2024-05-15 00:54
RIO DE JANEIRO, May 14 (Reuters) - The chief executive of Brazil's Petrobras (PETR4.SA) New Tab, opens new tab offered to step down, the state-run oil company said on Tuesday, as the government lined up a former regulator for the role, sending shares sliding as investors braced for political interference. Brazilian President Luiz Inacio Lula da Silva will replace the outgoing CEO Jean Paul Prates with Magda Chambriard, the former head of Brazilian oil and gas regulator ANP, according to a securities filing citing the Mines and Energy Ministry. New York-listed shares of Petrobras fell more than 6% in after-hours trading as news broke that Prates was headed for the exit. The ouster of Prates represents a win for members of Lula's cabinet pushing for lower fuel prices, smaller dividends and more capital spending to create jobs and boost the economy. "In our view, the exit of Prates is a deterioration of Petrobras governance and a downside risk for the investment thesis," Citi analysts Gabriel Barra and Andres Cardona told clients in a note. "The new CEO arrives with the pressure to fulfill the investment plan and accelerate the capex expansion, which may negatively impact the company's dividend payment." The Petrobras board will meet on Wednesday to discuss the proposed departure of Prates, the company's press office said. Since he took over as CEO in January 2023 Prates has tangled repeatedly with Energy Minister Alexandre Silveira, who has openly criticized the company for not doing enough to lower prices at the pump or boost Brazil's economy with investments. Silveira's criticisms often echoed Lula's own concerns about Petrobras, which he has said should do more to help the country. The dispute between Silveira and Prates hit fever pitch in March, when the company's board – largely appointed by Silveira – defied Prates and withheld an extra dividend expected by investors, which weighed heavily on Petrobras shares. Chambriard, who started her four-decade career in the energy industry as an engineer at Petrobras in 1980, headed up petroleum regulator ANP from 2012 to 2016, under a previous government run by Lula's leftist Workers Party. She was considered a top prospect for the Petrobras CEO job after Lula won the 2022 election, and that December, she gave an interview to Reuters echoing many of his views on the company. At the time, she criticized a policy of weekly fuel price adjustments tracking global markets, which Petrobas has since scrapped. She also called for more development of natural gas and criticized large dividends to shareholders, arguing that profits should be reinvested in energy exploration and output. Sign up here. https://www.reuters.com/markets/commodities/petrobras-ceo-offers-resignation-us-listed-shares-tumble-2024-05-15/
2024-05-15 00:49
RIO DE JANEIRO, May 14 (Reuters) - Two Brazilian states have asked a court to more than double the amount that miners Vale and BHP, plus a jointly owned tie-up, must pay in damages for a 2015 deadly tailings dam failure, according to a legal document seen by Reuters on Tuesday. In January, a Brazilian federal judge ruled that Vale (VALE3.SA) New Tab, opens new tab, BHP (BHP.AX) New Tab, opens new tab and their joint venture Samarco must pay 47.6 billion reais in damages for the dam burst, a preliminary decision which prompted Vale and BHP to raise provisions related to the case. In late 2015, the collapse of the dam, near the town of Mariana, Minas Gerais, at the Samarco iron ore mine, caused a vast flow of mud and toxic mining waste that buried a nearby village, killing 19 people. It also left hundreds homeless while polluting the Doce River, a major waterway that flows through neighboring Espirito Santo state. According to a legal document filed on Monday, Minas Gerais and Espirito Santo states have asked a court to order Vale and BHP to pay a total 100 billion reais ($19.5 billion), along with interest plus a late payment penalty. The states argue that a larger payment amount is needed to repair the affected areas, claiming the companies are able to pay more based on their most recent three years of earnings, according to the document. Also on Tuesday, BHP said in a statement it remains willing to collectively seek a solution to the disaster that would guarantee fair and comprehensive reparation. Vale declined to comment. Samarco did not immediately respond to requests for comments. Earlier this month, the Brazilian government and Espirito Santo state rejected a proposal by Vale, BHP and Samarco that offered to pay a total of 127 billion reais. Minas Gerais said it wanted to keep negotiating. An eventual agreement would conclude several ongoing lawsuits over the incident. ($1 = 5.1289 reais) Sign up here. https://www.reuters.com/world/americas/brazil-states-ask-court-double-what-vale-bhp-should-pay-dam-burst-2024-05-15/
2024-05-15 00:34
