2024-04-02 21:09

WASHINGTON, April 2 (Reuters) - U.S. officials are open to ending President Joe Biden's pause on approvals of liquefied natural gas exports to get a Ukraine aide package passed in Congress but want to wait to see the entire proposal before making any decisions, two White House sources said on Tuesday. Biden, a Democrat, in late January had paused approvals for pending and future applications to export the supercooled fuel after protests about the booming industry from activists concerned about its impact on climate change. Republican U.S. House of Representatives Speaker Mike Johnson suggested on Fox News on Sunday that reversing Biden's pause on LNG export approvals could make it easier for his party to support a new aid package for Ukraine's fight against Russia. "We want to have natural gas exports that will help unfund (Russian President) Vladimir Putin's war effort there," said Johnson, from Louisiana, a state rich in gas production and LNG projects. Reversing the pause could be tolerable to the White House in order to advance Ukraine aid, in part because the pause has no bearing on near-term LNG exports, the White House sources. Hard line conservatives in the House are likely to look for more from Johnson to quell their anger over a possible Ukraine vote, complicating any negotiations. A White House spokesman said the Reuters report was "not true" and restated the administration's public stance that the president wants Republicans to pass the $95 billion bipartisan national security agreement that already passed the U.S. Senate. "The President supports the pause on pending, additional approvals of LNG export licenses to evaluate the economic and climate impacts on consumers and communities," the spokesperson said. The U.S. last year became the world's largest LNG exporter, and capacity to export LNG is expected to double before the decade ends on already approved projects. "I don't think it's as hard for the White House to give in on this as it would seem because they can tell the climate folks substantively nothing has changed: 'We have not approved new exports, we have not changed the docket,'" said an industry source with knowledge of the discussions. Russia has been a large oil and gas supplier to Europe, but since Moscow invaded Ukraine in February 2022, Europe has increasingly purchased U.S. LNG. REPUBLICAN PRESSURE Activists are concerned that rising LNG exports can harm local communities with pollution, lock in global reliance on fossil fuels for decades, and lead to emissions from burning gas and from leaks of the powerful greenhouse gas methane. LNG backers counter that a prolonged pause could backfire by leading economies in Asia to turn to dirtier coal, while also complicating Europe's efforts to diversify away from Russian energy. Both Republicans and Democrats say the national security supplemental bill that includes the Ukraine aid package would pass the House with about 70% of votes, the same bipartisan margin with which a version passed the Senate in February. But Johnson, whose party has one of the smallest House majorities in history, is under pressure from the hard-right wing of his party to oppose Ukraine aid and has so far blocked a vote. The Speaker also is a close ally of former Republican President Donald Trump, who is running again in this year's presidential election and has suggested any assistance for Ukraine should be loans, not grants. Lifting the LNG pause would ease some of that pressure by appealing to Republicans from energy-producing states. The House returns to Washington next week. Some Democrats in the U.S. Senate from gas producing states have also raised concerns about the LNG pause, including Pennsylvania Senators Bob Casey and John Fetterman and Colorado Senator Michael Bennet. Ending the pause is one of a few proposals that Johnson has suggested could be added to a new version of the bill. He is also considering adding the "REPO Act," legislation that would help set the stage for the U.S. to confiscate Russian assets and hand them over to Ukraine for reconstruction. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/commodities/white-house-open-ending-lng-export-pause-push-ukraine-aid-sources-say-2024-04-02/

2024-04-02 20:46

MEXICO CITY, April 2 (Reuters) - Mexico's state energy company Pemex requested its trading unit to cancel up to 436,000 barrels per day of crude exports this month as it gets ready to process domestic oil at the new Dos Bocas refinery, an internal document seen by Reuters shows. Pemex and the government of President Andres Manuel Lopez Obrador said earlier this year that the Dos Bocas refinery built in Tabasco state would start producing gasoline and diesel in the first quarter. The refinery, which has been running behind schedule and over budget, is part of Lopez Obrador's strategy to wean the country off expensive gasoline and diesel imports. Last month, Pemex numbers showed that its crude oil production in February had fallen to its lowest level in 45 years, curtailing available supplies for the nation's six local refineries already operating. "They either refine it or export it. There is not enough crude for both," a person familiar with the matter told Reuters. The cancellations will reduce exports of Mexico's flagship Maya crude by 122,000 bpd, Isthmus by 247,000 bpd and Olmeca by 67,000 bpd, the document showed. It was not immediately clear if more cargo cancellations would occur after April, but one of the sources said the availability of Maya had been dwindling for some time and was unlikely to be resolved soon. The cancellations will affect term contract customers in Europe, the United States and Asia, the source said. A second source confirmed this. Pemex did not immediately respond to a request for comment. Mexico's energy ministry expects the Dos Bocas refinery to process an average of 178,600 bpd of crude oil this year. While the refinery is operational, it does not yet produce finished fuels. In total, the energy ministry numbers show domestic crude oil processing is expected to increase from 713,300 bpd in 2023 to an average of 1.04 million bpd this year. At the end of the year, Pemex CEO Octavio Romero has said local refineries - including the Dos Bocas refinery - would process 1.7 million bpd. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/commodities/mexicos-pemex-cancel-up-436000-bpd-crude-exports-apr-document-2024-04-02/

