Crude oil lower; Uncertainties remain despite easing bank tensions

Crude oil lower; Uncertainties remain despite easing bank tensions

By Peter Nurse   

Investing.com -- Oil prices edged lower Tuesday, handing back some of the previous session’s substantial gains as supply disruptions in Turkey added to a degree of stability in the global banking sector.

By 09:20 ET (13:20 GMT), U.S. crude futures traded 0.3% lower at $72.60 a barrel, while the Brent contract fell 0.4% to $77.44 a barrel. 

The two crude benchmarks recorded gains of around 3% on Monday in response to news of Turkey suspending about 400,000 barrels a day of crude exports from Kurdistan through a pipeline to the Mediterranean following a legal dispute.

This added to the general feeling of calm that fell over the banking sector following the announcement that First Citizens BancShares (NASDAQ:FCNCA) will acquire deposits and loans of failed Silicon Valley Bank and reports that U.S. authorities will look at ways to ensure all of the country’s bank deposits are safe.

Prices were also underpinned by research from China’s largest oil company suggesting that the country’s imports will rise by more than 6% this year to 540 million tons, reflecting the end of COVID-19-related restrictions on economic activity.

Still, Monday's gains are being sold into as a great deal of uncertainty exists on both sides of the demand/supply equation.

While there is a great deal of optimism about demand surging in China, the largest importer of crude in the world, the latest data showed that Chinese industrial profits fell sharply in the first two months of 2023, with some facets of the economy still struggling even after the lifting of anti-COVID measures.

Additionally, the cooling of tensions in the global banking sector will probably allow central banks, in both Europe and the U.S., to continue lifting interest rates to combat still elevated levels of inflation, likely weighing on future economic activity.

On the supply side, Russian Deputy Prime Minister Alexander Novak stated earlier this week that Moscow is close to achieving its target of cutting crude output by 500,000 barrels per day. 

But last week’s tanker tracking data from Bloomberg suggested that Russia’s shipments remain fairly constant.

Then there’s OPEC.

The Saudi-led 13-member Organization of the Petroleum Exporting Countries, called OPEC+ if it includes Russia, is set to hold a policy meeting at the beginning of April.

While it is unlikely to go beyond the production cut of 2M barrels per day it announced in November, the producer group is unlikely to approve of the slump in prices this month, with oil on track to post its worst month since November.

There’s more data to study later in the session as the American Petroleum Institute, an industry group, is set to publish its inventory data.

This is expected to show another build in U.S. crude stocks after expanding last week by just over 3M barrels.

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2023-03-28 21:32:00     Come from : Investing.com

BP, ADNOC offer to buy 50% of Israel's NewMed Energy

BP, ADNOC offer to buy 50% of Israel's NewMed Energy

By Ron Bousso

LONDON (Reuters) - BP (NYSE:BP) and Abu Dhabi's state oil giant on Tuesday offered to acquire 50% of Israeli offshore natural gas producer NewMed Energy for around $2 billion, making their entry into Israel's growing energy sector.

The offer would involve acquiring NewMed's free floating shares and taking the company private. BP shares gained 2% by 0810 GMT while NewMed shares were up around 30%.

Abu Dhabi National Oil Co (ADNOC) and BP said they intend to form a new joint venture as part of the deal that will be "focused on gas development in international areas of mutual interest including the East Mediterranean."

NewMed is the largest stakeholder in the giant Leviathan offshore field, operated by Chevron (NYSE:CVX), which produces 12 billion cubic metres (bcm) of gas that are supplied to Israel, Egypt and Jordan.

NewMed and its partners plan to nearly double Leviathan's production to 21 to 24 bcm by 2027 are also exploring plans for a liquefied natural gas (LNG) terminal to further boost exports, Chief Executive Officer Yossi Abu told Reuters.

"This is a sign of confidence in the East Med becoming a major supplier of gas to Europe," Abu said.

The offer is a further sign of the strengthening economic links between Israel and the United Arab Emirates since the two countries agreed to normalise ties in 2020.

Last year, Abu Dhabi's Mubadala Petroleum acquired from Delek Drilling a 22% stake in the east Mediterranean Tamar gas field for about $1 billion.

For BP, the deal highlights the British company's focus on growing natural gas production after Chief Executive Bernard Looney last month slowed down its shift away from fossil fuels.

