2024-06-18 00:55

Fire at Russian product terminals after Ukrainian drone strike Israel decision on all-out war with Hezbollah pending Federal Reserve policymaker comments on rate cuts API data shows US crude, distillate stocks up, gasoline down HOUSTON, June 18 (Reuters) - Oil settled more than 1% higher on Tuesday due to escalating geopolitical risk in Europe and the Middle East, where wars continue to threaten global supply. Brent crude futures settled up $1.08, or 1.3%, at $85.33 per barrel. U.S. West Texas Intermediate crude futures ended $1.24, or 1.5%, higher at $81.57 a barrel. Global benchmark Brent has clambered back from an early-June close of $77.52, yet remains off its $90 peaks from mid-April. Prices rose after a Ukrainian drone strike caused a large fire in a fuel tank at an oil terminal in Russia's southern port of Azov, according to Russian officials and a Ukrainian intelligence source. The port of Azov has two oil product terminals, which handled a total of about 220,000 tons of fuel for export during the period from January to May. The ongoing attacks on Russia's oil refining complex pose a threat to physical global supply, as well as boosting the risk premium priced into crude futures. “The Ukrainian attack reminds the market that Russian energy infrastructure is very much in the crosshairs, the global market needs those barrels of crude and refined products to keep prices in check,” said John Kilduff, partner at Again Capital. Meanwhile, Israeli Foreign Minister Israel Katz warned that a decision on an all-out war with Hezbollah was coming soon even as the U.S. tries to avert a greater war between Israel and Lebanon's Hezbollah movement. Special envoy Amos Hochstein to U.S. President Joe Biden, said he had been dispatched to Lebanon immediately following a brief trip to Israel because the situation was "serious." "Everywhere you look the geopolitical risk factor is very high," Price Futures Group's Phil Flynn said. "We have not seen a major impact on supply but that could change really quickly," he added. Prices also climbed after New York Federal Reserve President John Williams said interest rates will come down gradually but gave no precise timetable. Later, oil came under pressure when Boston Federal Reserve President Susan Collins cautioned that it was "too soon to determine whether inflation is durably on a path back to the 2% target." The market is also watching U.S. stockpile data due this week for hints on the oil demand outlook during summer driving season. U.S. crude oil inventories posted a surprise build last week while gasoline stocks fell, market sources said, citing American Petroleum Institute figures. The API figures showed crude stocks rose by 2.264 million barrels in the week ended June 14, the sources said on condition of anonymity, compared with an expected draw of 2.2 million barrels. Gasoline inventories fell by 1.077 million barrels, and distillates rose by 538,000 barrels. Official inventory data from the U.S. Energy Information Administration will be released at 11:00 a.m. EDT on Thursday, delayed a day due to the Juneteenth holiday. Sign up here. https://www.reuters.com/markets/commodities/oil-up-firming-demand-mideast-tensions-underpin-risk-premium-2024-06-18/

2024-06-18 00:01

MEXICO CITY, June 17 (Reuters) - The United States paused avocado imports from Mexico's top-producing Michoacan state due to a security incident involving U.S. inspectors, a state government source said on Monday, in a hit to a major farm commodity shipped to its northern neighbor. The source added the temporary suspension was triggered last Saturday following an incident at a protest in support of local police in the municipality of Paracho. The Governor of Michoacan, Alfredo Ramirez, told reporters on Monday they were in contact with U.S. officials to give "guarantee" and "certainty" about exports from the state. Mexican newspaper El Universal reported the duration of the suspension has not been determined as talks between U.S. agriculture officials and local producers are ongoing. The U.S. Department of Agriculture and the U.S. embassy in Mexico City did not immediately respond to requests for comment. In 2022, U.S. officials temporarily suspended avocado shipments from Michoacan, a state that has suffered longstanding problems with gang violence, also citing security problems faced by inspectors. Sign up here. https://www.reuters.com/markets/commodities/us-suspends-avocado-imports-mexican-state-due-security-incident-local-media-says-2024-06-17/

