2024-07-11 20:41

July 11 (Reuters) - Hedge funds Nut Tree Capital Management and Caspian Capital said on Thursday they have made an offer for Martin Midstream Partners (MMLP.O) New Tab, opens new tab, aiming to scuttle a bid from the fuels storage and transporter's largest shareholder to buy it out. The rival offer would give unitholders of Martin Midstream $4 per unit in cash, valuing the Kilgore, Texas-based company's publicly-traded units at $156 million. The price is a 21% premium to the unit's closing price on Wednesday. The bid tops the $3.05 per unit cash offer which Martin Resource Management Corporation (MRMC) said on May 24 it had made to acquire all common units it did not already own. MRMC is headed by Ruben S. Martin III, whose father in 1951 set up the business to which MRMC and Martin Midstream trace their roots. Martin Midstream's common units jumped on the news, closing 13% higher at $3.73 per unit. In a letter to the board committee set up to evaluate MRMC's offer, the hedge funds said efforts to engage with Martin Midstream on their bid had been rebuffed, despite it being more financially attractive. It said MRMC faced conflicts of interest and was trying to acquire Martin Midstream at below market value. "We believe the committee's insistence on the general partner's support to engage in discussions regarding a premium acquisition offer is inappropriate and calls into question the committee's own independence," the letter said. In a statement, Martin Midstream said it could not comment on the Nut Tree and Caspian offer as MRMC remained in active discussions with Martin Midstream's board committee about MRMC's earlier proposal. Martin Midstream is structured as a tax-efficient master limited partnership (MLP), meaning ownership is split into publicly-traded common units, but also general partner (GP) units which have outsized influence because the owner of these controls the governance of the MLP. The GP stake is controlled by MRMC, which also owns 15.7% of the common units. MRMC remains only interested in buying out the company and will not sell its position to another party, MRMC said in a statement. Dealmaking involving pipeline and storage companies has steadily grown, as buyers want to secure assets located in strategically-important locations, at a time when developing new energy infrastructure has proven challenging in many places. Martin Midstream offers storage and transportation services for fuels and petrochemicals. It also manufactures fertilizers and lubricants, with its operations concentrated along the U.S. Gulf coast. Both Nut Tree Capital and Caspian Capital are New York-based funds which focus on distressed middle-market companies. Sign up here. https://www.reuters.com/business/energy/hedge-funds-make-rival-takeover-bid-energy-firm-martin-midstream-2024-07-11/

2024-07-11 20:18

July 11 (Reuters) - Options on just-launched leveraged products that track the spot price of bitcoin via derivative swaps began trading on Thursday, a first for the cryptocurrency exchange-traded fund (ETF) universe. Investors will now be able to buy options on the T-Rex 2x Long Bitcoin Daily Target ETF and the T-Rex 2x Inverse Bitcoin Daily Target ETF , which were launched on Wednesday, Rex Shares and Tuttle said. The SEC has yet to approve options on the nine new ETFs launched in January that track the spot price of bitcoin directly. The underlying leveraged ETFs are designed for daily traders interested in getting twice the return or betting on a decline in the underlying asset, which in the case of these products is BlackRock's market-leading iShares Bitcoin Trust (IBIT.O) New Tab, opens new tab. The leverage makes the ETFs potentially more volatile. "We strongly encourage all traders to approach this exclusive offering with diligence, ensuring they are well-informed about the unique characteristics and risks associated with trading options for these specialized ETFs," Rex Shares and Tuttle said. Sign up here. https://www.reuters.com/technology/firms-launch-options-swap-based-bitcoin-etf-2024-07-11/

