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Backwardation in US oil futures narrows to a 20-month low amid fears of a glut
The front-month U.S. Crude Oil Futures contract ended Monday's trading with the smallest premium over the seven-month contract since January 2024, as OPEC+ increases supply and seasonal refinery maintenance pressures the demand for immediate barrels. The market term for immediate delivery fetching a higher premium than later deliveries suggests that investors are losing money by selling their oil on the spot market, as the near-term supply appears to be abundant. For the first time since January, U.S. crude oil futures would be in a contango if the spread reversed from a premium into a discount. WTI crude futures settled for November delivery at $59.49 a barrel on Monday. The May 2026 contract settled for $59.02 a barrel, creating an additional 47 cents per barrel for the prompt barrels The narrowest since last January 16th. Andrew Lipow, President of Lipow Oil Associates, said that the narrowing of the gap is indicative of an excess of supplies in the short term and then a concern about tightening of supplies when future demand increases. Lipow said, "We're seeing an increase in supply from OPEC+. This, combined with reports that more oil is in floating storage, puts pressure on the curve at the front, along with seasonal refinery maintenance. OPEC+ (the Organization of Petroleum Exporting Countries plus its allies) has increased their oil production targets this year by over 2.7 million barrels a day, which is equivalent to around 2.5% of the global demand. This has stoked supply glut concerns. Shohruh Zhritdinov said that this is flattening WTI's curve, as the market now prices in less tightness for early 2026, according to a Dubai oil trader. According to the Energy Information Administration, the average U.S. refinery usage for a four-week period fell to 92.5%, its lowest level since the first half of June when the U.S. driving season began. Zukhritdinov stated that "physical builds and refinery delays equate to a lower need to pay for prompt barrels." (Reporting and editing by David Gregorio in Houston, Georgina McCartney from Houston)
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Gold reaches $4,100 on the back of trade tensions and rate-cut optimism
On Monday, gold broke through $4100 per ounce, a new record, on renewed U.S. China trade tensions, and on expectations of U.S. rate cuts. Silver also reached a new high. As of 01:47 pm, spot gold had risen 2.2%, to $4,106.48 an ounce. After hitting a new record of $4,116.77 at 1747 GMT ET (1747 GMT), spot gold was up 2.2% to $4,106.48 per ounce. U.S. Gold Futures for December closed 3.3% higher, at $4133. Gold prices have risen 56% in the past year, and last week they reached the $4,000 mark for the first. This is due to factors such as geopolitical uncertainty, economic concerns, and expectations of U.S. rate cuts. Central bank purchases are also a major factor. Gold could continue to rise. "We could see prices above $5,000 by 2026," said Phillip Streible. Chief market strategist at Blue Line Futures. Streible said that the structural support of the market is provided by steady central bank purchases, strong ETF inflows as well as U.S. China trade tensions. The geopolitical front saw U.S. president Donald Trump reinitiate trade tensions with China, ending a tense truce between two of the world's largest economies. While traders price in a 97% chance of a Federal Reserve rate reduction in October, and a 100% probability for December. Gold is a non-yielding investment that tends to perform well in low interest rate environments. Standard Chartered's forecast for next year has been raised to $4,488 on average. Standard Chartered Bank's global head of commodities research, Suki Cooper said: "We believe this rally will continue, but a short-term correction is better for a long-term trend." Spot silver climbed 3.1% to $51.82, reaching a record high earlier in the session of $52.12. This was boosted by the same factors that supported gold and tightness on the spot market. Technical indicators indicate that both gold and silver are overbought. The relative strength index (RSI), which measures the relative strength of the two metals, is 80 for gold and 83 in the case of silver. Palladium rose 5.2% to 1,478.94, while platinum gained 3.9%. Reporting by Noel John in Bengaluru, Pablo Sinha, Sherin Elizabeth Varighese, and Kavya Varghese; Additional reporting and editing by Joe Bavier and Alexander Smith; Shreya Biwas.
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Officials say that 19 people were killed by rebels affiliated with the Islamic State in eastern Congo.