2024-06-17 23:45

Chinese premier attends business roundtable Australia screening foreign investment in critical minerals Officials protest to Chinese embassy over journalist incident SYDNEY, June 18 (Reuters) - Chinese Premier Li Qiang visited a lithium processing plant in resource-rich Western Australia state on Tuesday, highlighting China's push to secure critical minerals as Washington tries to break Beijing's supply dominance. Western Australia supplies more than half of the world's seaborne iron ore, with China its top customer, and half of its lithium used in electric vehicles, smartphones and other electronic devices. Li's visit to Australia, which began Sunday, is the first by a Chinese premier in seven years and marks a stabilisation in ties between the U.S. ally and the world's second-biggest economy. While China has largely lifted suspensions imposed on $20 billion worth of Australian exports in 2020, after Canberra sought an investigation into the origins of COVID-19, it continues to express concerns about obstacles to Chinese investment in Australia's vast resources industry. The issue of how Australia screens Chinese investment in its critical minerals sector was expected to be discussed at a business roundtable in Perth attended by Li and Australian Prime Minister Anthony Albanese. Critical minerals including rare earths have become an area of intense competition between China and the U.S., which sees Australia's deposits as a way to break China's strangehold over global supply. Australia last month blocked several Chinese investors from increasing stakes in a rare earths miner on national interest grounds, and last year blocked the acquisition of a lithium mine by Chinese interests. The U.S. this year extended its support for the first time to back two Australian-listed rare earths projects to help build out the supply chain. Li said on Monday that China hoped Australia would provide "a fair, just and non-discriminatory business environment for Chinese enterprises", and told the business roundtable the two countries benefit from each other's development. Cooperation was important for stabilising industrial supply chains and boosting economic growth, Li said, according to Chinese state news agency Xinhua. Albanese told the Australian and Chinese executives that three-quarters of Australia's exports to China come from Western Australia. He also said his government wants to create jobs in critical minerals processing, refining and manufacturing, and sell to a broader range of markets. "Our commitment to investing in local manufacturing doesn’t mean cutting trade ties or pulling-up the economic drawbridge. Far from it," he said. "International partnerships and the inflow of foreign investment will continue to be crucial for Australia as we modernise and diversify our economy, even as we take steps to secure our economic sovereignty and build resilience in sectors that are vital to our national interest," he added. Ahead of the roundtable, Li toured a lithium hydroxide processing plant owned by Tianqi Lithium Energy Australia, 51% owned by Shenzhen-and Hong Kong-listed Tianqi Lithium (002466.SZ) New Tab, opens new tab and 49% by Australian miner IGO (IGO.AX) New Tab, opens new tab, that is considering whether it will more than double production. Australia said last month it would consider Chinese ownership when deciding whether companies qualify for tax credits under a new programme of incentives and support for the critical minerals sector. Tianqi Lithium Chief Executive Frank Ha told the Australian Financial Review on Monday the company had not sought incentives but now that they were on the table it wanted a "fair go". "CLUMSY ATTEMPT" Albanese told ABC Radio on Tuesday that Australian officials had expressed concern to China's embassy over an incident at parliament house involving Chinese officials and Australian journalist Cheng Lei. Cheng, who was jailed for three years in Beijing on national security charges until her release in October, was among media covering Li's visit to Canberra on Monday when Chinese officials stood in front of her to prevent her appearing on camera. Cheng has said it was likely the Chinese officials did not want her to appear on domestic Chinese news coverage. The incident dominated Australian media coverage of Li's Canberra meeting. "When you look at the footage it was a pretty clumsy attempt," Albanese told the ABC, adding Australian officials had intervened. "There should be no impediments to Australian journalists going about their job. And we've made that clear to the Chinese embassy." China's embassy did not respond to a Reuters request for comment. Sign up here. https://www.reuters.com/world/asia-pacific/chinese-premier-li-meet-business-leaders-mineral-rich-western-australia-2024-06-17/

2024-06-17 23:37

HOUSTON, June 17 (Reuters) - A U.S. judge on Monday dismissed a lawsuit Exxon Mobil (XOM.N) New Tab, opens new tab had filed against activist group Arjuna Capital after the group had agreed not to pursue future proxy filings at the company's annual meetings. The lawsuit by the largest U.S. oil company had raised alarm among activists and public pension investors who argued it would muzzle debate among shareholders and public companies. U.S. District Court Judge Mark Pittman ruled Exxon's claim was no longer valid after Arjuna "unconditionally and irrevocably" agreed not to submit a future proposal regarding Exxon's greenhouse gas emissions. "The court cannot advise Exxon of its rights without a live case or controversy to trigger jurisdiction" and Arjuna's pledge not to file similar resolution in the future "has eliminated any case or controversy," Pittman wrote. Pittman's dismissal was without prejudice, meaning Exxon could refile its case in the future. Arjuna and Follow This, a Netherlands-based environmental group, had proposed a resolution calling on stockholders to request the oil major set new targets for reducing some of its greenhouse gas emissions. Exxon sued the pair in January and refused to drop the case after they agreed not to bring the petition forward, citing "the likelihood" the two could file similar resolutions in the future. Pittman last month had dropped Follow This from the case as the group was outside his court's jurisdiction. Sign up here. https://www.reuters.com/legal/us-judge-dismisses-exxon-case-against-activist-investor-over-proxy-filing-2024-06-17/

