2023-11-07 20:53

RIO DE JANEIRO, Nov 7 (Reuters) - Russian diesel is no longer competitive in Brazil, said the chief executive of state-run oil company Petrobras (PETR4.SA) on Tuesday, when asked about a drop in imports of the fuel by local firms. "Russian diesel was a sanctioned diesel, it was cheaper," CEO Jean Paul Prates said at an event in Rio de Janeiro. Western nations sanctioned Russian fuel after the country invaded Ukraine last year, initially causing prices to drop for other buyers. "But from a certain point on, prices became the same and it was no longer worth importing," Prates explained. Russian diesel, which accounted for nearly three-quarters of all the diesel imported by Brazil in August, represented only 42.1% in October, according to StoneX analyst Bruno Cordeiro. In the first 10 months of the year, Brazil imported 11.72 billion liters of diesel, 15.7% down from a year earlier, a drop StoneX attributed to higher domestic production and a higher percentage of biodiesel required in the fuel. This growth in domestic diesel production was driven by Petrobras, which reported record output and sales of its S-10 diesel in the third quarter. The increased domestic market share shows Petrobras is competitive and can adapt as it is "the backbone of national supply," Prates added. https://www.reuters.com/markets/commodities/russian-diesel-no-longer-competitive-brazil-says-petrobras-ceo-2023-11-07/

2023-11-07 20:13

NEW YORK, Nov 7 (Reuters) - A member of the Republican minority on the top U.S. securities regulator asked his colleagues on Tuesday to consider revising draft regulation on disclosing climate-related risks which has stoked fierce debate and expectations of lawsuits. The Securities and Exchange Commission (SEC) has been wading through some 16,000 letters received in response to a proposal released in March 2022 that would force listed companies to formally report their greenhouse gas emissions and climate-related risks. Mark Uyeda, one of two Republicans on the five-member SEC board, suggested in remarks prepared for an event in New York that the agency should consider starting the process again. "Before the Commission adopts any final rule that significantly deviates from the proposal, it should seriously consider re-proposing the rule with revised rule text and an updated economic analysis," the text of Uyeda's speech said. The rule was originally expected earlier this year but the timetable is now unclear. Uyeda has previously echoed the influential U.S. Chamber of Commerce lobby group in expressing concerns it would increase the cost of doing business. It would need votes from three of the five commissioners to pass. Democrats, who currently outnumber their conservative opponents, have been broadly friendlier to environmental regulation in recent years. SEC Chair Gary Gensler told reporters at an event in Washington that he had not yet reviewed Uyeda's comments. "We've finalized a couple dozen rules and we do make modifications but we generally do adopt," Gensler said. The current draft would in some cases ask companies to make difficult assessments of greenhouse gas emissions created throughout their supply chains, and to lay out risks like physical damage and disruption from severe weather events. https://www.reuters.com/sustainability/boards-policy-regulation/republican-wall-st-regulator-suggests-revising-draft-us-climate-rule-2023-11-07/

