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Sources say that the Yaroslavl refinery in Russia has shut down two units of crude distillation after a drone attack.
An oil refinery in Russia's Yaroslavl region, Slavneft-Yaroslavnefteorgsintez, or ?YANOS, suspended oil processing at two ?of its three crude distillation units after a drone ?attack on August ?28, two industry ?sources ?told . The local governor stated on Friday that the facility had been hit by debris from an Ukrainian drone. Sources claim that the attack caused damage to the AVT-3 primary unit of crude distillation with a daily capacity of 17,140 metric tonnes, which is about 40% of the refinery's total capacity. The AVT-4 unit, with a daily capacity of 14,300 tons, represents 33% of the total capacity. The refinery's last operating crude distillation plant has a capacity of 11,430 tonnes per day. This is equivalent to 27% of?the?plant's capacity. YANOS didn't immediately respond to a comment request. Sources could not be identified because they weren't authorised to publicly speak on the subject. The St. Petersburg International Mercantile Exchange reported that no gasoline was sold by the plant on August 31. Diesel fuel sales also dropped several times. YANOS is owned by Slavneft which is controlled jointly by Rosneft and Gazprom Neft. The refinery, located about 250 km (155 miles), northeast of Moscow, has an oil processing capacity of 300.000 barrels per day or 15,000,000 metric tons annually. According to industry sources, YANOS will process 14.9 million metric tonne of crude oil by 2024. This will result in 2.6 million metric tons of gasoline, 4.0 millions tons of diesel fuel, and 4.7million tons of fuel oil.
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German long yields are at their highest level in 15 years; ECB rate is priced to be near 3% by late 2027
On Monday, German and French government bond yields reached their highest level in more than a decade as the price of oil and natural gas rose. Federal Reserve Chair Kevin Warsh also'suggested that rate hikes might be necessary if inflation continues to exceed target. Investors are watching closely the bond supply of both countries, as Germany increases spending on infrastructure and defense and France enters a tough budget battle. Investors are also concerned that geopolitical tensions may fuel more defence spending. The oil prices increased after new fighting broke out between the U.S. The Iranian army claimed that it attacked the Al Minhad Air Base of the United Arab Emirates after an attack by the U.S., but the UAE denied the claims. Investors also pay attention to the crack spread, which is a measure of refinery margins. The ICE heating oils/Brent cracks spread During the war, oil prices were at $36 and then rose to $84.50. Even if oil price drops on a deal to open the Strait of Hormuz, margins will likely remain high while damaged refinery capacities take time to rebuild. Natural Gas Prices at Highest Since March The price of natural gas, which is a major driver for inflation expectations in the eurozone, increased 5%, reaching EUR70.70. This was their highest level since March. Early August, they were around EUR51. Gas Infrastructure Europe data shows that EU gas stores are 64.7% filled, which is the lowest level ever for this time of year and 12.4% below last year. The yield on Germany's 10-year bonds rose 5 basis points, to 3.3233%. This is the highest level since May 2011. After Warsh's remarks, the yield curve of U.S. Treasury 2-year bonds flattened and the yields increased. On Monday, they were not much different. Commerzbank's rate strategist,?Rainer?Guntermann, said that Bunds are not immune to the U.S. Treasuries market headwinds but they should still perform well as the markets are prepared for the next European Central Bank interest rate hike. He added that "month-end flows" should provide temporary relief to today. The German 2-year bond rate was up 3 basis points at 2.9237%. This is the highest it has been since July 2024. French short-dated bond yields also reached their highest level since summer 2024, at 3.1202%. Preliminary data shows that the rate of inflation in Germany could rise this month. Traders are pricing in the ECB’s?deposit rates at around 2.70% in December. This implies an 80% probability of a rate hike from the current 2.25%. Investors also expect rates to move closer to 3% in late 2027. The deposit rate is priced at 2.98% for September 2027. Mark Haefele is the chief investment officer of UBS Global Wealth Management. "Although there is a greater risk of a hike in September, the most recent sequential?inflation figures are consistent with a further deflation," said Mr. He. FRENCH BORROWING? COSTS AT THE HIGHEST FOR ALMOST 18 years The 10-year yield on French bonds rose by 4.5 basis points to 4.1729%. This is the highest level since November 2008. The 30-year bond yield reached 4.9408% - its highest level since September 2008. The yields on Italian 10-year notes and 30-year bills reached their highest levels since June 2024 and December 2023, at 4.11640% et 4.9355%.
