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MORNING BID EUROPE - Oil swept on Troubled Waters
Wayne Cole gives us a look at what the future holds for European and global markets. The week has started off with a shaken market as Iran and?United States trade wars in the Gulf while Tehran claims that it closed the vital Strait of 'Hormuz. The strait of?Hormuz is a vital waterway for commercial traffic. According to U.S. officials, 20 ships have been escorted by U.S. officials in the past 24 hours. The UKMTO reported that transits were already down to 10 on Friday. Ship tracking sites also showed that there were no ships in the narrowest section of the strait by Monday or, at least, none with transponders turned on. Brent and U.S. oil rose almost 4% and 10-year yields increased by 2 basis points. The dollar also gained in value. The Nikkei led Asian stock markets lower and European share futures are down about 0.6%. Nasdaq Futures fell 0.6% as investors focused more on the upcoming earnings season, and if high expectations for chipmakers and AI-related companies can be met. The major banks will begin their earnings season on Tuesday. Netflix and General Electric also have a lot to look forward to. Analysts at BofA warned that the AI capex boom is eroding the cash generation. Hyperscalers have spent $234 billion in this year, and the free cash flow for the future will be negative for the very first time since 2007. Investors are also pointing to the possibility of an interest rate hike from the Federal Reserve just one day before Chairman?Kevin Warsh will be addressing Congress for the very first time as his new role. The headline inflation rate for June could be lower than the 4.2% reported on Tuesday, as petrol prices fall. However, some of this will reverse once oil prices rise again. The dollar strengthened to 162,05 yen on Monday, regaining ground lost last Friday after Japanese Finance Minister Satsukikatayama floated a?idea? to encourage the Government Pension Investment Funds (GPIFs) of $1.8 trillion and other retirement vehicles to bring home some of their cash. The pound has eased to $1.3381 in anticipation of a crucial week for UK politics. Andy Burnham will be officially?anointed on Friday as Labour leader and named as Prime Minister on July 20. Market developments on Monday that may have a significant impact - Appearances of Fed Board Governor Christopher Waller; Fed Vice Chair for Supervision Michelle Bowman; ECB Member Isabel Schnabel; Bank of England Executive director Ruth Smith
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Copper drops as Middle East conflict renews inflation risk
The price of copper fell on Monday as the fighting between the U.S., Iran and other countries intensified.?Tehran announced that it had once again closed the Strait of Hormuz, a vital energy corridor. Benchmark three-month Copper on the?London Metal Exchange fell 0.72% to $13,387 per metric tonne by 0300 GMT. Shanghai Futures Exchange's most traded copper contract lost 0.75% to 103,030 Yuan per metric ton. The U.S. forces and Iranian forces traded heavy drone and missile assaults at the weekend. This 'diminished risk appetite' and reignited fears that higher inflation and energy prices could prompt policymakers to raise interest rates for longer. The price of oil increased while non-yielding gold and silver declined. High interest rates have a negative impact on the economy and industrial metals. The U.S. dollar strengthened ?slightly over the weekend, making greenback-denominated commodities like copper more expensive for ?buyers using other currencies. In the meantime,?aluminium has largely ignored a possible disruption in supply. It looked like it was returning to full capacity after an interim peace agreement following a war that broke out on February 28, firstly in the Middle East. On the LME the metal was stable, ticking up 0.05%. It fell by 0.35% on the SHFE. Emirates Global Aluminium, a major supplier of alumina in the UAE, announced on Friday that it had restarted its alumina refining plant. The LME warehouses registered with the exchange also showed that visible aluminium stocks were at their lowest level since 2022. In June, the exchange reported that 95% of all available Russian-origin aluminum stocks were in LME warehouses. Consumers have found alternative materials to offset the worst of the shortage despite the conflict and declining inventories. Other?LME Metals: Zinc lost 0.71%;?lead fell 1.08%; nickel dropped 1.02%; and Tin fell 0.24%. The SHFE saw zinc fall 0.64%; lead fell 0.78%; nickel rose 0.05% and tin dropped 1.38%. Reporting by Solomon Cefai, Editing by Harikrishnan Nair
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Minnesota Governor mobilizes National Guard for Wildfire Fighting in Northern Part of State
By Erwin Seba Minnesota Governor Tim Walz mobilized the state National Guard troops on Sunday to fight wildfires along Minnesota's northern border with Canada. According to the Minnesota State website, these fires have burned more than 800 acres over five days. They are still not contained. The fires are among a series of fires that have been raging across the United States due to the hot and dry conditions caused by El Nino. Walz, a Democrat, said: "I have declared a 'peacetime emergency' and mobilized the National Guard in order to help with wildfire suppression efforts in northern Minnesota." "Minnesotans express our deepest thanks to all first responders who work around the clock to ensure the safety of their neighbors," said Walz, a Democrat. The Superior National Forest in northern Minnesota is currently ablaze with?16 fires. This forest normally receives around 150,000 visitors during the summer. According to the website of the Minnesota Natural Resources Department, park rangers escorted visitors out of the parks over the weekend. According to the National Weather Service, the high temperatures over the weekend increased fire risks.
