2024-02-26 11:25

LONDON, Feb 26 (Reuters) - Commodities pricing agency Platts said on Monday its addition of U.S. WTI Midland crude into the global Brent oil benchmark has gone well, and it won't be necessary to add any further crudes for the time being. Platts, part of S&P Global Commodity Insights, added Midland to its dated Brent price assessment in May 2023, bolstering volumes underpinning the benchmark amid diminishing output of the five North Sea grades, Brent, Forties, Oseberg, Ekofisk and Troll. The integration of Midland has gone "smoothly," Vera Blei, head of Established Benchmarks at S&P Global Commodity Insights, told the company's London Energy Forum on Monday. "Midland coming into dated Brent has added a significant amount of volume with a grade that was already established in Europe," she said. The volumes Midland brings to the benchmark should future proof it for the next decade or so, Blei said, but the company did not rule out future additions. Platts has learned by adding Midland that it is possible to expand the benchmark using crude from outside the North Sea, she said when asked if any more additions were being planned. "This is a long undertaking," she said. "We can introduce a grade from outside of the North Sea successfully if we have to." The Midland addition serves "to really futureproof this for the next decade," she added. "It doesn't mean we won't be looking at new grades as and when that becomes necessary." The addition of Midland has helped bring new counterparties to the North Sea benchmark trading environment, Blei said, including U.S. oil company Occidental (OXY.N) , opens new tab and Saudi Aramco (2222.SE) , opens new tab. https://www.reuters.com/markets/commodities/platts-says-adding-midland-brent-has-gone-well-no-need-more-2024-02-26/

2024-02-26 11:09

Alumina's only asset is 40% stake in AWAC JV with Alcoa AWAC has assets in Guinea, Spain, Saudi, Brazil, Australia New entity to simplify operations, tap global growth footprint MELBOURNE, Feb 26 (Reuters) - U.S. aluminium producer Alcoa (AA.N) , opens new tab on Monday made a $2.2 billion all-stock buyout proposal for its Australian joint venture partner Alumina (AWC.AX) , opens new tab, in a deal that would give it greater upstream exposure and simplify its operations. Alumina's only asset is a 40% stake in the Alcoa World Alumina and Chemicals (AWAC) joint venture, which is controlled by Alcoa and has interests in bauxite mining, alumina refining and aluminium smelting across Australia, Brazil, Spain, Saudi Arabia and Guinea. Alcoa CEO William Oplinger told analysts the deal would eliminate Alumina's A$12 million ($7.87 million) a year of overhead costs and allow the combined company to tap tax advantages related to holding debt. The broader global footprint will also allow Alcoa more options for growth, he added. Under the proposed deal, Alumina shareholders would receive 0.02854 shares of Alcoa common stock for each share held, giving them a 31% stake in the combined company. This would imply a value of A$1.15 per Alumina share, based on Alcoa's closing price as of Friday. Alumina shares closed 7 Australian cents higher at A$1.09 on Monday. Alcoa's shares were down 2.9% in U.S. premarket trading. Melbourne-based Alumina said its board backed the deal in the absence of a superior offer, though it also noted there was no certainty the proposal would be made binding. Alumina's largest shareholder, investment manager Allan Gray Australia, holds just under a 20% stake in the company, which it said it had agreed to sell to Alcoa. "To a very large degree it simplifies the corporate structure," portfolio manager Simon Mahwhinny of Allan Gray said of the deal. Alumina was created from a 2002 de-merger of WMC Ltd's alumina assets and an Alcoa buyout has been viewed as logical by analysts for more than two decades. AWAC also has a 55% interest in the Portland aluminum smelter in Australia with China's CITIC Resources (1205.HK) , opens new tab and Japan's Marubeni (8002.T) , opens new tab. CITIC Resources and other subsidiaries of its parent CITIC Ltd hold a combined 19% stake in Alumina, according to CITIC Resources' 2023 interim report, making the Chinese group the second-largest shareholder. CITIC did not respond immediately for a request for comment on whether it backed the Alcoa offer. "We believe this transaction makes strategic sense, but the economic upside to Alcoa is offset by the premium paid," Jefferies analysts in a note on Alcoa. "We would expect shareholders of both companies to vote for this transaction, although this is not certain as AWC shareholders may be disappointed by the relatively small premium in an all-share deal." The deal offered a 13% premium to Alumina's last closing price, below more typical takeover premiums of about 30%. The Alcoa proposal comes at a tough time in the alumina industry due to low prices. Alcoa said in January it planned to stop production this year at AWAC's loss-making Kwinana alumina refinery in Western Australia due to challenging market conditions and the facility's age. ($1 = 1.5256 Australian dollars) https://www.reuters.com/markets/deals/us-aluminium-maker-alcoa-makes-22-bln-offer-australias-alumina-2024-02-25/