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German unions warn that massive opposition is expected in the Volkswagen turnaround dispute
IG Metall - Germany's largest union - warned on Monday that it would resist any attempts by Volkswagen to undo a restructuring package previously agreed. However, the union did not threaten strikes in advance of a critical board meeting scheduled for the end of this week. Since July, Volkswagen's management has been at odds with its unions over what could be the biggest overhaul of the automaker to date. This includes?plant closings, the carving-out and 50,000 more layoffs. It would be less than two-years after the most recent package, which was reached following months of intense talks and warning strikes, as Europe's largest carmaker tried to?address tariffs, Asian competitors, and a weak Chinese marketplace. Thorsten Groeger, a manager at one of the sites facing closure, told workers in Hanover that if the board tried to question the agreement 'again', the factory floors would be up in arms. "We will fight it with all of our strength." Volkswagen's supervisory council will meet Friday to vote on three competing restructuring proposals. This could lead to a full-blown escalation, which may result in a special shareholder meeting. Arno Antlitz said that the group will do "everything it can to protect jobs as effectively as we possibly can" and warned there is no viable production plan for factories in Hanover Emden Neckarsulm Zwickau. Antlitz stated that if the excess capacity was not reduced and production continued at these sites as before, it would result in a cost disadvantage permanent of approximately EUR1.5 billion ($1.74billion) per year. Volkswagen is one of Germany's largest private employers. The crisis has prompted regional state heads to speak out, worried that plant closures could hurt their position, as the far right AfD continues to climb in the polls. Michael Kretschmer is the leader of Saxony where Volkswagen's Zwickau factory is located. He said that the workers, management, and 'political leaders' must all work together in order to minimize the impact of job cuts and capacity reductions. Kretschmer said, "We need to all work together." He said, "Manufacturing in Germany must become easier, cheaper, and better."
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California utility stocks fall as amended wildfire law preserves insurer claims
Utilities shares fell in premarket trade on Monday after an amendment to the Senate bill in California failed to significantly alter the liability exposure of grid operators in the state. Sempra shares fell 3.5%, while PG&E shares fell 15.7%, Edison International fell 10.4% and PG&E fell 15.7%. Wildfires have made the state 'particularly vulnerable in the past couple of years. Some lawmakers wanted to introduce broader cost sharing reforms to prevent pressure on the Wildfire Fund. California lawmakers, however, settled on allowing issuance of bonds to increase financing and didn't make any changes to the insurers right to recover from utilities. In a statement, California Governor Gavin Newsom stated that "we reached a compromis which blocks hedge funds profiteering from wildfire survivors and bars utility executives taking?bonuses? when their company starts a fire. This compromise will get money to survivors faster." Brokerage?BMO lowered?PG&E's rating to "market perform" from "outperform" after the amendment. Mizuho lowered?Edison's rating to "neutral" from "outperform." The brokerage analysts said that the proposed legislation "does not ensure the long-term solvency of the wildfire fund (and the associated liability cap)," which exposes investors to an open-ended 'wildfire-related tail-risk.
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Japan's oil imports rose 17% in July, as US supplies jumped
Japan's crude oil imports increased by 17% from the previous year in July, as a result of a surge in U.S. Official data released on Monday showed that?shipments, a resurgence in Saudi Arabian purchases and lower supplies from Middle Eastern producers were offset by a rise in?supplies. The Ministry of Trade, Economy and Industry reported that imports increased to 2,38 million barrels a day (11.72 millions kilolitres) for the second consecutive month despite disruptions caused by the U.S./Israeli war against Iran. Imports to?the Middle East dropped 21.4% from July. The United Arab Emirates, Japan's two largest suppliers, and Saudi Arabia both saw a decline of 18.4% and 7.4% respectively. The drop was however less than the declines of 68.7% in April, 49.7% in may and 32.4% June. Imports from the United States jumped five-fold in comparison to a year ago, reaching?about 879.800 bpd (4.3 million kl). Japan imported crude oil from Ecuador, Mexico, Vietnam, and South Sudan. In?2025, the?Middle East will account for 94% of Japan’s crude oil imports. In July, this?share dropped to?58.9%. This was the 10th consecutive decline year-on-year.