2023-11-07 19:43

China releases long-awaited plan to tackle methane Beijing's methane strategy envisions no emissions reductions The plan focuses on capturing and using methane as fuel BEIJING, Nov 7 (Reuters) - China published its long-awaited plan to tackle climate-warming methane on Tuesday, but included no firm targets for reducing those emissions - only goals for re-using them as fuel. Policy analysts called the plan vague and disappointing. Producing more than 14% of global methane emissions, China is by far the biggest methane emitter. Beijing released its plan near the end of a four-day climate meeting between China and the United States, pledging to "effectively improve" its monitoring and supervision systems for methane in its five-year plan period through 2025, and to "significantly improve" those systems in 2026-2030. The country will also strive to curb "flaring," or burning off emissions, at oil and gas wells, while targeting methane leaks at coal mines to be closed up, according to the plan published by China's Ministry of Ecology and Environment. And it vowed to promote methane control in agriculture and to strengthen methane controls from waste. In a statement, the president of this year's COP28 climate summit, Sultan Al Jaber, welcomed the announcement as "a critical step for global climate action." Policy analysts were less enthusiastic. Having waited two years for the plan after China pledged at COP26 in Glasgow to cooperate with the U.S. on measuring and reducing methane, the analysis said the resulting strategy left much unaddressed. "The objectives mentioned in the plan are too ambiguous, and contain mainly descriptive text, no specific targets in methane emissions reduction," said Yan Qin, lead carbon analyst at Refinitiv, a part of LSEG that provides global financial market data. Tackling methane emissions is seen as a key way of controlling climate change in the short term, as its warming potential is 100 times that of carbon dioxide. It also dissipates within years from the atmosphere, compared with CO2 lasting up to 1,000 years. That means reducing methane emissions can have a rapid impact in slowing global warming. China has not joined a global pact signed by more than 150 countries to cut their methane output 30% by 2030. While China's plan does not include targets for reducing methane, it does envision capturing and using more of those emissions as fuel. It says it will aim to use 6 billion cubic metres (7.9 million cubic yards) of methane gas released from coal mines by 2025, and will aim for collecting what it describes as an "international advanced level" of these emissions from oilfields by 2030. China's methane plans have been a key part of negotiations with the United States to find common ground ahead of COP28, with the Chinese climate envoy Xie Zhenhua meeting this week with U.S. counterpart John Kerry in California. The State Department did not immediately respond to a request for comment on the plan. Climate analyst Li Shuo, incoming director of the China Climate Hub at the Asia Society, told Reuters that the plan's release potentially "paves the way" for a joint statement from the world's two largest greenhouse gas emitters in coming weeks. https://www.reuters.com/world/china/china-unveils-action-plan-reduce-methane-emissions-2023-11-07/

2023-11-07 19:32

FRANKFURT, Nov 7 (Reuters) - The European Central Bank must remain "vigilant" because inflation in the euro zone may still come in higher than expected, fuelled by wage growth and shrinking labour supply, ECB policymaker Joachim Nagel said on Tuesday. The Bundesbank president was part of a chorus of conservative ECB policymakers stressing the need for vigilance, using a word that echoes past central bank code for interest rate hikes. "It is imperative to remain vigilant," Nagel told an event in London. "There is a lot of uncertainty surrounding the outlook, and we still face risks that the inflation outlook could turn out higher than expected." The ECB raised interest rates 10 straight times to bring down inflation before pausing last month. Investors are now betting the next move will be a cut, potentially as soon as the spring. Seeking to counter those expectations, ECB board member Isabel Schnabel and Austrian governor Robert Holzmann also mentioned vigilance in recent days. During Jean-Claude Trichet's presidency, the ECB regularly used the phrase "strong vigilance" to signal a hike was only a month away. https://www.reuters.com/markets/europe/ecb-must-be-vigilant-inflation-may-surprise-nagel-says-2023-11-07/

