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Sources say that OPEC+ is likely to increase oil production targets again in August.
Three sources told Reuters that OPEC+ countries are likely to agree on a 'further increase in their 'output targets for August, when they meet?Sunday. This will add supply at a moment of falling prices, as the Strait of Hormuz slowly reopens. Sources said that the target for August will be the same as it was for June and for July. OPEC didn't immediately respond to a comment request. All sources, who spoke under condition of anonymity, said that 'no decision has been finalized. Seven members of OPEC+ (which groups OPEC, Russia and other producers) have increased their 'output quotas between April and July by nearly 800,000 barrels a day. The Iran War has, however, led to a sharp decline in production among key members. OPEC data shows that OPEC+ production fell from 42.77 to 33.13 millions bpd between February and May. Oil prices have returned to prewar levels despite the pressure from weaker Chinese imports and higher exports by non-Middle East suppliers. The International Energy Agency coordinated a record-breaking'strategic inventory release', which helped to ease supply concerns. Brent crude was trading just above $72 per barrel at 1309 GMT. Sources said last week that Iraq, OPEC’s second largest producer after Saudi Arabia, and one of the five founding members had considered quitting the group if not allowed to increase its oil production significantly. Baghdad officials later said that they were in favor of a re-evaluation of OPEC's production quotas, to reflect the current conditions within member states. Rollback of 2023 Supply Cut The seven producers - Saudi Arabia, Russia. Iraq, Kuwait. Algeria, Kazakhstan, and Oman - are increasing output as part of a gradual rollback of the 1.65 million bpd cut in supply agreed upon in 2023 when the group included?the UAE. The UAE left the alliance at the end of April to better align its production with its capacity, without the production restrictions imposed by the group. OPEC+ has been reviewing the oil?production capacities of its members to serve as a benchmark for production baselines in 2027, from which quotas will be set. Calculations show that the seven countries will have to bring back 379,000 bpd from the original cut by August. This is after the UAE's exit in May. If the group continues to unwind at the same rate, they will have unwound the remaining cut by September.
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UK's National Grid invests $1.75 Billion in AI power boom through Joulent Investment
Britain's National Grid said on Wednesday that it would invest $1.75billion for a 35 percent stake in Joulent. Joulent is a U.S. platform for developing power infrastructure for the data centres. It wants to take advantage of the surge in demand for electricity driven by AI. The agreement will fund Joulent’s first project: a 2,67-gigawatt, gas-fired facility developed in a joint venture with Chevron in?West Texas. Chevron will also supply power to a Microsoft data centre campus under a 20 year power purchase contract. National Grid's shares dropped 1.4%, trading at 1,230.5 pence as of?1142 GMT. AI-related demand for electricity is changing the global energy market. The demand for data centres to power artificial intelligence services grew?by 17 percent in 2025. This was far greater than the growth of 3% in global electricity 'demand. National Grid stated that the?investment would add to its existing capital investment programme for five years of at least PS70bn through fiscal year 2020 and be funded by available capacity in its balance sheet. The company stated that the transaction would not affect its current financial situation. We would expect that the returns on this investment through National Grid Ventures will be higher than the 9-10% equity return we expect from regulated networks, reflecting a slightly greater relative risk profile. Morgan analysts stated in a report. National Grid stated that the strategic partnership would also strengthen their 'existing data center connection programme. They expect to connect over 10 gigawatts in the UK and United States within the next five year. Kilby is the name of the 'project, which has already secured crucial equipment including GE Vernova Turbines, reserved engineering and construction capacities, and aims to start delivering electricity by 2028. National Grid stated that Joulent will be able to generate a positive cash flow from early 2030s. The final investment decision for the Joulent stake should be made by the end 2026. Reporting by DhanushVigneshbabu in Bengaluru, Editing by Jonathan Ananda & Emelia Sithole Matarise
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Petrobras CEO believes oil will settle in the range of $72 to 75 per barrel
The chief executive of Brazil's state oil company Petrobras said that the oil prices have remained in a range between $72 and $75 per barrel. However, the market is yet to 'normalize fully,' he added. Petrobras announced its decision to lower diesel prices on Tuesday evening, reflecting the fall in Brent crude oil prices. CEO Magda Chambriard confirmed this in an interview that same day. Brent crude futures traded at $72.05 per barrel on Wednesday. This is close to the price seen the day before Israel and the U.S. launched their military campaign against Iran. Chambriard stated that "the oil market hasn't yet returned to normal but $75-$72 seems to be the new range." Petrobras has announced a price reduction of 0.3515 Reais per liter of diesel that it sells to its distributors. This is equal to the amount of the government subsidy now being removed. The company's selling prices will therefore remain unchanged. According to an announcement by Finance Minister Dario Durigan on Tuesday, the government's diesel subsidies, which were introduced to 'cushion the effect of the Iran War, will expire on Wednesday. According to Durigan, other fuel subsidies are being reviewed for gradual phase-out following the drop in oil prices and easing tensions across the Middle East. Last month, Iran and the U.S. signed an interim agreement aimed at halting the war and reopening the Strait of Hormuz through which 20% of global oil supply had passed before the conflict. Parties are also exploring ways to reach a permanent resolution of the conflict.
