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Sources say that Venezuela's opposition will soon lose control of US refiner Citgo
The Venezuelan opposition-controlled boards that have supervised U.S.-based refiner Citgo Petroleum for ?the last seven years are preparing to ?wind down as soon as this ?month, ?following a shake-up by Venezuelan interim President Delcy Rodriguez, two sources involved in the preparations said. Rodriguez started preparing to take control of the refinery owned by Venezuela earlier this year after Washington recognized her government. Her government replaced Nicolas Maduro’s administration, after he had been captured by U.S. troops in January. According to U.S. courts filings, the interim president's administration replaced law firms who had previously?represented Venezuelan and state-run PDVSA oil company in lawsuits and arbitral cases abroad. They were hired by a National Assembly led by opposition. One source said, "The boards no longer have the support of all legal and political counterparts. They can't continue." This is unfortunately happening without any prior discussion. The Venezuelan oil ministry, PDVSA and Citgo, as well as the supervising board, did not respond to comments immediately. Following U.S. imposition of sanctions on Venezuela's energy sector in 2019, Houston-based ?Citgo severed ties with its parent, Caracas-headquartered ?PDVSA, under orders from a National Assembly that the opposition then controlled. Even after the Venezuelan government lost control over the assembly, opposition-led boards in other countries continued to supervise the refiner. They were also involved in the appointment of its board of directors. CITGO AUCTION LOOMS: STATUS Unrealized is a U.S. court auction, in which a judge accepted a bid from an affiliate hedge fund Elliott Investment Management for Citgo Holding Company to pay creditors who are pursuing the refiner. The sale is awaiting final approval by the U.S. Treasury Department which has been protecting Citgo against creditors in recent years. Treasury extended the protection of a license to September 17 in early August. The U.S. Court of Appeals, which is considering the challenges against the 'auction process', has set an October hearing. After that date the court will rule on refiner ownership. The administration of Rodriguez has labelled the court-ordered sales as "theft", but it's unclear what it will do next as it works with Washington to revive OPEC's country's oil industry. The sources stated that Citgo's board and executive team led by CEO Carlos Jorda will not be changing anytime soon. Citgo remains profitable under the Venezuelan opposition?oversight. Citgo has recently gained access to Venezuelan crude oil for refining. The company registered a net income of 936 million dollars in the second quarter. This is up from 100 million dollars in the same period in last year, despite solid margins.
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S&P 500 closes down as oil reaches $100 per barrel
U.S. stock prices closed lower on the day as oil 'prices' soared over $100 per barrel. Apple also fell and Treasury yields increased?ahead of?important inflation data due later this week. Brent crude soared above $100 per barrel on concerns about global oil supplies and an increase in Middle East tensions. This is a critical level for the stock exchange. The U.S. and Israeli war against Iran, which is now in its seventh-month, has stoked fear of a broader conflict within the region, while high oil prices are fueling inflation. All other sector indexes declined, but the S&P 500 Energy Index rose. Treasury Department announced it would purchase up to $6 billion of 10-to-20 year government bonds. Some analysts expected a bigger purchase in the $8 billion to $100 billion range. Stocks are less appealing to investors when they have higher yields on government bonds. Rob Haworth is a senior investment strategist with U.S. Bank Wealth Management, Seattle. The Federal Reserve will look at the U.S. Producer Price Index on Thursday, and consumer prices on Friday to determine its interest rate path. The Fed is expected to raise interest rates by 60% at its next policy meeting. The S&P 500 fell 36.36 points or 0.47% to 7,637.16 while the Nasdaq Composite dropped 164.77 or 0.62% to?26.256.64. The Dow Jones Industrial Average dropped 403.65 points or 0.76% to 52,382.42. The S&P is down around 2% from its record-breaking close on August 13, and remains about 12% higher in 2026. Meta jumped, and the S&P 500 declined less after the social'media company rolled-out a much-touted AI Assistant that can automatically send emails,'sell a car, or make travel reservations on behalf of its users. Alphabet declined to bid after Google parent announced it would invest $15.1 billion over the next two years in 'AI infrastructure' in Finland, including a large deal for the supply of nuclear energy. Advanced Micro Devices gained on the Philadelphia Semiconductor index. Dow dropped after Bloomberg News reported that the chemicals manufacturer was considering ending its $20 billion partnership agreement with Saudi Aramco.
