2024-06-21 00:40

Crude benchmarks end the week 3% higher U.S. dollar hits 7-week high versus major currencies U.S. oil demand on the rise as summer begins Israel-Lebanon tensions ratchet up June 21 (Reuters) - Crude prices eased about 1% on Friday on worries that global oil demand growth could be hit by a strong U.S. dollar and negative economic news from some parts of the world. Prices declined despite signs of improving U.S. oil demand and falling fuel inventories that helped boost crude prices to a seven-week high a day earlier. Brent futures fell 47 cents, or 0.6%, to settle at $85.24 a barrel, while U.S. West Texas Intermediate crude (WTI) ended 56 cents, or 0.7%, lower at $80.73. The decline pushed WTI out of technically overbought territory for the first time in four days, while Brent futures remained overbought for a fourth day in a row for the first time since early April. For the week, both crude benchmarks were up about 3% after gaining about 4% last week. The U.S. dollar (.DXY) New Tab, opens new tab rose to a seven-week high versus a basket of other currencies with the Federal Reserve's patient approach to cutting interest rates contrasting with more dovish stances elsewhere. The Fed hiked interest rates aggressively in 2022 and 2023 to tame a surge in inflation. The higher rates boosted borrowing costs for consumers and businesses, which can slow economic growth and reduce demand for oil. A stronger U.S. dollar can also reduce demand for oil by making greenback-denominated commodities like oil more expensive for holders of other currencies. In the world's biggest oil consumer, U.S. business activity crept up to a 26-month high in June amid a rebound in employment, but price pressures subsided considerably, offering hope that a recent slowdown in inflation was likely to be sustained. U.S. existing home sales, however, fell for a third straight month in May as record-high prices and a resurgence in mortgage rates sidelined potential buyers. Data from the U.S. Energy Information Administration on Thursday showed total product supplied, a proxy for oil demand, rose by 1.9 million barrels per day last week to 21.1 million barrels per day. Despite the decline in crude prices, U.S. gasoline futures climbed for a fourth day to a one-month high on rising demand during the summer driving season and a drop in inventories. MIXED GLOBAL DEMAND SIGNALS In India, refiners processed nearly 1.3% more crude oil in May than a year earlier, provisional government data showed, while the share of Russian supplies in imports to India, the world's third biggest oil consumer, increased. "Signs of stronger demand in Asia also boosted sentiment. Oil refineries across the region are bringing back some idled capacity after maintenance," analysts at ANZ Research said. But in the euro zone, business growth slowed sharply this month as demand fell for the first time since February. In China, the world's second biggest oil consumer, Beijing warned that escalating frictions with the European Union over electric vehicle imports could trigger a trade war. Geopolitical tensions added to the mixed picture. Ukraine's military said its drones struck four oil refineries, radar stations and other military objects in Russia. The head of Lebanon's Hezbollah this week pledged a full-on conflict with Israel in the event of a cross-border war and also threatened EU member Cyprus for the first time. In Ecuador, state oil company Petroecuador has declared force majeure over deliveries of Napo heavy crude for exports following the shutdown of a key pipeline and oil wells due to heavy rains. Sign up here. https://www.reuters.com/business/energy/oil-prices-slip-rate-hike-worries-come-into-focus-2024-06-21/

2024-06-21 00:38

SEOUL, June 21 (Reuters) - The finance ministers of South Korea and Japan will hold a bilateral meeting in Seoul on June 25, South Korea's finance ministry said on Friday. The bilateral meeting takes place two months after Choi Sang-mok and his Japanese counterpart Shunichi Suzuki vowed to take appropriate steps to stabilize excessive volatility in their currencies during their meeting in Washington DC. Sign up here. https://www.reuters.com/world/asia-pacific/south-korea-japan-hold-bilateral-finance-ministers-meeting-june-25-2024-06-21/