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Portugal wants investment commitments from Moeve-Galp for Sines refinery
The Portuguese Environment Minister said that Moeve and Galp, Spain's refiners, should?invest and commit to the viability of Sines as part of a planned merger of their operations. Moeve has been in talks with Galp since January to create two joint ventures. One will operate 3,500 fuel stations in the Iberian Peninsula. The other will combine Galp's refinery located in southern Sines, Spain, with Moeve refineries located in Huelva, Spain, and Algeciras, in southwest Spain. Moeve will hold the majority of shares in Europe's largest refining company, while Galp retains a mere?over 20 percent. Environment Minister Maria da Graca Carvalho stated that the government closely monitored the deal, from the perspective of?security of supply and sovereignty of the nation. She stated that it was important to "ensure the sustainability and continuity of operations at Sines refinery, the only one in Portugal, in the long run. She told a hearing in parliament that "the Sines refinery must be given the conditions necessary to increase investment, modernise its infrastructure, and improve production processes." Carvalho stated that it was necessary to also attract skilled workers, encourage innovation and create business and industrial synergies. She said that the current geopolitical background, which includes tensions in the Middle East, underscored the need for Portugal to strengthen its infrastructure and reduce its dependence on fossil fuels by preparing for the future. The refinery must focus more on the so-called "green molecules" such as hydrogen, sustainable aviation fuel, and second-generation Biofuels. The government does not have veto power, but the strategic importance of Sines refinery to Portugal allows it to exert pressure on other parties regarding the future direction of the asset. The Portuguese government also owns 8% of Galp. (Reporting and editing by Louise Heavens; Sergio Goncalves)
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Sberbank of Russia lowers expectations for corporate lending as bad debts increase
Sberbank's finance chief said on Wednesday that the bank will lower its corporate lending growth forecast for 2026 due to the deteriorating financial position of its borrowers. Taras Skovortsov, CFO of Bank of Russia, told the Bank of Russia Financial Congress in St Petersburg that the country's largest lender had performed better than expected, but that the economy was slowing due to the ongoing conflict in Ukraine and the growth forecast for 2026 is only 0.4%. Skvortsov stated that "it is true?that we performed slightly better than anticipated in the first half. This is primarily due to interest income and perhaps even the cost of risks." "In the second half of this year, and particularly in the last few months, we have seen some worrying trends regarding the quality of corporate portfolio." Skvortsov stated that there had been a decline in the financial health of clients, which included requests to restructure loan. "All this will, of course, force us to set aside provisions for such cases. He added that the cost of corporate risk is likely to rise. Skvortsov cited high interest rates as another factor for the projected 9% to 11% growth in corporate lending by Sberbank this year. He declined to provide any further details about the revised forecast. On June 19, the central bank cut its main interest rate from 15.5% to 14.25%, a smaller reduction than analysts had expected. Retail fuel prices have increased due to nationwide fuel shortages following 'Ukrainian drone strikes on refineries. Analysts surveyed in June raised their inflation forecasts from May's 5.5% to 5.7%. An official of the central bank said that the attacks on Russian oil refining facilities will likely have an impact on the economic growth in the second half. "We are observing the situation on fuel markets. Skvortsov stated that all of this has a direct impact on the economic position of a number of companies. He added that the lender would?try to keep its dividend payout percentage at 50% of its net profit over the next three year but would then present its final calculation along with its strategy by the end of 2026. Reporting by Elena Fabrichnaya, Writing by Lucy Papachristou, Editing by Mark Trevelyan & David Goodman
