2023-11-16 20:21

MEXICO CITY, Nov 16 (Reuters) - The International Monetary Fund's executive board has approved a two-year, $35 billion flexible credit line for Mexico, it said in a statement on Thursday, noting the Latin American country's economy is undergoing a broad-based expansion. The Mexican authorities stated their intention to treat the new arrangement as precautionary and are set on maintaining prudent policy going forward, the statement added. This is Mexico's tenth flexible credit line arrangement since 2009, and the country has reduced amounts of the lines granted in recent years, the IMF said. In 2017, the IMF granted Mexico a credit line worth around $88 billion, which by 2021 was reduced to $50 billion. "Mexico's macroeconomic policies and institutional policy frameworks remain very strong," Gita Gopinath, the IMF's First Deputy Managing Director, said in the statement. Mexico does remain exposed to elevated external tail risks, however, Gopinath said, including "renewed volatility in the financial markets, increased risk premia, and capital outflows from emerging markets, as well as weaker U.S. growth and a global slowdown." Authorities will reassess the external risk outlook and their implications on access under the agreement in November 2024, the IMF added. https://www.reuters.com/world/americas/imf-approves-35-bln-credit-line-mexico-2023-11-16/

2023-11-16 20:17

HOUSTON, Nov 16 (Reuters) - U.S. oil firm Chevron Corp (CVX.N) has begun supplying fuel to Venezuela's state-run oil company PDVSA under Washington's approval of expanded deals with the South American country, three people familiar with the matter said on Thursday. Chevron and PDVSA previously had stuck to a 2022 agreement to expand some operations that included a swap of Venezuelan crude for Chevron-provided diluents to their joint ventures and for repayment of debts owned by Venezuela. Last month, Washington broadly eased sanctions on the country's oil sector, paving the way for wider sets of exchanges. Under terms that imply an expansion of the previous swap deal, Chevron has begun supplying PDVSA with fuel including naphtha and gasoline blend stock, one of the people said. The first vessel under the arrangement arrived in Venezuela's Jose port this week carrying 450,000 barrels of heavy naphtha for PDVSA, according to tanker tracking data and a document see by Reuters. A second tanker was being chartered this week to transport some 240,000 barrels of gasoline blend stock for November delivery, two of the sources added. PDVSA did not reply to a request for comment. Chevron declined to comment on commercial matters and said the firm is committed to conducting business in compliance with all laws and regulations where it operates. Earlier this month, Chevron began inspecting PDVSA's facilities at the El Palito port, close to the country's capital and a traditional hub for motor fuel imports, in preparation for the deliveries, according to one of the sources. It was not immediately clear if the fuel shipments will be compensated with Venezuelan crude or under a different payment mechanism. The October license clears the way to make and receive payments from Venezuela, and to procure goods and services for oil and gas projects. https://www.reuters.com/business/energy/chevron-shipping-fuels-venezuelas-pdvsa-expansion-oil-swap-2023-11-16/

2023-11-16 20:13

Nov 16 (Reuters) - New York State will issue a new offshore wind solicitation on Nov. 30 with bids due in January 2024, the state government said, in a move that should support the troubled industry. European energy companies Orsted (ORSTED.CO), Equinor (EQNR.OL) and BP (BP.L) have taken a combined $5 billion of writedowns on U.S. offshore wind projects that are not even completed, in part because their existing power sales contracts would not cover the cost of building and financing the projects. That is because soaring inflation, rising interest rates and supply chain problems have led to much higher costs than anticipated. The new solicitation will be open to all bidders, including those with existing contracts. This would allow the companies to re-offer their planned projects at higher prices and exit their old contracts. The companies had warned they could cancel the power sales contracts after failing to convince the New York Public Service Commission (NYPSC), the state's utility regulator, to renegotiate the old contracts at higher prices. In response to the NYPSC's decision, New York Governor Hochul announced on Oct. 12 a 10-point plan to help renewable energy firms "overcome recent macroeconomic and inflationary challenges that have impacted the renewable energy sector." Those measures included the expedited solicitation for offshore wind and other renewable projects announced on Thursday. The offshore wind projects that the companies are developing are Orsted's 924-megawatt (MW) Sunrise, and the joint venture between Equinor and BP's 816-MW Empire Wind 1, 1,260-MW Empire Wind 2 and 1,230-MW Beacon Wind. In a positive sign for the companies, the New York State Energy Research and Development Authority (NYSERDA) on Oct. 24 awarded three offshore wind contracts at much higher prices than the earlier projects bid by Orsted, BP and Equinor. https://www.reuters.com/business/energy/ny-state-issue-new-offshore-wind-power-solicitation-nov-30-2023-11-16/