2024-07-11 20:12

July 11 (Reuters) - The Japanese yen surged nearly 3% on Thursday in its biggest daily rise since late 2022, a move that local media attributed to a round of official buying to prop up a currency that has languished at 38-year lows. The dollar dropped to as low as 157.40 , straight after data showed U.S.consumer inflation cooled more than expected in June. Yet the scale and speed of the move put traders on alert to the possibility of Japanese intervention. Authorities stepped in as recently as early May to bolster the yen. Domestic news service Jiji cited top currency diplomat Masato Kanda as saying he could not comment on whether or not there was an intervention, but that recent moves in the yen were "not in line with fundamentals". COMMENTS: MICHAEL BOUTROS, CHIEF TECHNICAL STRATEGIST, FOREX.COM, NEW YORK “I find it hard to believe there was someone sitting there waiting for that, to throw fuel on the fire. It would be a really strategic move, but I just don't think that's how they operate. More so than the nominal level... their assertion has always been the speed of the move. So there was nothing here today, this week, that would suggest something would spark this move all of a sudden for them to jump in.” “I'm treating this right now as proper market mechanics. It's been a strong uptrend. We need these pullbacks. These pullbacks are healthy within uptrends. Even on basic technical standards you’re seeing divergence on the weekly chart in momentum, we’ve been tracking this on the daily chart as well, so its been looking for catalysts in my opinion, and all we needed was that weak print... not only is price action correcting lower because of dollar weakness, but also we’re repricing the interest rate divergence lending to that carry trade unwind as well, and we’ll see if that unwind leads to a larger trend reversal.” GARRETT MELSON, PORTFOLIO STRATEGIST, NATIXIS, BOSTON "Just looking at the charts and listening to some of the chatter – seems pretty likely the MOF did intervene this morning after the CPI print. Vice Finance Minister Kanda with a typical refusal to answer to whether or not there was intervention, but the first leg down for the JPY was right at the CPI print after which it stabilized before the next larger leg lower about 10 minutes later." "Again, very possible the fundamentals are a key driver here given extended positioning, but looking closer at the timing of the moves with the MOF’s no-comment seems like an admission of some action taking place." PAULA COMINGS, HEAD OF FX SALES, U.S. BANK, NEW YORK “The focus in the coming days will be how today’s movement impacts overall volatility for corporates that are hedging both long JPY revenues and short JPY expenses. “We sailed through the technical level we were watching at 158.26, which we hit on June 20. The next level down would be 155.70, which was the low on June 12. "This is a strange time in the market where an argument can be made that there are opportunities to enter into options-based strategies at favorable rates and/or prices to either buy or sell JPY." ATHANASIOS VAMVAKIDIS, GLOBAL HEAD G10 FX STRATEGY, BOFA GLOBAL RESEARCH, LONDON "I think it was just the reaction to the weak US CPI and the squeeze of the market long USD positioning. The USD weakened across the board, but more so against the JPY because of positioning." CHRIS SCICLUNA, HEAD OF ECONOMIC RESEARCH AT DAIWA CAPITAL MARKETS, LONDON "The MOF won't confirm this for some time but the extent of the move gives a strong impression that it has been active and taken advantage of the post U.S. CPI data to take action." HELEN GIVEN, FX TRADER, MONEX USA, WASHINGTON DC “Traders have speculated for the last couple of months that any potential intervention from Japanese currency officials may be financed by the sale of their US treasury holdings, so any substantial move lower there is going to impact JPY more than other G10 currencies. “We'll have to see, of course, whether today's big move for JPY holds up over the next week or so, but this is definitely good news for BoJ as speculation on if and when they may intervene on behalf of the flailing currency has plagued markets consistently for the last month.” SAMEER SAMANA, SENIOR GLOBAL MARKETS STRATEGIST, WELLS FARGO INVESTMENT INSTITUTE, CHARLOTTE, NORTH CAROLINA "With CPI doing what it's doing, it's hard to kind of disentangle the two. Given the fact that the biggest portion of the move happened around the time that CPI was released, I would say it's more CPI than intervention. It is possible they did something overnight." GEOFF YU, SENIOR MACRO STRATEGIST, BNY MELLON, LONDON: "Our view is that rate differentials are clearly converging as a September (U.S.) rate cut is priced in." "Hard data also shows yen shorts are the strongest in almost three years and quite extreme so there's no resistance to the upside." MARC CHANDLER, CHIEF MARKET STRATEGIST, BANNOCKBURN GLOBAL FOREX, NEW YORK “I'd be surprised if they are, partly because of the time zone and partly because the dollar is responding to fundamentals as we would expect - softer CPI, lower U.S. rates, and of course dollar/yen falls… I think the market got caught leading the wrong way.” “I think there's three broad conditions. Volatility, and volatility is not very high, it wasn't going into today. Secondly, I think they care about a one-way market, and it hasn't been really a one-way market for a couple of weeks. And thirdly, I think about how the dollar reacts to fundamentals, and this is responding in line with fundamentals. So, the three broad criteria I don't think are met.” GIUSEPPE SERSALE, PORTFOLIO MANAGER, ANTHILIA, MILAN "The yen is currently making fireworks. Honestly, I couldn't say exactly what's driving it. If the movement persists, it could mean that short-term positioning was too skewed towards short yen. And this US data created a situation where there was a violent rebound and a series of stop losses for those short on yen." "If, however, the movement deflates, halves during the day, or becomes very erratic, it means there was also a contribution from the Japanese Treasury, who at this moment doesn't admit it... the move however seems excessive since the euro is gaining half a point, the pound is gaining half a point, and so on. Therefore, I have the impression that there is also a bit of contribution from the Japanese." JAMES MALCOLM, HEAD OF FX STRATEGY, UBS LONDON: “My personal guess is that this is not intervention.” “The thing is the market position is so, so extended that it can feed on itself very, very easily, Regardless of whether you think it should be stabilising, if dollar-yen is dropping and you’re long, you have to get out… that’s the definition of a classic carry unwind.” “There is an incentive to perhaps to do a little bit of intervention later in the day to ensure it doesn't rebound.” KENNETH BROUX, HEAD OF CORPORATE RESEARCH FX AND RATES, SOCIETE GENERALE "It's certainly a big move but I don't think we can say it's anything to do with intervention," said Societe Generale's head of corporate research FX and rates Kenneth Broux. "The US CPI has been a trigger and it's more about stops being triggered than intervention," he said. STEVE ENGLANDER, HEAD, GLOBAL G10 FX RESEARCH AND NORTH AMERICA MACRO STRATEGY, STANDARD CHARTERED BANK NY BRANCH, NEW YORK “Obviously the yen story has been a rate differential story and positions - long dollar/yen positions - have piled up. So when you get a number that's this definitive in terms of making, say, September highly probable and kind of reinstating the disinflation story, that rate differential story erodes. Most likely it was cleaning up of positions because my sense from clients, especially short-term traders, is that everybody had some long dollar/yen on that they were thinking that maybe 165 or higher was kind of where it was headed.” “There's some vague speculation on intervention, just everybody's looking at the price chart and kind of saying, oh, that's, kind of a sharp drop so maybe could have it been. The answer is it could have, but I'd say most likely its position squaring rather than any official moves.” LEE HARDMAN, SENIOR FX STRATEGIST, MUFG, LONDON When the market is heavily positioned in one direction and then it goes the other way it can trigger this kind of abrupt move. Dollar/yen long positioning was very stretched COLIN ASHER, SENIOR ECONOMIST, MIZUHO, LONDON "Most likely, it's just short covering, as speculation of US rate cuts on the horizon build in the wake of the negative CPI print." "USD/JPY is the G10 pair where positioning is most stretched." "It's certainly a sizable move, with the intra-day range the biggest since the intervention at the start of May." Sign up here. https://www.reuters.com/markets/currencies/view-japanese-yen-jumps-after-us-data-traders-still-wary-intervention-2024-07-11/

