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The G7 nations have announced that they will be targeting those who continue to buy Russian oil.
The Group of Seven finance ministers announced on Wednesday that they would take joint measures to increase pressure against Russia, targeting those who continue to increase their purchases of Russian crude oil and those who facilitate circumvention. The G7 Finance Ministers have also agreed that trade measures such as tariffs, import and export restrictions, and bans on certain products are important in the effort to reduce Russian revenue due to Moscow’s invasion of Ukraine. The statement was released after a virtual finance minister meeting. Why it's important Washington has called upon its allies, including India and China, to impose tariffs against purchasers of Russian crude oil. Trump has not imposed additional tariffs against Chinese imports due to China's purchase of Russian oil. However, his administration has imposed extra tariffs upon imports from India. In the G7 statement of Wednesday, India and China were not mentioned. KEY QUOTES The G7 statement stated that "we will target those who continue to increase their purchases of Russian oil after the invasion of Ukraine, and those who facilitate circumvention." It added, "We will take measures to reduce our remaining imports, with an aim of eliminating them, including hydrocarbon imports." The G7 Foreign Ministers said that they are also "considering seriously" trade measures and other limitations on countries who help finance Russia's military efforts. The statement did not identify any country. CONTEXT Russia's full-scale Invasion of Ukraine The next election will be held in February 2022. In 2014, Moscow annexed Crimea. Western powers have imposed heavy sanctions on Russia and are considering ways to limit its financing. war efforts . (Reporting and editing by David Gregorio in Washington)
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Gold hits record price as US Government Shuts Down
The dollar and U.S. stock market were inchoate on Wednesday as the U.S. shutdown its major operations. This delayed the release of important jobs data that could affect the outlook for interest rates. The U.S. payroll data showed that employment in the private sector fell by 32,000, contrary to expectations of a 50,000 increase. This fueled fears that the U.S. labour market may be weakening. In the past, weak employment numbers would have led to increased bets that interest rates could be cut in order to support equity markets. However, with this week's shutdown of the government, it is less clear what will happen. Due to the government shutdown, Friday's publication of the Labor Department's September employment report, which is more comprehensive and closely watched than other reports in this category, will not take place. This would make it difficult for the Federal Reserve to determine whether or not rate cuts are warranted, as they assess U.S. economy health. Matthew Miskin is co-chief investment strategy at Manulife John Hancock Investments, Boston. The Fed is made more difficult by the lack of other data. The agencies have warned that the government shutdown will result in the furloughing of 750,000 federal employees at a cost of $400,000,000 per day. After a volatile session, the S&P 500 ended 0.3% higher. The Nasdaq Composite gained 0.4% and the Dow Jones Industrial Average remained flat. The MSCI All-World Index.MIWD00000PUS gained 0.4% after moderate gains on Wall Street. Gold prices rose to $3,895 per ounce, a new record for the third consecutive session. The benchmark 10-year Treasury yield in the United States fell by 5 basis points, to 4.1%. The STOXX Europe 600 index rose 1.2%, bucking the trend of the global market. It is now hovering near record highs. The FTSE 100 in Britain and the SMI in Switzerland outperformed. Healthcare stocks soared on expectations that they would avoid excessive U.S. tariffs following President Donald Trump's agreement with Pfizer regarding prescription drug prices. In the STOXX 600, the healthcare sector is ranked third. Lars Skovgaard is senior investment strategist for Danske Bank. He said: "There are a lot political risks in the healthcare industry, but once you see these risk diminish, investors will buy." I think that this could support European shares in the next few days." SLOW DOWN to Delay Data Investors may give greater weight to the ADP National Employment Report if Friday's nonfarm payrolls data is not released. George Lagarias is the chief economist of Forvis Mazars. He said: "The general notion is that these things will have a short term impact and not a longer-term effect, and the markets know this." The lack of data means we will assume that the current trend will continue. If there's no sign of a strong recovery in the economy, the Fed is likely to continue its current course. The futures market now indicates a 95% likelihood of a Fed rate reduction in October. This is up from 90% a day ago, and there's a 75% chance that another move will be made in December. Anthony Saglimbene is the chief market strategist for Ameriprise. He said that, if the shutdown continues, mid-October inflation reports could be affected. In a note, he stated that "an extended period in which the U.S. Bureau of Labor Statistics does not operate at full capacity could affect data collection for other reports and may impact the data quality." Japan's Nikkei fell 0.9% on Tuesday after a 11% rise in the previous quarter. South Korea's stocks rose by 0.9% to add to their 11.5% gains in the previous quarter. Data showed that exports in September rose at the highest rate in 14 months. DOLLAR FALLS The dollar index fell for the fourth consecutive day on foreign exchange markets. It was down last by 0.1% at 97.78. The euro remained unchanged at $1.1729 while the pound sterling rose 0.2% to $1.3478. The dollar fell 0.6% to 147.12yen after a Bank of Japan report showed that confidence among large Japanese manufacturers had improved in the second quarter. This increased the likelihood of an interest rate increase as early as this month. After two days of declines, oil prices dropped further as investors weighed up potential OPEC+ plans to increase output next month. U.S. crude fell about 0.7% to $61.93 per barrel, while Brent dropped 0.8% to $65.5.
