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Sources say that Russia is using its spare capacity for oil refining to compensate for drone damage in Ukraine.
Sources and data show that despite Ukraine's largest drone attacks, Russia's oil production has only fallen by 3% in this year. Refineries have avoided a sharp decline in fuel output by using spare capacity to offset the damage caused by the strikes. Ukraine has intensified drone attacks in Russia. The aim is to destroy oil refineries and depots, and shut down pipelines, as well as Moscow's main source of funding the war in Ukraine. The majority of attacks took place at the beginning of 2025, then resumed in August. At least 17 major refineries were targeted by Ukrainian drones, which forced Russia, the second largest crude exporter in the world, to halt fuel exports and increase drone defenses. According to calculations based upon information from three Russian sources, at the peak of the second strike wave between August and Oct., attacks and planned repairs took 20% of Russia’s refinery capacity off-line. Sources and data show that this only led to a 6% decline in the total Russian refining volume to around 5.1 millions barrels per day, a drop of about 300,000. From January to October, the oil processing industry fell by 3% to 220 millions metric tons (5,2 million bpd). Due to the sensitive nature of the subject, the sources spoke under condition of anonymity. Russia does not publish data on the refining of oil. The Russian energy ministry refused to comment. There was no breakdown of planned versus unplanned maintenance. RUSSIA USE SPARE CAPACITY; KYIV APPLAUSES DRONE SUCCESSFUL Three industry sources said that Russian refineries had been running at a capacity well below their full potential before the attacks. They were able, however, to minimize the impact of the attacks by re-starting spare units in both the damaged and unaffected plant as well as by putting the repaired units back into service. Russia's total refining capability is around 6.6 millions bpd. However, industry sources claim that it is rarely used to its full potential. Kyiv claims its drone offensive is aimed at disrupting fuel supplies for Russian troops in Ukraine, and denying Moscow oil revenues. The International Energy Agency reported that Russian revenues from crude oil and petroleum products sales fell in August, to the lowest level since the beginning of the war 2022. Last month, Ukraine's president Volodymyr Zelenskiy stated that long-range strikes could have cut gasoline supplies by as much as a fifth in Russia. Vladimir Putin, the Russian president, has stated that Moscow will not bow to foreign pressure. UKRAINE STRIKES INSIDE RUSSIA The drone attacks may have helped Russian refineries to cope for the moment, but they are not without impact. The first quarter of this year saw six major refineries hit by Ukraine, including Ryazan and Volgograd. According to the data collected by UK-based non profit group Open Source Centre, since August began, at least 58 drone attacks have been launched on Russian energy sites. Drones were sent as far as 1,200 miles (1,200 km) into Russian territory. Since early August, drones from Ukraine have damaged several plants in the region, including those at Novokuibyshevsk and Kirishi. Western sanctions have made it difficult for Russia to get spare parts from Western companies, which have upgraded the majority of Russia's refineries in the last 30 years. Russian companies have stated that they have developed ways to manufacture equipment in Russia or import it from China. China remains a strategic ally for Moscow. Industry sources say that repairs have allowed distillation units to be back in operation within a few weeks. They are expensive and can take longer to complete. It is unclear for how long Russia will be able to use spare capacity, if Ukrainian drones continue to attack. (Reporting and Editing by Guy Faulconbridge, Joe Bavier).
