2024-07-05 06:34

HOUSTON, July 5 (Reuters) - Oil prices settled lower on Friday as the rising possibility of a ceasefire deal in Gaza outweighed strong summer fuel demand and potential supply disruptions from Gulf of Mexico hurricanes. Brent crude futures settled down 89 cents, or 1.02% lower, to $86.54 a barrel, after reaching their highest since April earlier in the session. U.S. West Texas Intermediate (WTI) crude futures settled at $83.16 a barrel, down 72 cents, or 0.9%. For the week, Brent rose 0.4%, while WTI futures posted a 2.1% rise. The head of Israel's Mossad has returned from Doha after an initial meeting with mediators trying to reach a Gaza ceasefire and hostage release deal, and negotiations will resume next week, Prime Minister Benjamin Netanyahu's office said on Friday. Netanyahu's office said in a statement that gaps remain between the sides. “Obviously a breakthrough there would help calm the waters”, said John Kilduff, partner at Again Capital. An easing of the Middle Eastern conflict reduces the risk premium of barrels out of the region and weighs on oil prices. WTI did not settle on Thursday due to the Independence Day holiday, giving way to thin trading, but prices have risen this week on strong summer oil demand expectations in the U.S. "The last couple of days represent the peak of the drive season, in terms of demand and prices continue to creep higher. This is coming from stronger consumer demand and the effects of Hurricane Beryl," Tim Snyder, economist at Matador economics said in a note on Friday. The U.S. Energy Information Administration (EIA), on Wednesday, reported a much larger-than-expected 12.2 million barrel inventories draw last week, compared with analyst expectations for a draw of 700,000 barrels. On the supply side, Hurricane Beryl, a Category 2 storm, made landfall in Mexico, after killing least 11 people in the Caribbean, tearing through buildings and power lines across several Caribbean islands. Mexico's major oil platforms are not expected to be affected by the storm, but oil projects in U.S. waters to the north may be disrupted if the hurricane continues on its expected path. The possibility that U.S. interest rate cuts are approaching, meanwhile, raised expectations for an increase in oil demand. U.S. job growth slowed marginally in June, but a rise in the unemployment rate to more than a 2-1/2 year high of 4.1% and moderation in wage gains pointed to an easing of labor market conditions, and could put a rate cut at the July meeting in their sights. "This morning’s employment data shows that there are some cracks in the labor market, that could spur on a rate cut even this month”, said Kilduff at Again Capital. Lower interest rates can boost economic activity and increase crude oil demand. Sign up here. https://www.reuters.com/business/energy/oil-prices-track-fourth-straight-week-gains-2024-07-05/

