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Oil prices rise on Venezuelan supply concerns but OPEC+ output limits gains
The oil prices rose on Wednesday, as investors considered the supply risks following the U.S.'s decision to bar Chevron from importing Venezuelan crude under a newly-issued asset authorisation. However, expectations for more production from OPEC+ continue to limit gains. Brent crude futures gained 25 cents or 0.4% to $64.34 per barrel at 0345 GMT. U.S. West Texas Intermediate crude rose 24 cents or 0.4% to $61.13 per barrel. Sources told the media that Trump's administration had issued a new authorization for U.S. major Chevron, which would allow them to retain assets in Venezuela without allowing them to export oil or expand their activities. Robert Rennie, Westpac's director of commodity and carbon strategies, wrote in a report that the loss of Chevron Venezuelan barrels will lead refiners to rely more on Middle Eastern crude. The previous license had been revoked by the U.S. president Donald Trump on 26 February. The licences granted to Chevron, and other foreign oil companies in recent years have helped to support a small recovery of Venezuelan oil production that was hit by sanctions. It has now reached about 1 million barrels a day. The price increases were however capped Wednesday as OPEC+ is expected to decide on a higher output during a meeting scheduled for this week. The Organization of the Petroleum Exporting Countries (OPEC+) and its allies will meet in full on Wednesday. However, no major policy changes are anticipated. Sources say that eight members of the group could decide on a July output increase when they meet this Saturday. "Oil prices are barely moving in the last few sessions, as the industry prepares for an oversupplied second part of the year," Priyanka Sackdeva, Senior Market Analyst at Phillip Nova said. Sachdeva said that Trump's policies on trade and OPEC's failure to meet production quotas negatively affect global oil demand. Trump's earlier statement that he would be considering new sanctions against Russia also helped to support the market. The commodities strategists at ING said on Wednesday that this increased the risk of sanctions against Russia and put Russian energy flows in danger. Reporting by Colleen Lerh and Jeslyn Howe from Beijing; editing by Sonali and Kate Mayberry
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German court will rule on Peruvian farmer's climate case
On Wednesday, a German court will decide whether the lawsuit filed by a Peruvian against German energy giant RWE may continue. This is a landmark case which sets a precedent for future climate litigation. Saul Luciano Lliuya, a farmer who began the case a decade earlier, argues that RWE emissions have contributed towards the melting of Andean ice, which has increased the risk of flooding in his home. Lliuya cites data from the Carbon Majors Database, which tracks historical emissions from major fossil-fuel producers. He says RWE has been responsible for almost 0.5% of all global emissions caused by humans since the Industrial Revolution and that it must pay its proportionate share of costs to adapt to climate changes. RWE's contribution to a $3.5million flood defence project in Lliuya’s region would be approximately $17,500. The 44-year old farmer, who grows corn, barley, wheat and potatoes with his family in a hilly area outside Huaraz says that he chose to sue RWE, because it's one of the largest polluters in Europe, rather than any specific company project near his home. RWE, which has phased out its coal-fired plants, claims that a single carbon dioxide emitter cannot be blamed for global warming. The Higher Regional Court of Hamm, in two days of hearings in March, examined a 200 page report from experts that it had hired to determine if melting glaciers raised the water level in Lake Palcacocha posing a risk to Lliuya’s Huaraz home over the next 30 years. Roda Verheyen, the lawyer for Lliuya, raised concerns in March about the court's assessment of the risks, which found that there was a 3% risk of flooding. She said she would be willing to challenge the findings. Verheyen had filed a motion disqualifying one of the court experts. The court was forced to delay the verdict originally scheduled for April. Verheyen stated that the arguments were very clear. She told the media at a briefing on Thursday that "in my opinion, we can't lose". At successive U.N. Climate Summits, the amount industrialised countries are expected to contribute towards mitigating global warming effects, such as rising sea levels, heatwaves and extreme storms, was fiercely debated. If the court finds that Lliuya’s home is at risk of flooding, it will examine the impact climate change and greenhouse gases emissions have on the melting Andean glaciers and the increased risk. Climate academics say that regardless of the outcome of Wednesday's case, the legal reasoning used by the court will be used in future cases. Noah Walker-Crawford is a researcher with the London School of Economics Grantham Research Institute. He said: "Even if this case is dismissed, it would still be a huge step forward." ($1 = 0.8809 euro) (Reporting and editing by Barbara Lewis; Riham Alkousaa)
