Latest News
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Saudi crude oil supply to China remains at record low
Saudi Arabian crude oil sales to China will likely remain at record lows this month as the high 'prices' in the wake of the U.S. and Israeli war on Iran continue to impact demand. Market participants closely monitor the allocations as a measure of Chinese demand. They indicate that refiners are reluctant to import barrels at high prices after run cuts, and because they have exhausted their domestic stocks. Saudi Aramco will ship 12 million barrels to China customers for July loading. This is about 387.096 barrels a day. Sources'requested anonymity because they weren't authorized to speak with the media. According to?sources, Sinopec is the largest refiner in the world by processing capacity. It has not bought any Saudi crude since the second month. Rongsheng Petrochemical, another major refiner was also buying at much lower levels than before the war. Aramco's July 'official selling prices' to Asia were cut by $6 per barrel compared to the previous month. However, they still remained much higher than pre-war levels. Refiners have cut back on runs in China due to high crude prices and low fuel demand, which led to refining losses. This resulted in the lowest oil imports for a decade in May. Aramco, Sinopec and Rongsheng didn't immediately respond to comments. (Reporting and editing by Christopher Cushing in Singapore, Thomas Derpinghaus and Siyi Liu)
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Fuel stations run out of fuel in Crimea after a new night of Ukrainian drone attacks
Witnesses reported that fuel stations in the Russian-held Crimean Peninsula?were?out of petrol on Thursday as the escalating Ukrainian campaign to cut off supply lines into the peninsula?. A? A witness in Sevastopol said that most petrol stations in the city were out of fuel. Supplies are struggling to keep up even with the recent rationing. Another said that in Yevpatoriya's resort town, there was a queue of people waiting outside the only petrol station. Ukraine has intensified drone strikes against supply lines for the peninsula that Russia captured from Kyiv in 2014. Local authorities have implemented fuel rationing, and some food is also in short supply. The Russian-backed governor of Sevastopol, Mikhail Razvozhaev, said on Wednesday that the plans to distribute rationed fuel?had been pushed back because trucks were unable to deliver the fuel into Sevastopol, due recent Ukrainian strikes along supply routes. Fuel is mainly delivered by rail and road to Crimea via the Russian territories in the north that Moscow took over in 2022. Drone attacks have disrupted these routes more and more. Fuel was previously delivered to Crimea via barge from an oil terminal located in the city Feodosia. However, supplies have been cut since Ukraine attacked the terminal in April. The governor of Sevastopol who was installed by Moscow said that Ukrainian drones caused a light amount of damage over night, and 33 were downed. The Russian-backed Governor of the Moscow-held Kherson region which borders Crimea on the north said that Ukraine had targeted bridges and caused some damage. Authorities reported that Kyiv struck southern Russia over night, causing damage, including an 'incident at the Afipsky Oil Refinery, which has since been put out. The Adygea governor also reported damage to civil infrastructure in the area. Reporting by Felix Light in Sevastopol, Yevpatoriya; Editing by Alex Richardson
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South Korea anticipates favorable outcome following Lee's EU Steel Request
A senior South Korean adviser to the president said that the European Union would give maximum consideration to South Korea’s request for favorable?treatment of their?steelmakers, under the new import regime. The request was made by the South Korean president Lee Jae Myung during a Wednesday meeting in Brussels with Antonio Costa, President of the European Council and Ursula von der Leyen, President of European Commission. Kim Yong Beom, a presidential policy advisor, told a press briefing that Lee had asked the EU to "consider" South Korea's status as a strategic?partner and a?partner in a free trade agreement. Kim said that the EU had stated it would?consider our request as far as possible", adding South Korea was expecting a better outcome than other countries. Kim stated that South Korea made "significant progress" during the talks between its minister of trade and the EU's trade commissioner regarding steel quota volume. The European Parliament approved plans in May to reduce tariff-free imports of steel by almost half, from levels in 2024 to 18.3 millions metric tons per year. Tariffs of 50% will be applied to volumes over that level. South Korea's largest steel export market is the EU. Kim said that South Korea exported 3.24 million tonnes of steel to the EU last year, out of a total of 28.25 millions tons. Kim reported that Lee raised other economic issues, such as cooperation in semiconductors, defence and artificial intelligence, with EU leaders. Heejin Lee and Joyce Lee, Sonali Paul and Ed Davies edited the report.
