2024-08-06 11:34

Aug 6 (Reuters) - Marathon Petroleum (MPC.N) , opens new tab beat second-quarter profit estimates, as higher volume of crude processing and a strong midstream segment helped offset low refining margins, sending the shares of the top U.S. refiner up nearly 6%. It was able to process up to 16% of the country's total demand at its 13 U.S. plants as of June even as fuel demand took a hit from lower manufacturing activity and higher renewable fuel supply. In anticipation of higher demand, U.S. refiners had ramped up processing capacity to 93.5% in the second quarter, compared with 91% a year ago, according to the U.S. Energy Information Administration. Weak demand hit Marathon's refining margins that came in at $17.37 per barrel, compared with $22.10 per barrel a year ago It, however, saw a quarterly crude capacity utilization of 97%, up from 93% last year. This led to a total throughput of 3.1 million barrels per day (bpd) compared with 2.9 million bpd a year ago. Marathon expects total crude throughput of 2.6 million bpd, or 90% of capacity in the third quarter. "(Third quarter) refinery throughput looks to be lower than street forecasts. However, Marathon's ability to capture margin and maintain sound operating performance looks to continue," said Peter McNally, global head of analysts at Third Bridge. Marathon Chief Financial Officer John Quaid said third quarter production was lower because of lower demand. "We've got (turnaround) activities, as I mentioned, in the Mid-Continent and the Gulf Coast that are going to affect what we're going to be able to run," Quaid said. "But really we're going to continue to run our assets optimally to meet the demand in the market. Yes, but we will run economically." Refiners routinely perform maintenance in the first and third quarters of the year. It joins rivals Phillips 66 (PSX.N) , opens new tab, Valero (VLO.N) , opens new tab, and HF Sinclair (DINO.N) , opens new tab in posting lower quarterly profits, but exceeding profit estimates on higher amount of crude processed. Marathon's refining and marketing core adjusted profit was 36.7% lower from a year ago on lower market crack spreads. But its core adjusted profit for midstream segment jumped 5.7%, on higher rates, volumes and fuel moved through pipelines. The company posted a profit of $4.12 per share for the three months ended June 30, higher than analysts' estimates of $3.09, according to LSEG data. Revenue from its operations jumped to $38.36 billion, higher than expectations of $35.08 billion. Marathon CEO Maryann Mannen said there was no truth to rumors the company was in talks about a buyout with Finnish refiner Neste Oyj (NESTE.HE) , opens new tab. "I heard you mention that. That rumor is not factual and we are not having any conversations about a buyout with Neste," Mannen said. Sign up here. https://www.reuters.com/business/energy/marathon-petroleum-posts-lower-second-quarter-profit-2024-08-06/

2024-08-06 11:29

Aug 6 (Reuters) - Ukraine's foreign currency reserves slipped to $37.2 billion as of Aug. 1, the central bank said on Tuesday, but have since risen to more than $40 billion due to a financial aid inflow from the U.S. The reserves fell by 1.8% over July due to the central bank's interventions to cover the structural foreign currency deficit in the market, and the country's debt payments, the central bank added. On Monday Kyiv officials said Ukraine had received $3.9 billion from the U.S., the first such inflow of 2024 after the aid package was stalled for months by Republicans in Congress. "Thanks to this, international reserves have now exceeded $40 billion," the bank said on the Telegram messaging app. More than 29 months into the full-scale Russian invasion, Ukraine is heavily reliant on financial aid from its Western partners to cover social spending as it allocates its own revenues for military needs. Ukraine paid $185.0 mln to service its foreign debts in July, the bank said in a statement. Sign up here. https://www.reuters.com/markets/currencies/ukraine-forex-reserves-slip-372-bln-central-bank-says-2024-08-06/