2023-11-16 20:12

WASHINGTON, Nov 16 (Reuters) - The U.S. on Thursday imposed sanctions on maritime companies and vessels for shipping Russian oil sold above the G7's price cap, as Washington seeks to close loopholes in the mechanism designed to punish Moscow for its war in Ukraine. The U.S. Treasury Department in a statement said it slapped sanctions on three United Arab Emirates-based companies and three vessels owned by them in the action, accusing the vessels of engaging in the export of Russian crude oil priced above the $60 a barrel cap. It said the vessels used U.S.-person services while transporting the Russian-origin crude oil. The U.S., other Group of Seven (G7) countries and Australia imposed the cap last year, seeking to reduce Russia's revenues from seaborne oil exports as part of sanctions for its invasion of Ukraine. While the cap on crude has been in place for around a year and is aimed at restricting the Kremlin's oil revenues, robust global oil prices this year and Moscow’s growing usage of shadow tankers’ fleet have meant that much Russian oil has traded above the cap. The cap bans Western companies from providing maritime services, including insurance, finance and shipping, for Russian seaborne oil exports sold above $60 a barrel, while seeking to keep oil flowing to markets. Caps also were imposed on Russian fuel exports. “Shipping companies and vessels participating in the Russian oil trade while using Price Cap Coalition service providers should fully understand that we will hold them accountable for compliance,” Deputy Treasury Secretary Wally Adeyemo said in the statement. “We are committed to maintaining market stability in spite of Russia’s war against Ukraine, while cutting into the profits the Kremlin is using to fund its illegal war and remaining unyielding in our pursuit of those facilitating evasion of the price cap.” Russia's embassy in Washington did not immediately respond to a request for comment and the Kremlin was not immediately available for comment. It has repeatedly dismissed the Western sanctions as illegal, saying it would act in its own interests despite the restrictions. Thursday's action freezes any U.S. assets of those targeted and generally bars Americans from dealing with them. The UAE-based firms targeted are Kazan Shipping Incorporated, Progress Shipping Company Limited and Gallion Navigation Incorporated. The Liberian-flagged ships hit with sanctions are the Kazan, Ligovsky Prospect and NS Century, according to the Treasury Department. Global oil prices have risen to around $85 a barrel in recent months on production cuts and thin world spare production capacity. That has helped limit the efficacy of the cap, but the coalition can toughen enforcement to make it more effective, according to people who advised the Treasury. Russian crude and oil product exports dropped by 70,000 barrels per day in October to 7.5 million barrels per day, the International Energy Agency (IEA) said in a report on Tuesday. It added that estimated export revenues fell $25 million to $18.34 billion, while Russian crude and product prices were mainly above the G7 price cap. Thursday's action comes after the U.S. in October imposed the first sanctions on owners of tankers carrying Russian oil priced above the cap, one in Turkey and one in the United Arab Emirates. A senior Treasury official warned at the time that Washington would take action in the coming weeks and months in an effort to increase Russia's costs and weaken Russia's ability to sustain the war in Ukraine. https://www.reuters.com/business/energy/us-targets-maritime-companies-vessels-shipping-oil-above-russian-price-cap-2023-11-16/

2023-11-16 20:05

WASHINGTON, Nov 16 (Reuters) - The U.S. on Thursday extended through May 16 a license allowing four oilfield service firms to maintain their current assets in Venezuela, while restricting what services they can perform in the country. Washington in October issued a broad license temporarily allowing Venezuela's oil and gas exports to its chosen markets, but warned the easing could be frozen or reverted if progress was not made in the following weeks towards a fair presidential election in the country. Halliburton (HAL.N), SLB (SLB.N), Baker Hughes (BKR.O) and Weatherford International can maintain "essential operations" in Venezuela, including those to ensure personnel safety and asset integrity, according to a notice posted on the U.S. Department of Treasury website. But the companies remain prohibited from drilling, lifting, processing, purchasing, transporting or shipping any Venezuela-origin oil. Some of the four firms have engaged in talks with President Joe Biden's administration in recent years to have their license expanded. More recently, some oil service companies from the U.S. and elsewhere also have been in talks with state company PDVSA to reactivate stored or damaged equipment in the country. SLB's CEO Olivier Le Peuch said in a call with investors last month the world's largest oil service firm was planning a quick return to Venezuela's oilfields if allowed by the new sanction regime. https://www.reuters.com/business/energy/us-renews-license-oil-service-firms-venezuela-same-terms-2023-11-16/

2023-11-16 19:40

NEW YORK, Nov 16 (Reuters) - Spot global crude oil futures traded at a discount to longer-dated contracts this week for the first time in four months, a signal that traders believe the market has become oversupplied and inventories are poised to build. A switch to contango, which gives traders an incentive to buy and store fuel, came this week as crude futures fell to the lowest since mid-July on concerns about weaker near-term demand. Traders who two months ago predicted oil could hit $100 per barrel by next month are unloading near-term bets. U.S. West Texas Intermediate's front-month contract on Thursday traded as much as 23 cents lower than the second-month contract, and up to 29 cents lower than prices for purchases six months out. , The international benchmark Brent also switched into contango on Thursday, with the front-month contract trading 13 cents lower than second-month prices. Weaker economic and oil demand data from the U.S. and China, the world's largest energy consumers, came alongside U.S. government data that showed a rise in U.S. crude inventories and a record 13.2 million barrels per day (bpd) of domestic oil production. REFILLING STORAGE Traders pointed to an ongoing refilling of the Cushing, Oklahoma, oil storage hub that helped prompt the switch to contango. Inventories at Cushing in mid-October had dropped to a concerning 21.01 million barrels in mid-October, close to operational lows. They rose to 25.01 million barrels in the week to Nov. 10, U.S. Energy Information Administration data showed. "We have seen significant increases in Cushing taking away the fear of a supply squeeze," said Phil Flynn, an analyst at Price Futures Group. "All the people that were in that trade are going the other way." U.S. refiners have trimmed production runs and oil exports are elevated at about 4.9 million barrels per day in the latest week, EIA data showed. Those factors have added to sentiment that supply is not tight, said John Kilduff, partner at Again Capital LLC in New York. https://www.reuters.com/business/energy/oil-futures-spreads-signal-market-moving-toward-oversupply-2023-11-16/