2026-02-04 05:51

Europe will need LNG to refill inventories Sees slight rebound in Asia, China demand this year Eni needs to contract 7 mpta more LNG to meet 2030 target DOHA, Feb 4 (Reuters) - The global liquefied natural gas (LNG) market is expected to stay finely balanced this year as thin supply buffers, low European inventories and recovering Asian demand leave little room for unexpected weather shocks, an Eni executive said. "Europe has very low storages, and we need to refill it in the summer," Cristian Signoretto, director for global gas & LNG portfolio at Italian energy major Eni (ENI.MI) , opens new tab told Reuters. Sign up here. "And we expect also Asia, China, to rebound a bit from the low consumption of last year, because prices will be a bit softer than last year," he added, speaking on the sidelines of the LNG2026 conference. "If we have a cold spell in the last part of this winter... Or if you have a heat wave in Asia or Europe during the summer, we might be in a tricky situation to be able to pull gas for European storages," Signoretto said. "So we still see 2026 as very finely balanced." From 2027 into 2028 however, additional LNG supply will help to further soften prices, although project delays remain a risk, he added. New demand from Southeast Asia and the Middle East will show up if LNG prices fall below $10 per million British thermal units (mmBtu), Signoretto said. PORTFOLIO AIM Eni has said it aims to have 20 million metric tons per annum (mtpa) of contracted LNG supply in its portfolio by 2029 to 2030. Signoretto said Eni still needed to contract about 7 mtpa of LNG to reach that target. "Our strategy is to try to bring into our portfolio LNG coming from our production sites in Congo, Mozambique, Indonesia, Cyprus," he said, adding that its production will account for 605 to 70% of the company's portfolio. "And the rest we are comfortable with having third-party LNG in our portfolio." EUROPE In Europe, President Donald Trump's transactional diplomacy and his pursuit of "energy dominance" have sharpened concerns about the region's heavy reliance on U.S. LNG, which replaced most of the volumes previously supplied by Russia. Policy makers must intervene if they want to bring about change, Signoretto said, as market fundamentals direct U.S. cargoes to Europe because of shorter shipping distances. "This is just the market reality of having an important source of LNG on the other side of the Atlantic," he said. "It's the most efficient way to transport the LNG. So that's why American LNG is getting in big quantities into Europe." The European Union's imports of LNG from the United States stood at almost 60 million tons in 2025, nearly four times higher than 2021 levels, Kpler data shows. https://www.reuters.com/business/energy/eni-sees-2026-lng-market-finely-balanced-thin-supply-asian-demand-2026-02-04/

2026-02-04 05:48

OSLO, Feb 4 (Reuters) - Equinor (EQNR.OL) , opens new tab reported a decline in fourth-quarter profits on Wednesday from the same period last year as oil and gas prices fell, but still outperformed analysts' expectations for the period. The Norwegian group's oil and output grew by 3.4% in 2025 to a record high 2.14 million barrels of oil equivalent per day, after a 6% year-on-year rise in production in the fourth quarter. Sign up here. The energy group's adjusted earnings before tax for October-December fell to $6.20 billion from $7.9 billion a year earlier, beating the $5.93 billion predicted in a in a poll , opens new tab of 25 analysts compiled by Equinor. "In 2026, we expect around 3% production growth, up from record levels in 2025. We are taking firm actions to strengthen free cash flow, remain robust towards lower prices and maintain competitive capital distribution," CEO Anders Opedal said in a statement. The company said it would cut its share buybacks in 2026 to $1.5 billion from $5 billion last year, while its quarterly cash dividend was raised to $0.39 per share from $0.37 previously. Equinor expects its organic capital spending (capex) in 2026 to total $13 billion, in line with the $13.1 billion spent last year and compared with $12.9 billion expected by analysts. In 2027 Equinor plans to slash its capex to $9 billion, primarily from reductions within its Power unit, which includes renewables, gas-fired power plants and batteries, as well as its in its Low Carbon Solutions (LCS), the company said. https://www.reuters.com/business/energy/equinor-q4-profit-falls-less-than-expected-2026-02-04/