Two local officials reported on Monday that suspected Islamic State-backed terrorists killed 19 civilians during an overnight attack in eastern Congo. This has exacerbated the insecurity of this mineral-rich area. Alain Kiwewa is the Lubero territory military administrator, where Mukondo lies, and he told reporters that the death toll may rise. The ADF has not immediately claimed responsibility. Also known as the Islamic State Central Africa Province, (ISCAP), it has been responsible for several attacks in recent weeks, including a September attack on a funeral in which more than 60 people were killed. ADF could not be reached for comment immediately. Assailants from Mukondo were wearing uniforms that looked like those of the Congolese Army, which enabled them to enter Mukondo without being noticed. The attackers then used guns, knives, and clubs to attack people, according to a local priest who refused his name out of security concerns. Espoir Kambale, a leader of the civil society in the region, put the death toll at 19. He also said that eight people were injured and 26 homes had been burned. Kambale said, "We ask ourselves how the terrorists came and attacked us when we thought the village was secure." The population is in a panic. "Some residents fled to the bush and never returned." The ADF began as a Ugandan rebel force, but is now based in the Congolese forests since the late 90s. It has also been recognised as an affiliate by the Islamic State. The recent attacks by the M23 rebels, who are backed by Rwanda, have increased security concerns in eastern Congo. This has prompted U.S. president Donald Trump's administration, to attempt to broker peace. Reporting by Congo Newsroom; Writing by Ayen deng Bior; editing by Rob Corey-Boulet, Lisa Shumaker and Lisa Shumaker
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EU lawmakers oppose cuts to the reach of sustainability laws
The European Parliament’s Legal Committee backed plans on Monday to weaken the EU’s Corporate Sustainability Law, which has been criticized by companies who claim that complying with these rules will hinder the competitiveness for European industries. Corporate Sustainability Due Diligence Directive (CSDDD), adopted by the European Union last year, requires companies to address human rights and environment issues in their supply chain or face a fine of 5% global turnover. The European Parliament's Legal Committee voted on Monday to approve proposals that would only make the rules compulsory for companies with at least 5,000 employees and a turnover of 1.5 billion euros. CSDDD is currently applicable to companies that have 1,000 employees or more and a turnover of over 450 millions euros. The committee also supported dropping the requirement that companies have "transition plans." CUTTING BUSINESS COSTS The (conservative-leaning) European People's Party's aim has always been to reduce costs and simplify rules for businesses," said Jorgen Warsborn, the legislator who drafted the approved text on Monday. "Our vote will bring more predictability to our businesses in a world that is unpredictable," said Jorgen Warborn, the lawmaker who drafted the text approved on Monday. The committee asked that the European parliament begin negotiations with EU countries on final rules without a vote by the entire assembly. The committee could force a vote by a group of legislators equivalent to 10% of the assembly. Some of the proposed changes are already likely to be implemented. EU countries have already stated that they support changing the law so that it only applies to companies with at least 5,000 employees. CSDDD is one of the most controversial parts of Europe’s green agenda. Countries such as the United States and Qatar have demanded changes. The EU, they argue, is going too far by imposing these requirements on foreign firms. TotalEnergies and other European companies have called on the EU to scrap the law completely, warning that it could harm the competitiveness of the EU. Investors and activists have reacted negatively to the move, claiming that it undermines corporate accountability while reducing Europe's capacity to attract investment towards meeting climate goals. Amandine van den Berghe, senior lawyer at nonprofit law firm ClientEarth, said: "If these changes are adopted in the end, this law would be stripped of its purpose to serve short-term political convenience." What is a cornerstone for responsible business in Europe has been turned into a bargaining chip. (Reporting from Kate Abnett in Brussels and Inti landauro; Editing by Benoit van Overstraeten, Matthew Lewis).
