2023-12-01 21:18

Dec 1 (Reuters) - Michigan regulators on Friday approved Canadian pipeline company Enbridge Inc's (ENB.TO) application to build a tunnel under the Great Lakes to house its aging Line 5 oil pipeline, a major step forward for the $750 million project. Enbridge is planning to replace a section of the pipeline, which runs underwater for 4 miles (6.4 km) through the Straits of Mackinac between Lakes Michigan and Huron, to address concerns Line 5 could leak. The Michigan Public Service Commission (MPSC) approved Enbridge's siting application, finding there was a public need to protect the Great Lakes from the risk of an oil spill while also keeping the pipeline operating. "There are no feasible and prudent alternatives to the replacement project pursuant to the Michigan Environmental Protection Act (MEPA)," the MPSC said in a decision posted on its website. Calgary-based Enbridge still requires federal permits from the U.S. Army Corps of Engineers and construction is not expected to start before 2026. The company first submitted an application to build the tunnel in 2020 to address concerns Line 5 could leak. The 70-year-old pipeline carries 540,000 barrels per day from Superior, Wisconsin, to Sarnia, Ontario, and is at the center of a long-running legal dispute between Enbridge and the state of Michigan, which says it should be shut down. "With the MPSC’s decision, the Michigan agencies involved in the permitting process have given the go ahead for this critical project," Enbridge spokesperson Ryan Duffy said in a statement. The decision was criticised by some environmental groups opposed to the project, who say it is not necessary to keep Line 5 running in a world aiming to transition away from fossil fuels to cleaner sources of energy. "We are extremely disappointed in the commission’s actions today as they ignored warnings from safety and energy experts that a tunnel would continue to leave the Great Lakes and our climate at risk," said Bentley Johnson, from the Michigan League of Conservation Voters. https://www.reuters.com/business/energy/michigan-regulators-approve-enbridge-great-lakes-tunnel-oil-pipeline-2023-12-01/

