2024-02-26 04:39

Houthi rebel attacks drive up fears of disruption to supply US refineries expected to end planned work in the coming weeks European diesel demand lifts crude prices higher Talks on Gaza-Israel ceasefire appear to progress HOUSTON, Feb 26 (Reuters) - Oil prices gained on Monday as European diesel demand, constrained by Russian sanctions and shipping disruptions, pulled prices higher in a market jittery with U.S. refinery output limited by planned overhauls, analysts said. Brent crude futures settled with a gain of 91 cents, or 1.11%, at $82.53 a barrel. U.S. West Texas Intermediate crude futures (WTI) finished up $1.09, or 1.43%, at $77.58. "We're all watching the diesel," said John Kilduff, partner with Again Capital LLC. A slump in U.S. refining activity and disruptions to global trade have tightened diesel supplies in recent weeks, dampening historically high U.S. diesel exports to Europe this month. U.S. diesel cracks briefly surged to a four-month high of more than $48 a barrel this month, crimping arbitrage opportunities to ship the fuel to Europe. Iran-aligned Houthi rebels in Yemen narrowly missed hitting a U.S.-flagged tanker on Saturday, the U.S. Central Command said. Another vessel hit by the rebels last week was abandoned and has been seen leaking fuel in the Red Sea. Possible disruptions "are what's haunting this market," Kilduff said. While early trade on Monday was driven by fears about persistent inflation limiting demand, the focus moved to a more basic issue, said Phil Flynn, analyst and Price Futures Group. "We seem to be slipping back to the supply side issue," Flynn said. "Demand is very strong and at the end of the day, it's about supply and demand." Refiners are also expected to begin restoring production in March following the completion of planned plant overhauls at U.S. refineries, he said. U.S. refinery utilization has been at 80.6% of national capacity for the past two weeks, the U.S. Energy Information Administration said last week. Oil prices have been trading between $70 and $90 a barrel since November, as rising U.S. supply and concern over weak Chinese demand offset OPEC+ supply cuts despite wars raging in Ukraine and Gaza. As the Israel-Hamas conflict continues in the Middle East, 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 hostage deal during talks in Paris but were still in negotiations. https://www.reuters.com/markets/commodities/oil-extends-losses-early-asian-trade-2024-02-26/

2024-02-26 04:02

Feb 26 (Reuters) - Russia's finance ministry has been discussing with its Chinese counterparts the possibility of taking out loans in yuan, but there has been no decision yet, Russian Finance Minister Anton Siluanov told state media in remarks published on Monday. "Negotiations with Chinese partners have been going on for a long time. So far there is no decision," Siluanov told the RIA news agency. "We discussed this topic at the end of last year at the inter-ministerial dialogue." Siluanov added Moscow is ready to start testing payments in digital currencies with China or countries of the Eurasian Economic Union and will promote the idea with its partners. He reiterated Russia's position that any actions with Russian assets abroad will receive a symmetrical response in Moscow. The European Union and the Group of Seven nations (G7) froze some 300 billion euros ($323 billion) of Russian central bank assets following Moscow's invasion of Ukraine in 2022. The EU and G7 have been debating if and how these funds can be used for over a year. "We are following the decisions of Western countries: we have frozen no less (than they have)," Siluanov said. Siluanov said Russia's budget is "under control" with revenues coming in slightly higher than expected this year. Spending has been slower than last year's pace, following stricter controls over advance payments and spending justification, he added. https://www.reuters.com/markets/currencies/russia-finance-minister-says-talks-with-china-yuan-loans-2024-02-26/

