2023-12-11 04:20

Excess 2024 supply expected from growth in non-OPEC output China experiencing rising deflationary pressures Investors await central bank interest rate decisions Dec 11 (Reuters) - Oil prices settled up slightly on Monday as OPEC+ production cuts failed to fully offset worries around crude oversupply and softer fuel demand growth next year. Brent crude futures settled up 19 cents, or 0.3%, to $76.03 a barrel while U.S. West Texas Intermediate crude futures settled up 9 cents, or 0.1%, at $71.32. Both contracts jumped more than 2% on Friday but were down for a seventh straight week, their longest streak of weekly declines since 2018, on lingering oversupply concerns. "There is little doubt that the oil complex remains in a state of vulnerability," oil broker PVM's John Evans said in a note on Monday. Despite a pledge by the OPEC+ group, which comprises the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, to cut 2.2 million barrels per day (bpd) of crude oil production in the first quarter, investors remain sceptical about compliance. "Members participating in the output curtailments are not only seeing reduced revenue from smaller volumes but also from the price plunge that developed subsequent to the last OPEC+ decision," said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois. Output growth in non-OPEC countries is expected to lead to excess supply next year. RBC Capital Markets expects stock draws of 700,000 bpd in the first half, but only 140,000 bpd for the full year. "Prices will remain volatile and directionless until the market sees clear data points pertaining to the voluntary output cuts," RBC analysts said in a note. With cuts not implemented until next month, oil faces a volatile two months before clarity from any quantifiable compliance data, the analysts said. The latest consumer price index data from China, the world's biggest oil importer, showed rising deflationary pressures as weak domestic demand cast doubt over the country's economic recovery. Chinese officials on Friday pledged to spur domestic demand and consolidate and enhance the economic recovery in 2024. This week, investors are watching for guidance on interest rate policies from meetings at five central banks, including the U.S. Federal Reserve, as well as U.S. inflation data to assess the potential impact on the global economy and oil demand. Recent price weakness drew demand from the United States, which has sought up to 3 million barrels of crude for the Strategic Petroleum Reserve (SPR) in March 2024. "We know the Biden Administration is in the market looking to refill the SPR, which will provide support," IG analyst Tony Sycamore said in a note, adding that prices were also being supported by technical chart indicators. Meanwhile, a draft of a potential climate deal at the COP28 summit on Monday suggested a range of options countries could take to reduce greenhouse gas emissions, but omitted the "phase out" of fossil fuels many nations have demanded. U.N. Secretary General Antonio Guterres said a central benchmark of success for COP28 would be whether it yielded a deal to phase out coal, oil and gas use fast enough to avert disastrous climate change. https://www.reuters.com/business/energy/oil-extends-gains-us-strategic-reserve-purchase-2023-12-11/

2023-12-11 00:16

LONDON, Dec 11 (Reuters) - Global Futures and Options (GFO-X), a digital assets trading platform, said on Monday that Britain's M&G Investments (MNG.L) has led a $30 million second round of funding ahead of its launch. GFO-X is licensed by the UK's Financial Conduct Authority for global institutional investors to trade digital asset futures and options that will be cleared at the London Stock Exchange Group's Paris clearing arm LCH SA. M&G Investments, which provided most of the latest $30 million funding, is part of M&G Plc, and will have a seat on the board of GFO-X Holdings. "The strategic investment will fund GFO-X through its forthcoming launch and support future innovation in the regulated digital asset sector, enhancing trust and credibility in the market," GFO-X said in a statement. M&G portfolio manager Jeremy Punnett said the lack of regulated trading venues is materially hampering the growth of the crypto derivatives trading market. "The UK has the potential to become a global hub for crypto asset technology and investment, making London an excellent destination for GFO-X’s new global trading exchange," Punnett said. LSEG's LCH SA clearing arm in Paris said it will provide a regulated marketplace for bitcoin index futures and options. https://www.reuters.com/technology/britains-mg-invests-crypto-derivatives-platform-gfo-x-2023-12-11/

2023-12-10 23:09

Dec 10 (Reuters) - The PGA Tour said on Sunday that it has unanimously decided to advance discussions with Strategic Sports Group (SSG), a consortium of U.S.-based sports team investors that includes Fenway Sports Group. The PGA Tour Policy Board selected SSG to further negotiate with, even as talks with the Saudi Arabia's Public Investment Fund (PIF) continue to progress, according to a statement posted to PGA's website. "Further, the DP World Tour will continue to be an important part of the process as we build toward PGA TOUR Enterprises." PGA said. Fenway Sports Group are the owners of Major League Baseball's Boston Red Sox, as well as Premier League club Liverpool. The consortium also includes investment firm Cohen Private Ventures, New York Mets owner Steve Cohen's family office and private equity firm HighPost Capital. Reuters reported in September that Fenway Sports Group and Endeavor Group (EDR.N) were interested in investing in the PGA Tour and any potential transaction would rival PGA's deal with the PIF. https://www.reuters.com/sports/golf/pga-tour-advances-deal-talks-with-investors-including-fenway-sports-group-2023-12-10/

