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TotalEnergies CEO: French prefer a fuel price cap over a superprofit tax
Patrick Pouyanne, Chairman and CEO of TotalEnergies, said at the annual general meeting held on Friday that French citizens prefer to have energy companies 'cap fuel prices' at the pump rather than pay a tax on superprofits. He was answering a climate NGO's representative who asked if?the company could do more to help ease the price shocks for consumers. TotalEnergies has been criticized for its massive profits from oil price spikes caused by the war in Iran. French politicians are pushing for a tax on the company to help lower prices. Pouyanne claimed that a survey had revealed that French citizens prefer a price limit, but he did not specify which poll was in question. Pouyanne stated that "French citizens have already spoken out, saying they prefer a direct benefit from a price cap at the pump to a later supertax which the government could or might use?to finance energy transition." He added: "By a way, I think?that is why the government backed?back from its intention to impose supertax... We are the lone company in France to voluntarily cap fuel prices, and the more that we sell, the more money we lose." Reporting by America Hernandez, Editing by Sudip kar-Gupta & Susan Fenton
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Reliance gets relief from India's highest court in securities fraud case
The Indian Supreme Court granted relief to Reliance Industries Ltd on Friday in a securities?fraud?case, overturning both a lower court decision and a 2020 order by the markets regulator that claimed the 'firm' engaged in manipulative trading. According to the order, the court ordered the Securities and Exchange Board of India to refund the 2.5 billion rupees (26.32 millions dollars) that it collected from Mukesh Ambani's company while the appeal was pending. RIL and SEBI didn't immediately respond to requests for comment. Requests for comment from RIL and SEBI were not immediately responded to. The case is about RIL's decision in November 2007 to sell a?5% stake in Reliance Petroleum Ltd. (RPL). Before the sale, RIL entered into agreements with 12 entities who took short positions on RPL futures contracts. Profits and losses from these trades were ultimately attributed to the company. SEBI's?2020 order ruled that this arrangement was fraud and market manipulative as it circumvented derivatives position limits, cornered market, and influenced settlement price. The company was ordered to refund 4,47 billion rupees in investor funds. RIL appealed the order to the Securities Appellate Tribunal which confirmed SEBI's findings. The company then approached the Supreme Court. The top court held, however, that a violation of position limits was a regulatory violation, but did not establish fraud by itself. Hedging is a legitimate risk management tool, and there's no requirement to have a "perfect" hedge. The court said that there was no legal requirement for SEBI to "ensure a perfect hedging with a 1:1" ratio. It also stated that SEBI failed to meet its higher burden of proof to prove manipulation. Sumit Agrawal is a senior partner at Regstreet Law Advisors. He said: "Concentration of positions, aggressive trading strategy, or even violations of trading standards may invite regulatory consequences but are not sufficient to establish market abuse." $1 = 95.0000 Indian Rupees
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Data analysis shows that Russia's diesel production fell by another 10% in May following drone attacks
Data analysis revealed on Friday that the production of diesel in Russia dropped?by about 10% in 'May. This was on top of a %10% monthly drop in April, as Ukrainian drones attacked refineries, forcing them to cut back or stop their output. Kyiv is targeting Russia's energy infrastructure in order to reduce the amount of money that Moscow can earn from oil and gas, which it could use to fund its war against Ukraine. The Russian government has been focusing on exporting diesel at a high price. However, this is the time of year when farmers are in high demand. According to Interfax, the government is considering an export ban. Some industry sources stated that a ban is unlikely, as restrictions would complicate the refineries' operations. Calculations showed that drones hit refineries reduced their diesel production by as much as 1 million metric tonnes in April. 7.5 million tonnes of diesel were produced in March, according to sources within the industry. Data from LSEG and market?sources showed earlier this month that Russia's seaborne gasoil?and diesel exports increased by 8% in April compared to March. However, they were only down slightly from 3.3 mtonnes the same month a previous year. According to data, exports remained stable in May. Due to the 'effective closure' of the Strait of Hormuz, the resulting?reduced output of Russia as a result of drone attacks could limit its ability to?benefit from an increase in oil prices related to the Iran War. This has caused a unprecedented energy market disruption. Washington has been distracted from its efforts to end the Ukraine conflict by the Iran war that began at the end February with U.S. and Israeli airstrikes. Barbara Lewis is responsible for editing and reporting.
