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Chevron's refining division posts its first loss in 4 years, missing earnings estimates
Chevron Corp. reported earnings for the fourth quarter below Wall Street expectations on Friday, as low margins forced its refining division into a first-time loss since 2020. The second largest U.S. oil company posted total earnings for the three-month period ending Dec. 31 of $3.24 Billion, up from $2.26 Billion in the same time last year. The company's adjusted earnings per share, which were $2.06, fell below the Wall Street estimate of $2.11, due to weak fuel sales. Fuel sales profits fell across the industry in 2012, as demand for oil slowed down after the pandemic and the economic situation in China and the United States, two of the largest oil consumers, deteriorated. Chevron’s downstream business suffered a loss of $248 million during the fourth quarter of 2024. This compares to a profit made of $1.15bn in the same time period last year. Margins softened in both the U.S. and international markets, but weak jet fuel demand aggravated troubles for the Houston-headquartered company's domestic business. Chevron reported that U.S. fuels sales were down 3% on an annual basis. Chevron's fourth-quarter oil production was relatively unchanged, at 3,35 million barrels equivalent per day (boepd), as compared to 3.39 million boepd one year earlier. Reporting by Seher dareen and Arunima kumar in Bengaluru, Editing by Saumyadeb chakrabarty
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Markets prepare for Trump tariffs and US inflation data
The global stock market stabilized on Friday following a volatile week, thanks to the introduction of a Chinese artificial intelligence (AI) model that is low-cost. Investors braced themselves for U.S. Tariffs against Canada and Mexico starting as early as this Saturday. Apple's relatively strong sales forecasts overnight helped to support the market sentiment. European stocks rose 0.4% early in trading while Wall Street futures rose between 0.4 to 0.7%. Investors reacted badly to the AI model of Chinese firm DeepSeek on Monday, sending shares in high-profile technology names like Nvidia and Oracle plummeting. The tech stocks have recovered some of their losses. Microsoft and Meta CEOs defended their massive expenditures to remain competitive in the AI sector. Investors are also focused on the looming threat of U.S. President Donald Trump to impose 25% tariffs on Mexico, Canada and other countries. This has helped boost the dollar and gold prices and put pressure on the Mexican peso as well as the Canadian dollar. Michael Nizard is the multi-asset Chief Investment Officer at Edmond de Rothschild. He said that markets are undervaluing the risks associated with Trump's tariffs. Europe may be his next target. After the Federal Reserve kept rates unchanged on Wednesday, the U.S. inflation figures due on Friday will be closely scrutinised to determine the direction of interest rates. The data released on Thursday indicated that the U.S. economy slowed down in the fourth-quarter, but was still robust enough to allow investors to expect the Fed will only lower rates gradually this year. The U.S. Dollar Index was up last 0.1% for the day, and is on track to gain 0.7% on a weekly basis. As expected, the European Central Bank cut rates on Thursday. The market expects the Bank of England to follow suit next Monday. Both the euro and the sterling fell slightly on Friday. The yen last traded in Japan at 154.71 dollars. Recent yen gains are due to expectations of more rate hikes from the BOJ in this year. Ryozo Himino, the BOJ's Deputy Governor, said that the BOJ would continue to increase rates if prices and the economy move in accordance with central bank forecasts. Gold rose to a record of $2,800.99, and was flat for the day. Brent crude futures fell 0.3% to $76.7 per barrel. U.S. crude oil futures fell 0.2% to $72.62 per barrel. The stock markets of mainland China, Hong Kong, and Taiwan were closed to celebrate the Lunar New Year. The MSCI Asia-Pacific broadest index outside Japan fell 0.1% but is still on track for a gain of about 1% this month.
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Sources say that Syria has turned to intermediaries after the low level of interest in tenders for its oil imports.