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Report: Gas Investments in Australia Stalling
Australia is losing its competitive edge in attracting investment in natural gas exploration and production, threatening the nation’s energy security, economic growth and emissions reduction targets, a new report by Wood Mackenzie has found.The ‘Australia’s Natural Gas Investment Competitiveness’ report found that while global investment in gas exploration has grown by nearly 30% in the past five years, investment in Australia is lagging with just 15% growth recorded over the same period. The analysis included a CEO sentiment survey of Australian gas producers. 95% of those surveyed believe Australia is a less attractive place to invest today, compared with five years ago. More than 95% of those surveyed reported direct investment impacts from changing government policy and regulatory settings, and one in five affected projects were either cancelled or relocated offshore.Australia is now attracting only a 15% share of the investment portfolio of major international oil companies, down from 40% just over a decade ago.Australian Energy Producers Chief Executive Samantha McCulloch said the findings underscored the importance of competitive and stable policy settings for Australia to attract future investment in gas exploration and development.“The new political landscape presents opportunities for industry to work with the Government and Opposition on bipartisan and enduring policy reforms for Australia’s long-term energy security and economic growth,” McCulloch said.“The report highlights Australia’s abundant natural gas resources and access to global markets makes it ideally placed to attract significant new investment and remain a global energy powerhouse. “Key to realizing this opportunity and restoring investor confidence will be addressing approval uncertainty and delays, supporting critical energy infrastructure, and recognizing the vital role of gas in the energy transition.”Wood Mackenzie also highlight the huge growth opportunity on Australia’s doorstep. Global LNG demand is forecast to rise 58% by 2050, with the Asia Pacific region accounting for three quarters of total LNG demand by the middle of the century. But investment in Australia’s LNG capacity is only a quarter of that in the rest of the world. Wood Mackenzie found: “Whilst Australia led the mid-2010s wave of LNG projects, a subsequent emerging wave is being led by the United States and Qatar, with Australia no longer featuring significantly.”“Australia now trails peer nations such as the United States, Canada, Qatar, Norway and countries in South-East Asia and Africa in key investment areas including exploration and LNG capacity,” McCulloch said. Australia will also face fierce competition for future carbon capture, utilization and storage (CCUS) investment unless supportive policy frameworks and regulatory certainty are established.“Energy and climate policy must go hand-in-hand with economic policy. Without a stable policy and regulatory environment, Australia risks losing its energy edge and missing out on the next wave of global investment,” McCulloch said.
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Iron ore declines due to tepid China demand and higher shipments
The price of iron ore futures fell for the fourth session in a row on Wednesday. This was due to a combination of a lower demand for this steelmaking ingredient from China, the world's largest consumer, and increased shipments by Australia and Brazil, two major producers. By 0300 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.21% lower. It was 698 yuan (US$96.94) per metric ton. The benchmark June Iron Ore traded on the Singapore Exchange fell 0.18% to $95.9 per ton. Mark Ferguson, Director of Metals and Mining Research at S&P Global Commodity Insights, told a conference in Singapore on Wednesday that China's crude output is expected to drop to 968 millions metric tons in 2025, down 37million tons from 2024. Lange Steel, citing data from the China Iron and Steel Industry Association, said that daily crude steel production at key steel companies in May decreased by 0.3% on a month-to-month basis to 2.2 millions tons. Data from Mysteel revealed that the total volume of iron-ore shipped from Australia and Brazil increased by 0.9% week-on-week as of 25 May, reaching 27.3 million tonnes. Mysteel attributes the increase to increased ore shipments by Australia. They increased their shipments to China from 10.4% to 17.4 millions tons week-on-week. The Brazilian government also dampened sentiment by renewing 25% tariffs, which were originally imposed on 19 steel products last year. Official data released on Tuesday showed that China's industrial profit increased in April. This gives policymakers reason to be optimistic, as recent stimulus measures are helping keep the economy afloat, despite the trade tensions between the United States and China. Coking coal and coke, which are used to make steel, also fell by 0.99% and 0.75%, respectively. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Rebar fell 1%, while hot-rolled steel coils lost 0.74%. Stainless steel also slipped 0.82%.
