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The price of gas in Europe is rising as demand increases with cooler temperatures
The wholesale gas prices in the Netherlands and Britain rose on Tuesday morning, as cooler temperatures forecasted by the weather forecasters increased demand for gas. LSEG data shows that the benchmark Dutch front-month contract was up 0.09 euros at 33.10 Euro per Megawatt Hour (MWh), which is $11.43/mmBtu at 0819 GMT. The Dutch day-ahead contracts was up by 0.10 euros at 32.85 Euro/MWh The British gas front-month price increased by 0.36 pence to 81.67 pence a therm. LSEG data shows that the local distribution zone demand in Northwest Europe will increase by 52 gigawatt-hours/day, to 781 GWh/d, for the next day. In a daily note, LSEG analyst Dzmitry Dauhalevich stated that the temperature had dropped by 0.5 degrees Celsius. LSEG data revealed that Norwegian exports were curtailed by maintenance. They are forecast to fall 7 mcm/d and be at 240 million cube metres/day. In a daily report, Auxilione said that "Temperature is now a major focus for near-term delivery contracts, and it will drive the direction of future projects." Market participants will be looking for further details on a gas supply agreement after Hungary's Foreign Minister announced that he was signing a long-term contract to purchase gas later that day. The benchmark carbon contract in Europe was down by 0.22 euros at 76.95 euro per metric ton. (Reporting by Susanna Twidale, Editing by Sonia Cheema).
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Gulf Markets modestly increase oil prices ahead of US rate announcement
The early trading on Tuesday saw most Gulf stock exchanges rise, boosted by higher oil prices and the growing expectation of a U.S. interest rate cut in this month. Saudi Arabia's benchmark stock index rose 0.1% during choppy trading as higher oil prices supported the oil-sensitive exchange. Saudi Arabian Mining, a heavyweight index component, and Saudi Aramco (the oil giant) both advanced by 1.3% and 0.1% respectively. Oil, a major catalyst for Gulf markets, rose after OPEC+ said it would increase production by fewer percentage points than expected. This boosted sentiment in the entire region. Dubai's main index rose 0.1% in the UAE. This was aided by a 0.6% increase at Emirates NBD Bank. The Abu Dhabi Index was up 0.1% as well, thanks to modest gains made by heavyweight stocks that helped partially reverse recent declines. Abu Dhabi Commercial Bank gained 0.9% after recovering from a 7.5% drop the previous day -- its steepest one-day decline in more than three years. The bank announced a rights issue of 6.1 billion dirhams priced at a discount of 30%. Qatar's benchmark index, on the other hand, fell by 0.2% due to losses in financials. Qatar National Bank, the largest lender in the region, fell by nearly 1%. According to CME FedWatch, investors continue to closely monitor the Fed. Traders have fully priced in a rate cut of 25 basis points and assigned a 10% chance to a 50-bp jumbo cut. The Fed's position has a lot of weight in the Gulf region, where the majority of currencies are pegged with the U.S. Dollar, thereby anchoring the regional monetary policies. (Reporting and editing by Harikrishnan Nair in Bengaluru, Amna Mariyam from Bengaluru)
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Islamic State-linked rebels killed over 50 at an east Congo funeral
Officials said that Allied Democratic Forces (ADF) rebels used machetes to kill more than 50 civilians at a funeral held in eastern Congo. This was the latest large-scale assault by the Islamic State-backed organization. Macaire Sivikunula is a local administrator who confirmed that the attack took place on Monday evening in Ntoyo in North Kivu's Lubero Territory. I can confirm that a preliminary death toll is 50. He said that the victims were taken by surprise at a ceremony of mourning in Ntoyo village at 9 pm. "Most of them were killed using machetes," added Mr. Okoti. The search continues." Colonel Alain Kiwewa is the military administrator of Lubero. He told reporters that the death toll could be as high as 60, and it may even rise, since there are still many people missing. In Congo's mineral rich east, the ADF is one of several militias fighting over land and resources. Congo's army, along with its ally Uganda, has intensified operations in recent weeks against the ADF. The ADF has killed over 50 civilians last month in multiple attacks. In July, the ADF attacked a church and left 38 people dead. Reporting by Congo Newsroom, Writing by Robbie Corey Boulet, Editing and rewriting by Timothy Heritage and Andrew Cawthorne
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Japan increases battery production, but some companies are concerned that new rules may slow growth.
