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Nigeria's Dangote refining company to supply fuel directly to local traders
In August, the Dangote Oil Refinery is set to begin directly supplying fuels to retailers, manufacturers, telecoms companies, and other large consumers. This could increase supply, but also put it in direct competition against local fuel traders. Last year, Africa's largest refinery with a 650,000-bpd production capacity began to process gasoline for the local market and allowed local fuel dealers to lift products from their refinery. It now wants to be involved in distribution. In a Sunday statement, the refinery announced that it has purchased 4,000 new Compressed Natural Gas powered trucks and will be building over 100 CNG refueling stations throughout the country. The refinery will also offer credit facilities, which allow purchases of 500,000-liters to have access to an additional 500,000-liters for credit over a period of two weeks with bank guarantees. Dangote plans to deploy 4,000 trucks, which is double the current number. This has local fuel traders worried. Billy Gillis Harry is the head of Petroleum Products Retail Outlets Owners Association of Nigeria. The group, which has over 6,700 members, said that the introduction of cheaper CNG trucks will threaten the livelihoods of truckers as well as the businesses of the traders who supply the telecom companies and retail stations. Reporting by Isaac Anyaogu, Editing by ChizuNomiyama
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Q&A: Is Venezuela on the verge of losing its prized foreign asset, Citgo?
The final stages of a U.S.-court-organized auction for shares in Citgo Petroleum, the Venezuelan-owned parent company, have been reached. Bidders are submitting better offers and creditors hope to recover some of the proceeds. The auction is a result of a case Crystallex, a Canadian miner, filed in Delaware eight years ago against Venezuela. Citgo Holding's parent company, PDV Holding was found liable by the court for Venezuela's expropriations and debts. This allowed over a dozen creditors to seek compensation for nearly $19 billion. The auction, despite delays, has moved forward, particularly since last year. This is because there have been two rounds of bidding. In March, Red Tree Investment's $3.7 billion bid was chosen as the starting bid. Rivals are now challenging this offer. Red Tree is not the only company competing for better bids. A consortium that includes Gold Reserve, Rusoro Mining and Koch, as well as a trading house, Vitol are also in competition. According to a source with knowledge of the matter, Elliott Investment Management affiliate Amber Energy also considers whether or not to make a bid following a court ruling that favored a potential offer. The court officer who oversees the auction and said last month that new bidders might emerge just before the June 18 deadline for submitting offers must recommend the winner of the auction by July 2. A final hearing is expected on August 18 with the judge and all parties involved. What could be the possible loss for Venezuela? Venezuela would lose its largest overseas asset if it fails to retain equity in the refinery and its U.S. parent companies. With a foreign debt of $150 billion, the country has already lost assets in Europe, Asia and elsewhere to creditors. Leonard Stark, a Delaware judge, has allowed parties representing Venezuela the opportunity to make an offer. The boards that supervise the seventh largest U.S. refinery would have to get the backing of politicians from both Washington and Caracas, a difficult task given the U.S. sanctions against the OPEC nation. Prior to the sanctions, Citgo's 807,000-barrel-per-day refining network was a primary processor of Venezuela's heavy sour crudes. Citgo's 2019 break with its ultimate parent company, Caracas based PDVSA has left Venezuela struggling to find new markets. The Houston-based refiner, on the other hand, has been sourcing crude from different suppliers. Venezuela's opposition worked tirelessly for years to keep Citgo, funding legal defenses as well as lobbying Washington. Treasury Department must approve the winner of the auction. Treasury Department has protected Citgo in recent years from creditors. Citgo, according to opponents of Venezuelan president Nicolas Maduro, could help the nation's economy recover if democracy was restored. Maduro officials rejected U.S. sanction and called the auction "robbery". Can creditors claim post-auction compensation? Yes. Yes. If they are not satisfied with the results, creditors who rejected the result of the bidding round in the past due to the conditions set by the winner can file objections. They can also pursue parallel cases in U.S. court. Three of the original 18 creditors cleared by the court have withdrawn due to mounting legal fees and uncertain prospects for recovery. Other participants, such as the owner of artifacts belonging to Venezuelan independence hero Simon Bolivar and a collector of Bolivar-related items, failed to meet all requirements set by the court. All creditors will be compensated Unlikely. Citgo's value was between $11 billion to $13 billion in the Delaware case. However, the auction is expected to yield less than $8 billion when you factor in possible side agreements with important creditors like bondholders. Citgo's recent poor performance, which includes a profit that dropped to $305 millions last year, from $2 billion by 2023, will also affect its valuation. This suggests that over half of the registered creditors who collectively claim $18,9 billion may not receive any distributions.
