2025-11-03 00:11

Reuters Open Interest (ROI) is your essential source for global financial commentary. LAUNCESTON, Australia, Nov 3 (Reuters) - OPEC+ managed to both meet market expectations and deliver a surprise by agreeing to a small rise in crude oil output for December, but then pausing for the first quarter of next year. The eight members of the exporter group undertaking voluntary production cuts decided at their monthly meeting on Sunday to lift their output target by 137,000 barrels per day (bpd) for December. Sign up here. This matched market expectations and continued the recent pattern of modest increases seen in October and November. The eight OPEC+ members, which include heavyweights Saudi Arabia and Russia, have now raised output targets by about 2.9 million bpd, about 2.7% of global supply, since April. However, the group said they would pause any increase in targets for the first three months of 2026, despite sticking to their oft-expressed view of a "steady global economic outlook and current healthy market fundamentals". The stated reason for suspending any further production hikes in the first quarter of next year was about as upbeat as bearish news can be presented. "Beyond December, due to seasonality, the eight countries also decided to pause the production increments in January, February, and March 2026," OPEC+ said in a statement. It is correct that the first quarter tends to be softer from a demand perspective, but it's also likely that OPEC+ is putting a positive spin on what is an uncertain outlook for both global oil demand and supply. There is a high degree of divergence between the forecasts by the Organization of the Petroleum Exporting Countries and the International Energy Agency (IEA) for next year. OPEC's monthly report in October forecast 2026 oil demand growth at 1.38 million bpd and that demand and supply growth will be largely balanced. The IEA expects 2026 demand to rise by 700,000 bpd but a surge in supply will lead to a surplus of as much as 4 million bpd, the agency said in its October monthly report. Most oil market analysts sit somewhere between OPEC and the IEA, with a Reuters poll in September showing an expected surplus of 1.6 million bpd in 2026. UNCERTAINTIES OPEC+'s decision could be viewed as a sensible precaution to guard against any oversupply, and the inevitable slump in prices that would accompany a glut of oil. The decision is also a bit of insurance against current market uncertainties on both the supply and demand fronts. The recent U.S. sanctions against Russian crude producers and ongoing pressure on the major buyers of Russian oil, India and China, by U.S. President Donald Trump has led to questions as to whether the market will lose Russian barrels. The general expectation is that even if there is a pullback in purchases by India and China, it will only be for the short term and before long Russian supplies will once again be at full strength. The bullish supply narrative largely rests on Russia being able to export as much as it can, as well as ongoing output gains among non-OPEC producers. The bullish demand narrative rests largely with Asia, the top-importing region that takes about two-thirds of all global seaborne crude. Asia's demand is expected to have rebounded in October with LSEG Oil Research estimating imports of 28.59 million bpd, up 1.49 million bpd from September's 27.1 million bpd. But much of the gain is concentrated in China and India, the world's two biggest net oil importers. China's October imports are estimated at 12.21 million bpd, up from 11.5 million bpd in September, while India's are pegged at 5.05 million bpd, rising from September's 4.79 million bpd. What China and India have in common is that they tend to be price-sensitive buyers, importing more when prices are deemed to be reasonable and cutting back when prices rise. September's weak imports came after oil prices spiked in June amid the brief conflict between Israel and Iran, with cargoes arriving that month largely having been arranged during the period of high prices. The jump in October arrivals coincides with the drop in prices after the June spike as the risk premium eased and OPEC+ continued to lift output targets. The dilemma for OPEC+ is that for their bullish demand forecasts to be correct, prices are going to have to be low enough to tempt Asian buyers to lift imports, especially China, which is still building commercial and strategic inventories. But if OPEC+ is subtly shifting to once again limiting gains in output in order to stabilise prices, it runs the risk of buyers easing back on imports. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn , opens new tab and X , opens new tab. The views expressed here are those of the author, a columnist for Reuters. https://www.reuters.com/markets/commodities/opec-makes-subtle-shift-mitigate-potential-crude-oil-glut-2025-11-03/