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Gold reaches $4,100 on the back of trade tensions and rate-cut optimism
On Monday, gold broke through $4100 per ounce, a new record, on renewed U.S. China trade tensions, and on expectations of U.S. rate cuts. Silver also reached a record high. As of 12:17 pm, spot gold had risen 2.4%, to $4,114.31 an ounce. After hitting a new record of $4,116.77 at 1617 GMT ET (1617 GMT), gold prices have risen 2.4% to $4114.31 per ounce. U.S. Gold Futures for December Delivery rose by 3.3% to $4133.90. Gold prices have risen 56% in the past year, and last week they reached the $4,000 mark for the first. This is due to factors such as geopolitical uncertainty, economic concerns, and expectations of U.S. rate cuts. Central bank purchases are also a major factor. Gold could continue to rise. "We could see prices above $5,000 by 2026," said Phillip Streible. Chief market strategist at Blue Line Futures. Streible said that the structural support of the market is provided by the steady central bank purchases, the firm ETF inflows as well as the U.S. China trade tensions. Streible added that on the geopolitical side, U.S. president Donald Trump reignited the trade tensions between China and the United States last Friday, ending a tense truce. While traders price in a 97% chance of a Federal Reserve rate reduction in October, and a 100% probability for December. Gold is a non-yielding investment that tends to perform well in environments with low interest rates. Bank of America analysts and Societe Generale expect gold to hit $5,000 by 2026. Standard Chartered's forecast has been raised to $4,488 on average next year. Standard Chartered Bank's global head of commodities research, Suki Cooper said: "This rally is strong, but a short-term correction will be better for a long-term trend." Spot silver increased 3.1% to $51.82, reaching a record high earlier in the session of $52.07. This was boosted by the same factors that supported gold and tightness on the spot market. Technical indicators indicate that both gold and silver are overbought. The relative strength index (RSI), which measures the strength of the relationship between two assets, is 80 for gold. Palladium rose 6.5%, to $1496.52. Platinum gained 5%, to $1666. Reporting by Noel John in Bengaluru, Pablo Sinha in Mumbai and Sherin-Elizabeth Varghese; Additional reporting and editing by Joe Bavier & Alexander Smith.
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Trump will meet Zelenskiy this Friday to discuss air defense and new weapons
Three sources familiar with the plans said that President Donald Trump would meet Ukrainian President Volodymyr Zelenskiy for a luncheon on Friday. The meeting comes amid increasing discussions over the possible provision of Tomahawk long-range missiles to Kyiv. Both leaders met on Saturday and Sunday. A high-ranking Ukrainian delegation, headed by Prime Minister Yulia Shvyrydenko is scheduled to arrive in Washington, DC, before Friday's meeting, to prepare the groundwork for their talks. One of the sources, who requested anonymity, as the visit had not been announced publicly, stated that the main topics would be air defense, additional U.S. arms for Kyiv, and Russia's possible return to the negotiation table. Zelenskiy is lobbying Washington for the supply of U.S. Tomahawk missiles that can hit Moscow but are only used on military targets, according to Ukrainians. Moscow said that such a move could be a significant escalation. Trump said that he was considering sending Tomahawks into Ukraine. He also stated that he may speak to Russian President Vladimir Putin. Ukraine and the U.S. also appear to be closing in on an historic drone deal, in which Ukraine will share drone technology with United States. European diplomats view such a deal to be an important tool in keeping the volatile U.S. President engaged and supportive of Ukraine. Reporting by Steve Holland in Washington, Tom Balmforth and Gram Slattery from London. Editing by Jeff Mason & Matthew Lewis.