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Sources say that Kazakhstan has agreed to provide 50,000 tonnes of gasoline to Russia
Four industry sources reported on Wednesday that Kazakhstan agreed to provide 50,000 metric tonnes?of fuel to Russia as humanitarian assistance in July and August. Russia has been stricken by fuel shortages, long queues and soaring gasoline and diesel prices over the last few weeks, as Ukraine has attacked Russian energy infrastructure, including oil refineries, to undermine Moscow's funding for war efforts. Sources in the industry have said earlier that Russia began importing gasoline from India. In summer, the?Russians consume at least 110,000 tonnes of gasoline per day. Vladimir Putin said that Ukraine is trying to create discord among the Russians. He also admitted that strikes had triggered fuel shortages in various Russian regions, but that Russia was addressing them. According to sources, the refineries of Pavlodar in Kazakhstan and Kondensat in Kazakhstan will provide gasoline Ai-95 or Ai-92. In an emailed statement, the Kazakhstani energy ministry said that it had not received any request from state entities in Russia regarding fuel supplies as humanitarian assistance. It has also not ruled out supplying from the Kondensat oil refinery, which processed naphtha supplied by Tatneft, the Russian oil major. The availability of petroleum products on Kazakhstan's national market will determine whether or not motor gasoline can be supplied to Russia in the near future. The report added that "if such supplies are discontinued, motor gasoline will be produced from feedstock supplied by Tatneft in Russia." Sources said sanctions against Ukraine could also complicate payments and supplies. (Reporting and Editing by Elaine Hardcastle).
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Sources say that Russia purchases gasoline from India in order to combat shortages
Two industry sources confirmed on Wednesday that Russia began importing gasoline by sea from India in an effort to reduce fuel shortages caused by Ukrainian attacks against its energy infrastructure. Fuel shortages have been felt in all 11 time zones of Russia, with long queues and record gasoline prices. The Kremlin announced on Tuesday that Russia is in contact with other nations and discussing the importation of fuel at reasonable prices. The Indian oil ministry and the Russian energy ministry have not responded to requests for comment. A source in the industry said that at least 60,000 tons of gasoline were shipped?from India into Russia. Two tankers with parcels ranging from 30,000 to 40 000 tons were reported by another source. According to a third source, Russia intends to import 400,000 tonnes of gasoline each month from different countries, including Belarus, who has been exporting fuel already to Russia. In the summer, when fuel demand is high, Russia consumes at least 110,000 tons of gasoline per day. There is no information on which refinery in India will supply gasoline to Russia. At a Sunday meeting with government officials and other officials, President Vladimir Putin acknowledged that Ukrainian drone attacks on oil refineries caused fuel shortages in certain regions. He said that Russia is dealing with the situation. Belarus nearly tripled its gasoline rail supplies to Russia in the first six months of June, compared to the first six months of May. This is according to calculations. Last week, Russia's Parliament approved changes to its tax code to combat?fuel shortages caused by?Ukrainian drone attacks. Subsidies on fuel imports are also offered, based on Indian delivery costs and price. India's crude imports from Russia soared to a new record in June. Ship tracking data from LSEG - and Kpler - showed that refiners bought Russian barrels as a way to offset the effects of the Strait of Hormuz closing on other sources of supply. Kpler data shows that Russian oil made up?more than 50% of India's total imports in June, up from 36.5% a year earlier. India, the third largest oil importer in the world, received approximately 2.70 million barrels of oil per day from Russia, according to preliminary data from Kpler & LSEG. Alexander Smith, Reporting and Editing
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Rate hikes and firm Treasury yields are driving gold to a 7-month low.
