2024-03-25 10:56

March 25 (Reuters) - British energy regulator Ofgem has started talks on the future of price caps, it said on Monday, adding it was considering how energy regulation as a whole needs to adjust to protect customers as they move to net zero. A cap on electricity and gas bills has been in place since January 2019 and was designed to make sure people paid a fair price for their energy based on a calculation of factors including wholesale energy prices and network costs. It currently sets a cap on the amount suppliers can charge for each unit of gas or electricity for the most widely used tariffs, and is reviewed every four months. Ofgem said while protecting customers is still important there have been changes in some way people are charged for electricity, such as agile pricing which enables people to pay less to use electricity when demand is low, and save money but using less when demand is high. These time-of-use tariffs are expected to grow as more households use electric heat pumps or electric vehicles. "As customer diversity grows, and more households adopt time-of-use tariffs, it could become harder to retain a universal price cap that is suitable for everyone," Ofgem said in a statement. It has suggested options such as a dynamic price cap, with unit rates set on the time of use to help encourage consumers to be more flexible about when they use energy. It also said there could be a targeted price cap to protect vulnerable consumers. The consultation is open until May 6 and is seeking views from charities, consumer groups, businesses, bill-payers, and suppliers. 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/uk-energy-regulator-starts-discussions-future-price-caps-2024-03-25/

2024-03-25 10:39

BEIJING/SINGAPORE, March 25 (Reuters) - PetroChina's (601857.SS) , opens new tab, net profit rose 8.3% last year off record levels in 2022, as strong growth in natural gas sales and its marketing segment offset lower realised oil prices. PetroChina's net profit amounted to 161.1 billion yuan($22.34 billion) in 2023, versus 148.7 billion in 2022, while revenue fell 7.0% to 3,239 billion yuan, the firm said in a filing to the Hong Kong Stock Exchange on Monday. Operating profit for the natural gas segment more than tripled to 43.0 billion yuan from around 13.0 billion yuan, while operating profit in the marketing segment rose 66.7% on the previous year. The average realised price for crude oil fell by 16.8% compared to 2022 levels. The national energy giant produced 937.1 million barrels of crude oil last year, or 2.57 million barrels per day, up 3.4% over the previous year (906.2 mln bbl). Natural gas output was up 5.5% at 4,932.4 billion cubic feet (bcf). Refinery crude throughput rose 15.3% to 1,398.8 million barrels, or 3.83 million barrels per day, reversing the previous year's 1% decline due to a strong recovery in gasoline and aviation fuel demand as China dropped pandemic curbs. PetroChina recorded a 17.3% increase in domestic sales of gasoline, diesel and kerosene combined, with domestic kerosene sales surging by 82.1% on 2022. The group's chemical new materials output increased 60.0% on last year. The refining segment "seized the favourable opportunity of market recovery" and "improved the proportion of featured refined products and high-end chemical products," the statement said. PetroChina forecasts this year's crude oil output to fall by 3% to 909.2 million barrels. Natural gas output is expected to increase by 4% to 5,142.6 bcf. It also aimed for a 0.3% growth in refinery output this year. An annual outlook released last month by a research arm of parent company CNPC showed China's aviation fuel consumption is likely to expand 13.1% this year on a surge in passenger travel, while diesel use may drop 1.8% amid broader economic headwinds. Capital spending is planned at 258 billion yuan ($35.78 billion) for 2024, which would be 6.3% lower than the 275.3 billion spent last year. While capital expenditure on the upstream segment is expected to fall, capex in the refining and marketing segments is forecast to increase significantly, by 177% and 49.8% respectively. The group will "promote the refining and chemical business towards the middle and high-end of the industrial chain," with extra spending ear-marked to for the group's petrochemical subsidiaries in Jilin and Guangxi. Higher spending in the marketing segment will be used to support the development of "integrated energy stations" offering EV charging and hydrogen fuel services, it added. ($1 = 7.2111 Chinese yuan renminbi) Get a look at the day ahead in Asian and global markets with the Morning Bid Asia newsletter. Sign up here. https://www.reuters.com/markets/asia/petrochinas-2023-net-income-up-83-strong-fuel-gas-sales-2024-03-25/