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Gold prices fall for the third consecutive month as inflation worries linger
Gold prices fell for the third consecutive month as fears about rising energy costs fueled expectations of higher rates. As of 1151 GMT, spot gold was up by 0.9% to $4,532.03 an ounce. On Thursday, gold fell to its lowest level in two months, $4,365.76, but it closed higher. Metal has dropped?around 2 percent so far in this month. U.S. Gold Futures for August Delivery rose by 0.7% to $4.562.60. Gold remains negatively correlated to oil which impacts inflation and monetary policy. "Gold is positively correlated to lower oil prices, which reduces the likelihood of rate increases," said UBS analyst Giovanni Staunovo. Oil futures dropped more than 1%, and were on course for their steepest weekly drop since early April. This was after reports that U.S. officials and Iranian officials 'agreed on Thursday to extend the ceasefire and remove restrictions on shipping through Strait of Hormuz. The agreement has not yet been approved by Donald Trump, the U.S. president. Iranian state media also said that it was still in its preliminary stages. The 'Iran War' has led to higher energy costs in the U.S., which have accelerated inflation. The surge in prices confirmed economists' belief that the Federal Reserve will hold interest rates at the same level well into next, with some expecting a rate increase by the end this year. Gold is considered to be a 'hedge against inflation', but the non-yielding investment tends not to perform well in environments with high interest rates. "May 2026 was a time of consolidation on global markets after a turbulent first quarter." Geopolitical tensions, inflation fears and easing safe haven demand continued to influence sentiment. However, a firmer outlook on interest rates and a softer outlook for the economy impacted precious metals in May," wrote precious metals trading company?Rotbart & Co. Spot silver remained at $75.61 per ounce, platinum fell 0.1% to 1,920.75 and palladium rose 0.8% to 1 378.67. Palladium and platinum were on course to lose money in the month of March, but silver was expected to gain.
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Oil tumbles, stocks gain on US-Iran deal hopes
Oil prices fell and were headed towards a weekly decline as traders awaited clarification on the efforts to reopen Strait of Hormuz, and extend an?U.S.Iran ceasefire. United States and Iran reportedly agreed to lift shipping restrictions and extend their ceasefire, according to sources. However, U.S. president Donald Trump is yet to approve this deal. Iranian state media also said that it was not finalized. Oil futures dropped around 2%, and are on course for their biggest weekly drop since early April. MSCI's global stocks index rose by 0.4%, reaching a new record high. Chipmakers led the gains after Dell's upgraded forecasts boosted AI sentiment. Benchmarks in Tokyo, Seoul, and other cities rose by 2.5% and 3.5% respectively. Jason da Silva is the director of global investments strategy at Arbuthnot Latham. Gains in other countries were modest. Wall Street futures were largely flat, but European stocks gained 0.5%. S&P 500 closed Thursday at a record 7,563.63. Dollar was set for a?small weekly decline due to lower U.S. Treasury rates. Analysts said, however, that the drop in yields could be limited as a U.S. Iran deal is unlikely quickly to reverse inflation pressures caused by elevated fuel prices. Jason Wong is a senior?market analyst at BNZ Wellington. He said that the?market has already taken the view that a?deal's going be done, and the Strait will be open. The main point is that it eliminates the tail risk of an extremely, very bad outcome. I don't believe it's an okay to let oil fall $20 or Treasurys drop 20 points. Investors also monitor other geopolitical risk. NATO member Romania reported on Friday that two people were injured by a Russian drone during an attack overnight on Ukraine. This was the first time a drone has hit a heavily populated area of Romania in this war. KIWI TRYS TO LIFT OFF WHEN YEN IS SQUEEZED Global bond yields have fallen this week. The U.S. 10-year Treasury yield is now at 4.4453 percent. The euro zone's largest four economies saw their inflation rate rise above the European Central Bank target of 2% for the third consecutive month in May. This was due to a rise in fuel prices triggered by the "Iran War" that began to affect other prices. Overnight U.S. consumption, income and home sales data came in?below expectations?, with inflation running hot, but just a bit below forecasts. In Japan, core annual inflation in Tokyo was below the central bank’s 2% target in May for the fourth consecutive month. However, a rebound in factory activity indicated resilience and supported a rate hike in June. The yen remains under pressure after sliding back to levels that prompted suspicions of intervention. The yen was just below the 160 mark, which is considered a key level for policymakers. The Ministry of Finance announced on Friday that the Japanese authorities spent 11.7 trillion yen (roughly $73.5 billion) between April 28 and May 27 on currency interventions. This is a small fraction of their $1 trillion war chest. The euro dipped 0.1% to $1.164175. The New Zealand dollar has been a major mover this week, rising about 2% against the U.S currency after the Reserve Bank of New Zealand held rates steady on Wednesday but delivered a more-hawkish-than-expected outlook.
