2024-08-15 06:59

LONDON, Aug 14 (Reuters) - Europe's record gas surplus inherited from the winter of 2023/24 has been largely eliminated following an unusually small accumulation of inventories so far in the summer of 2024. Inventories across the European Union and the United Kingdom have risen by just 336 terawatt-hours (TWh) since March 31, according to data from Gas Infrastructure Europe (GIE). The accumulation has been the smallest since 2012 and compares with a prior 10-year average increase of 443 TWh ("Aggregated gas storage inventory , opens new tab", GIE, Aug. 14). Stocks were still 170 TWh (+20% or +1.46 standard deviations) above the 10-year average on Aug. 12 but the surplus had narrowed from 277 TWh +70% or +2.03 standard deviations) at the end of winter on March 31. The record carryout from last winter ensured stocks would need to accumulate more slowly than usual to prevent storage space running out before the winter of 2024/25, but the adjustment is now largely complete. EU and UK inventories totalled 1,006 TWh on Aug. 12, slightly below 1,024 TWh on the corresponding date last year; storage facilities were just under 88% full compared with more than 89% full in 2023. Chartbook: Europe gas storage and prices , opens new tab Europe's storage season is approaching the two-thirds way point, with stocks increasing for 134 days so far since March 31, compared with an average duration for the refill season of 209 days over the last 10 years. Storage typically peaks around Oct. 27, but there has been considerable variation, depending on autumn temperatures and gas prices. Since 2011, pre-winter inventories have peaked as early at Oct. 9 (in 2016) or as late as Nov. 13 (in 2022) according to GIE data. Based on patterns over the last decade, however, storage is projected to reach 1,173 TWh before winter depletion begins in late October or early November. The projected peak has come down from 1,280 TWh at the start of the injection season and is only slightly above the technical capacity of the system at around 1,149 TWh. As a result, the threat of storage space running out before summer ends has been almost eliminated, which has lifted both spot gas prices and calendar spreads from relatively depressed levels earlier this year. Inflation-adjusted front-month Dutch TTF futures prices have averaged 38 euros per megawatt-hour (MWh) so far in August (86th percentile for all months since 2010), up from 26 euros (42nd percentile) in February. Futures contracts for October and November 2024, covering the peak storage period, have traded in an average contango of 2 euros so far in August, which is the smallest discount since the start of 2023. The narrowing contango/discount signals less need to defer LNG imports until after the winter drawdown begins and less need to encourage generators to burn extra fuel in the meantime to ensure space does not run out. The rebound in front-month prices has likely been anticipated, accelerated and amplified by traders and investors, leading some analysts to question whether it has already overshot. But prices are unlikely to retreat to the lows of February and March unless the forthcoming winter proves very much milder than normal for the third time in a row. Related columns: - Europe’s gas glut is gradually eroding (July 10, 2024) - Europe’s gas surplus narrows as LNG redirected to Asia(June 11, 2024) - Europe’s limited storage space will push gas into Asia(April 9, 2024) - Europe’s mild winter leaves gas stocks at record high(March 7, 2024) John Kemp is a Reuters market analyst. The views expressed are his own. Follow his commentary on X https://twitter.com/JKempEnergy , opens new tab Sign up here. https://www.reuters.com/business/energy/europes-gas-surplus-has-mostly-been-eliminated-kemp-2024-08-14/

2024-08-15 06:32

Brent crude futures up $1.28 or 1.6% U.S. WTI futures up $1.18 or 1.53% U.S. economic data allays fears of imminent recession NEW YORK, Aug 15 (Reuters) - Oil prices gained more than $1 a barrel on Thursday after U.S. economic data allayed fears of recession in the world's biggest economy, although the rally was limited by concerns of slower global demand. Brent crude futures settled up $1.28, or 1.6%, at $81.04 a barrel. U.S. West Texas Intermediate crude futures rose by $1.18, or 1.53%, to $78.16. Data showed U.S. retail sales rose more than expected in July. Another report showed a smaller-than-expected increase in the number of Americans filing for unemployment benefits. "The positive economic data serve as an indicator that we're heading towards a soft landing," said Bob Yawger, director of energy futures at Mizuho in New York. Data from the Labor Department on Wednesday showed U.S. consumer prices rose moderately in July. This reinforced expectations the Federal Reserve will cut interest rates next month, which could boost economic activity and oil consumption. Oil prices also drew support from worries about how Iran would respond to the killing of the leader of the Palestinian militant group Hamas last month. "Geopolitics and the risk of an expanding conflict in the Middle East are propping up prices, as the threats of retaliation continue to grow louder," said Tim Snyder, chief economist at Matador Economics. A new round of Gaza ceasefire talks was underway in the Qatari capital Doha, as Palestinian health authorities said the death toll from the war surpassed 40,000 and pressure to end the war in the Palestinian enclave mounted. The Russia-Ukraine conflict also kept prices elevated. Russia said on Thursday it would beef up border defenses, improve command and control and send in additional forces, days after Ukraine made the biggest attack on its sovereign territory since World War Two. Both main oil benchmarks had fallen more than 1% on Wednesday after U.S. crude inventories increased unexpectedly. U.S. crude oil stockpiles rose by 1.4 million barrels in the week ended Aug. 9, compared with estimates for a 2.2 million barrel draw, building for the first time since late June. China's factory output growth slowed in July, while refinery output fell for a fourth month, underscoring the country's spotty economic recovery and limiting the upside for crude markets on Thursday. Sign up here. https://www.reuters.com/markets/commodities/oil-prices-rise-hopes-us-rate-cuts-boosting-fuel-demand-2024-08-15/

