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Hungary will give subsidies to diesel car owners
The government of Hungary will provide a 'targeted subsidy' to households that use diesel-powered cars as fuel prices have increased. However, the price cap won't be introduced as it could lead to a shortage in supplies. Magyar stated in a post on Facebook that Europe was experiencing a?diesel crisis unprecedented in its history. The global diesel market has tightened dramatically in recent weeks. Industry executives have warned that the supply will remain constrained through 'winter, due to Russia's export embargo, and the approaching peak of 'heating demand. Magyar stated that his government will "provide direct and effective support to the owners of one-million diesel-powered cars and their families." He said that by December, diesel-powered vehicles up to 150 horsepower would receive a total compensation of 20,000 forints (63.96 dollars). Farmers will also get help through refunds of excise taxes. The Middle East has seen its supplies curtailed by the Iran War and the reduced shipping through the Strait of Hormuz. Hungarian oil group MOL's main Danube refining facility has been operating at reduced capacity since an October 2025 fire damaged one unit.
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German union demands Volkswagen commit to 2024 Labour Agreement
A leading union representative in Germany said that IG Metall demands Volkswagen honour a landmark labor deal signed in 2024. He cited fears of mass job losses due to a recent turnaround agreement. Thorsten Groeger, a Hanover-based reporter, told reporters that IG Metall members 'decided on Friday to invoke a clause in the agreement signed?in December of 2024. This move is a significant step in the 'fight for Volkswagen's Future', where management has been pitted against state governments and workers over a plan to double layoffs and dramatically cut production. Volkswagen did not immediately comment on the move. Daniela Cavallo is the head of Volkswagen's works council. After mass walkouts the 2024 agreement resulted in wage concessions and 35,000 layoffs. However, it prevented immediate plant closures by securing job and investment assurances from management. Existing labour agreements prevent IG Metall from striking until the end the year. In recent months, tensions have flared up between the two sides over Oliver Blume's plans for a major overhaul, which includes four threatened plant closures in early 2020. This is as Europe's largest carmaker struggles with Chinese competition, mounting duties and high manufacturing costs. Cavallo called the criticism of German manufacturing costs by management "finger-pointing". Cavallo called for more comprehensive policies to protect the industry from heavily subventioned competitors from China. The labour chief stated that "we in the automotive industry are in fierce competition with players who enter the market under totally different competitive conditions. We simply cannot keep up."
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Copper to experience first weekly decline since June due to US tariff concerns
The copper price was headed for its first weekly decline?since June. They also stabilized on Friday after a steep drop in the previous session following reports?that White House had not yet made a decision on imposing tariffs on the metal. The London Metal Exchange's three-month copper was unchanged at $14,230 per metric ton during the official open outcry. It fell 3.6% on Friday after reaching a record high price of $14,875; it is expected to finish the week at a loss of?1.6%. This would put an end to its 10-week winning streak. Alastair Mudro, senior base metals analyst at Marex said via email that the market had been "caught long". He said that copper stocks were still tight in certain areas and it would take time to move large amounts of money. "We see the potential of further tightness but for now, it's about risk management." Sucden Financial stated that heavy volumes on the decline of Thursday showed "meaningful reduction in risk" but agreed with the fact that fundamental tightness underpinning any selloff should be limited. Copper stocks available on the LME Shanghai Futures Exchange stocks in China, the top metals consumer, were unchanged at 117.600 tons. The weekly decline in exports was 13%, to 54,780 tonnes, the lowest level since January 2024. Stocks on the U.S. COMEX Exchange The price of copper in the United States has dropped, but it is still rising. Three-month LME Copper Spread On Thursday, the market structure?flipped into a contango, where future prices?are higher than those?for immediate delivery, signaling a easing of concerns about near-term supply. Cash contract last traded at a discount of $5.50 per ton from?the forward three-month contract. As rising borrowing costs and inflationary concerns roiled the markets, the rest of the LME Complex was in the red. Aluminium dropped 1.4% to $3.249 per ton. Zinc fell 0.6% to $3.870, and lead lost 0.3% to $1.895. Nickel fell 1.5% to $16,410 and reached a new two-month low. Tin dropped 0.7% to $53,950 and hit its lowest level since July 28.