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Oil and Treasury yields rise as stocks fall
Brent crude prices soared to $100 per barrel on Wednesday, and the yield on 10-year Treasury bonds hit its highest level since November 20, 2023. Middle East?and inflation fears weighed on Wall Street. Brent crude reached $100.27 a barrel at midday, an increase of 2.4% for the day. This is the first time the price has breached the symbolic level since July 24. After Iran claimed it had fired ballistic missiles against a U.S. military base in Jordan, and both sides claiming to have attacked vessels. Treasury Department announced that it would purchase up to $6 billion of?10 to 20-year government securities. The Treasury Department had initially indicated a $4 billion buyback, but analysts expected a larger amount as part of?a bid to support long-duration bonds. Globally, stocks were down amid Middle East turmoil as well as looming action from several central bankers including the Federal Reserve. All three major U.S. All three major?U.S. The MSCI index of stocks around the world fell by 0.42%. Brent breaking above $100 marks a significant psychological milestone for the markets. But what it means for inflation is of greater concern. "A prolonged oil shock may keep prices high and complicate central bank policy," said Lukman otunuga, FXTM's head of market analysis. CENTRAL BANK BANK DECISIONS AHEAD The euro rose ahead of Thursday's ECB policy announcement, as markets were expecting a rise amid inflationary pressures caused by the Iran War. The currency hit a high of $1.16493, which is higher than the previous week's. As traders retreated from short positions in the Japanese currency, the yen gained strength and reached a high of nearly seven months. There are growing expectations for faster Bank of Japan interest rate increases and a possible rush of repatriation of Japanese capital. The dollar index fell by 0.03%, to 98.75, measuring the greenback in relation to a basket including the yen, the euro and other currencies. The U.S. consumer and producer price reports will be released this week. Policymakers are looking for more evidence that inflation is continuing to cool. In the latest survey, 70% of economists expect the Federal Reserve will keep rates stable at its rate-setting session next week. However, this certainty is below the 90% of economists who expected rates to remain steady in August. Matthew Ryan, Head of Market Strategy at global financial services company Ebury, said: "Financial market participants are genuinely divided on whether the FOMC is going to raise rates next week at its September meeting. This unusual uncertainty comes so close to the decision date." Gold rose 1.5% to $4,417 per ounce.
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US States sue Trump Administration for weakening endangered animal protections
On Wednesday, two U.S. state filed lawsuits accusing President Donald Trump's administration?of illegally weakening federal Endangered Species Act. This landmark law has protected the bald?eagle from the dangers posed by the development. In a?one? lawsuit, states challenged a law that narrowed a definition of harm. This had included habitats where animals were endangered. Oil drilling, mining, and other activities are allowed in these habitats as long as they do not directly harm or kill the animals. Two rules are at issue in the other lawsuit. The first rule "eliminates protections for new threatened species, unless the U.S. Fish and Wildlife Service will create species-specific protections. The second rule states that the government must consider objections from developers, fossil-fuel companies and other businesses prior to declaring areas as "critical habitats." Letitia J., New York Attorney general, said that the attorneys general of 20 states as well as the District of Columbia filed one or both lawsuits. The Endangered Species Act, passed by Congress in 1973 has been credited for saving a number of animals, including the California Condor, Grizzly Bear and Humpback Whale from extinction. Trump's goal is to reduce regulations, which he claims are a constraint on American businesses. This includes the scaling back of various environmental initiatives and standards. Wildlife advocates often consider habitat destruction to be the leading cause of animal extinction. Interior Secretary Doug 'Burgum said that the Endangered Species Act had been "weaponized". This has weakened competitiveness, undermined national security and hurt Americans' pockets. He said that the new rules aligned the law more closely with its original intention. The changes are a result of the U.S. Supreme Court ruling in 2024 that overruled a precedent dating back 40 years, which required courts to give deference to federal agencies reasonable interpretations on laws they administer.