Investors pour billions of dollars in Japan's new electricity storage market, as the demand for power is increasing after a long period of decline. However, changes to the grid to improve the flow of energy and lower prices could limit returns. Japan relies heavily on fossil fuels, around 70%, for its electricity. To improve its energy security, it has expanded renewable sources, but its fragmented grid system has led to frequent power cuts, particularly in Tohoku in the north and Kyushu south. This is creating a surge in interest in battery-based energy storage systems (BESS), to smooth out mismatches between supply and demand. According to calculations, since December 2023 companies have announced at least $2.6 Billion in Japanese battery storage project investments. This includes $677 millions in investment by Japanese real-estate firm Hulic, announced in January, and $1.3 billion in spending by trading house Sumitomo in last year. Energy storage is a solution that is obvious for Japan to achieve its renewable energy goals, said Franck Bernard. He is the managing director of Gurin Energy's energy storage and flexible. His company is planning to build a storage battery of 1 gigawatt hour (GWh), capable of supplying 240 megawatts of power (MW) for four hours, in Fukushima Prefecture. Gurin and TotalEnergies Saft have partnered for the project worth 91 billion yen (618 million dollars). The project, which will start in 2028 and consist of 200 standalone installations that look like shipping containers, has the potential to double its capacity. According to data released by the Ministry of Energy, Trade and Industry, companies planning battery storage projects asked to connect 113 GW of transmission grid capacity to the grid in the fiscal period ending in March. The number of requests for power, though only an indication of interest, has nearly tripled from the previous year. Most of the requests came from Tohoku and Kyushu, as well as the Chugoku area in the west, where there are frequent curtailments. Rystad Energy analyst Uranulzii Batbayar said that the regions of Tohoku and Kyushu have many renewables. This makes them very attractive to battery projects. Rystad estimates that Japan's battery capacity could reach 4 GW based upon projects currently under construction, those planned or awarded and the $6 billion investment required. Batbayar says that Japan's low base for grid-connected BESSs allows for growth. The recent setback in Japan's offshore market expansion due to Mitsubishi's withdrawal is unlikely to hamper development of battery projects. According to METI, Japan's grid-connected BESS had reached 0.23 GW as of March. According to the Energy Institute, China installed 75 GW while the U.S. installed 26 GW. AUCTION CHANGES Battery storage could be threatened by changes planned to the government's decarbonised long-term capacity auctions, which guarantees project revenues for up to twenty years after new power generation plants come online. The LTDA, which was first introduced in 2023 to encourage renewable energy projects, has been expanded by the government in order to include fossil fuels and nuclear power sources. METI will only offer 800MW of battery storage for its next auction. This is down from the 1.7GW that was awarded in the previous round. The next auction will increase the natural gas-fired power to 3 GW from the previous 1.3 GW and 1.5 GW nuclear plants. METI plans to also increase the duration of BESS to at least 6 hours, from 3 to 6 hours in the past. METI documents from may stated that the change was needed to allow longer-operating battery to respond to the addition of more intermittent renewable energies and reduce curtailments. This will smooth the flow of electricity to the grid, and help lower the prices for the end-users. Batteries with shorter life cycles are preferred by battery companies to take advantage of lucrative peak hours. Battery operators who plan systems that only discharge for three hours could require more land and new connections permits if the units are moved, Kentaro Ono said, Managing Director of Eku Energy in Japan, which is building a Kyushu site for launch next year. He said that the proposed changes in May and June would have made it difficult for companies to comply with the new regulations and could cause them to miss the registration deadline of October for the next LTDA Auction. Analysts also worry that the changes could undermine the decarbonisation targets the LTDA is supposed to be addressing. In a recent note, Mika Kudo said that, rather than replacing existing capacity with new ones, this could end up conserving the power sources already in place. Mahdi Behrangrad is the head of Pacifico Energy's energy storage system and virtual plant department. Pacifico Energy was an early participant in Japan’s battery storage sector with projects in Kyushu, Hokkaido and other parts of Japan. He agrees that the LTDA changes are more supportive of existing power generation assets than battery storage, and could hurt additional battery investment in Japan. "We must remember that investment is global. Investors have many choices and we need to convince them to come here. We are finding it difficult to explain to people: Are we the right place to be?" $1 = 147.3300 Japanese yen (reporting by Katya Glubkova in Tokyo, Yuka Obayashi in Singapore and Sudarshan Varadhan in Singapore. Editing by Tony Munroe & Christian Schmollinger).