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Gold reaches $4,100 on the back of trade tensions and rate-cut optimism
On Monday, gold broke through $4100 per ounce, a new record, on renewed U.S. China trade tensions, and on expectations of U.S. rate cuts. Silver also reached a new high. As of 10:50 am, spot gold had risen 2.1%, to $4,099.55 an ounce. After hitting a new record of $4,103.58 at 1450 GMT ET, gold prices rose 2.1% to $4099.55. U.S. Gold Futures for December Delivery rose 3% to 4,120.10. Gold prices have risen 56% in the past year, and last week they reached the $4,000 mark for the first. This is due to factors such as geopolitical uncertainty, economic concerns, and expectations of U.S. rate cuts. Central bank purchases are also a major factor. Jeffrey Christian, managing partner of CPM Group, said that gold and silver prices rise when investors become concerned about the current state of the economy or politics. Donald Trump, the U.S. president, reignited the trade tensions between China and the United States on Friday. This ended an uneasy truce that existed between the two world's largest economies. While traders price in a 97% chance of a Federal Reserve rate reduction in October, and a 100% probability for December. Gold is a non-yielding investment that tends to perform well in environments with low interest rates. Bank of America analysts and Societe Generale expect gold to hit $5,000 by 2026. Standard Chartered's forecast has been raised to $4,488 on average next year. Standard Chartered Bank's global head of commodities research, Suki Cooper said: "This rally is strong, but a short-term correction will be better for a long-term trend." Spot silver increased 3.3% to $51.95, reaching a record high earlier in the session of $52.07. This was boosted by the same factors that supported gold and tightness on the spot market. Technical indicators indicate that both gold and silver are overbought. The relative strength index (RSI), which measures the relative strength of a currency, is 80 for gold. Palladium rose 5.4% to $1.482.00, while platinum gained 4.6%. (Reporting from Sherin Elizabeth Varighese and Pablo Sinha in Bengaluru, Additional reporting by Kavya Baliaraman; Editing and Joe Bavier by Alexander Smith and Joe Bavier)
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EU legislators back further reductions to the sustainability law
The European Parliament’s Legal Committee on Monday supported plans to further reduce the EU's Corporate Sustainability Law, which has been criticized by companies who say that complying with these rules would hinder European industries' competitiveness. Last year, the European Union adopted the Corporate Sustainability Due Diligence Directive (CSDDD), which requires companies to address human rights and environment issues within their supply chains or risk a fine of 5% global turnover. On Monday, the European Parliament’s Legal Committee approved proposals to limit the application of the regulations to only those companies with at least 5,000 employees and a turnover of 1.5 billion euros. CSDDD currently covers companies with at least 1,000 employees and a turnover of more than 450 millions euros. The committee also supported dropping the requirement that companies implement "transition plans" in order to align their activities with climate change goals. The EPP has always sought to simplify the rules and reduce costs for business -- even going beyond the original Commission proposal. "Our vote today will bring more predictability to our businesses in a world that is unpredictable," said Jorgen Warborn. He was the legislator who drafted and approved the text on Monday. The committee asked that the European parliament now begin negotiations with EU countries on final rules. The EU Parliament as a whole will decide whether or not to proceed with this request next week. It appears that some of the changes are already likely to be implemented. EU countries have said that they are in favor of changing the law so it only applies to companies with at least 5,000 employees. CSDDD is one of the most controversial parts of Europe's Green Agenda. Countries like the United States, Qatar and others have demanded changes, claiming that the EU has overstepped by imposing demands on foreign companies. TotalEnergies and other European companies have called on the EU to scrap the law completely, warning that it could harm the EU's economic ability to compete with foreign competitors. Investors and activists have reacted negatively to the move back on ESG regulations. They say that it undermines corporate accountability, and Europe's ability attract more investment towards climate goals. Some companies also have resisted. In an August survey conducted by the think-tank E3G with YouGov of 2,500 European company leaders, 63% said that they were in favor of large companies implementing a climate change plan. Only 11% disagreed. (Reporting and editing by Kate Abnett, Inti Lanauro)
Warren Buffett's PacifiCorp utility singed by wildfires
Two years earlier, Warren Buffett branded Berkshire Hathaway's energy service among his corporation's 4 giants. Now he fears its company design might be broken.
Berkshire Hathaway Energy's PacifiCorp system faces billions of dollars in possible liabilities from wildfires that have blistered numerous thousands of acres in southern Oregon and northern California.
Expenses could rise as more fires break out, and from efforts to prevent them. Climate modification, reflected in drier and hotter weather and more combustible plants, adds to the dangers.
I did not prepare for and even think about the adverse developments in regulative returns, Buffett wrote in his yearly shareholder letter in February. I made an expensive mistake in not doing so.
What remains uncertain is the extent PacifiCorp's issues drag on the conglomerate's overall outcomes, with Berkshire's. deep balance sheet and dozens of other operations being not able. to completely combat.
Buffett, 93, and his designated follower Greg Abel, 61, may. face investor concerns at Berkshire's May 4 annual conference. in Omaha, Nebraska, about their concerns for the energy business.