2023-12-01 21:12

LONDON, Dec 1 (Reuters) - Festive cheer has come early to world markets (bar those dollar bulls) on growing certainty that central banks will start slashing interest rates next year. For sure, key U.S. jobs data will test the exuberance, while Australia's central bank could reinforce a view that rates have peaked. Here's your week ahead in financial markets from Ira Iosebashvili in New York, Kevin Buckland in Tokyo, Naomi Rovnick and Marc Jones in London and Yoruk Bahceli in Amsterdam. 1/ SANTA'S BEEN Christmas has come early with global stocks posting their best monthly performance in three years in November and global investment-grade bonds returning almost 4% - the best month on record going back to 1997 (.MERGBMI). Now, the early Santa rally risks running into a central bank Grinch. Markets price rate cuts as early as the first half of 2024. The U.S. Federal Reserve and the European Central Bank, wary of market euphoria loosening financial conditions, may start to push back. Whether equities and bonds can rise in tandem next year also feels doubtful. Stocks price in a benign economic scenario of lower borrowing costs and steady growth. Government bonds, which shine in recessions, have been boosted by signs that the impact of previous rate rises is starting to cause pain. Both cannot be right. 2/ GOLDILOCKS, WELCOME Will Goldilocks stick around? That's the question investors are pondering as they await the Dec. 8 U.S. jobs report after a rebound that has taken the S&P 500 within spitting distance of a fresh year high. The data will have to walk a fine line to satisfy the so-called Goldilocks narrative of cooling inflation and resilient growth that has boosted asset prices. Too strong a number would undercut bets that the Fed will begin easing monetary policy sooner than expected, presenting an obstacle to the searing fourth quarter rally in stocks and bonds. A weak number, on the other hand, could spark fears that the economy is beginning to roll over following 525 basis points of rate increases, potentially dulling risk appetite. Economists polled by Reuters expect the U.S. economy to have added 175,000 jobs in November, versus 150,000 in October. 3/ A HAWKISH HOLD? Cooler than expected consumer inflation has sounded the death knell for any expectations the Reserve Bank of Australia will hike rates on Tuesday. But investors are wary of a hawkish hold, with prices still elevated and new Governor Michele Bullock increasingly seen as more of a hawk than her predecessor. Traders currently put odds for a hike at the following meeting in February at about 1-in-3. The RBA will keep its key rate unchanged at 4.35% and a rate cut is not expected until late 2024, according to Reuters poll. Some hint of how soon the Bank of Japan can begin its own, much-delayed tightening campaign may come from the Tokyo CPI data, also on Tuesday. Whether business and the economy could even weather a return of higher interest rates will also be clearer from the Tankan corporate sentiment surveys and GDP data on Wednesday and Friday. 4/ TROUBLE AND STRIFE First political turmoil in Spain and Portugal and now upheaval in Germany and the Netherlands heralds fresh uncertainty ahead of a jam-packed 2024 election year. After November's constitutional court blow, Germany faces a 17 billion-euro ($18.54 billion) hole in next year's budget. No date has been set for the budget, so news from Berlin remains in focus and a fiscal correction means the economy is at risk of shrinking for a second straight year. And coalition talks are stumbling in the Netherlands after far-right, anti-EU Geert Wilders's shock election win. Turmoil in two EU heavyweights is unwelcome just as the bloc seeks more cash from members and finance ministers meet to iron out new fiscal rules on Friday. Bond vigilantes are watching for a deal giving leeway for public investments while taking debt sustainability seriously. All this as the first EU-China summit in four years on Dec. 7-8 looms. 5/ RIDING TIGERS Emerging market investing sometimes gets likened to riding a tiger - a lot of fun while you are on it but the dismount can be deadly. November has certainly been the enjoyable part. EM stocks (.MSCIEF) are up 7.5% for their best month since January. Bonds in both local currencies and dollars have made 6%, while a 10% rebound by Israel's shekel and 5-6% rises from central European currencies have hoisted MSCI's EM FX index (.MIEM00000CUS) to its highest since April 2022. Decembers have been generally kind too. That FX index has risen every December since a dip in 2015 and stocks have made decent gains in three out of the last four. It will depend on where bond yields and risk premia, or 'spreads', go from here of course, but many of the big investment houses are again sounding hopeful. ($1 = 0.9168 euros) https://www.reuters.com/business/take-five/global-markets-themes-takealook-2023-12-01/

2023-12-01 21:10

DUBAI, Dec 1 (Reuters) - World leaders are set to take the stage for a second day at the U.N. climate summit in Dubai on Saturday, as their governments lined up a slew of new pledges around green energy. Among the headliners expected to speak at COP28 are U.S. Vice President Kamala Harris, Barbados Prime Minister Mia Mottley and Ukrainian President Volodymyr Zelenskiy, whose video address had originally been scheduled for Friday. Governments also are poised to announce a promise to triple renewable energy capacity, boost nuclear energy capacity and rein in emissions of methane. Friday's first day at the summit highlighted tensions between the United Nations, whose secretary general urged leaders to commit to quitting fossil fuels, and the COP28's UAE hosts, who have urged cooperation with oil companies. Some leaders also used their podium time to criticize the war in Gaza. ___ For daily comprehensive coverage on COP28 in your inbox, sign up for the Reuters Sustainable Switch newsletter here. https://www.reuters.com/business/environment/what-watch-cop28-saturday-2023-12-01/