2024-03-25 10:13

March 25 (Reuters) - Washington's drive to make the United States a major global lithium producer is being held back by a confusing mix of state regulations that are deterring developers and hampering efforts to break China's control of the critical minerals sector. Across Texas, Louisiana and other mineral-rich states, it's unclear who owns the millions of metric tons of lithium locked in salty brines underneath U.S. soils, how the battery metal should be valued by regulators and who ultimately should pay to process it into a form usable by manufacturers. These legal ambiguities are the latest impediment - alongside technical challenges and sagging commodity prices - to America's plans to produce more of its own lithium and wean the country off foreign supplies, according to interviews with regulators from seven U.S. states, legal experts, politicians, landowners, investors, royalty firms, industry executives and consultants. U.S. federal officials in Washington are largely powerless to force states to change regulations, leaving the Biden administration's aggressive electrification targets beholden to the pace at which local officials update outdated statutes. Global lithium demand is expected to outpace supply by 500,000 metric tons annually by 2030. Unless the United States boosts its own production, the country's manufacturers will find themselves reliant on China and others for supply as the end of the decade approaches, analysts warn. The Texas legislature, for example, last year approved a law - supported by Standard Lithium (SLI.V) , opens new tab and Chevron (CVX.N) , opens new tab - that instructed the state's oilfield regulator to craft regulations for lithium extraction from brines. But the regulator, known as the Railroad Commission of Texas, told Reuters is has no timeline for when it will finish that task. "I don't even know where to start in terms of working with the local authorities to get brine mineral rights in Texas. It's confusing," said Brady Murphy, CEO of Tetra Technologies (TTI.N) , opens new tab, which aims to produce lithium with partner Exxon Mobil (XOM.N) , opens new tab. The Railroad Commission of Texas told Reuters it plans to release its rules for public comment once they are formulated, and then the three commissioners will vote on them. While the 1972 U.S. Clean Water Act gives Washington regulatory power over water extraction and reinjection across the country, state officials have autonomy to govern other parts of the process. Tetra, which also produces chemicals for water treatment and recycling, has tested more than 200 brine samples from Texas, but so far has opted not to do business in the Lone Star State due to legal uncertainty, Murphy said. Koch Industries-backed Standard Lithium said last October it had drilled a Texas brine well with lithium concentrations nearly as high as those found in parts of Chile, which has the world's largest lithium reserves. But Standard can't touch that lithium until regulations are set. "We're taking a measured approach to Texas," said Robert Mintak, Standard's CEO. REGULATORY RISKS In Oklahoma, which has several brine deposits, the Oklahoma Corporation Commission - which oversees oil and gas development - said it has no jurisdiction over lithium production and royalties, and referred comment to the state's Department of Mines, which said it also does not oversee lithium. In Utah, the state legislature and governor approved a bill last year aimed at preventing water levels from dropping in the lithium-rich Great Salt Lake. That led Compass Minerals (CMP.N) , opens new tab to abandon plans last month to produce lithium for Ford (F.N) , opens new tab in the imperiled lake and disband its entire lithium team, saying "regulatory risks have increased significantly around this project." And in Louisiana, the lack of state guidelines is fueling concerns from legal experts that producers could trespass on neighboring land when they reinject brine after filtering out lithium. Reinjection is a key step to preserve underground water table levels. "There'll likely need to be a court fight about whether they have the right to do that," said Keith Hall, director of the Louisiana State University's Mineral Law Institute. The Louisiana Department of Energy and Natural Resources told Reuters it does not have existing statutes related to lithium. The path is even murkier for water that is extracted alongside crude oil. Oil companies for decades have paid to dispose of that produced water, which contains lithium that could be sold for a profit. With lithium demand now on the rise, landowners, oil producers, and companies that oversee water disposal are tussling over ownership. A Texas state appeals court last year ruled that COG Operating controls such water that it extracts alongside crude oil, but the ruling only applied to that specific case. And not all oilfield leases include clauses for who owns other minerals extracted alongside oil, sparking questions as to whether lithium is covered by existing leases or if companies need to negotiate new contracts with landowners. "That is going to have a chilling effect on capital investments until it's resolved," said Jamie Rhymes, an attorney specializing in minerals contracts at the Liskow & Lewis law firm. ARKANSAS Legal experts told Reuters that it's unclear how lithium will be valued for royalty payouts given the cost for equipment to filter the battery metal from brine, which unlike oil typically has no market value itself. In Arkansas, where Tetra, Exxon, Albemarle (ALB.N) , opens new tab and Standard Lithium hope to produce the battery metal within a few years, state officials have been debating a royalty structure to compensate landowners since 2018. Shane Khoury, who oversees the body that will set the royalty rate in his role as secretary of the Arkansas Department of Energy and Environment, said the state may charge different rates depending how much lithium is in a brine deposit. Albemarle, the world's largest lithium producer with operations in the United States, Chile, Australia, China and elsewhere, plans to open a pilot facility in Arkansas by the end of the year and said it has chosen not to - for now - submit a royalty proposal while it watches Standard's royalty review process. "We're waiting to see how (the Arkansas royalty situation) evolves," said Netha Johnson, the Albemarle executive overseeing the company's Arkansas lithium project. "There's a couple of fundamental differences between the way that brine royalties could be calculated." Exxon also has not submitted a royalty proposal despite spending more than $100 million in Arkansas and on a Houston test facility as part of an aggressive move into lithium, but said it hopes the state's royalty will be uniform across the state. California, which has giant lithium reserves in its Salton Sea region east of Los Angeles, last year imposed a flat-rate tax for each metric ton of lithium. The move has pushed back development of projects slated to supply General Motors (GM.N) , opens new tab and Stellantis (STLAM.MI) , opens new tab. California's governor and legislators have defended the tax as a necessary way to ensure all residents benefit from the energy transition. Nevada, which has the only commercial U.S. lithium operation - a small mine operated by Albemarle - has taxed minerals for more than 100 years, but at a rate based on each facility's revenue. Industry analysts expect regulations to be eventually set in various states, but predicting when is anyone's guess. "The uncertainty is the scariest part," said the owner of lithium-rich acreage across several states who declined to be named so as not to offend regulators. "How do you develop these projects and muster financial support without a regulatory structure in place?" 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/americas-lithium-laws-fail-keep-pace-with-rapid-development-2024-03-25/

