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Maguire: Recovering wind power may cool Europe's hot gas market
The wind-powered electricity produced in Europe in January 2024 was down by more than 7%, denying regional power producers a vital source of clean energy just as the demand for heating reached its peak. This wind shortage triggered an increase in Europe's natural gas-based electricity generation to its highest level in three years. It also supported a rally which has driven benchmark regional gas prices up by more than 15% this year. Models of wind forecasts now predict a recovery in regional production. This should lift overall electricity generation in Europe in the coming weeks and could set the stage for lower gas prices and usage. WINDS WEAK According to the energy think tank Ember the total wind-powered electricity produced in Europe in January was just under 67 terawatts hours (TWh). This is a drop of roughly 7% from the same period in 2024, and also the lowest January total in the last 2022. Wind farms are Europe's fifth largest source of electricity (after coal, gas, and nuclear). The drop in production compared to expectations has forced regional power companies to replace the lost supply by output from alternative sources. Gas-fired electricity production jumped nearly 6 percent in January compared to a year ago, the highest figure for a month since January 20,22, right before Russia invaded Ukraine and slowed regional gas flow. The increased gas consumption sparked a reduction in regional gas stocks, which in turn has fueled the bullish sentiment on the gas market so far this season. REBOUND The latest wind forecast models from LSEG predict an increase in wind power generation in major markets in the next few weeks. This should alleviate the tight energy supply situation in Europe. Germany, Europe's biggest wind power producer, is expected to maintain its wind production below the long term average until February 20. Then, it will rebound and be mainly above this long-term standard through the end March. The United Kingdom is Europe's largest gas-fired generator and second-largest wind power producer. If the wind power generation increases as predicted, power producers from both countries could reduce their gas-fired power production levels while maintaining power output. As local wind production increases, both countries could also reduce their power imports. This would free up energy supplies in Europe. This could lead to a drop in the regional benchmark TTF prices. These have reached their highest level since early 2023, and are causing new concerns about energy inflation in Europe. These are the opinions of a market analyst at.
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Oil drops as a potential Ukraine peace agreement may ease supply disruptions
The oil prices dropped on Thursday as a result of expectations that a possible peace agreement between Ukraine and Russia will end the sanctions that have disrupted supplies, while crude stocks in the United States grew. Brent futures fell 68 cents or 0.9% to $74.50 per barrel at 0515 GMT. U.S. West Texas Intermediate crude (WTI), however, dropped 65 cents or 0.9% to $70.72. Brent and WTI both fell by more than 2% after U.S. president Donald Trump claimed that Russian President Vladimir Putin, and Ukrainian President Volodymyr Zelenskiy had expressed a wish for peace to him in separate telephone calls. Trump also ordered top U.S. government officials to start talks about ending the conflict in Ukraine. The price of oil has risen because Russia is the third largest oil producer in the world. Sanctions imposed by the United States on Russia's crude exports following its invasion of Ukraine almost three years ago are also contributing to this. In a Thursday note, ANZ analysts stated that oil prices had eased following the news of potential peace talks due to "optimism" about the risks to crude supply easing. They pointed to the U.S. The sanctions are reducing Russia's production. They said that signs of a tightening in supply had pushed up the price of oil in recent weeks. The US sanctions against Russian oil companies, and their vessels are believed to have worsened the situation. The market was also affected by the increase in crude oil stocks in the United States. This is the largest crude oil consumer in the world. The Energy Information Administration (EIA), which released data on Wednesday, showed that U.S. crude oil stocks increased more than expected in the past week. The EIA reported that crude inventories increased by 4.1 millions barrels, to 427.9million barrels for the week ending February 7. This was higher than the analysts' expectation of a 3-million barrel increase in a survey. "This recent decline in crude oil futures is the result of a period where there were consecutive stock builds," said Darren Lim a commodities analyst at Phillip Nova. The price of crude oil could be further impacted by geopolitical developments such as the end of the conflict in Ukraine. Trump's threat to impose additional tariffs on U.S. trading partners also pushed up prices because of fears that this could reduce economic growth, and therefore oil consumption. Trump announced that he would begin imposing reciprocal tariffs on Wednesday evening against every country that levies duties on U.S. imported goods. This move has heightened fears of an expanding global trade war, and could accelerate inflation in the United States. (Reporting from Georgina McCartney, in Houston; and Emily Chow, in Singapore; editing by Christian Schmollinger & Clarence Fernandez).