2026-02-04 05:32

A look at the day ahead in European and global markets from Rae Wee Euro zone preliminary inflation data on Wednesday will set the tone for markets ahead of the European Central Bank's rate decision a day later, as policymakers keep close tabs on the euro's strength. Sign up here. Expectations are for consumer prices in the bloc to have eased slightly to an annual 1.7% last month. That remains comfortably below the ECB's 2% target as price pressures dissipate and give the central bank reason to stay on hold. Recent data showed German inflation unexpectedly rose slightly in January, though France's came in less than expected. A significant miss could raise alarm bells for ECB policymakers, who last month flagged growing concerns over the euro's quick appreciation against the dollar and its potential to push inflation even lower if it continues strengthening. The common currency , while retreating from its highs above $1.20 hit in January, remains sensitive to uncertainties from U.S. President Donald Trump's chaotic policies. That risk continues to keep the dollar under pressure, meaning more upward potential for the euro. The focus will also be on whether a rout in data analytics, professional services and software companies continues. On Friday, Anthropic's launch of plug-ins for its Claude Cowork agent sparked worries of an AI-fuelled disruption to those industries. Selling pressure abated in Asia given the region's historical dominance in hardware manufacturing, while European and U.S. stock futures pointed to a steadier open. The latest development highlights the disruptive threat to sectors once seen as AI winners, which analysts note is drawing a clearer line between the true winners and losers of a rally that has so far been fairly broad-based. Results from Google parent Alphabet (GOOGL.O) , opens new tab are also due later on Wednesday, where it is expected to report a 15.5% jump in revenue to $111.37 billion. Investors will be focused on the company's spending plans for 2026, its outlook for cloud services demand and an update on AI capacity constraints. Key developments that could influence markets on Wednesday: - Flash euro zone inflation (January) - Euro zone producer prices (December) - Alphabet earnings - U.S. ISM services PMI (January) - U.S. ADP private payrolls report (January) https://www.reuters.com/world/china/global-markets-view-europe-2026-02-04/

2026-02-04 05:31

Ultra-low spreads seen as crucial for euro prominence Southern Europe debt risk premia lowest since 2008 Further tightening hard without more European integration ECB monetary policy, risk assets outlook also key factors Feb 4 (Reuters) - Euro zone sovereign bond yield spreads are at their lowest since Lehman Brothers collapsed in 2008, but investors say steeper falls will be difficult without deeper reforms, as volatile geopolitics forces Europe to rethink spending. The yield premium that Southern European governments pay over safe-haven German Bunds has shrunk almost non-stop since late 2023, when it became apparent the European Central Bank was going to cut interest rates. Sign up here. But market participants say there may be limited room for further declines to a unified point economists believe will help create a deeper and more liquid bond market, an essential step towards strengthening the euro’s role on the world stage. The United States, under President Donald Trump, has become a less predictable partner, both for trade and security. His administration has insisted Europe must pay more for its own security, and euro zone governments, led by Germany, are planning huge increases in borrowing to fund that. Trump's short-lived threat in January to take over Greenland prompted yield spreads to briefly edge higher, before retreating once more. Italy, Spain, Portugal and Greece are at around 53 basis points, 37 bps, 24 bps and 43 bps, respectively. In 2007, before the crisis when debt loads were far smaller than today, spreads were even lower, with Italy at about 22 bps, Spain and Portugal at 5 bps, Greece at 25. “It wasn’t always about fundamentals, (some) spreads were close to zero (before the GFC) because there was a hope that over time, the monetary union would evolve into a fully-fledged fiscal and political union,” said Konstantin Veit, portfolio manager at PIMCO, referring to the 2008 global financial crisis. “We remain constructive on peripheral spreads, but compression potential might be limited without improvements on the institutional side,” he added. Veit was referring to further progress on the banking union, capital markets union, common issuance and a shared fiscal capacity, something ECB President Christine Lagarde last year said was needed for greater international prominence , opens new tab for the euro. EU INTEGRATION AND POLITICS Given the strength in the euro, the ECB could deliver another rate cut this year, based on analyst forecasts and market pricing. This should help keep spreads stable this year, analysts said. On the political front, the EU’s pandemic‑era Next Generation fund and the growing need for higher military spending had fuelled expectations of more joint debt issuance. That in turn has supported the bonds of Southern Europe, an effect that analysts expect to last throughout 2027. Economists remain sceptical about greater joint issuance, given Germany’s opposition. “I think more integration will only come in a stress scenario, and we're not yet in a stress scenario,” Carsten Brzeski, global head of macro research at ING, said. He mentioned the possibility of debt-to-GDP ratios increasing in Southern Europe if the economy slows. “We can enjoy the good place, but we should be cautious in deriving any longer-term conclusions from the current state,” he added. Italy, long seen as politically unstable, has become one of Europe’s more stable countries, while German politics has become more volatile, in part as far-right, eurosceptic parties such as Alternative für Deutschland gain more power. “Politics in Italy or other Southern European countries is the part I’m least concerned about,” Rohan Khanna, head of euro rates strategy at Barclays, said. “What I’m more concerned about is how the market thinks about Italy in a post‑NGEU world.” Barclays expects spreads to trade in a tight range, with less room for a decline in Italian spreads than those elsewhere in Southern Europe. https://www.reuters.com/business/finance/ultra-low-bond-spread-unity-still-out-reach-euro-area-2026-02-04/