2024-08-06 11:22

Aug 6 (Reuters) - Libya's National Oil Corporation (NOC) said on Tuesday that it is gradually reducing production from the Sharara field, one of Libya's largest oil fields, citing force majeure due to protests in the area. Production at the field is still reaching 200,000 barrels on Tuesday, two field engineers told Reuters. The field has the capacity of about 300,000 barrels per day. Sharara, located in southwestern Libya and operated by a joint venture of the state National Oil Corporation (NOC) with Spain's Repsol (REP.MC) , opens new tab, France's TotalEnergies (TTEF.PA) , opens new tab, Austria's OMV (OMVV.VI) , opens new tab and Norway's Equinor (EQNR.OL) , opens new tab, has been a frequent target of local protesters. In the statement, NOC attributed the gradual reduction in output to "force majeure circumstances resulting from a sit-in of the gathering of the Fezan movement". Sharara was also shut down by protests in January, one of many disruptions to Libya's oil output in the chaotic decade since the country divided in 2014, which left it with separate administrations in the east and west following the NATO-backed uprising that toppled Muammar Gaddafi in 2011. Sign up here. https://www.reuters.com/business/energy/libyas-noc-gradually-reduce-sharara-oil-field-production-due-protests-2024-08-06/

2024-08-06 11:18

URUAPAN, Mexico, Aug 6 (Reuters) - On a sweltering July afternoon, two large yellow bulldozers dug into the brown soil at the bottom of a lush avocado orchard near the small town of Madero, located in central Mexico's Michoacan state. Drone footage recorded by Reuters captured the earth movers hollowing the ground, in what Mexican environmental group Guardian Forestal - which collaborates with the Michoacan state government - and an activist who reviewed the video described as an attempt to construct a water reservoir. Mexican law requires an environmental impact study and permit to store and use water for resource-intensive avocado farming. Data from the national water authority Conagua showed only 42 reservoirs and wells in Madero were registered with permits. However, two activists interviewed by Reuters said there were hundreds of similar water pools in the area. With Michoacan battling a drought, avocado producers often resort to taking water from lakes or communal basins, draining them to worrying lows, according to three local and state officials. Illegal practices in Mexico's avocado heartland, which is expanding rapidly to feed growing demand in the United States, come at the expense of nearby forests, according to Michoacan government officials. The environmental damage has prompted U.S. nonprofit the Organic Consumers Association to file lawsuits against unlisted West Pak Avocado Inc and another major avocado importer Fresh Del Monte Produce Inc (FDP.N) , opens new tab for labeling Mexican avocados as "sustainable" or "responsibly sourced." "Contrary to West Pak's representations, its avocados are neither responsibly sourced nor environmentally sustainable," the Organic Consumers Association, a Minnesota-based lobby group that has sued various food and agriculture companies over marketing claims, said in one of the lawsuits. West Pak declined to comment and Fresh Del Monte did not respond to questions for this story. The U.S. lawsuits filed in DC Superior Court Monday shine a spotlight on the supply chains of some U.S. companies operating in the Mexican avocado industry. While lucrative for the growers, the industry is under increasing pressure from organized crime groups and facing accusations of rising environmental damage. Reuters visited two orchards in July that an analysis of satellite images by U.S. nonprofit Climate Rights International showed were illegally deforested in Madero after 2015. Climate Rights International identified these two orchards as having sold avocados to West Pak as recently as December and January, according to Mexican government shipping records, also reviewed by Reuters. During a July visit, the news agency's journalists observed the farm machinery digging a water reservoir on one of them. The lawsuits, filed by Irvington, N.Y.-based law firm Richman Law and Policy on behalf of the Organic Consumers Association, demand an injunction be put in place that would require West Pak and Fresh Del Monte to remove their marketing claims of a sustainable supply chain, citing water scarcity, climate change and a decline in the migration of endangered Monarch butterflies that flock yearly to Michoacan. The Organic Consumers Association is also asking the court to declare that the two avocado importers are violating the District of Columbia's consumer protection law, and to bar them from continuing such conduct. AVOCADO DEMAND SKYROCKETS Avocado exports to the United States have soared 48% since 2019, according to U.S. trade data. The U.S. market accounts for about 80% of Mexico's total avocado exports, data by the U.S. Department of Agriculture shows, a trade worth $3 billion last year. In February, U.S. Ambassador to Mexico Ken Salazar said avocados sourced from illegal orchards should be blocked from the U.S. market. There