2023-12-14 23:44

Dec 14 (Reuters) - Peru's central bank on Thursday cut its interest rate by 25 basis points to 6.75%, in line with expectations and as the speed of price increases in the Andean nation comes under control amid a recession. The monetary authority signaled in a statement that the rate cut did not necessarily imply more would follow. The central bank's fourth-consecutive cut comes as Peru's annual inflation rate slowed to 3.64% in November, nearing the upper end of the bank's target range of 1% to 3%. "Annual inflation is projected to reach the target range within the next few months," the central bank said. Annual core inflation, which strips out some volatile items such as food and energy, is projected to come within target by the end of 2023, the bank added. "This would be explained by the moderation of international price effects on several items, the reversal of supply shocks in the agricultural sector and the expectation of reduced inflation," the monetary authority said. "However, there are risks associated with climatic factors coming mainly from the El Nino weather phenomenon." Peru, the world's No. 2 copper producer, has been battling a technical recession this year on the adverse impacts of El Nino, lower private investment and lingering effects from social conflicts sparked late last year. The government has since announced a slew of measures meant to kickstart the economy. https://www.reuters.com/markets/rates-bonds/peru-again-cuts-interest-rate-inflation-eases-2023-12-14/

2023-12-14 23:37

Dec 14 (Reuters) - Freeport LNG, which operates the second-largest U.S. liquefied natural gas export plant in Texas, agreed with the U.S. Environmental Protection Agency to settle safety violations related to a June 2022 blast that caused some $275 million in damage to the facility. The consent agreement dated Monday, made public by Freeport LNG in a filing with the Federal Energy Regulatory Commission (FERC) on Thursday, included a civil penalty of $163,054 for breaking chemical accident prevention rules under the Clean Air Act. The settlement follows allegations by the EPA that Freeport LNG failed its duty to maintain a safe facility, did not implement recommendations from a 2021 hazard analysis, and failed to punctually update its emergency contact information. Under the settlement, Freeport LNG neither admitted nor denied the allegations. The incident occurred at its Texas Gulf Coast plant in Quintana, Texas. Three weeks ago, the FERC approved Freeport LNG's request to return its plant to full operation, after it remained shut for about eight months from June 2022 to February 2023 after a fire. When operating at full power, the three liquefaction trains at Freeport LNG can turn about 2.1 billion cubic feet per day (bcfd) of gas into LNG. One billion cubic feet of gas is enough to supply about 5 million U.S. homes for a day. On Wednesday, Freeport LNG, which has had several incidents that caused liquefaction trains to trip over the past few months, reported issues with the upstream gas feed at the Texas Gulf Coast facility. https://www.reuters.com/business/energy/freeport-lng-settles-with-us-epa-over-safety-failures-june-2022-texas-blast-2023-12-14/

2023-12-14 23:23

WASHINGTON, Dec 14 (Reuters) - Natural gas and coal plants in Texas, California and North Dakota will share up to $890 million in U.S. funding for projects to demonstrate the viability of carbon capture technologies, the U.S. Energy Department said on Thursday. Carbon capture and storage, or CCS, is an emerging technology that the administration of President Joe Biden says is vital to help fight climate change. CCS plants aim to pull carbon dioxide emissions from fossil fuel plants before they reach the atmosphere for storage underground. Many environmentalists oppose CCS, saying it has a history of failure and could extend reliance on fossil fuels. Project Tundra, in Center, North Dakota, which is adjacent to the Milton Young lignite coal plant got $350 million. Senator Kevin Cramer, a Republican, said in a release it will be a "major feather in the cap for North Dakota's innovative energy system, keeping miners on the job while putting clean, reliable electricity on the grid." The Energy Department said the projects have the potential to prevent about 7.75 million metric tons a year of CO2 from being released, equal to the emissions of about 1.7 million gasoline-powered cars. Other projects getting the 2021 bipartisan infrastructure law funding include a CCS system at the Baytown Energy Center natural gas plant in Texas, and one at the Sutter Energy Center gas plant in Yurba City, California. A Congressional Budget Office report said this week there are 15 CCS plants operating in the U.S. with the capacity to capture just 0.4% of the country's annual CO2 emissions. Almost all of the plants recoup some of their costs by pumping CO2 into aging oilfields to squeeze out more crude. CBO said the extent to which CCS will be used in the future is "highly uncertain" depending on changes in the costs and availability of pipeline networks to transport CO2. https://www.reuters.com/sustainability/climate-energy/us-awards-up-890-million-carbon-capture-projects-gas-coal-plants-2023-12-14/