Several trade sources said that Syria wants to import oil through local intermediaries because its first post-Assad import bids did not attract much interest from oil traders, due to the ongoing sanctions and financial risk. According to tender documents, the caretaker government of Syria issued tenders for the import of 4.2 million barrels crude oil as well as 100,000 tons of each fuel oil and diesel. Sources said that the tenders which closed on the Monday have not been awarded, and the government has now begun negotiating with local firms to meet the requirements. After Iran seems to have stopped sending regular oil deliveries, the new authorities of Syria may face more energy security problems. The names of local companies or the companies that might be able sell the large quantities of oil requested in the tender could not be confirmed. The ministry of petroleum in Syria did not respond immediately to an email request for comments. Ahmed al-Sharaa said that he would form a transitional inclusive government, representing different communities, to build institutions and govern the country, until free and fair elections can be held. Sources at the companies cited sanctions and financial risk as reasons for the refusal of major oil traders to participate in the tenders. There is no clear answer as to whether EU sanctions are lifted. The problem is compounded further by the wider banking issues," said a Middle East trader who was familiar with this tender. The EU announced on Monday that it had reached an agreement on a roadmap for easing sanctions against Syria in order to jumpstart its recovery. However, it said it would take a gradual approach and reverse it if it wanted to maintain leverage. Sources said that payment terms were also a deterrent to potential sellers. The sources said that sellers were discouraged by the terms of payment. The 13-year civil conflict in Syria decimated Syria's energy sector, and the new government is facing a steep battle to restore energy stability. The oil minister of the country, Ghiath Diab, told CNBC Arabia in early October that oil production in areas controlled by the government is 10,000 barrels per days, as opposed to 383,000 barrels a day before international sanctions were imposed in 2011. Kpler, a shipping analytics company, reports that no crude oil shipments from Iran have been recorded since November. CNBC reported that some fuel is produced at Syria's two refining plants, according to the minister. Syria also published an import tender of 20,000 tons LPG which closed on January 20.
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French nuclear giant EDF raises production forecast to 2025 and beyond
EDF, France's nuclear power company, has increased its forecasts of production for 2025. This is after the strong recovery in 2024. The state-owned energy giant raised its production forecast on Thursday night to between 350-370 terawatt hours (TWh), compared with the previous 335-365 terawatt hours (TWh) expected for 2025-2026. Why it is important EDF's maintenance schedule has caused challenges over the years, but a strong winter of nuclear production has helped French baseload contracts to trade at a lower price than German ones. CONTEXT Nicolas Goldberg, a consultant at Colombus Consulting, stated that EDF management had set a goal to reach 400 TWh in nuclear production. This is a conservative estimate. After the Russian invasion of Ukraine 2022, which caused electricity prices to spiral out of control and hurt European economies, Europe still struggles with a lack in power demand by large industries. KEY QUOTE Goldberg stated that "we could have expected the nuclear production to continue increasing." He added, "What I believe is that there's still a backlog of significant work on the nuclear fleet which is why these conservative estimates are made." By the Numbers EDF's production for 2024 was revised up during the prior year to 361.7 TWh. This is 12.9% more than the 320.4TWh produced in the 2023. The company has recovered from stress corrosion problems that forced a large part of its fleet offline in the 2022. GRAPHIC
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Japan's Kansai Electric increases FY profit forecasts on nuclear energy, demand
Kansai Electric Power Co, Japan's largest nuclear power company, has raised its profit forecast by 40% for the fiscal year that ends in March to 365 billion Japanese yen ($2.4billion) due to higher nuclear power runs as well as stronger earnings from its transmission and distribution businesses. Kansai Electric has five nuclear reactors with a combined power of 4.6 gigawatts. This was the case as of December 31. The company increased its nuclear capacity factor forecast, an indicator of nuclear power load to 85% on Friday from the previous expected 80%. Kansai Electric expects its profit in the transmission and distribution sector to increase by 73 billion Japanese yen compared to previous estimates. The company also targets higher gas and electricity sales due to the higher demand forecast in the Kansai region, Japan's second-busiest area after the Tokyo Metropolitan Area. This includes Osaka and Kyoto. Kansai Electric's nine-month period ending in December saw a 362 billion-yen increase in its net profit, a result of increased nuclear operations, and a gain of 63 billion-yen from the sale a 28 percent stake in UK-based Electricity North West. Results from Kansai Electric which retained a 12% share in Electricity North West following the deal are different from those of major Japanese power companies. JERA, Japan's largest utility, saw profits fall by half to 155 billion Japanese yen between April and December due to weaker performances in the overseas power generation business, fuels, and renewable energy, including Taiwan. Tokyo Gas, Japan’s largest city gas provider, saw its profit for the quarter drop by 68% to 36,6 billion yen due to rising raw material prices. It revised its guidance for the full-year to 72 billion yen, from an earlier expectation of 81 billion. JERA's profit forecast for the entire fiscal year remained at 200 billion yen.