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Wall Street closes at a higher level as investors ignore the US shutdown and jobs data
Wall Street's major stock indexes rose Wednesday with support from the Healthcare sector, despite a weaker than expected private payroll data and the uncertainty surrounding the first day of U.S. Federal Government shutdown. Investors were closely watching the ADP National Employment Report, as the Labor Department is expected to postpone its September jobs report if the federal government does not reopen by Friday. ADP reported a decrease in private payrolls by 32,000, and a downwardly-revised 3,000 drop in August. These numbers were lower than the economists' forecasts of growth of 50,000 for September, and the previous report of 54,000 in August. The Institute for Supply Management reported that U.S. manufacturing eked out a recovery in September. All three major U.S. indices rose after opening lower. S&P 500 Healthcare, which was boosted by pharmaceutical firms, was the largest gainer among the 11 major S&P 500 industry sectors. Tuesday, after Pfizer announced that it had reached a deal with President Donald Trump of the United States, healthcare rallies began in earnest. In exchange for tariff relief, the drugmaker agreed that it would lower its prescription drug prices under Medicaid compared to what they charge in other developed nations. Trump said that he expects more drug companies will follow suit. Lara Castleton of Janus Henderson Investors said that yesterday was a catalyst for the healthcare sector. She added that the sector had underperformed the market this year. She said that people haven't avoided it but haven't put as much money into healthcare as in technology or all the AI hype. Preliminary data shows that the S&P 500 rose 22.46 points or 0.34% to 6,710.92, and the Nasdaq Composite increased 94.02 or 0.42% to 22,754.03. The Dow Jones Industrial Average increased 42.04 points or 0.09% to 46,439.93. The S&P 500 technology sector gave the benchmark index another boost. Materials was the sector that saw the largest percentage drop during the session. Castleton observed that investors in equity appeared to be ignoring the uncertainty surrounding the shutdown. The markets have always been resilient when the government is closed. According to a Deutsche Bank note, the S&P 500 has risen during each of six shutdowns in recent years. The indexes advanced during the last government shutdown between the end 2018 and the start of 2019. AES shares rose sharply after Financial Times reported BlackRock's Global Infrastructure Partners is close to a deal worth $38 billion to buy the utility group. The U.S. Department of Energy took a 5% share in Lithium Americas, and another 5% in its joint venture with General Motors. Albemarle shares also soared after the U.S. Department of Energy acquired a stake. Corteva announced it would separate seed and pesticide business into separate publicly listed companies, sending shares of its company sharply down.