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Hitachi Energy India aims to grab a bigger share of the data centre boom by implementing 'grid-to rack'
Venu Nuguri, the CEO and Managing Director of Hitachi Energy India, told?that they plan to capture 30% of the data centre industry's overall spending, up from their previous goal of 10-15%. According to consulting firm IMARC Group, India's data center market is expected to grow from $5.55 billion to $13.11 billion between 2025 and 2034. This growth will be driven by digitalization, cloud adoption, and increasing AI workloads. Hitachi Energy India is a subsidiary of Hitachi Energy in Zurich. It manufactures and supplies power equipment, grid technology, and data center solutions for several industries. It controls about half the high-voltage direct-current (HVDC), or bulk electricity, market in India. The company had previously estimated that it could reach between 10%-15% (of the total data center spending) in the country through its equipment and software offerings. Nuguri's "grid to rack" solution integrates power infrastructure from grid level connection to server rack distribution. Nuguri stated that the solution would increase the market addressable by the company by 10%-15% from the total data centre segment. Hitachi Energy India announced this week a 20 billion-rupee investment ($210.53 millions) in a?large greenfield power transformer facility located in Gujarat in western India. This brings the company's cumulative capex up to 40 billion rupees, spread across 19 factories in eight locations. The company ended 2026 with an order backlog of 296 billion rupees, a record. Nuguri stated that the firm was "actively" looking at acquisitions, including data centres, digital layer, power consulting and others, to fill in capability gaps. According to the Ministry of Power, India's peak?power?demand reached a record 270.8 Gigawatts in may, an increase of 68% over 148 GW from 2014. Data showed that demand?is expected to double to 458 GW in 2032. Nuguri, the CEO of Nuguri, said this is a structural tailwind which the company considers to be one of its main growth drivers. $1 = 95.0000 Indian Rupees (Reporting and editing by Abhinav Paramar in Bengaluru)
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Analysts raise oil forecasts as energy flows slow down
A monthly poll released on Friday showed that analysts have raised their oil price forecasts to 2026 for the third time since the Iran War began in February. They cite an 'extended timeline' for normalising energy flows back to pre-conflict levels. According to a?survey? of 33 economists, analysts and other experts, Brent crude will average $90.44 a barrel by 2026 compared to the $86.38 per barrel forecast last month. U.S. crude oil was projected to average $84.63 per barrel, up from the April view of $80.07. The forecasts are up about 40% compared to February estimates, which were $63.85 per barrel for Brent and $ 60.38 per barrel for WTI. These estimates were published just a day prior to the U.S.-Israeli strike on Iran. Brent and WTI are at four-year highs of more than $126.41 a barrel and $119.8 a barrel respectively, since the war began. The closure of the Strait of Hormuz caused sweeping disruptions in energy supplies. Prices remain below 2008 record highs of more than $147 per barrel. "It is unlikely that prices will reach new records in this year." Surabhi Menon, EIU India, said that even though prices are forecast to continue increasing until July this year, the increase will only be marginal compared to current high levels. This is based upon the assumption that war in Iran will remain in the current state (with the Strait of Hormuz shut and a ceasefire) until the end of July at the very least. Kpler data showed that the monthly crude oil exports of the Middle East region, which is the largest oil exporting area in the world, dropped to less than half their previous level, at about 8.8 million barrels a day, since March. Thomas Wybierek is an analyst with NORD/LB. He said that the disruptions will last longer than expected, and the trade flow through the Strait of Hormuz could reach levels similar to those before the crisis. Even if a short-term ceasefire is reached or a type of peace contract is signed, the amount of oil and gas delivered by sea will not be the same in 2026. Analysts polled predict that the global oil market will face a significant supply deficit by 2026. Estimates range from 500,000 to eight million bpd. In May, the Organization of Petroleum Exporting Countries forecast a 1.17 million bpd increase in the global?oil?demand in 2026. This is down from the 1.38 million bpd previously expected. The U.S. Energy Information Administration also predicted a decline in demand of about 420,000 bpd. "The?drag on demand is increasing due to weaker macro-conditions. The?consumption is being impacted by higher prices, weaker trade flows and GDP downgrades. The conflict has the effect of tightening up supply and slowing down demand growth," Crisil analysts said. Analysts expect a rise in non-OPEC oil production, as inventories are expected to be reduced. This will keep global stock levels under pressure. Four sources have said that the seven leading OPEC+ countries are likely to agree on a modest increase in July production when they meet next week. Tobias Keller is an analyst at UniCredit. He said: "The constraint that has to be met by the government is not quotas, but rather the inability of moving incremental barrels across Hormuz. This means that output policy will remain largely symbolic, while exports are still impaired."
