2023-11-09 05:16

Brent nearly $20 a barrel lower than September peak Brent and WTI benchmarks hit lowest since July on Wednesday OPEC to discuss 2024 output policy later this month HOUSTON, Nov 9 (Reuters) - The Brent crude oil benchmark finished above $80 a barrel on Thursday, after demand concerns and a fading war-risk premium triggered a sell-off earlier this week. Brent crude futures settled at $80.01 a barrel, a gain of 47 cents, or 0.59%. U.S. West Texas Intermediate (WTI) crude futures finished at $75.74 a barrel up 41 cents or 0.54%. Late in Thursday's trading, comments by U.S. Federal Reserve Chairman Jerome Powell indicating possible future interest rate increases shook stock and crude oil markets' hopes for strong demand. "There's a macroeconomic head wind affecting markets today," said John Kilduff, partner with Again Capital LLC. Market fundamentals dominated trader sentiments through much of Thursday as fears of Middle East supply disruptions have eased, said Jim Burkhard, vice president and head of research for oil markets at S&P Global Commodity Insights. "The onset of the Israel-Hamas war does fuel volatility and bring additional risks, but it has not affected underlying oil market fundamentals," Burkhard said. "Oil prices have remained below where they were in late September - a week before the Hamas attack. Strong oil market fundamentals are prevailing over any fears at the moment." Brent is nearly $20 a barrel lower than its September peak. Data from China on Thursday showed policymakers struggling to control disinflation, casting doubt over the chances of a broad-based economic recovery in the world's biggest commodity consumer. Earlier in the week customs data showed that China's total exports of goods and services contracted faster than expected. Demand indicators also imply weakness in the United States. U.S. crude oil inventories increased by 11.9 million barrels over the week to Nov. 3, sources said, citing American Petroleum Institute figures. If confirmed, this would represent the biggest weekly build since February. The U.S. Energy Information Administration (EIA), however, has delayed release of weekly oil inventory data until Nov. 15 for a system upgrade. Global markets, however, were upbeat on Thursday on the belief that major central banks have completed their rate hikes. High interest rates raise the cost of borrowing, dampening demand in markets, including oil. Both OPEC and the International Energy Agency (IEA) are due to offer their view on the state of oil demand and supply fundamentals next week. OPEC is set to meet at the end of the month to discuss output policy for 2024. https://www.reuters.com/markets/commodities/oil-ticks-higher-markets-shrug-off-china-inflation-data-2023-11-09/

2023-11-09 05:11

PURWAKARTA, Indonesia, Nov 9 (Reuters) - Indonesia's President Joko Widodo on Wednesday inaugurated a 192 megawatt peak (MWp) floating solar power plant on a reservoir in West Java province as part of a drive to increase renewable energy sources and switch away from coal. The 1.7 trillion rupiah ($108.70 million) project was developed by PLN Nusantara Power, a unit of Indonesia's state utility company Perusahaan Listrik Negara (PLN) and United Arab Emirates renewable energy company Masdar, a unit of Mubadala Investment Company. "I spoke with Minister Thani from the UAE that this would be expanded to around 500 MWp and we hope more renewable energy could be developed in Indonesia," the president popularly known as Jokowi told reporters, referring to UAE Minister of Foreign Trade Thani bin Ahmed Al Zeyoudi. The solar power infrastructure was built on Cirata reservoir, 108 kilometres (67.11 miles) southeast of Indonesia capital Jakarta. A hydropower plant at the dam has an installed capacity of about 1,008 MW. The plant is the third largest floating solar plant in the world and could be expanded up to 1,000 MWp, PLN chief executive Darmawan Prasodjo said, as the 13 arrays installed so far only occupied 4% of the reservoir's surface. Regulations permit up to 20% of the reservoir's area to be utilised by the solar plant, Darmawan said, adding that discussions were underway with Mubadala for the next phase of the expansion. "This is just the beginning. The president instructed us to maintain the momentum so that renewable energy development could be escalated," Darmawan said at the same event. Renewable energy accounted for 12.3% of Indonesia's energy mix in 2022, and Jokowi said that the target of 23% by 2025 would probably be missed. "It is not easy because there was COVID-19 pandemic, we could not reach it. But our commitment is to keep moving to achieve the target we have promised," Jokowi said. ($1 = 15,640.0000 rupiah) https://www.reuters.com/sustainability/indonesia-president-inaugurates-108-million-floating-solar-plant-2023-11-09/