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Asia replaces Russian crude oil quickly: Russell
Asia's crude markets are quickly adjusting to the new sanctions imposed against Russia, grabbing cargoes as they come and looking for alternatives to deliver in the coming months. According to LSEG Oil Research, the top oil-importing continent Asia is expected to receive approximately 3.23 million barrels of Russian crude per day in February. India and China both bought less, but this is a decrease of 7.4% compared to January's 3,49 million bpd. In Asia, there are only two major buyers of Russian crude oil by sea, namely India and China. Myanmar does also take a small amount. LSEG expects India's imports to Russian oil to reach a record high in three months, at least 1,71 million bpd. This figure may increase by the end February as more cargoes will be assessed. After Western sanctions deprived Europe of its customers, the South Asian nation has become the largest buyer of Russian crude. India was allowed to purchase Russian oil at discounted prices as the United States, and other Western countries, tried to keep Russian crude on the global market. However sanctions were imposed after the February 2022 invasion by Ukraine to cut off the revenue flowing to Moscow. Last month, former president Joe Biden imposed restrictions on Russia's shadow tanker fleet in order to prevent the vessels from delivering crude oil. The Indian refiners were scrambling to purchase as much Russian crude before the new measures took effect, resulting in an increase in arrivals in February before a possible decline in March. Chinese refiners have cut back more quickly on Russian crude. Imports of seaborne crude in February are expected to be around 500,000 barrels per day, down from an average of 1.05 million barrels per day over the previous three months. According to LSEG's estimates, China's crude imports are expected to total 10.35 million bpd for February, which is roughly the same as January's 10,10 million bpd but lower than 11.16 million bpd from February 2024. China has replaced Russian crude oil with cargoes of other suppliers. So far, it appears to have mostly turned to Angola or Brazil. Switching suppliers is a good way to save money. The imports of Angolan crude oil in Asia are expected to jump to 1.13m bpd by February, up from 670,000 bpd last month. Brazil's exports are also set to increase to 1.05m bpd. China's decision, as part of its response to the new president Donald Trump's 10% tariff on all Chinese imports, to levy 10% on crude oil imports from the United States has made the situation even more complicated. It will take several more months before the tariffs on U.S. crude oil are applied to actual imports. This is because there are many delays between when cargoes arrive and when they're delivered. Kpler, a commodity analyst firm, estimates that China's imports from the U.S. of crude oil will increase significantly in March and April. Arrivals for March are currently estimated at 339,000 barrels per day and those for April to be 461,000. These cargoes have already been placed on the water, or arranged. China's imports of crude oil from the United States are likely to fall in May, but India could pick up the slack. These are the views of the columnist, an author for.
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Vantage to Explore Drilling Opportunities with Dorado Drillship
Offshore drilling contractor Vantage Drilling has entered into a marketing agreement with Eldorado Drilling for the seventh generation ultra-deepwater drillship Dorado.Vantage Drilling will market the Dorado drillship for drilling opportunities in various locations in Africa, the Mediterranean, Asia and Australasia.The Dorado is one of the last delivered seventh generation drillships - an advanced-capability drillship designed to operate in water depths of up to 12,000 feet.“We are delighted to have entered into this agreement with Eldorado Drilling and we look forward to successfully placing the rig in operation.“This new agreement further demonstrates the rig owners’ confidence in Vantage as a most reliable and trusted partner to market and operate their assets,” said Ihab Toma, CEO of Vantage Drilling.
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Sources say that India's Tata Steel is likely to return to the bond market following a near one-year absence.
