2024-05-07 20:58

NEW YORK, May 7 (Reuters) - World oil demand this year is expected to grow less than earlier forecast and output should expand faster than previous estimates, resulting in a more balanced market, the U.S. Energy Information Administration (EIA) said on Tuesday. The agency hiked its production forecasts from regions outside the Organization of the Petroleum Exporting Countries, while also lowering its expectations of demand from developed economies, according to a monthly update of EIA's Short-Term Energy Outlook (STEO). The EIA now expects global oil and liquid fuels consumption to grow by 920,000 barrels per day (bpd) this year to 102.84 million bpd, slightly smaller than the 950,000 bpd growth forecast in its April STEO. Total world crude oil and liquid fuels production was forecast to rise by 970,000 bpd to 102.76 million bpd this year, compared with its previous estimate of an 850,000-bpd increase. The improving market balance also led to a reduction in EIA's oil prices forecasts for the rest of the year. It now expects spot Brent crude prices to average $90 a barrel in the third quarter and decline to $88.67 in the final quarter of the year. Its previous forecast saw Brent prices of over $91 in the third quarter and over $89 in the fourth. For the U.S., the world's top oil producer, the EIA lowered its production forecast for this year to 13.20 million bpd, still a record high but slightly below its previous forecast of 13.21 million bpd. Next year, however, the agency expects a slightly bigger record high of 13.73 million bpd, up from the prior forecast of 13.72 million bpd. The EIA expects some producers in OPEC+, which includes OPEC and its allies, to limit their production after current voluntary output cuts expire at the end of June. Three OPEC+ sources said last week that the group is yet to begin formal talks on extending cuts, but it could extend them if demand fails to pick up. The group's next meeting is on June 1. Sign up here. https://www.reuters.com/business/energy/eia-cuts-world-oil-demand-forecast-2024-hikes-output-expectations-2024-05-07/

2024-05-07 20:43

S&P win streak at four; Dow on best run since Dec Disney has worst day since Nov. 22 on TV, box office weakness Tesla falls on China-made EV sales drop in April Palantir slides on lower-than-expected annual revenue forecast Indexes: Dow up 0.08%, S&P up 0.13%, Nasdaq down 0.1% May 7 (Reuters) - The S&P 500 and Dow Jones Industrial Average both clung onto gains to ended slightly higher on Tuesday, extending recent winning streaks fueled by renewed expectations that the Federal Reserve will cut interest rates this year. The advances pushed the S&P 500 (.SPX) New Tab, opens new tab to a fourth straight higher close, and its best winning run since March. For the Dow (.DJI) New Tab, opens new tab, it is now on its longest positive run since December 2023, gaining for the fifth session in a row. The benchmark performances came despite Walt Disney (DIS.N) New Tab, opens new tab slumping 9.5%, its biggest percentage fall since November 2022, as a surprise profit in its streaming entertainment division was eclipsed by a drop in its traditional TV business and weaker box office. Despite Disney's drag, markets have been generally buoyed by a weaker-than-expected labor market report last week, which fueled bets that the U.S. central bank will cut rates. The Nasdaq Composite (.IXIC) New Tab, opens new tab has also benefited, but it slipped lower in afternoon trade on Tuesday and closed slightly lower, snapping its own winning run at three. "I think the market is in this little holding pattern until the big data comes next week," said Garrett Melson, portfolio strategist at Natixis Investment Manager Solutions, referring to the Producer Price Index (PPI) due on May 14, and the Consumer Price Index (CPI) scheduled for May 15. Generally, the Fed and policymakers have been consistent in their message in recent weeks that rate cuts will come but the central bank is going to be cautious in implementing them. This meant, on a day lacking major data announcements, markets shrugged off comments from Minneapolis Federal Reserve President Neel Kashkari that the Fed may need to hold rates steady for the remainder of the year due to stalled inflation and housing market strength. Overall, Friday's payrolls data and better-than-expected earnings reports have helped soothe investor jitters around sticky inflation and a robust economy that have kept the rates elevated. Traders are anticipating rate cuts of 46 basis points (bps) from the Fed by the end of 2024, according to LSEG's interest rate probabilities app, with the first pivot to rate cut seen in September and another in December. They were expecting only one cut before the labor report last week. "The market is far more hypersensitive to the data than the Fed is," said Natixis' Melson, adding that "the bar for the Fed to abandon the easing bias is extremely high." The S&P 500 (.SPX) New Tab, opens new tab gained 6.96 points, or 0.13%, to 5,187.70 points, while the Nasdaq Composite (.IXIC) New Tab, opens new tab lost 16.69 points, or 0.10%, to 16,332.56. The Dow Jones Industrial Average (.DJI) New Tab, opens new tab rose 31.99 points, or 0.08%, to 38,884.26. Megacap stocks Alphabet (GOOGL.O) New Tab, opens new tab and Meta Platforms (META.O) New Tab, opens new tab rose 1.9% and 0.6%, respectively, boosting the main indexes. Nvidia (NVDA.O) New Tab, opens new tab fell 1.7% after the Wall Street Journal reported that Apple (AAPL.O) New Tab, opens new tab was developing its own chip to run artificial intelligence (AI) software in data centers. Apple gained 0.4% as it introduced a new chip called the M4, but put the new chip in an iPad Pro model rather than a laptop. Tesla (TSLA.O) New Tab, opens new tab fell 3.8% after data showed the U.S. automaker sold 62,167 China-made electric vehicles in April, down 18% from a year earlier. Palantir Technologies (PLTR.N) New Tab, opens new tab tumbled 15.1%, its sharpest one-day decline since May 2022, after the data analytics firm's annual revenue forecast fell short of analysts' estimates. The S&P 500 posted 49 new 52-week highs and 2 new lows while the Nasdaq recorded 155 new highs and 69 new lows. Sign up here. https://www.reuters.com/markets/us/sp-500-dow-futures-inch-higher-ahead-walt-disney-results-2024-05-07/