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North China experiences its longest rainy period since 1961 and the hottest summer in country's history
The national weather agency reported on Tuesday that China experienced its hottest summer in 1961, while the north of the country had its longest rainy period for the same time frame. Scientists have linked the atmospheric chaos to climate change. Huang Zhou said at a press conference that the summer plum rains, named because they coincide with the plums ripening on China's Yangtze River, began one week sooner than usual. Huang said that large areas of the country were experiencing extreme heat. There were 13.7 days of high temperatures, which is 5.7 days more than the average of June to August. He said that the national average temperature for all of Canada was 22 degrees Celsius (72.14 Fahrenheit), which is 1.1 degrees Celsius above normal. This was tied with 2024, as being the highest temperature since 1961. The second largest economy in the world, China, had to contend with a subtropical high pressure system that caused warm, dry weather and the East Asian Monsoon this summer. The torrential downpours that pushed up from Southeast Asia caused the death of hundreds and billions in economic losses. Extreme weather is a challenge for policymakers. Heavy rains can overwhelm aging flood defences, displacing millions of people, and scorching heat can strain the power grid. Beijing's northern Huairou District and the neighbouring Miyuan District received an entire year's rain in one week, late last month. This precipitation triggered flash floods which devastated villages and led to 44 deaths in the deadliest flooding since 2012. China does not provide a count of heat-related death, but in a report from 2023 published in The Lancet, the number was estimated at 50,900 in 2022. This is a doubled figure compared to 2021. According to the EU-funded Copernicus Climate Change Service, on Tuesday, August 2025 will be the third warmest month in the world, with an average temperature 0.49C higher than the 1991-2020 average. The two warmest augusts recorded in the world were 2023 and 2024. Even the oceans are hotter. C3C's monthly bulletin stated that the temperatures of the sea surface in most areas in northern Pacific were above average, and in some cases reached record highs. (Reporting and editing by Saad sayeed; Ryan Woo and Joe Cash)
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Russell: Crude oil prices fall as negative factors increase.
The crude oil market is now expecting a decline in prices. At the largest gathering of the industry in Asia, the discussion was more about timing rather than direction. The outlook for prices is the main topic of discussion and presentations at the annual APPEC Conference. This week was no exception. The market has changed and this year the bull was the least sighted amongst a sea full of bearish participants. The two factors that dominated APPEC, despite the fact that there are many other factors that influence crude oil prices were the decision of OPEC+ not to continue to unwind production cuts as well as the risk to the global economic system from the trade and geopolitical policy of U.S. president Donald Trump. First, there is the supply factor. The market expects OPEC+ to continue adding barrels as gaining market share has become a higher priority now than defending prices. The decision by the eight OPEC+ members to reduce their production on September 7, to 137,000 barrels a day (bpd), was largely viewed to be minor, and unlikely to change the balance of the market. What is significant is that it is expected that the producer group - which includes the top exporters Saudi Arabia, and Russia - will continue to grow their output through the first half 2026, and unwind the 1,65 million bpd in cuts since April 2023. They have already stopped an additional 2.2 millions bpd cut from November 2023. It is unlikely that all these barrels make it to the market. However, with the global demand growth forecasts convergent at a maximum 1 million bpd in this year and the next, OPEC+ are likely to add enough back to overwhelm the demand increase. Market consensus is heavily skewed towards an oversupply in the coming months due to the likelihood that non-OPEC output, particularly from the Americas outside the United States will also increase. Demand is also clouded by uncertainty, mainly due to the impact of Trump's tariffs on imports. The impact of raising the average tariff for goods imports to 18% from just under 2% varies, but there is a consensus that it will be a drag on the growth of the U.S. economy, and increase inflation in the U.S., while likely lowering inflation elsewhere. HIDDEN BULLS APPEC was not all gloom and doom. Some positive factors were also discussed. The bullish case depends on some things going better than anticipated, and others getting worse. The world economy is on the bright side, as it has been able to withstand the Trump attack largely unharmed. Consumer sentiment and spending are holding strong in developed economies, while developing economies continue to be able to attract trade and investment. The