2024-07-05 06:21

Ukraine navy chief says Russia losing control of Crimea hub Sea drone and missile attacks compromise its capabilities Most Russian warships have rebased at a distance, he says Ukraine's tactics allowed it to open new export corridor Russian land forces have the upper hand ODESA, Ukraine, July 5 (Reuters) - The Russian navy's Black Sea Fleet has been forced to rebase nearly all its combat-ready warships from occupied Crimea to other locations, and its main naval hub is becoming ineffectual because of attacks by Kyiv, Ukraine's navy chief said. Vice-Admiral Oleksiy Neizhpapa said Ukrainian missile and naval drone strikes had caused heavy damage to the Sevastopol base, a logistics hub for repairs, maintenance, training and ammunition storage among other important functions for Russia. "They were established over many decades, possibly centuries. And clearly they are now losing this hub," Neizhpapa told Reuters in a rare interview in the port city of Odesa ahead of Ukraine Navy Day on Sunday. More than 28 months since Russia's full-scale invasion, Kyiv has dealt a series of stinging blows to Moscow in the Black Sea although Ukrainian ground troops are on the back foot across a sprawling front. Ukraine, which has no major warships at its disposal, has used uncrewed naval boats packed with explosives to target Russian vessels, and pounded the fleet's facilities and other military targets on Crimea with Storm Shadow and ATACM missiles. "Almost all the main combat-ready ships have been moved by the enemy from the main base of the Black Sea Fleet, and the ships are kept in Novorossiisk, and some of them are kept in the Sea of Azov," he said. Russia's Novorossiisk naval base on its eastern Black Sea coast lacks the extensive facilities of Crimea's Sevastopol, which served as the storage and loading site for cruise missiles used by its warships to launch air strikes on Ukraine, he said. "I understand that they are now trying to solve this problem in Novorossiisk," he said, describing this as a "main issue" for the fleet. Russia's defence ministry did not respond to a Reuters request for comment on Neizhpapa's remarks. President Vladimir Putin told navy chiefs last month that Russia's fleet had been replenished over recent years and that a major modernisation was under way, including steps to "increase the combat stability of the fleet" and strengthen it. Alongside strategic bombers and ground-based launchers, missile-carrying warships and submarines play an important role in Russia's regular long-range missile attacks. Neizhpapa said Ukraine had destroyed or damaged 27 naval vessels, including five that he said were damaged by sea mines laid by Ukrainian naval drones near the Bay of Sevastopol. Moscow seized and annexed Crimea from Ukraine in 2014. Before February 2022, Russia used its Black Sea Fleet, which consists of dozens of warships, to project power into the Mediterranean and the Middle East. Throughout the Ukraine war, Turkey, which controls the straits in and out of the Black Sea, has not allowed warships to enter or exit. DEFENSIVE POSTURE In a sign of their more defensive posture, some Russian warships that seldom entered the Sea of Azov to the east of Crimea are now stationed there regularly, Neizhpapa said. Monitoring data compiled by the Ukrainian Navy and provided to Reuters showed that as of June 27, 10 Russian warships were stationed in the Sea of Azov compared with none in 2023. The Black Sea Fleet is primarily used now for logistics, a small amount of coastal territorial control and for firing Kalibr cruise missiles at Ukraine, he said. He declined to say what Ukraine's future plans in the Black Sea would involve. Ukraine's operations in the Black Sea have allowed it to establish and secure its own shipping corridor without Russia's blessing after Moscow pulled out of the wartime food export deal brokered by the United Nations last year. The pushback began with Ukrainian coastal defences that allowed it to force naval vessels away. In April 2022, Ukrainian anti-ship missiles sank the Moskva, the flagship of Russia's Black Sea Fleet, in a humiliating blow for the Kremlin. With the addition of naval drone attacks and strikes, Russian warships do not enter the northwestern part of the Black Sea over an area of almost 25,000 square km (9,650 square miles), Neizhpapa said. He said the delivery of U.S.-made F-16 fighter aircraft, expected to happen soon, would be a boost allowing it to challenge what he called Russia's "full dominance" of the skies over the Black Sea. "F-16s with the right armaments will be able to push away Russian warplanes. The northwestern part of the Black Sea, particularly the corridor for civilian ships, will be almost 100% secure," he said. He added that Ukraine would like to expand its shipping corridor, which currently only involves maritime traffic from three of the main Odesa ports, to include the ports of Mykolaiv and Kherson, but that it was not possible. He cited Russia's control over the Kinburn Spit, which juts out along that route. Civilian vessels are accompanied by patrol boats in some areas to help with protection against mines, and air defences provided cover both to the ports and the corridors, he said. The volume of cargo through the corridor has stabilised over the last six months, with Ukraine operating two daily convoys of vessels in comparison with one in 2023. (This story has been corrected after the navy clarified, to say 'damaged', not 'destroyed', in paragraph 12) Sign up here. https://www.reuters.com/world/europe/ukraine-navy-chief-says-russia-is-losing-crimean-hub-black-sea-2024-07-05/