2025-11-03 00:00

OPEC+ agrees to small output increase in December OPEC+ plans to pause production increases in the new year Supply outlook and Asian factory data weigh on prices NEW YORK, Nov 3 (Reuters) - Oil prices held steady on Monday as the market balanced the latest OPEC+ supply increase with the group's plans to pause output increases in the first quarter of 2026 along with fears of an oil supply glut and weak factory data in Asia. Brent crude futures rose 12 cents, or 0.2%, to settle at $64.89 a barrel. U.S. West Texas Intermediate (WTI) crude rose 7 cents, or 0.1%, to settle at $61.05. Sign up here. OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, agreed on Sunday to raise output by a small 137,000 barrels per day (bpd) in December. OPEC+ also agreed to pause increases in the first quarter of next year. "Any negative price implications from OPEC’s furtherance of this quarter’s 137,000 bpd production increase were offset by the cartel’s suggested pause in output advances after the end of this year," analysts at energy advisory firm Ritterbusch and Associates said in a note. On Monday, Morgan Stanley raised its Brent crude forecast for the first half of 2026 to $60 a barrel from $57.50, citing the decision by OPEC+ to pause quota hikes in the first quarter of next year and recent on Russian oil assets. Last month, the International Energy Agency said the global oil market faces a surplus next year of as much as 4 million bpd. OPEC expects global oil supply and demand to balance next year. European oil CEOs at a conference in Abu Dhabi cautioned against being too bearish on oil. Analysts at RBC, a Canadian bank, said Russia remains a supply wild card after U.S. sanctions on Russian producers Rosneft and Lukoil and attacks on energy infrastructure. Headwinds for Asia's big manufacturing hubs persisted in October, business surveys showed on Monday. Asia is the world's biggest oil-consuming region. Chinese oil demand growth has slowed since 2020 as the country transitions to greener energy, oil major TotalEnergies (TTEF.PA) , opens new tab CEO Patrick Pouyanne said on Monday. He said he remained optimistic long-term due to rising demand in India. STRONG DOLLAR A strong U.S. dollar (.DXY) , opens new tab weighed on oil prices by making crude more expensive for buyers using other currencies. The dollar hovered at a three-month high against a basket of peers. Federal Reserve officials kept pressing competing views of risks facing the U.S. economy, and the debate should intensify ahead of the central bank's next policy meeting in the absence of data suspended due to the federal . Federal Reserve Bank of Chicago President Austan Goolsbee said on Monday he's in no hurry to cut interest rates again with inflation still too far above the central bank's 2% target. San Francisco Federal Reserve President Mary Daly on Monday said she supported the U.S. central bank's last week, and will want to sift through incoming data to assess if another reduction in borrowing costs is warranted at the December 9-10 meeting. Lower interest rates can boost economic growth and oil demand by reducing costs for consumers. U.S. manufacturing contracted for an eighth straight month in October as new orders remained subdued, and suppliers were taking longer to deliver materials to factories against the backdrop of tariffs on imported goods. President Donald Trump said the U.S. military could deploy troops to Nigeria or carry out air strikes to stop what he called the killing of large numbers of Christians in the West African country, an OPEC member and Africa's biggest oil producer. https://www.reuters.com/business/energy/oil-extends-gains-after-opec-pauses-q1-output-hikes-2025-11-03/

2025-11-02 23:52

SYDNEY, Nov 3 (Reuters) - The CEO of Singapore Telecommunications-owned (STEL.SI) , opens new tab Optus apologised to Australia's parliament for an emergency number outage that was linked to four deaths but declined to stand down, citing a need for stability. *Stephen Rue started in the role a year ago following a massive cyber attack and separate half-day outage which resulted in the previous CEO leaving. Sign up here. *On September 18, Optus said a failure of its "000" emergency line affected thousands of people and four died as a result of the inability to contact emergency services. *Rue told an Australian Senate hearing there are questions about his position but "another change of leader at this time is not what Optus needs or what our customers need". *He added that "the disruption and uncertainty could actually set back the transformation underway and create further risks." *Optus announced on October 23 that its CFO Michael Venter and Chief Information Officer Mark Potter would be stepping down early in 2026. KEY CONTEXT *Optus has been under intense political and regulatory scrutiny since a 2022 cyber attack exposed millions of people's personal details to criminals. *The event resulted in a sweeping overhaul of Australia's cyber-readiness and response rules including mandatory reporting and increased fines for prevention failure. *In 2023, millions of Optus residential and business customers were without phone or internet for most of a day after a routine software upgrade inadvertently sent its entire network offline until it was rebooted manually. *Rue told parliament the September 2025 emergency line outage was caused by human error during a routine firewall upgrade which meant that traffic wasn't diverted before locking the equipment that was being upgraded. https://www.reuters.com/business/media-telecom/australias-optus-ceo-apologises-emergency-line-outage-refuses-stand-down-2025-11-02/

2025-11-02 23:00

SHANGHAI, Nov 3 (Reuters) - China's CATL has placed orders with external suppliers for lithium ore in November, sources say, as the battery giant seeks alternative feedstock while its flagship Jianxiawo mine is closed. A CATL (300750.SZ) , opens new tab subsidiary and joint venture producing lithium carbonate in Yichun, near where the mine is located, made the orders with traders earlier this month, according to two sources with direct knowledge who requested anonymity as they were not authorised to speak publicly. Sign up here. The two companies would rarely do that when the mine was operating at full capacity, one of the sources said. CATL did not respond to a request for comment. Mining at CATL's Jianxiawo site, one of several lithium assets it owns in Yichun in Jiangxi province, has been suspended since early August after its mining license expired. CATL said in August it was applying to renew the license as soon as possible. A month later, Chinese newspaper Securities Times reported that the mine was set to reopen soon. However, CATL has yet to announce such a move. The Jianxiawo mine has annual production capacity equivalent to about 46,000 metric tons of lithium carbonate, accounting for 3% of 2025 global output, according to data from Australian government. The mine closed last year, reopening in February before being shut again in August. Lithium prices have reacted sharply each time given the mine's importance to global supply. https://www.reuters.com/world/asia-pacific/catl-taps-outside-suppliers-lithium-ore-flagship-mine-stays-closed-2025-10-31/