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GE Aerospace's jet engine supply is dependent on the 'black arts' of castings
GE Aerospace, a leader in the aerospace industry, has acted to reduce shortages of precision parts for jet engines while securing valuable technologies. It did this by purchasing Consolidated Precision Products at a price of $12 billion. The purchase of CPP, the world's third largest manufacturer of metallic components for engine blades, is part and parcel of a long-term effort to improve aerospace supply chains. Larry Culp of GE Aerospace, who announced his largest acquisition after splitting the industrial giant General Electric and turning it around, described this capacity as "mission-critical". The deal shows a shift in focus from winning new orders towards production strategy for the aerospace industry. Its biggest challenge is to deliver on order books that are seven to ten years old. INDUSTRIAL CHOKEPOINT Since the COVID-19 pandemic, castings -- which are parts made of liquid metal but difficult to produce in large quantities -- and forgings (which are made of solid metal, and equally hard to manufacture) have been the most stubborn chokepoints within the industry. GE's competitors also want to?address this issue. Pratt & Whitney announced last year that it would be adding a casting foundry to its North Carolina facility, while Rolls-Royce will expand an existing British plant. Analysts say that turbine blades are the most expensive aerospace products because they use a combination of age-old techniques, such as?wax replications, and cutting-edge technology to resist temperatures above their melting points. The engines have also been the source of larger?production snags that fuel tensions between the airline industry and the engine industry. The few players who have invested and acquired specialist knowledge over decades are difficult to copy and keep prices high. Kevin Michaels, Managing Director of AeroDynamic Advisory, said: "It is the black art?of manufacturing that has always been a big barrier." "It's the hardest thing to make a new design... you might have to throw out half or more of your work (to create a new one)," he said. Jefferies reports that CPP is among the four largest global suppliers of such castings, and provides a quarter GE's requirements. Industry sources claim that GE has been courting the Ohio-based company for many years, as it seeks to insure against disruptions from larger suppliers Howmet and Precision Castparts Corp. DEAL WILL BE ANTITRUST SCRUTINED Bottlenecks are not the only reason for expansion. GE plans to utilize its LEAN Production System to increase efficiency and reap greater rewards. Analysts claim that the IPO and turnaround of UK counterpart Doncasters set a new tone. A strategic competition between engine developers is also centered around castings and forgings. Michaels stated that China also wants a piece of the market. Jerrold Lundquist of The Lundquist Group said that GE is expecting a financial return from the deal. It also gives them the opportunity to own a critical piece of the engine supply chain. Elon Musk highlighted the broader?competition in advanced metal parts last week when he posted that SpaceX's plans to manage separate?castings on-site would be "a profound game-changer". Deals such as GE's do not come without risk. Deals like GE's are not without risk. Howmet CEO John Plant stated on Wednesday that he was "fine with the deal". The deal will also be subject to?antitrust review. GE will likely point out its ownership of Italian gear manufacturer Avio Aero, a major Pratt & Whitney supplier. Matteo Peraldo is an aerospace and defense partner with U.S. based AlixPartners. He said: "I expect GE will be required to divest some facilities, making integration and any carve outs related to that process quite complex."
