2024-03-27 06:09

LITTLETON, Colorado, March 27 (Reuters) - Carbon dioxide emissions from Vietnam's coal-fired power plants jumped to a new high for the first month of the year in 2024 as the country's power producers cranked output to avert a repeat of power outages seen last year. Vietnam has nearly doubled imports of thermal coal so far this year from the same period in 2023 as the government strives to reassure foreign businesses and investors that power supplies will remain uninterrupted in 2024. The surge in coal purchases by the world's 10th largest coal consumer suggests coal-fired emissions may climb higher still in the months ahead, undermining global efforts to cut back on fossil fuel use and pollution. NEW HIGHS January's coal-fired emissions tally of 11 million metric tons of CO2 and equivalent gases is the highest on record for that month, data from energy think tank Ember shows. The January total is nearly 70% above the emissions load in the same month of 2023, and is roughly 30% above the January average for the past five years - indicating a clear break with the energy generation trends of previous years. Coal-fired electricity generation was 12.75 terawatt hours (TWh) in January, 68% more than in January 2023 and the highest monthly total since last July. Coal produced 55% of the country's total electricity in January, up from an average of 46% in 2023 as a whole. Total electricity generation from all sources was 23.35 TWh, or 30% more than the same month in 2023. The high coal-fired and overall generation totals indicate that Vietnam's power firms are clearly committed to raising output, likely in response to pressure from the government to avert the outages seen in 2023 that hurt output at several major factories and production lines. Recovering industrial activity in neighbouring China is also likely spurring Vietnam's power producers to raise production, as several key Vietnamese industries have strong ties to China and tend to see pickups in order flows whenever Chinese consumer demand rises. SEASONAL PEAKS As Vietnam's annual power emissions historically peak around May and June when demand for air conditioning is highest, the surge in emissions at the start of the year suggests potential for additional emissions increases over the coming months and for full-year emissions tallies to smash previous records. For 2023 as a whole, Vietnam's coal-fired emissions were a record 110 million tons, and up from 90 million tons in 2022. If the strong pace of emissions seen so far in 2024 is sustained through the rest of the year, then a full-year total of more than 130 million tons is possible. The exact volume of power emissions will ultimately be determined by the power mix available to Vietnam's power producers during peak demand periods. The second largest source of electricity in Vietnam after coal is hydropower, which produced around 30% of the country's electricity in 2023. In January, hydro dams accounted for only 20.5% of total generation due to enduring drought issues, which forced power firms to ratchet up production from other sources. If the country receives increased rain levels over the coming months, hydro generation could rebound sharply and allow for curbs to coal generation later in the year. Higher production from solar and wind farms could also allow for power providers to cap coal use, especially during the sunniest months of the year when air conditioning demand is at its highest. Wind electricity generation scaled a record in January as new wind farms came online, and wind output should continue to pick up over the rest of the year as new facilities flow power onto the grid. However, solar and wind farms generated only 13.6% of Vietnam's total electricity in 2023, and will likely struggle to push their collective share of overall generation much higher over the near term amid ongoing concerns about the profitability of new renewable energy projects. That means power firms will remain heavily reliant on coal for a majority of Vietnam's power needs for the foreseeable future, and may continue lifting coal-fired emissions to new highs for several more years. 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/vietnam-coal-fired-power-emissions-hit-new-highs-early-2024-maguire-2024-03-27/

