2024-04-30 21:25
April 30 (Reuters) - The Canada Energy Regulator (CER) on Tuesday approved the final permits for the Trans Mountain oil pipeline expansion, clearing the way for the project to start operating after years of delays and massive cost overruns. The C$34 billion ($24.69 billion) pipeline expansion, bought by the Canadian government in 2018 to ensure it went ahead, will nearly triple the flow of crude from Alberta to the Pacific coast to 890,000 barrels per day (bpd). Trans Mountain said this month the pipeline would start operating on May 1, but some shippers including Canadian Natural Resources Ltd (CNQ.TO) New Tab, opens new tab, were skeptical it would receive all necessary permits from the CER in time. The pipeline is now authorized to carry crude from Trans Mountain's Edmonton Terminal in Alberta to its Westridge Marine Terminal in British Columbia, the regulator said in a statement. "Today marks a significant milestone," CER Chief Executive Tracy Sletto said. Trans Mountain said last week it would complete line fill on the expanded pipeline in early May and it expected the first tanker to load at Westridge dock in the second half of the month. ($1 = 1.3773 Canadian dollars) Sign up here. https://www.reuters.com/business/energy/canada-energy-regulator-approves-final-permits-trans-mountain-expansion-project-2024-04-30/
2024-04-30 21:23
April 30(Reuters) - Diamondback Energy (FANG.O) New Tab, opens new tab beat first quarter profit estimates on Tuesday as the oil and gas firm benefited from higher oil production and better prices. Crude oil prices in the quarter mirrored the previous year as production cuts by OPEC+ countries offset lower demand, helping oil producers like Diamondback Energy. Quarterly oil production was at 24.8 millions of barrels (mmbls), up about 10% up from the previous year and prices for oil was up 2.7% at $75.06 per barrel for the same period. The Midland, Texas-based company had said in February it would buy privately-held rival Endeavor Energy Partners in $26 billion cash-and-stock deal, which is expected to close in the fourth quarter. It received a second request from the U.S. Federal Trade Commission (FTC) earlier in the week seeking additional information and documentary material in connection with the deal. "Announcement of a second FTC request for the proposed FANG/Endeavor transaction is not surprising to us, and we still fully expect the strategic/accretive deal to close this year," Truist Securities analyst Neal Dingmann said in a note. The combined company would be the third-largest oil and gas producer in the Permian Basin of West Texas and New Mexico, behind Exxon Mobil (XOM.N) New Tab, opens new tab and Chevron (CVX.N) New Tab, opens new tab. Diamondback expects production between 459,000 barrels of oil equivalent per day (boepd) and 466,000 boepd in the second quarter, higher than its production of 449,912 boepd for the same period last year. The company reported an adjusted profit of $4.50 per share for the quarter ended March 31, topping analysts' average estimate of $4.42 per share, according to LSEG data. Sign up here. https://www.reuters.com/business/energy/diamondback-energy-beats-first-quarter-profit-estimates-2024-04-30/
2024-04-30 21:07
April 30 (Reuters) - President Joe Biden's administration on Tuesday released guidance on its sustainable aviation fuel (SAF) subsidy program that allows corn-based ethanol to qualify for the program if it is sourced from farms using climate-friendly growing techniques. The plan is likely to be bittersweet for the politically powerful U.S. ethanol industry, which is eager to secure the subsidies but had hoped for a lower hurdle. Air travel so far accounts for about 2% of U.S. carbon pollution and is one of the fastest growing sources. Biden hopes creating a subsidized market for lower-emissions SAF can counter that threat, while giving a boost to farm country, an important constituency in November’s presidential election. “Sustainable aviation fuel is a key part of the Biden-Harris administration's efforts to transition the American economy to a clean energy future and rebuild the middle class from the bottom up to the middle out in rural America,” said Secretary of Agriculture Tom Vilsack. SAF can be made from corn, soy or other agricultural products. But to access the SAF subsidies that make it economically viable to produce, refiners must demonstrate their fuel