2024-07-04 15:36

MOSCOW, July 4 (Reuters) - Russia's oil producers Rosneft (ROSN.MM) New Tab, opens new tab and Lukoil (LKOH.MM) New Tab, opens new tab will sharply cut oil exports from the Black Sea port of Novorossiisk in July, two sources familiar with a loading plan said, as the companies resumed operations at their refineries. Combined Novorossiisk oil loadings by Rosneft and Lukoil in July will fall by some 220,000 barrels per day (bpd) compared to last month, Reuters calculations based on market data showed. Last week Russian government decided to continue with unrestricted gasoline exports in July, extending the waiver for a partial ban on overseas fuel sales, as Russia's domestic oil plants produce enough oil products to meet peak seasonal demand despite a spate of Ukrainian drone attacks on refineries. Rosneft oil exports from Novorossiisk are set to fall to 0.62 million metric tons in July from 1.06 million tons in June, while its Tuapse refinery is set to resume crude runs this month. Lukoil's exports from the port will fall to 0.19 million tons in July from 0.58 million tons last month, sources said. Lukoil restarted a key piece of equipment for oil processing, the CDU-6 crude distillation unit, at its NORSI refinery, Russia's fourth-largest, following a drone attack in March. Rosneft and Lukoil did not reply to Reuters requests for comments. Novorossiisk total oil loadings in July were set at 1.8 million tons, down from 2.9 million tons in June. Russia's overall oil exports and transit from its western ports in July are expected to decline from June amid higher refinery runs and Moscow's pledge to stick to OPEC+ output cuts. Sign up here. https://www.reuters.com/markets/commodities/rosneft-lukoil-cut-oil-exports-black-seas-novo-sources-say-2024-07-04/

2024-07-04 15:25

BRUSSELS/LONDON, July 4 (Reuters) - Nigeria's debt to gasoline suppliers has surpassed $6 billion - doubling since early April - as state oil firm NNPC struggles to cover the gap between fixed pump prices and international fuel costs, six industry sources said. Nigerian President Bola Tinubu announced an end to expensive fuel subsidies last year, allowing pump prices to triple. But state oil company NNPC capped pump prices shortly afterward as citizens chafed under rising cost of living. The cap, coupled with a naira currency crash, allowed the subsidy to creep back. Tinubu's government expects the subsidy to cost at least $3.7 billion this year. Analysts, NGOs and even government officials have slammed the subsidy for years as wasteful and corrupt. But Nigerians, who get few government services, have long seen cheap fuel as their right, especially in the current cost-of-living crisis. Last week, deadly riots forced Kenya's debt-burdened government to cancel planned tax rises, casting a shadow over efforts elsewhere to inflict any further pain on citizens stung by rising inflation. Senegal's energy subsidy bill remains high, at 3.3% of GDP, while Egypt and Angola are also trying to axe subsidies to shore up state finances. NNPC began struggling early this year when late gasoline payments surpassed $3 billion. The company has still not paid for some January imports, traders said, and the late payments amount to $4 billion to $5 billion. Under contract terms, NNPC is meant to pay within 90 days of delivery. NNPC declined to comment. "The only reason traders are putting up with it is the $250,000 a month (per cargo) for late payment compensation," one industry source said. At least two suppliers already stopped participating in recent tenders after hitting self-imposed debt exposure limits to Nigeria, the sources said, meaning they will not send more gasoline until they receive payments. Traders thrive in risky environments, but they place limits on how much credit they allocate per trade in order to avoid too much exposure on one borrower. These limits vary by company based on their size and where they operate. As a result, Nigeria's tenders to buy gasoline in June and July were smaller, traders said. NNPC will import via tender about 850,000 tonnes in July, two of the sources said, down from the typical 1 million tonnes in previous months. Fresh fuel queues have already started to form in Lagos and Abuja this week, and some Abuja stations stopped selling gasoline. Nigeria, Africa's largest oil exporter, imports virtually all its fuel due to years of neglect at its state-owned oil refineries. The newly opened 650,000 barrel-per-day Dangote refinery has not yet produced marketable gasoline, and is selling other fuels abroad. The country has few savings to fall back upon as corruption and wasteful spending have eaten up decades of oil revenues. Cash-strapped NNPC has also mortgaged much of its spot oil cargoes, limiting what it can sell for cash. In late 2023, NNPC secured its biggest-ever oil-backed loan worth $3.3 billion from Afreximbank and a consortium of traders, including Gunvor New Tab, opens new tab, to shore up the country's foreign exchange. Sign up here. https://www.reuters.com/business/energy/nigerias-gasoline-debt-hits-6-billion-some-traders-back-out-say-sources-2024-07-04/