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World Bank predicts Indonesia's GDP will slow to 5% by 2026 due to fiscal pressures
The World Bank announced on Thursday that Indonesian economic growth is 'expected to slow down to 5% by 2026 due to an ambitious spending program and the increasing cost of fuel subsidies as a result of the 'Iran war. The World Bank's forecast is lower than Indonesian growth projections, which range from 5.4% to 6.0%. Investors are worried about the spending plans of President Prabowo, and fuel subsidies from the state budget have ballooned. "The 2026 projection reflects stronger-than-expected Q1 outcomes and frontloaded public spending, rather ?than a more benign external environment or assessment of risks," the World Bank's assessment of Indonesia's economy said. The report said that the growth rate depends on the ability of fiscal stimuli to drive public consumption. This brings risk due to the limited room for manoeuvre when it comes to spending. The report stated that "Higher oil costs increased the cost of energy subsides and compensation while the depreciation of the rupiah increased the external debt servicing costs." The World Bank has called for the government to readjust fuel subsides gradually to reduce the fiscal pressure. Indonesia uses state funds to maintain fuel prices at the same level, in an effort to boost public support. It raised the prices of only two kinds of gasoline widely used by?32% in this week, a move that analysts interpreted to be a recalibration of policy. The World Bank warned that generalised subsidy?ends up benefiting wealthy households instead of vulnerable sections?of the population. Indonesians are very sensitive about fuel prices. The recent increase in fuel prices has led to protests all over the 280 million-person archipelago. The report stated that the oil shock presented an opportunity to "reform the subvention programme" and move towards more targeted assistance, such as cash transfers to the 40% poorest households and reallocation of savings to social protection and investments. (Reporting and editing by David Stanway; Stanley Widianto)
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US State Department: US official killed in Myanmar
According to the U.S. State Department a senior American official died in Myanmar’s commercial capital, Yangon. Two sources confirmed this on Thursday. The incident occurred at a hotel in Myanmar last month. A spokesperson for the State Department said: "We confirm the death of a U.S. Government employee assigned to U.S. embassy Rangoon." The spokesperson did not provide any additional information. Rangoon was the name of Yangon in its colonial days. We have no more information at this time, out of respect for privacy and the loved ones of the deceased. According to two sources familiar with the case who declined to give their names due to the sensitive nature of the issue, the official was located at 'Yangon's Sakura Residence & Hotel', one of the main diplomatic hubs in the city. The hotel staff who were contacted by telephone declined to comment. And the local police station did not respond to requests for comments. The Associated Press reported on the incident first and said that a Thai woman was detained for the death. Could not independently and immediately verify the details. The Thai Foreign Ministry declined to comment on the matter, saying that it was a question of consular assistance. A police investigation is also ongoing. Since the military took power through a coup in February '2021, Aung San Suu Kyi, Nobel laureate and other members of her government were arrested. The military took over the country, triggering widespread protests and a civil conflict that pitted them against a coalition of prodemocracy resistance forces and ethnic minorities armies. Min Aung Hlaing, the former head of the military junta, was sworn in to the office of president in early April. This followed a heavily criticised election, which was rigged by the military and conducted during the heights conflict. Reporting by Simon Lewis and Washington D.C. staff; Writing by Devjyot Ghoshal, Editing by Thomas Derpinghaus
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Onitsuka Tiger, the 'Kill Bill" sneaker brand from Asics, is slated for global expansion.
Asics, the company that makes its Onitsuka Tiger sneakers famous for their yellow and black color scheme, has announced a global expansion in order to capitalize on the booming demand of retro style shoes. However, analysts say this ambitious plan could threaten its margins. Onitsuka, represented by the sneakers worn by Uma Thurman, in the hit 2003 movie "Kill Bill", and a Bruce Lee version, which is tied to the martial artist, will be opening flagship stores in Europe, as well as the United States. The weakened yen has led to a shopping frenzy in Japan. The sales grew by around a third during the quarter between January and March. This resulted in a profit margin that was the highest of all Asics businesses at about 40%. Mark Chadwick is an analyst at Smartkarma who warns that the new structure of the brand could put its margins in danger. He said that the "exceptional margins", which are a result of becoming a stand-alone business, may be harder to maintain, because it incurs