2023-11-07 07:10

DUBAI, Nov 7 (Reuters) - Saudi oil giant Aramco (2222.SE) on Tuesday reported a 23% fall in third-quarter net profit, marginally beating analyst estimates, on lower crude oil prices and volumes sold. Net profit declined to $32.6 billion for the quarter to Sept. 30 from $42.4 billion a year earlier. The Saudi oil giant said the decline in oil prices and volumes was partially offset by a reduction in production royalties during the period. A company-provided median estimate from 12 analysts had expected net profit of $31.8 billion in the quarter. Aramco recorded revenues of $113.09 billion in the quarter, compared with $144.99 billion in the year-ago period. Energy majors Chevron (CVX.N) and Exxon Mobil(XOM.N) last month posted sharp year-on-year drops in third quarter profit as energy prices cooled. Earnings by the state oil giant have benefitted from higher crude oil prices compared to the previous quarter, but prices are well off record year-ago levels. Saudi Arabia, OPEC's de facto leader, said it would continue with its voluntary oil output cut of 1 million barrels per day (bpd) until the end of the year and that it would review the decision again next month. Aramco declared a base dividend of $19.5 billion for the third quarter. The company approved a second distribution of its performance-linked dividends with a $9.87 billion payout in the fourth quarter, equal to the first performance-linked payout. The second performance-linked dividend is based on Aramco's results in 2022 and the first nine months of 2023. Subsequent distributions are expected to be adjusted to reflect the remaining results for 2023, the company said. https://www.reuters.com/business/energy/saudi-aramco-q3-profit-falls-23-lower-crude-oil-prices-volumes-2023-11-07/

2023-11-07 07:05

TOKYO, Nov 7 (Reuters) - The head of the tax panel for the Japanese political party Komeito, a junior coalition partner with the ruling Liberal Democratic Party (LDP), said on Tuesday a thorough debate is needed on a controversial plan to cut income tax next year. Makoto Nishida, Komeito's tax panel head, said that policymakers should not have a preset mind to limit the tax break to just a year, signalling a possibility to extend it beyond 2024. "Flexible response would be called for given various factors for consideration such as a possibility of monetary normalisation and developments of the Middle East conflicts," Nishida told reporters as lawmakers kick off their internal tax policy debate. Prime Minister Fumio Kishida of the LDP plans to adopt income tax cuts for the next fiscal year as part of a broader economic package to boost household incomes and consumption. Opposition lawmakers have criticized the income tax cuts as politically motivated and ineffective as it takes time to implement and it could end up adding to the Japan's debt burden, the industrial world's largest. (This story has been refiled to correct the name of Japanese Prime Minister to Kishida in paragraph 4) https://www.reuters.com/world/asia-pacific/japanese-junior-coalition-party-calls-debate-income-tax-cuts-2023-11-07/

2023-11-07 07:04

Arctic LNG 2 covers for 3% of Japan LNG imports Govt, Mitsui look into U.S. sanctions implications Japan to ensure energy supply not harmed, minister says TOKYO, Nov 7 (Reuters) - Japan will make sure its energy supplies are not affected by sanctions the United States recently imposed on the Arctic LNG 2 project in Russia in which it has a stake, Industry Minister Yasutoshi Nishimura said on Tuesday. Japan, the world's second-largest liquefied natural gas (LNG) buyer, relies on LNG as a transition fuel before it reaches carbon neutrality in 2050, and has supply contracts and stakes in projects globally to guarantee imports. The Arctic LNG 2 project is to be launched next month, with shareholder Japan eligible for 2 million metric tons of LNG per year, or 3% of total imports, once the plant is fully operational in the second half of this decade. "A certain degree" of impact from the U.S. sanctions imposed on the Siberian project last week to punish Russia for its war in Ukraine is "inevitable", Nishimura told reporters. "We will work with the Group of Seven countries to make a comprehensive judgment and respond appropriately so as not to impair the stable energy supply to our nation," he added. The project's full capacity is 19.8 million tones per year, of which 80% are destined for Asia, including for its Chinese shareholders CNPC and CNOOC, which have a combined 20% stake. Novatek (NVTK.MM) has a 60% stake and TotalEnergies holds another 10%. Japan has the remaining 10% share. "We recognise that this is an important project for Japan's stable energy supply in the LNG market, where supply and demand are expected to remain tight for the time being," Nishimura said. An industry ministry source, who declined to be named as they were not authorised to speak to the media, said Japan was particularly concerned about the stability of its energy imports as Israel's war on Hamas may put supply from the Middle East at risk. Japan imports the bulk of its oil and over a tenth of LNG from the Gulf region. Mitsui & Co (8031.T) which owns combined 10% stake in the project together with the state-owned Japan Organization for Metals and Energy Security said last week it would examine the sanctions impact and "take appropriate measures" in cooperation with the government and other stakeholders. Mitsui, whose exposure to the Arctic LNG 2, including investments, loans and guarantees, was 249 billion yen ($1.7 billion) as of end-September, did not change its full-year net profit guidance because of the sanctions. Japan is also a shareholder in Russian oil project Sakhalin 1 and the Sakhalin 2 LNG plant. ($1 = 150.1300 yen) https://www.reuters.com/business/energy/japan-says-sanctions-russia-will-affect-lng-project-2023-11-07/