2024-08-15 06:30

LONDON, Aug 15 (Reuters) - The pound strengthened a touch on Thursday after data showed Britain's economy grew in line with economists' expectations in the second quarter of 2024. Sterling was last up 0.2% on the dollar at $1.2854, and also strengthened versus the euro, which dipped 0.19% to 85.68 pence. , The economy grew by 0.6% in the second quarter of 2024, in line with forecasts and building on a 0.7% recovery in the first quarter of the year, after a shallow recession in the second half of 2023, official figures showed. Analysts however also noted that growth in government spending contributed to the increase, while private consumption growth was fairly lacklustre. "What we really want to see is an increase in consumer spending, and from that point of view I think the gains in the pound could fade as it leaves the door open to further Bank of England rate cuts," said Jane Foley, head of FX strategy at Rabobank. The BoE cut rates earlier this month from a 16-year high, and market pricing currently reflects two further 25 basis point rate cuts this year, though with just under a 40% chance of another cut priced for the BoE's September meeting, traders expect it to move cautiously. "We don't think there is enough evidence for the bank to go back to back, with services inflation still at 5.2%," said Foley. British consumer price inflation increased for the first time this year in July, official figures showed on Wednesday. Annual services price inflation fell to 5.2% in July from June's 5.7%, but was below all forecasts in a Reuters poll and was the lowest since June 2022. Sign up here. https://www.reuters.com/markets/currencies/pound-strengthens-slightly-after-british-gdp-data-2024-08-15/

2024-08-15 06:29

US consumer prices increase as expected in July Bullion fell the most since Aug. 6 on Wednesday US retail sales, initial jobless claims data due at 1230 GMT Aug 15 (Reuters) - Gold prices rose on Thursday, a day after U.S. inflation data suggested the Federal Reserve might reduce interest rates next month though the extent of cuts remains uncertain, prompting investors to await further economic indicators. Spot gold was up 0.5% at $2,460.38 per ounce as of 1131 GMT, just $23 shy of the record high of $2,483.60 reached last month. U.S. gold futures rose 0.7% to $2,497.70. "Gold continues to find resistance in the $2,475-80 area with traders increasingly looking for the rate cut cycle to start before potentially adding more exposure," said Ole Hansen, head of commodity strategy at Saxo Bank, adding that the market is torn between whether a 25 or a 50-basis point will be delivered next month. Markets have priced in a 100% chance of a U.S. rate cut in September, according to the CME FedWatch Tool , opens new tab. FEDWATCH Data on Wednesday showed that the U.S. consumer prices rose moderately in July and the annual increase in inflation slowed to below 3% for the first time in nearly 3-1/2 years, opening the door wider for the Fed to cut interest rates next month. Atlanta Fed President Raphael Bostic is open to an interest-rate cut in September, he told the Financial Times, adding the Fed can't "afford to be late" to ease monetary policy. A low interest rate environment tends to boost non-yielding bullion's appeal. The market focus will now be on U.S. retail sales and initial jobless claims data, both due at 1230 GMT. "If the labour market softens that would be mildly supportive for gold, and vice versa," said StoneX analyst Rhona O'Connell. Among other metals, spot silver gained 2% to $28.15 per ounce. "Silver gaining some ground on gold, supported by rising copper prices amid fears to supply from strike action at the world’s biggest mine in Chile," Hansen said. Platinum rose 2.1% to $938.50 and palladium dipped 0.1% to $934.25. Sign up here. https://www.reuters.com/markets/commodities/gold-regains-ground-softer-us-dollar-yields-2024-08-15/