The offer price is 12.05 ILS ($3.38) per share, reflecting a 72% premium above the pre-deal market price, valuing the entire company at about 14.1 billion ILS, or $3.96 billion.

After the deal closes NewMed will become a private corporation equally held by the BP-ADNOC JV and Delek Group, which holds the remaining 50%.

($1 = 3.5669 shekels)

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2023-03-28 16:35:00     Come from : Reuters

New protests against Macron and his pension bill amid warnings of violence

New protests against Macron and his pension bill amid warnings of violence

By Ingrid Melander

PARIS (Reuters) - France faces a new nationwide day of strikes and protests on Tuesday after some of the country's worst street violence in years marred rallies over the past week.

Protests against President Emmanuel Macron's plans to delay retirement age by two years to 64 had been largely peaceful so far.

But anger has mounted since the government pushed the bill through parliament without a vote mid-March, with polls showing that Macron's perceived disdain for voters, as well as footage of police violence, made things worse.

In the last nationwide day of protests on Thursday, "Black Bloc" anarchists smashed shop windows, demolished bus stops and ransacked a McDonald's (NYSE:MCD) restaurant in Paris, with similar violence in other cities.

Interior Minister Gerald Darmanin warned on Monday that there was "a very serious risk" of further violence on Tuesday, in the capital and beyond. Some 13,000 police will be assigned to the rallies, just under half of them in Paris.

Violent far-left groups, some of them coming from abroad, want to "set France on fire", he told a news conference.

Police have advised shop owners on the path of the Paris protest rally to close for the day.

Rights groups and international organisations have denounced an excessive use of force by police in recent protests.

As with previous days of industrial action since mid-January, trains and flights will be disrupted and some schools shut, while rolling strikes continue to hit the energy sector.

On Monday, as at least six out of seven refineries in France were shut or functioning at reduced capacity and liquefied natural gas (LNG) terminals were blocked.

The government says the pension bill is vital to ensure the system does not go bust. Unions and protesters say there are other ways to do that.

Unions have asked Macron to withdraw or pause the bill - which has been adopted but not yet published, pending a review by the Constitutional Council - to calm things down.

Macron responded that he is more than willing to talk to unions, but on other topics.

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2023-03-28 12:15:00     Come from : Reuters

Oil rally stalls as markets weigh tighter supply, demand disruption

Oil rally stalls as markets weigh tighter supply, demand disruption

By Ambar Warrick

Investing.com-- Oil prices fell slightly in early Asian trade on Tuesday after rallying in the prior session, as markets weighed the prospect of tighter near-term supply against growing political disruptions in parts of Europe.

Crude markets shot up on Monday after reports said that about 450,000 barrels per day, or 0.5% of global oil supply from Kurdistan was stopped after an arbitration case confirmed that Iraq’s consent was needed to ship the oil from Turkey. The move pointed to some disruptions in oil supplies over the near-term.

But on the other hand, major transport strikes in Germany and France pointed presented near-term headwinds to oil demand. This trend cut short an oil rally this week, and is likely to act as a weight on markets in the near-term.

Germany in particular saw public transport grind to a halt as increasing inflation saw calls for greater wages, in turn sparking walkouts by transport unions.

Brent oil futures fell 0.4% to $77.47 a barrel, while West Texas Intermediate crude futures fell 0.1% to $72.75 a barrel by 22:43 ET (02:43 GMT). Both contracts rallied between 4% and 5% on Monday. 

Easing concerns of a banking crisis, following a government-brokered takeover of Silicon Valley Bank (NASDAQ:SIVB) by peer First Citizens BancShares Inc (NASDAQ:FCNCA) helped improve sentiment, as did a slew of assurances from regulators that the banking sector was stable. 

A lack of bad news on U.S. banks over the past week helped bring concerns over a banking crisis to a rest. 

Weakness in the dollar also benefited oil prices this week, as weakening safe haven demand and expectations of a less-hawkish Federal Reserve dented the greenback. A weaker dollar supports crude demand by making oil cheaper for international buyers. 

Still, oil prices were down nearly 10% so far this year, having sunk to 15-month lows earlier in March as markets feared that slowing economic growth will dent crude demand this year.