2026-02-04 05:17

BOJ sets high hurdle for intervention, which not met yet, sources say Tools include emergency bond buying, taper suspension, sources say BOJ in no mood to tame yield rises driven by fiscal concerns Some analysts see current JGB moves as 'calm before the storm' TOKYO, Feb 4 (Reuters) - Prime Minister Sanae Takaichi should not count on the Bank of Japan's help in taming sharp bond yield rises given the huge cost of intervention, including the significant risk of igniting unwelcome yen falls, sources say. Japanese government bonds (JGB) went into free fall last month, sowing turmoil in global debt markets, after Takaichi called a snap election and pledged to suspend a food levy for two years, stoking fears that increased fiscal spending would add to the nation's already huge debt pile. Sign up here. Super-long bond yields rocketed to record highs in a rout reminiscent of the "Truss" shock in 2022, when then-British Prime Minister Liz Truss' announcement of large, unfunded tax cuts triggered a collapse in gilts and a historic surge in yields. Growing prospects that Takaichi's party will score a landslide victory in the election on Sunday, and secure a mandate for her expansionary fiscal policy, have kept bond investors on edge amid concern over Japan's worsening finances. The volatility has raised alarm within the central bank, though three sources familiar with its thinking say the risks of intervention in the bond market at this stage outweigh the rewards. Japanese policymakers face a tricky trade-off having to keep sharp bond yield rises in check, while seeking to prop up the ailing yen through threats of currency intervention. The challenge puts the BOJ in a bind as any attempt to keep long-term interest rates low would conflict with its gradual rate-hike path, which it hopes would moderate inflationary pressures from a weak yen. At a policy meeting on January 22-23, one board member called for vigilance over a "one-sided steepening" of the yield curve, while another warned of high volatility particularly for super-long JGBs, a summary of opinions showed. BOJ Governor Kazuo Ueda also escalated his warning by describing the pace of yield rises as "quite fast," and repeated the bank's readiness to act in exceptional circumstances. THRESHOLD FOR BOND MARKET INTERVENTION NOT MET While markets have regained a semblance of calm, the bond selloff has turned investors' attention to whether the BOJ would come to the rescue in the event of a renewed rout after the election. But the central bank sees recent market moves as falling short of meeting the very high threshold for intervention, say the sources, who spoke on condition of anonymity. The BOJ has several tools at its disposal such as conducting unscheduled, emergency bond-buying operations, or tweaking the composition of bonds it buys under a quarterly purchase plan. The last resort would be to suspend or altogether overhaul its bond taper programme, which has been rolling since 2024. The BOJ would step in only during a panic selloff driven by speculative trade, or a destabilising move that requires the central bank to act as market maker of last resort, the sources said, adding that neither scenario had unfolded so far. Any intervention would also be temporary, rather than a precursor to a sustained resumption of increased bond buying, to avoid setting a new line-in-the-sand on bond prices, the sources said. "If bonds are being sold on speculative trading, the BOJ could see scope to intervene. But it's clear the recent rise in yields reflects market concern over Japan's fiscal policy," said former BOJ board member Takahide Kiuchi. "It's the government's job, not the BOJ's, to deal with the consequences of market distrust over fiscal policy." Ueda made the point clear, stressing that the BOJ and government stood ready to play "each of their roles" in dealing with market volatility - putting the onus on the government to deal with any fiscal-policy-induced rise in yields. CALM BEFORE THE STORM? The BOJ's hesitance reflects the high cost of intervention. Ramping up bond buying would roll back its efforts to reduce its huge balance sheet through a gradual tapering that began in 2024. Stepping into the bond market would also drag the BOJ back into the bond yield-control policy it ditched in 2024, and risk unleashing a fresh bout of yen selling by giving markets the impression it was loosening policy again, analysts say. A weak yen has become a headache for policymakers as it pushes up import costs and broader inflation. Japan is scrambling to lift the yen with rate checks and verbal warnings. "Trying to push down bond yields would send a conflicting message to markets at a time the BOJ is raising its short-term policy rate," said Mari Iwashita, executive rates strategist at Nomura Securities. It also puts the BOJ's credibility on the line by stoking fears it is bankrolling government debt, she said. Some analysts see current conditions as the calm before the storm with investor concern over Japan's fiscal outlook making the JGB market vulnerable to abrupt, sharp selloffs. Domestic life insurers, which were once stable buyers of super-long JGBs, are retreating to the sidelines and may even be forced to sell ahead of the March fiscal year-end, they say. "I'm sure policymakers are extremely nervous about the bond market now," said former BOJ official Nobuyasu Atago. "The BOJ would need to act if markets go into a free fall, but stepping in at the wrong moment could amplify panic and make things worse," he said. "Either way, it would be an extremely hard decision." https://www.reuters.com/world/asia-pacific/boj-wont-come-rescue-takaichi-driven-bond-rout-2026-02-04/