2023-11-07 06:38

NEW YORK, Nov 7 (Reuters) - The U.S. dollar gained on Tuesday as a sharp selloff last week was seen as overdone in the short term, while the euro was dented by weak German data and the Australian dollar slid after the country's central bank raised interest rates but hinted the hike was the last of the current tightening cycle. The Japanese yen also weakened back above 150 against the greenback, a level that has kept traders on edge in recent weeks as they look for signs of intervention from Tokyo. The dollar index which tracks the U.S. unit against six main peers, was up 0.26% at 105.52. It fell 1.4% last week, its steepest weekly decline since mid-July. "This dollar bounce we're having yesterday and today is really a correction to what happened last week, which I would say was a one-two punch between the Fed and the jobs data," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. The U.S. currency dropped last week after Federal Reserve Chair Jerome Powell took a more dovish tone than expected at the conclusion of the U.S. central bank's two-day policy meeting on Wednesday, when it left interest rates unchanged. A softer-than-expected U.S. jobs report on Friday added to the dollar's weakness. "If you look at the percentage of currencies that have been down versus the dollar over the last 26 weeks, it was approaching 100%, and data also showed very long dollar positioning ... So we got a reversal of some of those positions triggered by the jobs report," said Chester Ntonifor, foreign exchange strategist at BCA Research. Traders are now pricing in only a slim chance of a further interest rate increase by the Fed and see three 25-basis-point rate cuts by next November. As the U.S. economy slows, the dollar may also see further weakness. Data next week is expected to show softening consumer price inflation and a decline in retail sales, which "feeds into the headwinds that people are talking about - the resumption of student loans, higher interest rates biting the consumer," Chandler said. "The dollar's rally, especially since July, was fueled by a divergence and now we're going to get convergence - but not because of good news from overseas, but more because we're getting worse news from the U.S.," he added. This week investors are also focused on comments from Fed officials including Powell, who is due to speak on Wednesday and Thursday. Fed Governors Christopher Waller and Michelle Bowman both noted the third quarter's "blowout" growth, at an annualized 4.9% rate, in comments on Tuesday. Minneapolis Fed President Neel Kashkari also said that the U.S. central bank may have to do more to bring inflation back down to its 2% target, while Chicago Fed President Austan Goolsbee said the Fed has made significant inroads in its battle to bring down price pressures. The euro fell 0.20% to $1.0695 after data showed a larger-than-expected fall in German industrial production in September. "The data comes after the German manufacturing PMI showed a deep contraction in October and suggests that the sector remains under pressure, acting as a drag on the German economy," said Fiona Cincotta, senior financial market analyst at City Index. The Australian dollar fell sharply after the Reserve Bank of Australia (RBA) raised interest rates by 25 basis points to combat stubborn inflation, as expected, but indicated that further tightening was unlikely. The Australian currency was last down 0.88% at $0.6431 and is on course for its biggest one-day percentage decline in a month. It reached a three-month high of $0.6523 on Monday. The U.S. dollar gained 0.25% to 150.43 Japanese yen . The yen softened to 151.74 per dollar last week, edging closer to October 2022 lows that spurred several rounds of dollar-selling intervention. ======================================================== Currency bid prices at 3:00PM (2000 GMT) https://www.reuters.com/markets/currencies/dollar-steady-risk-rally-eases-rba-focus-2023-11-07/