2024-03-27 06:07

MOSCOW, March 27 (Reuters) - Russian oil firms face delays of up to several months to be paid for crude and fuel as banks in China, Turkey and the United Arab Emirates (UAE) become more wary of U.S. secondary sanctions, eight sources familiar with the matter said. Payment delays reduce revenue to the Kremlin and make them erratic, allowing Washington to achieve its dual policy sanction goals - to disrupt money going to the Kremlin to punish it for the war in Ukraine while not interrupting global energy flows. Several banks in China, the UAE and Turkey have boosted their sanctions compliance requirements in recent weeks, resulting in delays or even the rejection of money transfers to Moscow, according to the eight banking and trading sources. Banks, cautious of the U.S. secondary sanctions, started to ask their clients to provide written guarantees that no person or entity from the U.S. SDN (Special Designated Nationals) list is involved in a deal or is a beneficiary of a payment. The sources asked not to be named due to the sensitivity of the issue and because they are not allowed to speak to media. In the UAE, banks First Abu Dhabi Bank (FAB) and Dubai Islamic Bank (DIB) have suspended several accounts linked to the trading of Russian goods, two sources said. UAE's Mashreq bank, Turkey's Ziraat and Vakifbank and Chinese banks ICBC and Bank of China still process payments but take weeks or months to process them, four sources said. Mashreq bank declined to comment. UAE's FAB and DIB banks, Turkey's Ziraat and Vakifbank, China's ICBC and Bank of China did not reply to requests for comments. Kremlin spokesperson Dmitry Peskov said payment problems exist when asked about reports that banks in China have slowed payments. "Of course, unprecedented pressure from the United States and the European Union on the People's Republic of China continues," Peskov told a daily conference call with reporters. "This, of course, creates certain problems, but cannot become an obstacle to the further development of our trade and economic relations (with China)," Peskov said. U.S. EXECUTIVE ORDER The West has imposed a multitude of sanctions on Russia after it invaded Ukraine in February 2022. Dealing with Russian oil is not illegal as long as it is sold below a Western-imposed price cap of $60 per barrel. Russian oil exports and payments for it have been disrupted in the first months of the war but later normalised as Moscow re-routed flows to Asia and Africa away from Europe. "Problems returned from December after banks and companies have realised the threat of U.S. secondary sanctions is real," one trading source said. The source was referring to a U.S. Treasury executive order , opens new tab published on Dec. 22, 2023, which warned it could apply sanctions for the evasion of the Russian price cap on foreign banks and called on them to boost compliance. It became the first direct warning about a possibility of secondary sanctions on Russia, putting it on par with Iran in some areas of trade. Following the U.S. order, Chinese, UAE and Turkish banks that work with Russia have increased checks, started asking for extra documentation and trained more staff to make sure deals were compliant with the price cap, the trading sources said. Additional documents can also include details on the ownership of all companies involved in the deal and personal data of individuals controlling the entities, so that banks can check on any exposure to the SDN list. In the end of February UAE banks had to rise payment scrutiny as they were asked to provide data to the U.S. correspondent banks and the U.S. treasury if they have transactions that go to China on behalf of a Russian entity, according to one banking source familiar with the matter. "This meant delays in processing payments to Russia," one of the sources said. One source said one payment had been delayed by two months, while another said the delays amounted to two to three weeks. "It has become tough and not even for the dollar transactions. Sometimes it takes weeks for a direct yuan-rouble transaction to be executed," one of the traders said. 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/russia-struggles-collect-oil-payments-china-uae-turkey-raise-bank-scrutiny-2024-03-27/

2024-03-27 05:54

Central banks continue to report gold purchases- analyst Focus on U.S. PCE data due on Friday Traders price in 70% chance of Fed rate cut in June-CME FedWatch March 27 (Reuters) - Gold prices edged higher on Wednesday as investors awaited U.S. inflation data that could offer fresh clues about when the Federal Reserve will start easing its monetary policy. Spot gold was up 0.3% at $2,185.89 per ounce as of 1205 GMT. U.S. gold futures rose 0.4% at $2,184.80. Investors now look forward to U.S. core personal consumption expenditure (PCE) price index data for February due on Friday. The index was seen rising 0.3% last month, which would keep the annual pace at 2.8%. "The Fed probably needs higher inflation figures to derail the path of three rate cuts this year in the U.S," although liquidity might be thinner due to a holiday in Europe on Friday, said UBS analyst Giovanni Staunovo. Gold hit a record high last week after Fed policymakers indicated they still expect to reduce interest rates by three-quarters of a percentage point by 2024 end, despite recent high inflation readings. "Central banks continue to report ongoing gold purchases, driven by their desire to diversify their currency reserves. This is offsetting the weakness from investment demand, which focuses more on US rate cut expectations," Staunovo said. Traders are pricing in a 70% probability that the Fed will begin cutting rates in June, according to the CME Group's FedWatch Tool , opens new tab. Lower interest rates reduce the opportunity cost of holding bullion. SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.62% to 830.15 tons on Tuesday. "Aligned with the supported yet more sideways price action, open interest figures show that most of the early March inflows into gold have so far stuck," JP Morgan said in a note. India's gold imports are set to plunge by more than 90% in March from the previous month as banks cut imports after record-high prices hit demand. Spot silver was up 0.2% at $24.48 per ounce, platinum lost 1% to $894.45 and palladium fell 1.2% to $981.71. 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/gold-subdued-dollar-firms-investors-seek-more-fed-cues-2024-03-27/

2024-03-27 05:49

TOKYO, March 27 (Reuters) - Japan's Osaka Gas (9532.T) , opens new tab expects to see little impact on its balance of supply and demand for liquefied natural gas (LNG) from a partial shutdown of U.S. Freeport LNG's facilities, the president of the city gas provider said on Wednesday. Last week Freeport said it shut the Train 2 liquefaction unit at its Texas plant, while Train 1 would be taken down soon in expectations of completing by May its inspections and any subsequent repairs at both units. "Our procurement volume from Freeport may fall slightly due to the issue, but we remain in comfortable position in terms of LNG procurement, thanks to the mild winter conditions," President Masataka Fujiwara told a press conference. "I don't see it as significantly affecting our supply and demand balance," he said, adding that he believed the mild winter had left most of Japan's other buyers with an excess of fuel. Freeport LNG, the third biggest LNG export plant in the United States, supplies Osaka Gas with 2.32 million metric tons of the super-chilled fuel each year. A fire in June 2022 shut Freeport for about eight months, causing the Japanese utility a hefty loss as it needed to pay higher prices for alternative supply. Osaka Gas is also an owner of the U.S. project, with stakes of 10.8% in Freeport LNG and 25% in one of the three liquefaction trains. 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/osaka-gas-sees-little-impact-freeport-lngs-partial-shutdown-2024-03-27/