While a recovery in China is expected to push up crude consumption, initial economic readings from the country have painted a weak picture of crude demand. The country’s oil imports sank in the first two months of the year. 

Crude markets are awaiting key Chinese business activity data due on Friday for more economic cues on the world’s largest oil importer. The country saw a sharp rebound in activity after the lifting of anti-COVID restrictions earlier this year.

But this has yet to translate into higher crude demand. 

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2023-03-28 10:48:00     Come from : Investing.com

US, Japan strike trade deal on electric vehicle battery minerals

US, Japan strike trade deal on electric vehicle battery minerals

By David Lawder

WASHINGTON (Reuters) - The United States and Japan on Tuesday announced a trade deal on electric vehicle battery minerals that is key to strengthening their battery supply chains and granting Japanese automakers wider access to the new $7,500 U.S. EV tax credit.

The swiftly negotiated agreement prohibits the two countries from enacting bilateral export restrictions on the minerals most critical for EV batteries, according to senior Biden administration officials. Those minerals include lithium, nickel, cobalt, graphite and manganese.

The deal also aims to reduce U.S.-Japanese dependence on China for such materials by requiring collaboration to combat "non-market policies and practices" of other countries in the sector and on conducting investment reviews of foreign investments in their critical minerals supply chains.

Minerals-focused trade deals are one way that the Biden administration hopes to open up access for trusted allies to the $7,500 per vehicle EV tax credits in last year's climate-focused Inflation Reduction Act.

Half of the credit for purchasing consumers is reserved for North American-assembled vehicles and batteries, a source of considerable tension with the European Union, Japan and South Korea, who worry that their car and battery makers will be rendered uncompetitive.

The other half of the credit is contingent on at least 40% of the value of critical minerals in the battery having been extracted or processed in the United States or a country with a U.S. free trade agreement or recycled in North America.

The U.S. Treasury is expected to define sourcing requirements for the EV tax subsidies by the end of this week, providing eagerly awaited guidance to the auto, battery and clean energy sectors.

But asked whether the trade agreement would qualify Japan-sourced batteries, components and vehicles for that part of the tax credit, the officials said that determination was up to Treasury.

The officials said that USTR does not intend to seek approval by Congress for the minerals trade agreement because it falls under the agency's authority to negotiate sectoral trade agreements at the executive level.

But they said provisions in the deal to promote labor rights and recycling in their battery mineral supply chains would help both countries.

"Japan is one of our most valued trading partners and this agreement will enable us to deepen our existing bilateral relationship," U.S. Trade Representative Katherine Tai said in a statement.

"This is a welcome moment as the United States continues to work with our allies and partners to strengthen supply chains for critical minerals, including through the Inflation Reduction Act."

The two countries agreed to review the minerals agreement every two years, including whether it is appropriate to terminate or amend it.

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2023-03-28 10:36:00     Come from : Reuters

Gold prices rise from steep losses, safe haven demand seen easing

Gold prices rise from steep losses, safe haven demand seen easing

By Ambar Warrick

Investing.com-- Gold prices rose in early Asian trade on Tuesday, but were pinned well below recent highs as gains in the stock market and hopes that a U.S. banking crisis had been avoided saw investors pivot away from safe haven assets.

The yellow metal fell sharply on Monday as repeated reassurances of stability in the banking sector helped ease concerns over broader contagion from the collapse of several banks this month.

The takeover of beleaguered lender Silicon Valley Bank (NASDAQ:SIVB) by peer First Citizens BancShares Inc (NASDAQ:FCNCA) also laid to rest concerns over economic ructions stemming from SVB’s collapse. This triggeredovernight gains on Wall Street, sapping some of the safe haven demand that benefited gold in recent weeks.

Spot gold rose 0.3% to $1,962.80 an ounce, while gold futures expiring in June rose 0.5% to $1,981.20 an ounce by 21:54 (01:54 GMT). Both instruments fell nearly 1% on Monday after racing past the $2,000 an ounce level last week.

But gold’s inability to hold the $2,000 level also spurred bets that the yellow metal will see more consolidation in the coming days, especially if risk appetite improves further.

Still, weakness in the dollar offered some relief to gold prices, as markets also bet that the Federal Reserve will lack sufficient economic headroom to keep raising interest rates. 

The greenback hovered above its weakest level in nearly two months on Tuesday. 