2023-11-07 06:28

NEW DELHI, Nov 7 (Reuters) - India is concerned by the imposition of a carbon tax by the European Union (EU) and is taking up the issue with the grouping and the World Trade Organization (WTO), trade minister Piyush Goyal said on Tuesday. "We are taking it up with the EU and at the WTO very, very seriously," Goyal said at an industry event. https://www.reuters.com/world/india/india-taking-up-carbon-tax-issue-with-eu-wto-trade-minister-says-2023-11-07/

2023-11-07 06:17

Wall Street rallies but Euro STOXX 600 falls 0.2% Dollar gains as appetite for riskier currencies diminishes Treasury yields slip as investors weigh Fed commentary Fed's Bowman suggests rate hike may be needed NEW YORK, Nov 7 (Reuters) - The dollar gained and world shares pared losses on Tuesday, as stocks on Wall Street surged and investors assessed Federal Reserve commentary about a too-strong U.S. economy that could require another interest rate hike to tame inflation. Gold hit a two-week low as the safe-haven rally triggered by Mideast tensions ebbed and oil prices hit 2-1/2-month lows as mixed economic data from China offset the impact of Saudi Arabia and Russia extending output cuts. Treasury yields fell as other Fed officials speaking on Tuesday suggested the U.S. central bank could be near the end of its tightening cycle, helping U.S. equity indexes to rise, with the Nasdaq up almost 1% as large-cap growth stocks surged. The rally on Wall Street pushed the S&P 500 and Nasdaq to post their longest winning streaks in two years. But Fed Governor Christopher Waller said "blowout" third-quarter U.S. economic growth at an annualized 4.9% rate warrants watching as the U.S. central bank considers its next policy moves, leading a colleague to explicitly call for another hike. Fed Governor Michelle Bowman said she took the recent GDP number as evidence the U.S. economy not only "remained strong," but may have gained speed and require a higher Fed policy rate. "We're in for a much longer cycle of higher rates than the most bullish people are expecting," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. "Inflation is something that we've learned is hard to tamp down once it really gets going." But Meckler said the bigger investor concern is whether there will be a meaningful U.S. recession or not, a reason why investors are buying large-cap tech stocks with "iron balance sheets and the predictable cash flows," as they're seen as the least likely to be hurt in a recessionary environment. The Nasdaq Composite (.IXIC) advanced 0.9%, the S&P 500 (.SPX) gained 0.28% and the Dow Jones Industrial Average (.DJI) rose 0.17%. But MSCI's gauge of global stock performance (.MIWD00000PUS) closed down 0.15%, while the pan-European STOXX 600 index (.STOXX) lost 0.16%. The dollar advanced as last week's rally in riskier currencies took a breather, gaining on the euro after a larger-than-expected fall in German industrial production in September. "The dollar on a broad basis is still quite strong," said Brad Bechtel, global head of FX at Jefferies in New York. "The economy's going to hold in there, and then we get these dovish pendulum swings back the other way, which is where we're at now." Against a basket of currencies, the dollar index rose 0.25% to 105.52, with the euro down 0.2% to $1.0694. The euro and most other currencies gained sharply on the dollar last week after various data - most notably a U.S. labor report that showed job growth slowed in October. Currency traders were also focused on the Australian dollar, which fell about 1.1% to $0.642 after the Reserve Bank of Australia announced a 25 basis point hike, as expected, taking the cash rate to a 12-year high of 4.35%. But the central bank softened its language on the necessity of any further action. Treasury yields slipped ahead of large bond auctions this week. U.S. benchmark 10-year yields have dropped in five of the last six sessions, and 30-year yields in four of the last five. The two-year's yield, which reflects interest rate expectations, fell 2.8 basis points to 4.913%, while the 10-year slipped 8.7 basis points at 4.575%. Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) slipped 1.2%, snapping three straight days of gains. In China, data showed imports unexpectedly grew in October, while exports contracted faster than expected, in a mixed set of indicators that showed the recovery in the world's second-largest economy remains uneven. Hong Kong's Hang Seng (.HIS) fell 1.7%, while mainland China blue chips (.CSI300) fell 0.4%. Crude oil fell more than 4%, with U.S. crude sliding $3.45 to settle at $77.37 a barrel and Brent falling $3.57 to settle at $81.61. U.S. gold futures settled down 0.8% at $1,973.50 an ounce. https://www.reuters.com/markets/global-markets-wrapup-1-2023-11-07/