2024-04-02 20:32

TSX ends down 0.5% at 22,075.10 Communication, real estate stocks decline Energy rises 1.2%; oil settles 1.7% higher Metal miners gain as gold posts new record high April 2 (Reuters) - Canada's main stock index ended lower on Tuesday, giving back some recent gains, as increased uncertainty around the timing of expected Federal Reserve interest rate cuts weighed on the communication services and real estate sectors. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) , opens new tab ended down 110.15 points, or 0.5%, at 22,075.10, pulling back from a record closing high on Monday. "This modest weakness is really driven by concerns that the economic strength in the U.S. and higher oil prices in the last couple of days could delay the Fed's rate cuts", said Angelo Kourkafas, senior investment strategist at Edward Jones Investments. Canada's 10-year bond yield touched its highest level since mid-February at 3.678%. High-dividend paying sectors such as communication services and real estate could particularly benefit from lower borrowing costs. Communication services fell 2.1% and real estate was down 1.3%. Industrials and heavily-weighed financials were also a drag, with both sectors losing 1%. Helping to offset those declines were gains for resource shares. The energy sector added 1.2% as oil settled 1.7% higher at $85.15 a barrel. The move in oil came as supplies face fresh threats from Ukrainian attacks on Russian energy facilities. The materials sector, which includes metal miners and fertilizer companies, added 0.6% as copper prices rose and gold climbed to a fresh record high. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/tsx-set-muted-open-after-three-day-record-run-gold-oil-stocks-limit-declines-2024-04-02/

2024-04-02 20:00

Loonie trades in a range of 1.3557 to 1.3584 Price of U.S. oil settles 1.7% higher Ten-year yield touches its highest level since Feb. 13 TORONTO, April 2 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Tuesday as higher commodity prices offset increased investor nervousness about the timing of interest rate cuts. The loonie was nearly unchanged at 1.3570 to the U.S. dollar, or 73.69 U.S. cents, after trading in a range of 1.3557 to 1.3584. It extends the sideways pattern for the USD-CAD currency pair in recent months. "I think the market is waiting for a crack in the U.S. or Canadian economy to dictate the next move in USD-CAD," said Adam Button, chief currency analyst at ForexLive. "There has been some broader U.S. dollar strength, but it's mitigated by higher commodity prices." Canada is a major producer of commodities, including gold, which notched a fresh record high, and oil. U.S. crude oil futures settled 1.7% higher at $85.15 a barrel as oil supplies faced fresh threats from Ukrainian attacks on Russian energy facilities, while Wall Street's main indexes dropped as recent strong economic data raised doubts over the three rate cuts that the Fed has outlined for this year. The Bank of Canada is also expected to begin cutting rates this year but likely not as soon as a policy announcement next week. Canada's jobs report for March, due on Friday, could offer clues on the strength of the domestic economy. Economists forecast a gain of 25,000 jobs. "We have a series of top-tier data coming up. I expect much more volatility before the week is out," Button said. Canadian government bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year was up 3.2 basis points at 3.620%, after earlier touching its highest level since Feb. 13 at 3.678%. 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/c-steadies-bond-yields-commodity-prices-climb-2024-04-02/