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Marico, India's largest company, misses profit forecasts as costs outweigh price-led growth
Indian consumer goods maker Marico reported a smaller-than-expected quarterly profit on Friday, as higher raw material costs and marketing spends overshadowed price increases-led growth. Parachute Coconut Oil's profits were impacted by rising prices for raw materials such as copra and vegetable oils. The company is also facing intense competition, and continues to invest heavily in marketing and advertising. Marico's third-quarter expenses increased 17.7%, to 23,18 billion rupees (267.54 millions dollars) The net profit for the year was 3.99 billion rupees (46.05 millions), up from 3.83 billion rupees. According to data compiled and analyzed by LSEG, analysts expected a profit in the range of 4,02 billion rupees. The revenue, however, was 27.94 billion rupees. This is a 15.4% increase from the previous year, mainly due to an improved rural demand and higher product prices. Marico announced that it would increase the prices of its products to compensate for an expected "firmness in commodity prices". It noted that copra prices were up 38% during this financial year. The company also stated that its revenue will increase by double-digit percentages in the medium term, as it increases its market share across all its brands. Hindustan Unilever, the industry leader and Dove soap maker, reported results below expectations last week. They also forecast further margin pressures.
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Asia Gold-Indian demand muted amid record prices, with eyes on budget
Indian gold demand was subdued as prices surged and buyers awaited the federal budget. Trading activity in other Asian hubs remained muted because of the Lunar New Year holiday. This week, Indian dealers offered a discount Up to $35 per ounce discount on official domestic prices compared with the $38 reduction last week. The retail demand has been minimal because of the price spike. Jewellers have stayed away from the market because they don't want to purchase before the budget is set," said Chanda Vekatesh of CapsGold, a bullion merchant based in Hyderabad. A Mumbai-based dealer from a bullion import bank said that at the beginning of the week, discounts were high. However, they dropped sharply by the end of the day as traders began to speculate about a possible duty increase in the budget. Nirmala Sitharaman, Finance Minister, will present her budget for the next financial year on February 1, after a reduction of import taxes on gold was made in the last budget. The domestic gold price in India reached a record-high of 82210 rupees for 10 grams. Meanwhile, the international spot gold price hit a new high of 2,800.99. Bullion was traded in Japan A discount of $3.5 or a premium of $1. A Tokyo-based trader said that despite gold's higher price, investors still look for the opportunity to buy dips. Another trader said that such high prices could impact on the investment and physical demand of bullion. This week, the markets in China and Hong Kong are closed for Lunar New Year. Swiss customs data revealed that gold exports to China, the top consumer of Swiss gold, fell by over 74% from November. ($1 = 86.2720 Indian rupees). (Reporting and editing by Shash Kuber in Mumbai, and Rahul Paswan from Bengaluru)
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Take Five: the big Trump tariff countdown
The deadline for President Donald Trump to impose tariffs is fast approaching, while the U.S. releases data on jobs and the markets gauge the new AI landscape before major tech companies report. Bank of England is deciding on interest rates, and lenders across Europe are also publishing their results. Kevin Buckland, Saqib Ahmad, Lewis Krauskopf, and Amanda Cooper, in London, provide a guide to global markets for the coming week. 1/T DAY Everyone wants to know the severity of Trump's tariffs. From currency traders and bond investors to Fed officials and other foreign powers. Trump's promise to impose 25% tariffs on Canada and Mexico until illegal migrants and fentanyl are stopped from crossing their border could be the most