2023-12-10 22:05

Carbon pricing debated again at COP28 climate talks Corporate prices from under $1 to $1,600/metric ton - CDP Low prices raise concern over impact BOSTON/DUBAI/SAN FRANCISCO, Dec 11 (Reuters) - A growing list of global companies are setting a price or charging themselves for each metric ton of their carbon emissions, looking to shape their investments and business for future pollution taxes or other new climate rules. Their prices are all over the place, from less than $1 per metric ton of carbon emissions to $1,600, the most of any company worldwide, set by California drugmaker Amgen (AMGN.O). Regulators, too, have offered a range of prices, including the Biden administration's "social cost" of carbon, around $200, and a suggestion from the International Monetary Fund that it should be at least $85 by 2030. Incorporating the cost of carbon dioxide and other greenhouse gas emissions into business decisions has been a dream of climate activists for decades as a way to force corporations to cut emissions. While a standardized global carbon price is not going to be set at the COP28 climate summit underway in Dubai, the concept has many uses in business such as enabling executives to charge their own divisions extra to use power from fossil fuels, thus making renewables more attractive. "While there are other strategies to do so, failure to use this tool could imply that companies may be failing to adequately plan for the medium- to long-term realities of the cost of carbon," said Amir Sokolowski, global director for climate change at CDP. An analysis by the non-profit for Reuters found that 20% of 5,345 global companies making climate-related disclosures said they used an internal carbon price last year, up from 17% the year before. Another 22% planned to do so in the next two years, although historically only a fraction of the companies that planned to implement one have done so. The analysis from CDP, not previously published, reveals both that companies have embraced the new planning tool but also that much debate remains about what prices will spur significant action by companies to cut emissions. Shown the trends, several analysts told Reuters the emerging picture is one of executives getting ready for some type of new emissions regulation even if they lack a clear sense of what's ahead. Companies are "getting ready for the reality that it’s going to be required" said Columbia University economist Joseph Stiglitz. But the median prices are still too low to have a major impact on corporate decision-making, making the effort a "mixed bag", the Nobel Prize winner said. Companies do not have a simple path to follow, since using a high carbon price can dramatically change investment plans, while using a low one can bring charges of "greenwashing." Several executives who spoke with Reuters said internal pricing plans help them cut emissions and clarify the implications of capital spending and other business activities for the planet. Market prices for carbon offsets can range from $5 to $1,500 a metric ton, said Joe Speicher, chief sustainability officer at software maker Autodesk (ADSK.O). Autodesk has steadily raised its internal carbon price to $20. Ideally regulators would clarify how companies should treat emissions costs, Speicher said. "Wouldn't it be nice to have a public authority to help to create a more coherent market?" he said. The company uses the price to help identify things like the value of its investments in carbon-removal projects, he said. TYING IN TO MARKETS Various carbon markets operate globally, including the European Trading System, where carbon currently trades around $70 per metric ton. Many companies have designed their own internal mechanisms. When carmaker Volvo (VOLVb.ST) embraced internal carbon pricing, it could not find a good model to follow because "very, very few companies" used such prices throughout their business, Jonas Otterheim, Volvo's head of climate action, said in an interview. Volvo has incorporated a "shadow price" of 1,000 krona per metric ton, about $92, in decisions ranging from which model vehicles to produce to what materials to use in factories. Adding the cost of carbon pollution to aluminum, for instance, made using aluminum created with renewable energy a "super high priority" because it has less than a quarter of the carbon emissions of typically made material, he said. Similarly, Volvo reconsidered the real cost of its bigger cars as stricter EU rules come into effect. The discussion "actually made us change the whole volume planning of the company to say that we should not prioritize some cars versus other even though they look more profitable, because they will actually sort of give us a penalty that other cars won't," Otterheim said. Drugmaker Amgen assesses an "internal fee" of $1,000 per metric ton on higher-emitting projects. Proceeds are then used to fund emissions-cutting projects. For example, a utility expansion project in Ireland added $700,000 to its sustainability budget, a spokesperson said. In its 2023 CDP climate report, Amgen said it also uses an "investment evaluator" to judge whether to buy new emissions-reduction equipment, using an even higher price for carbon. "Sustainability projects that cost more than traditional projects but are less (than) $1,600 per (metric ton) of CO2e emissions reduced are considered reasonable for design," the report states. Amgen as a science-based company aims to be carbon-neutral within its own operations by 2027, the spokesperson said. A PRICE THAT BITES Several analysts who spoke with Reuters offered a range of views about what price companies should use. Gunther Thallinger, a board member of German insurer Allianz and a member of a U.N. climate advisory council, said a comprehensive global carbon market would be "a massive boost" to efforts to cut emissions. But the current variation in prices is a problem, especially with some prices below $5 per metric ton. "I fear this is going in the direction of greenwashing," he said. However, Anita McBain, head of EMEA ESG Research for Citi, said practical uses matter more than high prices. “We'd rather see a carbon price with teeth than one without. We'd rather see a $25 price that's actually influencing decisions versus a $75 price that's just a tick-the-box," she said. ___ For the latest news from companies, data, and decisions around ESG finance, sign up for the Sustainable Finance newsletter here. https://www.reuters.com/sustainability/no-global-carbon-price-some-companies-set-their-own-2023-12-10/