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Inflation in the US increases in August
U.S. consumer price increases accelerated in August as gasoline prices rebounded after two consecutive monthly drops. This boosted financial market expectations of a rate hike by the Federal Reserve next week. Bureau of Labor Statistics of the Labor Department announced on Friday that Consumer Price Index rose 0.4% in August after increasing by 0.1% in July. Consumer inflation increased by 3.4% in the 12-month period ending August after increasing by the same amount in July. The economists polled predicted that the CPI would increase by 0.4% in the month of August and 3.4% on an annual basis. The CPI increased 0.3% in August after increasing 0.2% the previous month. The core CPI rose 2.4% on an annual basis in August, after increasing 2.5% in July. For its 2% target, the U.S. Central Bank tracks Personal?Consumption Expenditures Price Indexes. The government announced on Thursday that the Producer Price Index rose in August. This was due to strong increases in several key components?that are used in calculating PCE inflation. This, along with the robust August employment report released last week, has boosted expectations for a rate increase next week. After comments made by Fed Governor Christopher Waller last week at a NEXT Newsmaker Event, he said he would be inclined to advocate for a rate hike if the data showed that inflation pressures had cooled. The oil price rose above $100 per barrel again on Thursday. Diesel prices are also at record levels, indicating that inflation is likely to continue and spread. Frustration over inflation is growing Tariffs on imports, including the most recent ones against Canada, one United States' largest trading partners, have caused some economists to see price pressures continuing. The frustration over rising prices, particularly for gasoline and foods, has caused a sharp decline in the approval rating of President Donald Trump and could cost him control of the U.S. Congress during?the midterm elections in November. Following Thursday's PPI, economists estimated that August's core PCE index would rise by as little as 0.15 percent to as much as 0.28%. In July, core PCE inflation increased by 0.2%. The estimates for the increase in core PCE inflation over the past year ranged between 3.2% and 3.3%. Core PCE inflation increased by 3.3% over the past 12 months. Some economists believe that the August?PCE report on inflation will include changes in the methodology. This could reduce the core inflation rate a few basis points. According to the CME's FedWatch, the financial markets had priced in a 70% chance that the Fed would raise rates by 25 basis points at its policy meeting on September 15-16. The Fed's overnight benchmark interest rate currently ranges between 3.50% and 3.75%. Fed Chairman Kevin Warsh said last month that the central bank would "have work to be done" if they don't get the confidence needed to believe inflation will?go down to 2%. Trump has been pressuring the Fed for a rate cut, and posted on social media "LOWER THE RATES OR I'LL STOP TRADER WITH COUNTRIES WHERE WE HAVE A DEFICIT." Economists blamed the rise in yields of long-term U.S. Government bonds on what they called political intimidation. Some people expected the Fed would tighten its policy on Wednesday in order to demonstrate its independence.
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German environmental group sues to block Rosatom-linked nuclear fuel permit
BUND -Niedersachsen, a German environmental group, has filed a lawsuit against the Lower Saxony government to stop the expansion of the Lingen nuclear power plant. They claim that the involvement of Rosatom, based in Russia, poses a security risk. The case challenges the clearance by the regional state for a French subsidiary, Framatome, to produce nuclear fuel in Lingen, a northern German town. This was done under a license agreement with a state-backed Russian company. Lower Saxony’s environment?ministry with the guidance of the federal environment ministry had approved approval subject to certain terms and conditions despite political concerns about Russia’s war in Ukraine. BUND, in collaboration with the anti-nuclear.ausgestrahlt group, claimed that the permit was "the result of procedural mistakes and would pose a risk to security because of Rosatom’s role." They claim that the environmental screening was based on outdated documents, and that Rosatom wasn't fully disclosed. Olaf Bandt, BUND Germany's Chair, said that production and inspection could have been manipulated because Rosatom machines are used in Lingen for both manufacturing and quality control. Berlin said that it viewed the collaboration critically. However, the decision was in line with the current laws. The instrument to address these concerns would be?stricter EU sanctions. Lower Saxony's environment ministry stated that the?legal challenges would be?thoroughly evaluated. The letter also referred to a statement made by Lower Saxony’s environment minister Christian Meyer in July, stating that he was 'fundamentally opposed to working with Rosatom' but 'that there were no legal grounds to deny administrative clearance. Rosatom has not responded to all requests for comment. Framatome said that the collaboration was an interim measure to help customers who operate Russian-designed reactors to diversify their purchases away from direct Russian purchase until it develops own production technology.