telling sign so far. Tariffs will be applied to a combined trillion dollar of U.S. bound shipments per year. Canada has launched a crackdown on fentanyl to head off any possible action. Mexico, in December, made the largest fentanyl arrest in its history. China is arguably a more interesting case. Anyone can guess whether the 10% tariffs that have been mooted will also be in place for Saturday. The White House confirmed that it is still seriously considering the possibility, despite Trump saying he did not want to use tariffs against China after a "friendly phone call" with Xi Jinping. Should I stay or should I go? Investors are assessing the prospect of further interest rate reductions and the potential impact that new Trump Administration policies may have on the labour market. The U.S. monthly jobs report is due to be released on February 7. The blowout December jobs report led to doubts over whether the Fed could ease its monetary policy any further. This sent Treasury yields soaring. Inflation data that were encouraging did calm the market, but a strong January jobs report may change everything. Fed Chair Jerome Powell has said that he will not cut rates until inflation and employment data indicate it is appropriate. Trump's agenda on the labour market is a big unknown. It includes a crackdown on immigration and plans to reduce the federal workforce. The White House offers 2 million federal workers financial incentives to leave. 3 TECH-TONIC SHIFTs Investors have speculated for years about what could slow down the AI investment steamroller. Now, they have a fresh perspective: the emergence of China's AI sensation DeepSeek. It has rewritten assumptions about computing power and the amount of money needed to develop state-of-the art models. This change shattered Nvidia stock's value, causing it to plummet. DeepSeek also challenges the dominance of U.S. tech, and raises questions about the competitive advantage of the seven top tech stocks, known as the Magnificent Seven. Investors will be able to decide whether the recent AI market volatility represents a warning for future challenges, or an opportunity to invest in this rapidly expanding sector. 4/IN FOR A SLEEZE The pace of European bank earnings will pick up in the coming week, as BNP Paribas and Societe Generale report their fourth-quarter results, followed by UBS and Santander from Spain and Switzerland. The majority of lenders will have wrung out enough extra cash from higher interest rates, helped by soaring revenues in investment banking. This will boost their profits to keep the two-year rally going. Investors are looking for signs that the recent surge in deal-making is not over. Still, there are challenges. The falling interest rates put pressure on the banks' earnings on loans and their deposits. Meanwhile, the U.S. economic growth is accelerating. Deutsche Bank, a German bank, has caused concern after it reported a steep drop in profit and abandoned a major goal regarding costs. This sent its shares down. 5/DECISION TIMES On Thursday, the Bank of England will meet to set interest rate. The markets haven't fully priced in a quarter point cut but economists appear to believe that this is likely. UK data are weakening. Multiple measures of employment indicate cracks in the labour markets, and unexpectedly consumer spending fell during the crucial holiday shopping season. The BoE predicts that growth will remain flat in the fourth quarter of 2024. Many banks believe that the British economy will struggle to grow by even 1% in this year, despite plans from Finance Minister Rachel Reeves to revive growth. The bond market turmoil that occurred earlier this month pushed government borrowing costs for 10-year bonds to their highest level since 2008. Gilt yields are down, but still uncomfortably high at 4.5%. This is more than any other G10 country except New Zealand.
Why is Russia trying to seize the strategically important Ukrainian city of Pokrovsk
After capturing a series of villages in its southern part, Russian forces have begun to surround the strategically significant eastern Ukrainian city of Pokrovsk. Ukraine has also halted its production at its one coking coal mining near this city.