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Stocks are aiming for record highs with the US shutdown about to end
The world stock market was looking to return to record levels on Thursday, following the end of the U.S. shutdown which is the longest ever recorded. Meanwhile, the Japanese yen, under pressure from the US dollar and the euro hit record lows. The STOXX 600 index in Europe had a difficult day. A near 1% increase from France's CAC 40 pushed both indexes up to their highest levels before profit-taking and a 5% drop by German engineering giant Siemens brought it down. The U.S. Stock Futures fluctuated from a slight negative to a 0.2% gain, but the 47-country MSCI All World Index still held on to hope of achieving a fourth daily gain. On Wednesday, U.S. president Donald Trump signed a bill ending the shutdown of the federal government in the Oval Office. Next week, we can expect to see the first delayed economic data. The first data to be released could be October's payrolls, with the focus being on whether the figures will confirm recent surveys which have indicated a softening of the job market. Michael Metcalfe, State Street Global Markets, said that they were waiting for data fog to clear. However, the PriceStats data shows that inflation has rolled over, so the jobs data will drive risk sentiment. SQUEEZED JEN The currency markets were also active, as the dollar was slipping lower and the yen of Japan under pressure again after Wednesday's appeal by the new Japanese premier to the Bank of Japan for it to slow down rate increases. The yen reached a record low in Asian trading of 179.49 euros and was close to a nine-month low on the dollar, at 154.66 dollars despite the reminder by the Finance Minister that the government is closely watching the currency. The Nikkei closed at a record high of 0.4%, while the Topix index reached a new all-time level as investors moved their portfolios away from the most frothy artificial intelligence companies to purchase exposure to other sectors of the economy. There is still debate over whether the BoJ tightens rates by the end of this year. "Our inclination would be that they will but there's a strong narrative in the market that will prove hard to break, that policy settings will encourage an even weaker yen," State Street’s Metcalfe said. The pre-market U.S. trade was brightened by a 7% increase in the number of shares traded. Shares rose after the company increased its profit forecast for the full year, citing signs that the artificial intelligence boom was boosting demand. Investors have recently shifted away from the most expensive firms and into more defensive sectors such as healthcare, consumer staples and consumer goods. Next week, the AI chip giant Nvidia will release its latest earnings which could put further pressure on the sector. Gold held on to its recent gains, trading above $4,200, while government bond benchmarks were slightly weaker, with the U.S. 10 year yields edging higher to 4.10%, and Germany's yields at 2.67%. OIL SPILLS Hong Kong's Hang Seng fell slightly from its one-month high, and the Shanghai Composite gained 1% in advance of data on retail sales and credit due later this week. In London, the mining heavy FTSE 100 fell from its all-time high on Wednesday. However, Europe's technology stocks rose 0.6% after ASML and Infineon displayed signs of recovery following steep losses last week. The British pound shrugged data that showed its economy barely growing, and Scotland receiving its own credit rating. Meanwhile, the Australian dollar edged up as strong employment numbers bolstered the bets that the rate-cutting cycles there may be ending. Brent crude futures rose from a three-week-low to $63.33 a barge a day after OPEC’s new forecast that a small excess to demand on the world oil markets for 2026 triggered a drop of 3.8% a day before. Suvro Sarkar is the DBS Bank energy sector team leader. He said that "recent price weakness" seems to be caused by OPEC revising supply-demand balances for 2026. This confirms that the group has now acknowledged the possibility of an oversupply. (Stephanie Kelly contributed additional reporting from London; Sharon Singleton, Ed Osmond and Ed Osmond edited the article)
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USDA targeted grants for cancellation by searching for terms such as 'diversity' and 'climate modelling'
Documents seen by have revealed that the U.S. Department of Agriculture asked its staff to search for over two dozen words and phrases relating to climate change and diversity in order to determine which grants could be terminated during the first months of the second Trump Administration. This effort was part of a broader campaign among federal agencies in order to comply with President Donald Trump’s directives that diversity, equity, and inclusion efforts as well as climate regulation be eliminated within the federal government. Trump called DEI a "racist" practice and said it was "illegal". He also pressed private institutions like universities to end diversity practices. Climate change has been called a "con-job" by Trump. The documents obtained by FarmSTAND, a legal advocacy group, and shared with show the breadth of this effort at the Farm Agency, whose portfolio includes everything from food stamps, farm subsidies, to conservation programs. According to the Department of Government Efficiency's website, USDA terminated 600 grants worth more than $3 billion. It has never been reported how the USDA identifies grants that are to be terminated. In a pair publicly accessible memos dated March 13, Agriculture Secretary Brooke Rollins stated that the review and possible termination of grants helped the agency "establish an American return and realign its focus towards the Department's original objectives", which include promoting agriculture, assuring safe food, and protecting national forest. Terms include'socially vulnerable,' and 'carbon pricing' According to a memo dated February 6, agency officials instructed budget and finance officers that they should identify awards using the terms "diversity", "equity", "inclusion", "DEI", "DEIA", "environmental justice", "underrepresented producers", "underserved community", "socially disadvantaged producer" and "socially susceptible" (and similar phrases). The memo was written by USDA's acting general counsel Ralph Linden. He is now the deputy general attorney, Lynn Moaney who is deputy chief financial officer, and John Rapp, budget director. The USDA refers to "socially disadvantaged farmers" as farmers of color, sometimes including women. Until July, the USDA had prioritized enrollment for these farmers or allocated funding pools to them. Chelsea Cole, the federal financial assistance department's policy lead in the Office of the Chief Finance Officer of the agency, instructed the officials on February 24 to expand their review by including 16 topics and search terms related climate change. Documents show that the topics and terms include "climate modeling", "climate and emissions analysis", "climate-smart agriculture and land use which does not directly profit farmers," "carbon price and market mechanics", "renewable energies modernization, which does not directly benefits farmers," and "climate adaptation (sic) planning and resilience planning". The documents did not make it clear whether all of the grants identified were canceled or if other factors were taken into consideration for the 600 canceled grants. CANCELLED GRANT The work funded by the cancelled grants included technical assistance for farmers using climate friendly practices such as planting cover crops, local purchases of food for schools and improving nutritional status for those receiving federal food assistance. Holly Bainbridge is a senior lawyer with FarmSTAND. She said that the termination process has affected organizations all over the country, and their ability create a fairer food system that supports local small farmers, that delivers food to those who are in need. FarmSTAND, Earthjustice, and Farmers Justice Center sued the USDA for grant terminations.
