2024-04-03 11:50
April 3 (Reuters) - Global energy trader Gunvor's net profit nearly halved in 2023, as the high price volatility seen across energy commodities abated versus the preceding year. Like Gunvor, rivals including Vitol and Trafigura, had a bumper year in 2022 amid high price volatility and as Russia's war in Ukraine reshaped global commodity flows. However, in 2023, even as the Ukraine war persists, commodities markets faced new headwinds including a weaker-than- expected Chinese economy, monetary tightening, a stronger U.S. dollar, and an oil supply cut by OPEC+, Gunvor said on Wednesday. The Geneva-based trader brought in about $1.25 billion in net profit after taxes last year, after posting a record $2.36 billion for 2022. Last month, Gunvor agreed to pay some $662 million to resolve U.S. and Swiss investigations into payments to Ecuadorean officials to win business. The U.S. government has imposed a string of steep fines against the world's top commodity traders over corruption, with others including Trafigura and Vitol also facing fines for similar charges. Gunvor's 2023 net income result includes $467 million in provisions taken related to the settlement of the Ecuador case, along with other non-recurring expenses. The firm, one of the world's largest oil traders, saw its revenue fall to $127 billion from $150 billion the previous year, reflecting a decline in commodities prices. Rival Vitol, which posted its results in late March, reported a 20% drop in 2023 revenue to $400 billion from a year earlier. "The very high price volatility across energy commodities in 2022 gradually decreased over 2023, and prices normalized, particularly in natural gas," Gunvor said in a statement. Still, total trading volumes in 2023 increased to 177 million metric tons, up from 165 million tons in 2022, driven by the growth in staff and business lines, it added. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/energy-trader-gunvors-2023-net-profit-nearly-halves-2024-04-03/
2024-04-03 11:18
AMSTERDAM, April 3 (Reuters) - The Dutch Senate has postponed a vote on a law to close permanently the Groningen gas field, angering the government that has said production would never resume because of the risk of earthquakes. Normal gas production at Groningen in the north of the Netherlands ended last October after years of output cuts to limit seismic activity, linked to decades of extraction, that has damaged thousands of buildings. The gas field, once one of Europe's main suppliers, was available for limited production during a cold snap in recent months, but the government has proposed a law that would close the field entirely by Oct. 1. Although backed by the Lower House of parliament last month, several Senate factions on Tuesday said they needed more guarantees that the law would not jeopardise the security of the country's gas supply. "This could delay the final decision by a year and a half, which makes me angry," Hans Vijlbrief, mining state secretary, told a parliamentary hearing on Wednesday. Vijlbrief said he would resign unless the Senate changed its mind quickly. "Security of supply would only possibly be at risk in case of two very cold winters in a row, a chance that is estimated at 1 in 80,000," Vijlbrief said. "I trust there is a misunderstanding and that we will see a final Senate decision soon." Among those asking to postpone the vote were three of the four parties that are trying to form a government, including the nationalist PVV party that won the November 2023 election and the centre right VVD of outgoing Prime Minister Mark Rutte. Without the law, gas production could theoretically resume. Lower House lawmakers on Wednesday said they feared a considerable delay and ongoing uncertainty for people living in the region. Rutte's caretaker government, in charge until a new government is formed, has repeatedly said it will not resume gas production at Groningen under any circumstance. VVD lawmaker Silvio Erkens on Wednesday also said the decision to end gas production would not be reconsidered. "But the Senate has the right to ask for more information," he added. Shell (SHEL.L) , opens new tab and ExxonMobil (XOM.N) , opens new tab, whose NAM joint venture operates the field, have asked an arbitration court to decide whether the Dutch state should compensate them for the ending of gas production at Groningen, which still contains huge reserves. Gas profits have delivered an estimated 363 billion euros ($391.13 billion) to the Dutch treasury since production started in the 1960s, while Shell and Exxon's profit from Groningen was around 66 billion euros during that period. ($1 = 0.9281 euros) The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/dutch-senate-postpones-decision-groningen-gas-field-shutdown-2024-04-03/
2024-04-03 11:08
BRUSSELS, April 3 (Reuters) - The European Union has opened two investigations into whether two Chinese bidders benefited excessively from subsidies in their offers in a public tender for a solar power park in Romania, the European Commision said on Wednesday. The first investigated consortium is composed of Romania's ENEVO Group and a subsidiary of LONGi Green Energy Technology Co (601012.SS) , opens new tab. The second involves subsidiaries of Chinese state-owned Shanghai Electric Group Co. (601727.SS) , opens new tab According to an EU official, the total contract was worth about 375 million euros ($404 million). The Commission said it was justified in opening in-depth investigations since there were sufficient indications that both Chinese firms had been granted foreign subsidies that distorted the EU single market. Under EU foreign subsidies regulations, which have applied since July 2023, companies are obliged to notify the European Commission, which then has to assess whether subsidies allow companies to submit overly advantageous offers. The Commission has until August 14 to take a decision. ($1 = 0.9284 euros) The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/eu-opens-investigations-into-foreign-subsidies-solar-sector-2024-04-03/
2024-04-03 11:07