2024-06-17 23:07

SAO PAULO, June 17 (Reuters) - Brazilian state-run oil giant Petrobras (PETR4.SA) New Tab, opens new tab said on Monday it had agreed to join a government tax debt renegotiation program that would result in an estimated 11.9 billion reais ($2.19 billion) hit to its second-quarter net income. In a securities filing, Petrobras said it had agreed to pay the Brazilian government a total of 19.8 billion reais to end several tax cases, equating to a 65% discount from the original amount the tax office said was owed by the firm. The agreement would close tax cases from 2008 to 2013 related to funds Petrobras had sent abroad to pay for services such as the chartering of vessels, it said. The tax payments should also help the Brazilian government to balance its budget as the administration of President Luiz Inacio Lula da Silva seeks new sources of revenue to meet its fiscal targets for this year and 2025. The announcement was one of the first made by Petrobras since Magda Chambriard took the chief executive role, after Lula dismissed former Petrobras CEO Jean Paul Prates in May. Local media, however, had been reporting a potential tax deal between the company and the government was being discussed before the firm's leadership swap. From the total amount, Petrobras said it intended to pay about 8 billion reais through legal deposits it had already made or fiscal credits related to previous losses from subsidiaries. Some 13% of the amount Petrobras agreed to pay is related to deals it has made alongside business partners, the oil giant said, adding it is currently negotiating conditions under which it would receive a repayment in the future from these companies. ($1 = 5.4250 reais) Sign up here. https://www.reuters.com/markets/commodities/petrobras-pay-37-billion-close-some-tax-cases-brazil-2024-06-17/

2024-06-17 22:57

Goldman Sachs raises S&P 500 year-end target to 5,600 points Evercore ISI hikes year-end S&P 500 target to 6,000 points Autodesk up after report Starboard Value takes ~$500 mln stake Indexes higher: Dow 0.49%, S&P 500 0.77%, Nasdaq 0.95% June 17 (Reuters) - The S&P 500 and Nasdaq scored record closing highs on Monday as technology shares rallied on enthusiasm over artificial intelligence ahead of this week's economic data and Federal Reserve officials' speeches that could shed light on monetary policy. Megacaps Apple (AAPL.O) New Tab, opens new tab and Microsoft (MSFT.O) New Tab, opens new tab rebounded from early losses to end 1.97% and 1.31% higher respectively. Apple shares extended their rally from last week when the company announced new AI features meant to rekindle demand for iPhones. "This is continuing to be driven by AI," said J. Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management in Champaign, Illinois. Broadcom (AVGO.O) New Tab, opens new tab and U.S.-listed shares of Taiwan Semiconductor Manufacturing Co were up 5.41% and 2.74% respectively while Micron Technology (MU.O) New Tab, opens new tab rose 4.58% after price-target raises by brokerages. The Philadelphia SE Semiconductor index (.SOX) New Tab, opens new tab hit an all-time high even as artificial intelligence chip leader Nvidia (NVDA.O) New Tab, opens new tab retreated from a record high to lose 0.66%. Consumer discretionary (.SPLRCD) New Tab, opens new tab and technology (.SPLRCT) New Tab, opens new tab were the biggest gainers among the 11 S&P 500 sector indexes, while utilities (.SPLRCU) New Tab, opens new tab and real estate (.SPLRCR) New Tab, opens new tab led declines. "There is hope that lower interest rates might come into play looking forward, reducing housing costs and helping consumers out," said Evans. Goldman Sachs lifted its 2024 year-end target for the S&P 500 Index (.SPX) New Tab, opens new tab to 5,600 from 5,200, while Evercore ISI raised its forecast for the benchmark index to 6,000 from 4,750. Both brokerages cited technology strength and enthusiasm for AI as reasons for their upgrades. The tech-heavy Nasdaq (.IXIC) New Tab, opens new tab and S&P 500 hit multiple all-time peaks in the previous week. The Fed will be able to cut its benchmark interest rate once this year, Philadelphia Fed President Patrick Harker said on Monday, if his economic forecast plays out. Fed Board Governor Lisa Cook will speak later on Monday. This week's economic roster includes May retail sales data on Tuesday, followed by industrial production, housing starts and the S&P flash Purchasing Managers' Index. Markets will be closed on Wednesday for the Juneteenth holiday. The Fed held interest rates steady on Wednesday and pushed out the start of rate cuts to perhaps as late as December. However, markets still expect about two 25-basis-point cuts this year, LSEG data showed. The CME FedWatch tool shows easing is still seen beginning at the September meeting. The Dow Jones Industrial Average (.DJI) New Tab, opens new tab rose 188.94 points, or 0.49%, to 38,778.10. The S&P 500 (.SPX) New Tab, opens new tab climbed 41.63 points, or 0.77%, to 5,473.23 and the Nasdaq Composite (.IXIC) New Tab, opens new tab advanced 168.14 points, or 0.95%, to 17,857.02. Autodesk (ADSK.O) New Tab, opens new tab jumped 6.48% after a report that activist investor Starboard Value had bought a roughly $500 million stake in the software maker. Advancing issues outnumbered decliners by a 1.44-to-1 ratio on the NYSE, which had 250 new highs and 126 new lows. The S&P 500 posted 37 new 52-week highs and six new lows while the Nasdaq Composite recorded 61 new highs and 214 new lows. Volume on U.S. exchanges was 11.12 billion shares, compared with the 11.87 billion average for the full session over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/futures-pull-back-investors-await-data-fed-comments-2024-06-17/