2026-02-04 04:49

DOHA, Feb 4 (Reuters) - QatarEnergy will supply Petronas 2 million metric tons a year (mtpa) of liquefied natural gas (LNG) in a 20-year deal, the Malaysian state-run firm said on Wednesday, helping address the country's rising gas demand amid dwindling reserves. The deal, signed at the LNG2026 conference in Doha, is the first long-term supply arrangement between the two countries and follows Qatar's 27-year LNG supply deal with Japan last week. Sign up here. Petroliam Nasional, or Petronas, is actively pursuing investments in new natural gas fields abroad and seeking partnerships with foreign firms to boost extraction, while seeking LNG import deals amid falling local reserves. "The long-term volumes secured through this agreement will play a critical role in reinforcing Malaysia's energy supply security, ensuring stable and reliable LNG availability to meet growing demand in Malaysia," Petronas said in a statement. Malaysia, the world's fifth-largest LNG exporter, expects to significantly boost its imports to address rising power demand from data centres. Petronas has signed LNG import deals with Woodside Energy, Commonwealth LNG, Venture Global and ADNOC in recent years, and is planning a third regasification terminal. QatarEnergy is betting on its massive North Field expansion project, which is expected to produce its first LNG in the second half of this year and help cement its position as the world's second-largest LNG seller. The project is expected to produce 126 mtpa of LNG by 2027, boosting QatarEnergy's output by some 64% from its current 77 mtpa. Qatar shipped out over 81 million tons of the fuel last year, data from analytics firm Kpler showed. https://www.reuters.com/business/energy/petronas-signs-20-year-lng-supply-deal-with-qatarenergy-2026-02-04/