2023-12-01 20:40

Canadian dollar strengthens 0.5% against the greenback Touches its strongest since Sept. 29 at 1.3488 Canada adds 24,900 jobs in November Canadian yields track move lower in U.S. yields TORONTO, Dec 1 (Reuters) - The Canadian dollar strengthened to a two-month high against its U.S. counterpart on Friday as domestic data contributed to the recent upswing in sentiment toward the currency, showing that the economy added more jobs than expected last month. The Canadian dollar was trading 0.5% higher at 1.3495 to the greenback, or 74.10 U.S. cents, after touching its strongest level since Sept. 29 at 1.3488. For the week, the currency climbed 1%. Canadian employment rose by 24,900 jobs in November, eclipsing the 15,000 gain that economists had expected, although hours worked fell and the jobless rate ticked up to 5.8%, as growth in the population continued to outpace employment growth. Separate data showed Canada's manufacturing sector contracting for a seventh straight month in November as global industrial weakness weighed on output and new orders. The jobs data added to positive sentiment toward the loonie after the currency was lifted by broad-based weakness in the U.S. dollar in recent weeks, said Michael Goshko, senior market analyst at Convera Canada. The U.S. dollar (.DXY) fell against a basket of major currencies as Federal Reserve Chair Jerome Powell struck a cautious tone on further interest rate moves. The price of oil , one of Canada's major exports, settled 2.5% lower at $74.07 a barrel as the market kept a wary eye on the latest round of OPEC+ production cuts. Canadian government bond yields fell across the curve, tracking moves in U.S. Treasuries. The 10-year was down 9.3 basis points at 3.455%. https://www.reuters.com/markets/currencies/jobs-data-helps-lift-canadian-dollar-2-month-high-2023-12-01/

2023-12-01 20:20

Leaders push starkly different hopes for fossil fuels King Charles III of Britain pleads for climate progress South Africa, Turkey criticize conflict in Gaza DUBAI, Dec 1 (Reuters) - U.N. Secretary General Antonio Guterres urged world leaders at the COP28 climate summit on Friday to plan for a future without fossil fuels, saying there was no other way to curb global warming. Speaking a day after COP28 president Sultan Ahmed al-Jaber proposed embracing the continued use of fossil fuels, Guterres said: "We cannot save a burning planet with a fire hose of fossil fuels." "The 1.5-degree limit is only possible if we ultimately stop burning all fossil fuels. Not reduce. Not abate," he said, referring to nascent technologies to capture and store carbon emissions. The competing visions summed up the difficulty of this year's U.N. climate summit in the oil-producing United Arab Emirates, where divisions over fossil fuel, acrimony over lagging finance and geopolitical tensions around the war in Gaza threatened to distract delegates from making progress. King Charles III of Britain pleaded with world leaders to make progress in the global climate agenda. "Scientists have been warning for so long, we are seeing alarming tipping points being reached," he said. "Unless we rapidly repair and restore nature's economy, based on harmony and balance, which is our ultimate sustainer, our own economy and survivability will be imperilled," said the king, who has spent most of his adult life campaigning on the environment. The comments from Charles appeared to be at odds with his government's. British Prime Minister Rishi Sunak, who announced 1.6 billion pounds ($2.02 billion) in climate finance, has rolled back several domestic measures set by previous governments to help the country meet its 2050 net-zero targets. Indian Prime Minister Narendra Modi appeared to admonish wealthy countries for their role in releasing the most climate-warming emissions since the Industrial Revolution. "We do not have much time to correct the mistakes of the last century," Modi said. "Over the past century, a small section of humanity has indiscriminately exploited nature. However, entire humanity is paying the price for this, especially people living in the global south." A former Marshall Islands president, whose country faces inundation from climate-driven sea level rise, resigned from the main COP28 advisory board on Friday in protest at the UAE's support of continued use of fossil fuels. Hilda Heine said in her resignation letter that she was "deeply disappointed" that the UAE had reportedly used its COP28 role to broker oil and gas deals. The UAE has strongly denied the accusations. The UAE's COP28 presidency said it was "extremely disappointed" by Heine's resignation. "We have been completely clear, open, and honest throughout this process," the statement said. ANGER OVER GAZA Some world leaders took their turn at the podium on Friday to criticize Israel's bombardment of Gaza, breaking an unspoken agreement to steer clear of politics at U.N. climate summits. Turkey's President Tayyip Erodgan and South Africa's President Cyril Ramaphosa accused Israel of committing war crimes in Gaza during their speeches, while an Israeli official said the military was abiding by international law and was intent on destroying Hamas. "South Africa is appalled by the cruel tragedy that is underway in Gaza. The war against the innocent people of Palestine is a war crime that must be ended now," Ramaphosa said. A group of demonstrators at the conference, some wearing shirts that spelled "ceasefire", chanted "Free Palestine". Elsewhere, a display of shoes was meant to represent the thousands killed in Gaza. OPTIONS FOR A COP28 DEAL Away from the main stage, delegations and technical committees set to work on Friday on the mammoth task of assessing their progress in meeting global climate targets, specifically the Paris Agreement goal of limiting global warming to within 2 degrees Celsius (3.6 degrees Fahrenheit), above pre-industrial temperatures. Scientists say that a global temperature rise beyond this threshold will unleash catastrophic and irreversible impacts worldwide. The United Nations on Friday published its first draft for what could serve as a template for a final agreement from the COP28 summit, which ends Dec. 12. The draft offers "building blocks" for a political outcome and includes several options to address the central problem of whether, and to what extent, fossil fuels should play a role in the future. One of the options involves including commitments to either "phase down" or "phase out" the use of fossil fuels, to quit coal energy and to triple renewable energy capacity by 2030. Also on the table for discussion is whether to phase out fossil fuel subsidies, which totalled some $7 trillion globally last year, and whether to include provisions for carbon capture and removal technology. ___ For daily comprehensive coverage on COP28 in your inbox, sign up for the Reuters Sustainable Switch newsletter here. ($1 = 0.7910 pounds) https://www.reuters.com/world/cop28-spotlights-global-warnings-about-pain-climate-change-2023-12-01/