2023-12-14 22:00

WINNIPEG, Manitoba, Dec 14 (Reuters) - Canadian government-owned Trans Mountain Corp (TMC.UL) asked the country's energy regulator on Thursday to reverse a decision rejecting proposed construction changes on its oil pipeline expansion, warning of a possibly "catastrophic" two-year delay and billions of dollars in losses. If Trans Mountain goes ahead with the construction plan that is currently approved, complications could result in a borehole for the pipeline becoming compromised, forcing Trans Mountain to find an alternative installation plan, the company said in a letter to the Canada Energy Regulator (CER). The CER this month had denied Trans Mountain's request for a variance on a section of pipeline under construction in British Columbia. Trans Mountain had asked to be allowed to install smaller diameter pipe in a 1.4-mile (2.3-km) section of the oil pipeline's route after encountering difficult drilling conditions due to the hardness of the rock in a mountainous area between Hope and Chilliwack. The CER decision was yet another setback for the over-budget, delayed C$30.9-billion ($23.05 billion) expansion project (TMEP), intended to triple shipments of crude from Alberta to Canada's Pacific coast to 890,000 barrels per day once it starts operating. In Thursday's letter, Trans Mountain said the hard rock conditions and fractured areas within the bedrock have allowed high rates of water ingress, causing complications. Those problems are likely to worsen if Trans Mountain has to proceed with installing larger-diameter pipe, it said. "If the (horizontal directional drill) fails and Trans Mountain is required to implement an alternative installation plan, the TMEP schedule will likely be delayed by approximately two years, and Trans Mountain will suffer billions of dollars in losses," the company said. Trans Mountain asked for a decision no later than Jan. 9 to stick to its current schedule. The Trans Mountain expansion is due to start shipping oil by the end of March 2024. Trans Mountain had previously warned of a shorter delay of 59 days if it was forced to install larger-diameter pipe. Given the new information provided by Trans Mountain, the CER will likely approve its request, Stifel analyst Michael Dunn said in a note. Concerns about delays have increased the discount this month on Canadian heavy crude compared to the North American benchmark. Oil producers have been raising output in anticipation of expanded options to export their oil to refineries in California and Asia. The CER could not be immediately reached. Construction of the Trans Mountain expansion is 97% complete. ($1 = 1.3405 Canadian dollars) https://www.reuters.com/sustainability/trans-mountain-pipeline-warns-2-year-delay-over-regulatory-setback-2023-12-14/

2023-12-14 21:48

Dec 15 (Reuters) - A look at the day ahead in Asian markets. Asian markets are set to end the week on the front foot as another steep slide in the dollar and U.S. bond yields extends the Fed-fueled buying frenzy, although some investors may be tempted to take some chips off the table ahead of the weekend. The Dow climbed to a fresh all-time high on Thursday and the S&P 500 and Nasdaq made new 2023 highs, while the MSCI emerging market and Asia ex-Japan indexes both rose around 2%. Unless the MSCI World index slumps around 2.5% on Friday it will chalk up its seventh weekly rise in a row, its best run in six years. That should provide enough momentum to keep Asia in the green on Friday, although a batch of Chinese economic indicators and central bank decision on one-year lending rates could knock markets off course. The latest Chinese retail sales, industrial production, business investment, unemployment and house price data for November will be released, and investors will be looking for signs of growth or, in some cases, accelerating growth. China's central bank, meanwhile, is expected to keep its one-year lending rate steady but increase liquidity injections. But sentiment around China's economy and markets is bleak, and it will take more than a few data points to lift meaningfully. The underperformance of Chinese stocks is the main reason Asian markets have lagged their U.S. and global peers. Since the last week of October, in which time U.S. and global indexes have jumped 15% or more, the MSCI emerging and Asia ex-Japan indexes have risen 10%. The Chinese blue chip CSI 300 index is in the red, down 13% this year, and is near a five-year low. The bullish narrative global markets are running with, however, is that the U.S. economy will achieve its 'soft landing,' giving the Fed room to pivot towards rate cuts earlier and more aggressively than many had thought. That was given an implicit seal of approval by the Fed itself in the revised Summary of Economic Projections. But as is invariably the case, markets may have overshot. The two-year U.S. yield is down 35 basis points this week, the 10-year yield has crashed below 4% and markets are pricing in 150 bps of Fed rate cuts next year - twice as much as the Fed's median forecasts indicate. There are other reasons to warrant caution - the European Central Bank and Bank of England don't appear to be willing to follow the Fed's dovish lead, Norway's central bank raised rates on Thursday, and oil jumped more than 3% on Thursday. And next week we have the Bank of Japan's policy meeting, potentially the biggest curveball of the year. Here are key developments that could provide more direction to markets on Friday: - China retail sales, unemployment, house prices, business investment, industrial production (November) - Japan flash PMIs (December) - Australia flash PMIs (December) https://www.reuters.com/markets/asia/global-markets-view-asia-pix-2023-12-14/

