2024-01-12 23:48

EMMAUS, Pennsylvania, Jan 12 (Reuters) - U.S. President Joe Biden said he was concerned about the impact of war in the Middle East on oil prices, which rose on Friday after the U.S. and Britain launched dozens of air strikes across Yemen on Houthi targets. WHY IT'S IMPORTANT Oil rose 1% on Friday as an increasing number of oil tankers diverted course from the Red Sea following the strikes. London and Washington say their strikes in Yemen were in retaliation for months of attacks by the Houthi movement on Red Sea shipping that the Iran-backed fighters cast as a response to Israel's ongoing war in Gaza. The move raised fear of the widening of the Gaza war. KEY QUOTES "I am very concerned," Biden told reporters on Friday when asked how concerned he was about the impact of the strikes in Yemen on oil prices, suggesting that impact was a key reason why the conflict should be stopped from widening. "That's why we got to stop it." BY THE NUMBERS Brent crude futures settled 88 cents, or 1.1%, higher at $78.29 a barrel. The session high was up over $3 to more than $80, its highest this year. CONTEXT The Houthi armed movement that took control of most of Yemen over the past decade has been attacking shipping at the mouth of the Red Sea - one of the world's busiest trade lanes - since October. The attacks have forced shippers to change course and take longer routes. The Houthis say their attacks have been a show of support for Palestinians under siege by Israel in Hamas-governed Gaza. https://www.reuters.com/business/energy/biden-cites-concern-impact-war-middle-east-oil-prices-2024-01-12/

2024-01-12 23:27

Jan 12 (Reuters) - Microsoft's (MSFT.O) stock market value ended a trading session higher than Apple's (AAPL.O) for the first time since 2021 on Friday, making it the world's most valuable company as worries about demand hit the iPhone maker's shares. Apple crept up 0.2% on Friday, while Microsoft added 1%. With that, Microsoft's market capitalization stood at $2.887 trillion, its highest ever, according to LSEG data. Apple's market capitalization was $2.875 trillion, calculated with data in a filing on Thursday. Worries about smartphone demand have pushed Apple's shares down 3% so far in 2024 after rallying 48% last year. Microsoft is up about 3% year to date after surging 57% in 2023 in a rally driven in part by its lead in generative artificial intelligence through an investment in ChatGPT-maker OpenAI. Apple's market capitalization peaked at $3.081 trillion on Dec. 14, according to LSEG. Microsoft has incorporated OpenAI's technology across its suite of productivity software, a move that helped spark a rebound in its cloud-computing business in the July-September quarter. Its AI lead has also created an opportunity to challenge Google's dominance of web search. Apple, meanwhile, has been grappling with tepid demand, including for the iPhone, its cash cow. Demand in China, a major market, has slumped as the country's economy makes a slow recovery from the COVID-19 pandemic and a resurgent Huawei [RIC:RIC:HWT.UL] erodes its market share. Sales of Apple's Vision Pro mixed-reality headset start on Feb. 2 in the United States, marking Apple's biggest product launch since the iPhone in 2007. However, UBS in a report this week estimated that Vision Pro sales would be "relatively immaterial" to Apple's earnings per share in 2024. A handful of times since 2018, Microsoft has briefly taken the lead over Apple as the most valuable company, most recently in 2021, when concerns about supply chain shortages related to the COVID-19 pandemic hit the iPhone maker's stock price. Both tech stocks look relatively expensive in terms of price to their expected earnings, a common method of valuing publicly listed companies. Apple is trading at a forward PE of 28, well above its average of 19 over the past 10 years, according to LSEG data. Microsoft is trading around 32 times forward earnings, above its 10-year average of 24. In its most recent quarterly report in November, Apple gave a sales forecast for the holiday quarter that missed Wall Street expectations, hurt by weak demand for iPads and wearables. Analysts on average see Apple posting revenue up 0.7% to $117.9 billion for the December quarter, according to LSEG. That would mark its first year-on-year revenue increase in four quarters. Apple reports its results on Feb. 1. Analysts see Microsoft reporting a 16% increase in revenue to $61.1 billion, lifted by ongoing growth in its cloud business when it reports in the coming weeks. https://www.reuters.com/technology/microsoft-edges-out-apple-worlds-most-valuable-company-2024-01-12/