2024-07-04 13:29

Rates decision due on Monday at 1300 GMT After January cut, BOI has stayed on hold since Israeli inflation rate steady at 2.8% in May, within 1-3% target Q1 GDP recovers, grows 14.4% after war-induced Q4 drop JERUSALEM, July 4 (Reuters) - The Bank of Israel will hold the line on short-term interest rates for a fourth straight meeting next week and perhaps until 2025 because of the war in Gaza, sticky inflation and a widening risk premium, a Reuters poll showed. All 15 economists polled said they expected the central bank to hold its benchmark rate (ILINR=ECI) New Tab, opens new tab at 4.5% when the decision is announced on Monday at 4 p.m. (1300 GMT). The annual inflation rate held steady in May at 2.8%, coming in below the 3.2% forecast to remain within a 1-3% target. But it has edged up since it eased to a 2.5% rate in February. "Persisting inflation pressures, geopolitical risks, currency weakness and fiscal expansion provide no room for the BOI (Bank of Israel) to ease," said Morgan Stanley economist Alina Slyusarchuk. "We see the base rate firmly on hold in July, all the way until late autumn and potentially longer." The monetary policy committee in January reduced its key rate by 25 basis points, which followed 10 straight rate hikes in an aggressive tightening cycle from an all-time low of 0.1% in April 2022, before a pause last July. The war has raged since gunmen from the Palestinian Islamist group Hamas stormed Israel on Oct. 7. Ofer Klein, head of economics and research at Harel Insurance and Finance, said continued high geopolitical uncertainty, which is reflected in the high the risk premium measured in Israel's government bond yield spreads, supports leaving the interest rate unchanged. After a steep contraction in the October-December period, the economy rebounded an annualised 14.4% in the first quarter from the prior three months - a sign there was no pressing need to ease monetary policy. Bank of Israel Governor Amir Yaron told Reuters after the prior decision in late May that further rate cuts would be tough as long as inflation pressures persist and Israel's war against Hamas fuels uncertainty and drives up government spending. The budget deficit - on the heels of higher defence costs - has surged to 7.2% of gross domestic product, above a 2024 target of 6.6%. At the same time, there are fears of a second war between Israel and Iran-backed Hezbollah on the Lebanese border - keeping Israel's risk premium high and the shekel jittery. Hezbollah has been firing rockets into Israeli towns in solidarity with Hamas and Israel has been hitting back. In addition to the rates announcement, the Bank of Israel on Monday will also publish updated macroeconomic estimates and Yaron will hold a news conference at 4:15 p.m. (1315 GMT). "We believe that in the updated forecasts the bank will continue to signal that it does intend to reduce the interest rate in the next 12 months," Klein said, "but will also emphasize the issue of fear of the risk premium". Sign up here. https://www.reuters.com/markets/bank-israel-firmly-hold-next-week-possibly-until-2025-2024-07-04/

2024-07-04 12:40

July 4 (Reuters) - BHP Group (BHP.AX) New Tab, opens new tab has notified tens of thousands of its global workers that it will cut incentive pay after the miner failed to meet its internal performance targets, the Australian Financial Review reported on Thursday. The world's largest listed miner will only pay 80% of short-term incentives that were on offer in 2023-24, the report said, citing employees. These incentives apply to all of BHP's workers and can add up to about 15% of their salaries, the AFR said. The company's leadership cited misses on cost and production targets across some of its divisions, as well as the death New Tab, opens new tab of a worker at its Saraji coal mine in Queensland in January as the reason behind the incentive cuts, the report said. BHP did not immediately respond to a Reuters' request for comments. The miner's first-half profit was hit by an impairment charge worth $2.5 billion related to its Western Australia nickel business. Sign up here. https://www.reuters.com/markets/commodities/bhp-trims-employee-incentives-across-globe-afr-reports-2024-07-04/

