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The spot crude premium is rising as US sanctions against Russian producers are driving China and India demand
Trade sources and analysts reported that spot premiums on crude markets rose on Thursday, as traders and analysts expected the U.S. sanctions against top Russian producers to spur China and India’s demand for supplies coming from the Middle East and Africa, and South America. Washington imposed sanctions on major oil suppliers Lukoil and Rosneft over the Ukraine conflict, causing concern over a tighter supply from Russia. Russia is the largest supplier of crude oil to China and India. Brent oil futures, the global benchmark for crude oil, rose more than 4% Thursday. Sources said that Indian refiners, as well as some Chinese companies who are among the top buyers of oil in the world, will curtail their Russian oil imports, to comply with new sanctions. They'll turn to alternative suppliers. This prompted a surge in spot premiums Thursday for the key Middle Eastern benchmarks after they had fallen earlier this month due to an abundance of supply, as the Organization of the Petroleum Exporting Countries (OPEC) and its allies increased output. Data showed that Cash Dubai's premium reached a high of $2.71 a barrel for the third consecutive session. This is more than twice the $1.26 compared to the previous session. On October 2, it hit a low of 22 months. The data also showed that spot premiums for benchmark grades GME Oman, IFAD Murban, and IFAD Murban, both rose to new one-month highs of $3.12 a barrel and $2.86 a barrel, respectively. Two sources who have direct knowledge of this matter confirmed on Thursday that Reliance Industries, a privately-owned company, will cease importing crude oil as part of a long-term agreement to purchase nearly 500,000 barrels of crude oil per day from Rosneft. Sources with direct knowledge said that Indian state refiners, including Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp., are also reviewing their Russian trade documents in order to ensure that no oil will come directly from Rosneft or Lukoil following the U.S. sanctions against the oil companies. Reliance purchased crude oil cargoes in recent days from Brazil and Middle East. These included Qatari al-Shaheen, Land grades and Iraqi Basra Medium. The crude could be used as a partial replacement for Russian supplies. Reliance was seen Thursday in the market scouting out supplies, according to a Middle Eastern merchant approached by Reliance. We expect that most of the substitute crudes will come from the Middle East. Richard Jones, an Energy Aspects crude analyst, said that the urgent need for sour-barrels will allow the current Basra surplus to be cleared faster than previously expected. The Brent-Dubai swap has fallen further into negative territory as a result of today's rally, which supports Atlantic basin arbs. Brent's premium to Dubai quotes LSEG data show that the price of a barrel was 1 cent on Thursday. It had been negative since this week's start. Brent-linked grades of oil from the Atlantic Basin are more attractive to buyers in Asia as the price difference narrows. Last week, Britain also sanctioned Rosneft (Russian oil company) and Lukoil (Russian oil company). Reporting by Florence Tan in Singapore and Siyi Luu in New Delhi, with additional reporting by Nidhi verma; editing by Harikrishnan Nair
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PG&E 2026 profit forecast beats expectations amid strong power demand
PG&E, the utility firm, forecast its 2026 full-year profit on Thursday. This was a little above Wall Street's expectations due to a surge in power demand. According to the U.S. Energy Information Administration, U.S. electricity consumption is expected to reach record levels in 2026, as data centers for artificial intelligence, cryptocurrency, and household and commercial use consume huge amounts of energy. The California-based utility announced in September that it will spend $73 billion between now and 2030 on transmission upgrades, to keep up with the surge in demand for electricity due to data centers. According to LSEG data, the company expects 2026 core earnings adjusted between $1.62-$1.66 per share. The midpoint is expected to exceed analysts' average estimates by one cent per share. The outlook for 2025 was also reduced to $1.49 to $1.51 per common share, from $1.48 to $1.52. The company reported an adjusted profit per share of 50 cents in the third quarter. This was above the 42 cents expected by analysts, due to the higher demand and lower operating expenses. The wildfire fund is a pool of money that covers the costs utilities incur due to such events. In the third quarter, the company spent $86 million, which was down 38% compared to a year ago. PG&E is investing in its grid to improve reliability, and has built underground power lines. This comes after it was blamed for causing a number of wildfires including the most deadly ones in California. The utility reported that at the end of the third quarter it had liabilities totaling $1,33 billion in relation to the Kincade Fire in 2019, $2,13 billion in relation to the Dixie Fire in 2021 and 250 million in relation the Mosquito Fire in 2022. PG&E, the parent company of Pacific Gas and Electric Company (PG&E), is an energy provider that provides service to 16 million Californians in a 70,000 square-mile area. (Reporting from Pranav Mathur, Bengaluru. Editing by Vijay Kishore.