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Oil will remain above $80 per barrel despite Middle East supply concerns
Analysts maintain 'forecasts of oil prices above $80.00 a barrel by 2026, as shipping disruptions related to the U.S. - Iran?conflict are expected to reduce supplies. A poll revealed. A survey conducted in August by 31 economists and analyst predicted that Brent crude will average $85.08 per barrel in 2026, and U.S. oil $80.20 per barrel. This is roughly in line July's predictions of $85.22 and $80.14 respectively. "China is the greatest downside risk, as import demand remains sluggish so long as oil prices remain above $80/bbl. Suvro Sarkar is the head of energy research for DBS Bank. He said that the urge to replenish inventories would only occur at lower oil prices. According to analysts polled, the global oil demand is expected to decline by between?1million and 1.6million barrels per day by 2026. China's crude imports dropped to a near-decade low in June, and imports for July remained 24.3% below the year before. SHIPPING DISRUPTIONS SUPPORT PRICING The U.S. - Iran war, which began late in February and escalated to attacks on energy and transport infrastructure throughout the Gulf region, has dramatically reduced vessel traffic along Middle Eastern waterways including the Strait of Hormuz. In August, progress in the efforts to restore shipping along the Strait of Hormuz was limited. U.S. forces attacked two launchers in Iran's Larak island on Sunday. This was the first U.S. attack on Iran since July. Iran has responded by attacking U.S. bases in Jordan. Iranian media cited the Revolutionary Guards. Brent crude traded mainly between $80 and $90 a barrel. Iran and Oman continue to work on details of an agreement regarding the Strait of Hormuz, according to which both countries will share revenue generated by the waterway. Price Futures Group senior analyst Phil Flynn said that traders no longer price an imminent collapse of Gulf exports. However, they do not price a "swift" return to normal. A survey revealed that analysts expect the global oil market to remain in deficit by 2026. Estimates ranged from 1,65 million to 3,5 million barrels of oil per day. SUPPLY SHOCK DOMINATES The International Energy Agency predicts that global demand will fall?by 1.6million bpd by 2026. OPEC, however, forecasts a growth of 580,000 bpd - albeit 200,000 bpd lower than its earlier projections. OPEC+ - which includes the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other allies - announced in August a 188,000 bpd increase?for the month of September. This completed the group's rollback of about 1.65million bpd of voluntary output cuts?introduced by 2023. OPEC+ has lost its ability to influence oil prices six months after the Iran War. Supply disruptions in the Middle East have overshadowed their output decisions, and China's reduced imports, the largest oil importer in the world, are helping to balance the markets.
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Trump will host oil executives following his accusation that refiners are ripping off consumers.