2024-02-26 03:34

Feb 26 (Reuters) - The London Metal Exchange should classify its nickel contracts into "clean" and "dirty" contracts to give customers more choice, Australian iron ore magnate Andrew Forrest said on Monday. The comment by Forrest, chairman and founder of Fortescue Metals Group (FMG.AX) , opens new tab, is part of a push by miners and Australian lawmakers to save the country's nickel industry after prices collapsed amid a jump in cheaper supplies from Indonesia. Nickel, a key ingredient in electric vehicle batteries, is typically produced to higher environmental and regulatory standards in Australia than in Indonesia. That has Australian producers calling for a green premium. "If you've got dirty nickel in your battery systems, then you want to know about that because you don't want to propagate that and you want the choice to buy clean nickel if you can. So the London Metal Exchange must differentiate between clean and dirty," Forrest told Australia's national press club. The LME did not immediately respond to a request for comment. Australia's nickel industry is shedding hundreds of jobs. Forrest's private investment arm, Wyloo Metals, said last month it would put its Western Australian nickel operations on care and maintenance at the end of May due to low prices. It bought those assets last year for $504 million. https://www.reuters.com/markets/commodities/fortescues-forrest-urges-lme-separate-nickel-contracts-into-dirty-clean-2024-02-26/

2024-02-26 03:07

'Tough' politics complicate deal-making: WTO chief 160 ministers due to meet from Feb. 26-29 Few deals possible at WTO biennial meeting ABU DHABI, Feb 26 (Reuters) - Trade ministers from nearly every country in the world gathered in Abu Dhabi on Monday for a World Trade Organization meeting that aims to set new global commerce rules, but even its ambitious chief Ngozi Okonjo-Iweala sought to curb expectations. The almost 30-year-old global watchdog, whose rules underpin 75% of global commerce, tries to strike deals by consensus, but such efforts are becoming more difficult amid signs that the global economy is fragmenting into separate blocs. "Let's not pretend that any of this will be easy," Ngozi Okonjo-Iweala said in his opening speech, describing the atmosphere as "tougher" than the WTO's last 2022 meeting, citing wars, tensions and elections and signs that trade growth will undershoot the body's own estimate. She called on ministers to "roll up their sleeves" and complete negotiations, but seemed to rule out any deal in Abu Dhabi on reforming the body's mothballed appeals court. "We are not there yet," she said. However, negotiators say they are still hopeful for an agreement that could buoy global fish stocks and protect fishermen by banning government subsidies. "We are not in dreamland here. International cooperation is in bad shape. Real success would be fish, plus two or three things," one trade delegate told Reuters. Other outcomes from the four-day meeting that are either definite or achievable are the accession of two new members - Comoros and East Timor - and a deal among some 120 countries to remove development-hampering investment barriers. Tougher areas are extending a 25-year moratorium on applying tariffs on digital trade, which South Africa and India oppose, and an agreement on agriculture trade rules that has eluded negotiators for decades. "The multilateral trading system with the WTO at its core is at a critical juncture; it is confronting many challenges," Thani Al Zeyoudi, conference chair and UAE's minister of foreign trade said in an opening address. "The WTO remains a powerful force in countering the current unilateralism, protectionism, and discrimination." FUTURE RELEVANCE On Sunday, the UAE announced a $10 million grant to support WTO initiatives such as the Fisheries Funding Mechanism, the Enhanced Integrated Framework (EIF), and the Women Exporters in the Digital Economy (WEIDE) Fund, launched during the conference. Zeyoudi said that trade and sustainability would be on the agenda as part of an effort to ensure the body's future relevance. One factor that could help is the determination of Okonjo-Iweala, a former Nigerian finance minister, whose insistence on all-night meetings helped deliver a package of deals in Geneva in 2022. "What makes me a bit more optimistic than others at this point is that the director-general is a very proactive person and is prepared to push ministers. Also, the UAE trade minister is very results-orientated," said Alan Yanovich, partner at law firm Akin Gump Strauss. John Denton, International Chamber of Commerce Secretary General, said even a modest outcome such as a forward-looking ministerial statement that showed common purpose among governments would be worth taking. "The WTO is a public good ultimately, and our view is that there is a major cost to the real economy from any erosion of that system," he said. https://www.reuters.com/world/not-dreamland-wto-aims-modest-outcomes-abu-dhabi-meeting-2024-02-26/

