2024-05-01 21:19

May 1 (Reuters) - Albemarle (ALB.N) New Tab, opens new tab, the world's largest producer of lithium for electric vehicle batteries, on Wednesday missed first quarter profit estimates on lower prices. Softening Electric Vehicle (EV) demand has knocked down global lithium prices, hitting lithium producers such as Albemarle. Many producers worldwide have cut production and reduced their workforce. Lithium prices had fallen by more than 80% in the year up to March, according to a basket tracked by Benchmark Mineral Intelligence. Albemarle's biggest segment, which focuses on products and technologies that enable the development and production of lithium-ion batteries used in electric vehicles, posted quarterly adjusted core profit of $198 million, compared with $1.57 billion the previous year. Prices in the unit fell 89%. Overall, Albemarle posted revenue of $1.36 million in the January to March period, down 47% from the year before, and slightly better than an analyst estimate of $1.31 billion, according to LSEG data. However, the company reported an adjusted profit of 26 cents per share, below analysts' average estimate of 27 cents per share. Albemarle said the company in the first quarter logged more than $90 million in "productivity and restructuring cost savings," putting it on track for $280 million in productivity benefits over the course of the year. It did not detail what the cost-cutting measures in the first quarter included. "Our team demonstrated agility in dynamic market conditions by continuing to deliver solid volumetric growth, ramping new conversion facilities, and executing cost reduction and productivity improvements," said Kent Masters, CEO of the North Carolina-based company, in a statement. The company in January said it would cut jobs and defer spending on a U.S. refinery project as part of a wide-ranging plan to save $750 million in cash flow. Executives plan to hold a conference call on Thursday to discuss the results and outlook. Sign up here. https://www.reuters.com/markets/commodities/albemarle-misses-first-quarter-profit-estimates-2024-05-01/

2024-05-01 21:11

HOUSTON, May 1 (Reuters) - The U.S. State Department believes oil services firm SLB (SLB.N) New Tab, opens new tab has not violated sanctions against Russia and the company has been told what Washington is willing to accept, Assistant Secretary of State Geoffrey Pyatt told Reuters in an interview on Wednesday. "I have had conversations with the CEO of that company... I think there is a clear understanding within SLB in terms of where the guard rails are on the sanctions policy," Pyatt said. The U.S. and other European countries have sought to reduce Moscow's energy revenue through sanctions that prompted several oilfield service companies to leave since Russia invaded Ukraine in 2022. SLB has remained operating in the country, helping keep Russian oil production flowing. "I am confident from my conversations with Treasury colleagues that SLB's actions thus far have been in conformance with rules that OFAC, Treasury and the price cap coalition have set up," Pyatt said. The U.S. is determined to ensure Russia does not return to being a reliable energy partner and Washington will continue to sanction present and future energy projects, while taking care not to cause oil price shocks, said Pyatt. SLB did not reply to a request for comment. The company last year received 5% of its revenue from Russia. It had 10,000 employees in Russia helping Gazprom Neft, Rosneft and other top energy firms pump oil and gas when the war began in 2022. The U.S Treasury is also going after shippers, insurance companies and others that circumvent the sanctions. Russia's oil and gas tax revenue is down about a third year-on-year, he said. Washington is targeting Russia's future energy projects, including liquefied natural gas (LNG), seeking to prevent Russia from sending gas that previously flowed to European customers via pipeline to global markets as LNG, said Pyatt. "So you have seen very strong sanctions against Novatek and there is more to come in the short term on that score," he told Reuters. Technology sent by China to Russia to assist in its war efforts is another concern, said the Assistant Secretary of State and is one of the reasons the U.S. believes access to rare earth materials is crucial for global energy security. The U.S. has brought together 14 countries including Korea as well as the European Union to invest tens of billions of dollars in the value chain including access to critical minerals in an effort to end China's dominance of the trade. "We were slow out of the blocks in terms of recognizing the moves that China was making to dominate the supply chains for these key inputs for the energy transition," Pyatt said. The U.S. and Korea will partner in developing batteries and electric vehicles as part of its ongoing energy security partnership, Pyatt said. (This story has been corrected to clarify that 'the U.S. has brought together 14 countries including Korea as well as the European Union' not '15 countries and is partnering with Korea,' in paragraph 11) Sign up here. https://www.reuters.com/markets/commodities/us-state-dept-says-oil-service-firm-slb-is-not-violating-russia-sanctions-2024-05-01/