2024-03-25 10:09

NEW YORK, March 25 (Reuters) - Terraform Labs and its founder Do Kwon built a "house of cards" and lied to investors about the stability of a cryptocurrency whose collapse rippled through markets in 2022, a lawyer for the U.S. Securities and Exchange Commission told a Manhattan jury as its civil fraud trial began on Monday. The SEC accused Kwon and the Singapore-based blockchain company of misleading investors in 2021 about the stability of TerraUSD, a stablecoin designed to maintain a value of $1. The regulator also accused them of falsely claiming Terraform's blockchain was used in a popular Korean mobile payment app. "Terra was a fraud, a house of cards, and when it collapsed, investors lost nearly everything," SEC attorney Devon Staren said at trial. Louis Pellegrino, an attorney for Terraform, said the regulator's case relies on cherry-picked evidence and the testimony of witnesses hoping for whistleblower payouts if the SEC wins. Kwon's attorney David Patton said the crypto entrepreneur never represented Terra's cryptocurrency as risk-free. "Failure doesn't equal fraud," Patton said. Kwon will not attend the trial, which is expected to last around two weeks. He was arrested in Montenegro in March 2023 and is awaiting extradition to his native South Korea, where he faces criminal charges. A Montenegro court on Friday delayed his extradition after the prosecutor's office there voiced concerns about the process. Federal prosecutors in New York have also charged Kwon with fraud and are seeking his extradition to the United States. Kwon designed TerraUSD and Luna, a more traditional token that fluctuated in value but was closely linked to TerraUSD. The SEC estimates that investors lost more than $40 billion on the two tokens combined when the TerraUSD peg to the dollar could not be maintained in May 2022. Their collapse also dragged down the value of other cryptocurrencies, including bitcoin, and caused wider havoc in the crypto market, leading several companies to file for bankruptcy in 2022. The SEC has said Kwon and Terraform secretly arranged to have a third party purchase large amounts of TerraUSD to prop up the price when the stablecoin slipped from its peg a year earlier, in May 2021. Kwon falsely attributed the recovery to the reliability of TerraUSD's algorithms, according to the regulator. The SEC also has said Kwon and Terraform falsely touted Terraform's blockchain as being used to process and settle transactions between customers and merchants on the Chai payment app. The SEC is seeking civil financial penalties and orders barring Kwon and Terraform from the securities industry. U.S. District Judge Jed Rakoff granted the SEC a partial win in December, ruling that Terraform Labs unlawfully sold digital assets without registering them as securities. The judge dismissed the SEC's allegations that Terraform and Kwon illegally offered security-based swaps through a feature that let users create digital assets that mirrored the price of another asset, such as a different cryptocurrency or stock. The judge has not yet determined the amount of damages that Terraform must pay. The company, which filed for bankruptcy protection in January, has said a penalty could exceed its assets. The Technology Roundup newsletter brings the latest news and trends straight to your inbox. Sign up here. https://www.reuters.com/technology/terraform-labs-civil-fraud-trial-set-begin-new-york-2024-03-25/

2024-03-25 10:02