Two sources with knowledge of the matter confirmed on Thursday that India's Tata steel is set to return to the corporate bond markets after an absence of almost a year. One source said that the company was already in discussions with investors and merchant bankers. They were offering different tenors and would finalise a few of them based on the levels they receive. Tata Steel will raise approximately 30 billion rupees (about $345,6 million) from this bond issue. The issue is expected to be completed before the end this month. According to the source, the company is flexible with regard to maturity and is currently in discussions for bonds of three, five, seven or even ten years. The sources have both requested anonymity because they are not authorized to speak with media. Tata Steel didn't immediately respond to an email seeking comment. India Ratings recently upgraded the bonds issued by the steel company from AA+ to AAA, the highest rating. India Ratings stated in a February 11 note that "the ratings factor in strategic linkages between TSL, its sponsor Tata Sons Private Limited, and the strong financial flexible of Tata Sons." Ratings agency also noted that the upgrade reflects the likely reduction of losses in Tata Steel U.K.'s operations over the next 2 financial years, and the eventual profitability. The company has bonds outstanding worth more than 128,70 billion rupees. Of this, 6,70 billion rupees is due for maturity next month. Tata Steel's last bond sale was in March 2024 when it raised 27 billion rupies through bonds with a maturity of three years and a coupon rate of 7.79%.
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Aluminium prices rise as traders evaluate trade war risks
Aluminum prices fluctuated on Thursday, as traders assessed the risks of a trade war after President Donald Trump imposed 25% tariffs on imports of steel and aluminum. As of 0405 GMT, the price for three-month aluminium at the London Metal Exchange was $2,624 per metric ton. Don Farrell, Australia's Trade Minister, said that the U.S. had approved the increase in aluminium supplies by Australia. Australia, the sixth largest aluminium producer in the world, contributed 1% to the U.S. steel imports and 2% to its aluminum imports. The copper price also traded within a narrow range. The LME benchmark copper edged up by 0.2% to $9470 per metric ton. Many traders believe that Trump is targeting copper as well, following his announcement of 25% tariffs for aluminium and steel. ANZ Research noted that signs of tightness also boosted the sentiment. Trump has not yet imposed tariffs on the copper but he threatened them last week, without giving any further details. The treatment charges, the fees that miners pay to smelters in order to convert raw materials into metal, have declined. This indicates a lack of material. Fastmarkets' copper TC/RC index (treatment charge/refining fee) has been at record lows for the past few weeks. On Wednesday, it was minus $12.50 per ton and minus 0.25 cents per lb. This compares with a TC that was about plus $20 one year ago. Lead increased 0.1% at $1,975, zinc rose 0.1% at $2,864 and nickel fell 0.1% from $15,405. Aluminium contract at the Shanghai Futures Exchange was down by 0.2%, to 20,540 Yuan ($2,818.45). The SHFE copper price rose by 0.8%, to 77.370 yuan. Nickel was down by 0.2%, to 124.120 yuan. Zinc was up by 0.4%, to 23,745 Yuan. Lead was up 0.2%, to 17,125 Yuan. Tin was also up 0.1%, to 257.340 Yuan. $1 = 7.2877 Chinese Yuan Renminbi (Reporting and editing by Sherry J. Phillips).
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US data on gold and trade wars is in focus
Gold prices rose on Thursday as investors watched developments regarding President Donald Trump's proposed tariffs, which could spark a global trading war. They also awaited important U.S. economic data that was due later in day. As of 0240 GMT, spot gold was up by 0.2%, at $2,908.50 an ounce. Bullion reached a record high of $2,942.70 per ounce on Tuesday. U.S. Gold Futures rose 0.3% to $2.936.50. Trump announced that he will impose reciprocal duties as early as Wednesday night on all countries that charge duties on U.S. imported goods. This move has heightened fears of an expanding global trade war, and could accelerate U.S. inflation. "Gold is a key asset to diversify portfolios amid trade uncertainty, and market participants are seeking to reduce volatility," said IG's market strategist Yeap Jun-Rong. The U.S. Consumer Price Index increased more than anticipated in January, reinforcing Federal Reserve's statement that it is not in a hurry to cut interest rates despite growing economic uncertainty. Jerome Powell, the Chair of the House Financial Services Committee, said that the Fed's fight against rising prices was not over. Any further rate reductions would need to be delayed until inflation returns to the Fed's target of 2%. Investors will now turn their attention to the Producer Price Index data (PPI), scheduled for 1330 GMT. This data can provide further insight on monetary policies. Yeap stated that "markets are largely ignoring the higher-than-expected CPI reading, and the upcoming PPI report may have a less pronounced impact on sentiment given the fact that rate expectations had already been adjusted to the prolonged high-for longer-rate environment." Bullion is a good hedge against inflation. However, higher interest rates make it less attractive. Trump has ordered the top U.S. officials on the geopolitical side to start talks about ending the conflict in Ukraine. Spot silver increased 0.2%, to $32.29 an ounce. Platinum rose 0.2%, to $994.75. Palladium climbed 0.5%, to $978.46.