2024-05-07 20:35

SAO PAULO, May 7 (Reuters) - Heavy flooding in southern Brazil has hit food storage facilities in lower areas while hampering the shipping of grains to port, jeopardizing the nation's exports and wreaking havoc to the economy of Rio Grande do Sul state, a large soy, rice, wheat and meat producer. Anec, an association representing global grain exporters, said on Tuesday access to the port of Rio Grande had been disrupted as a local rail line stopped operating. The group, which represents firms like Cargill and Bunge (BG.N) New Tab, opens new tab, also cited road blockades forcing grain trucks to travel an extra 400 kilometers (248.55 miles) through alternative routes to reach the port, increasing freight costs. The unprecedented climate event, which left entire towns under water and destroyed critical infrastructure in the capital and rural areas, also killed livestock and caught farmers in the final stages of the corn and soy harvests, clouding the outlook for national grain production in 2023/2024. The escalating crisis also led competing meatpackers to join forces to circumvent logistical hurdles brought about by the heavy downpours, which disrupted water and electricity services to 1.4 million people, the state's Civil Defense agency said. According to a local meat lobby New Tab, opens new tab, the meat companies began sharing resources to speed up delivery of feed and water supplies to chicken and hog farms, where an unspecified number of animals have perished due to the devastating floods. Paulo Pires, president of Rio Grande do Sul farm lobby Fecoagro, said it was too early to know how much grain production had been lost due to the flooding that hit silos around river areas. "They are large silos, so it is significant, but it is really difficult to quantify this," Pires said by telephone. Gedeao Pereira, president of agriculture lobby Farsul, confirmed isolated cases of food silos being hit but floods, but said they could dry in time and hence losses would be minimized. Pereira said he is more concerned with crops like soy which farmers have yet to harvest in Rio Grande do Sul, especially in center and southern areas. Earlier on Tuesday, the state's port authority said Rio Grande was "operating normally" as its terminals had not been affected by the rise in the level of the Laguna dos Patos lagoon. At around 8 a.m. the current was ebbing in the access channel Rio Grande port, allowing water to flow at a speed of about three knots, the equivalent of 5.55 kilometers per hour, the authority noted. The tide table indicated a level of 90 cm above normal. Cargonave, a shipping agency, confirmed slower grain arrivals at Rio Grande port, which last year had exported 10.4 million tons of soybeans and 3.6 million tons of soymeal. Sign up here. https://www.reuters.com/business/environment/brazil-floods-disrupt-rail-road-access-major-grains-ports-2024-05-07/