2024-07-04 12:05

Mexico's Yucatan in path, Cancun braces for impact Beach resorts on 'red alert' for maximum hazard storm At least 11 dead in Caribbean islands, Venezuela Parts of St. Vincent and the Grenadines 'flattened' TULUM/CANCUN, Mexico, July 5 (Reuters) - Mexico's top tourist destinations went on "red alert" early on Friday as Hurricane Beryl, a Category 3 storm, was expected to hit land in the wake of a deadly trail of destruction across several Caribbean islands. Beryl, packing maximum winds of 115 mph (185 kph), was on course to hit the east coast of the Yucatan peninsula, the U.S. National Hurricane Center (NHC) said, warning of a dangerous storm surge and damaging waves overnight. The unusually fierce, early season hurricane was about 90 miles (140 km) east of the Mexican beach resort of Tulum, the NHC said, with a hurricane warning declared along the Yucatan coast from Puerto Costa Maya to Cancun, including Cozumel. The "red alert" called by Mexico's civil protection agency signifies a threat of maximum hazard from Beryl. It told people to stay in their homes or at storm shelters. President Andres Manuel Lopez Obrador urged those in the storm's path to take shelter after the meteorological service forecast heavy to torrential rains that could trigger landslides and flooding. "No hesitating," the president wrote on social media. "Material things can be recovered. The most important thing is life." The storm churned past the Cayman Islands on Thursday after belting Jamaica with winds that tore apart buildings and uprooted trees. Authorities say at least 11 people have died from the storm across Jamaica, Grenada, St. Vincent and the Grenadines and in northern Venezuela. The toll could rise as communications are restored and more reports flow in from islands devastated by floods and gales. But late on Thursday, there were still people in the streets of Tulum as the storm approached, said Mara Lezama, governor of Quintana Roo, which is home to Mexico's top tourist destination of Cancun. "It is time to protect ourselves and take care of those we love most," Lezama said in a posting on X. "We are still on red alert, we must take extreme precautions." Tourists scrambled to catch the last flights out of Cancun international airport, where at least 100 flights were canceled on Thursday. Some evening stragglers walked on the beach in Cancun as winds began picking up. In nearby Playa del Carmen, police blocked off beach entrances with yellow caution tape to dissuade visitors. Beryl had weakened since skirting Jamaica's southern coast on Wednesday as a powerful Category 4 storm on the five-step Saffir-Simpson Hurricane Wind Scale, with Prime Minister Andrew Holness saying there were two storm-related deaths. Joseph Patterson, a bee keeper in the southwestern town of Bogue, described fallen power lines, roads blocked by debris and "tremendous damage" to farms. "We're happy to be alive, happy that the damage was not more extensive," he added. Beryl was forecast to dump as much as 4 inches to 6 inches (10 cm to 15 cm) of rain on Mexico's Yucatan through Friday, rising to 10 inches (25 cm) in some places, the NHC said. It expects the storm to weaken rapidly while crossing the peninsula early on Friday, but sees Beryl getting stronger again when it moves over the Gulf of Mexico. The storm is expected to move toward northeastern Mexico and southern Texas late in the weekend, the NHC said. TOURISTS BEWARE On Thursday, the island getaway of Isla Mujeres evacuated about 3,000 tourists back to the mainland near Cancun, its tourism director, Jose Magana, said. Workers in Cancun and Playa del Carmen could be seen filling sand bags and boarding up doors and windows in shops and hotels. Fisherman Jose Martin was one of several who docked his boat in Cancun ahead of Beryl's arrival. "It affects us a good deal because, first, we can't work, and second, we need to find shelter," Martin said. Schools were closed on Thursday and Friday in the state of Quintana Roo, where Mexico's defense ministry opened about 120 storm shelters to prepare for expected flooding. Mexico's civil protection agency urged people to take pets indoors or find them a safe place, with some government-run shelters taking in cats and dogs. "I love Cookie very much," said Edgar Novelo, a resident of Tulum, referring to his pet dog, as he took her to a temporary refuge. "All the love I have is for her." Tulum residents queued at gas stations to fill their tanks and additional containers, while hotels and tourist complexes moved loose furniture and equipment. Mexico's major oil platforms, most clustered around the shallow waters of the southern Gulf of Mexico, are not expected to be affected or shut down. Oil projects in U.S. waters to the north could be hit if the hurricane stays on its expected trajectory. The first hurricane of the 2024 Atlantic season, Beryl was the earliest Category 5 storm on record at its peak. The U.S. National Oceanic and Atmospheric Administration has predicted an "extraordinary" storm season this year, as scientists say climate change caused by humans fuels weather extremes. Sign up here. https://www.reuters.com/business/environment/hurricane-beryl-heads-cayman-islands-mexico-after-striking-jamaica-2024-07-04/

2024-07-04 11:36

MUMBAI, July 4 (Reuters) - India's cut and polished diamond exports have been faltering due to weak demand from the key market, China, and they are unlikely to stabilize unless the government provides support to the industry, the head of a leading trade body said on Thursday. India is the world's largest centre for cutting and polishing diamonds, accounting for nine out of 10 diamonds polished globally. "We're battling weak demand, particularly due to China's slow recovery from COVID-19. As a result, demand continues to fall," Vipul Shah, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), told Reuters. China accounts for around a third of India's cut and polished diamond exports and primarily buys through Hong Kong. The economic slowdown, shifting consumer preferences from diamonds to gold jewellery and fewer weddings have been squeezing the demand for diamonds in China. India's cut and polished diamond exports fell nearly 15% in the June quarter, compared with a year earlier, following a 27.5% decline in the 2023/24 marketing year that ended on March 31, Shah said. The industry is in trouble, and last month it requested the government to provide a few concessions in this year's budget so it can sail through the ongoing rough weather, he said. The GJEPC has urged the government to allow the sale of rough diamonds in Special Notified Zones (SNZs) and give permission to globally recognised diamond trading houses like Bonas and I Hennig to operate from SNZs, Shah said. Unlike Belgium and Dubai, Indian bidders cannot purchase rough diamonds from SNZ due to the lack of a tax waiver. Indian diamond units have curtailed rough diamond imports due to both weak demand for polished diamonds and pressure on their margins caused by softening polished diamond prices, he said. India's gems and jewellery industry - which employs over 4.3 million and accounts for more than 10% of India's goods exports. Sign up here. https://www.reuters.com/markets/commodities/weak-chinese-demand-dents-indias-diamond-exports-industry-seeks-support-2024-07-04/