2023-12-10 21:48

Dec 11 (Reuters) - A look at the day ahead in Asian markets. Asian markets are set for a positive open on Monday, taking the baton from Wall Street on Friday after a surprise fall in the U.S. unemployment rate bolstered the view that an economic 'soft landing' will be achieved and recession avoided. Looked at through a 'good news is good news' prism, the rise in Treasury yields and the dollar on Friday should not be a drag on Asian and emerging markets, like they often are. The two-year U.S. yield posted its biggest rise since June after data showed that the unemployment rate fell to 3.7%. Any lingering hopes for a rate cut this week quickly vanished, and the first fully priced rate cut was pushed back to May next year from March. If the S&P 500 and Nasdaq's rise on Friday to their highest levels since early 2022 lifts most Asian markets on Monday, Chinese assets may struggle after figures this weekend showed that deflationary pressures intensified in November. Consumer prices fell 0.5% both from a year earlier and compared with October, much deeper than the median forecasts in a Reuters poll of 0.1% declines for both. The year-on-year decline was the steepest since November 2020. Factory-gate deflation deepened too - producer prices have been falling on a year-on-year basis or more than a year now - indicating rising deflationary pressures, weak domestic demand, and increasing doubt over the economic recovery. Figures like these will only deepen calls for more stimulus from Beijing, and are a reminder as to why Chinese markets are underperforming so much - China's blue chip CSI 300 index has lagged the MSCI World Index, S&P 500, and Nikkei 225 this year by 24%, 27% and 30%, respectively. A batch of major economic indicators from Beijing will be released on Friday - industrial production, retail sales, house prices, unemployment and business investment for November. The Asian economic and policy calendar is light on Monday - money supply and a quarterly business survey index from Japan, and industrial production figures from Malaysia are all investors have to get their teeth into. For the rest of the week, interest rate decisions from Taiwan and the Philippines, inflation data from India, and that data dump from China on Friday are the main regional calendar events. But market sentiment and direction will largely be driven by the key events in developed economies. They include policy meetings from the Bank of England and European Central Bank, U.S. inflation, and the one everyone is waiting for - the Federal Reserve's policy decision on Wednesday. The Fed is widely expected to keep its fed funds target range steady at 5.25-5.50%, so all eyes will be on the accompanying statement, policymakers' revised projections, and Chair Jerome Powell's press conference. Here are key developments that could provide more direction to markets on Monday: - Malaysia industrial production (November) - Japan money supply (November) - U.S. bills, 10-year note auctions https://www.reuters.com/markets/asia/global-markets-view-asia-pix-2023-12-10/

2023-12-10 21:24

DUBAI, Dec 11 (Reuters) - After being told by COP28 President Sultan al-Jaber to not "let me down", the almost 200 nations at the U.N. climate summit will be wrestling on Monday with the thorniest issue - whether to call for a wind down in the world's use of oil and gas. The COP28 presidency is expected to release a new draft text of what would be a hoped-for final deal from the summit. At that point, the negotiations kick into high-stress mode, with countries wanting language to "phase out" fossil fuels facing off against those who see them as an economic lifeline. For many countries resisting a fossil fuel mention, the final deal should focus instead on reducing climate pollution, rather than on the fuels that are causing it. Time for an agreement is running short, with the summit scheduled to end on Tuesday. And stakes are high - with the talks expected to continue well into Monday night. Any mention of fossil fuels would mark the first time countries have directly addressed them in 30 years of U.N. climate talks - something that the summit host, the United Arab Emirates, would hail as a success. For opponents, such as OPEC members Saudi Arabia and Iraq, any such move would be a hard sell at home. https://www.reuters.com/world/what-watch-cop28-monday-2023-12-10/