costs. The business is also at risk due to its "capital intensive" strategy, opening flagship stores. Onitsuka Tiger, a nearly 80-year old brand, traces its roots to a shoe company founded in Kobe, Japan, in 1949 by Kihachiro Onitsuka. However, the Mexico line, featuring the iconic stripes, was only introduced in 1966 after products like basketball shoes. In that decade, Phil Knight, the co-founder of Nike, met with officials from Onitsuka and began importing the running shoes produced by the company in the United States. In 2002, Asics launched Onitsuka Tiger again in Europe. The classic design was revived as a fashion label. Ivan Su is an analyst with Morningstar. He said: "Onitsuka Tiger benefited from the consumers' preference for minimalist shoes over maximalist shoes that have lots of cushioning." In recent years, the popularity of Onitsuka Tiger has soared, thanks to a renewed interest in retro-inspired trainers. FATIGUE WITH BIG SNAKER DOMINANCE Asics announced on Wednesday that Onitsuka Tiger, a brand with a value of $20 billion, would be transferred via a?split' to OT Group. This is a fully-owned subsidiary. The company stated that there are no plans to list. Analysts believe that the spin-off will make it easier for Asics if necessary to change its ownership structure. Chadwick stated that "the move does unlock value, but it lays a foundation for the market's recognition of OT as a fundamentally new business with fundamentally new economics." Onitsuka Tiger, which has almost 200 stores in the world, plans to add more this year. These will be located in countries like China, Italy, and South Korea. The company plans to return to the U.S. in February next year with a new store in Los Angeles. This will be three years after it closed a New York-based outlet. Glenn McMahon is a Los Angeles-based fashion and retail brand consultant. McMahon stated that "the brand benefits from... increasing consumer interest in other sneaker brands, and growing fatigue with Nike and Adidas dominance." RUNNING FOR GLOBAL GLOBAL EXPANSION Designs such as pink cherry flowers highlight the Japanese roots. The company sells a premium line of "Nippon Made", which is handmade in a small village in western Japan. Kaito Hikino, an American student at a college, said that Onitsuka Tiger shoes have "the vintage feeling with the novelty for the U.S. Market and the exotic vibe." He purchased a pair Mexico 66 TGRs for his girlfriend during a recent family trip to Japan. Most of his female friends in the United States also own Onitsuka Tiger shoes. The brand has stores on swanky streets such as London's Regent Street or the Champs-Elysees, in Paris. Shintaro Umeda, an analyst at Nomura Securities, said that "we think some prior investment will be required", including opening directly managed shops in major U.S. Cities and strengthening advertising. Onitsuka Tigers is always mentioned as one of the must-dos when looking at online lists for things to do in Japan. This was said by Brazilian Ana Lebl who visited Japan after graduating high school in America. "I found them online around?a year back through resellers, but they were always much more costly," said Lebl who purchased a pair Mexico 66SD trainers in Tokyo. Kenya?Matsuo, an analyst at SMBC Nikko, said in a recent note that "we would expect steeper growth if the company accelerated its store openings compared with its current cautious approach." Global heavyweights like Nike, Adidas and Puma have their own minimalist shoe lines. One analyst stated that fashion is fickle, and Onitsuka could lose its footing. Su, of Morningstar, said: "We've seen a number of companies do something similar to what Onitsuka Tiger did with the Mexico 66 Model and fashion trends are beyond their control." The Onitsuka Tiger has been popular for some time, but we believe that this might fade over the next few years, which will affect margins.
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German construction sector warns that the downturn is not over and urges for faster action
The German construction industry hasn't?yet recovered from its downturn. A tentative recovery is being impacted by a?new?geopolitical?price shock. Marcus Nachbauer of the Bundesvereinigungbauwirtschaft said that the conflict in the Middle East with its temporary 'closure of Strait of Hormuz had pushed up energy and raw materials prices, burdening companies already'suffering' from weak demand. Nachbauer said that bitumen, cement and concrete, plastics, heating oil, diesel, and diesel fuel have all risen in price within the last few weeks. He cited a survey where 80% of respondents reported a rise in plastics and bitumen prices. In 2025, the member companies of the association will generate revenues in excess of EUR432 billion (US$500 billion), a nominal increase by 0.8%, mostly due to price effects. The association anticipates that revenue in 2026 will?remain at the same level as last year, but only because?higher price offsets weaker construction volume. Nachbauer stated that Germany needs faster planning and approval procedures, reliable housing subsides?and infrastructure investments that reach municipalities. He said that "building is economic policy" and added that the sector could help lift Germany out from stagnation if the conditions improved.