A look at the day ahead in U.S. and global markets from Mike Dolan A holiday-shortened final week of the quarter started with a whimper in financial markets, with the buoyant dollar knocked by concern about Japanese and Chinese action to shore up the listing yen and yuan . As the Easter break in most western markets appears in view, investors can look back at a pretty buoyant first quarter that's seen Wall St stocks set new records and gains broaden out beyond a handful of megacap tech names to other sectors and also around the world. While the S&P 500 (.SPX) , opens new tab and Nasdaq (.IXIC) , opens new tab are both up more than 10% for the year to date, the equal-weighted S&P500 (.EWGSPC) , opens new tab - which adjusts for the impact of giant stocks such as the 'Magnificent Seven' megacap tech leaders - is also up 6%. Japan's Nikkei (.N225) , opens new tab is up 13%, while MSCI's all-country index (.MIWD00000PUS) , opens new tab has gained more than 7%. The spluttering of some of the Big Tech leaders this year amid mounting antitrust moves on both sides of the Atlantic only serves to underline the impressive gains of broader indexes. Last week's sweep of central bank meetings seem to have convinced everyone interest rate cuts are coming by the end of the second quarter and overseas policymakers will at least match the Federal Reserve blow for blow - speculation that lifted the dollar (.DXY) , opens new tab across the board last week. China's renminbi was a notable casualty on Friday as the offshore yuan skidded to a 2024 low. But suspected selling of dollars by state-owned banks on Monday and a strong official guidance from the country's central bank seems to have steadied the ship, even though the offshore unit is still almost 0.5% weaker than Thursday's close. In Japan too - where the Bank of Japan ended its negative interest rate policy last week - the sliding yen seems to have found a foothold just under 152 per dollar as traders grow wary of official intervention on further sharp losses. Japan's top currency diplomat Masato Kanda said on Monday the yen's current weakness did not reflect fundamentals, seemed somewhat speculative and nothing would be ruled out if moves got out of hand. "I feel something strange about it," he said. The overall tone seemed to dampen stock markets in Asia on Monday, with the Nikkei slipping back 1% and Chinese stocks off too. European stocks and Wall St futures were a little steadier. CALMER RATE, BOND MARKETS Interest rate and bond markets seemed calm, with Treasury yields hovering around Friday's close. That's even as Atlanta Fed boss Raphael Bostic sent a hawkish note late Friday by saying he now expects just a single quarter-point interest rate cut this year instead of the two he had projected earlier, citing persistent inflation and strong economic data. The big economic report of the week is Friday's release of the Fed's favored PCE inflation gauge for February - but Wall St stock exchanges will be closed for Good Friday and won't get a chance to react until next week. And there was relief that another threatened government shutdown was averted over the weekend - and the issue put aside for six months. With two-year notes under the hammer again later on Monday, the main Treasury market volatility index (.MOVE) , opens new tab has fallen to its lowest in more than two years. Congress early on Saturday overwhelmingly passed a $1.2 trillion budget bill, keeping the government funded through a fiscal year that began six months ago. Key federal agencies including the departments of Homeland Security, Justice, State and Treasury, which houses the Internal Revenue Service, will now remain funded through Sept. 30. Elsewhere in domestic politics, former U.S. President Donald Trump faces a Monday deadline to post a bond covering a $454 million civil judgment against him in a New York state case, after a judge found he had overstated the value of his assets. And in geopolitics, President Joe Biden and Japanese Prime Minister Fumio Kishida will agree next month to tighter military cooperation, including talks on the biggest potential change to Washington's East Asia command structure in decades. Key diary items that may provide direction to U.S. markets later on Friday: * US Feb new home sales, Dallas Fed March manufacturing survey, Chicago Fed Feb business survey * Federal Reserve Board Governor Lisa Cook and Atlanta Fed President Raphael Bostic speaks. Bank of England policymaker Catherine Mann speaks * US Treasury sells 2-year notes, 3- and 6-month bills 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/global-markets-view-usa-2024-03-25/