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ROI-US, Japan share unorthodox anti-inflation tool - fiscal stimulus: McGeever
Both the United States and Japan use a novel tool to combat inflation: fiscal stimuli. Both U.S. president Donald Trump and Japan’s prime minister Sanae Takaichi want to calm down angry voters who are being squeezed by rising costs of living. Offering lavish fiscal giveaways in order to control inflation is like trying to put out a raging fire by putting gasoline on it. Trump's Republican Party lost key gubernatorial elections and mayoral elections earlier this month. Concerns about high costs of living were a big factor. The White House seems to have heard loud and clear the electorate. The president is now determined to send a $2,000 cheque to the majority of U.S. homes, funded by money raised from increased duties on U.S. imported goods. Treasury Secretary Scott Bessent stated on Wednesday that the issue is being discussed. What? The hundreds of billions in tariff revenue was supposed to be used to reduce the budget deficit, right? Trump's 'One Big Beautiful Bill Act,' which he pushed through earlier this year, made it clear that the 'One Big Beautiful Bill Act,' was no longer a priority. According to the nonpartisan Congressional Budget Office, the package contains a slew of tax cuts which are expected to add $2.4 billion to the federal deficit over the next 10 years. Trump's administration is focused on growth. This means that it will keep the economy humming, even at the cost of inflation above target. White House officials may not have said it publicly, but they seem to believe that inflation nearer 3% than the Fed target of 2% is worth it in order to maintain nominal growth. FISCAL HOUSE DISEORDDER Looks like Japan's new Prime Minister is adopting a similar strategy. The rising cost of living in Japan was a major factor in the historic defeat suffered by the Liberal Democratic Party in the summer elections that led Takaichi to surprise sweep to the top last month. Takaichi and Trump advocate a fiscal easing, rather than tightening policy to combat inflation. Her newly formed government is preparing a stimulus package for the economy that will probably exceed last year's package of $92 billion. One of the three main goals of this package is to reduce the impact of rising costs. She has also appointed members of key government economic panels who advocate an expansionary fiscal strategy. This week, she indicated that her willingness to slacken long-term commitments in getting the country's financial house in order. Takaichi, as well as Trump, have both made it known to their central banks that they want to maintain a stimulative monetary policy - something with which many rate-setters may disagree. Both leaders seem to be determined to counter the effects of inflation by taking actions that may very well worsen inflation. Inflation Doom Loop Fiscal stimulus is a powerful tool that can help lower-income people spend their money. The Global Financial Crisis of 2007-09 and the Pandemic of 2020 both showed that fiscal generosity is necessary during times when the economy is trapped in a liquidity trap, the demand for goods and services has collapsed and deflation must be defeated. The U.S. and Japan are not facing an economic disaster. In aggregate, both countries are experiencing a soft but steady growth, with unemployment at a historically low level and inflation a full percentage-point or more above the target. Also, it is unclear by how much the fiscal spree will boost growth. The 'fiscal multiplyer' is not a measure that is universally accepted. It is a measure of how much additional government spending and tax cuts increase economic growth. The San Francisco Fed's 2020 paper stated that economists agree it is higher during recessions. It is also higher when debt-to GDP ratios are low and monetary policy less "activist". It is a completely different environment than the one that exists in both countries. Washington and Tokyo may find it politically appealing at the moment to indulge in populist fiscal splurges, but this unorthodox approach could make it harder to bring down inflation. The opinions expressed in this article are those of the columnist, who is also the author. Open Interest (ROI) is your indispensable 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.
