2024-08-02 12:41

Aug 2 (Reuters) - Traders bet on Friday that the Federal Reserve will start easing policy in September with a big half-percentage-point interest rate cut, after government data showed employers added far fewer workers than expected last month, and the jobless rate rose. Interest rate futures contracts now reflect about a 70% chance seen of a half-percentage-point rate cut next month, versus what was seen before the report as a 70% chance of a more usual quarter-point cut. Sign up here. https://www.reuters.com/markets/us/fed-seen-cutting-rates-by-half-point-sept-after-weak-jobs-data-2024-08-02/

2024-08-02 12:34

Aug 2 (Reuters) - Utility PPL (PPL.N) , opens new tab beat second-quarter profit estimates on Friday, helped by warmer weather and lower operating expenses. Extreme heat in the quarter prompted consumers to increase their usage of air conditioners and refrigerators during peak summer months, boosting earnings of utilities such as PPL. Earnings from PPL's Kentucky segment rose 50% to 18 cents per share in the second quarter from a year ago and earnings from its Pennsylvania segment were up 40% at 21 cents per share. Companies have also initiated cost-cutting measures as the U.S. Federal Reserve lifting interest rates to curb inflation has led to higher borrowing costs. The company's quarterly operating expenses were down 1.8% at $1.49 billion, from a year ago. The company reported an adjusted profit of 38 cents per share for the quarter ended June 30, compared with analysts' average estimate of 33 cents, according to LSEG. PPL reaffirmed its full-year forecast for earnings from ongoing operations at $1.63 to $1.75 per share. Sign up here. https://www.reuters.com/business/energy/utility-ppl-beats-second-quarter-profit-estimates-warmer-weather-2024-08-02/

2024-08-02 12:19

Aug 2 (Reuters) - Petrochemical manufacturer LyondellBasell (LYB.N) , opens new tab on Friday edged past Wall Street estimates for second-quarter profit and said it expects margins to continue to benefit from lower feedstock prices in the third quarter. U.S. prices of natural gas (.NGc1) , opens new tab, a key feedstock for chemical firms, have fallen 21.7% so far this year. In the third quarter, the company said it expects margins to benefit from low costs for natural gas and natural gas liquids utilized in its North American and Middle East production, relative to higher oil-based costs in most other regions. "With the summer driving season underway, oxyfuels margins are expected to remain above historical levels with high octane premiums," it said in a statement. Oxyfuels are a key component of clean-burning, high-octane gasoline. They improve fuel efficiency, engine performance and air quality by improving combustion efficiency, which in turn reduces vehicle emissions, including greenhouse gases. The company said its second-quarter volumes benefited from increased production and improving seasonal demand. LyondellBasell completed the sale of its U.S. Gulf Coast-based ethylene oxide and derivatives business for $700 million in May, which benefited its second-quarter earnings by 58 cents per share. It posted adjusted profit of $2.24 per share in the second quarter, compared with analysts' average estimate of $2.23 per share, according to LSEG data. Sign up here. https://www.reuters.com/business/energy/lyondellbasell-beats-quarterly-profit-estimates-expects-margins-improve-2024-08-02/

2024-08-02 12:10

Aug 2 (Reuters) - Canada's Imperial Oil (IMO.TO) , opens new tab on Friday reported a 68% jump in second-quarter profit, as the integrated oil firm was helped by higher crude prices and production. Extension of a production cut by OPEC+, forecast of strong travel demand and hopes of interest rate cuts by the U.S. Federal Reserve helped lift crude prices nearly 7% in the April-June quarter compared to last year. Upstream production rose 11.3% to 404,000 gross barrels of oil equivalent per day (boepd), its highest second-quarter production in over 30 years, after adjusting for the divestment of XTO Energy, the company said. Separately, Imperial's majority shareholder and oil and gas major Exxon Mobil (XOM.N) , opens new tab beat Wall Street's expectations for second-quarter profit earlier in the day, helped by an increase in oil production. The Calgary-based company said its net profit rose to C$1.13 billion ($814.30 million), or C$2.11 per share, in the quarter ended June 30, from C$675 million, or C$1.15 per share, last year. Sign up here. https://www.reuters.com/business/energy/imperial-oil-posts-higher-quarterly-profit-2024-08-02/