Gold logged steep gains in March as fears of a banking crisis pushed up safe haven demand and saw investors bet on a less hawkish Federal Reserve. While the central bank still signaled continued measures against high inflation, its outlook on future interest rates appeared less certain.

A pause in the Fed’s rate hike cycle is likely to benefit non-yielding assets such as gold and precious metals.

Other precious metals also rose on Tuesday, recovering slightly from a weak start to the week.

Platinum futures rose 0.2%, while silver futures added 0.6%.

Among industrial metals, copper prices trended slightly higher on hopes that an economic crisis had been averted.

Copper futures rose 0.1% to $4.1015 a pound.

Focus this week is on business activity data from major copper importer China to gauge the state of an economic recovery in the country. 

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2023-03-28 09:56:00     Come from : Investing.com

Oil prices little changed; supply concerns, banking crisis in focus

Oil prices little changed; supply concerns, banking crisis in focus

By Laura Sanicola

Crude prices moved in a narrow range in early Asian trade on Tuesday after rallying in the previous session, with oil markets focused on developments in the banking crisis as well as on supply concerns and indications of strengthening demand.

Brent crude futures fell 2 cents to $78.10 a barrel at 0018 GMT. West Texas Intermediate U.S. crude gained 8 cents, or 0.1%, to $72.89.

Prices rose in the previous session after Turkey stopped pumping crude from Kurdistan via a pipeline following an arbitration decision that confirmed Baghdad's consent was needed to ship the oil.

Monday's announcement that First Citizens BancShares Inc will acquire deposits and loans of failed Silicon Valley Bank spurred optimism about the condition of the banking sector that has roiled financial markets.

U.S. authorities are also reportedly in early deliberations about expanding emergency lending facilities.

Oil prices also drew support from indications of strong Chinese demand.

China's crude oil imports are expected to rise 6.2% in 2023 from last year's level to 540 million tonnes, according to an annual forecast by a research unit of China National Petroleum Corp on Monday.

U.S. crude oil stockpiles were seen rising about 200,000 barrels last week, a preliminary Reuters poll showed on Monday.

The American Petroleum Institute (API), an industry group, will publish its inventory data at 4:30 p.m. EDT on Tuesday and the U.S. Energy Information Administration at 10:30 a.m. on Wednesday.

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2023-03-28 09:07:00     Come from : Reuters

Gold backs further away from $2,000 as risk appetite rebounds

Gold backs further away from $2,000 as risk appetite rebounds

By Barani Krishnan

Investing.com -- Gold moved further from the $2,000 target aspired by longs in the market as assurances over the crisis-struck U.S. banking sector boosted the appetite for risk assets, resulting in reduced demand for safe havens.

Gold for April delivery settled at $1,953.80 per ounce on New York’s Comex, down $30, or 1.5%, on the day. The benchmark gold futures contract hit a session high of 2,023.90 in Friday’s trade, closing all of last week up for a fourth week in a row, delivering a net gain of more than 9% over the stretch to longs in the game.

The spot price of gold, more closely followed than futures by some traders, was at $1,952.43 by 13:50 ET (17:50 GMT), down $26.18, or 1.3% on the day. Spot gold reached as high as $2,003.19 on Friday.

“Gold prices are slipping amid higher yields and an improvement in risk appetite,” said Craig Erlam, analyst at online trading platform OANDA.

“If turbulence in the banks subsides, we could see gold give back some of its recent gains and from a technical perspective, the two failed runs at $2,000 has left us with a possible double top forming, with the neckline around $1,935.”

On the banking front, First Citizens BancShares Inc (NASDAQ:FCNCA) said it will acquire the deposits and loans of failed Silicon Valley Bank, closing one chapter in the crisis of confidence that has ripped through financial markets.

The Federal Reserve’s Vice Chair for Supervision Michael Barr said the central bank will be “fully accountable” for any supervisory or regulatory failures involving Silicon Valley Bank, which was the first to fall among U.S. banks two weeks ago, triggering a domino effect.

Barr, who is due to testify before U.S. lawmakers on Tuesday, however, admitted in a pre-testimony speech released Monday that “contagion from SVB's failure could be far-reaching and cause damage to the broader banking system.”

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2023-03-28 02:05:00     Come from : Investing.com