2025-11-02 21:35

Bessent says high interest rates put housing sector into recession Federal Reserve should cut interest rates faster, Bessent says Low-end consumers hit hardest by high mortgage rates, Treasury secretary says Nov 2 (Reuters) - Parts of the U.S. economy, particularly housing, may already be in recession because of high interest rates, U.S. Treasury Secretary Scott Bessent said Sunday, repeating his call for the Federal Reserve to accelerate rate cuts. "I think that we are in good shape, but I think that there are sectors of the economy that are in recession," Bessent said on CNN's "State of the Union" program. "And the Fed has caused a lot of distributional problems with their policies." Sign up here. Bessent said that, although the overall U.S. economy remains solid, high mortgage rates still hinder the real estate market. Housing, he said, is effectively in a recession that is hitting low-end consumers the hardest because they have debts, not assets. Pending home sales in the United States were flat in September, according to the National Association of Realtors. The treasury secretary characterized the overall economic environment as in a transition period. Fed Chair Jerome Powell last week signaled that the central bank may not cut rates further at its December meeting, prompting sharp criticism from Bessent and other Trump administration officials. Federal Reserve Governor Stephen Miran, who is on leave from his post as chairman of the White House Council of Economic Advisers, said in an interview with the New York Times published on Saturday that the Fed risked inducing a recession if it did not swiftly lower interest rates. Miran, who is due to return to his White House job in January, was one of two central bank governors who dissented from last week's Fed decision to lower interest rates by 25 basis points, arguing instead for a cut of 50 basis points, or 0.5 percentage point. "If you keep policy this tight for a long period of time, then you run the risk that monetary policy itself is inducing a recession," Miran said in the New York Times interview, which was conducted on Friday. "I don't see a reason to run that risk if I'm not concerned about inflation on the upside." Bessent echoed that view, saying that the Trump administration's cuts in government spending had helped to lower the deficit-to-gross-domestic-product ratio to 5.9% from 6.4%, which in turn should help lower inflation. The Fed can also help by continuing to bring down interest rates, he said. "If we are contracting spending, then I would think inflation would be dropping. If inflation is dropping, then the Fed should be cutting rates," he said. https://www.reuters.com/business/bessent-says-high-us-interest-rates-may-have-caused-housing-recession-2025-11-02/

2025-11-02 21:06

BRUSSELS, Nov 2 (Reuters) - The European Union is considering a brake clause to weaken its 2040 climate target in the future, if it becomes clear countries' forests are not absorbing enough CO2 emissions to meet the goal, a draft EU compromise proposal showed. EU countries are attempting to approve their new 2040 climate target at a November 4 meeting of their climate ministers, just in time to avoid European Commission President Ursula von der Leyen going empty-handed to the U.N.'s COP30 climate summit with other world leaders on November 6. Sign up here. But with some countries concerned about the costs to struggling domestic industries, the EU is considering various flexibilities and options to weaken the climate target, which the commission has said should be to cut planet-warming emissions 90% by 2040. Countries' latest draft negotiating compromise, seen by Reuters on Sunday, added a new clause that said if forests and other land-based activities that absorb CO2 emissions fall short, the EU will be allowed to propose "an adjustment of the 2040 intermediate target corresponding to and within the limits of the possible shortfalls". Brussels could also respond by proposing extra measures to help get the forest sector back on track for the emissions goal, it said. The move echoes a proposal made by France last week, previously reported by Reuters, which had demanded an "emergency brake" to reduce the 90% emissions target by 3%, if forests and the land-use sector underdeliver. The amount of CO2 absorbed by Europe's forests and land-use sector dropped by nearly a third in the last decade, because of factors including wildfires and unsustainable forest management. Previous negotiating drafts showed countries were already considering letting the EU revise the 2040 goal every two years, another route that could weaken it in the future. But their ministers will still have to thrash out key issues on Tuesday, including the share of the 90% emissions reduction which countries will be allowed to cover by buying foreign carbon credits. Support from at least 15 of the 27 EU members is needed to pass the goal. A spokesperson for Denmark, which holds the EU's rotating presidency and drafted the document, said all the necessary ingredients were now in place to land a deal. “With COP30 about to start this is the time to agree on the 2040 target,” the spokesperson said. https://www.reuters.com/sustainability/cop/eu-considers-weakening-2040-climate-goal-over-forest-co2-absorption-draft-shows-2025-11-02/