2023-11-09 05:10

LONDON, Nov 9 (Reuters) - Shell (SHEL.L) is suing Greenpeace for $2.1 million in damages after the environmental group's activists boarded the company's oil production vessel in transit at sea this year, according to Greenpeace and a document seen by Reuters. The British oil and gas major filed the claim in London's High Court. Greenpeace activists boarded the vessel in January near the Canary Islands off the Atlantic coast of northern Africa to protest oil drilling and travelled on it as far as Norway. In an email to Reuters, Shell confirmed legal proceedings were taking place when asked whether it was suing Greenpeace over the incident but declined to comment on the claim amounts. Boarding a moving vessel at sea was "unlawful and extremely dangerous," a Shell spokesperson said. "The right to protest is fundamental and we respect it absolutely. But it must be done safely and lawfully," the spokesperson said. The vessel was destined for the Penguins oil and gas field in the North Sea, which is not yet in production. Four Greenpeace activists used ropes to hoist themselves onto the vessel from inflatable boats that chased the ship at high speed. Protests at sea against oil, gas or mining infrastructure have long been part of Greenpeace's operations. The damages Shell is seeking include costs related to shipping delays and expenses for extra security, as well as legal costs, according to a document seen by Reuters. "The claim is one of the biggest legal threats against the Greenpeace network’s ability to campaign in the organisation’s more than 50-year history," Greenpeace said in a statement. The group said Shell offered to reduce its damage claim to $1.4 million if Greenpeace's activists agree not to protest again at any of Shell's oil and gas infrastructure at sea or in port. Greenpeace said it would only do so if Shell complied with a 2021 Dutch court order to cut its emissions by 45% by 2030, which Shell has appealed. A claim for additional damages of around $6.5 million by one of Shell's contractors, Fluor (FLR.N), is unresolved, according to the document seen by Reuters. Fluor did not immediately respond to a request for comment. Shell and Greenpeace have held negotiations since the case was filed, but talks ended in early November, Greenpeace said, adding it was now waiting for Shell to file further documents in court. Greenpeace said it will then consider its next steps, including ways to stop the case from proceeding. https://www.reuters.com/sustainability/climate-energy/shell-sues-greenpeace-21-million-after-boarding-oil-vessel-2023-11-09/

2023-11-09 03:53

MUMBAI, Nov 9 (Reuters) - The Indian rupee is expected to open slightly higher on Thursday after demand worries prompted a further fall in oil prices and as U.S. yields slid more. Non-deliverable forwards indicate the rupee will open at around 83.24-83.25 to the U.S. dollar, compared with 83.2725 in the previous session. "Taking into account how it has panned out on other days, this marginal opening dip (in USD/INR) is all we will get," a forex trader at a bank said. "What oil prices and U.S. yields are doing is curtailing the upside pressure (in USD/INR), which the RBI (Reserve Bank of India) will be happy about." The RBI has repeatedly defended the rupee, not wanting the currency to drop below the 83.30 handle, according to traders. Brent crude on Wednesday fell below $80 a barrel for the first time since around mid-July on concerns over waning demand in the U.S. and China. Brent is now down nearly 12% since last Monday, a relief for a major oil importer like India. The 10-year U.S. yield dropped below 4.50%, reaching the lowest in more than a month and is now down more than 50 basis points from its recent high. The Federal Reserve nearing a pause in its rate hiking cycle and weaker-than-expected U.S. data has prompted investors to lap up Treasuries. Fed Chair Powell on Wednesday did not comment on monetary policy or economic outlook in prepared remarks. He will be speaking once again on Thursday. "The takeaway from the Fed Chair is to be more flexible on economic forecasting during times of 'unpredictable shocks', but his words clearly fell short of a direct guidance of growth risks for the U.S. economy," Yeap Jun Rong, market strategist at broker IG Asia, said. KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.28; onshore one-month forward premium at 4.75 paisa ** Dollar index inches down to 105.50 ** Brent crude futures at $79.9 per barrel ** Ten-year U.S. note yield at 4.48% ** As per NSDL data, foreign investors sold a net $37.5mln worth of Indian shares on Nov. 7 ** NSDL data shows foreign investors bought a net $179.2mln worth of Indian bonds on Nov. 7 https://www.reuters.com/world/india/rupee-may-inch-up-after-us-yields-oil-prices-fall-further-2023-11-09/

