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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 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."
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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
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Shanghai Zinc has its best month since January due to tight supply
Shanghai zinc rose on Monday as a result of tightening supply outside China. This is the best month for Shanghai zinc since January. By 0715 GMT, the?most traded zinc contract at?the Shanghai Futures Exchange had risen?1.66%. It was now worth?26.710 yuan (US$3,975.35) per metric ton. This brought its August gain up to 5.57%. It is the largest monthly increase since January. The metal is mainly used to galvanize steel. Zinc shortages outside China are encouraging exports of zinc from?China. Daniel Hynes is a senior commodities analyst at ANZ. He said that the stockpiles in zinc LME warehouses have fallen by more than 20 percent over the last two months. "Disruptions at mines has led to smelter?charges as low as USD110/t." London Metal Exchange closed Monday due to a British public holiday, but zinc prices in Britain reached a four-year peak on Friday. Copper prices, like zinc, have been supported by concerns about inventory. The red metal is in short supply as the material is being sucked up into the U.S. to prepare for a possible tariff on imported refined copper. The SHFE's most traded copper contract increased by 0.44%, to 109.100 yuan per ton ($16,237.78). U.S. officials make hawkish comments about interest rates. Analysts from Chinese broker Galaxy Futures stated in a note that Federal Reserve Chairman Kevin Warsh is exerting downward pressure to copper prices. According to CME's FedWatch, traders on Sunday had priced in a 60% probability that the Fed would raise interest rates at its September meeting. This is up from 40% one week prior. Rates that are higher for longer can be a problem for commodities such as copper, which depend on economic growth. The SHFE monitored warehouses reported total copper stock on Friday Last week, metal stocks on-warrant - that is, metal not yet marked for withdrawal – were down by more than 19%. Aluminium gained 0.61% among other SHFE metals. Lead gained 0.8%. Nickel lost 0.94%. Tin lost 0.71%.
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Eskom's profit doubles, but sales weakness and municipal debt clouds outlook
South 'African Eskom has more than doubled their annual?profit? in the 2026 financial period, thanks to a turnaround of operations and higher electricity rates, but weaker demand, and increasing municipal debt, are clouding their prospects. State-owned utility SA Power said Monday that it had made a profit of $30.3 billion rand in the fiscal year ending March. This was compared to a restated $14.0 billion rand in the previous year. The power cuts that have hampered Africa's largest economy for over a decade are now much less frequent. Eskom reported that it had only implemented rolling blackouts four times during the financial year. This compares to 13 days one year ago and 329 days last year. The revenue rose by 4.1% due to a 12.7% increase in the average tariff, but a decline of 6.2% in electricity sales volume partially offset this gain. Calib Cassim, the outgoing chief financial officer, said that the weaker electricity sales, and the idleness of the Mozal aluminum smelter (which has been placed in care and maintenance because Eskom and it could not reach an agreement on tariffs), would affect the results for the current fiscal year. MUNICIPAL DUT CASTS SHADE Gross debt was 356 billion rand by the end of march, up from 326.7 billion rand one year ago. Unpaid municipal debt is the biggest threat to South Africa's dominant power supplier. Eskom accounts for over 40% of its sales from municipalities and metropolitan areas. Eskom reported that municipal debt increased by 17.9% to 111.6 billion Randd, and could reach 358 billion rand in the year 2031 if no action is taken. Cassim stated that Eskom's earnings could have been 15 billion rand more if it had collected the 15.8 billion Rand owed by municipalities. This is because revenue received from municipalities who do not pay is only recognised when cash is received. He said that Eskom could be in a better position to meet capital requirements without government assistance, but the municipality's debt must be resolved. South?Africa is holding municipal elections on November 4. South?Africa will hold municipal elections on?November 4.
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.
(source: Reuters)