2024-07-05 06:18

LONDON, July 5 (Reuters) - Shell (SHEL.L) New Tab, opens new tab will take an impairment charge of up to $2 billion after the sale of its Singapore refinery and pausing of construction of one of Europe's largest biofuel plants, it said on Friday. The British energy company had announced on Tuesday that it would halt construction at its Rotterdam plant in the Netherlands because of weak market conditions. The biofuels plant was slated to have annual capacity of 820,000 metric tons a year and begin operations next year. Shell said the decision will lead to a non-cash, post-tax impairment of between $600 million and $1 billion when it publishes second-quarter results on Aug. 1. At the same time, Shell expects to take an impairment of $600 to $800 million on the Singapore refining and chemicals hub that it agreed to sell in May. Sign up here. https://www.reuters.com/business/energy/shell-take-up-2-bln-writedown-singapore-rotterdam-plants-2024-07-05/

2024-07-05 06:14

BEIJING, July 5 (Reuters) - Rows of what look like thin, white shipping containers are lined up on a barren dirt field in China's Shandong province. Filled with batteries, they form a 795 megawatt (MW) plant that can hold up to 1 million kilowatt-hours of electricity - enough to power 150,000 households for a day, making it China's largest such storage facility when it was connected to the grid last Saturday. Built by Lijin County Jinhui New Energy Co, the project is part of an explosion in development of energy storage in China, which has called for even more investment in the sector to boost renewable electricity and ease grid bottlenecks. While the state-led drive has provided a welcome spark for home-grown battery giants such as CATL (300750.SZ) New Tab, opens new tab and BYD, some industry insiders and experts say pricing reforms and technology improvements are needed for a storage sector whose rapid growth has been plagued by low utilisation and losses for operators. "Most of the players in this sector are trying to figure out how to make money," said Rystad Energy senior analyst Simeng Deng. Investment in grid-connected batteries in China surged 364% last year to 75 billion yuan ($11 billion), according to Carbon Brief, creating by far the world's largest storage fleet at 35.3 GW as of March. In May, China set a new target of at least 40GW of battery storage installed by the end of 2025, up 33% from the previous goal under a wider plan to reduce carbon emissions. Storage is critical to help balance supply and demand when wind and solar farms produce more renewable electricity than the grid's distribution system can handle, or when a lack of sun or wind means they are generating too little power. To meet Beijing's targets, local governments have required renewable energy plants to build storage, driving rapid capacity growth. However, highly regulated power markets have struggled to incentivise usage, particularly at solar and wind facilities, leading China's cabinet to call for research into improving price mechanisms. Energy storage at renewables plants operated just 2.18 hours a day last year, while independent facilities operated only 2.61 hours per day, according to the China Electricity Council. By comparison, storage at industrial and commercial plants operated 14.25 hours per day. Policy mandates requiring renewables plants to install storage have failed because they add to project costs and often sit idle, said Cosimo Ries, an analyst at Trivium China. "Because power prices are not flexible enough during different hours, these projects just can't really make money," Ries said. BIG BUILD The stakes are high for China, which leads the world in adoption of energy transition technology, and for its battery giants, which are seeing faster growth in batteries for storage than for cars as electric vehicle sales growth slows. While government mandates are a key driver of China's storage boom, big power users such as industrial parks and EV charging stations are also driving adoption. China, where 60% of the world's electric vehicles are sold, has worried about the effects of EVs on its power grid, and storage can help smooth demand spikes. Falling battery prices are improving the economics of storage in China, with costs for batteries used in standard energy storage down by about a fifth between the end of 2023 and mid-June, according to consultancy Shanghai Metals Market. Also, expanding adoption of "peak-valley pricing", which discourages electricity use during peak demand times by raising prices, gives storage providers more chance to profit by selling stored power when they can charge more. That has led to intraday price differentials of up to 0.9 yuan per kwh in coastal provinces like Guangdong, where the peak price of 1.1868 yuan/kwh is more than four times the low, enough to incentivise use of both battery and pumped hydro storage, said Alex Whitworth, head of Asia Pacific power research at Wood Mackenzie. Pumped hydro is an established technology with more than 60% greater capacity than battery storage in China, but with geographical limitations and long lead times. Investor returns on solar-plus-storage projects are also improving as solar module prices fall, making renewables-plus-storage "financially feasible in most parts of China" with internal rates of return meeting the minimum investment hurdle rate of at least 8%, wrote Pierre Lau, a Citi analyst. Further market reform is needed to incentivise battery storage, industry players say, with storage operators calling for wider use of capacity payments similar to those meant to keep struggling coal plants online, with costs shouldered by customers. BETTER BATTERIES Battery technology is also improving. The vast new Shandong plant incorporates both lithium ion and vanadium redox flow batteries, according to a report by local state media. Vanadium is a newer technology that promises longer storage times and improved safety. While the economics of lithium ion batteries are expected to improve, experts say most current technology is suitable for shorter storage durations of four hours or less, and some say it is best used in smaller-scale applications. Fire risk remains a concern, particularly with lower-quality batteries, experts say. Emerging technologies such as thermal energy storage, redox flow batteries, and sodium ion batteries have shown promise for longer-duration storage but have higher up-front costs, with technology and supply chains that are less mature. China is hedging its bets by increasing its pipeline of pumped hydro projects - which can take five to seven years to build - and encouraging demonstration projects in emerging technologies. Sign up here. https://www.reuters.com/business/energy/china-struggling-make-use-boom-energy-storage-calls-even-more-2024-07-05/