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Gold recovers from a six-month low, US inflation data is in focus
Investors?bought? the metal at a bargain price on Thursday as they awaited a crucial U.S. Inflation Report that could influence Federal Reserve policy. Gold spot rose 0.7% by 0741 GMT to $4,103.74 an ounce, after having fallen as low as $4,022.09 per ounce on November 21, earlier in the day. U.S. gold futures for August were down 0.2% to $4,125.10. Matt Simpson, senior analyst at StoneX, said: "With prices hurtling toward $4,000, there's an obvious level of support which could encourage bears to make a quick profit, or tempt battered bulls off the sidelines." The U.S. Dollar Index failed to gain much ground after Wednesday's CPI Report. If there are no 'nasty' surprises in the PPI (Producer?Index), gold could see a short-term technical boost. In May, U.S. consumer prices increased at their fastest rate in three years. This was largely due to the surge in energy prices in response to the Middle East conflict. The U.S. May PPI data will be released at 1230 GMT. According to CME FedWatch, traders?price in more than 70% of the chance that the U.S. will raise interest rates by December. United States and Iran exchanged air attacks for the?second straight day? on Thursday, with U.S. president Donald Trump threatening further strikes if Tehran didn't immediately agree to peace. After U.S. airstrikes, Iran announced the closing of the Strait of Hormuz. While gold is viewed as an inflation hedge, it tends to be weighed down by higher interest rates. Silver spot rose by 1.1%, to $64.41 an ounce. Platinum gained 0.8%, to $1671.09 and palladium increased 2.9%, to $1248.59. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu and Harikrishnan Nair)
Nigeria's Dangote oil refinery might speed up European sector's decline
Nigeria's huge Dangote oil refinery might bring to an end a decadeslong gas trade from Europe to Africa worth $17 billion a year, heaping pressure on European refineries currently at danger of closure from increased competitors, experts and traders said.
The refinery began production in January and cost $20. billion to build. It can improve up to 650,000 barrels per day. ( bpd) and will be the largest in Africa and Europe when it. reaches full capacity this or next year.
It has long been touted as the turning point for Nigeria's. mission for energy independence. Nigeria is Africa's most populated. country and its leading oil manufacturer, yet it imports practically all its. fuel due to lack of refining capability.
About a 3rd of Europe's 1.33 million bpd average gasoline. exports in 2023 went to West Africa, a bigger chunk than any. other region, with the majority of those exports winding up in. Nigeria, Kpler information shows.
The loss of the West African market will be bothersome for. a small set of refineries that do not have the package to upgrade. their gasoline to European and U.S. spec, consultancy. FGE's head of improved products Eugene Lindell said, referring to. more rigid ecological standards for other markets.
As much as 300-400,000 bpd of refining capacity in Europe is. at threat of closure because of increasing worldwide gasoline production,. according to Kpler's expert Andon Pavlov.
A European refinery executive who decreased to be determined. said seaside refineries that are geared for exports will be more. exposed while inland refineries are less susceptible since they. rely on regional demand.
The changes won't happen overnight, but they could. ultimately lead to closures of refineries and their conversion. to storage terminals, he included, referring to the tough. market environment.
Pavlov said the UK's Grangemouth and Germany's Wesseling. refineries might close ahead of schedule as an outcome of looming. gasoline oversupply later this year and ensuing pressure on. refining margins.
Petroineos CEO Franck Dema flagged the energy transition. which is triggering demand for nonrenewable fuel sources to diminish as one of. the factors behind his company's choice to shut down. Grangemouth next year. Shell stated its choice to shut. down Wesseling next year was part of its drive to minimize carbon. emissions.
Petroineos did not react to a request for comment and. Shell decreased to comment about whether its plant might close. ahead of schedule.
SHRINKING SECTOR
Around 30 European refineries have shut down because 2009,. information from refining market body Concawe program, with almost 90. plants of different sizes and complexities still in operation.
Closures have actually been caused by competition with newer and. more intricate plants in the Middle East and Asia and more. recently because of the impact of the coronovirus pandemic.
Since 2016, Europe has lost 1.52 million barrels daily. of functional crude distillation which presently stands at. 13.93 million bpd, consultancy IIR's information shows.
Most of the decline took place in 2021 and 2022 as need. damage during the COVID-19 pandemic forced shutdowns.
European refineries don't produce sufficient diesel to fulfill. local requirements however produce excessive gasoline and count on exports. to clear excess supply.
West Africa has long been the primary outlet for gasoline that. doesn't fulfill more stringent ecological constraints in Europe on. sulphur and metals material.
That trade represented $17 billion in 2023, according to. cost information from Argus Media and estimations.
The Dangote refinery, funded by Africa's wealthiest man Aliko. Dangote, was set up to produce as much as 53 million litres. of gas a day, about 300,000 bpd.
The drop in West African imports will coincide with brand-new. environmental laws in Northwest Europe, that will require plants. to reconfigure, seek brand-new markets for lower-quality gas, or. shut down.
Plants that have funds to reconfigure could direct gas. exports to the U.S. or South America, Kpler senior refining. analyst Yaping Wang stated.
But upgrading refineries is likewise challenging since banks. watch out for lending cash to fossil fuel tasks.
Even if you find a bank which will fund a European refinery. upgrade job, rates will be too expensive to make it work, said. an executive at a major U.S. bank which provides to oil companies.
(source: Reuters)