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Fermi: Allies could own equity in US nuclear consortium
The founders Fermi America, a company that hopes to build the largest data center in the world and fuel it using nuclear power, solar, and gas, said on Wednesday, foreign countries may take an equity stake. Fermi made its Nasdaq debut on Wednesday, with shares valued at $14.8 billion. Investors are increasingly interested in AI infrastructure stocks. Founders Rick Perry and Toby Neugebauer, a former U.S. Energy Secretary in the first Trump administration, want to build a site near Amarillo in Texas that will have four Westinghouse Electric AP1000 nuclear reactors. This would be the second U.S. plant to be built in a desert. Perry and Neugebauer are looking for the U.S. Government to partner with them in this project. It would be home to artificial intelligence powered by nuclear energy that the Pentagon could use. The founders stated that it is possible for the U.S. and other allies to take equity stakes into a nuclear consortium where Fermi will be involved. Neugebauer stated that high-level delegations from around the world have visited Neugebauer's office to discuss a possible partnership. "It's possible that other countries would also take an equity position in a nuclear consortium. He said that other countries could be interested in reinvesting in the United States, and becoming partners with us. After Trump's executive orders were issued in May, the interest in nuclear reactors increased. These executive orders aimed to speed up applications for new nuclear reactors, revamp the Nuclear Regulatory Commission and make nuclear waste and excess plutonium available for reactor fuel. The latest reactors in the U.S. were also Westinghouse AP1000 models at Vogtle, Georgia. They were delayed for years and cost about $16 billion more than budget. (Reporting and editing by Timothy Gardner, Echo Wang)
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US agencies continue to work on fossil fuels during shutdown
According to the Interior Department's contingency plan published on Wednesday, some government employees will remain on duty during the shutdown to process oil, gas, and coal leases on public lands. The U.S. Bureau of Land Management posted a plan that stated the goal of maintaining workers in these areas was to address the national energy crisis declared by President Donald Trump when he assumed office in January. BLM's shutdown plan for 2023 did not exclude energy leasing or permitting. The plan stated that "in order to protect life and property of the federal government and to address the National Energy Emergency," BLM employees responsible for processing coal energy leases and oil and gas permits/leases and other energy and minerals necessary for energy production would be excluded or excused on demand, to the extent necessary to protect life and property. It wasn't immediately clear if the Utah coal lease auction scheduled for Wednesday would go ahead. No officials from the Interior Department or BLM were available to comment. The BLM allows energy development on the 245,000,000 acres of federal land it manages. In its contingency plans, the Bureau of Ocean Energy Management (BOEM), which supervises energy development on federal waters, stated that renewable energy would cease, but oil-and-gas work would continue, albeit in a limited manner. BOEM announced that some exempt employees would continue to work on projects such as the Gulf of Mexico Oil and Gas Lease Sale scheduled for December and the development of the next oil and natural gas leasing plan for the United States. Energy Information Administration of the Department of Energy, on the other hand, announced on Wednesday that its weekly petroleum inventories - which heavily influence oil markets – would continue to publish on schedule. The Antideficiency Act prohibits federal agencies from spending taxpayer money without an appropriation from Congress, unless it is necessary to protect life or property. (Reporting and Editing by Bill Berkrot.)
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Gold hits record price as US Government Shuts Down
The dollar and U.S. stock market were inchoate on Wednesday as the U.S. shutdown its major operations. This delayed the release of important jobs data that could affect the outlook for interest rates. The U.S. data on private payrolls showed that employment in the U.S. fell by 32,000, contrary to expectations of a 50,000 increase. This added to fears that the U.S. labor market may be weakening. The government shutdown has muddied the outlook this week. While weak employment numbers would normally add to bets for interest rate reductions that could support the equity markets, it is not uncommon to see such bets. Due to the government shutdown, the Labor Department will not publish its more comprehensive and closely followed employment report for September on Friday. Investors said that this would make it difficult for the Federal Reserve to evaluate the U.S. economy as they weigh potential rate cuts. Matthew Miskin is co-chief investment strategy at Manulife John Hancock Investments, Boston. "Not having any other data makes this difficult for the Fed." The agencies said that there was no way out of the funding impasse, and the shutdown would result in the furloughing of 750,000 federal employees at a cost of $400,000,000 per day. S&P 500 recovered