Donald Trump has accused U.S. refiners of ripping off Americans. He also called for an investigation by the Justice Department and encouraged companies to use their profits to'reduce gasoline prices, which spiked during the conflict with Iran. He is expected to welcome many of these companies to the White House on Tuesday to celebrate their efforts to maintain a well-supplied market in an effort to manage gasoline prices, which currently average over $4 per gallon. Executives have had to make an unusual calculation because of the timing. According to those familiar with the plans and the timing, companies received the invitations late last week with little information about the event, or who would be attending. Some executives were left wondering if sending their CEOs to the White House could result in an uncomfortable meeting with an unpredictable President. You want to sit at the table but also consider what might happen once you are there. One company official who was tasked with advising which executives to invite said, "You don't want the CEO to be embarrassed." One company official stated that there were concerns regarding the event, but it was also a rare chance for executives to directly address Trump about issues such as the biofuel policy of the Trump administration and the Jones Act which could affect the availability and cost of fuel shipments between U.S. port. The official stated that "there are concerns about the opticals but you don't want miss the opportunity to have an immediate conversation with the President about issues important to the industry." Caution is warranted. Darren Woods, Exxon's CEO at the time, drew Trump’s ire in January by calling Venezuela in its present form "uninvestable." Trump said that he "was inclined to keep Exxon out of Venezuela" and accused the company of being "too cute." Sources claim that Exxon was not invited to the meeting on Tuesday. Exxon is the third largest refiner in America by capacity. Exxon and the White House declined to comment on who was invited. The invited companies are from the entire refining industry - large integrated oil companies and smaller independent fuel manufacturers. According to those familiar with the plan, they include Marathon Petroleum, Delek US Holdings, Chevron PBF Energy, and Valero Energy. No company responded to requests about concerns regarding attending the meeting. Expanding Refining Capacity White House officials say the meeting's focus will be on increasing U.S. refinery capacity. They claim that Democratic policies have led to years of refinery closures, and discouraged investments in new facilities or expansions. A White House official stated that the U.S. operates at almost 100% of its current refining capacity. The administration is therefore focused on taking "concrete and near-term steps" in order to increase capacity. This will ultimately lead to lower gasoline prices. Officials said that the meeting is taking place as "the administration" works to increase Venezuelan crude oil flowing to U.S. refining facilities. Trump has made cheaper fuel a central part of his economic agenda. However, he has been increasingly enraged by the high prices at the pump, accusing refiners of profiteering, even as he seeks their support in his larger push to increase U.S. production of energy. Prices have been high for most of the year. They soared after the conflict with Iran began in late-February and climbed above $4 per gallon by spring. Prices are the highest they have ever been for this time of the year as we head into Labor Day weekend. The American Automobile Association says August will be the most costly month in history. U.S. refiners reported bumper profits during the second quarter, as gasoline and diesel margins soared. Meanwhile, overseas buyers were turning to 'the U.S. as global fuel supplies were disrupted. Marathon, Phillips 66, and?Valero - three of the biggest U.S. refining companies - reported a combined second quarter profit of $12.6 billion, according to. Stephen Brown, former Washington energy lobbyist, consultant and advisor to CEOs in presidential politics, has said that he wouldn't recommend sending a chief executive officer to the event, given Trump's treatment towards the industry over the past few months. Brown stated that "this event is a TV moment, pure performative, which can only embarrass our company."
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Japan's oil imports in July rose 17.0% year-on-year - METI