2024-02-26 11:02

A look at the day ahead in U.S. and global markets from Mike Dolan Chastened interest rates markets are now inclined to doubt there will be any U.S. monetary easing in the first half of this year, prompting a minor stepback in record high stock indexes into a new week dominated by the latest critical inflation update. Before we get to the Federal Reserve's favored PCE price gauge release on Thursday, U.S. Treasury yields slipped back somewhat - ahead of 2- and 5-year debt auctions later in the day and partly soothed by ebbing crude oil prices. What's more, bonds are keeping half an eye on the latest juncture in the long-running U.S. government funding standoff. The money is due to run out again on Friday for some federal agencies, including the Department of Transportation, while others like the Defense Department face a March 8 deadline. President Joe Biden plans to meet with congressional leaders on Tuesday to discuss funding the government. Last week hardline U.S. House Republicans asked Speaker Mike Johnson to abandon talks with Senate Democrats on legislation that might avoid that shutdown and instead implement an automatic spending cut. The upshot at the start of the week is that 10-year Treasury yields slipped back to an 11-day low of 4.21% - more than 10 basis points off Friday's early peaks. Futures markets are now not fully priced for a quarter-point Fed rate cut until July, with as little as 83 bps in the easing curve for the whole year - close to the 75 bps of cuts Fed policymakers themselves indicated in December. Thursday's January PCE release will be critical this week - with traders watching closely to see if the upside surprise seen in the consumer price index for the same month is replicated, underlining Fed caution about the timing of rate cuts. Even though year-on-year headline and 'core' PCE inflation rates are forecast to slip to 2.4% and 2.8% respectively, monthly rates are expected to be a brisk 0.3% and 0.4% - stalling some of disinflationary momentum that recently saw 6-month annualized rates slip below the Fed's 2% target. The retreat in crude oil prices will help calm the horses a bit - falling to an 11-day low early on Monday on a mix of robust inventories, a firm dollar, worries about overseas demand and some hopes of a breakthrough in Middle East talks. The year-on-year crude price slipped back negative again too after 10 days with a plus sign attached. White House national security adviser Jake Sullivan told CNN on Sunday that negotiators for the United States, Egypt, Qatar and Israel had agreed on the basic contours of a Gaza hostage deal during talks in Paris. Israel's Prime Minister Benjamin Netanyahu, however, said it was not clear yet whether a deal would materialize. The dollar (.DXY) , opens new tab was steady for the most part, gaining on China's offshore yuan . But the euro gained ground even as this Friday's release of 'flash' euro zone inflation is expected to show 'core' rates there falling below 3% for the first time in two years. Record high stocks held most of last week's spectacular gains, driven mostly by the latest bout of excitement about artificial intelligence as chipmaker Nvidia (NVDA.O) , opens new tab soared again following another blowout earnings report. Futures were off a touch, but the S&P500 (.SPX) , opens new tab closed Friday less than 25 points from its new record of 5,111. Class B shares of Warren Buffett's conglomerate Berkshire Hathaway climbed 5% premarket after the firm on Saturday posted a record $37.4 bln operating profit in 2023 as its insurance business benefits from improved underwriting. Overseas, Japan's Nikkei (.N225) , opens new tab set another record and helped MSCI's all-country index close to Friday's record too. But China's stocks (.CSI300) , opens new tab turned tail again - snapping a nine-day rebound - and with key business surveys watched closely later in the week. China's President Xi Jinping held a meeting of a key economic policy body on Friday, the Central Financial and Economic Affairs Commission, to discuss support to manufacturers and lowering logistics costs, state media reported. Companies have scuttled plans for initial public offerings in China this year as the securities watchdog tightens rules on share listings in a bearish market. Forty-seven pulled their listing plans from China's ailing stock exchanges so far this year, compared with 29 withdrawals during the same period one year earlier, data from stock exchanges showed. Key diary items that may provide direction to U.S. markets later on Monday: * U.S. Jan new home sales, Dallas Fed's Feb manufacturing survey * Kansas City Federal Reserve President Jeffrey Schmid speaks; European Central Bank President Christine Lagarde speaks in Strasbourg * World Trade Organization ministerial meeting in Abu Dhabi * U.S. Treasury auctions 2- and 5-year notes, 3- and 6-month bills * U.S. corp earnings: Zoom, Domino's Pizza, iRobot, AES, ONEOK, SBA Communications, Progressive, Fidelity National Information Services, Skywater, Everbridge, EverQuote, Freshpet, Kaspi, Itron, Playtika Li Auto, Krystal Biotech etc https://www.reuters.com/markets/us/global-markets-view-usa-2024-02-26/

