2023-12-26 17:53

CAIRO, Dec 26 (Reuters) - Saudi Arabia's cabinet on Tuesday announced its approval of contracting regulations for firms that do not have regional headquarters in the Kingdom, Saudi state news agency SPA reported. The decision comes just days before Saudi Arabia's January 2024 deadline for companies to move their regional headquarters to the kingdom or risk losing hundreds of billions of dollars in lucrative government contracts. The statement on the cabinet meeting did not disclose the regulations. It is not clear if they permit the government to award contracts to foreign companies that do not have regional headquarters in Saudi Arabia. Saudi officials did not immediately respond to requests for comment outside regular business hours. Finance Minister Mohammed Al Jadaan told Reuters in October that the deadline for a move would be enforced, even as foreign firms struggled to meet the deadline amid unclear regulations. The ultimatum, part of efforts by Crown Prince Mohammed bin Salman to wean the economy off oil and draw foreign business into the kingdom, puts Riyadh in competition with its neighbour the United Arab Emirates, the traditional financial hub of the region. https://www.reuters.com/world/middle-east/saudi-cabinet-approves-contracting-rules-firms-not-based-there-2023-12-26/

2023-12-26 17:51

Dec 26 (Reuters) - U.S. retail sales rose 3.1% between Nov. 1 and Dec. 24, as shoppers looked for last-minute Christmas deals amid big promotions, a Mastercard report showed on Tuesday. The increase is lower than the 3.7% growth Mastercard forecast in September and last year's 7.6% rise as higher interest rates and inflation pressured consumer spending. Amazon.com and Walmart (WMT.N) ramped up promotions through November in the United States to entice bargain-hunting shoppers, but analysts said that the discounts were not as deep as the prior year, when retailers were saddled with excess stock after the pandemic. Some of those discounts were rolled back starting in December, when customers were expected to buy last-minute gifts and household goods on the Saturday before Christmas - dubbed "Super Saturday." Arun Sundaram, an analyst at CRFA Research, said many shoppers waited for Black Friday and Cyber Monday to make holiday purchases and finished the final sprint during Super Saturday. "Consumers are still spending, but they're still price conscious and want to stretch their budgets," Sundaram said. He said the weeks between Cyber Monday and Super Saturday were a "soft period" for spending, but shoppers used the final weekend before Christmas to look for "big deals." Ecommerce sales grew at the slower pace of 6.3% compared to last year's 10.6% as the popularity of online shopping came off pandemic highs, the report showed. Sales in the apparel and restaurant categories rose 2.4% and 7.8%, respectively, during the holiday shopping period, according to the Mastercard SpendingPulse report, while sales of electronics fell 0.4%. Mastercard SpendingPulse measures in-store and online retail sales across all forms of payment. It excludes automotive sales. https://www.reuters.com/markets/us/us-retail-sales-grow-31-during-holiday-season-mastercard-report-2023-12-26/

2023-12-26 16:55

NEW DELHI, Dec 26 (Reuters) - India said on Tuesday it had signed agreements with Russia for future units of the Kudankulam Nuclear Power Project in the southern state of Tamil Nadu. Foreign minister Subrahmanyam Jaishankar, who is on a visit to Russia, is expected to hold talks with his Russian counterpart Sergei Lavrov on Wednesday, and the two ministers plan to discuss bilateral ties as well as the conflicts in Ukraine and Gaza and issues related to groups such as BRICS. "Today, in the presence of Deputy Prime Minister Denis Manturov, we signed some important agreements pertaining to future units of the Kudankulam Nuclear Project," Jaishankar said at a gathering with the Indian community in Moscow on Tuesday. Construction of the first two units began nearly two decades ago as part of a project signed by both countries. New Delhi and Moscow have enjoyed a close relationship for decades and India has refused to condemn Russia over the war with Ukraine. https://www.reuters.com/world/india/india-russia-sign-deal-future-units-nuclear-power-plant-2023-12-26/

2023-12-26 15:54

NEW YORK, Dec 26 (Reuters) - Annual home prices in October rose again, pointing toward continued recovery of the housing market, data on Tuesday showed. A Federal Housing Finance Agency (FHFA) report showed home prices grew 6.3% on a yearly basis, up from a revised 6.2% the month prior. Annual price growth began to accelerate in June after declining steadily since February 2022. Prices increased moderately by 0.3% on a month-to-month basis after climbing by 0.7% the month before. Rates on the most common home loan neared 8% in October, reaching a two-decade high on the back of the Federal Reserve's rate hike cycle. The Fed left its policy benchmark interest rate unchanged for three consecutive meetings, bolstering expectations of a closing rate hike cycle and stoking a rally in the bond market. The average rate on a 30-year fixed-rate mortgage fell below 7% in December, as yields on mortgage-backed securities headed down. Existing home sales have risen moderately since then, gaining 0.8% in November and indicating softening rates may draw sellers from the sidelines and open up inventory to prospective buyers, a National Association of Realtors report released in December showed. "The lack of inventory in the housing market has continued to affect the sector and has reduced the effects of higher mortgage rates," said Eugenio Aleman, chief economist at Raymond James. "This decline in mortgage rates is likely to push future HPI readings higher as more buyers enter the market and the supply of homes remains limited." A separate national price index released by S&P Core Logic/Case-Shiller showed home prices gained by 4.8% on a yearly basis in October, the largest rate this year. The Mid-Atlantic and New England regions experienced the largest gains in October, of 9.9% and 9.7%, respectively, according to the FHFA report. On a city basis, Detroit and San Diego posted the largest annual growth in home prices, the Case-Shiller data showed. https://www.reuters.com/markets/us/annual-home-prices-rise-again-fhfa-2023-12-26/