2023-11-09 03:07

SINGAPORE, Nov 9 (Reuters) - Global energy trader Gunvor [RIC:RIC:GGL.UL] is exiting fuel oil storage at the Oiltanking Seraya terminal in the Asian oil hub of Singapore, with a Sinopec unit set to take over the space, several market sources told Reuters. The Geneva-based trader's exit comes after more than a decade of storing fuel oil at the terminal on Pulau Seraya, part of Singapore's Jurong island oil and chemicals hub. Onshore oil storage space in Singapore is limited and is often viewed as a strategic asset for companies and their trading activities. Gunvor still holds fuel oil storage tanks at the Jurong Port Universal Terminal site although it was not immediately clear if the trading house would renew its lease there, which will likely expire by the end of the year, the sources said. The company may instead charter tankers to store fuel oil, which provides more flexibility at lower costs, the sources added. A spokesperson for Gunvor Group declined to comment. Oiltanking and Jurong Port Universal did not respond to requests for comment. Sinopec Fuel Oil Singapore, a unit of Asia's largest refiner, state-run Sinopec (600028.SS), will gradually take over the fuel oil tanks Gunvor is vacating, which can hold about 600,000 cubic metres of fuel, the sources said. Sinopec Fuel Oil has been expanding its fuel oil cargo and bunker trading volumes this year after receiving a bunker licence to sell ship fuel from Singapore's port authority last year. Sinopec did not respond to a request for comment. Storage fees to lease onshore tanks in Singapore reached S$7 ($5.15) per cubic metre in November for new contracts, about $1 more than floating storage, according to the sources. Gunvor's move occurs against a backdrop of steepening backwardation in the fuel oil market structure. Spot prices are higher than those in later months in a backwardated market, which means the value of oil held in storage declines over time and deters traders from holding too much oil in their tanks. The prompt monthly spread for very low sulphur fuel oil between November and December hit $34.50 in early November, its widest backwardation in more than a year, LSEG data showed. The spread remained above $30 a metric ton on Wednesday. Fuel oil volumes stored in Singapore onshore tanks were at 19.44 million barrels in the week to Nov. 1, compared to weekly average volumes of 20.94 million barrels in 2022, Enterprise Singapore data showed. ($1 = 1.35685 Singapore dollars) https://www.reuters.com/business/energy/gunvor-drops-seraya-fuel-oil-storage-singapore-sinopec-take-over-2023-11-09/

2023-11-09 02:44

NEW YORK, Nov 8 (Reuters) - A key reform proposed by the U.S. Securities and Exchange Commission to boost the use of central clearing in the Treasury market would need to be implemented over an extended period to avoid disruptions at a time of already turbulent market dynamics, BNY Mellon said on Wednesday. The SEC central clearing rule, first proposed in September last year, would apply to the cash Treasury and repurchase agreements (repo) markets, where banks and other players such as hedge funds borrow short-term loans backed by Treasuries and other securities. Under the rule, more trades would be sent to a clearing house, requiring counterparties to put up cash to guarantee execution in the event of defaults. The regulator is expected to finalize the rule soon, but it is unclear how much time the industry would have to implement it. Some market participants worry that the higher trading costs linked to central clearing could discourage certain investors from trading, undermining the rule's objective to improve liquidity and resilience in the world's biggest bond market. "We're in a period when the Treasury market needs to be relied upon for its safety and liquidity," Nate Wuerffel, head of market structure at BNY Mellon, said in an interview. "And if on top of that you're trying to implement very rapidly a fundamental reassembly of the Treasury market, that's when you run the risk of having market functioning deteriorate." Liquidity crunches in recent years have raised regulatory concerns about the Treasury market's ability to function during times of stress. Notably, in March 2020 the market seized up as pandemic fears gripped investors, prompting the Federal Reserve to buy Treasuries to support the market. The rule would likely be implemented at a crucial time for bond investors. The Federal Reserve is reducing its Treasury security holdings as part of quantitative tightening, the Treasury plans to issue more debt to fund rising fiscal deficits, and investors are adjusting to the fastest increase in interest rates in at least 40 years. "Central clearing will strengthen the market’s core attributes of safety and liquidity in times of stress. But implementation will be difficult," Wuerffel said in a note on Wednesday. "An extended implementation timeline in the final rule could substantially lower the risk that the transition itself could worsen market functioning," he said. https://www.reuters.com/markets/us/bny-mellon-warns-about-treasury-market-functioning-risks-key-reform-looms-2023-11-08/