2024-07-11 20:10

July 11 (Reuters) - The leaders of small Caribbean island nations on Thursday said that financial damages wrought by Hurricane Beryl would run beyond their capacities and urged lenders to ease financing costs to address the worsening impacts of climate change. The Atlantic hurricane season runs from June to November, but Beryl, this season's first hurricane, was the earliest on record to surge to a Category 5, as human-caused climate change causes storms to intensify faster and stronger. An estimated 20,000 people lost homes across Grenada and St. Vincent and the Grenadines during Beryl and are vulnerable to more storms in what has been forecast to be a highly active season due to record ocean temperatures. The two countries' leaders each estimated hundreds of millions of dollars in damages, and said that racking up more debt to international financiers was neither just nor sustainable. "We are seeing what can happen in just a few hours - entire small islands decimated," St Vincent and the Grenadines' Prime Minister Ralph Gonsalves told a press conference, adding that major polluting nations were either not listening or lacked the political will to tackle climate change. The region has long called for wealthy nations to honor their pledges to reduce emissions, fund climate relief efforts and consider debt relief. A recent Reuters investigation found billions in climate funds being funneled back to rich nations. International lenders, Gonsalves added, "are not fit for purpose for disasters of this kind. There's very little money available for relief." The Caribbean Catastrophe Risk Insurance Facility (CCRIF), a regional risk pool, said this week it would pay $44 million to Grenada, its largest-ever single payout, surpassing the $40 million it paid Haiti after its 2021 earthquake. CCRIF said Beryl was "very reminiscent" of 2004's Hurricane Ivan, which caused the United States some $20 billion in damages and $6 billion in the Caribbean, costing both Grenada and the Cayman Islands losses totaling 200% of their annual GDP. Grenadian Prime Minister Dickon Mitchell said the two nations "simply cannot afford another hurricane." He said the payouts were just a "drop" of what was needed, as mainland Grenada would need to feed the worst-hit islands for the next six months at least, and it could take their devastated economies, agriculture and wildlife decades to recover. "The needs of our citizens are immediate," Mitchell said. "The cost of living on the front lines of the climate crisis is too high for us to bear alone." Sign up here. https://www.reuters.com/world/americas/leaders-beryl-hit-caribbean-say-more-aid-needed-2024-07-11/