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Dalian iron ore gains on Australia's supply concerns
Dalian iron-ore futures prices increased for the second session in a row on Thursday. This was largely due to lingering worries about weather-related disruptions of supply in Australia, a major exporter. Fears of a global trade war following President Donald Trump’s new tariffs on aluminum and steel imports have curtailed gains. By 0209 GMT, the most traded May iron ore contract at China's Dalian Commodity Exchange rose 0.3% to $823 yuan (about $112) per metric ton. Port Hedland - the world's biggest iron ore export center - closed Wednesday because of tropical cyclone Zelia. Analysts at Shengda Futures wrote in a report that the hot metal production, which is typically used to gauge the demand for iron ore, has increased at a faster pace than it did the previous year. The recovery in the downstream steel demand also exceeded expectations. Prices were also supported by the expectation that steelmakers would still need iron ore after the Lunar New Year holiday to meet their production needs. The benchmark March ore price on the Singapore Exchange, however, was down 0.24% at $107.55 per ton as of 0206 GMT after reaching its highest level in almost four months on Tuesday. Analyst at Jinrui Futures, Zhuo Guqiu said that investors are concerned about the possible domino effects triggered by Trump’s latest tariff. India could tax steel imports from China by 15% to 25% in six months due to the "serious threat" that cheap imports pose to local producers after Trump's new tariffs. Coking coal and coke, which are both steelmaking ingredients, have also lost ground. They fell by 0.8% and 0.8%, respectively. The benchmark steel prices on the Shanghai Futures Exchange have been moving sideways. The benchmarks for steel on the Shanghai Futures Exchange moved sideways. ($1 = 7.3067 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson)
Oil drops as a potential Ukraine peace agreement may ease supply disruptions
Oil prices fell Thursday as a result of expectations that a possible peace deal between Ukraine, Russia and the EU would end sanctions which have disrupted supplies. Also, President Donald Trump’s plan to introduce reciprocal tariffs has stoked inflation fears.
Brent futures fell 55 cents or 0.73% to $74.63 per barrel at 0141 GMT, while U.S. West Texas Intermediate crude (WTI), dropped 52 cents or 0.73% to $70.85.
Brent and WTI both fell by more than 2% after Trump claimed that Russian President Vladimir Putin, Ukrainian President Volodymyr Zelenskiy and other officials had expressed their desire for peace to him in separate telephone calls. Trump also ordered the top U.S. official to start talks about ending the conflict in Ukraine.
The price of oil has risen because Russia is the third largest oil producer in the world. Sanctions imposed by the United States on Russia's crude exports following its invasion of Ukraine almost three years ago have also supported prices.
In a note published on Thursday, analysts at ANZ stated that oil prices had eased following the news of potential peace talks due to "optimism" about risks to crude supply.
Analysts at ANZ pointed out that sanctions imposed by the U.S., EU and other countries have pushed down Russia's production.
In recent weeks, "signs of tightening supplies have pushed up oil prices." The U.S. sanctions against Russian oil companies, vessels and their assets are said to be a factor in the current situation.
Trump's threat to impose additional tariffs on U.S. trading partners also pushed prices up because of fears that this could reduce economic growth, and therefore oil consumption.
Trump announced that he would begin imposing reciprocal tariffs on Wednesday night on all countries that charge duties on U.S. imported goods. This move has heightened fears of an expanding global trade war, and could accelerate U.S. inflation.
The market was also affected by the increase in crude oil stocks in the U.S.
The Energy Information Administration (EIA), which released data on Wednesday, showed that U.S. crude oil stocks increased more than expected in the past week.
The EIA reported that crude inventories increased by 4.1 millions barrels, to 427.9million barrels for the week ending Feb. 7. This was compared to analysts' expectations in an analyst poll of a 3-million-barrel increase. (Reporting and editing by Christian Schmollinger in Houston. Reporting by Georgina Mccartney, Houston)
(source: Reuters)