2024-03-27 05:46

A look at the day ahead in European and global markets from Kevin Buckland A gradual tick lower in currency markets would not normally ruffle many feathers, but the yen's tentative foray to the cusp of 152 per dollar for the first time since 1990 was enough to draw immediate warnings from Japan's finance minister of "decisive steps" to tame "disorderly" moves. The last time he used those words was before the central bank intervened in late 2022 to prop up the yen. The trigger for the yen's slight depreciation was likely comments from Bank of Japan board member Naoki Tamura, who advocated moving "slowly but steadily toward policy normalisation" - emphasis on the slowly - following the central bank's first rate hike since 2007 made last week. Several other central bankers take to the podium during the day, and Sweden's Riksbank announces a policy decision, meaning more market-jarring commentary from policymakers can't be ruled out. The Riksbank is widely expected to hold rates steady at this meeting, but traders will be hoping for hints on whether a cut is coming in June, or even earlier. Federal Reserve Board Governor Christopher Waller speaks on the economic outlook at an Economic Club of New York reception. European Central Bank board member Piero Cipollone gives a speech on monetary policy followed by Q&A at the House of the Euro in Brussels. And Swiss National Bank Vice Chairman Martin Schlegel speaks on where next for policy, after the monetary authority surprised with a rate cut last week. Meanwhile, stock markets continued to display the choppy, directionless trade that the end of a quarter tends to bring - particularly when it finishes with a key U.S. inflation reading and a speech from the Fed chief on Good Friday, when most markets are closed for holidays. A tick up in U.S. stock futures may be the most accurate indicator for European equity direction, with Asian markets polarized by a rising Nikkei and falling Chinese indexes. Key developments that could influence markets on Wednesday: -Riksbank policy decision -France consumer confidence (March), unemployment (Feb) -Spain CPI (March), retail sales (Feb) 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/global-markets-view-europe-2024-03-27/

2024-03-27 05:33

LONDON, March 27 (Reuters) - The Bank of England could end up beating the Federal Reserve and the European Central Bank in the race to cut interest rates if market expectations prove correct, but the pound has more than just its yield appeal to ward off any serious bear attacks. At its March meeting, the BoE left interest rates unchanged at 5.25% and maintained its outlook for inflation and growth. But two policymakers who had previously voted for a rate hike switched to a hold - lending the central bank's decision a more cut-friendly bent than it otherwise would have had. One major support for the pound over the last six months has been the expectation that the BoE will be slower to cut rates than either the Fed or the ECB, meaning UK lending rates have been higher than those elsewhere. A week on from the BoE's last meeting and the futures market has flipped. Traders are now placing a small, but nonetheless noticeable, bet the BoE could be the first of the three to cut. There is a 20% chance the central bank could deliver a quarter-point cut at its next meeting on May 9, while the chance of a cut from the ECB at its upcoming meeting on April 11 lies at around 5%, and at roughly 13% for the Fed to move on May 1. But investors haven't exactly deserted the pound. The most recent weekly data from the U.S. regulator shows speculators trimmed their bullish sterling position to $4.23 billion from $5.623 billion - the largest since records began in 2012. The British economy has muddled its way through over two years of almost non-stop rate rises and soaring energy prices with little more than a short, mild recession. A number of macro metrics have recently improved. Even inflation has declined enough to bring the UK more in line with the rest of the G10 - a year ago, Britain was a clear outlier, with price pressures well above the average for this group. "Sterling's external vulnerabilities screen much lower now, helped in no small part by the fall in energy prices," Deutsche Bank said in a recent note that pointed to the narrowing in the current account deficit as another sterling-positive example. Sterling might also have time on its side, given that it is fast approaching what has traditionally been its best month of the year for performance. April is a sweet spot for the pound, according to strategists at Bank of America, who say if history is any guide, the pound could hit $1.30 next month, up from around $1.266 right now. On average over the last 50 years, the pound has gained 0.7% against the dollar in April, making this by far its strongest month for performance, compared with August, its weakest month, when it has lost an average of 0.7%. "Seasonality does play a part and partly that's to do with the tax year-end and people filling up their ISAs (individual savings accounts), so there's more investment, UK-wise," XTB research director Kathleen Brooks said. "Whilst the yield differential could be eroded, and that's definitely what's driven sterling in the last year, it could be in a way that is growth-positive, which could support the pound," she said. 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/good-time-year-be-sterling-bull-2024-03-27/