2024-06-05 00:15

HOUSTON, June 4 (Reuters) - Members of Venezuela's political opposition and the boards that supervise state-owned refiner Citgo Petroleum have met U.S. officials and lawmakers in recent days in a new effort to pause a court-ordered auction of shares to pay creditors, people close to the talks said. A second bidding round for shares in Citgo's parent company PDV Holding is expected to close on Tuesday, the final step in a years-long process expected to result in a change of ownership of the seventh-largest U.S. refiner. WHY IT'S IMPORTANT A total of 18 creditors including ConocoPhillips (COP.N) New Tab, opens new tab, Koch Industries and miners Crystallex, Rusoro (RML.V) New Tab, opens new tab and Gold Reserve (GRZ.V) New Tab, opens new tab, aim to cash up to $21.3 billion in claims. But the highest offer in the first bidding round did not reach $8 billion, prompting Citgo's supervisory boards to protest and present an alternative payment option. If successful, the talks could result in a change of U.S. policy guidance issued by the Biden administration, which last year gave a green light to the U.S. District Court in Delaware to move forward with the auction. Citgo and its supervisory boards did not immediately respond to requests for comment. WHAT'S NEXT The Venezuela representatives want a pause in the court process at least until results are known from the Venezuelan presidential election in July. BY THE NUMBERS Citgo has plants in Louisiana, Illinois and Texas that can jointly process 807,000 barrels per day of oil. In the last two years, the company has generated $4.8 billion in combined net earnings. Sign up here. https://www.reuters.com/business/energy/venezuela-representatives-us-officials-meet-over-citgo-auction-2024-06-05/

2024-06-05 00:07

Reuters poll graphic on global foreign exchange forecasts - BENGALURU, June 5 (Reuters) - The dollar's relentless strength in the recent past will make way for minor weakness over the next 12 months, according to FX strategists in a Reuters poll, who generally agreed the dollar was overvalued. Analysts have been predicting dollar weakness just around the corner for months. But the greenback has continued to extend its dominance against most major currencies, with the dollar index (.DXY=) New Tab, opens new tab up 2.9% this year. Much of that resilience is down to interest rates staying higher for longer. At the beginning of the year, forecasters and financial markets had predicted the U.S. Federal Reserve would have cut rates at least once by now. With latest interest rates futures pricing showing the Fed would start easing policy in September, analysts in the May 31-June 4 poll of 75 forex strategists forecast the dollar to give up some its gains in coming months. Much hinges on how U.S. inflation - at 2.7% as measured by the Fed's preferred gauge - progresses over the next couple of months. A separate Reuters poll showed inflation averaging above the Fed's 2.0% target at least until late 2025, suggesting the risk was the dollar would remain strong for an extended period. "We think U.S. inflation could be picking up again by the middle of the year and the Fed easing cycle could be really very short, almost irrespective of when it does commence," said Jane Foley, head of FX strategy at Rabobank. "That means even though the dollar will give back some ground, when the Fed starts to cut, the dollar is likely to remain relatively firm. It's not going to give back an awful lot of this year's gains and it's going to remain overvalued." While nearly all major currencies have faced the wrath of a strong dollar, the Japanese yen was the only currency to weaken against the greenback every year since 2021. The currency has shed over a third during that period. Median forecasts showed the yen rising nearly 8% from current levels to trade around 145.00/dollar in 12 months. The currency has lost around 10% for the year. Meanwhile the euro was forecast to change hands at $1.08 and $1.10 in six and 12 months, suggesting a gain of around 1% in a year from now. "We're expecting the dollar to generally lose ground against other currencies...once the Fed starts to cut, the dollar should be vulnerable and should give up some of its strength," said Brian Rose, senior economist at UBS Global Wealth Management. "We're not looking for any kind of dollar collapse. We're just talking about giving up a few percent against most major currencies." (For other stories from the June Reuters foreign exchange poll:) Sign up here. https://www.reuters.com/markets/currencies/us-dollar-weaken-fed-rate-cuts-are-required-say-strategists-2024-06-05/