LONDON, May 15 (Reuters) - Oil prices slipped on Wednesday as International Energy Agency (IEA) data showed demand in developed countries was forecast to flag this year as inflation remains persistent. Brent crude futures were down 54 cents or 0.6% at $81.84 a barrel at 1140 GMT. U.S. West Texas Intermediate crude futures (WTI) fell 50 cents or 0.6% to $77.52 a barrel. The IEA trimmed its forecast for 2024 oil demand growth on Wednesday by 140,000 barrels per day (bpd) to 1.1 million bpd, largely citing weak demand in developed OECD nations. Oil demand in those countries actually contracted in the first quarter of this year, the IEA added. But lending some support to prices, U.S. crude oil inventories fell by 3.104 million barrels in the week ended May 10, according to market sources citing American Petroleum Institute figures on Tuesday. Refineries are increasing runs to meet increased fuel demand heading into the peak northern hemisphere summer driving season. Gasoline inventories fell by 1.269 million barrels and distillates rose by 673,000 barrels. U.S. government inventory data is due later on Wednesday which is likely to also show a drop in crude stockpiles. "Prices will remain range bound between $80-$90 through 2Q24," said Macquarie global oil and gas strategist Vikas Dwivedi. "After 2Q, we expect oil will become bearish as a result of non-OPEC supply growth, decreasing OPEC+ space capacity and softer-than-anticipated demand due to persistent inflation." U.S. consumer price index (CPI) data is also due on Wednesday and should give a clearer indication whether the Federal Reserve may cut interest rates later this year, which could spur the economy and boost fuel demand. Oil prices also found support from a softer U.S. dollar. "U.S. inflation data looks set to dominate market sentiment going forward, with the dollar heading lower for a third consecutive day today," said chief market analyst at Scope Markets Joshua Mahony. "The apparent optimism seen throughout markets does stand on somewhat unstable ground given concerns over the potential for stubbornly high inflation throughout much of this year." Sign up here. https://www.reuters.com/business/energy/oil-prices-up-wildfires-canada-us-inventories-drawdown-expectations-2024-05-15/
2024-05-14 23:52
May 14 (Reuters) - Vanguard Group named former BlackRock (BLK.N) New Tab, opens new tab executive Salim Ramji as its new chief executive officer and as a member of the board, effective July 8, the U.S. asset management company said in a statement on Tuesday. Ramji will replace Tim Buckley, whose departure as the chairman and CEO was announced in February. Buckley has spent more than three decades at the company. Under his tenure, Vanguard expanded its assets under management by 80% to $9 trillion. Ramji joined Blackrock as global head of corporate strategy in 2014, leaving his position of Senior Partner at McKinsey & Company in January. At BlackRock, he became a member of the company's Global Executive Committee and the global head of iShares and Index Investments, where he was responsible for two-thirds of the firm's assets and growth. Ramji exited Blackrock in January. The Pennsylvania-headquartered Vanguard is the world's second-largest asset manager by assets after BlackRock. Vanguard manages 423 funds worldwide and employs about 20,000 employees, according to its website. Sign up here. https://www.reuters.com/business/finance/vanguard-preparing-tap-former-blackrock-executive-salim-ramji-ceo-wsj-reports-2024-05-14/
2024-05-14 23:42
SAN SALVADOR, May 14 (Reuters) - El Salvador has mined nearly 474 bitcoins since 2021 thanks to a volcano-fueled geothermal power plant, official data showed on Tuesday, bringing the government's total bitcoin portfolio to nearly $354 million at current prices. The country's "Bitcoin Office," an official government entity, reports that government coffers now hold 5,750 bitcoins. The new additions, 473.5 bitcoins worth some $29 million since September of 2021, were powered by a small amount of geothermal energy generated by the country's imposing Tecapa volcano, touted as a green way to accumulate the well-known cryptocurrency, which is not regulated by any central bank. The administration of Bitcoin enthusiast President Nayib Bukele, who earlier this year was reelected to a second term, has installed 300 processors to "mine" bitcoins from the volcano. Of the 102 megawatts (MW) produced by the state-owned power plant, 1.5 MW are devoted to cryptocurrency mining. The so-called crypto mining process requires large amounts of energy for computing and cooling data processing centers, which perform complex math equations in order to secure cryptocurrencies like bitcoin. Elsewhere in the world, cryptocurrency miners have recently come under increased scrutiny for their electricity-sapping operations, and for the impact their activity has on power grids and carbon emissions. In 2021, El Salvador became the first country to adopt bitcoin as legal tender, alongside the U.S. dollar which it adopted two decades earlier. The bitcoin move earned Nayib's government harsh criticism for its embrace of the volatile cryptocurrency, including from the International Monetary Fund (IMF). Cryptocurrency miners Foundry USA, Ant pool, ViaBTC, F2Pool and Binance Pool pooled their resources to win a reward for opening a blockchain that can verify the last three years of bitcoin transactions originating from the power plant, according to the government Bitcoin Office. Sign up here. https://www.reuters.com/world/americas/el-salvador-mined-nearly-474-bitcoins-adding-state-crypto-holding-last-three-2024-05-14/