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Chinese data on copper demand gives rise to optimism
Prices of copper rose on Monday, after higher consumer spending raised hopes that metals demand would increase in China. By 0950 GMT, the benchmark three-month price of copper at the London Metal Exchange had risen by 0.2% to $9,660 per metric tonne. Metals investors were focused on retail sales that exceeded expectations, even though China's factory production growth in May was at a six-month minimum. You've still got all of these consumer products, like washing machines, air conditioners and electric vehicles. "As long as people continue to buy all of that stuff, it is good for base metals," Dan Smith from CommodityMarket Analytics said. We're currently in a volatile but resilient economic environment. The Shanghai Futures Exchange's most traded copper contract rose by 0.2%, to 78.550 yuan per ton ($10,938.89). Expectations that U.S. president Donald Trump would impose tariffs against copper, as he did on aluminum and steel, has increased U.S. prices of copper and prompted metal flows to the U.S. to take advantage. U.S. Comex Copper Futures fell 0.2% to $4.80 a lb. The Comex premium to LME copper is now $927 per ton. This was down from $969 last Friday. LME copper inventories Data showed that the number of shipments dropped another 7,300 tonnes to 107 325. This was the lowest level in over a year, and down 60% during the last four months. A slightly weaker dollar also helped base metals, as it made commodities priced in dollars less expensive for buyers who used other currencies. The escalating conflict between Israel & Iran has however dampened some of the optimism. Metals analysts in Beijing said that the geopolitics of the conflict has created new uncertainty, which has led to concern about metals consumption. Other metals were little changed, with LME Aluminium at $2,504 per ton. Zinc gained 1.1%, to $2.653, Lead rose 0.5%, to $1.999.50. Nickel was up by 0.2%, at $15.155, and Tin gained 0.5%, to $32,850. Click here to see the latest news in metals.
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Kremlin: Russia is willing to mediate in Iran and accept Tehran's Uranium.
The Kremlin announced on Monday that Russia is still ready to serve as a mediator between Israel and Iran. Moscow's proposal to store Iranian Uranium in Russia also remains on the table. Tehran claims it has a right to peaceful nuclear energy, but the rapid progress of its uranium-enrichment programme has sparked fears across the Gulf and the West that the country is trying to build a nuclear bomb. enriched uranium It is possible to ease the crisis by converting nuclear fuel from Iran into civilian reactor fuel. This proposal is still on the table and it is still relevant. "But, as you know, the situation is now very complicated, especially with the outbreaks of hostilities," Kremlin spokesperson Dmitry Peskov stated. Donald Trump, the U.S. president, expressed optimism that peace will soon come on Sunday. Cite the possibility Vladimir Putin, the Russian president, could be of assistance. Peskov stated that Russia was ready to mediate in the event of a conflict, but he also noted that the root causes needed to be addressed. He added, however, the military strikes had escalated the crisis beyond its previous levels. Peskov stated that "Russia is ready to do whatever it takes to eliminate the causes of this crisis." "But, the situation is worsening more than ever, and this, of course is not improving the situation." Peskov responded that the Kremlin was aware of Netanyahu's comments to Fox News Sunday, in which he said that Israel's military strikes could lead to a regime change in Iran. Peskov stated, "You are aware that we condemn the actions that have caused such a dangerous increase in tensions in the region." We also observe a consolidation of society within Iran in the context of the Israeli bombing. (Reporting and writing by Dmitry Antonov, Editing by Guy Faulconbridge).