2024-01-12 23:11

LATEST DEVELOPMENTS: Pentagon says strikes degraded Houthi attack capability White House's Kirby: We are not interested in a war in Yemen Russia's UN ambassador says strikes spread Gaza conflict to 'entire region' Biden calls Houthis a 'terrorist' group WASHINGTON/ADEN, Yemen, Jan 12 (Reuters) - U.S. and British warplanes, ships and submarines launched dozens of air strikes across Yemen against Houthi forces in retaliation for months of attacks on Red Sea shipping that the Iran-backed fighters cast as a response to the war in Gaza. Witnesses confirmed explosions at military bases near airports in the capital Sanaa and Yemen's third city Taiz, a naval base at Yemen's main Red Sea port Hodeidah and military sites in the coastal Hajjah governorate. "These targeted strikes are a clear message that the United States and our partners will not tolerate attacks on our personnel or allow hostile actors to imperil freedom of navigation," U.S. President Joe Biden said. White House spokesperson John Kirby said the strikes in the early hours of Friday had targeted the Houthis' ability to store, launch and guide missiles or drones. The Pentagon said the U.S.-British assault reduced the Houthis' capacity to launch attacks, especially complex operations such as those they carried out earlier in the week. The U.S. military said 60 targets in 28 locations had been hit, using more than 150 munitions. "I know we have degraded (their) capability," U.S. Lieutenant General Douglas Sims told a media briefing. "I don't believe that they would be able to execute the same way they did the other day. But we will see." The Houthis, who have controlled most of Yemen for nearly a decade, said five fighters were killed in 73 air strikes. They vowed to retaliate and continue their attacks on shipping, which they say are intended to support Palestinians against Israel. The UK Maritime Trade Operations information hub said it had received reports of a missile landing in the sea around 500 metres (1,600 feet) from a ship about 90 nautical miles southeast of the Yemeni port of Aden. The shipping security firm Ambrey identified it as a Panama-flagged tanker carrying Russian oil. In Yemen, crowds gathered in cities. Drone footage on the Houthis' al-Masirah TV showed hundreds of thousands of people in Sanaa chanting slogans denouncing Israel and the United States. "Your strikes on Yemen are terrorism," said Mohammed Ali al-Houthi, a member of the Houthi Supreme Political Council. "The United States is the Devil." Biden, whose administration removed the Houthis from a State Department list of "foreign terrorist organisations" in 2021, was asked by reporters if he felt the term "terrorist" described the movement now. "I think they are," he said. At the United Nations, the Security Council was due to meet late on Friday about the Red Sea crisis. Sparked by Israel's onslaught on the Palestinian enclave of Gaza, which is ruled by another Iran-backed Islamist group, Hamas, it has raised concerns about the potential for a larger Middle East conflict. Russia's U.N. Ambassador Vassily Nebenzia said the U.S. and Britain "singlehandedly triggered a spillover of the conflict (in Gaza) to the entire region." In Washington, Kirby said, "We're not interested in ... a war with Yemen." In Yemen, a poor country only just emerging from nearly a decade of war that brought millions to the brink of famine, people fearing an extended new conflict queued at gas stations. "We are rushing to fuel our car and we bought flour and rice in case of any emergency because we are expecting the Houthis to respond and an escalation to take place," said Ali Ahmad, 52. OIL PRICE JUMPS The price of Brent crude oil rose more than $2 on concern that supplies could be disrupted, before later giving up half its gain. Biden expressed concern about the impact of the Middle East conflict on oil prices. Commercial ship tracking data showed at least nine oil tankers stopping or diverting from the Red Sea. INTERTANKO, an oil tanker industry body, sent a note to members saying the U.S.-led Combined Maritime Forces had advised ships to "stay well away from Bab al-Mandab", the mouth of the Red Sea where 15% of global seaborne trade passes, for several days. Houthi attacks have forced commercial ships to take a longer, costlier route around Africa, creating fears of a new bout of inflation and supply chain disruption. Container shipping rates for key global routes have soared this week. Carmakers Tesla and Volvo, owned by China's Geely, said delays to parts shipments from Asia had forced them to suspend some production in Germany and Belgium respectively, the first big manufacturers to make such announcements. MONTHS OF RAIDS The strikes follow months of raids by Houthi fighters, who have boarded ships they claimed were Israeli or heading for Israel. The United States and some allies sent a naval task force in December, and recent days saw increasing escalation. On Tuesday, the United States and Britain shot down 21 missiles and drones. However, not all major U.S. allies chose to back the strikes. The Netherlands, Australia, Canada and Bahrain provided logistical and intelligence support, while Germany, Denmark, New Zealand and South Korea signed a joint statement defending the attacks and warning of further action. But Italy, Spain and France chose not to sign or participate, fearing a wider escalation. Egypt, which controls the Suez Canal linking the Red Sea to the Mediterranean, expressed deep concern. A senior U.S. official accused Tehran of providing the Yemeni group with military capabilities and intelligence to carry out their attacks. Iran condemned the strikes. In a posting on the X platform, Iranian Foreign Minister Hossein Amirabdollahian said the White House could "restore security across the region" by stopping its "all-out military and security cooperation" with Israel against the people of Gaza and the West Bank. Iran-backed groups have increased attacks on U.S. targets in several countries since Hamas militants attacked Israel on Oct. 7, killing 1,200 people and precipitating the war in Gaza, which has so far killed more than 23,000. https://www.reuters.com/world/us-britain-carry-out-strikes-against-houthis-yemen-officials-2024-01-11/