is at least 50% lower in emissions than petroleum jet fuel. Ethanol-based SAF can meet that threshold, according to the guidance, only if corn farmers use a bundle of agriculture practices that include no-till, cover cropping and efficient fertilizer application that hold carbon in the soil. Soy-based biodiesel will also qualify if the soy farms use a combination of no-till and cover cropping, according to the announcement. Recognition of so-called climate-smart agriculture practices in the subsidy program will be effective for fuels made in 2023 and 2024, after which it could be adjusted or expanded, officials said. The SAF subsidies amount to $1.25 per gallon for fuels that hit the 50% emissions reduction threshold, and up to $1.75 per gallon for those that exceed it. The plan was based on an update to the GREET climate model that covers lifecycle emissions of ethanol and other biofuels under a variety of circumstances and includes the climate impact of related land use changes. The Renewable Fuels Association industry group said it was encouraged by the announcement. "However, RFA believes less prescription on ag practices, more flexibility, and additional low-carbon technologies and practices should be added to the modeling framework to better reflect the innovation occurring throughout the supply chain,” said the group's president and CEO, Geoff Cooper. Some environmental groups and researchers are concerned the SAF strategy will not deliver the promised climate gains, in part because of scientific uncertainty about the benefits of no-till or cover crop farm techniques and the sheer volumes of fuel that will be required. "The bottom line is that to decarbonize aviation, U.S. airlines need a volume of alternative fuels that sustainable biomass alone cannot meet," said Mark Brownstein, senior vice president, energy transition, at the Environmental Defense Fund. Bill Hohenstein, director of USDA's Office of Energy and Environmental Policy, said the administration is confident in the plan. “We do have robust data, analysis, information and modeling that all supports the conclusions that these practices do have greenhouse gas benefits," he said. Sign up here. https://www.reuters.com/sustainability/biden-team-sets-out-ethanols-path-aviation-fuel-subsidies-2024-04-30/
2024-04-30 20:43
LONDON, April 30 (Reuters) - World cocoa prices recovered on Tuesday after clocking losses of more than 20% for the week earlier in the session as technical triggers prevailed thanks to record low liquidity, dealers said. Prior to this week's slump, cocoa futures traded on the ICE exchange - and used as a benchmark to price the bean the world over - had nearly tripled in value this year owing to adverse weather and disease in top producers Ivory Coast and Ghana. The ascent left many physical market players out of pocket and has even driven hedge funds away, dealers said, leaving the futures market in the hands of algorithmic funds programmed to follow similar technical signals. In the absence of liquidity, these funds exaggerate price swings on both the upside and downside. "Is there a concrete bit of news that drove the market here? No," said Jonathan Parkman, head of agricultural sales at Marex. "The New York position is tiny, a record low in modern times. The lack of liquidity is going to move the market disproportionately in both directions." July London cocoa futures on the ICE exchange fell nearly 15% on Monday for their largest one-day loss and then lost more than 10% at the market open on Tuesday. They settled up 251 pounds, or 3.3%, to 7,929 pounds per metric ton at the close, while July New York cocoa futures rose 3.9% to $9,283 a ton, having lost nearly 16% on Monday. The market is focused on crop development in Ivory Coast and Ghana, which will become clearer in the next two months, alerting investors on whether a recovery is on the cards or not next season. The two countries together produce nearly 60% of the world's cocoa and, with crop prospects still murky for now, there are no new fundamental factors driving prices and supplies remain extremely tight. ING noted that Monday's price slump followed moves by the ICE exchange to increase initial margins on cocoa futures. The increases are likely to bring a further reduction in liquidity. "The higher margins and volatility in cocoa have led to open interest declining from around 400,000 lots in November to around 243,000 lots currently," the bank said. In other soft commodities, July robusta coffee fell 3.4% at $4,021 a ton - having hit a record high last week of $4,338 - while July arabica coffee fell 4.8% at $2.1665 per lb. May raw sugar lost 2.4% at 19.71 cents per lb. The contract expired on Tuesday with a large delivery. August white sugar fell 0.8% at $569.30 a ton. Sign up here. https://www.reuters.com/business/environment/cocoa-prices-slump-20-two-days-amid-record-low-liquidity-2024-04-30/