from earlier losses to gain 0.2% in the afternoon. Nasdaq Composite gained 0.3% and the Dow Jones Industrial Average remained flat. The MSCI All-World Index.MIWD00000PUS gained 0.3% thanks to moderate gains on Wall Street. In the face of uncertainty, gold prices rose to $3,895 per ounce, a new record for a third consecutive session. Meanwhile, the 10-year Treasury yield, the standard, fell by 4 basis points, to 4.1116%. The STOXX Europe 600 index rose 1.2%, bucking the trend of the global market. It is now hovering near record highs. The FTSE 100 in Britain and the SMI in Switzerland outperformed. Healthcare stocks soared on expectations that they would avoid excessive U.S. tariffs following President Donald Trump's agreement with Pfizer regarding prescription drug prices. In the STOXX 600, the healthcare sector is ranked third. Lars Skovgaard is senior investment strategist for Danske Bank. He said: "There are a lot political risks in the healthcare industry, but once you see these risk diminish, investors will buy." I think that this could support European shares in the next few days." SLOW DOWN DATA Investors may give greater weight to the ADP National Employment Report if Friday's nonfarm payrolls data is not released. George Lagarias is the chief economist of Forvis Mazars. He said: "The general notion is that these things will have a short term impact and not a longer-term effect, and markets are aware of this." The lack of data means we will assume that the current trend will continue. If there's no sign of a strong recovery in the economy, the Fed is likely to continue its current course. The futures market now indicates a 95% likelihood of a Fed rate reduction in October. This is up from 90% a day ago, and there's a 75% chance that another move will be made in December. Anthony Saglimbene is the chief market strategist for Ameriprise. He said that, if the shutdown continues, mid-October inflation reports could be affected. In a note, he stated that "an extended period in which the U.S. Bureau of Labor Statistics does not operate at full capacity could affect data collection for other reports and may impact the data quality." Japan's Nikkei fell 0.9% on Tuesday after a 11% rise in the previous quarter. South Korea's stocks rose by 0.9% to add to their 11.5% gains in the previous quarter. Data showed that exports in September rose at the highest rate in 14 months. DOLLAR FALLS The dollar index fell for the fourth consecutive day on foreign exchange markets. It was down last by 0.1% at 97.78. The euro fell 0.1% at $1.1724 while the pound rose 0.2% to $1.3475. The dollar fell 0.5% to 147.16yen after a Bank of Japan report showed that confidence among large Japanese manufacturers had improved in the second quarter. This increased the likelihood of an interest rate increase as early as this month. After two days of declines, oil prices dropped further as investors weighed up potential OPEC+ plans to increase output next month. U.S. crude fell about 1% to $61.71 per barrel while Brent dropped 1% to $65.35.
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Venezuelan oil exports exceed 1 million barrels per day for the first time since 2020
According to documents and shipping data from the state-run PDVSA, Venezuelan oil exports in September averaged 1,09 million barrels a day, which is the highest level since February of 2020. Data and documents show that the country has been struggling to stabilize its oil production and exports after coming under U.S. sanction in 2019. However, rising crude production, sales of stocks accumulated and increased imports of diluents for exportable crude grades have all contributed to a boost in oil shipments. The average for September was 13% higher than the previous month, and 39% higher than a year earlier. Around 84% of the total exports went to China directly or indirectly last month. China remained the top destination for Venezuelan crude shipped by intermediaries who have been trading Venezuelan oil since the sanctions were imposed. The data shows that an authorization granted by Donald Trump's U.S. administration in late July to Chevron has also allowed for increased exports. In September, 108,000 bpd Venezuelan crude was sent to the U.S., compared to 60,000 bpd in August. Oil exports dropped in the second quarter after the Trump administration suspended all licenses granted to foreign energy companies operating in Venezuela. This led to an increase of crude oil inventories, especially at Venezuela's primary production region, the Orinoco Belt. Some licenses were not reinstated. PDVSA has been draining these stocks since August while securing the imports of heavy crude oil and heavy naphtha, which is essential to dilution of OPEC's extra heavy output from allies, including Russia and China. Imports of diluents fell to 41,000 bpd from 99,000 bpd during the preceding month. Venezuela, however, has increased its purchases of heavy naphtha, light crude, and especially those from Russia this year. The accumulated average for the period through September is now 92,000 bpd, up from 88,000 bpd during the same period last year. Last month, Venezuela exported to its political ally Cuba 52,000 bpd crude oil and fuel and 74,000 tons of methanol. Venezuela reported to OPEC a crude production of 1.1 millions bpd for August, higher than the 1.08million bpd from the previous month. This is the highest output since February 2019.