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Nine people are killed and 10 injured in a traffic accident in Mexico, including four Americans
Civil Protection reported that a multi-vehicle crash?in Mexico, caused by a tractor-trailer, left nine 'people dead 'and ten injured, including four U.S. residents, on a highway within the state of Jalisco. The report from the agency indicated that two of the victims were minors. Two members of the National Guard are also in serious condition. They have been 'transferred' to the Magdalena Hospital, Guadalajara. Local media posted videos on social media showing several vehicles burning?on the highway that connects Guadalajara with?Tepic. Four patients with minor conditions, all?U.S. "Four patients in minor condition,?all?U.S. citizens, were transported to the Arboledas Hospital?in Guadalajara?by a private ambulance?from the highway," Jalisco Civil Protection said. (Reporting and writing by Daniel 'Becerril, in Mexico City; Sarah Kinosian, in Caracas; editing by Stephen Coates.)
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Oil prices jump 3% following US and Iran's increased strikes in the Middle East
The oil prices soared?on?Monday as Iran increased its strikes against?Gulf States following US attacks, threatening energy?shipments through the Strait?of Hormuz. Brent crude futures rose $2.34 or 3.08% to $78.35 at 2311 GMT. U.S. West Texas Intermediate crude climbed $2.21 or 3.09% to $73.62 a barrel. The U.S. and Iran launched new strikes against each other over the weekend. This is the latest in a series of counter-attacks and attacks on shipping through the Strait. U.S. president Donald Trump announced on Sunday that the Strait of Hormuz was open for commercial?traffic. Iran had earlier declared that it had closed the Strait of Hormuz after a vessel traveling on an unapproved route was struck. Shiptracking data from Kpler revealed that six vessels crossed the strait Sunday, the lowest number for five weeks. The increasing attacks have cast doubt on the future a U.S.-Iranian interim agreement signed last week that was intended to reopen strait after 60 more days of negotiation and end war. In its report published on Friday, the International Energy Agency said that following the agreement, oil supplies worldwide?rose by 4,1 million barrels per days in June but were still 9,4 million bpd lower than pre-war levels. ANZ analysts wrote in a note that the chances of a relatively 'quick resolution' to the skirmishes over the weekend may have been lowered. IG analyst Tony Sycamore stated that the'relatively tame' rise in oil prices indicated the market believed the current flare-up was an escalation of a fragile truce, and fell far short of a total collapse of the ceasefire. In a letter, he wrote: "How accurate this view is yet to be determined."