2024-04-30 20:42
April 30 (Reuters) - Natural gas producer Chesapeake Energy Corp (CHK.O) New Tab, opens new tab missed Wall Street estimates for first-quarter profit on Tuesday as persistently low natural gas prices weighed down on the company's top-line results. Natural gas prices had dropped 20.4% in the first quarter compared with the year-ago quarter, as high inventory combined with lackluster demand resulted in producers such as Chesapeake curtailing gas production. The company said it plans to drop an additional rig in the Marcellus around mid-year. Chesapeake Energy said that it expects total natural gas production for the second quarter between 2,620 million cubic feet of gas equivalent per day (mmcfepd) and 2,720 mmcfepd, which is below the 3,653 mmcfepd reported in the year-ago quarter. The Oklahoma-based company is also executing its previously disclosed plan to delay bringing completed wells online for production, citing continued weak market dynamics. It added that it plans to activate the productive capacity of these wells when supply and demand imbalances correct. Chesapeake Energy had joined its peers APA Corp (APA.O) New Tab, opens new tab and EQT Corp (EQT.N) New Tab, opens new tab to curtail spending and natural gas output this year and said in February that it sees the market being "oversupplied". The company's adjusted profit was 56 cents per share for the three months ended March 31, compared with analysts' average estimate of 60 cents per share, according to LSEG data. Chesapeake, which is on the cusp of becoming the biggest natural gas producer pending its acquisition of Southwestern Energy (SWN.N) New Tab, opens new tab, reported quarterly net production of 3.20 billions of cubic feet equivalent per day (bcfepd), utilizing an average of nine rigs. Sign up here. https://www.reuters.com/business/energy/chesapeake-energy-misses-quarterly-profit-estimates-natgas-prices-remain-low-2024-04-30/
2024-04-30 20:22
TSX ends down 1.35% at 21,714.54 For the month, the index loses 2% Resource shares lead declines Tilray Brands surges as DOJ reclassifies pot April 30 (Reuters) - Canada's main stock index fell on Tuesday, extending its monthly decline, as commodity prices dropped and U.S. labor cost data added to investor concerns that the Federal Reserve would be unlikely to begin cutting interest rates in the coming months. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) New Tab, opens new tab ended down 297.08 points, or 1.35%, at 21,714.54, For the month, the index was down 2%, its first monthly decline since October. "The numbers out of the U.S. this morning showed wage inflation remaining sticky," said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth. "The Fed doesn't look to be cutting rates anytime soon." U.S. stocks also traded lower as markets weighed economic data showing labor costs rose more than expected last quarter on the eve of a key Fed policy meeting. The energy sector (.SPTTEN) New Tab, opens new tab tumbled 3.1% as the price of oil settled 0.9% lower at $81.93 a barrel on the back of rising U.S. crude production as well as hopes of an Israel-Hamas ceasefire. The materials group (.GSPTTMT) New Tab, opens new tab, which includes metal miners and fertilizer companies, was also down 3.1% as gold and copper prices fell, with Ivanhoe Mines Ltd (IVN.TO) New Tab, opens new tab tumbling 9.5% after the company reported quarterly results. Domestic data showed that gross domestic product increased 0.2% in February, which was less than economists had expected. Restaurant Brands (QSR.TO) New Tab, opens new tab was a bright spot. Its shares gained 3.5% after the company's quarterly results beat analysts' estimates, while the shares of Tilray Brands Inc jumped 41.9% as the U.S. Department of Justice moved to reclassify marijuana as a less dangerous drug. Sign up here. https://www.reuters.com/markets/tsx-futures-muted-gold-declines-offset-oil-gains-2024-04-30/