2024-02-26 02:48

MUMBAI, Feb 26 (Reuters) - The Indian rupee is expected to open flat to slightly higher on Monday and is tipped to remain in a narrow range during the week amid dollar inflows and intervention by the central bank. Non-deliverable forwards indicate the rupee will open at around 82.90-82.94 to the U.S. dollar, compared with its close of 82.9375 in the previous session. The rupee managed to inch higher last week and was in an 82.8350-83.0150 range. Traders reckoned that the Reserve Bank of India bought dollars regularly through the week to prevent the rupee from appreciating much in the face of persistent inflows. "Expect more of the same this week. The bias (on USD/INR) is for sure on the downside and at the same time, there is little doubt that the RBI will now allow much of a drop," an FX trader at a bank said. This week, the rupee will have additional support from MSCI-rebalancing inflows. India is expected to record passive inflows of $1.2 billion into equities following MSCI's quarterly review, set to take effect on Feb. 29, according to calculations by Nuvama Alternative & Quantitative Research. On the U.S. data side, the January headline and core PCE index out on Thursday will be off of added importance following the higher-than-expected consumer inflation print. The second release of GDP is due Wednesday. And, there are a number of Fed speakers lined up this week, who are expected to reinforce that the U.S. central bank is in no hurry to cut interest rates. "Both data and a series of Fed speakers should continue to paint a picture of a patient Fed," HSBC said in a note. Asia FX was mixed to begin the week, while shares were mostly lower. U.S. equity futures dipped. KEY INDICATORS: ** One-month non-deliverable rupee forward at 82.97/83.00; onshore one-month forward premium at 7 paisa ** Dollar index up at 104.01 ** Brent crude futures down 0.4% at $81.3 per barrel ** Ten-year U.S. note yield at 4.23% ** As per NSDL data, foreign investors sold a net $22.7 million worth of Indian shares on Feb. 22 ** NSDL data shows foreign investors bought a net $59.9 million worth of Indian bonds on Feb. 22 https://www.reuters.com/markets/currencies/rupee-caught-between-inflows-likely-rbi-intervention-2024-02-26/

2024-02-26 02:14

ORLANDO, Florida, Feb 25 (Reuters) - Hedge funds are wagering one of their biggest bets against the Japanese yen in years, pushing Japanese authorities' tolerance of the currency's slide towards new 34-year depths to the limit. Although Tokyo has cranked up the warnings recently that "rapid" moves in the exchange rate are "undesirable", there are reasons to believe there may be less appetite to carry out large-scale yen-buying intervention than there was in 2022. Speculative market positioning, however, is one variable that could push Tokyo to act. And speculators have the bit between their teeth. The latest Commodity Futures Trading Commission data show that funds increased their net short yen position to more than 120,000 contracts in the week ending Feb. 20 from just over 111,000 the week before. That's a $10 billion, leveraged bet on the yen weakening. A short position is essentially a wager an asset's price will fall, and a long position is a bet it will rise. Hedge funds often take directional bets on currencies, hoping to get on the right side of long-term trends. And the yen has weakened substantially. It has shed 6% of its value against the dollar so far this year, falling below 150.00 per dollar to within sight of its post-1990 lows around 152.00 per dollar. The yen is the worst-performing major currency this year as funds and others have traded on the huge U.S.-Japan interest rate and bond yield gap and bet that it will persist. Either the Bank of Japan will be slow to 'normalize' policy or the Federal Reserve won't cut rates as much as many people expect. Or both. However the policy mix plays out, it has been a winning trade for hedge funds so far. The latest CFTC net short yen position is the biggest since November and the second largest in six years, and there have only been three periods since yen futures contracts were launched in the late 1980s where funds have been more bearish on the yen. Perhaps more importantly, it is larger now than September and October 2022, when Japan intervened in the FX market buying yen for the first time since 1998, spending a record $60 billion in total to stem the bleeding. Hedge funds have doubled their net short position since the start of the year, probably a major driver of the yen's renewed slump towards fresh 34-year lows. The yen is flirting with historic lows against other major currencies, and on a trade-weighted basis is also on the brink of printing fresh multi-decade lows. Japan has just registered a technical recession and interest rates are still negative, while rates across most of the rest of the developed world are their highest in decades. Maybe the yen's weakness is justified? Regardless of the 'fundamentals', authorities in Tokyo are unlikely to want speculators to continue the rapid expansion of their short yen position. (The opinions expressed here are those of the author, a columnist for Reuters.) https://www.reuters.com/markets/currencies/funds-short-yen-bets-test-japans-intervention-resolve-mcgeever-2024-02-26/