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Stocks surge on positive earnings; sanctions against Russia boost oil
The global stock market got a boost Thursday thanks to a series of positive earnings reports that helped offset some of the gloom in Wall Street due to a lacklustre performance by tech megacaps. Oil prices also rose following U.S. sanction against Russia. Oil prices rose 5% following Washington's sanctions against major Russian companies Rosneft, and Lukoil for the Ukraine conflict. The STOXX 600 index rose 0.3% for the day, as positive earnings helped to boost the domestic indices. The MSCI All-World Index, however, fell 0.1% and is now heading towards its third consecutive day of decline. Chinese stocks recovered from a drop of 1.1% to close at 0.3%. Sources said that the White House is considering a plan of reducing software exports to China as a retaliation to Beijing's recent round of export restrictions on rare earths. Investors are on the defensive as Trump's Asia trip (next Monday) is causing geopolitical tensions, according to Charu Chanana of Saxo Bank, Singapore. Positive Earnings Surprises As earnings season begins, global equity markets are beginning to ease off their record highs. Although there have been some disappointing results or outlooks for megacaps, the majority of companies have so far surpassed analysts' expectations. Futures for the S&P 500 index and Nasdaq lost 0.1% of their gains, reversing previous gains. Tesla, the first company of the Magnificent Seven to announce earnings, saw its shares drop around 3% on Thursday in premarket trade after it missed profit expectations despite record revenue for the third quarter. There was still plenty of tech to be excited about. Shares of IonQ Computing, Rigetti Computing, and D-Wave Quantum jumped more than 20% after a report in the Wall Street Journal stating that the U.S. Government is in negotiations with several quantum-computing firms to exchange stakes for federal funding. After Donald Trump imposed sanctions on Ukraine, oil rose up to 5.5% and reached a two-week-high of $66.04 per barrel. The EU approved the 19th set of sanctions against Moscow, which included a ban on Russian gas imports. Last week, Britain imposed sanctions on Rosneft and Lukoil. DO NOT UNDERESTIMATE THE MAGIC OF RATE CUTS Investors' firm belief that the Federal Reserve will soon be on a rate-cutting frenzy helps to ease some of the anxiety over geopolitical tensions and trade conflicts. The markets show that traders expect U.S. interest rates to fall from 4% now to 3% in June. "Never underestimate a Fed which cuts rates, and also the magic word: ending QT," IG Chief Market Analyst Chris Beauchamp, referring the central bank's programme of quantitative tightening, in which it reduces its holdings of Government Bonds to tighten up credit conditions. The dollar index which compares the U.S. dollar to six other currencies, rose 0.1% last week. It has been steadily rising since August when it hit a three-and-a half year low. Investors are more confident that the Fed will protect the economy. Gold, on its way to its largest weekly decline since May, rose 0.5% in the last 24 hours at $4,114 per ounce. Overnight, the price briefly approached $4,000 as investors took profits before this week's U.S. inflation report.
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Russia's Nornickel maintains 2025 nickel production forecast
Nornickel (Russia), one of the largest nickel producers in the world and the biggest palladium producer, maintained on Thursday its nickel production forecast for 2025, which is 196,000-204,000 tons. Nornickel reported that nickel production rose 18% in the third quarter compared to the previous three month period, when the company reduced shipments from its Dudinka Port in the Arctic because of seasonal flooding. Nornickel explained that the increase in raw material processing was due to the higher volume of materials processed during second quarter. The company also said that palladium production fell 6% to 617,00 ounces in the third quarter. This was due to a halt in navigation at Dudinka Port because palladium is a metal with a longer cycle of production. The company blamed the decline of nickel and palladium in the first nine month of the year of 4% and 6 % respectively on the need to upgrade Western mining equipment. Evgeniy Fedorov, Nornickel's Chief Operation Officer said that the adjustment was a result of a temporary drop in ore production due to the gradual switch to new mining equipment by Polar Division under the program for import substitution. (Reporting and writing by Anastasia Lyrchikova, editing by Andrew Osborn and Kirsten Donovan).