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France's Macron and Indonesia's Prabowo discuss defense ties
The French president Emmanuel Macron and his Indonesian counterpart Prabowo Subito will meet in Jakarta on Tuesday, with a focus on strengthening defence ties between Paris and its largest arms client in Southeast Asia. Indonesia is the second stop on Macron's regional tour after Vietnam where both countries signed deals valued at over $10 billion. He will fly to Singapore Thursday. Sjafrie Sjamsoeddin welcomed Macron to Indonesia on Tuesday evening. He said that the two countries will sign a letter of intent on defence and work together on "strategic weapons hardware". He cited fighter jets, submarines, and other military hardware. The Foreign Ministry had said earlier that the two sides will discuss "existing partnerships" but did not give specifics about the topics of discussion. In 2022 the two countries will sign an $8.1 billion deal in defence that includes an order for 42 Rafale jet fighters manufactured by France's Dassault aviation, as well a number of agreements, including sub-development and ammunition. "Some commitments require follow-up and Indonesia showed interest in other military hardware but there have been no advances yet," said Khairul FAHMI, a military specialist at the Institute for Security and Strategic Studies, an Indonesian-based institute. Rafale jets are not yet delivered to Indonesia. In February, Mohamad Tonny Harjono, the chief of Indonesian Air Force Mohamad Tonny Harjono stated that six jets will arrive in Indonesia by early 2026. In addition to the Rafale agreement, Indonesia has also announced that it will buy 13 Thales long-range air-surveillance radars in 2023 and two "Scorpene' submarines in 2024 from France. Prabowo was Minister of Defence when these deals signed. Paulo Castellari, the new CEO of Eramet, is part of Macron's delegation to Indonesia's mineral-rich Indonesia. Eramet Chairwoman Christel Bories said that they would be looking to discuss mining permissions in relation to Weda Bay Nickel Mine. Indonesia has the largest known nickel reserves and is the world’s leading producer. Eramet, among other companies, has complained about the reduction of volume allowances. Eramet is still interested in nickel processing, despite having dropped a plan last year to build a BASF plant. (Reporting and writing by Ananda Teresia in Jakarta and Stanley Widanto, in Paris. Editing and proofreading by John Mair.
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Gold prices rise as investors purchase gold on dips, and look to US economic data for clues
The gold price rose on Wednesday as investors bought at the bottom. However, gains were capped due to easing U.S. - EU trade tensions. Now, the market is awaiting the upcoming U.S. Personal Consumption Expenditures Report for clues on interest rates. As of 0237 GMT spot gold rose 0.3% to $3,308.99 per ounce. This was a slight recovery from the 1% drop in the previous session. U.S. Gold Futures increased 0.2% to $3.308.00. Donald Trump, the U.S. president, has backed off his threat to impose a 50% tariff on the European Union. He will now delay its implementation until the 9th of July, in order to allow time for negotiations between White House officials and the 27-nation group. Gold's drop below $3300 attracted some buyers. The broader market, however, is still generally optimistic now that US-EU tensions have eased. This is capping gold's upward run for the moment," said Tim Waterer. If support continues to hold in the $3.250-$3,280 range, gold could make another move towards $3.400, if risk appetite declines. Market participants are now awaiting the U.S. PCE for April data, which is due on Friday, in order to determine if Federal Reserve will be reducing interest rates. Data show that U.S. consumer sentiment rebounded in may, ending a five month slide. This was aided by a temporary truce between the U.S. and China trade war. Since December, the Fed's policy rate has remained unchanged at 4.25% to 4.50% as officials wait for more clarity about the economic and pricing impact of Trump’s tariffs. "More definitive moves in gold may need to be delayed until we have a better read on Nvidia's results and U.S. Waterer stated that Core PCE will be released on Friday. Spot silver remained at $33.31 per ounce. Platinum was up 0.4% to $1,084.07, and palladium was down 0.2% at $976.22.
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Copper prices rise as risk appetite increases after tariff relief
The copper price in London was stable on Wednesday. This was due to an improved risk appetite in the financial markets after President Donald Trump’s latest tariff relief. However, a strong dollar held gains in check. The London Metal Exchange's three-month copper price remained at $9,593.5 a metric ton as of 0214 GMT. The Shanghai Futures Exchange's (SHFE) most-traded contract for copper edged up 0.1% to 78.390 yuan per ton ($10,886.29). Copper prices have traded in line with the overall sentiment on the global stock exchange in the past two weeks. The US stock market has been lifted by trade optimism, and this has had a ripple effect on copper prices, said Kelvin Woong, senior market analyst for Asia Pacific, OANDA. Trump reversed his decision to impose tariffs of 50% on EU imports next month. He restored the deadline of July 9 to allow time for negotiations. The risk-taking sentiment on the financial markets was boosted. Tuesday, data showed that U.S. consumers' confidence improved in May after five months of declines. This was due to a truce between Washington and Beijing in