2024-01-12 23:04

HOUSTON, Jan 12 (Reuters) - Oil and gas activity in the U.S. Midwest and Rockies fell sharply in the fourth quarter, but is expected to recover over the next six months despite a weak outlook for natural gas, according to a survey released on Friday by the Federal Reserve Bank of Kansas City. The drilling and business activity fell to -33 from -13, according to the survey, which polls producers from states including Colorado, Wyoming, Oklahoma and the northern half of New Mexico. Lower natural gas prices in last six months of 2023 likely pressured the drop in activity, Chad Wilkerson, a senior vice president at the bank said. U.S. gas futures plunged by 44% in 2023, while crude oil futures fell 11%, prompting a 20% drop in the total number of drilling rigs in the country last year. Activity is anticipated to pick up modestly in the next six months, but survey participants expect profits to stay flat, hampered in part by lower natural gas prices. Henry Hub gas prices are projected to average just $2.50 per million Btu in six months, below the $3.12 per mmBtu needed to drill profitably, according to the survey. “There is an abundant supply of natural gas, driven mostly as a by-product of oil drilling,” said an unnamed survey participant. Gas prices need to rise to $4.04 per mmBtu to spur a substantial increase in drilling, participants said, but they do not anticipate Henry Hub to average over $4 for the next five years. Henry Hub futures settled at $3.31 on Friday, up roughly 8% ahead of extreme cold across much of the country. The outlook for oil prices was more upbeat, with respondents anticipating crude prices to average $75 a barrel within six months, well above the $64 a barrel needed to make a profit. Oil prices would need to average $84 a barrel to substantially increase drilling, they said. U.S. crude futures settled at $72.68 on Friday. Only 40% of firms said they expect to increase capital spending in 2024, while roughly another 40% anticipate decreasing spending. “Lack of infrastructure will prohibit being able to develop and connect supplies to growing markets," said one survey participant. The survey was conducted between Dec. 15 and Jan. 3 and included 31 responses from firms in the U.S. Midwest and Rockies. https://www.reuters.com/business/energy/oil-gas-activity-us-midwest-rockies-falls-4q-fed-survey-2024-01-12/

2024-01-12 22:49

Jan 12 (Reuters) - Airlines in the United States canceled more than 2,000 flights on Friday after a massive winter storm knocked out power and affected businesses in 12 states ahead of a likely brutal freeze over the weekend. A total of 2,058 flights were canceled and 5,846 flights were delayed as of 5.30 p.m. ET, according to flight-tracking website FlightAware. Southwest Airlines (LUV.N) led the list of cancellations with 401 flights, followed by SkyWest (SKYW.O) at 358. "We expect some operational challenges due to the weather in the Midwest today and potentially tomorrow due to the winter weather in the region," Delta Air Lines (DAL.N) said. Southwest Airlines said in a travel advisory that some of its flights in Chicago, Detroit and Omaha could be impacted. The Federal Aviation Administration (FAA) had on Thursday warned that clouds, snow and windforce could delay flights at certain airports. United has scrapped 284 flights so far, with some cancellations extending to Saturday as it awaits regulatory nod to resume operating Boeing's (BA.N) 737 MAX 9 jets. The carrier said in a statement that it was operating some planned flights by switching to other aircraft types. The FAA had on Thursday launched a formal investigation on 737 MAX 9 after a cabin panel blew off an Alaska Airlines (ALK.N) flight last week in mid-air, forcing an emergency landing. https://www.reuters.com/world/us/us-airlines-cancel-over-1200-flights-due-massive-winterstorm-2024-01-12/