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Chicago grains are mixed as the markets evaluate US-Iran ceasefire agreement
Chicago wheat and corn futures declined on Friday, while soybeans rose. The'market' assessed the impact of the possible new ceasefire agreement between the United States an Iran. The weather conditions in the U.S. grain belts were also a major topic. Crude oil futures have been a major factor in recent grain prices. This is because reports indicated that the U.S. had agreed with Iran on a possible ceasefire extension. The markets expect that any?U.S. Iran peace deal would cause a sharp fall in commodity prices. Chicago Board of Trade's most-traded Wheat fell?0.1% at 1055 GMT to $6.23-1/4 per bushel. Corn dropped 0.3% to $4.54-1/4 bushels, while soybeans rose 0.3% to $11.99. "Wheat and corn are mixed today, as the market assesses exactly what a potential?U.S./Iran sixty day ceasefire will mean, since technically, there has been an?easefire? since April," Matt?Ammermann said, commodity risk management at StoneX. The Midwest weather in the United States continues to be favorable with some much-needed heat. This is weakening the wheat crop, but rains are soon needed for U.S. soybean and corn crops. Soybeans were also encouraged by the expectation of a strong demand for biofuels to be blended with U.S. fuels, under?the Renewable Volume Obligations (RVOs). Ammermann stated that "Soybeans are continuing to trend higher. However, the bean oil story remains positive for the complex because U.S. cash bean oil supplies are in high demand due to?RVO obligations as well as record crush margins at the moment." Wheat gains have been limited by the upcoming harvests in the Northern Hemisphere. The U.S. crop was affected by drought but many other countries are on track to have good crops. According to traders, China may start purchasing U.S. farm products and soybeans under the new trade deal. Russia's Agriculture Ministry said Friday that the country is anticipating a?decent 2026 grain crop,? signaling export competition with the U.S.
McGeever: The Fed's Warsh faces a problem with the 'wedge of rare US core inflation'
The gap between the two main measures of?underlying U.S. Inflation is growing. Kevin Warsh, newly confirmed Federal Reserve chair, is disappointed to find that the preferred measure of the central bank, which measures inflation, is the one with the fastest rise. This further dampens any hopes for rate reductions.
The Bureau of Economic Analysis released the April personal consumption expenditures figures on Thursday. This is one of two closely-watched price change measures across a broad range of goods and services. The consumer price index is another important measure of price changes.
On the back of rising energy prices, annual headline PCE inflation rose to 3.8% in March from 3.5%. Core inflation, which excludes volatile energy and food costs, increased to 3.3%, up from 3.2%. The numbers are in line with what was expected, but they still make Warsh uncomfortable.
The annual measures of headline PCE, CPI and core PCE inflation have been over 2% for five years. President Donald Trump's new tariffs on Iran and his war against the country are likely to push that number up to six years or more.
A wedge is emerging between the core PCE (which is currently at 3.3%) and CPI (2.8%). This is a rare phenomenon that will frustrate President Donald Trump who has been vocal about his desire for rates to be cut.
Two Inflation Measures: A Tale
PCE, on average, is broader than CPI, as it includes both urban and rural households. The PCE index includes expenses made by consumers such as employer's health insurance payments.
Core PCE rarely exceeded core CPI in the three decades leading up to the COVID-19 pandemic. Bank of America economists estimate that PCE only has topped CPI 11% of the times since 1990.
This relationship has changed in the last few months. AI may have been a major factor. Dean Maki (chief economist, hedge fund Point72) notes that the PCE core index has a greater weighting for computer software and accessories. This series has been rising at a rate of about?14 per cent annually, boosted by the AI capex spending this year.
Morgan Stanley's latest AI capex predictions for this year show a spending of $800 billion, an increase of 80% over the previous year. This will continue to put pressure on prices.
A second factor is the classification. The Cleveland Fed defines the core PCE index as including "food services", that is, food purchased for consumption off premises. Maki reports that the price of food away from home increased by 3.6% in April.
Maki recently wrote that "core PCE inflation appears to be even higher than target than core CPI and we believe this is likely going to continue in the months ahead."
He is not alone. According to the Philadelphia Fed's quarterly survey of professional economists, core PCE is forecasted to increase by 3.4% this quarter compared with a previous estimate of 2.7%. This represents a larger upward revision and higher inflation than core CPI forecasts.
SHIFT GOAL POSTS
It may be because of this that Warsh is open to considering other PCE measures. He has indicated that he prefers the "trimmed mean" indexes of the Dallas Fed and Cleveland Fed, which remove extreme price movements at the margins. This gives a better picture of the underlying changes in prices from one month to the next.
For many years, particularly during the Alan Greenspan Fed period in the 2000s it was assumed that annual core PCE was the benchmark for the Fed’s 2% target.
According to the Fed website, "the 2% target now is measured by the annual change in the price index of personal consumption expenditures." This suggests that policymakers are looking to headline PCE. However, confusingly, these two measures have been interchanged by Fed officials, economics, and market participants in recent years.
This ambiguity, on the other hand, could give the Fed some wiggle-room as it balances the Fed's interest in maintaining full employment and its focus upon price stability.
The lack of clarity may lead the markets to believe the Fed is simply shifting the goalposts, selecting the measure that best supports the desired policy shift.
This is a big risk at a time where questions are being raised about the independence of the Fed. Warsh's honeymoon may be over even before it has begun.
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(source: Reuters)