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Nabiullina, the Russian central bank's Nabiullina, on interest rates and economy
Elvira Nabiullina, Governor of the Russian Central Bank and Alexei Zabotkin, Deputy Governor held a press conference on Friday following the bank's decision to leave its benchmark interest rate at 14%. Nabiullina and Zabotkin both spoke Russian. The following quotes were translated by into English. NABIULLINA POLICY OPTIONS DISSCUSSED, AND NEXT STEPS We discussed the issue of maintaining the current interest rate. This meeting was different from the last one in that we did not discuss a rate reduction. We will update our assessment of the future room for rate cuts in the October forecast update. We do, however, note that pro-inflationary risk has?increased, and continues to be dominant, and will continue to take this into consideration going forward. NABIULLINA ON THE BUDGET PARAMETERS We haven't yet changed our assumptions, estimates or working hypotheses in relation to our budget and the impact on the fuel market. We haven't received any new information about fiscal policy, and we anticipate that the parameters of the "three-year budget" will be finalized this month. If these parameters differ from those in our "baseline scenario", which assumes a 2% budget deficit this year, and a 1% deficit next year. A 0.5% budget deficit is projected for 2028. And a balanced budget by 2029. We will consider that in the revised forecast we release in October.
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Wall St. futures rebound as oil falls ahead of inflation test
U.S. index futures rebounded on Friday as oil prices dropped and investors hoped that the consumer inflation report would end a 'rough' week on a positive. Oracle's premarket price jumped by nearly 7% after it surpassed estimates for its quarterly results on Thursday. This reassured investors that their AI investments are paying off. Nvidia gained 0.8%. The market is weakened by fluctuating interest rates expectations as the stock markets navigate through a convergence of factors, such as the Middle East conflict intensifying and the elevated Treasury yields. After Thursday's slightly higher-than-expected Producer Price Index, which did not reassure investors, the market is now facing a Consumer Price Index report, another data point, that could change rate expectations. Said Haidar is the founder of Haidar Capital Management. He believes that the Federal Reserve must act quickly to prevent a repeating of the high inflation of 1970s. This would be yet another failure in discretionary monetary policies. At 6:58 am ET, the Dow E-minis were up 286 points or 0.55% and S&P 500 E-minis were up 40.5 points or 0.53%. ET, S&P 500 E Minis rose 40.5 points or 0.53% and Dow E-minis gained 286 points. Nasdaq E-minis rose?175.25 or 0.6%. The blue-chip Dow Jones was heading for its steepest drop since March, and the S&P 500 benchmark was on course for its largest weekly loss since last June. Some investors wonder how far this year's rally will go. Jeff Schulze is the head investment strategist of Franklin Templeton Institute. He wrote that history shows that strong starts are likely to continue. According to Schulze, since 1950, when the S&P 500 index gained more than 10% by the end of August in the year, it continued to gain from September to December in 25 out of 28 cases. Brent crude futures fell more than 3%, but were still over $103 per barrel. West Texas Intermediate crude futures fell 3.5%, but were still close to $100 a barrel. Bill Adams, Fifth Third Commercial Bank's chief U.S. economist, said that the surge in energy costs since the beginning of the month created a new risk for inflation. According to GasBuddy, the average national price of diesel in the U.S. on Thursday exceeded $6 per gallon for first time. Separately the yield on 10-year U.S. Treasury notes dropped 0.16 basis points but was still at 4.9424% - its highest level since 2023. Stocks are less appealing when Treasuries have high yields. Adobe's premarket price dropped by more than 4% after its midpoint revenue forecast for the fourth quarter fell short of expectations. ACV Auctions shares soared by 44% following the agreement of online vehicle auctioneer Copart to purchase it for nearly $1.9 billion.
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Weekend Reads: Oil-Patch AI, data-tampering, and critical-minerals risk
Looking for inspiration? Weekend Reads is a weekly roundup of what the Open Interest Team has been reading, watching, and listening to. This week's top picks include?span?data integrity, China’s decarbonisation drive, AI-powered oils fields and more. This weekend we are reading... MIKE DOLAN is a ROI Finance & Markets columnist. This article by Jed Kolko, at the Peterson Institute for International Economics (Washington) examines the corrosive effects of political'meddling' in official government statistics. GAVIN MAGUIRE is the ROI Global Energy Transformation Columnist. The latest analysis by UK think tank Ember tracks China's progress towards reducing its fossil-fuel dependency across all of its energy-intensive industries. This is a must read for anyone who's interested in global industrial production, carbon emissions and green technology. Andy HOME, ROI Metals columnist: This OECD?report examines the issue?of?traceability of critical minerals which is crucial for creating resilient supply chain. The report examines both the current situation and the challenges ahead. It focuses on lithium in Argentina, Chile and Indonesia as well as nickel in the Philippines. Listening to... RON BOUSSO is the ROI Energy Columnist. In this podcast, Bassam Fattouh, Director of the Oxford Institute for Energy 'Studies, and energy analyst Paul Horsnell discuss?changes? in oil -trading since the collapse on the 17th June ceasefire between the U.S. and Iran. We're always watching. CLYDE RUSSELL is a columnist for ROI Asia Commodities & Energy. This podcast, "Digital Innovations - in Oil and Gas", from consultant Geoffrey Cann examines how AI can revolutionize the management and maintenance of oilfields. Opinions expressed are solely those of the authors. These opinions do not represent News's views, which are committed to independence, integrity and neutrality under the Trust Principles.