2024-02-26 11:00

Denmark concludes Nord Stream explosion investigation Police say explosions were deliberate sabotage But evidence insufficient to pursue criminal case Germany continues own probe, still keen to resolve issue Kremlin calls investigation situation 'absurd' COPENHAGEN, Feb 26 (Reuters) - Denmark has dropped its investigation into the explosions in 2022 on the Nord Stream pipelines carrying Russian gas to Germany, police said on Monday, becoming the second nation to do so after Sweden closed its own inquiry. The multi-billion dollar Nord Stream 1 and 2 pipelines transporting gas under the Baltic Sea were ruptured by a series of blasts in the Swedish and Danish economic zones in September 2022, releasing vast amounts of methane into the air. The blasts occurred seven months after Russia launched a full-scale invasion of Ukraine, which triggered a wide range of Western economic and financial sanctions against Moscow. "The investigation has led the authorities to conclude that there was deliberate sabotage of the gas pipelines. However, the assessment is that there are not sufficient grounds to pursue a criminal case in Denmark," a Copenhagen police statement said. Sweden earlier this month dropped its investigation into the explosions, saying it lacked jurisdiction in the case, but had handed uncovered evidence over to German investigators, who have yet to publish any findings. The German government is still "very interested" in getting to the bottom of the blasts that ruptured the Nord Stream pipelines, a spokesperson said in Berlin on Monday. Last year, Germany told the U.N. Security Council it had found traces of subsea explosives on a sailing yacht that may have been used to transport the explosives, and that trained divers might have attached the explosives to the pipelines. Russia and the West, at loggerheads over Moscow's February 2022 invasion of Ukraine, have pointed fingers at one another over the pipeline blasts. Each has denied any involvement and no one has taken responsibility. The Kremlin on Monday said the situation regarding the investigations was "close to absurd". "On the one hand, there is recognition of deliberate sabotage, on the other hand, there is no further progress," Kremlin spokesman Dmitry Peskov said, adding Denmark had refused requests to provide information about its investigation. The Danish prime minister's office did not immediately respond to a Reuters request for comment on Peskov's assertion. Danish police said they had been cooperating with relevant foreign partners and that the investigation they had conducted had been "both complex and comprehensive". A police spokesperson declined to comment when asked by Reuters to elaborate on why there were insufficient grounds for continuing the investigation and on which authorities they had shared their findings with. Danish police had previously said the pipelines were hit by powerful explosions and Swedish investigators confirmed that traces of explosives found on site conclusively showed that sabotage had occurred. Russia has blamed the United States, Britain and Ukraine for the blasts, which largely cut Russian gas off from the lucrative European market. Those countries have denied involvement. Some Western officials have said Russian naval vessels were in the area at the time of the blasts. Others have said there is no hard evidence to implicate Moscow, which called the suggestion it was behind the attacks "absurd". https://www.reuters.com/world/europe/denmark-ends-investigation-into-nord-stream-pipeline-blasts-2024-02-26/

2024-02-26 10:56

BRUSSELS, Feb 26 (Reuters) - The European Union Council on Monday adopted rules to make instant payments in the euro currency fully available round-the-clock in a move it expected to help European payments companies compete against U.S. firms Visa (V.N) , opens new tab and Mastercard (MA.N) , opens new tab. The new regulation will allow customers to transfer euro-denominated money within 10 seconds at any time, including outside business hours, not only within the same country but also to another EU member state, the EU Council said. Currently, payments using existing cards and deposits can take several business days. The Council added that the new rule would factor in countries outside of the euro-zone economic bloc. "The new rules will improve the strategic autonomy of the European economic and financial sector as they will help reduce any excessive reliance on third-country financial institutions and infrastructures," the EU Council said in a statement. The EU has been working on reforms to prise open a payments market long dominated by banks and U.S. firms Visa and Mastercard, which are now being challenged by fintechs that offer rival services using data from customers' bank accounts. https://www.reuters.com/markets/europe/eu-adopts-euro-instant-payments-rules-take-visa-mastercard-2024-02-26/

2024-02-26 10:40

LONDON, Feb 26 (Reuters) - The pound edged up against the dollar on Monday, heading for a fifth straight daily gain, its longest unbroken streak so far this year, but volatility was subdued, as investors took a breather from a spate of influential economic data and earnings. Sterling rose 0.1% to $1.26855, marking a week-on-week gain of 0.7%. Against the euro , the pound lost 0.1% to trade around 85.48. The pound secured its biggest one-week gain versus the dollar this year last week, boosted by the same swell of risk appetite following blockbuster results from chipmaker Nvidia (NVDA.O) , opens new tab and upbeat business activity surveys that helped sweep a number of stock markets to record highs. A number of major data releases are due this week from the United States, the euro zone and Japan, but not much in the way of big UK data which could keep the pound on a fairly even keel for now, according to DailyFX strategist Richard Snow. "Sterling has performed well over the last week and with little to no ‘high impact’ data on the horizon, the currency may remain propped up on the whole," he said. The pound was set for a fifth daily rise against the dollar, its longest stretch of gains since the end of December. The futures market shows traders widely expect the Bank of England to cut rates in August, with a slim chance of a cut in June. Investors are banking on the BoE cutting rates by around 60 basis points to just below 4.60% by December, less than half of the 120 bps in cuts that were priced in at the start of this month. Next week brings finance minister Jeremy Hunt's Spring Budget. Economists and analysts say there is not much room for fiscal loosening, particularly with a general election due later this year. "A modest rearranging of the fiscal deck chairs is likely to be the Chancellor’s most effective plan for Budget 2024, alongside a modest support package," Nomura economists said in a note last week. https://www.reuters.com/markets/currencies/sterling-heads-longest-streak-daily-gains-2024-2024-02-26/