2023-11-07 18:21

JERUSALEM, Nov 7 (Reuters) - A month on from the Oct. 7 attack by Hamas gunmen that killed 1,400 Israelis, investors are gradually returning to country's financial markets, warily accepting the descent into its worst security crisis in decades. Although a significant weakening of the dollar over the last week has helped, Israel's shekel marked a remarkable comeback on Tuesday as it recouped the last of the 5% it lost in the days after last month's atrocities. The country's stocks and bond prices have been clawing back ground too, although they and the main market gauges of risk aversion such as credit default swaps (CDS) are still flashing warning signs. "The fact that the fighting is only in Gaza (for now) and not in the north is helping local investors to focus on the (economic) fundamentals," said Yaniv Pagot, head of trading at the Tel Aviv Stock Exchange. Israel's response to the attacks, which included the abduction of more than 240 Israelis, has been an unrelenting air bombardment of the Hamas-run Gaza Strip, followed by a ground offensive. The initial fear of many analysts was of it spilling into a more incendiary regional conflict involving Iran-backed Hezbollah in Lebanon, but so far the group has not waded in. Israel's central bank has played its part too with a flurry of support measures, and has stayed away from rate cuts. It has acknowledged the economy will slow, but points out it was in solid shape prior to the war and should bounce back, as in past conflicts, if it eases. "We have known how to recover from difficult periods in the past and to return rapidly to prosperity. I have no doubt that it will do so this time as well," the bank's Governor Amir Yaron said. At the outset of the war, markets were stunned. The shekel, which had already shed 10% in 2023 partly on the government's contested plan to overhaul Israel's judiciary, tumbled 5% and reached an 11-year low. The tide changed last week after Hezbollah signalled it was likely to stay on the sidelines for now and the U.S. Federal Reserve flagged that it might not need to raise interest rates again. That caused the dollar to wilt significantly. "Market sentiment has been stabilising, and more broadly this is a dollar move," said Geoff Yu a senior FX and Macro strategist at BNY Mellon, referring to the fall in the greenback. At the same time, Israel's central bank "has been seen as putting together a credible package (in reaction to the war's escalation)", he added, which has helped ease concerns about a major dive in the currency creating financial instability and fueling inflation. MONEY RETURNS Just two days into the war, the bank said it would sell up to $30 billion of foreign currency to defend the shekel and provide $15 billion of liquidity to the market via swap transactions. Data shows it spent less than a third - $8.2 billion - of that pledge during October. It still has more than $190 billion of foreign exchange reserves at its disposal, and has executed $400 million of dollar-shekel swaps. The shekel appreciated another 0.7% versus the dollar to move back to a pre-war level of 3.86 to the greenback on Tuesday. The government's cost of borrowing, measured by the benchmark 10-year bond yield , has also fallen back to 4.22%, almost where it was before the attack and well below the 4.67% it peaked at in the aftermath. MSCI's dollar-denominated Israel share index has recovered more than half of its initial losses too, and is down 6.3% compared to 15% lower in late October. "The Bank of Israel took very aggressive action," said Gil Moshe, the head of markets at the Israel unit of U.S. bank Citi. "Whenever (market) players are seeing that the liquidity is there, and the Bank of Israel is on top of things and willing to intervene whenever it's necessary, then they get more confident." He noted that local bid-offer spreads have come right back in after initially widening when the worries hit. Pagot said Israeli institutional investors who had moved money abroad earlier this year due to concerns about the judiciary system changes have now increased exposure to local stocks and bonds. "Institutions are bringing money back home," he said. "They think the low shekel is an opportunity for investment." Looking to next year, Shmuel Katzavian, a strategist at Israel's Discount Bank, expects the shekel to continue to strengthen. It has been falling for roughly two years as sentiment has weakened generally. https://www.reuters.com/markets/israels-war-wary-markets-start-attract-investors-back-2023-11-07/

2023-11-07 16:40

NEW YORK, Nov 7 (Reuters) - Texas-based energy company Vistra (VST.N) on Tuesday posted lower third-quarter net income, as higher hedging losses offset record electricity demand during a hot summer. Vistra's net income stood at $502 million in the three months ended Sept. 30, compared to $678 million a year earlier, the company said. Within the Texas region, hotter-than-usual temperatures had kept wholesale power prices higher than it had expected, it said, which ate into its earnings. Vista had set prices for consumers before the summer, at a lower level. However, the company captured earnings in markets outside of the Texas region due to milder weather that kept prices low, it said. As of end of the third quarter, Vistra had hedged approximately 90% of its expected generation volumes on average for the balance of 2023 through 2025, its earnings release showed. The company raised and narrowed its outlook for 2023 ongoing operations-adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to $3.95 billion-$4.1 billion from $3.6 billion-$4 billion previously. The group remained focused on producing strong earnings, returning capital to shareholders, maintaining balance sheet strength, and supporting the clean-energy transition, said Chief Executive Jim Burke in a statement. The company was working to close its $3.43 billion acquisition of Energy Harbor, announced in March, in the fourth quarter, he added. In addition to a retail business, Energy Harbor operates nuclear power plants in Ohio and Pennsylvania. The company's three largest combined solar and energy storage facilities are expected to break ground next spring at its retired coal plant sites, it said. The construction projects are part of Illinois' Coal to Solar and Energy Storage Initiative. https://www.reuters.com/business/energy/energy-group-vistras-profit-falls-hedging-losses-offset-higher-power-demand-2023-11-07/