2023-12-14 21:20

Dec 14 (Reuters) - Walt Disney (DIS.N) is bracing for a bitter proxy battle as activist investor Nelson Peltz nominated himself and an ally to Disney's board, his second attempt this year to gain sway over the company's strategy. The looming battle comes at a pivotal time for Disney, as the company is trying to reinvigorate its creative franchises, make its streaming business profitable and find partners to help build ESPN's digital future. Peltz's Trian Fund Management, which owns roughly $3 billion worth of Disney shares, abandoned a bid for one board seat in February when the media conglomerate outlined a sweeping restructuring plan that addressed his criticisms. Trian nominated Peltz and former Disney Chief Financial Officer James "Jay" Rasulo on Thursday. "As Disney's largest active shareholder, we can no longer sit idly by as the incumbent directors and their hand-picked replacements stand in the way of necessary change," Trian said in a statement, laying out the case for its two independent director candidates. After having signaling that he might nominate as many as four directors, Peltz cut the number to two. The decision came after Disney revamped its bylaws and after the company announced it was adding two new directors. "Disney is one of the most iconic companies in the world, with unrivaled scale, unparalleled customer loyalty, irreplaceable intellectual property, and enviable commercial flywheel," Trian said in a statement issued Thursday. "However, Disney has woefully underperformed its peers and its potential." Disney's stock price rose 1.1% to $93.94 on Thursday. Shares are up 8% in 2023; the broad-market S&P 500 has gained more than 20% in that time. "I’m less worried about the distraction (of a proxy war) and more worried about how complicated this all is," said LightShed Partners media analyst Rich Greenfield. "There are so many issues, all at once, all while doing the largest cost-cutting in the company’s history." Rasulo joined Disney in 1986 and worked in a variety of positions before being named chair of Walt Disney Parks and Resorts in 2002, where he oversaw a major expansion of the California Adventure theme park at the Disneyland Resort. One former Disney executive who worked with Rasulo described him as a financially savvy operator who could nonetheless be hard-nosed and sarcastic, whose leadership style was a contrast to the affable, polished Iger. Together, Peltz and Rasulo are positioning themselves to other investors as the people the company needs now to cut costs, lay out a sensible succession plan and revamp the company's streaming operations. Rasulo became Disney's CFO in 2010, swapping jobs with then-CFO Tom Staggs. The exercise was viewed at the time as broadening each executive's management experience as they vied for the No.2 job at Disney, positioning the winning candidate as a likely successor to Chief Executive Bob Iger. He left Disney in 2015, after being passed over as chief operating officer. The victor in the executive sweepstakes, Staggs, left Disney a year later, after learning he would not get the top job. Trian criticized Disney's financial performance, noting its per-share earnings in the most recent fiscal year are lower than a decade ago. Margins on the company's streaming business and its media operations lag peers, Trian argues. And movie releases continue to underperform expectations. "For shareholders, this subpar performance has destroyed value," Trian wrote. Trian argues that Disney's non-management directors collectively own less than $15 million of Disney stock, and Iger also sold the majority of his ownership stake, suggesting the board and CEO "have no conviction that things will get better." Peltz's fund argues that the "root cause of Disney's underperformance" is that the board is too closely aligned with Iger and lacks "focus, alignment and accountability." Disney issued a statement, saying its diverse and highly qualified board is focused on the long-term performance of the company, strategic growth initiatives including the company's ongoing transformation of its businesses, increasing shareholder value, and finding a successor to Iger. The company notes Trian is in partnership with Isaac Perlmutter, a longtime Marvel Entertainment executive who was ousted in March. Over the past 12 months, Disney has restructured the company and significantly reduced costs. It told investors last month it is on track to achieve about $7.5 billion in cost savings – $2 billion more than its original target. Disney has also said it would work to make its streaming business profitable, build ESPN into the "pre-eminent" digital sports brand, improve the performance of its film studios and "turbocharge" growth at its theme parks, through $60 billion in investment over the next decade. Trian said that since it gave Disney the time "to prove it could right the ship" in February, up to its re-engagement weeks ago, shareholders lost about $70 billion of value. Disney had announced the appointment of James Gorman, chair and chief executive of Morgan Stanley, and Jeremy Darroch, a veteran media executive and former group chief executive of Sky, as new directors last month. https://www.reuters.com/business/media-telecom/disney-prepares-bitter-battle-activist-peltz-seeks-two-board-seats-2023-12-14/