Solar strikes above its weight in powering US energy transition: Maguire
Solar farms produced less than 6% of the electrical power produced by energies in the United States in 2023, however that annual share greatly downplays the vital function that solar plays in making it possible for power firms to accelerate energy transition efforts.
On a day-to-day basis, solar plants can have such disruptive influence on system electricity streams that utilities have actually been forced to establish capabilities to rapidly cut output from other sources and shop surplus power for later usage.
In turn, that resulting dexterity and emerging ingenuity throughout the energy sector is assisting to accelerate international energy transition efforts by requiring power systems to more effectively accommodate big swings in clean power output.
With materials of all forms of renewable energy set to quickly grow, energies that find out to maximise the volume of solar energy within generation systems today will be best put to assist drive the additional evolution of energy systems in the years ahead.
CLEANER, BUT MORE VOLATILE
No other clean source of power comes close to creating both the opportunities and difficulties that rapidly expanding materials of solar energy require.
Solar's overall share of U.S. power output may currently be little, however it is growing quick, with output expanding by 155%. in between 2018 and 2023, according to the U.S. Energy Details. Administration (EIA.)
That growth rate compares to a 56% growth in wind power. and a 22.4% swell in natural gas-fired output over the exact same. period.
To accommodate growing renewables materials and make great on. dedications to lower power sector emissions, U.S. energies. lowered coal-fired power generation by 41% from 2018 to 2023,. which cut coal's share of the power mix from around 30% to 16%.
But by replacing such a substantial piece of baseload power. from coal with growing quantities of intermittent renewable. power from solar farms, the U.S. power system has become more. volatile in addition to more tidy over the past 5 years.
GIVE WAY!
California's power system best exhibits the volatility. that originates from rapid boosts in solar generation.
As the largest solar power manufacturer in the U.S., California. has actually enhanced solar power output by 72% from 2018 to 2023, and. depends on solar for around 28% of electricity materials,. according to energy think tank Coal.
The state likewise represents around 25% of nationwide. electrical energy supplies produced from solar.
But it's an enduring difficulty to turn the state's abundant. sunlight into useable electrical energy without distorting power. markets.
As more and more solar plants were connected to California's. grid over the past years, power prices in the state came under. increasing pressure during the middle of the day when solar. output peaks.
A compounding issue is that the peak solar production. period overlaps with what is traditionally the lowest period for. system need, so power companies have been required to lower power. rates in order to balance system needs up until solar output. declines later on in the day.
The resulting 'Duck Curve' shape of power rates became a. well known phenomenon over the last couple of years, with the. unexpected distortion to market dynamics triggered by surplus solar. power commonly lampooned in 2023 by opponents of the energy. transition.
The volume of California's solar output has actually increased. further so far in 2024, with solar electricity generation. through May 23 running 27% ahead of the very same duration in 2023,. according to LSEG information.
The unequal circulation of this output causes daily. contortions to the state's power generation mix, with solar. power accounting for 0% of power generation before dawn to. over 70% throughout the sunniest times of day.
And California's power prices continue to come under extreme. pressure during peak solar production hours, routinely turning. unfavorable for spells as the marketplace pricing mechanism tries to. lure demand and discourage production from other sources.
BATTERY BUTTRESS
To alleviate the effect of the system imbalance brought on by. runaway solar output, California's utilities have actually deployed. networks of utility-scale batteries that can soak up surplus. power during peak solar production periods, to be discharged. when the sun goes down.
The battery network is still being built out, but currently. accounts for around 20% of California's system needs during the. peak need period simply after solar output stops and when people. returning from work crank up home electricity demand.
The batteries also lower the need for power imports by. California during those peak need periods, which minimizes. regional power pressure and helps California become less reliant. on neighbouring states for power materials.
California's battery system likewise functions as a learning tool for. other power networks who are also dealing with the effect of. too much solar supply, too soon.
And in addition to broader usage of wise energy meters - which. encourage customers to increase power usage when materials. are most abundant - all U.S. energies are discovering crucial ways to. accommodate quick growth in solar output and set themselves up. for further energy transition progress.
<< The viewpoints expressed here are those of the author, a. columnist .>
(source: Reuters)