2024-07-05 06:02

July 5 (Reuters) - Australia's Mining And Energy Union has reached an agreement with Anglo American (AAL.L) New Tab, opens new tab to extend pay until August-end for workers at its Grosvenor mine that was shut earlier this week due to an ongoing underground fire, the two parties said. "We are pleased to confirm payment extension from July 15 to Aug. 31 for all employees and embedded contractors working full-time at Grosvenor in operations or staff roles," the miner said in a joint statement with a regional council and several unions on Friday. Anglo American had battled a fire ignited at its Grosvenor steelmaking coal mine in Australia's Queensland state last weekend. There were no injuries but assessment of the damage and the re-opening of the mine might take several months. The suspension of the mine has had investors worried over what impact it could have on the miner's plan to sell its coal portfolio. "We are making significant progress in the temporary sealing of Grosvenor Mine and stabilising the emergency response," the joint statement added. Sign up here. https://www.reuters.com/markets/commodities/anglo-american-extends-pay-workers-fire-hit-australian-mine-2024-07-05/

2024-07-05 05:50

July 5 - China's EV battery giants CATL <300750.SZ> and BYD <002594.SZ> are eyeing the growing market for stationary energy storage. Here are the numbers behind their energy storage business: CATL has ranked first globally in terms of battery deliveries for energy storage since 2021 with more than 40% of the global market share, according to its annual report. It counts among its major clients state-owned power companies such as Huaneng as well as top energy storage system manufacturers including Sungrow Power Supply (300274.SZ) New Tab, opens new tab. CATL saw deliveries for storage soar 46.8% to 69 gigawatt-hours (GWh) in 2023, outpacing its 32.6% growth for EV batteries. Energy storage batteries accounted for 17.6% of CATL's total battery sales volume, up from 12.5% in 2021. CATL will also supply battery cells and packs to Tesla's (TSLA.O) New Tab, opens new tab export-oriented Megapack storage plant in Shanghai, which will start production in early 2025 with plans to export, according to a person familiar with the matter. Tesla's Shanghai plant will be able to make 10,000 Megapacks a year with a combined 40 GWh of storage capacity, official media has reported. Rival BYD delivered 22 GWh of batteries for energy storage in 2023, up 57% from 2022, outpacing its EV battery shipments growth of 15.6%, according to SNE Research. By comparison, BYD's EV battery shipments totalled 135 GWh last year. Smaller players EVE, REPT, and HITHIUM also saw more than 100% growth in their energy storage battery sales last year, with 11%, 8%, and 7% of the 185 GWh global market, respectively. Sign up here. https://www.reuters.com/business/autos-transportation/how-chinas-ev-battery-makers-stack-up-energy-storage-2024-07-05/