2024-05-14 23:41
LITTLETON, Colorado, May 14 (Reuters) - A slew of U.S. solar stocks jumped to life this week amid a resurgence in retail investor buying so-called meme stocks and news that the Biden administration is imposing new tariffs on Chinese solar equipment that may support U.S. manufacturers. Share prices in U.S.-listed solar firms including Sunpower Corp, Maxeon Solar and Sunnova Energy all jumped more than 20% this week as they benefited from a wave of investor buying of stocks that have been battered for the past year or so. The Biden administration's new tariffs on several China-made products including solar components and electric vehicles also enlivened trading activity in related stocks. OVERSHADOWED Solar equities may lack the profile of meme stock behemoth GameStop (GME.N) New Tab, opens new tab, which rallied to its highest since 2021 this week as posts from "Roaring Kitty" Keith Gill raised chatter about the return of the central figure behind the 2021 meme stock frenzy. Nonetheless, stocks tied to firms mainly engaged in the U.S. residential solar sector have taken a drubbing and seen a surge in short-seller interest since 2022 as rising interest rates slowed demand for residential solar systems. SunPower, Maxeon and Sunnova share prices all plunged roughly 90% between mid-August 2022 and May 1,2024, and until this week looked set to face continued headwinds in 2024 on a "higher for longer" interest rate outlook. However, the downbeat tone pervading the solar space has been upended this week by the one-two punch of the meme stock revival alongside the heightened focus on the solar space from Biden's fresh tariffs and accompanying rhetoric about supporting U.S. businesses. OVERSOLD? Stocks in SunPower have been among the most active in the solar space this week, posting a record one-day gain of roughly 60% on May 14 as a buying frenzy took hold. The manufacturer and installer of large scale solar systems has racked up significant losses since California enacted new net-metering charges a year ago that greatly reduced the appeal of household solar systems in the state. The company's dismal stock price performance over the past year or so reflected the dour operating conditions, and the firm announced a major restructuring last month. However, the stock has also been a favourite among short-sellers during much of its descent, with short interest representing over 90% of the total amount of shares available to the public as of April 30, according to LSEG. Such lopsided investor positioning left the stock vulnerable to a short covering rally on any sudden shift in market sentiment, such as seen this week. UNCLEAR OUTLOOK Many of the challenges that have beset U.S. solar companies over the past year remain in place, including high interest rates that have snuffed out the appeal of financing the installation of rooftop solar systems. And the new tariffs imposed on Chinese components this week may actually worsen market conditions for some firms which rely on imported parts. Nonetheless, after a roughly 90% collapse in the price of some solar company shares since 2022, there was arguably only limited room for additional stock price weakness going forward, and plenty of scope for a rebound. Now that a major rebound has taken place, many opportunistic investors will no doubt have placed fresh short-sided bets on solar stocks, on the assumption that prices will revert to their downtrend once the short covering melee runs its course. But given how aggressive the upside price moves have been this week, most short-sellers will remain cautious about placing very large bearish bets, and will be ready to unwind positions if the market runs against them. That change in sentiment may take some of the pressure off the solar sector in general over the near term, and may allow stock prices to creep higher still on any upbeat news items or earnings reports. And if U.S. interest rates are viewed as likely to come down later in 2024 - making the financing of solar systems more palatable - some investors with a long-term outlook may start to view the beaten-down solar space as a bit of a bargain. Such a sentiment swing would have been viewed as outlandish just a few weeks ago. But now that scores of short-sellers have been battered and pushed out by this week's bull run, a change in the mindset of solar stock holders is on the cards, and a brighter outlook can't be rule out. The opinions expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/business/energy/meme-stock-squeezes-new-tariffs-shake-up-us-solar-sector-maguire-2024-05-14/