Gold prices were stable on Wednesday, but remained near the seven-month low they hit the previous session as the Federal Reserve raised interest rates and Treasury yields rose. As of 1109 GMT spot gold was unchanged at $4,010.11 an ounce, having touched its lowest level in November last year of $3,942.99 during the previous session. U.S. Gold?futures?for August delivery fell 0.4% to $4.023.80/oz. The yellow metal suffered its first quarterly decline since 2024. U.S. Treasury rates rose for the third consecutive session. The stronger U.S. Dollar also increased pressure, as it made bullion more expensive for overseas buyers. UBS analyst Giovanni Staunovo said, "The weakness in the market is partly driven by Hammack's comments suggesting that a rate hike may be necessary and market participants are pricing in more?rate increases for this year." Beth Hammack, the president of the Federal Reserve Bank of Cleveland, said Tuesday that she might advocate for higher interest rates if inflation continues to rise. CME FedWatch shows that traders expect a rate increase by September. Staunovo said that the expectation of more hikes is not helping to boost investment demand. ETF holdings, too, have experienced renewed outflows over the past few days. The Fed may be able to get more clues about its policy direction by examining the June ADP Employment data due at 1215 GMT and Thursday's Nonfarm Payrolls report. The markets will also be watching the annual conference of the European Central Bank in Sintra on Wednesday. Both Fed Chair Kevin Warsh, and ECB president Christine Lagarde are scheduled to speak. Geopolitically, there are concerns about the prospects of U.S. diplomacy with Iran after Tehran refused to meet'senior U.S. envoys' who travelled to the region in the wake of the recent outbreak of hostilities. Spot silver dropped 0.4% to $58,33 an ounce. Platinum rose 0.4% to $1,556.95 after reaching its lowest level since November. Palladium fell 1.4% to $1187.50. (Reporting and editing by Harikrishnan Nair, Diti Pjara and Noel John from Bengaluru)
MORNING BID AMERICAS - Kicking off H2
What's important in the U.S. and Global Markets Today By Mike Dolan. Editor-at-Large for Finance and Markets
Investors are in a cautious mood as we begin the new quarter, month and second half. U.S. Treasury rates have risen overnight, ahead of the June jobs report, and they're already anticipating the second-quarter earnings season. The jump in Treasury yields was not triggered by a specific event, but it came after news of a'surprise' increase in U.S. jobs for May. It also comes before Federal Reserve Chair Kevin Warsh speaks at the European Central Bank annual forum later today in Portugal.
Below, I will go into more detail. Check out the first in a new series of mid-week articles where I explore some of the less obvious topics in finance and the markets. Is a younger population still as beneficial to the economy as it used to be? Listen to the most recent episode of Morning 'Bid, a daily podcast that focuses on the key issues investors will focus on at the start of the new quarter. Subscribe to the Morning?Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a week.
KICKING H2 It appears that the U.S. labour market is gaining momentum. Many economists believed that the so-called JOLTS April report showed a surge in available jobs, but argued it was an anomaly and would be revised downward. Openings rose again in May's report to reach a 2-year high.
ADP's private sector jobs figures are due today. The June national payrolls report will be released a day earlier on Thursday, owing to the Independence Day holiday. The Iranian side did not show up for the top-level meetings between U.S. officials and Iranian officials that were supposed to begin on Tuesday. This was due to disagreements over the details of the framework deal. On the FX market, Japan's currency, the yen, slashed through 162 to dollar on Tuesday, reaching new lows of 40 years. However, there has been no intervention so far to stop it. South Korea's exports soared by over 70% in the past month. This was their highest pace in almost 50 years. The surge in exports of chips was responsible for this explosive 200% growth. The country is now only the fourth to surpass $100 billion in exports per month.
Wall Street is now focusing on the second quarter earnings season. It's not surprising, given the impact the last quarter had on the AI theme and chip sector.
The aggregate annual profit growth expected is about 22%. However, 60% of this is in the chip-and-tech equipment sector and only two companies account for 40%: Nvidia Micron.
Chart of the Day South Korea's exports grew?at the fastest pace in?nearly a half century last month. This smashed forecasts for a surge in chips sales propelled by a global boom in AI investments.
Exports of Asia's 4th largest economy rose by 70.9% from a previous year in June, to $102.25 billion. This is a significant increase from the 53.4% in May. It also marks the biggest annual growth since October 1978.
Semiconductor Exports jumped 199.5% to $44.8 billion. South Korea is now the fourth country worldwide after Germany, China, and the U.S.A.
Watch today's events
* U.S. June ADP payrolls (8:15 a.m. ?EDT), June ISM manufacturing PMI (10 a.m. EDT)
Kevin Warsh, Fed chair, speaks at the ECB annual forum in Sintra.
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(source: Reuters)