their trade war. The dollar index also added to the overnight gains. This made dollar-denominated investments more expensive for holders of other currencies. In its latest monthly bulletin, the International Copper Study Group reported that the global refined copper market had a surplus of 17,000 metric tonnes in March compared to a surplus of 180,000 metric tonnes in February. Other London metals include aluminium, which fell 0.3% at $2,478.50 per ton. Zinc also fell 0.1% to $2703, while lead declined 0.3% to 1,979.5, and nickel fell 0.3% at $15,370. Tin rose 0.1% to $22,630. The SHFE aluminium price rose by 0.5%, to 20,165 Chinese yuan per ton. Lead was down by 0.2%, at 16,765 Yuan. Nickel was 0.4% lower at 121,870 Yuan. Zinc was unchanged at 22,415 Yuan. Tin fell 0.3%, to 264440 Yuan. ($1 = 7.2008 Chinese Yuan) (Reporting and editing by Sherry Jacobi-Phillips in Bengaluru)
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Asian shares and the U.S. Dollar climb on positive data, technology optimism
The dollar gained on Wednesday, as the United States economy showed promising signs and speculation about strong tech earnings. The markets welcomed the apparent easing of trade frictions between Europe and the U.S., while global bond market settled after an alarming surge in long term yields. The U.S. consumer sentiment surprised to the upside before Thursday's closely watched employment figures. Nvidia's shares jumped by more than 4% on Tuesday and it will be the final of the Magnificent Seven tech giants in the U.S. to announce earnings after the close of U.S. markets. Chris Weston is the head of Pepperstone's research and said that there was renewed confidence in Nvidia to beat consensus estimates. He said that if Nvidia delivers better than expected sales and profit margins, "the rally will be on." According to LSEG, the chipmaker will report that its first-quarter revenues grew by 66.2% and reached $43,28 billion. According to two sources with knowledge of the situation, European Union officials are asking companies about their U.S. investments plans. MSCI's broadest Asia-Pacific index outside Japan rose 0.3% during morning trading, while Japan's Nikkei gained 0.6% for a fourth consecutive session. The dollar index (which tracks the greenback versus a basket currencies) rose by 0.1% on Tuesday, adding to the 0.6% gain of that day. The dollar rose 0.1% against the euro to $1.132. Australian shares rose 0.17% but the currency fell 0.2% as April consumer prices data exceeded expectations. The kiwi currency fell 0.3% as the Reserve Bank of New Zealand reduced rates, as expected. Japanese bonds fell, trimming an increase yesterday, in advance of a bid for 40-year-old securities and amid speculation that the Ministry of Finance would reduce the issue of long-dated instruments. Early trading saw oil prices rise as the U.S. banned Chevron CVX.N's export of crude from Venezuela due to a new authorization for its assets in Venezuela, raising the possibility of a tighter supply. Brent crude futures increased 0.4% to $64.37 per barrel while U.S. spot gold rose 0.1% following a drop of more than 1% Tuesday.
Oil prices rise after Trump extends EU Trade Talks deadline to July
The oil prices rose on Monday, after U.S. president Donald Trump extended the deadline for trade negotiations with the European Union. This eased concerns over U.S. tariffs against the EU that could harm the global economy and fuel the demand.
Brent crude futures were up 26 cents or 0.4% to $65.04 a bar by 0433 GMT, while U.S. West Texas intermediate crude was up 24cents or 0.39% at $61.77 a bar.
Tony Sycamore, IG's market analyst, said: "Crude oil and U.S. stock futures are up this morning following the extension of the deadline by U.S. president Trump."
Trump announced that he had agreed to extend the deadline for the trade talks between the United States and the European Union to July 9, after Ursula von der Leyen said that the European Union needed more time to reach a deal.
Sycamore stated that the headlines about trade and tariffs along with fiscal concerns will be the major wild card this week for crude oil and risk sentiment.
Brent and WTI continued to rise after ending 0.5% higher Friday, as the limited progress made in U.S. - Iran nuclear talks eased fears of Iranian oil returning on global markets. Also, U.S. buyers were covering positions before the three-day Memorial Day Weekend.
Baker Hughes, an energy services company, also released data that indicated U.S. companies, under pressure of lower oil prices and a reduction in the number operating oil rigs, had reduced the number to 465, the lowest level since November 2021.
At the next week's OPEC+ meeting, the Organization of the Petroleum Exporting Countries (OPEC+) and its allies are expected to decide on an increase in production of another 411,000 barrels a day (bpd).
Suvro Sarkar said that oil prices were already being impacted by OPEC+’s accelerated production strategy and a “mini oil war”.
He added that "any price gains will likely be dampened in the coming days by OPEC+'s decision."
This month, the group reported that it could complete the voluntary production cuts of 2.2 million barrels per day by the end October. It had already increased output targets for April, may and June by approximately 1 million barrels per day.
Warren Patterson, ING's director of commodities strategy wrote in a note to clients that OPEC+’s decision to raise output would keep the market supplied throughout the second half of the year. (Reporting from Sam Li in Beijing, and Florence Tan in Singapore. Editing by Muralikumar Aantharaman.)
(source: Reuters)