2024-08-02 11:50

Long-running debt overhaul back on track after IMF deal To save $200 mln repayment of dollar bond in re-work Prime minister defends adoption of new FX policy Wants banks to quickly unify official, black market rates ADDIS ABABA, Aug 2 (Reuters) - Ethiopia will enjoy $4.9 billion in relief from debt repayments when it completes a long-delayed restructuring, State Finance Minister Eyob Tekalign said on Friday, adding that he hopes to sign deals with creditor nations in the coming months. The East African country, which became the third economy on the continent in as many years to default on its debt at the end of 2023, wants to put the debt overhaul back on track after agreeing a new International Monetary Fund financing programme this week. "We will sign and finalise with each individual (creditor) country over the course of the next few months," Eyob told Reuters, referring to the estimated savings to Ethiopia as a result of the restructuring. The country's total external debt stood at $28.38 billion in March this year, finance ministry data showed. Prime Minister Abiy Ahmed, explaining recent economic reforms in a televised speech late on Thursday, said the estimated savings would include $200 million from the restructuring of its $1 billion Eurobond . Eyob said that could be accomplished through "nominal reduction" of the value of the bond as part of the debt re-work. CURRENCY SLIDES Abiy also defended this week's switch to a market-determined foreign exchange rate, saying it aimed to close the gap between the official and black market rates and did not amount to a devaluation of the currency. The central bank allowed the birr currency to float freely on Monday, fulfilling a key condition for securing IMF support. Since then, the birr has slipped at least 31.5% against the dollar to trade at 83.94 per greenback, the country's biggest lender, Commercial Bank of Ethiopia said, and some economic analysts and commentators have voiced concern that inflation could surge. "There were two markets. One is 100 and the other is 50. So when the gap between the two became wide, it brought many dangers. So what we said, (the two) should be unified," Abiy said, chiding banks for failing to swiftly unify the two rates. "I believe your approach is not correct. The rate you are currently posting does not ensure unification," he told bank executives who were present when he spoke. Banks posted new, weaker rates for the birr after Abiy's comments, with some quoting it at 90 per dollar, closer to the current black market rate of 118 per dollar. While lifting foreign exchange trading restrictions helped Ethiopia clinch the IMF deal and funding from other creditors including the World Bank, concern about the policy's inflationary impact on low-income households has led to a crackdown by authorities. The federal trade ministry has closed more than 700 shops for "unjustified price hikes and hoarding" after the new exchange rate kicked in, it said in a statement on Friday. At least two local governments have also taken action against shops raising prices. The government and its creditors say the liberalisation will help the private sector make a bigger contribution to the economy and boost long-term growth. Sign up here. https://www.reuters.com/markets/currencies/ethiopias-pm-defends-currency-float-amid-inflation-concerns-2024-08-02/

2024-08-02 11:47

Aug 2 (Reuters) - Chevron Corp (CVX.N) , opens new tab on Friday posted sharply weaker second-quarter earnings and the oil major's CEO discounted the chance to close a $53 billion acquisition of Hess Corp (HES.N) , opens new tab before mid-2025, sending shares down 3%. Shares were off 9% since Wednesday following company statements saying a Hess deal closing could well be pushed back by another year, if not blocked entirely. Chevron is counting on the Hess acquisition to establish a foothold in Guyana, home to the largest oil discovery in nearly two decades. It also hopes the deal will mitigate risks associated with the company's performance-challenged oil projects in Australia and Kazakhstan, where operational issues again hit production, pushing maintenance work into the third quarter. The company had warned oil output this quarter would slip along with refining margins, but investors were surprised at the magnitude of the declines. Quarterly earnings fell 19% to $2.55 per share, well below a year ago and 38 cents below Wall Street's consensus estimate. "This quarter was a little light due to some operational and other discrete items that impacted results," CEO Michael Wirth told analysts. The company's plan to enter Guyana's lucrative offshore oil fields was shaken by a challenge from Exxon Mobil. A slow arbitration process looks to drag the deal closing well into 2025. Asked by analysts about the prospect of a compromise with Exxon, CEO Wirth said the idea would be "sensible" and that Chevron had pursued it, without success. "It doesn't appear that is how this is going to end up," he said. Exxon claims its joint operating agreement with Hess and China's CNOOC Ltd gives it the right of first refusal to Hess' Guyana properties. Chevron reported earnings fell sharply to $4.4 billion, or $2.43 per share, in the quarter, from $6 billion a year before. It reported adjusted earnings of $4.7 billion, or $2.55 per share, down from $5.8 billion, or $3.08 per share, a year ago. In contrast, Exxon beat Wall Street estimates on strong oil production in U.S. shale and Guyana's oil field. Chevron's earnings from pumping oil and gas fell 9.4% on weakness outside the U.S. Earnings from fuels and chemical operations tumbled about 60%. Refining suffered from weak margins that also hit rivals Exxon and Shell. Oil refiners overall made less money selling gasoline in the second quarter, as demand softened after production had soared earlier this year. Companies had two years of stellar profits after ramping up production in the travel boom after COVID-19 shut-ins dissipated. "Despite recent operational downtime and softer margins, we remain poised to deliver significant long-term earnings and cash flow growth," CEO Wirth said. HESS DEAL DELAY On Wednesday, Chevron said an arbitration panel that will evaluate Exxon's challenge to its Hess acquisition should have a decision between June and August 2025. Exxon's Chief Financial Officer Kathryn Mikells told Reuters she expects a hearing in late May and a decision on the dispute by September 2025. Until earlier this week, Chevron expected to close the deal by the end of the year. CALIFORNIA Chevron said it would relocate its headquarters to Texas from California, continuing an exodus of oil companies from the state due to higher taxes, stricter climate regulations and depleting oil fields. Chevron expects all corporate functions to migrate to Houston over the next five years. Positions in support of its California operations, which includes oil fields and two refineries, will remain in San Ramon. Chevron CEO Wirth and Vice Chairman Mark Nelson will move to Houston before the end of 2024, the company said. Chevron currently has roughly 7,000 employees in the Houston area and about 2,000 employees in San Ramon. Sign up here. https://www.reuters.com/business/energy/chevron-reports-q2-miss-hess-takeover-faces-new-delays-2024-08-02/