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Five people were killed in Israeli attacks on Gaza, including a young girl, according to medics
Palestinian officials said that Israeli attacks on Sunday killed at least five people, including a nine-year-old child. Medical personnel said Israeli gunfire was directed at an encampment of a 'tent' on the eastern edge of the Al-Bureij Refugee Camp in central Gaza, killing Tala Abumatar. The Israeli military didn't immediately comment on Tala Abu Matar's death. Four people were killed in an airstrike on a metal foundry located in the Sabra neighborhood of Gaza City. Three Israeli missiles were reported by witnesses to have struck the site. Israel's military claimed to have struck "terrorist infrastructure" without providing any further details. Despite the fact that Israel and Hamas agreed to a ceasefire in October 2025, it failed to stop Israeli attacks which have killed over 1,000 Palestinians in Gaza since its implementation. In the same time period, militants have killed four Israeli soldiers in Gaza. Hamas leaders are in Cairo to continue discussions about implementing the second phase U.S. president Donald Trump's Gaza Peace Plan. According to sources familiar with the talks, there are discussions about Hamas disarmament, and Israeli army withdraws. However, they add that a breakthrough has not yet occurred. Hamas controls a small strip of land on the coast where nearly all of Gaza's two million residents, many of whom have already been displaced multiple times, live. According to Israeli statistics, Hamas-led militants killed 1,200 people during their cross border attack into Israel on October 7, 2023. Gaza's health ministry reported that more than 73,000 Palestinians had been killed on the territory since. Reporting by Nidal Al-Mughrabi, Editing by Helen Popper
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Three people were killed in Israeli attacks on Gaza, including a young girl, according to medics
Palestinian officials reported that Israeli attacks on Gaza Strip killed three people, including a nine-year-old child. Medical personnel said that 'Israeli gunfire was directed at a tent camp on the eastern side of Al-Bureij Refugee Camp in central Gaza, killing 9-year-old Tala Abmatar. The Israeli military didn't immediately comment on Tala Abu Matar's death. Two people were killed in an airstrike on a metal foundry located in Gaza City's Sabra neighborhood. Three?Israeli rockets were reported by witnesses to have hit the site. Israel's military claimed to have struck "terrorist infrastructure" without providing further details. The ceasefire agreement between Israel and Hamas in October 2025 halted major combat in the enclave. However, it failed to stop Israeli attacks which have killed more than 1,000 Palestinians since its implementation. In the same time period, militants have killed four Israeli soldiers in Gaza. Hamas leaders are in Cairo to continue discussions on the implementation of phase two of President Donald Trump's Gaza Peace Plan. According to sources familiar with the talks, there are discussions about Hamas disarmament, and Israeli army withdraws. However, they add that a breakthrough has not yet occurred. Hamas controls a small strip of land on the coast where nearly all of Gaza's two million residents, many of whom have already been displaced multiple times, live. According to Israeli statistics, Hamas-led forces killed 1,200 people during their cross-border attack on israel on October 7, 2023. Gaza's health ministry reported that more than 73,000 Palestinians had been killed on the territory since. Reporting by Nidal Al-Mughrabi, Editing by Helen Popper
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Iraqi Prime Minister to Visit Washington on Monday, Oil and Gas Deals Expected
Iraq's Prime Minister will visit Washington, D.C. on Monday to strengthen strategic ties. Oil and gas deals are expected to be signed as part of an broader push towards economic, trade, and investment cooperation. Iraq is trying to maintain a balance between its relations with Iran, its neighbour, and the U.S. Haider al Aboudi, a government spokesperson, said that the agreements will include memorandums?of understanding in the oil and natural gas sector. Iraq is preparing to bring in various U.S. firms to provide a boost to oil production. Al-Aboudi of Iraq's State News Agency said that the planned oil and gas deals would also create alternative export outlets in order to reduce Iraq’s exposure to disruptions at the Strait of Hormuz. Iraq has also suffered a decline in oil revenues, as have other Gulf oil producers due to the closure of the crucial shipping route during the U.S. - Iran war. Al-Aboudi stated that strengthening Iraq's military forces will also be discussed in Washington. The relationship between Iraq and the U.S. has been strained at times over the presence of U.S. soldiers in Iraq, Baghdad’s ties with Iran, and U.S. pressuring Iraq to curb the influence Iran-backed armed group. Ali al-Zaidi, however, received 'congratulations' from U.S. president Donald Trump after he was nominated to the premiership in April. Trump said that he hoped Baghdad would work more closely with Washington. Reporting by Muayad?Hameed. Eman Abouhassira wrote the article. David Goodman, Mark Potter and Mark Potter (Editing)
Archrock to buy natgas compression firm TOPS for $983 mln (July 22).
Energy infrastructure business Archrock said on Monday it would buy agreement gas compression services provider Total Operations and Production Services (TOPS) for about $983 million in cash and stock from Apollo Global Management funds.
The acquisition will increase Archrock's Permian Basin compression capability by 30% to nearly 2.2 million operating horse power and its Permian-based possessions will represent more than half of its total operating horse power.
The deal comes as dealmaking in the Permian shale basin, the biggest U.S. oilfield that straddles West Texas and New Mexico, has actually reached this year after a bumper 2023.
The transaction is anticipated to be more than 10% accretive to revenues per share and more than 20% accretive to money readily available for dividend per share in 2025, Archrock CEO Brad Childers stated in a declaration.
Houston, Texas-based Archrock will release 6.87 million new shares to TOPS, and will fund the $826 million money part with a combination of equity and financial obligation.
Archrock's shares were down 6.9% in extended trading.
The offer is anticipated to close by completion of 2024.
(source: Reuters)