2023-12-26 11:45

VIENNA, Dec 26 (Reuters) - Iran has reversed a slowdown in the rate at which it is enriching uranium to up to 60% purity, close to weapons grade, returning to a rate of around 9 kg a month from the reduced rate of 3 kg, the International Atomic Energy Agency said on Tuesday. "The IAEA confirmed that Iran had increased the production of UF6 (uranium hexafluoride) enriched up to 60% U-235 to approximately 9 kg per month since the end of November at these two facilities combined," the U.N. nuclear watchdog said in a statement, referring to sites at Fordow and Natanz. https://www.reuters.com/world/middle-east/iran-undoes-slowdown-enrichment-uranium-near-weapons-grade-iaea-2023-12-26/

2023-12-26 11:02

HOUSTON, Dec 26 (Reuters) - The oil and gas industry went on a $250 billion buying spree in 2023, taking advantage of companies' high stock prices to secure lower-cost reserves and prepare for the next upheaval in an industry likely to undergo more consolidation. A surge in oil demand as world economies shook off the pandemic downturn has stoked acquirers' enthusiasm. Exxon Mobil (XOM.N), Chevron Corp (CVX.N) and Occidental Petroleum (OXY.N) made acquisitions worth a total of $135 billion in 2023. ConocoPhillips (COP.N) completed two big deals in the last two years. The grand prize in this dealmaking is the largest U.S. shale-oil field, the Permian Basin in west Texas and New Mexico. The four companies are now positioned to control about 58% of future production there. Each aims to pump at least 1 million barrels per day (bpd) from the oilfield, which is expected to produce 7 million bpd by the end of 2027. And more transactions are on the horizon. Three-quarters of energy executives polled in December by the Federal Reserve Bank of Dallas expected more oil deals worth $50 billion or more to pop up in the next two years. Endeavor Energy Partners, the largest privately held Permian shale producer, is exploring a sale that could further concentrate U.S. shale oil output. "Consolidation is actively changing the landscape," said Ryan Duman, director of Americas upstream research at energy consultancy Wood Mackenzie. "A select few companies will determine whether (production) growth will be strong, more stable or somewhere in between." The consolidation will have spillover effects on oilfield servicers and pipeline operators. The companies that provide drilling, hydraulic fracturing and sand and transport oil and gas to market are entering an era of fewer customers wielding more power over pricing. "Consolidation is good for producers but doesn't help service companies at all. It will squeeze their margins as existing contracts are renegotiated," said an executive with a U.S. oil producer who declined to be identified because he was not authorized to speak publicly. Pipeline operators face their own consolidation wave with fewer new oil and gas pipes being approved and built, said Rob Wilson of pipeline experts East Daley Analytics. Expansions to existing lines out of the Permian Basin will provide some relief, but by mid-2025 pipeline capacity from the Permian will be 90% full, estimates East Daley. HANGING ON TO CASH The latest acquisitions illustrate oil companies' quest for untapped and lower-cost oil and gas reserves. Among the major deals of 2023 was Exxon's $59.5 billion bid for Pioneer Natural Resources and purchase of Denbury Inc for $4.9 billion. Chevron offered $53 billion for Hess (HES.N) and bought oil rival PDC Energy for $6.2 billion. Occidental will pay $12 billion for CrownRock. Helped by their strong share prices, most of the year's major acquisitions were stock swaps, not the big cash outlays that would jeopardize buyers' balance sheets if oil prices were to fall as they did in 2016 and 2020. Exxon, for example, is sitting on about $33 billion in cash, more than six times the amount it held four years ago. Andre Gan, a partner at Wong & Partners law firm and an M&A expert, said fossil fuels were attracting new investment again. Rising interest rates in 2023 made paying for acquisitions with stock more attractive to investors than funding new renewable energy projects with cash. Offshore wind projects in the U.S. and France were canceled due to increasing interest rates and supply chain costs. Producers have also recognized that the U.S. move toward renewable fuels, electric vehicles and greater energy efficiency will cut fossil fuel consumption and squeeze companies with high production costs. Oil demand globally rose about 2.3 million barrels per day (mbpd) in each of the last two years, to 101.7 mbpd. That increase tightened global stocks, helping bolster prices as OPEC and allies kept output constrained. Wood Mackenzie expects oil output to rise an average of about 250,000 bpd annually over the next five years, half the level of the prior five years as big oil companies focus on boosting cash flow rather than production. Growing slowly helps companies with untapped reserves control expenses and boost margins. Consolidation has prompted U.S. antitrust regulators to ask Exxon and Chevron for additional information on their purchases, pushing back deal closings. Both predict they will receive approval, pointing to the size of U.S. oil market and aggressive small rivals as signs that competition will remain robust. The emergence of fewer, bigger oil producers focused on extending the longevity of their fossil fuel businesses may put the companies in greater tension with governments prioritizing a shift to clean energy sources. Meanwhile, global oil prices are expected to be largely stable in 2024 after averaging about $83 per barrel in 2023, down from $99 in 2022. Analysts see oil in 2024 trading between $70 per barrel and $90, above the $64 a barrel average in 2019. https://www.reuters.com/business/energy/big-oil-enters-2024-strengthened-by-us-industry-consolidation-2023-12-26/