2024-08-15 06:25

OSLO, Aug 15 (Reuters) - Norwegian oil and gas investments are expected to hit a record this year and to stay high in 2025, driven by a string of ongoing field developments and cost inflation, a national statistics office (SSB) survey showed on Thursday. The country's biggest business sector now expects to invest an all-time-high 257 billion Norwegian crowns ($23.99 billion) in 2024, up from a 246.9 billion crown estimate made in May and exceeding a previous record of 224 billion crowns in 2014. Preliminary estimates for oil and gas investments in 2025 stood at 240 billion crowns, compared to a previous estimate of 215.8 billion crowns in May. Forecasts will normally rise as companies firm up spending plans in the months leading up to a new year. ($1 = 10.7126 Norwegian crowns) Sign up here. https://www.reuters.com/business/energy/norwegian-oil-companies-further-increase-oil-investments-2024-08-15/

2024-08-15 06:15

Wall Street stocks, dollar rise as U.S. retail data reassures Markets also soothed by Fed rate cut bets after wild ride Investors reduce bets for 50 bps rate cut by Fed in September UK economy grew 0.6% in Q2 NEW YORK/LONDON, Aug 15 (Reuters) - World stocks rose on Thursday and Treasury yields spiked after surprisingly strong U.S. retail sales data soothed fears about slowing economic growth, and tempered investor bets of imminent aggressive interest rate cuts. Retail sales increased 1.0% last month, well above market forecasts for a 0.3% gain, the Commerce Department's Census Bureau said on Thursday, suggesting that consumers have maintained spending by bargain hunting. Some investors said the robust data did not alter bets that the Federal Reserve could begin lowering rates in September, but dimmed the chance that the central bank will start easing policy with a hefty 50 basis-point rate cut. "This diminishes fears of a recession any time soon and it is good news in terms of stocks, but may not be good news for the bond market," said Peter Cardillo, chief economist at Spartan Capital Securities in New York. "With this report, we're back to square one, with the Fed probably cutting rates by 25 basis points in September. Chances are diminishing for a more robust 50 basis-point cut." Equity markets welcomed the latest sign of economic resilience. The S&P 500 (.SPX) , opens new tab finished 1.6% higher, the Dow Jones Industrial Average added 1.4%, and the Nasdaq Composite leapt 2.3%. MSCI's world share index (.MIWO00000PUS) , opens new tab, which has moved in excess of 1% on more than half of the trading days in August so far, rose 1.2%. Pressured by speculation that the Fed is likely to reduce rates at a more moderate pace, the benchmark 10-year Treasury yield jumped to 3.9188%, while the two-year Treasury yield climbed to 4.1034%. The jump in Treasury yields offered some respite to the dollar, which gained 0.45% against other major currencies , halting a stretch of losses that took it to its lowest per euro on Wednesday since late 2023. The dollar is also down almost 15% against Japan's yen since early July . A firmer dollar weighed on the euro on Thursday, with the common currency down 0.4% at $1.09703. The dollar also strengthened against the yen to 149.3 yen. RISK APPETITE In Europe, the pan-European STOXX 600 index (.STOXX) , opens new tab was up 1.2%, although some analysts cautioned investors against complacency. Nordea chief market analyst Jan von Gerich said the speed of the Wall Street bounce-back was a reason to be wary of further volatility ahead. "The tentative rebound in risk appetite has happened surprisingly fast, so I would be cautious," he said. Wall Street's fear barometer, the VIX (.VIX) , opens new tab volatility gauge, eased to its lowest point of the month, having soared to a four-year high on Aug. 5. The Federal Reserve has held its main funds rate at 5.25%-5.5% for more than a year, helping to quell consumer price rises, but also exacerbating some market imbalances that erupted into chaos this summer. A sustained period of high U.S. rates driving the dollar higher against Japan's yen screeched to a halt in July, creating a wrecking-ball effect on a popular speculative trade that involved borrowing the Japanese currency to buy U.S. stocks. A vicious unwinding of this so-called carry trade sparked a market rout last week, although many investors believe the currency-related disruption is almost over. "I don’t this (has been) a long-term wider market correction," said James Henderson, equity fund manager at Janus Henderson. Elsewhere in markets, sterling rose 0.2% to $1.2854 after data showed Britain's economy grew 0.6% in the second quarter of 2024, which was in line with economists' expectations. Spot gold price rose 0.3% to $2,455.29 per ounce , close to its July 17 record high, as market speculation that U.S. rates might soon be lowered lifted the non-yielding metal. Oil markets were also strong on Thursday, with Brent crude, the international benchmark, 1.4% higher at $80.90 a barrel as the U.S. retail report increased the outlook for global demand. Sign up here. https://www.reuters.com/markets/asia/global-markets-wrapup-1-2024-08-15/