has been no government action from either Washington or Mexico to do so. The voracious U.S. demand for the staple ingredient of guacamole divides communities in Mexico, where it is both a driver of economic growth and the catalyst for an environmental and social crisis. Dubbed "green gold" among Mexicans, the avocado trade has attracted crime groups that extort payments from producers and have acted as muscle for others by displacing people and deforesting the once-verdant countryside, according to 10 locals interviewed by Reuters in Michoacan. Climate Rights International, whose findings are cited in the Organic Consumers Association's lawsuits, said it has documented more than 30 threats or acts of intimidation associated with the expanded avocado trade, including four abductions and five fatal shootings. One Madero farmer, who asked to remain anonymous due to concerns for his safety, said he was was kidnapped after he protested deforestation. "If they only knew ... behind every avocado that people in the United States eat, there is a bloodstain, a dead person, a missing person," he said. Reuters could not independently verify the accounts from the local residents or Climate Rights International's findings. Up to 70,000 acres in Michoacan and neighboring Jalisco state have been deforested for avocado farming in the last decade, the data from Guardian Forestal and Climate Rights International show. Residents told Reuters some local people fight back by destroying the illegal water pumps installed by producers that drain communal reservoirs. "They have even gone to destroy avocado orchards," said Claudia Alejandra Sanchez, an activist for Michoacan's Purepecha indigenous people. Climate Rights International, which has tracked human rights violations linked to climate change including in Mexico's avocado trade, told Reuters it contacted West Pak, Fresh Del Monte and other U.S. importers and supermarket chains including Whole Foods Market, Costco (COST.O) , opens new tab, Trader Joe's and Target (TGT.N) , opens new tab in April and November last year regarding their supply chains. Reuters reviewed copies of letters shared by Climate Rights International. Yet the importers and U.S. retailers still sell avocados sourced from illegally deforested orchards in Michoacan, according to a new report by Climate Rights International and Guardian Forestal exclusively reviewed by Reuters. The new data shows West Pak, Fresh Del Monte and other importers kept shipping from illegally deforested orchards even after being informed of the deforestation in their supply chain, according to Climate Rights International's analysis of trade records. The two importers' avocados landed on the shelves of U.S. supermarkets, the Climate Rights International's findings showed. Most of those companies have publicly pledged to adhere to sustainable supply chains in compliance with local laws. Reuters requested comment from nine major U.S. supermarkets and food chains that sell Mexican avocados to ask how they ensured their supply chains were free of illegal deforestation and violent exploitation. Only Amazon's (AMZN.O) , opens new tab Whole Foods Market responded, saying it was actively working with its suppliers to "prioritize Fair Trade certified and other responsibly sourced avocados." Daniel Wilkinson, Climate Rights International's senior adviser, said: "If these companies are serious about their public commitment to sustainability, they could easily clean up their supply chains and greatly reduce the main incentive driving the deforestation and attacks on local communities." 'SET MOUNTAINS ON FIRE' Mexico requires legal permission to convert forest to agricultural land and has not granted such authorizations in Michoacan for nearly three decades, Michoacan's Secretary Of Environment Alejandro Mendez told Reuters. "About eight or ten years ago it was pure wilderness here," said Madero's environmental director Savas Melchor Gomez, standing in front of the orchard's trees. "They set the mountains on fire to clear them and continue expanding, and it goes on and on." To deal with endemic logging, Michoacan officials plan to establish an online platform that offers public information about illegally deforested orchards. The platform, which officials said they want to launch this month, would certify avocados from orchards that do not deforest illegally. Michoacan Governor Alfredo Ramirez said the platform should enhance transparency by allowing foreign governments and companies to see where avocados from illegally deforested areas are going. "So far, no large supermarket has approached us over this issue... but we do not really see an interest in it, these companies taking any responsibility," Ramirez said in an interview. Activists, local officials and researchers who spoke to Reuters estimated the true number of illegal orchards in Michoacan was likely in the thousands and would not be properly identified by the platform, which only includes illegal deforestation after 2018. Sign up here. https://www.reuters.com/business/environment/avocado-goldrush-links-us-companies-with-mexicos-deforestation-disaster-2024-08-06/