2023-12-01 20:09

HOUSTON, Dec 4 (Reuters) - Venezuela's oil exports remained almost unchanged in November at 651,000 barrels per day (bpd) even as an easing of U.S. sanctions is now allowing sales to trading houses, according to shipping and tanker tracking data. Washington in October temporarily lifted oil sanctions on the country as a way to encourage a presidential election in 2024, which prompted spot sales of Venezuelan crude and fuel oil to traders mostly bound for China. State company PDVSA also has recently negotiated cargo sales bound for India through intermediaries. However, stagnant crude production, long-standing loading delays and some shippers' aversion to sending vessels to Venezuela are reshuffling exports to different customers, without increasing total volumes shipped. A total of 40 vessels departed Venezuelan ports last month carrying an average 651,000 bpd of crude and fuels, and 434,000 metric tons of petrochemicals and byproducts. The petroleum exports declined 2.3% from October, while the byproducts increased from 229,000 tons the previous month. Sales through intermediaries took 57% of total, while Chevron's (CVX.N) exports of Venezuelan crude to the United States declined to some 144,000 bpd from 178,000 bpd in October, according to the data. Venezuela's crude output averaged 786,000 bpd in October, according to official figures reported to OPEC, below a peak of 820,000 bpd in August, a target of 1 million bpd set for this year and an OPEC quota of 1.9 million bpd. The stagnant production has driven PDVSA to offer trading houses and intermediaries a large portion of its oil stocks for exports. PDVSA's heavy crude inventories from Venezuela's main production region, the Orinoco Belt, fell to 3.5 million barrels at the end of November, the lowest number so far this year, according to a company document seen by Reuters. Analysts have warned that Venezuela will obtain little financial relief from the U.S. sanction easing, which allows the country to cash oil sales through mid-April, if PDVSA is unable to increase crude output and exports. Besides seeking spot cash oil sales, PDVSA also has ramped up fuel imports since October. In November, the company discharged some 50,000 bpd of naphtha and gasoline blend stock supplied by Chevron and Spain's Repsol (REP.MC) as part of U.S-authorized oil swaps. https://www.reuters.com/markets/commodities/venezuelas-oil-exports-remain-almost-unchanged-middlemen-seek-deals-2023-12-01/