2024-03-25 09:59

Rate decision due March 27, 0830 GMT All 17 analysts see policy rate remaining at 4.00% Riksbank expected to flag cut in June Rates expected to fall to around 3.00% by year end Link to the data: STOCKHOLM, March 25 (Reuters) - Sweden's central bank will keep rates at 4.00% this week and is expected to flag that it will start cutting rates in the months ahead as long as inflation remains tame, a Reuters poll of analysts showed on Monday. After two years of rapid rate hikes, headline inflation has finally slowed to near the central bank's 2% target after peaking at over 10%. Meanwhile, growth has ground to a halt and unemployment is rising. All 17 analysts in the poll expected the policy rate to be unchanged on March 27, but for the Riksbank to signal a cut in May or June. "The domestic data support a move already in May, but the question is how concerned the board is about the ramifications for the krona," JP Morgan said in a note. "A wait and see approach until June - when more data will be available and the Fed/ECB presumably have cut rates - could make sense." Ten economists saw policy easing starting in June with seven picking May. A cut would be the first by the Riksbank since early 2016 when the policy rate hit an all-time low of -0.50% Negative or zero rates lasted until 2022 when Russia's invasion of Ukraine sparked a surge in prices and forced the central bank to ratchet up borrowing costs at a record pace. In February, the Riksbank said rates had now peaked and that it might start to ease policy in the first half of the year - good news for households struggling with mortgage repayments that have tripled over two years. Rate-setters, however, remain wary of setbacks, particularly the chance of a weaker Swedish crown. A surprise cut by the Swiss National Bank last week saw the franc weaken against the euro and the Riksbank will want to avoid policy easing leading to a similar result for the crown. Sticking close to the timetable of the U.S. Federal Reserve and the European Central Bank would give Swedish rate-setters more confidence. Both the Fed and ECB are seen cutting in June. With inflation benign, the economy sluggish and wage increases still moderate, analysts see further cuts once the Riksbank takes the plunge. The median forecast is for rates to end 2024 at 3.00% and drop to 2.25% a year later. 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/swedens-riksbank-hold-rates-signal-cut-june-poll-shows-2024-03-25/