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US to help Kenya develop its critical mineral processing
A senior American official stated on Wednesday that the United States would help Kenya develop an important minerals processing industry. This was in response to the rivalry between China &?the US. Over access to essential minerals. Kenya is considering bids for the development of Mrima Hill, a coastal deposit that is estimated to contain rare earth minerals worth tens and billions of dollars, as well as niobium - a metal commonly used in aerospace manufacturing. Frank Garcia, Assistant Secretary of State for Africa, said at a meeting of a Kenyan business lobby group, the American Chamber of Commerce, that "critical minerals" are a priority for both President (Donald Trump) Trump and Secretary of State (Marco) Rubio. We are prepared to work with Kenya in order for it to become a regional leader. We are ready to assist you in building a mining sector that is transparent, attracts legitimate business, respects the communities and secures global supply chains. U.S. U.S. U.S. International Development Finance Corporation?supports a pipeline African rare earth project as Washington tries to reduce its dependence on the top producer China. China dominates global supply chains and has tightened their export controls in recent years. Garcia stated that "if we are serious about rare Earths minerals, energy, and a stronger America we do it together, not alone." William Ruto, Kenya's president, welcomed the U.S. assistance and said that local processing of minerals would help his government to create jobs. Ruto said at the same meeting that "in critical minerals we are accelerating responsible exploration and the development of rare earth elements, titanium graphite, Lithium, Niobium, and other strategic resources". In July, Critical Metals Corp. and RareX Australia announced that they were shortlisted for the rights to Mrima hill. Harry Kimtai said that the Kenyan government had not released a shortlist, but six companies were on it, with two from the United States, he added. U.S. Official says he rejects the extractive model Chris Kulukundis said that the U.S. and Kenya have reached an agreement on how to develop the mining sector. The Mrima?Hill procurement process is?moving in a transparent way. He said that two U.S. consortiums were being considered for the tender process. If selected, they would be able to complete the project the right way. Ruto said in June that Kenyan and U.S. officials were nearing the completion of a crucial minerals deal. On Wednesday, neither side gave an update. Garcia stated that the United States favored a mining model which includes local processing in producing countries and value addition. He said that some of his competitors were "efficient" at only one thing, which was to pull minerals from the ground and whisk them offshore. They then captured all the value added far from the land from where the minerals came from. China has denied the accusations made by some governments and advocacy organizations about its export of raw minerals to be processed elsewhere.
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Portugal purchases power and gas company REN in order to protect strategic assets and influence investments
Portugal's Government said Wednesday that it?bought a share in the power and /gas grid operator REN?to safeguard its strategic assets amidst growing geopolitical uncertainties and?gain a greater influence over?key investment. Last month, the state agreed to purchase 13.7% of REN. This is a return to the company after 12 years when it left during Portugal's bailout. During this time, China's State Grid acquired a 25% stake, becoming its?largest investor. The Environment Minister Maria da Graca Carvalho stated that Portugal has maintained a "good 'dialogue and cooperatio" with the Chinese company. However, she said the decision was based on considerations such as sovereignty, national interest, security, and geostrategic. She told a committee of parliament that "whether it's this state-owned firm?or another one from another country, the constant geopolitical changes?we've seen in recent months cannot be ignored." She stated that in light of the growing geopolitical uncertainties, it is important to control REN’s strategic assets - the electricity and natural gas transmission networks, and the gas storage infrastructure - especially when ownership is outside the European Union. She said: "We have European and national laws that allow us to act, particularly in matters of security and sovereignty, as a preventative measure?against the?highly unpredictable geopolitical climate today." She added that the stake would increase the state's "influence 'from within'" investments aimed to expand REN's?grid of electricity, and speed up connections for new wind and solar projects. This, she said, would 'help lower electricity costs and boost 'the economy's competition. She said, "We have a long list?of major investments that are dependent on the availability and reliability of the grid for electricity in Portugal."