2024-06-21 00:34

June 20 (Reuters) - Hawaii on Thursday agreed to settle a lawsuit by 13 young people alleging the U.S. state was violating their rights under its constitution by operating a transportation system that contributes to greenhouse gas emissions and climate change. Democratic Governor Josh Green announced the settlement at a press conference attended by some of the youth activists and lawyers involved in the lawsuit, which they called the first-ever youth-led climate case seeking zero emissions in transportation. The case was set to go to trial on Monday. It would have been the second-ever trial in the U.S. of a lawsuit by young people who claim their futures and health are jeopardized by climate change and that a state's actions violated their rights. Under the settlement, Hawaii has agreed to develop a holistic roadmap to achieve zero carbon emissions in its transportation system by 2045 and give young people a seat at the table through a volunteer youth council, a lawyer for the plaintiffs said. "We're addressing the impact of climate change today, and needless to say this is a priority because climate change is here," Green said. The case is one of several by young environmental activists in the United States that broadly accuse governments of exacerbating climate change through policies that encourage or allow the extraction and burning of fossil fuels. The young people, represented by the nonprofit law firm Our Children's Trust, claim the policies violate their rights under U.S. or state constitutions. The cases have raised novel legal claims and have been dismissed by several courts saying that the judiciary could not mandate broad policy changes that are best left to lawmakers and the executive branch. But the young activists scored a major victory last year when the first such case went to trial in Montana. In that case, a Montana judge concluded that the Republican-led state's policies prohibiting regulators from considering the impacts on climate change when approving fossil fuel projects violate the rights of young people. The lawsuit against Hawaii was filed in 2022 and alleged that the state Department of Transportation was operating a transportation system that ran afoul of state constitutional mandates and impaired their right to a life-sustaining climate. The plaintiffs, who were 9 to 18 when the case was first filed, said that despite Hawaii being a leader among states in acknowledging the dangers of climate change, it was projected to fall significantly short of its own goal of net-negative carbon emissions by 2045. The lawsuit argued that the state was not only failing to reduce greenhouse gas emissions in the transportation sector but was "heading in the opposite direction," citing investments in infrastructure like highways as running counter to its goals. The youth argued that as a result, the state was violating a right guaranteed by the Hawaii Constitution to a clean and healthful environment and its constitutional duty to "conserve and protect Hawaii's natural beauty and all natural resources." Sign up here. https://www.reuters.com/legal/hawaii-agrees-settle-youth-climate-change-lawsuit-2024-06-21/

2024-06-21 00:12

Japan ready to act vs speculative moves, top FX diplomat says Tokyo sees Washington as having no problem with its FX policy Chief cabinet secretary says Tokyo keeping eye out on FX market TOKYO, June 21 (Reuters) - Japanese authorities are ready to take action against speculative and excessively volatile moves in the currency market that hurt the economy, the country's top currency diplomat Masato Kanda said on Friday. "It's not intended to change the market's trend," instead it was aimed at smoothing excessive volatility in the currency market, Kanda told reporters when asked about exchange-rate intervention. "As long as currency rates move stably in line with fundamentals, there's no need to intervene. By contrast, if there is speculative, excessive volatility in the market, we will take resolute action," said Kanda, who is vice finance minister for international affairs. The remarks failed to keep the yen from falling below 159 to the dollar for the first time since April 29, as markets continued to focus on the wide interest-rate divergence between Japan and the United States. The dollar stood at 159.12 yen in Asia on Friday. Chief Cabinet Secretary Yoshimasa Hayashi also warned yen bears against pushing down the currency, saying authorities would continue to monitor moves in the exchange-rate market. "It's important that exchange rates move in a way that reflects fundamentals," he told a news conference. Japan spent 9.8 trillion yen ($61.6 billion) intervening in the foreign exchange market in April and May, after the Japanese currency hit a 34-year low of 160.245 per dollar on April 29. While the moves have kept the yen from testing fresh lows, they have failed to reverse the currency's downtrend that is hurting households by pushing up fuel and food import costs. As markets keep an eye on the chance of renewed intervention, a U.S. Treasury report issued on Thursday added Japan to its foreign exchange monitoring list alongside six countries that were on the previous list. Finance Minister Shunichi Suzuki said on Friday he did not believe Washington had any problem with Japan's currency policy. "We will communicate closely with U.S. and other countries' authorities based on the G7 agreement that excessive, disorderly currency moves could have adverse effects on economies," Suzuki told a regular news conference. While the U.S. Treasury said Tokyo's recent currency intervention was not a factor in deciding to add Japan to the monitoring list, it said intervention should be reserved only for very exceptional circumstances in large, freely traded exchange markets. ($1 = 158.9900 yen) Sign up here. https://www.reuters.com/markets/currencies/japan-top-currency-diplomat-says-ready-act-vs-speculative-fx-moves-2024-06-21/