2024-05-01 21:01

May 1 (Reuters) - U.S. shale producer Devon Energy (DVN.N) New Tab, opens new tab beat first-quarter profit estimates on Wednesday as higher production from Delaware basin helped it offset a decline in natural gas prices. The Oklahoma City-based company also raised its full-year 2024 production outlook by 2% to a range of 655,000 to 675,000 barrels of oil equivalent per day (boepd). U.S. crude prices were largely range bound in the first three months of 2024 despite rising geopolitical tensions, as non-OPEC members kept up supplies, while a milder winter season and oversupply pushed natural gas prices to a 3-1/2-year low in the quarter. Its total production stood at 664,000 boepd in the January-March quarter, higher than 641,000 boepd it reported last year. Delaware Basin asset accounted for 66% of company wide volumes at 437,000 boepd. Devon said realized prices, without hedges, for natural gas in the reported quarter was $1.30 per thousand cubic feet (mcf), 43% lower than last year's $2.29 per mcf. The oil and gas producer reported adjusted income of $1.16 per share for the three months ended March 31, topping average analysts' estimate of $1.11 per share, according to LSEG data. Devon added that due to the addition of a fourth Delaware completion crew in January, the company's capital program in 2024 is expected to be weighted towards the first half of the year. As a result of this activity, second quarter production is expected to increase to a range of 670,000 to 690,000 boepd. "This improved outlook raises production targets and increases free cash flow projections, which will enhance our ability to accelerate the return of capital to shareholders," said CEO Rick Muncrief. Sign up here. https://www.reuters.com/business/energy/devon-energy-beats-q1-profit-estimate-2024-05-01/

2024-05-01 20:31

LONDON, May 1 (Reuters) - U.S. oil and gas production rebounded sharply in February after extensive disruption the previous month caused by freezing wells and other outages stemming from Winter Storm Heather in the middle of January. Nationwide crude and condensates output jumped by 0.6 million barrels per day (b/d) in February reversing a decline of 0.7 million b/d in January, according to data from the U.S. Energy Information Administration (EIA). Chartbook: U.S. oil and gas production New Tab, opens new tab For 10 days between Jan. 13 and Jan. 23, centred around the winter storm, temperatures across the Lower 48 states were significantly colder than average for the time of year. The storm had a relatively large impact on the country's top producing area in the Permian Basin in Texas and New Mexico with frozen equipment and crews unable to reach well sites. But as the storm passed and normal operations were restored, output bounced back, causing a large jump in reported daily flows ("Petroleum supply monthly New Tab, opens new tab", EIA, April 30). Production from the Lower 48 states excluding federal waters in the Gulf of Mexico surged by 0.5 million b/d in February after declining 0.6 million b/d the month before. OIL STABILISATION? There are tentative signs that U.S. oil production is stabilising after the sharp fall in prices between the middle of 2022 and the middle of 2023. Lower 48 production was up by almost 0.7 million b/d in February compared with the same month a year earlier but there had been little or no growth in the last six months. Front-month U.S. crude futures prices have averaged around $73-84 per barrel for the last six months, close to the long-run average since the start of the century, after adjusting for inflation. Front-month futures prices have retreated from an average of more than $123 in June 2022, in the 82nd percentile for all months since 2000, four months after Russia's invasion of Ukraine. In a delayed response to lower prices, the number of rigs drilling for oil has averaged 500-510 per month since September 2023 down from an average of 623 in December 2022. Storm-related distortions will make identifying a change in trend difficult for another month or two, but there are signs the industry has found a new equilibrium after the shock caused by Russia's invasion. U.S. GAS PRODUCTION Dry gas production rebounded by 2.3 billion cubic feet per day (bcf/d) in February after declining by 3.1 bcf/d in January owing to the storm ("Natural gas monthly New Tab, opens new tab", EIA, April 30). Production in February had increased by 3.7 bcf/d or 3.7% compared with the same month a year earlier, even after adjusting for the extra day of output owing to the leap year. But there had been essentially no growth in daily output since November, which could signal output is stabilising in gas too after an even more severe fall in prices. Front-month futures prices have averaged less than $2 per million British thermal units since the start of 2024, the lowest in real terms since the futures contract began trading in 1990. The number of rigs drilling primarily for gas averaged between 115 and 120 each month between September 2023 and February 2024, down from a post-invasion peak of 162 in September 2022. So far, gas inventories have remained far above normal because of the exceptionally warm winter in 2023/24, which more than offset the impact of ultra-low prices and record gas consumption by power generators. Inventories were almost 680 bcf (+39% or +1.46 standard deviations) above the prior 10-year seasonal average in late April 2024, according to weekly gas storage data from the EIA. The surplus had swelled almost continuously from just 64 bcf (+2% or +0.24 standard deviations) at the start of winter on Oct. 1, narrowing only briefly during the winter storm in January. In late February, however, several of the largest gas producers announced cuts to drilling programmes and/or output in an effort to reduce excess inventories and lift prices. The number of rigs drilling for gas declined even further to an average of just 108 in April, the lowest since the pandemic and its aftermath in 2020/21 and before that the last gas glut in 2016. Fewer rigs and increased consumption by power generators should eventually eliminated excess inventories, but the adjustment would be accelerated if there is a heatwave this summer boosting airconditioning. Related columns: - U.S. oil and gas output was severely hit by winter storm (April 3, 2024) - Record U.S. oil and gas production keeps prices under pressure (March 1, 2024) John Kemp is a Reuters market analyst. The views expressed are his own. Follow his commentary on X https://twitter.com/JKempEnergy New Tab, opens new tab Sign up here. https://www.reuters.com/markets/commodities/us-oil-gas-production-rebounds-after-winter-storm-2024-05-01/