2024-06-04 23:26

June 5 (Reuters) - A look at the day ahead in Asian markets. Investor sentiment is fragile as Asian markets reach the mid-point of the week, with bubbling angst and political volatility across the emerging world compounding deepening concern over U.S. and global economic growth. Indian assets, in particular, have been on a wild ride this week in response to the country's general election result, a strong safety bid is driving the Japanese yen higher, and regional stocks are now down four out of the last five days. That's the backdrop to a jam-packed economic calendar across the region, which includes: Australian first-quarter GDP, revised GDP data from South Korea, service sector purchasing managers index data from Australia, China and India, as well as inflation from Thailand and the Philippines. These indicators will go a long way to setting investors' policy expectations for the region. Rate cut hopes are also likely to mount if the prospects for greater Fed easing continue to grow - almost 50 basis points of U.S. rate cuts this year are now being priced in, up from around 30 bps last week. The latest indicator to suggest the U.S. economy is cooling was the 'JOLTS' report that showed job openings fell more than expected in April, pushing the number of available jobs per job-seeker to its lowest in nearly three years. Wall Street ended mostly flat, despite Treasury yields falling for a fourth day. Equity bulls might argue that Wall Street has held up well in the face of renewed growth concerns, but riskier markets will need more than that. What does Wednesday have in store for Indian markets? Stocks surged 3.4% to new highs on Monday after exit polls suggested Prime Minister Narendra Modi would extend his majority, but tumbled 5.7% on Tuesday as it became clear he would actually lose it. Analysts at Barclays reckon market reverberations will be felt for a while yet, a premium will be put back into Indian bonds, and the central bank will maintain its presence in the FX market to limit volatility and weakness in the rupee. Volatility in the yen is also picking up, with short-term implied volatility in dollar/yen on Wednesday jumping the most in a month as the dollar tumbled below 155.00 yen. If there is a safe-haven bid in FX right now, it looks to be going to the yen, which has the potential support of the world's largest repatriation flow. Japan is the world's largest creditor with a net $3.36 trillion invested overseas, more than half of that in equity and debt portfolio assets. Even a sliver of that brought back home can lift the yen. Here are key developments that could provide more direction to markets on Wednesday: - Australia GDP (Q1) - Indian market volatility - China, India, Australia services PMIs (May) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-06-04/

2024-06-04 22:54

LOS ANGELES, June 4 (Reuters) - Millions of Americans from the Gulf Coast of Texas to California's San Francisco Bay area were warned on Tuesday to curb outdoor activity and stay well-hydrated during a major pre-summer heat wave expected to roast much of the Southwestern U.S. this week. Unseasonably high daytime temperatures were forecast to soar above 100 degrees Fahrenheit (37.8 degrees Celsius) across several states into Friday, according to the National Weather Service. Forecasters attributed the excessive heat, coming more than two weeks before the official June 20 start of the summer season, to a strong ridge of atmospheric high pressure parked over the region and intensifying. Areas of particular concern for triple-digit temperatures included California's inland Central Valley and the state capital, Sacramento, where an "excessive heat warning" was in effect. Closer to the Pacific Coast, a less dire "heat advisory" was for slightly milder but still oppressively high mercury readings in the Bay area. In low-elevation areas of southern Arizona and Nevada, forecasters warned that temperatures would climb above 110 degrees F, likely topping 112 degrees F in Las Vegas on Thursday, which would become the city's earliest recorded 112 degree reading on record. Phoenix, Arizona's state capital and its biggest city, could see highs reaching 115 on Thursday. The heat wave as a whole, with temperatures 20-30 degrees above normal, was expected to peak over California's Central Valley on Wednesday, before expanding into the Desert Southwest later in the week, the NWS said. "Widespread temperature records are expected to be tied or broken across much of the aforementioned areas," it said. Forecasters and local officials urged residents to stay in air-conditioned indoor areas, especially during the hottest times of the day, drink plenty of fluids, and check on neighbors and relatives during the heat wave. "Extreme heat is an invisible but dangerous consequence of climate change, and CA's outdoor workers, seniors + children are particularly vulnerable," California's Environmental Protection Agency said in a social media post. A bout of extreme heat that has baked much of Texas for about a week was expected to peak on Tuesday but persist for a few days more, the weather service said. The prevailing conditions are seen as a prelude to hotter-than-normal temperatures that are likely to become a common occurrence over the next three months in many regions, according to the NWS. In addition to risks posed to human health, the extreme heat puts a strain on power grids. In May, the North American Electric Reliability Corp, which sets energy reliability standards for the U.S. and Canada, said that large parts of the United States remain at risk for supply shortfalls due to the demands of summertime air-conditioning. The hot weather outlook also could mean more wildfires in California this summer as arid, windy conditions fuel blazes. A 14,000-acre (5,665 hectares) wildfire, called the Corral Fire, was 75% contained after forcing thousands of residents to evacuate east of San Francisco over the weekend. Sign up here. https://www.reuters.com/business/environment/seasons-first-heat-wave-scorch-parts-western-southern-us-2024-06-04/