2024-07-11 19:44

July 11 (Reuters) - U.S. natural gas futures fell about 3% to a two-month low on Thursday on a bigger-than-expected weekly storage build as output rose and the amount of gas flowing to liquefied natural gas (LNG) export plants dropped after Freeport LNG in Texas shut early this week for Hurricane Beryl. Freeport started taking in small amounts of gas again on Thursday after power generators consumed a daily record amount of gas on Tuesday to keep air conditioners humming on the hottest day so far this summer. Front-month gas futures for August delivery on the New York Mercantile Exchange fell 6.1 cents, or 2.6%, to settle at $2.268 per million British thermal units (mmBtu), their lowest close since May 10. That price drop also kept the front-month in technically oversold territory for a third day in a row. The U.S. Energy Information Administration (EIA) said energy firms added 65 billion cubic feet (bcf) of gas into storage during the week ended July 5. That was more than the 55-bcf build analysts forecast in a Reuters poll and compares with an increase of 57 bcf in the same week last year and a five-year (2019-2023) average rise of 57 bcf for this time of year. That build boosted the amount of gas in storage to around 19% above normal levels for this time of year. Before the latest storage build, traders noted that injections were smaller than usual for eight weeks in a row because several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March. Higher prices in April, May and June prompted some producers, including EQT (EQT.N) New Tab, opens new tab and Chesapeake Energy (CHK.O) New Tab, opens new tab, to return to the well pad. But with prices now down about 12% so far in July, energy traders say it will be interesting to see whether drillers will keep boosting output over the next month or two. EQT is the nation's biggest gas producer, and Chesapeake is on track to become the biggest after its planned merger with Southwestern Energy (SWN.N) New Tab, opens new tab. Even though power generators were burning near record amounts of gas to keep air conditioners humming during a brutal heat wave, those gas burns were slightly depressed because roughly 1.3 million homes and businesses were still without power in Texas on Thursday in the wake of Hurricane Beryl. At its peak Beryl, which hit Texas on Monday, knocked out power to over 2.7 million customers. SUPPLY AND DEMAND Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 102.1 billion cubic feet per day (bcfd) so far in July, up from an average of 100.2 bcfd in June and a 17-month low of 99.5 bcfd in May. U.S. output hit a monthly record high of 105.5 bcfd in December 2023. Meteorologists projected weather across the Lower 48 states would remain mostly hotter than normal through at least July 26. With hotter weather expected next week, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 106.3 bcfd this week to 106.6 bcfd next week. The forecast for next week was lower than LSEG's outlook on Wednesday. Gas flows to the seven big U.S. LNG export plants fell to 11.9 bcfd so far in July after Freeport LNG in Texas shut ahead of Hurricane Beryl on Sunday, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023. Sign up here. https://www.reuters.com/business/energy/us-natgas-prices-fall-3-two-month-low-big-storage-build-rising-output-2024-07-11/

2024-07-11 19:29

LONDON, July 11 (Reuters) - Britain has reversed a decision to grant permission for an oil drilling operation and dropped its defence to a legal challenge over a disputed new coal mine, campaigners said on Thursday, after a landmark ruling on fossil fuel projects. The move comes in response to a major judgment last month from Britain's highest court on the climate effects of fossil fuel projects, which activists said could profoundly impact new fossil fuel projects in Britain. The Supreme Court ruled that planning authorities must consider the impact of burning, rather than just extracting, fossil fuels when deciding whether to approve projects. Law firm Leigh Day said ministers in the former Conservative government had agreed to the quashing of a 2023 decision to permit oil drilling in Lincolnshire, in eastern England on July 4, the day of a national election in which the Conservatives were replaced in government by Labour. Judge Judith Farbey said in a court order that the question of permission for the project would be remitted for a new decision to be made in light of the Supreme Court's judgment. Mathilda Dennis – a campaigner with SOS Biscathorpe, which brought a legal challenge over the project – said in a statement that "it is clear that the unequivocal link between fossil fuel extraction and climate crisis can no longer be ignored". Separately, environmental group Friends of the Earth said ministers had dropped the government's defence to a legal challenge over Britain's 2022 approval of its first new deep coal mine in decades. The group said a court hearing in their legal challenge might still go ahead next week unless West Cumbria Mining, which wants to develop the coal mine, also dropped its defence. The Ministry of Housing, Communities and Local Government referred a request for comment on the Lincolnshire oil project to the Planning Inspectorate, which declined to comment. Egdon Resources, operator of the Lincolnshire oil project, and West Cumbria Mining did not immediately respond to a request for comment. Sign up here. https://www.reuters.com/world/uk/uk-reverses-oil-drilling-permission-after-court-ruling-campaigners-say-2024-07-11/