2024-05-01 20:31

LONDON, May 1 (Reuters) - London Metals Exchange(LME) on Wednesday launched a consultation requiring producers of aluminium brands deliverable against its contracts to submit carbon emissions data by March 2025. The proposal aims to align aluminium market with the requirement of Europe's Carbon-Border Adjustment Mechanism (CBAM) which applies a carbon-related cost to certain imported products. LME-approved producers of primary aluminium, aluminium alloy, North American Special Aluminium Alloy Contract ("NASAAC")) will have to submit both Scope 1 and 2 emissions data to the exchange. Direct emissions from production of aluminium, including fuels used in melting furnaces, are under Scope 1, whereas indirect emissions from generation of electricity used for making aluminium are under Scope 2. Producers shall provide these emissions data "at the point at which it becomes LME-grade material," according to the proposal. Aluminium producers will have to make the first entry of 2024 emissions data by March 15, 2025, and are required to update it annually. Brands that did not submit emissions data could be delisted. Delivery of aluminium to LME-registered warehouses will also be accompanied by a "CBAM" emissions reporting form. Retroactive reports are not required for information-deficient aluminium already in warehouses. "The LME has liaised with its own LME-listed primary aluminium brands to understand the extent of work already being done within the space, and 84% of LME Primary Aluminium brands already publish sustainability reports which include their emissions calculations." said the exchange. The LME is also considering collaborating with its partner Metalshub to list an "LME globally deliverable low carbon aluminium (CBAM)" product to track liquidity of aluminium which fall below a specific carbon footprint. The exchange insisted it did not need a separate platform to trade low carbon aluminium since 2021. The lightweight metal widely used in transport, packaging and construction is the most energy-intensive metal to produce, requiring large amounts of electricity. In 2022, aluminium sector released 1.11 billion metric tons of carbon dioxide, according to International Aluminium Institute. Sign up here. https://www.reuters.com/markets/commodities/lme-plans-aluminium-producers-submit-carbon-emission-data-by-2025-2024-05-01/

2024-05-01 19:19

Canadian dollar gains 0.5% against the greenback Price of U.S. oil settles 3.6% lower Canadian factory activity slows in April Bond yields ease across the curve TORONTO, May 1 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Wednesday, clawing back some of the previous day's sharp decline, as the Federal Reserve's signaling about prospects for interest rate cuts was not as hawkish as some investors had feared. The loonie was trading 0.5% higher at 1.3710 to the U.S. dollar, or 72.94 U.S. cents, after it touched intraday on Tuesday an 11-day low at 1.3784. The currency has been pressured in recent weeks by a wider gap between U.S. and Canadian yields as investors anticipated a delayed start to Fed rate cuts. The U.S. central bank on Wednesday held interest rates steady and signaled it is still leaning towards eventual reductions in borrowing costs, but put a red flag on recent disappointing inflation readings and suggested a possible stall in the movement towards more balance in the economy. "It seems like Fed officials are opting to simply tweak their previous plans rather throw them out the window," said Royce Mendes, managing director and head of macro strategy at Desjardins. The U.S. dollar (.DXY) New Tab, opens new tab fell against a basket of major currencies after the Fed decision. Canadian manufacturing activity slowed in April, extending a lengthy period of contraction for the sector. The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) fell to a seasonally adjusted 49.4 in April from 49.8 in March, staying below the 50 threshold for the 12th straight month. The price of oil , one of Canada's major exports, settled 3.6% lower at $79.00 a barrel on a surprise build in U.S. crude stocks and the prospect of a Middle East ceasefire agreement. Canadian government bond yields fell across the curve, tracking moves in U.S. Treasuries. The 10-year was down 8.8 basis points at 3.730%. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-rebounds-fed-keeps-rate-cuts-table-2024-05-01/