MOSCOW, April 3 (Reuters) - Russia's finance ministry said on Wednesday it would more than double its purchases of foreign currency and gold in the month ahead, a move that combined with central bank selling will bring the state's net forex interventions overall close to zero. The finance ministry said it would buy the equivalent of 235.3 billion roubles ($2.6 billion), or 11.2 billion roubles per day, of foreign currency and gold from April 5 to May 7. The central bank conducts forex interventions on the finance ministry's behalf. Meanwhile, the central bank is also selling forex to compensate for money spent from Russia's rainy-day wealth fund in 2023. As a result, the Russian state overall will remain a net forex seller in April - just at a much lower volume than in the previous month, with overall sales diving to 0.6 billion roubles from 7.1 billion roubles a day. In the March 7-April 4 period, the ministry had planned to buy foreign currency worth 93.7 billion roubles, while analysts surveyed by Reuters had predicted purchases totalling 117.5 billion roubles. Under its own budget rule, Russia sells foreign currency from its National Wealth Fund to make up for any shortfall in revenue from oil and gas exports, or makes purchases in the event of a surplus. The ministry said it was increasing its purchases in part thanks to higher than expected income tax receipts. Proceeds from oil and gas sales for Russia's federal budget rose to 1.3 trillion roubles in March from 945.6 billion roubles in February, ministry data showed. In April, the ministry expects additional energy revenues for the budget of 128.3 billion roubles above its current plan. This year, the central bank's mirroring of finance ministry operations, including deferred foreign currency purchases from August to December 2023, is being adjusted by the volume of NWF funds spent on financing the government's budget deficit for 2023 and on supporting companies. The central bank deferred foreign currency purchases last August to avoid aggravating pressure on the rouble, which tumbled past 100 to the dollar in August and October. The ministry was selling Chinese yuan for the first half of 2023 as Western sanctions imposed over Russia's actions in Ukraine hit energy revenues. It reverted to purchases in August as commodity prices rose and energy revenues recovered. ($1 = 92.4050 roubles) Get a look at the day ahead in European and global markets with the Morning Bid Europe newsletter. Sign up here. https://www.reuters.com/markets/europe/russias-net-fx-interventions-be-near-zero-april-2024-04-03/
2024-04-03 10:51
April 3 (Reuters) - Bank of America (BofA) Global Research has raised its 2024 Brent and WTI oil price forecasts, citing escalating geopolitical tensions and the OPEC+ producer group maintaining supply curbs. The bank now expects Brent and WTI crude prices this year to average $86 and $81 per barrel respectively, with prices of both peaking around $95 per barrel during the summer. Brent crude futures were trading around $89 per barrel at 0902 GMT on Wednesday, while U.S. West Texas Intermediate crude futures were around $85 a barrel. "We now estimate that improving economic growth expectations have helped push global oil markets into a deficit in 2Q24 and 3Q24 of ~450 thousand barrel per day" BofA said in a research note, which did not include its previous forecasts. "Geopolitical turmoil has also boosted oil demand via longer trade routes and impacted supply by reducing refining capacity via attacks on Russian energy infrastructure." the bank said. A Ukrainian drone on Tuesday targeted Russia's third-largest oil refinery approximately 1,300 km (800 miles) away from the front lines, impacting a unit responsible for processing around 155,000 barrels of crude per day (bpd). OPEC+ members led by Saudi Arabia and Russia last month agreed to extend voluntary oil output cuts of 2.2 million bpd into the second quarter. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/bofa-raises-2024-oil-forecasts-sees-prices-peaking-95bbl-2024-04-03/
2024-04-03 10:41
MUMBAI, April 3 (Reuters) - The Indian rupee ended at a record closing low weighed down by dollar demand from local oil companies and weakness in its Asian peers. The rupee closed at 83.4350 against the U.S. dollar, weaker by 0.06% compared to its close at 83.3850 in the previous session. The rupee ended just shy of its historical low of 83.45 hit last week. Most Asian currencies fell with the Thai baht down 0.3% and leading losses, while the offshore Chinese yuan also weakened 0.1% to 7.26. During the day's session, dollar demand from importers, including local oil companies, pressured the local unit, a forex trader at a foreign bank said. Foreign banks were seen offering dollars in the latter half of the session which helped limit the rupee's losses, the trader added. Meanwhile, exchange-traded options of the Indian rupee faced turmoil on Wednesday after brokers asked clients to submit proof of underlying exposure on their derivative contracts or unwind their existing positions. Given the ongoing strength in the dollar and elevated crude oil prices, the rupee may stay under pressure in the near-term, Arnob Biswas, head of foreign exchange research at SMC Global Securities said. The dollar index is up 3.3% so far in 2024, and was last quoted at 104.8. Sustained strength in the United States economy, as seen in factory orders data released on Tuesday, has boosted U.S. bond yields supporting the dollar. Brent crude oil futures were at $89.21 per barrel, hovering close to their highest level since October as rising geopolitical tensions fuelled concerns about supply. Investors now await a raft of U.S. Federal Reserve speakers slated to speak later in the day, including Chair Jerome Powell. The remarks may offer cues on potential timing of interest rate cuts by the Fed and precede the closely watched non-farm payrolls report due on Friday. Keep up with the latest medical breakthroughs and healthcare trends with the Reuters Health Rounds newsletter. Sign up here. https://www.reuters.com/markets/currencies/rupee-ends-record-closing-low-pressured-by-asia-fx-oil-companies-dollar-buys-2024-04-03/
