverpool. The government said it expects the decision to attract 8 billion pounds of private investment into the communities and create 4,000 jobs directly for the communities hosting the projects. CCS involves capturing emissions from power plants and industry to enable them to be stored underground. The technology has been available for years but projects globally have failed to take off due to high costs and questions over the amount of carbon being captured. Britain’s conservative government that was voted out of office in July had in 2023 promised 20 billion pounds of CCS funding that was never fully awarded. The two sites in northern England will have a combined annual carbon capture capacity of 8.5 million metric tons a year, equivalent to taking 4 million cars off the road, the government said. The HyNet North West cluster in Merseyside seeks to capture emissions from industrial plants and store them in depleted gas fields in the Irish Sea. It is being developed by a consortium led by Italian energy group Eni. (ENI.MI) , opens new tab "HyNet… will decarbonise one of the key energy-intensive industrial districts as well as unlock significant economic growth in this region of the UK," Eni CEO Claudio Descalzi said in a statement. Oil and gas majors Equinor (EQNR.OL) , opens new tab and BP (BP.L) , opens new tab are involved in developing a project in Teesside that would store captured emissions under the North Sea. Green groups criticised the decision. "For a government that is committed to tackling the climate crisis, 22 billion pounds is a lot of money to spend on something that is going to extend the life of planet-heating oil and gas production," said Greenpeace UK’s policy director, Doug Parr. ($1 = 0.7625 pounds) Sign up here. https://www.reuters.com/sustainability/climate-energy/britain-promises-up-217-billion-pounds-cleaner-energy-2024-10-03/

2024-10-03 23:00

LONDON, Oct 3 (Reuters) - The OPEC+ group of crude oil exporters is still planning on lifting output from December, but it will be doing so against a backdrop of weak demand in the top-importing region of Asia. Asia's imports of crude were 27.05 million barrels per day (bpd) in September, up marginally from August's 26.47 million bpd, according to data compiled by LSEG Oil Research. The largely steady outcome for September arrivals was the result of region heavyweights China and India cancelling each other out. China, the world's biggest oil importer, saw arrivals of 11.43 million bpd in September, down from August's 11.61 million bpd, while India's imports were 4.94 million bpd, up from 4.71 million. However, the more important numbers for the oil market are the year to date figures, which show Asia's imports were 26.7 million bpd in the first nine months of the year, down 200,000 bpd from the 26.9 million bpd for the same period in 2023. Asia accounts for about two-thirds of global seaborne crude imports, and it's this market that tends to drive the price benchmarks such as Brent futures. Asia's lower oil imports for the first three quarters of 2024 undermine the forecasts for global demand growth made by the Organization of the Petroleum Exporting Countries. OPEC's September monthly report forecast that global demand growth in 2024 will be 2.03 million bpd, a slight 80,000 bpd reduction from its previous forecast. But much of the forecast relies on Asia, with OPEC expecting China's demand to rise 650,000 bpd, India by 270,000 bpd and the rest of Asia by 350,000 bpd. The volumes tracked by LSEG show that import growth in Asia is nowhere close to meeting the OPEC forecast. Of course, crude imports are only one aspect of total demand growth, albeit the most important. Others include domestic oil production, inventory movements and net imports of refined products. But even if these factors are positive for overall demand growth in Asia, they are very unlikely to be enough to offset the visible weakness in the region's crude imports. PRICE BOOST FOR DEMAND? There is some hope that Asia's crude imports may increase toward the end of the year, as volumes tend to respond to lower prices, once adjusting for a lag of up to two months to account for when cargoes are arranged and physically delivered. Global benchmark Brent futures trended weaker since mid-July, falling from a high in that month of $87.95 a barrel on July 5 to a low of $68.68 on Sept. 10. That 22% decline may well be enough to spark renewed buying interest, especially by Chinese refiners, who have a track record of boosting imports when prices weaken, but cutting back when they rise. It's also possible that imports will rise in other top buyers such as Japan and South Korea as refiners ramp up output ahead of peak winter demand. But even with a recovery in the fourth quarter, it's still likely that Asia's import growth in 2024 will fall short of expectations. This means that OPEC+, which brings together OPEC and allies including Russia, will be increasing production at a time when demand growth is still uncertain. The group held an online joint ministerial monitoring committee meeting on Wednesday, meeting market expectations for no change in policy. This puts OPEC+ on track to ease its output cuts by 180,000 bpd from December, the group having postponed its earlier plan to raise production from October onwards. Of course, OPEC+ retains the option to delay any increase to production further, but doing so risks ceding even more market share to producers outside the group, such as those in both North and South America. In addition to uncertainty over what OPEC+ will ultimately decide, the crude market is grappling with the risks of a wider conflict in the Middle East, including the possibility that Israel may target Iran's oil infrastructure in retaliation for Tehran's missile barrage this week. The tensions have resulted in a premium being once again priced into crude, with Brent rising to a one-month of $76.14 during Wednesday's trade. This premium is likely to persist until there is some de-escalation in the Middle East, and if that does occur, then it's likely the market will once again focus on the broader demand concerns. The opinions expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/markets/commodities/opec-still-has-an-asia-dilemma-crude-imports-remain-soft-russell-2024-10-03/

2024-10-03 22:39

Oct 3 (Reuters) - U.S. utility firm Talen Energy (TLN.O) , opens new tab said on Thursday it has bought TeraWulf's (WULF.O) , opens new tab minority stake in a 200-megawatt (MW) bitcoin mining facility in Pennsylvania. The deal is for a total consideration of $85 million in cash and some physical assets used in bitcoin mining operations. TeraWulf's shares fell about 3.8% after the bell. Talen now has complete ownership in the Nautilus facility, which has the capacity to power about 160,000 homes and is the first digital coin mining operation directly supplied with on-site nuclear energy. Earlier this year, Reuters had reported that Talen was looking to offload its stake in the Nautilus facility, in a process marketed to both data center developers and cryptominers. "(The deal) provides us with increased flexibility as we explore strategic alternatives in order to maximize the value per megawatt for our Susquehanna nuclear generation facility," Talen said in a statement. Operated by Talen, the Susquehanna nuclear plant is located right next to a 900 MW data center campus which it sold to e-commerce giant Amazon (AMZN.O) , opens new tab, earlier this year. Sign up here. https://www.reuters.com/business/energy/talen-energy-buys-stake-nuclear-powered-bitcoin-mining-campus-2024-10-03/