Wildfires make (the energies) fire insurer on. top of being energies, stated Steven Inspect, who oversees $1.9. billion at Check Capital management, consisting of $600 million in. Berkshire stock and choices. It is a material modification. Warren. Buffett did not see this coming at all.
INTENSIFYING CLAIMS
Berkshire Hathaway Energy serves about 5.3 million electrical. and gas customers through PacifiCorp, MidAmerican Energy and NV. Energy in 11 western and Midwestern states, and millions more in. England and Alberta, Canada.
It owns 36,400 miles (58,580 km) of electrical transmission. lines, and runs 21,000 miles of pipelines.
For many years, Berkshire Hathaway Energy - which is 92%. owned by Berkshire Hathaway - had actually been a constant revenues engine. for its parent, generally producing 10% to 12% of overall. running profit.
That was up to simply 6% in 2023, as the business's profit slid. 40% to $2.33 billion.
PacifiCorp was a big reason. Jurors have actually found the Portland,. Oregon-based utility responsible in several verdicts over wildfires. from 2020, blaming losses on its power lines. PacifiCorp has. rejected negligence.
However it ended 2023 with $2.4 billion of predicted wildfire. losses, and has actually said losses might grow to $8 billion.
Today, a group of 1,000 fire victims said PacifiCorp. should pay them $30 billion.
One result: PacifiCorp will pay no dividends to Berkshire. Hathaway Energy for a number of years, which might impact the. parent's ability to fund operations.
It's crucial for energies to recover costs and preserve a. strong financial profile so they can guarantee dependability for. customers, said Travis Miller, a Morningstar stock expert.
Utilities can reduce the threat of wildfires by insulating. wires to minimize the hazard of triggers, cutting or lowering. trees that could call power equipment, burying transmission. lines underground, and briefly turning off power.
However mitigation can be pricey, and Buffett vowed that. Berkshire will not knowingly toss great money after bad.
Toby Shea, senior credit officer at Moody's Investors. Service, explained: He's saying, look, if we essentially have to. pay billions and billions of dollars whenever there is a. big fire, this is not a practical design.
BLAME THE LAWYERS
This is not the first time Berkshire has actually experienced huge. headwinds in a significant business.
Berkshire invested years tidying up poor underwriting at. General Re after paying $16 billion for the reinsurer in 1998.
It also paid too much for Accuracy Castparts, which cost $32.1. billion in 2016, just to see its aircraft parts organization. collapse throughout the pandemic.
Lawsuits including PacifiCorp could drag out for several years,. and the supreme cost and timing of payments are uncertain.
In his investor letter, Buffett cautioned that a. confiscatory resolution might befall PacifiCorp, however that. Berkshire and Berkshire Hathaway Energy were structured to. endure it.
Though analysts do not anticipate a personal bankruptcy, Berkshire. could decide it may not be worth purchasing generating and. transmission possessions if it were forced to foot several years of. big legal bills.
Our assumption is that if damages at PacifiCorp become. unsustainable long term, the business's support toward PacifiCorp. could be limited, S&P Global expert Sloan Millman said.
Berkshire Hathaway Energy decreased to comment for this. article.
PacifiCorp said the $30 billion claim reveals the requirement for. legal reform, with its capability to serve clients threatened by. excessive wildfire damages pursued by plaintiffs' lawyers who. have a significant financial stake in these results.
Some states are resolving utilities' danger of personal bankruptcy. from wildfires.
In 2019, California legislators produced a. multibillion-dollar wildfire fund that utilities could tap to. pay for damages brought on by their equipment.
And in March 2024, Utah lawmakers permitted big energies to. collect additional charges from customers to establish wildfire funds,. and capped liability on some claims.
PacifiCorp could benefit if Oregon took comparable actions. For now, Berkshire's size uses protection from huge losses.
Paul Lountzis, president of Lountzis Asset Management in. Wyomissing, Pennsylvania, which invests 11% of its possessions in. Berkshire stock, said diversification really, truly helps. It's not like Berkshire is one particular energy.
(source: Reuters)