worst case scenario would be to take more aggressive and successful measures to reduce the flow to India and China of Russian crude oil, which are the only two major buyers of oil that have been sanctioned in an effort to end Moscow’s war against Ukraine. It is also possible that more effective measures could be taken against Iranian and Venezuelan crude oil. There is also the risk of an increase in tensions between Israel and Hamas, given the conflict. The risk premium on the crude oil market is in some ways largely determined by what Trump decides to do. Ironically, the only thing that the unpredictable and inconsistent U.S. president has consistently said is that he wants to lower oil prices. It is the fear of what he may do that keeps a risk premium on the market and helps to keep Brent futures around $65 per barrel. Unknown is also what strategies China's refiners will likely adopt in the coming months. The International Energy Agency recommends 90 days import coverage. They are storing as much as 600,000 barrels per day. China's stockpiles have been built largely due to discounted Russian barrels, and the lower prices for other grades of oil in the second quarter this year. The Chinese could be moving towards a view that oil prices should be more in the $50-$60 range and they may begin to reduce imports to encourage lower costs. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X and Twitter. Editing by Muralikumar Anantharaman
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Stocks are upbeat due to the prospect of Fed easing, which outweighs political uncertainties
Asia stocks rose Tuesday on the back of expectations that the U.S. will cut rates as soon as next week. However, political turmoil around world kept currency and bonds investors on edge. The broadest MSCI index of Asia-Pacific stocks outside Japan rose 0.7%. It took its lead from Wall Street, where the Nasdaq closed at a record-high overnight. Nasdaq Futures rose 0.06% last, while S&P500 futures also ticked upwards by 0.05%. European futures meanwhile eased as regional benchmark indexes recorded gains in the cash sessions on Monday. The EuroStoxx 50 futures declined by 0.2%. The FTSE and DAX Futures both fell 0.13% and 0.26% respectively. The expectation that the Federal Reserve will ease rates at its meeting next week after Friday's disappointing U.S. employment report gave new life to the rally in equities. Investors are betting on a 25 basis-point cut in this month's inflation figures. They are now focusing their attention on whether or not the Fed will deliver a 50-basis point move. Later in the day, the U.S. Labor Department is also expected to report an estimate of the preliminary revisions for the employment levels during the past 12 months up until March. Both publications will influence the central banks' pace on the monetary policy staircase, said Jose Torres senior economist at Interactive Brokers. He was referring to PPI and CPI data. A large subtraction of workers from the roster, coupled with a CPI that is below the target level, will likely increase the odds by a half percent to a coin toss. According to CME FedWatch, the markets now price in a chance of over 11% that the Fed will lower rates by 50bp during this month. This is up from zero a week earlier. Japan's Nikkei index surpassed the 44,000-mark for the first time. The yen was weaker and the fiscal hawk Shigeru Shiba resigned as Prime Minister. Ryosei Acazawa, Japan's chief tariff negotiator, said Tuesday in an X message that U.S. duties on Japanese products including auto parts and cars will be reduced by September 16. The Hang Seng Index in Hong Kong rose by 0.5% while the blue-chip index of China, CSI300, fell 0.7%. POLITICAL TURMOIL In recent sessions, the currency and bond markets have been shaken by renewed uncertainty about the political landscape in various countries. Investors had a lot to consider, from Ishiba’s resignation in Japan to French lawmakers voting to remove Francois Bayrou as Prime Minister, a crushing defeat of the ruling party of President Javier Milei in Argentina’s local elections to the sudden replacement for Indonesia’s Finance Minister. The dollar's decline was the only thing that capped losses in all currencies, and most bond markets are now largely stable. The yen last gained 0.3% at 147.05 to the dollar, recouping its previous losses, while the euro remained steady at $1.1772. After rising the previous session, yields on Japanese government bond fell on Tuesday. Bond yields are inversely related to bond prices. Shier Lee Lim is the lead FX and macrostrategist for APAC, at Convera. The yield on the two-year U.S. Treasury, which is usually a good indicator of near-term expectations, has been stuck at a low for five months, 3.5005%. The benchmark yield on the 10-year bond was also near its five-month low and stood last at 4,0512%. Oil prices rose on Tuesday as OPEC+ increased production less than expected by market participants. Brent crude futures rose by 0.73% to $66.50 a barrel. U.S. crude climbed 0.72%, reaching $62.71 per barrel. Gold spot reached a new record of $3,656.92 per ounce on the back of expectations of imminent Fed reductions.