2024-05-07 20:32

HOUSTON, May 7 (Reuters) - Occidental Petroleum (OXY.N) New Tab, opens new tab on Tuesday reported profit that beat analysts' first-quarter consensus estimate and forecast second quarter oil and gas production would climb 7%. Profit fell to $604 million, or 63 cents a share, from $1.07 billion, or $1.09 a share, as its midstream business fell into the red, operating profit in chemicals fell 45% and the oil business slumped 20%. However, adjusted profit of 63 cents per share for the quarter ended March 31, beat analysts' average estimate of 60 cents per share, according to LSEG data. The company forecast second-quarter output would rise to between 1,232-1,272 thousand barrels of oil and gas per day, but it forecast wider losses in its midstream business. Second quarter output at the midpoint of its forecast would be 7% higher. Output in the Permian basin is forecast to rise about 3% overall, it projected. The forecast excludes its $12 billion acquisition of Permian shale oil producer CrownRock. A regulatory review has delayed closing to the second half of the year. Occidental's first quarter oil and gas production declined on a year-over-year basis as previously disclosed hits from winter weather and Gulf of Mexico outages offset a slight gain in average sales price for its crude oil. Occidental pumped 1.17 million barrels of oil and gas per day in the quarter, down from 1.22 million a year ago, the company said. Output was in line with the company's prior guidance. Operating profit from oil and gas was $1.28 billion down from $1.614 billion a year ago. The midstream unit posted a loss of $64 million compared with profit of $36 million a year ago. Chemicals earned $260 million, down from $472 million a year ago. Quarterly average price collected for its oil rose to $76.04 per barrel, from $74.22 per barrel a year earlier. Shares trading down 42 cents in late trading after closing at $65.07. Sign up here. https://www.reuters.com/markets/commodities/occidental-petroleum-beats-quarterly-profit-estimates-higher-oil-prices-2024-05-07/

2024-05-07 20:28

May 7 (Reuters) - The U.S. Energy Information Administration revised its coal export forecast upwards, driven by stronger-than-expected February data and progress restoring access to the Port of Baltimore while coal- production declined in April. Metallurgical coal exports, primarily produced in Appalachia, were expected to reach 8 million short tons (MMst)in April and May despite concerns about the Port of Baltimore, a key export hub, which is responsible for "roughly 20% of metallurgical coal exports flow." The overall coal export forecast for April and May also climbed 9% to 13 MMst, contributing to a 4% increase in the EIA's annual coal exports forecast for 2024, at 99 MMst. However, domestic coal production saw a 19% dip from March to April as miners entered the shoulder season with high inventories. The EIA predicted production to rebound in the coming months, peaking at 49 MMst in August before declining through the end of the year. Overall, U.S. coal production is expected to reach 500 MMst in 2024 and decline slightly to around 490 MMst in 2025. Last month, the EIA had revised its April coal exports forecast down by 33%, and lowered its view for May by 20% due to the collapse of the Francis Scott Key Bridge in Baltimore and resulting port closure. Rebuilding the collapsed bridge is expected to cost between $1.7 billion and $1.9 billion and to be completed by fall 2028. Sign up here. https://www.reuters.com/markets/commodities/us-coal-exports-rise-production-declines-2024-05-07/

2024-05-07 19:10

BERLIN/FRANKFURT, May 7 (Reuters) - RWE (RWEG.DE) New Tab, opens new tab, Germany's biggest electricity producer, is considering options for its minority stake in Amprion, one of Germany's four high-voltage power transmission networks, the company said on Tuesday, potentially paving the way for a sale. "In view of the high capital requirements for grid expansion, we are currently examining various options and financing possibilities in relation to our Amprion investment," a spokesperson for RWE said in emailed comments. Handelsblatt earlier reported, citing sources familiar with the matter, that RWE was considering selling its 25.1% stake in Amprion and that a sales process could possibly start this year. The stake could be valued at 1.6 billion euros ($1.72 billion), brokerage Bernstein said in a note, adding any proceeds could be spent on a share buyback, which is something investors and analysts have pushed for. "Selling the Amprion stake is neutral strategically but can unlock some value as the Amprion stake is usually missed in RWE's valuation," Bernstein wrote. RWE late last year said it was open to talks about a possible sale of its Amprion stake, as efforts in Germany to restructure ownership of power networks is picking up pace. Last year, Berlin bought a minority stake in EnBW's (EBKG.DE) New Tab, opens new tab TransnetBW and is currently in discussions with the Dutch government to take over the German operations of grid operator TenneT (IPO-TTH.AS) New Tab, opens new tab. Via state lender KfW (KFW.UL), the German government also owns a minority stake in Elia's 50Hertz, fuelling expectations that Berlin could at some point combine its grid holdings as a way to better control critical energy infrastructure. ($1 = 0.9301 euros) Sign up here. https://www.reuters.com/markets/deals/rwe-reviews-options-stake-high-voltage-power-grid-amprion-2024-05-07/