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Brazil Energy Ministry seeks federal cash infusion for Eletronuclear amid risk of insolvency
Brazil's Mines and Energy Ministry asked the federal government to inject capital into Eletronuclear in order to prevent its imminent insolvency. This would add to the financial strains of the Angra 3 nuclear reactor in Rio de Janeiro, which is still unfinished. In a Monday letter seen by, Minister Alexandre Silveira informed the Finance, Planning and Management Ministries that planned investments for the maintenance of Angra 3 equipment and facility were completely cut from the budget 2026. Silveira said that the situation was "severely" compromising Eletronuclear, the state-run nuclear energy generator's ability maintain Angra 3 and service debts with banks BNDES Caixa Economica and Caixa Federal and make payments to a electricity sector fund. He claimed that the company would be "imminently insolvent" if it did not make a capital contribution to the budget cycle of next year. Without citing any figures, he referred to documents where the firm indicated a requirement for 1.4 billion reals ($262,70 million) to avoid government diluting before a planned bond issuance. Eletronuclear and the ministries did not respond immediately to comments. Budget uncertainty has caused a delay in the issuance of 2.4 billion reais ($450.4m) of debt to finance works that would extend Angra 1's operation by 20 years. Angra 1 is one of two nuclear plants in Latin America, operated both by Eletronuclear. According to a government agreement the securities would have been issued by Eletronuclear, and Eletrobras could convert them later into shares, without having to increase its stake or require additional federal support. Eletronuclear also called the issue "indispensable" in documents seen by. They cited short-term debts of 570 millions reais due to banks ABC and BTG in December, and cash that was expected to run out before November. If funds are not raised, BNDES, Caixa, and Santander could be in default, requiring "extraordinary liquidation measures" by October. Requests for comments from the lenders were not immediately responded to. ENBPar (which controls Eletronuclear) asked the Finance Ministry to convene a shareholder's meeting in August, but it has not been called. According to the internal studies in the documents, the government must pour 1.4 billion reals into Eletronuclear if it wants to keep control of the company.
Russell: China's modest stimulus does not have a big impact on commodities.
China has largely promised to continue the mild stimulus policy of last year, despite hopes that China's annual parliament meeting would bring a significant economic boost and boost commodities. The announcement of a 5% economic growth goal and the promise to increase consumption and combat any negative effects of the trade war with the United States was encouraging.
The parliament meeting of this week was also far short of any sort of announcements of stimuli that could have given commodity markets confidence that China, as the largest buyer of natural resources in the world, will see a meaningful increase in imports by 2025.
What's likely to happen is that the same trends as in 2024 will continue, with some commodities performing better than others, but overall, the story remains one of modest growth.
Data from the first half of this year suggests that China's imports are continuing on their recent path.
LSEG Oil Research estimates that China's crude oil imports in February were 10.75 million barrels a day (bpd), up from January's 10.1 mbpd but down from the 2024 customs figure of 11,04 mbpd.
The government has encouraged consumers to switch to new energy vehicles, which can be either hybrids or full-electric vehicles.
The subsidy program for switching to NEVs as well as more efficient appliances in the home was expanded this year. This means that NEVs will continue to grow rapidly, and now account for more than half of all new car sales.
The news isn't good for those who hoped that the increased focus on consumer spending would lead to a stronger demand for steel.
In a draft report by the state planner, China revealed for the first time in the last five years a plan to reduce crude steel production in 2025.
The report did not specify the steel output target, but it is likely to be less than 1 billion tons. This is the level at which China's production of steel has fluctuated around since 2019.
China's imports will be affected if steel production drops from the 1,005 billion tons in 2024. These are the two main raw materials.
COAL, IRON ORE
China imports around 75% of the seaborne iron ore in the world, but they are not off to a good start by 2025.
Kpler estimates that February arrivals will be 83.92 millions tons, the lowest total since April 2019. This is down from 104.34 in January.
Imports may have been affected by the Lunar New Year holidays in February, but adding them to Kpler's estimate for January gives an average daily of 3,19 million tons over the first two month of the year. This is down from the 3.39 million tons of 2024.
Kpler estimates that China's seaborne coal imports have fallen to 29.82 millions tons in 2025. This is the lowest level since February 2024, and is down from 35.9 million tons in January.
It is likely that the decline in coal imports reflects lower domestic fuel prices which have led to a rise in inventories, and a reduction of demand for imported fuel.
The announcements made by China this week were positive for commodities, especially those that are associated with energy transition.
In a Wednesday statement, the National Development and Reform Commission announced that China would develop new offshore wind farm and accelerate construction of "new energy bases" in the western desert areas of the country.
China's continued focus on renewable energy is good for its demand for metals like copper, aluminum and silver which are used in the manufacturing of solar panels.
The Shanghai exchange's copper contracts rose as early as Thursday morning, rising as much as 1.1 percent to 77.990 yuan (10,757) per ton. They are now up by 5.2% from the end of the last year. Aluminium futures were only up 0.5%.
The ongoing commitment to build renewable energy capacity in China and increase the share of NEVs is a reason for some optimism. However, the residential real estate sector continues to be a source of concern.
The potential impact of trade wars launched by Donald Trump's administration, which could slow down global growth and increase inflation, is a greater concern.
These are the views of the columnist, who is also an author. (Editing by Stephen Coates).
(source: Reuters)