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US to help Kenya develop its critical mineral processing
A senior American official said on Wednesday that the United States would help Kenya develop an important minerals processing industry, in the context of a 'rivalry between China and America over access to vital minerals. Kenya is considering bids for the development of Mrima Hill, a coastal deposit that is estimated to contain rare earth minerals worth tens and billions of dollars, as well as niobium - a metal commonly used in aerospace manufacturing. Frank Garcia, assistant secretary of state for Africa at the American Chamber of Commerce in Kenya, said: "Critical Minerals are a priority for President (Donald Trump) Trump and Secretary of State Marco (Rubio). We are prepared to work with Kenya, as it becomes regional leader in this area." "We're ready to help you create a transparent mining sector that attracts legitimate business, respects local communities and secures global supply chains." U.S. U.S. U.S. International Development Finance Corporation supports a pipeline of African Rare Earth?projects, as Washington aims to reduce?dependence from top producer China. China dominates the global supply chains and has tightened its export controls over recent years. Garcia stated that "if we are serious about rare Earths minerals, energy, and a stronger America we do it together, not alone." William Ruto, Kenya's president, welcomed the U.S. assistance and said that local processing of minerals would help his government to create jobs. Ruto said at the same meeting that "in critical minerals we are accelerating responsible exploration and development" of rare-earth element, titanium, graphite and lithium. In?July, Critical Metals Corp. and RareX.com.au announced that they were shortlisted for the right to develop Mrima Hill. Kenya's government is yet to publish a list of shortlisted companies. Ruto said in June that Kenya was close to completing a crucial minerals deal with the U.S. On Wednesday, neither side gave an update on the deal. Garcia stated that the United States favored a mining development model which includes local processing in producing countries and value addition. He said that some of his competitors were efficient in one area: they could extract minerals from the ground and whisk them off to offshore locations, where they would capture all the value added far from the lands the minerals came from. China has denied the accusations made by some governments and advocacy organizations about its export of raw minerals to be processed elsewhere.
Wall Street falls as investors worry about inflation and $100 oil
Wall Street closed lower on Wednesday as 'oil prices' remained at $100 per barrel, despite ongoing Gulf tensions. Inflation fears and Gulf tensions continued to weigh on investors.
The three major U.S. indexes all ended the day in a lower position. The Dow Jones Industrial Average fell by 0.77%. The S&P 500 was down 0.48%, and the Nasdaq composite shed 0.64%. MSCI's global stock index fell 0.52% after the U.S. close.
The stock market was down all day as headlines focused on the oil price surging above $100 per barrel for first time since last July. Iran claimed it had attacked ten ships near the Strait of Hormuz following the U.S. sinking of five Iranian oil tanks.
Brent crude closed the day up?3.4%, or $101.11 a barrel. U.S. West Texas Intermediate CLc1 rose $3.02 or 3.25% to $96.05 per barrel. These were the two highest closing prices since May.
The Treasury Department announced that it would purchase up to $6 billion of 10-to-20-year bonds. The Treasury Department had originally indicated a $4 billion buyback. However, the actual amount was $6 billion. Analysts had expected a bigger purchase to support bonds with longer duration.
Brent breaking above $100 marks a significant psychological milestone for the markets. But what it means for inflation is of greater concern. "A prolonged oil shock may keep prices high and complicate central bank policy," said Lukman otunuga, FXTM's head of market analysis.
CENTRAL BANK BANK DECISIONS AHEAD
The euro edged up ahead of Thursday's European Central Bank policy decision, with markets expecting a rate increase due to inflationary forces from the Iran War.
As traders redeemed their short positions, the yen rose to a level not seen in nearly seven months. There are growing expectations for Bank of Japan rate increases and the potential of a rush of Japanese capital repatriation.
The dollar index, which measures greenbacks against a basket including yens and euros, increased 0.05% to reach 98.83.
The U.S. consumer and producer price reports will be released this week. Policymakers are looking for more evidence that inflation is continuing to cool.
In the latest survey, about 70% of economists expect that the Federal Reserve will keep rates stable at its next policy meeting. This is below the 90% of economists who expected the same thing in August.
Matthew Ryan, Head of Market Strategy at global financial services company Ebury, said: "Financial market participants are genuinely divided over whether the FOMC will increase rates at its September meeting next week. This is an unusual level of uncertainty so close to a deadline."
Gold rose by 0.98%, to $4,396 per ounce.
(source: Reuters)