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G7 meeting seeks unity amid intensifying conflicts in Ukraine and the Middle East
Leaders of the Group of Seven nations began their annual meetings on Monday, amid the wars in Ukraine as well as the Middle East which have added to the global economic uncertainty. The host country Canada is also trying to avoid a confrontation with U.S. president Donald Trump. G7 leaders, including those from the United States, Canada, France and Germany, as well as Japan, the U.S.A., the European Union and Britain, will be meeting in Kananaskis, a resort in the Canadian Rockies, until Tuesday. Beyond the picturesque and serene mountain setting, however, they face challenges. Trump's first five months in office have been a turbulent time for the United States. His foreign policy has changed, he has raised concerns about his close ties with Russia and imposed tariffs on U.S. ally countries. The escalating conflict between Israel and Iran, which has pushed up global oil prices, makes the Canada summit a crucial moment for restoring a sense of unity among democratic powerhouses. Before attending his first G7, German Chancellor Friedrich Merz stated that the most important goal would be for world's seven biggest industrial nations to come together and take action. It will not be simple. After years of agreement, the traditional allies are scrambling to maintain unity and keep Trump engaged. Canada has given up on any attempt to adopt a comprehensive, all-encompassing communique in order to avoid a repeat of the 2018 Quebec summit when Trump ordered the U.S. delegation to withdraw their approval of the final communiqué after leaving. Ottawa instead sought consensus on a statement by the chair that summarizes key discussions, and six other prenegotiated declarations, such as those on migration, artificial intelligent, and forest fires. The focus of Monday's discussions will be on the economy, trade agreements, and China. The surge in oil price since Israel's attack on Iran on 12 June has complicated efforts to reach an agreement on lowering the G7 cap on Russian oil, even if Trump decides to opt out. Diplomatic sources say that escalation is on the agenda. They hope to reach at least a statement that urges restraint and returns to diplomacy. "We are one." "Nobody wants Iran to get a nuke and everyone wants the discussions and negotiations restarted," France's president Emmanuel Macron said to reporters in Greenland, Sunday, before he left for Canada. Washington has the ability to restart talks with Israel, he said. Trump said that many meetings and calls were being held to broker peace. RUSSIAN ELEPHANT INSIDE THE ROOM Trump, highlighting the unease of some Washington's allies on Saturday, spoke with Russian President Vladimir Putin. He suggested that Putin could play a mediator role. Macron rejected the idea. He argued that Moscow couldn't be a negotiator, because it started an illegal conflict against Ukraine. A European diplomat stated that Trump's suggestion demonstrated the fact that despite Russia being kicked out in 2014 for annexing Crimea and having been expelled from the group, it was still on U.S. mind. "In the U.S.' eyes, there is no condemnation of Ukraine; no peace with Russia; and even now credit for its role in mediating Iran. The diplomat stated that this G7 will be tough for Europeans. The summit will be held on Tuesday. Both the NATO Secretary General Mark Rutte and Ukraine's president Volodymyr Zelenskiy will be attending. The European officials expressed their hope to use this meeting and the NATO summit next week to convince Trump to take a more aggressive stance against Putin. Macron stated that the G7's goal should be to bring us back together, to achieve a ceasefire in Ukraine, which would lead to a robust, lasting peace. It is also important to see if President Trump will be willing to introduce much stronger sanctions against Russia. (Reporting and editing by Caroline Stauffer, Paul Simao, and John Irish)
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IAEA chief: No further damage to Iranian enrichment sites
Rafael Grossi, the U.N.'s chief nuclear watchdog, provided an update Monday on the current situation at Iran’s nuclear facilities following Israel’s military strikes. He said that there were no signs of further damage to the Natanz and Fordow enrichment site. Grossi, and the International Atomic Energy Agency, which he leads, reported previously that the smallest Iranian enrichment plant, an above ground pilot plant, at the sprawling Natanz Nuclear Complex, had been destroyed. Although there were no physical signs of an attack on the larger underground enrichment facility at Natanz there was a disruption in its power supply, which could have caused damage to the centrifuges that enrich uranium there. The Fordow underground plant was not damaged. Grossi, in a special meeting of the 35-nation Board of Governors of his agency, said that there had been no further damage to the Natanz Fuel Enrichment Plant since the attack on Friday which destroyed the above ground part of the Pilot Fuel Enrichment Plant. He elaborated on damage caused by Israeli strikes at Isfahan's nuclear facilities, including the conversion facility for "yellowcake", uranium that is converted into uranium-hexafluoride to be used as a feedstock in centrifuges. He said that four buildings at the Esfahan Nuclear Site were damaged by the attack on Friday: a central chemical lab, a uranium-conversion plant, the Tehran Reactor Fuel Manufacturing Plant, and the UF4 to EU Metal Processing Facility, which was in construction. The (International Atomic Energy) Agency will continue to be present in Iran. "Safeguards inspections will continue in Iran as soon as the safety conditions permit, as required by Iran's NPT safeguard obligations," he said. Reporting by Francois Murph Editing Bernadettebaum, Editing William Maclean