2024-06-20 23:50

Ghana close to debt restructuring deal after 2022 default Deal with bondholders to involve heavy writedown Plan is expected to make debt more sustainable ACCRA, June 21 (Reuters) - Ghana has reached an agreement in principle with its bondholders to restructure $13 billion worth of international debt, three sources told Reuters, after finalising a deal with official creditors earlier this month. Bondholders will take a haircut on principal of up to 37% and maturity of the bonds lengthened, two of the sources said on Thursday. Ghana's dollar bonds rallied on the Reuters report, with the 2027 bond rising to its highest price since 2022, Tradeweb data showed. The West African gold and cocoa producing nation defaulted on most of its $30 billion of international debt in 2022, as the strain of the COVID-19 pandemic, war in Ukraine and higher global interest rates tipped it into crisis after years of overspending. Like fellow African defaulter Zambia, Ghana also signed up for the G20's so-called 'Common Framework', a process designed to facilitate quick debt overhauls and to bring the newest large bilateral lender, China, into the process. Zambia has been finalising its restructuring in recent weeks and for Ghana "things are pretty close," one source said. "We can expect an announcement by next week," they added, asking not to be named because they were not authorised to speak to media. The other two sources said the announcement could come as soon as Friday. Ghana's finance ministry and the Paris Club, an alliance of largely Western creditor nations, did not immediately respond to requests for comment. FINISHING LINE IN SIGHT Banking analysts at Tellimer said the 37% writedown bondholders were expected to take as part of the deal was probably at the "upper-end" of its expectations. The world's No.2 cocoa producer started formal talks with two groups of its bondholders in March - a group of Western asset managers and hedge funds and another set including regional African banks. The negotiations, however, stalled in April after the proposed deal failed to meet the International Monetary Fund's (IMF) debt sustainability requirements. The three sources said the plan has been tweaked to fit a revised IMF debt framework that has recently been shared with bondholders, meaning the agreement in principle has been struck. Earlier this month, Ghana also finalised an agreement with its official sector creditors initially struck in January. The outlines of the agreement paved the way for the IMF executive board to hold a June 28 meeting on Ghana to consider a second review of its $3 billion loan, three-year package and the release of the next tranche of $360 million. Sign up here. https://www.reuters.com/world/africa/ghana-bondholders-reach-agreement-principle-restructure-13-bln-debt-sources-say-2024-06-20/

2024-06-20 23:42

June 20 (Reuters) - The Brazilian government issued on Thursday tighter guidelines for the extension of energy distribution contracts, easing the advanced cancellation of concessions and allowing the country to limit pay out from firms that do not comply with the rules. The energy ministry has been working since 2022 on the guidelines, which affect international energy groups such as Italy's Enel (ENEI.MI) New Tab, opens new tab and Portugal's EDP (EDP.LS) New Tab, opens new tab, as they are among the 20 concession contracts expiring by 2031 - the guidelines timeframe. The new rules are aligned with government hopes that tightening the enforcement for distributors would force companies to provide better services, after climatic events in Brazil left millions of people without power in some big cities in the last few months. "In case of non-compliance with the contract, we are allowing the early expiration of the concession or an intervention", energy minister Alexandre Silveira told journalists at an event to present the guidelines in Brasilia. The launch of the guidelines was delayed about five months from its previous deadline. Sign up here. https://www.reuters.com/business/energy/brazil-tightens-rules-renew-energy-distribution-concessions-2024-06-20/