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Palmetto gains for the third session in a row on stronger Dalian
Malaysian palm futures were little changed on Tuesday, as edible oils traded in Dalian and Chicago sideways. Market participants also awaited the Malaysian Palm Oil Board's (MPOB) data that was due the following day for clues about inventories and demand. By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for delivery in November gained 1 ringgit or 0.02% to 4,489 Ringgit ($1,067.28) per metric ton. A survey shows that Malaysian palm oil inventories will rise for the sixth consecutive month in august, as production continues outpacing exports, despite an improvement in demand. Darren Lim is a commodities strategist with Phillip Nova, based in Singapore. He said that traders are waiting for official data on supply, demand and stockpiles, which will be released by the MPOB within the next few days. Dalian's palm oil contract, which is the most active contract, was up 0.53%, but its soyoil contract was barely affected, only gaining 0.05%. Chicago Board of Trade Soyoil Prices fell 0.08%. As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils. The oil prices rose on Tuesday as OPEC+ increased production less than the market expected, and concerns about tighter supplies due to new sanctions against Russia also continued to support them. Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger. The palm ringgit's trade currency, the dollar, has eased by 0.21%, making the commodity more affordable for buyers who hold other currencies. Technical analyst Wang Tao believes that palm oil could test resistance around 4,506 ringgit for a metric ton. There is a high probability of it breaking through and moving up towards 4,568 ringgit. ($1 = 4.2060 ringgit)
Stocks soar as the prospect of Fed easing outweighs political uncertainty
Asia stocks rose Tuesday on the back of expectations that the U.S. will cut rates as soon as next week. However, political turmoil around world kept currency and bonds investors on edge.
MSCI's broadest Asia-Pacific index outside Japan rose by 0.2% early in the morning, following Wall Street's lead that was set overnight when Nasdaq closed at a record-high.
Nasdaq Futures continued the rally that began in the cash session, and ended the day up 0.06%. S&P500 futures also ticked higher by 0.05%.
The expectation that the Federal Reserve will ease rates at its meeting next week after Friday's disappointing U.S. employment report gave new life to the rally.
Investors are betting on a 25 basis-point cut in this month's inflation data. They now want to know if the Fed will make a 50 bp move.
Later in the day, the U.S. Labor Department is also expected to report an estimate of the preliminary revisions for the employment levels during the past 12 months up until March.
Both publications will influence the central banks' pace on the monetary policy staircase, said Jose Torres senior economist at Interactive Brokers. He was referring to PPI and CPI data.
A large subtraction of workers from the roster, coupled with a CPI that is below the target level, will likely increase the odds by a half percent to a coin toss.
According to CME FedWatch, the markets now price in a little over 10% chance that the Fed will lower rates by 50bp next month. This is compared to 0% a week earlier.
Other European futures were lower after the benchmark indexes had a positive cash session on Sunday.
The EuroStoxx 50 futures declined by 0.17%. Meanwhile, the FTSE and DAX Futures both slid by 0.04% and 0.22% respectively.
The Nikkei index in Japan jumped by nearly 1% after the resignation of fiscal hawk Shigeru Shiba as Prime Minister.
Ryosei Acazawa, Japan's chief tariff negotiator, said Tuesday in a X message that U.S. duties on Japanese products including auto parts and cars will be reduced by September 16.
POLITICAL TURMOIL
In recent sessions, currency and bond markets have been shaken by renewed uncertainty about the political landscape in various countries.
Investors had a lot to consider, from Ishiba’s resignation in Japan to Francois Bayrou’s ouster as French Prime Minister, to the heavy defeat of the ruling party of President Javier Milei of Argentina, to the sudden replacement of Indonesia’s finance minister.
Even so, the dollar's decline has largely capped losses in all currencies, and bond markets are now largely stable.
The yen last gained 0.1% at 147.37 to the dollar, recouping its previous session's losses, while the euro remained steady at $1.1768.
After rising the previous session, yields on Japanese government bond fell on Tuesday. Bond yields are inversely related to bond prices.
Shier Lee Lim is the lead FX and macrostrategist for APAC, at Convera.
The yield on the two-year U.S. Treasury, which is usually a good indicator of near-term expectations, has been stuck at 3.4966%, a level that's been near its lowest in five months.
The benchmark 10-year rate was also pinned at its lowest point in five months and stood last at 4.04944%.
Oil prices rose on Tuesday as OPEC+ increased production less than expected by market participants.
Brent crude futures rose by 0.36% to $66.26 a barrel. U.S. crude climbed 0.37%, reaching $62.49 per barrel.
Gold spot reached a new record of $3,647.23 per ounce on the back of expectations of Fed cuts imminent.
(source: Reuters)