Here are some key facts about Pokrovsk - which Russians refer to by its Soviet era name, Krasnoarmeysk - and the battle for power.
What is POKROVSK?
Pokrovsk, a hub for road and rail in Ukraine's eastern Donetsk Region, had an estimated 60,000 residents before the war. According to a Ukrainian Police statement from late January, the majority of residents have fled. Only 7,000 people remain.
The town is located on a major road that the Ukrainian military uses to supply other eastern outposts in conflict, such as the heavily fought-for towns of Chasiv Yar and Kostiantynivka, both in the Donetsk Region.
The only coking coal mine in Ukraine, which was vital to the pre-war economy and its steel industry, is located around 10 km (6 miles) west of Pokrovsk.
Metinvest, the Ukrainian steelmaker, announced in mid-January that it had halted the mine's operation due to the deteriorating situation. The steelmakers' union said that the loss of this mine threatens to reduce Ukraine's output by more than half.
Pokrovsk is home to the oldest and largest technical university in the region, which has been operating since 2014. Shelling has damaged the university and now many of its windows have been blown out or are boarded up.
Why does Russia want Pokrovsk?
Moscow claims to have annexed Ukraine’s eastern Donetsk Region and views the control of Pokrovsk, as a crucial step towards incorporating the whole region into Russia. Kyiv, the West and other countries reject Russia's territorial claims and accuse Moscow waging a colonial war.
The Russian media refer to the city as "the gateway to Donetsk". This would allow Moscow to disrupt Ukrainian supply routes along the eastern front, and boost its campaign for Chasiv Yar which is located on higher ground, offering the potential to control a larger area.
By limiting the Ukrainian military’s access to the nearby road network, Kyiv’s troops would be unable to maintain pockets of territory on either side of Pokrovsk. This could allow Russia advance its front line. Open source data indicates that Russian forces have begun to surround the city from the south and southeast in a pincer-like movement.
What is the UKRAINE doing to defend Pokrovsk?
The Ukrainian president Volodymyr Zelenskiy replaced Brigadier-General Andriy Hatov on Jan. 26, the commander of eastern front, which includes Pokrovsk. He said the move was intended to strengthen command of troops within the Donetsk Region.
Hnatov has been replaced by Major-General Mykhailo Draptyi as the commander in chief of the ground forces. He will continue to perform his previous duties.
This was after the December replacement of General Oleksandr Tarnavskiy, who had overseen the defences in Donetsk and been criticised for his failure to stop the relentless Russian push towards Pokrovsk by Ukrainian military bloggers. He was replaced by Colonel Oleksandr Ternavskiy.
Oleksandr Syrskyi is Ukraine's top military commander. He has stated that his troops have been preparing for the Russians approaching by strengthening their defensive positions.
Russian forces have taken over villages and settlements to the south of Pokrovsk. Ukraine claims that Moscow is trying everything to gain a foothold, but has suffered huge losses. Moscow claims that Ukrainian forces have suffered serious losses. Both sides do not disclose the full number of casualties.
Zelenskiy spoke to the troops who defended Pokrovsk and presented military awards.
What does Pokrovsk look like now?
Pokrovsk is no longer the vibrant city it once was. It has lost its electricity, gas, heating, and piped water.
On Jan. 27, footage showed that the façades of apartment buildings were badly damaged. Streets were deserted, and elderly residents, who had taken refuge in a basement, were evacuated.
A video from Dec. 20 showed shelling, anti-tank barriers called "dragon teeth" on certain roads, and a small grocery store running on a generator.
Residents interviewed said that they would not leave their homes because they have nowhere to go, and they lack financial resources. Reporting by Andrew Osborn, Moscow; Anastasiia Mlenko, Kyiv. Editing by Mike Collett White and Frances Kerry.
(source: Reuters)