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EU legislators support further weakening sustainability laws
After months of pressure, the far-right and centre-right joined forces in the European Parliament to support further reductions to the EU's corporate sustainability law. This comes after the U.S. government and Qatar and other companies have pressed for this. Last year, the European Union adopted its corporate sustainability due diligence (CSDDD). This directive requires that companies fix any human rights or environmental issues within their supply chains. Otherwise, they could face fines up to 5% global turnover. It has become a political hot potato, as countries such as the United States and Qatar have demanded that it be further weakened. The rules could disrupt their gas supply to Europe, they warned. The European Parliament voted on Thursday to require that only businesses with at least 5 000 employees and a turnover of 1.5 billion euros ($1.75 billion), should be compliant. They were also relieved from the requirement to outline their plans for meeting climate change commitments. CSDDD thresholds currently are 1,000 employees or 450 million euros in turnover. Due diligence rules were already delayed an additional year, to July 2027. Around 90% of the companies that were initially required to do so have been removed from this requirement. The CENTRE RIGHT and FAR RIGHT UNITE Jorgen Warborn is the Swedish center-right legislator who oversees the file. He said that the changes are among the most significant proposals to reduce red tape and save companies around 5 billion euro per year. This will help the EU to make up for its growth deficit against rivals like the United States. The EU parliament rejected proposals in October for a more radical easing of the rules. This prompted the centre-right European People's Party, with the support of far-right parties, to propose new amendments. Terry Reintke, co-president of the Greens and Orban's Le Pen, said: "They chose to unite with Orban and Le Pen in order to kill environmental and Human Rights laws that hold big companies accountable for their production processes." Patriots for Europe (which includes Marine Le Pen’s French National Rally, and Viktor Orban’s Fidesz, the Hungarian prime minister) said that the "cordon sanitaire", which was used to exclude non-centrist parties, had finally been broken. Due to the rightward shift in the EU assembly following last year's elections, these groups now have a majority. TotalEnergies, ExxonMobil and other companies have called on the EU to go further and withdraw this policy completely. They warn that it will make it more difficult for businesses in the EU. Ikea and Aldi are also companies that have expressed support for due diligence laws. The European Parliament will need to negotiate the final text with their counterparts in EU government. They aim to achieve this by the end 2025.
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Tata Steel wants to extend import tariffs for some steel products into India
T.V. Narendran, the chief executive of Tata Steel India, hopes that the government will extend the import tariffs for some steel products in order to protect against imports from China and other countries. Narendran said on Thursday. Narendran, in an interview, said that although the import volumes in India are small, they still affect the market. Narendran stated that "China exports a lot" of steel globally, and added that Indian steel producers had no choice but to export due to the "over-saturation" of most markets by Chinese competitors. In April, India, the second largest crude steel producer in the world, imposed temporary import duties on certain steel products as a way to reduce imports from China. These tariffs expired in the last week. Narendran also said that Tata Steel's Europe-UK operations were impacted by U.S. Tariffs, as they had exported 800,000 metric tonnes to the U.S. He said that some of the impact had been passed onto customers. Narendran, the steel producer, said that the company is considering alternative markets, such as Latin America and parts of Europe, Africa, and the Middle East, to counter the effects of U.S. Tariffs. Koushik Chaterjee is the chief financial officer of Tata Steel. He said that Tata Steel also wants the UK government to implement import restrictions to stop cheap shipments entering the country. Chatterjee stated that "UK has literally become a dumping grounds for imports". The steel producer is currently finalising its total costs for decarbonising its Dutch plant. Chatterjee stated that the job cuts announced by the company in April have yet to be implemented in the Netherlands. Chatterjee explained that the negotiations with the union were taking time. INDIA OUTLOOK Tata Steel anticipates that steel prices will be 1,500 rupees per ton lower in India in Q3 than in Q2. Narendran stated that the demand in India was "quite strong", especially from automotives, oil, gas, railways, and construction sectors. Reporting by Neha arora and Sethuraman N R, Editing by Ronojoy Mazumdar
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Gold reaches a 3-week high amid US debt worries and Fed rate cuts expectations