2024-06-04 22:53

WASHINGTON, June 4 (Reuters) - The U.S. could hasten the rate of replenishing the Strategic Petroleum Reserve as maintenance on the stockpile is completed by the end of the year, Energy Secretary Jennifer Granholm told Reuters on Tuesday. Granholm said she believes the global oil market is well-supplied and that she does not expect a big increase in oil and gas prices in the "next short while." The Energy Department this year has been buying about 3 million barrels of oil per month for the Strategic Petroleum Reserve after selling 180 million barrels in 2022 following Russia's invasion of Ukraine. President Joe Biden, a Democrat, directed the sale, the largest ever from the SPR, in an effort to control gasoline prices after the invasion. But the move sank levels in the reserve to the lowest in 40 years, leading to criticism from Republicans that it left the U.S. emergency oil buffer too thin. "It could pick up more than that," Granholm told Reuters in an interview in Washington, about the 3 million barrel per month pace. She said that a couple of the SPR's four sites on the coasts of Texas and Louisiana have been in maintenance. "All four sites will be back up by the end of the year, so one could imagine that pace would pick up, depending on the market," she said. The U.S. has bought back about 38.6 million barrels and canceled congressionally mandated sales of 140 million barrels through 2027. The administration has said it wants to keep buying oil as long as the price remains below $80 a barrel . "We want to continue to take advantage of the market when it is right for the taxpayers," Granholm said. The Organization of Petroleum Exporting Countries agreed on Sunday to extend production cuts into 2025 amid tepid demand growth. But Granholm was not concerned the agreement could result in higher oil prices. "It seems that they have backed off a bit from their goals of getting" much higher oil prices she said about OPEC. "And so that is encouraging." LNG PAUSE The Biden administration intends to finalize an environmental and economic review of its liquefied natural gas exports by the end of the first quarter of 2025, following a period of public comment, Granholm said. She did not expect the pause to have any impact on U.S. competitiveness in the global LNG market, given U.S. exporters are only shipping a fraction of what has already been authorized. The oil industry, Republican lawmakers, and presidential candidate Donald Trump have lambasted the Biden administration for its decision earlier this year to pause LNG export permitting. “It doesn’t pause anything that’s already happening and already authorized,” Granholm said. The U.S. is the world’s top LNG exporter at around 14 billion cubic feet per day. Granholm said the administration had authorized 48 billion cubic feet per day of LNG exports. OIL COMPANY CONSOLIDATION Granholm said she was worried about the recent flurry of mergers and acquisitions in the U.S. oil industry involving companies like Exxon (XOM.N) New Tab, opens new tab Chevron (CVX.N) New Tab, opens new tab and ConocoPhillips (COP.N) New Tab, opens new tab saying they risked harming consumers. “I’m always worried about consolidation in any industry and what the impacts for real people are on that, and the antitrust issues related. We've got to be vigorous on that throughout. Competition is good. And so consolidation is anti-competition, often. And I think that we should all be concerned about that.” Asked if she supported efforts by Democratic lawmakers to convince Attorney General Merrick Garland to launch an investigation into the oil industry, Granholm said: "I think it's up to Merrick Garland whether he takes this up. As a Cabinet member I respect his decision." As the U.S. and allies look to reduce dependence on fossil fuels and boost output of electric vehicles and renewable power, Granholm said the creation of a "strategic resilience reserve" to stockpile critical minerals like graphite and lithium is a "good idea." The reserve could protect against dependence on China for such minerals. The administration is talking with allies and should have announcements on critical minerals soon, Granholm said. Sign up here. https://www.reuters.com/business/energy/us-could-boost-rate-replenishing-oil-reserve-energy-secretary-granholm-says-2024-06-04/

2024-06-04 22:46

WASHINGTON, June 4 (Reuters) - President Joe Biden's administration is asking big technology companies to invest in new climate-friendly power generation to cover their surging demand, U.S. Energy Secretary Jennifer Granholm told Reuters. The talks come as a surprising surge in electricity demand has been driven by the adoption of technologies like generative artificial intelligence that require power-hungry data centers. This development could complicate Biden's target of decarbonizing the power sector by 2035 to fight climate change. “We've been talking with data companies. The large ones have commitments to net-zero and would like to see clean baseload power,” Granholm said in an interview with Reuters. She said the administration had discussed the possibility that companies could band together to make use of small modular reactors for nuclear energy, and could simultaneously place orders to reduce costs. “If the tech companies are coming in and are going to pull clean power from the grid, they should bring the power with them,” she said. "And so a lot of that conversation is happening right now among tech companies and utilities, tech companies and nuclear companies." She did not name any of the companies involved. Data centers could use up to 9% of total electricity generated in the U.S. by the end of the decade, more than doubling their current consumption, the Electric Power Research Institute said in a report last week. NuScale, the only small modular reactor company with a license to build from U.S. regulators, had to cancel its only project last year at the Energy Department's Idaho National Laboratory. Granholm said the NuScale did not have sufficient agreements to buy power from the project. "That's a lesson: If you're going to have new nuclear you have to have clear offtake of the power," Granholm said. The White House last week announced new measures to spur development of new U.S. nuclear power plants, a large potential source of carbon-free electricity the government says is needed to combat climate change. But no new U.S. nuclear plants are currently being built. The youngest U.S. nuclear power reactors, at the Vogtle plant in Georgia, were years behind schedule and billions over budget when they entered commercial operation in 2023 and 2024. Granholm said tech companies were also looking into other clean energy technologies, including geothermal. Sign up here. https://www.reuters.com/technology/power-hungry-data-centers-spur-us-talks-with-big-tech-energy-chief-granholm-says-2024-06-04/