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Gold drops as investors focus on G7 meeting and Fed decision
Gold prices fell on Monday, as investors assessed the impact of the ongoing Israel/Iran conflict. They also focused on the Group of Seven Leaders meeting and Federal Reserve's policy announcement later in the week. As of 0854 GMT spot gold dropped 0.5% to $3415.36 per ounce after reaching its highest level since the 22nd April earlier in session. U.S. Gold Futures fell 0.5% to $3434.50. Analyst Giovanni Staunovo at UBS said that geopolitical tensions will not be fading in the near future, and rates are likely to continue to fall. This should give gold a boost. Iranian missiles hit Israel's Tel Aviv, and the port of Haifa early on Monday morning. At least eight people were killed and homes destroyed. On the fourth day of this conflict, there was no sign that the fighting would cease. Investors showed no signs of panic as the currency markets remained calm and Wall Street futures rose after an initial dip. Ole Hansen is the head of commodity strategy for Saxo Bank. He said that investors will closely monitor developments in the Middle East, particularly the risk of other nations being drawn into the conflict. In times of geopolitical or economic uncertainty, gold is a popular safe-haven investment. Gold tends to do well in low-interest rates. The Federal Reserve will announce its interest rate decision this week and Fed Chairman Jerome Powell is expected to make a statement on Wednesday. Since December, the Fed has maintained its policy rate between 4.25% and 4.50%. Palladium rose 1.6% to 1,044.40, while platinum gained 1.2%. (Reporting by Anushree Mukherjee in Bengaluru; Editing by Kate Mayberry)
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TotalEnergies CEO: We will double our stake in Malaysian gas assets
Patrick Pouyanne, the CEO of TotalEnergies, announced on Monday that it had doubled its investment in Malaysian assets to meet the increasing energy needs of its Asian customers. Pouyanne, speaking at the Energy Asia Conference in Kuala Lumpur, said: "We produce natural gas and today afternoon, we will announce a deal to double our stake in Malaysia because the country is perfectly situated to produce energy and serve the market." The company didn't immediately respond to a question about the specifics of the transaction. TotalEnergies Buy Tickets SapuraOMV Upstream is a Malaysian independent gas producer whose principal assets are its operating interests in offshore blocks SK408 (40%), SK310 (30%), and SK410 (30%). Total has also signed contracts for liquefied gas worth 6 million metric tonnes in 2024. These are mainly with Asian customers, who, according to Pouyanne, form the "core" of Total's business, as sales to Europe have been declining. Pouyanne said that Total would also invest 30% of its capital to create an integrated power business. The goal is to increase the share of electricity to 20% in its portfolio by 2030. (Reporting and writing by Sudarshan Varadahan; editing by Martin Petty, Louise Heavens, and David Stanway)
Markets on hold in Europe as they wait and see what happens with the Middle East
Wayne Cole gives us a look at what the future holds for European and global markets.
While Israel and Iran continue their missile exchange, the markets have been resilient on Monday so far with most Asian indices in the green. Chinese retail sales exceeded forecasts but there was no reaction.
Oil initially jumped by 4%, but then settled down to a gain of around 1%. The Middle East's war is not unexpected, and so far it does not appear to be spreading.
Investors seem to assume that Iran won't threaten to close down the Strait of Hormuz, as this could potentially drag the United States into a conflict. Saudi Arabia, and the rest OPEC can also increase supply if necessary to keep prices down.
The G7 meeting, taking place in Canada this year, will be a headache to the host country. They already have enough problems with President Trump's tariffs against allies.
The progress made on trade agreements has been slow, and the U.S. China tariff truce last week may not have resolved the most important restrictions on minerals that are closely linked to national security.
The rise in oil prices will complicate the Federal Reserve's meeting this week. However, it must be a sustained increase in price to pose a real inflationary threat.
The Fed's dots plots are the key to determining whether they will keep the two rate cuts this year or reduce them to one, as some believe.
The central banks are busy this week. Bank of Japan is expected to remain steadfast on Tuesday, but may signal a slowdown of its bond-tapering for next year.
Bank of England, Norges Bank and Riksbank are all expected to hold steady. The markets are fully priced in for the Swiss National Bank to ease by a quarter-point, going down to zero.
Market developments on Monday that may have a significant impact
- Appearances of ECB members Joachim Nagel, and Piero Cipollone. (Reporting Wayne Cole; Editing Jacqueline Wong.
(source: Reuters)