2024-04-02 19:32

WASHINGTON, April 2 (Reuters) - U.S. Treasury Secretary Janet Yellen will return to China this week to continue her economic dialogue with top Chinese officials amid a new emphasis on the threat to global economies from the Asian superpower's growing excess industrial capacity, the Treasury Department said on Tuesday. The April 3-9 trip, which will be Yellen's second in-person visit to China as Treasury Secretary, will include a stop in the southern factory and export hub of Guangzhou before Beijing. She visited Beijing in July 2023 to re-establish ties after years of frosty relations. Her trip was announced as U.S. President Joe Biden and Chinese President Xi Jinping on Tuesday held their first direct talks since November in which Taiwan tensions and U.S. national security curbs on the sale of high-technology goods to China took center stage. Xi warned Biden that the U.S. was "creating risks" by suppressing China's trade and technology development, Xinhua news agency quoted the Chinese leader as saying. Yellen's dialogues with top Chinese officials have been partly aimed at trying to ease tensions over China-related security restrictions, with explanations that they are narrowly targeted and not aimed at de-coupling the world's two largest economies. In Guangzhou, Yellen will meet with her main counterpart, Chinese Vice Premier He Lifeng, Guangdong Province Governor Wang Weizhong and executives of U.S. companies in China, the Treasury Department said. She will hear first-hand about business climate challenges that are prompting U.S. firms to limit their investment in China. Yellen last met with He in November 2023, ahead of the Asia-Pacific Economic Cooperation Summit in San Francisco, where Biden also met with Xi. Since Yellen's first visit to Beijing last July, she and He have launched economic and financial working groups that meet virtually. Discussions so far have largely focused on economic issues facing each country and their policy responses, such as China's property market troubles that have undermined consumer confidence, or failures of two major U.S. regional banks last year. CAPACITY CHALLENGE The increased U.S. emphasis on Chinese excess capacity represents a shift in the discussions. China's exports have been growing at a time of weak domestic demand. Xi has pledged to unleash "new productive forces" in China by investing in developing technology industries including electric vehicles (EVs), new materials, commercial spaceflight and life sciences. Yellen said last week at a Suniva solar module factory near Atlanta that Chinese government support has led to "substantial overinvestment" in steel, aluminum and other industries, paving the way for cheap exports that have forced manufacturing to contract in other market-driven countries. "Now, we see excess capacity building in 'new' industries like solar, EVs, and lithium-ion batteries," Yellen said during her trip last week, adding this was distorting prices and production patterns and hurting workers in the U.S., European Union and other economies. Asked if she would raise the threat of new trade barriers on her next China visit, Yellen said she did not want to "get into retaliation," adding: "We want to see what we can do that's constructive." The EU is investigating whether China's EV industry is benefiting from unfair subsidies, a probe that could lead to tariffs to protect European carmakers. The U.S. Commerce Department has opened a probe into whether Chinese vehicles pose national security threats due to the data they transmit, and U.S. lawmakers have urged Biden to hike tariffs on Chinese EVs. A U.S. Treasury official told reporters that Yellen during her upcoming China trip would "make clear the global economic consequences of Chinese industrial overcapacity undercutting manufacturers in the U.S. and firms around the world." The official, speaking on condition of anonymity, said U.S. and Chinese officials would likely discuss currency matters as a routine part of their economic talks, but declined to comment on recent weakness in China's yuan currency. The official added that Yellen would seek further cooperation in areas mutually beneficial to both countries, including fighting climate change, combating illicit financing and narcotics trafficking and providing relief to debt-distressed developing countries. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us-treasurys-yellen-return-china-emphasize-excess-capacity-threat-2024-04-02/

2024-04-02 19:27

NEW YORK, April 2 (Reuters) - U.S. prosecutors were able to charge FTX founder Sam Bankman-Fried shortly after the cryptocurrency exchange's collapse in part because they secured the cooperation of its chief software engineer, one of the prosecutors said on Tuesday. Speaking five days after Bankman-Fried was sentenced to 25 years in prison, Assistant U.S. Attorney Thane Rehn said former FTX Chief Technology Officer Gary Wang's assistance was key to helping investigators understand how Bankman-Fried stole $8 billion in customer funds. "Without that, would we have found it? Probably," Rehn said at a discussion hosted by law firm Wilson Sonsini. "But it would have taken a software expert weeks or even months." Jurors in Manhattan found Bankman-Fried, 32, guilty last November on seven counts of fraud and conspiracy, in what prosecutors termed one of the biggest financial frauds in U.S. history. Bankman-Fried is expected to appeal his conviction, after testifying that he made mistakes in managing risk but never intended to steal funds. He had been arrested in December 2022, just one month after FTX's collapse and bankruptcy. Rehn's comments highlighted the importance of the government's three main cooperating witnesses - Wang, former FTX engineering chief Nishad Singh, and Caroline Ellison, the former chief executive of Bankman-Fried's Alameda Research hedge fund. Each pleaded guilty to fraud and testified against their former boss at his month-long trial. In his testimony, Wang said Bankman-Fried asked him to change FTX software code to let Alameda withdraw unlimited funds from the exchange. Rehn said Wang showed prosecutors code from his laptop shortly after FTX collapsed. "This case moved at lightning speed," U.S. Attorney Damian Williams told reporters after Bankman-Fried's conviction. Prosecutors are expected to recommend that the trial judge, U.S. District Judge Lewis Kaplan, take Wang's, Singh's and Ellison's cooperating into account when sentencing them. Wang testified that he hopes to avoid prison. His lawyer, Ilan Graff, declined to comment. Bankman-Fried's spokesman Mark Botnick declined to comment. Jumpstart your morning with the latest legal news delivered straight to your inbox from The Daily Docket newsletter. Sign up here. https://www.reuters.com/legal/sam-bankman-fried-prosecutor-says-coders-cooperation-sped-up-case-2024-04-02/