2024-08-06 11:15

LONDON, Aug 6 (Reuters) - The pound resumed its decline against the dollar on Tuesday, falling to a five-week low, and steadied on the euro as markets calmed down after the previous day's sharp swings. Sterling was last down 0.6% against the dollar at $1.2699, its lowest since July 3. It has fallen around 2.6% from its mid-July peak a fraction above $1.30, as traders trimmed their long positions into the Bank of England's rate cut last week . The sterling-dollar rate has been less affected than those for some other currency pairs by recent ructions across markets. Patrick Ernst, currency strategist at UBS Global Wealth Management said in a note this is because the pound's sensitivity to swings in assets like equities compensated for changes in the relative rate outlook. Markets have increased their expectations of Federal Reserve rate cuts substantially and now see over 100 basis points of easing across the Federal Reserve's three meetings this year. That compares with less than 50 bps of further cuts expected from the Bank of England. This shift in differentials would typically support the pound, but as one of high beta currencies that tend to follow broader market swings it came under pressure from the sharp sell-off in equities in the past two trading days. The pound was also a fraction weaker on the euro with one euro at 85.9 pence, though more stable than it was yesterday. The euro jumped to as high as 86.19 pence on Monday, its highest since early May, a move Nick Rees, currency analyst at Monex Europe, attributed to some safe-haven flows shifting to the common currency from the dollar, given the ructions in the United States. Against the yen, the biggest mover in currency markets in recent weeks, the pound was down 0.24%, at 183 yen, its sixth straight day of declines, as the unwinding of carry trades has supported the Japanese currency. The longer-term prospects for the pound, however, still depend on rate differentials. "We believe that resistance levels around 1.30 will hold in the short term and that they will only be broken later in the year when Fed cuts are underway and the USD weakens more broadly," said Ernst. Sign up here. https://www.reuters.com/markets/currencies/pound-trades-five-week-low-dollar-resumes-recent-slide-2024-08-06/

2024-08-06 11:12

BEIJING, Aug 6 (Reuters) - China's state planner unveiled details on Tuesday of a three-year plan to upgrade the power system as the country seeks to ramp up renewables and ease the strain of rising power demand on the national grid. The 2024-2027 plan launched by the National Reform and Development Commission aims to help China meet its goal of reaching a peak in carbon emissions before 2030 and includes guidance on the upgrading of transmission and distribution systems, the planning body said. The plan sets targets for demand response, the balancing of demands placed on power grids, by encouraging consumers to shift their electricity usage away from peak times - a necessity underscored by record-breaking heat that has strained grids in eastern China in recent days. Demand response capacity should reach 5% of the maximum electric load, according to the plan. It also for the first time sets a more ambitious goal for demand response to reach 10% of maximum load in certain areas, though it did not specify which areas. The plan focuses on building a more flexible power grid to better manage the transition to intermittent renewables, said Xuewan Chen, energy transition analyst at LSEG. But a crucial aspect not mentioned in the document was power market reform and the creation of a competitive power market to more effectively allocate resources, she said. Currently, transactions are mostly governed by medium- and long-term contracts. More renewable power should be used in China's long-distance power transmission projects, which typically send electricity from large plants in western China to cities in the east of the country, the NDRC plan said. It also called for creating standards for next-generation coal-fired power, reducing the emissions from coal power plants, and blending coal with lower-carbon fuels. Other plans include improving the country's electric vehicle charging infrastructure, piloting new grid scheduling plans in areas with heavy EV charging demand, and upgrading energy storage that had been installed at renewable power plants but not effectively utilised. Sign up here. https://www.reuters.com/world/china/chinas-state-planner-outlines-power-system-upgrade-priorities-2024-08-06/