The Ministry of Economy, Trade and Industry announced on Monday that Japan's crude imports increased 17.0% from a year ago to 2.38 million barrels a day (11.72 millions kilolitres). The data revealed that Japan's domestic oil products?sales fell by?2.4% last month compared to the same period a year ago, falling to?2.16 million barrels per day. 1 kilolitre equals 6.2898 barrels The data revealed that gasoline sales fell 3.3%, to 791.233 bpd. Kerosene, however, was up 5.5%, to 54.238 bpd. Below is a table that shows Japan's July product sales, imports, and other statistics. Figures are converted from kl to bpd unless otherwise stated. The inventory volumes are expressed in millions of barrels. The percentage changes are based upon bpd. Product/Volume Jul Jun M/M(%) Yr/Yr(%) Crude Imports 2 377 800 2 103 131 16.8 17.0 Processed : 2,402,911 2,173,006 14,3 10.6 Shipment 827 1 092 -21.8 62.3 Oil product sales 2,162,380 2,015,426 10.9 -2.4 Gasoline 791,233 7005,715 15,9 -3.3 kerosene 54,238 63,907 -12.3 5.5 Naphtha (502,315)?451,781 14.9.5.1 Imports of products 404,103, 334,483, 24.8 -22.2 Gasoline 81 551 25 713 227.7 -23.8 kerosene 7,594 17,609 -55.4 56.2 Naphtha - 291,218 268,994 11.9 Exports of products 573 408?369 529 60.3 39.3 Gasoline 63 276 43 702 49.6 103.6 kerosene 19,832 20,722 -1.1 33.7 jet fuel 163,096 127,459 32.2 -5.9 Gas oil 158 728 43 893 273.7 141.6 Fuel oil B, C 167 347 132 692 30.3 36.5 Refinery Production 2,339 955, 2,139 639 11.7 Gasoline 784 343 694 294 16.7 13.4 kerosene 106,316 135,546 -19.0 -8.6 Naphtha 219 432 191 828 18.2 6. jet fuel 236,659 215,659 13.4 11.9 Gas oil 646,987?541,847 19.7 23.4 Month-end Inventory Jul/Jun M/M (%) Yr/Yr Crude 72.3 69.5 4.2 2.0 Products 59.3 60.2-1.4 1.9 Gasoline 10.8 10.2 6.18 kerosene 12.7 11.7 ?8.9 -10.1 Click on to see Japan's monthly refinery production rate. This table shows Japan's crude oil imports. The amounts are given in kilolitres. Share of Country in Jul 2026 M/M/Yr/Year Total 11,719 259 100.0 16.8 170.0 Middle East 6,897.089 58.9?10.3-21.4 Saudi Arabia 3,204,880 27.3 47.9 -7.4 Arab-L 3,157,464 - Arab-S-L 47,416 - Oman 183 880 1.6 Oman 183 880 United Arab Emirates 3,508 329 29.9 2.22 -18.4 Murban 2,230,243 - U-Zakum 318,043 - DAS 960 043 - South East Asia 47.620 0.4 -26.5 46.0 Vietnam 47.620 0.4 Bach Ho 47,620 - North America 4,336,357 ?37.0 33.6 360.6 United States of America 4336,357 37,0 33.6 360.6 Wtim 2,825,294 - Mars 918.512 - WTL?433,515 T-Horse 159,036 - Central and South America 370 909 3.2 93.4 114.8 Mexico 165,473 1.4 Isthmus 165,473 - Ecuador 205,436 1.8 7.1 19.5 Napo 205,436 - Africa 46,484 0.4 27.8 Republic of South Sudan 46 484 0.4 27.8 S-Nile 46,484 Oceania 20,800 0.2 -82.3 -49.7 Australia 20,800 0.2 82.3 -49.7 Pyrenees 20 800
California utility shares fall as wildfire bill fails in its attempt to reduce liability risks
California's electric utilities' shares fell'sharply' on Monday, after a Senate Bill amendment failed to do much to'reduce' their exposure to wildfire liabilities or address the 'long-term''solvency' of the state's Wildfire Fund.
Sempra shares fell 3.4%, while PG&E's and Edison International's fell 19.7%, 21.3% and respectively.
BMO Capital Markets lowered PG&E from "outperform" to "market perform". Mizuho Securities also downgraded the utilities.
The amended Senate Bill creates fast-pay programs?for survivors of wildfires, expands efforts to prevent and prepare for wildfires and changes the rules that govern the Wildfire Fund's Continuation account.
According to analysts at?Mizuho, the legislation does not provide a mechanism for replenishing the wildfire funds. It also does not separate the liability of utilities from the solvency and viability of the fund. The fund is partially funded by utilities.
California utilities are facing increasing wildfire liabilities. PG&E is expected to emerge from bankruptcy in 2020, after its equipment has been linked to several deadly blazes.
The state has created a Wildfire Fund of $21 billion to cover future claims. Meanwhile, utilities are pushing for reforms that will reduce their exposure to costs associated with wildfires.
BMO Capital Markets stated that the bill would not guarantee the fund's solvency in the long term or protect utilities against wildfire-driven bankruptcy. The new $21 price goal for PG&E is based on the assumption that wildfire liabilities will not be capped after 2030.
The bill permits the administrator of the Continuation Account, to issue bonds in support of?the account? and?related costs. Mizuho stated that the provision would not add new money to the fund, but rather extend its existence.
The law also protects the ability of insurers to recover payments related to wildfires from?utilities, and prohibits private equity groups from purchasing wildfire claims or financing wildfire advertising.
California Governor Gavin Newsom released a statement saying, "We have reached a compromise which?blocks hedge fund profiteering from wildfire survivors, bars utility executives taking bonuses when their company starts a fire and puts money in the hands of survivors faster."
(source: Reuters)