2024-01-12 22:20

CHICAGO, Jan 12 (Reuters) - Tens of millions of Americans were in the pathway of dangerous and damaging weather conditions as snowstorms moved across the Northwest and Midwest, flooding threatened the East Coast and potential tornadoes were on tap in the South. Airlines delayed more than 7,600 flights across the U.S. on Friday, including planes grounded at Chicago's O'Hare International Airport due to winds and blinding snow. In Iowa, Republican presidential candidates canceled events three days out from the state's caucuses, the first of the state-by-state contests in which parties pick their nominees ahead of November's general election. Blizzards arrived in much of the upper Midwest on Friday morning with heavy snows and fierce winds of up to 60 miles per hour (96 kph) that were expected to continue into Saturday, the National Weather Service (NWS) warned. More than 133,000 homes and businesses lost power in Michigan, according to data from PowerOutage.US. The lights went out for another 150,000-plus customers in Wisconsin, West Virginia, Ohio and Pennsylvania. "This storm system is definitely dangerous," said Zack Taylor, a meteorologist with the NWS' Weather Prediction Center in College Park, Maryland. The service cautioned against unnecessary travel, noting that visibility on some roads in Chicago was less than half a mile. Taylor warned of risks of frostbite and hypothermia in Iowa, where temperatures for most of the state were forecast to drop below zero degrees Fahrenheit (minus 18 degrees Celsius). The forecast for Monday in Des Moines, the state capital, was a low of minus 18 F (minus 28 C). Temperatures for Monday's caucuses, which entail long meetings in churches and school gyms, are expected to be the coldest on record for that political event. Republican presidential candidate Nikki Haley, a former ambassador and South Carolina governor, canceled all three campaign events planned for Friday, substituting them for phone-in events. Fred Schuster, 68, braved Friday morning's blizzard to watch Ron DeSantis, Florida's governor, campaign in Ankeny, Iowa. "I am worried about the weather," Schuster said. "I think it's going to impact how many people attend the caucuses." Officials canceled a planned rally in Pella, Iowa, for supporters of Donald Trump, who is seeking a second White House term after losing 2020's election. By midmorning on Saturday, there could be 3 to 6 inches of snow in downtown Chicago. Throughout Friday, as the snow falls, strong winds could bring whiteout conditions. Chicago Public Schools remained open while dozens of other districts across the metro region canceled in-person classes for the day. The snow and wind contributed to 2,230 flight cancellations and more than 7,600 delays of flights within, into or out of the United States on Friday, according to FlightAware, with Chicago's O'Hare and Midway airports topping the list. Milwaukee, Wisconsin, is expected to receive some of the heaviest snow as the blizzard will drop 12 to 18 inches, with wind gusts up to 40 mph through the weekend. Western New York, including Buffalo, could get more than a foot of snow. But after this system pushes east, "lake-effect" snow could bring several more inches through Monday to the Buffalo area. Another 13 million people who live near the Atlantic Ocean or large waterways in Virginia north into New England were under the threat of flooding from heavy rains and snows over the past few days. To the south in Mississippi, some 3 million people were under the threat of tornadoes and severe thunderstorms as the NWS warned that the winds of up to 60 mph could damage roofs and take down trees and power lines. A winter storm system was also hitting the Pacific Northwest on Friday, and tracking through the Central Rockies with heavy snow that could drop "a couple feet of snow" at the higher elevations over the weekend, Taylor said. https://www.reuters.com/world/us/winter-weather-dumps-snow-us-midwest-threatens-east-coast-with-flooding-2024-01-12/