The gold price rose to its highest level in more than three weeks on Thursday, as investors hoped that the reopening of the U.S. federal government would lead to an increase in debt. Meanwhile, delayed U.S. data on economic activity could shed more light on Federal Reserve policy. As of 1147 GMT spot gold rose 0.7% to $4.229.19 an ounce. This is its highest level since October 21. U.S. Gold Futures for December Delivery rose by 0.5%, to $4,234.10 an ounce. The resolution of the U.S. Government Shutdown will not have a significant impact on the trend, because it is expected to increase debt levels, said Hugo Pascal. The physical demand for gold and silver remains strong, and recent U.S. indicators indicate a weakening of growth. This is a favorable combination for metals' prices. The U.S. president Donald Trump signed legislation on Wednesday to end a 43-day shutdown of the government, which was the longest in U.S. History. This delayed important economic data, such as reports on jobs and inflation. The agreement will fund federal operations until January 30. However, the government expects to add an additional $1.8 trillion per year to its debt burden of $38 trillion. Fed Chair Jerome Powell warned against further easing in this year due to the lack of data. However, he cut interest rates by a quarter point last month. The U.S. Labor Department is urged to prioritise the November data on employment and inflation in order for Fed officials to have current information during their December policy meeting. According to a poll, 80% of economists believe that the Fed will cut rates next month by 25 basis points. Gold is usually a beneficiary of lower interest rates, as it offers no return and can be seen as a safe haven during times of economic uncertainty. Gold has risen 61% this year. It reached a new record of $4,381.21 in October, fueled by geopolitical and economic concerns, increasing ETF flows, and expectations for further rate cuts. Silver spot rose 0.6%, to $53.70 an ounce. This is a move towards the record high reached on October 17. Palladium dropped 0.5%, to $1,466.05. Platinum fell 0.1%, to $1,613.17.
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EDF, France's energy company, will offer more long-term contracts
EDF, France's energy company, said Thursday that it was looking to expand the scope of its long-term contracts by including more competitors and power consumers. EDF wants to secure an additional 10,6 terawatt hours (TWh), of long-term contracts with utilities, power distributors, and other large customers for delivery beginning in January 2027. This will reduce its exposure to volatile prices. Marc Benayoun, EDF's Executive Director in Charge of Client and Services, said, "The goal is for French industry to be efficient, sustainable and resilient." EDF has called for interest in contracts known as Nuclear Production Allocation Contracts (CAPN) after struggling to sign long-term agreements with industrial users who face weak demand. The market prices for the next year are much lower than those of long-term contracts. It is therefore difficult to convince customers to sign longer-term contracts. EDF has said that it is interested in medium-term contracts lasting 4 to 5 year, and the volume signed up for these contracts is more than twice as much as the 35 to 40 TWh of long-term contracts. Benayoun stated that many players want a contract with attractive prices and fixed terms after their experience during the energy crisis. EDF expects to produce between 350 TWh and 370TWh of electricity from its nuclear reactors domestically in 2026 and 2020, and the CAPN scheme is expected to cover almost 10% of that production. Benayoun, a reporter, said that the contracts would eventually be available to all European players. Former EDF CEO Luc Remont attempted to open contracts to deliver heavy industry outside France in the beginning of the year. This angered French industries and contributed to his removal a few months later. (Reporting and editing by Joe Bavier, Alexander Smith, and Forrest Crellin)
JPMorgan: Almost a quarter of Russian oil exports are stuck in tankers
JPMorgan reported on Thursday that around 1.4 million barrels of Russian oil per day, or about a third, of the country's potential seaborne exports, are still in tankers due to the U.S. sanction against Rosneft, and Lukoil.
In the first sanctions that President Donald Trump has imposed directly on Russia since his second term began, the U.S. gave itself a deadline of November 21 to end all business with Rosneft or Lukoil.
The sanctions have caused Lukoil to struggle, forcing the company to sell foreign assets, and disrupting operations in Iraq, Finland, and Bulgaria.
According to trading sources, the overall Russian oil exports are relatively stable.
JPMorgan warned that after the November 21 deadline for receiving oil from sanctioned companies it could be difficult to unload cargoes.
It said that "Russian oil exports have entered a new phase as sanctions against Rosneft, Lukoil and other companies are about to go into effect. This has caused its two biggest customers - India and China - to drastically reduce their December purchases."
Traders reported earlier this week, that many ships loading in Russia's western port of Primorsk and Ust-Luga, and Novorossisk, list Port Said and the Suez Canal, as their destinations, but then continue to Asian ports, mostly India and China.
The Russian oil sold at the lowest discounts in Asia in the last year is expected to be shipped eventually to China. (Reporting and Editing by Emelia Matarise Sithole)
(source: Reuters)