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Asia Diesel Spot Premiums Hit Two-Year High on Firm Fundamentals
Asia's 10ppm sulphur diesel spot premiums LSEG data on Thursday showed that oil prices surged to a 2-year high. This was boosted by a strong first-month market and a reaction from the markets to new U.S. sanctions against two Russian oil exporters. The data revealed that spot market premiums were around $2.22 per barrel. This was an increase of more than $1.60 from September 1. However, there were few deals on the window for cargoes with a 10ppm quality. Last seen at these levels was in early October of 2023. Multiple trade sources reported that the 10ppm diesel premiums are on an upward trend since early September. This is due to limited supplies in the first month, which coincide with planned refinery maintenance, and regional production problems. The traders also said that several procurement tenders held by Southeast Asia-based buyers in early October were supportive. LSEG data also showed that front-month spreads had reached a slightly higher level than a 3-month high, of almost $2 a barrel. Traders say that the 6% increase in ICE Gasoil Futures today afternoon was also a positive factor for Asian markets. The east-west spreads have widened back to a discount of slightly over $41 per metric tonne, which is a month-wide discount. (Reporting and editing by Tomasz Janovski and Harikrishnan Nair.)
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Dow exceeds losses estimates with cost-cutting and new US capacity
Chemicals company Dow reported a smaller-than-expected adjusted quarterly loss in the third quarter on Thursday, as cost cuts and higher volumes from new U.S. Gulf Coast assets helped offset weakness in global chemical prices. In premarket trading, Dow shares were up 6.5% to $23,10. The company said that it had achieved more than half its $6.5 billion planned near-term cash assistance, including $1 billion of capital expenditure cuts and an accelerated delivery of costs reduction targets by the end of 2026. Jim Fitterling, Dow's CEO, said that Dow's cost-discipline and its new polyethylene and alkoxylation facilities in the U.S. Gulf Coast have helped to lift margins in key markets. The global chemical market is still under pressure due to the weak demand, increasing production costs and stricter environmental regulations. This is especially true in Europe. Companies are forced to review their strategies and optimize their operations. Dow says that addressing regional challenges including European shutdowns will result in an adjusted core profit increase of nearly $200 millions beginning mid-2026. The company forecasts a fourth-quarter net sale of $9.4 Billion, which is below the analysts' expectation of $10.2 Billion. Fitterling reported in September that it had observed stable volumes and strong export capabilities, as well as low-cost positions, during the third quarter of the year, in the United States. He said that after a drop in prices due to uncertainty over tariffs during the second quarter, the market for polyethylene is now poised to move upwards. According to data compiled and analyzed by LSEG, the Michigan-based firm reported an adjusted loss per share of 19 cents for the quarter that ended on September 30. This was lower than analysts' estimates of a loss average of 29 cents. The company's quarterly net sales were $9.97 billion. This was below the analysts' average estimate of $10.23billion. (Reporting and editing by Tasimzahid and Krishna Chandra Eluri in Bengaluru)
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F-35s, fixing and fires: Ukraine, Gaza Wars threaten climate
Climate damage: Russia must pay! Rebuilding Gaza will increase emissions Massive gaps in military emissions data Emma Batha Researchers estimate that the first three years of the conflict generated 237 million tons of greenhouse gasses (GHG). This is equivalent to the annual emissions of Belgium Austria and Ireland combined or 120 million cars running on fossil fuels. This is pushing us into the wrong direction, at a time we need to drastically cut emissions," said Lennard de Klerk of Climate Research, the lead author of a report that tallied the war's emission, published in this month. De Klerk stated that the cost of climate damage due to the war, in which hundreds and thousands of people were killed on both sides, already exceeded $43 billion. When post-conflict rebuilding is taken into account, a separate study on the Israeli-Hamas conflict in Gaza estimated the carbon footprint of the first 15 month's war topped 32 millions tons. This is equivalent to the annual emissions from Ivory Coast. Benjamin Neimark led the research of UK and U.S. based experts. The projected reconstruction emissions were a real shock. This was a shocking revelation and it made us sit up. The groundbreaking studies will be presented at the sidelines next month's COP30 Climate Summit in Brazil. Researchers say that conflicts and climate changes create a destructive cycle. Not only do wars cause climate change but climate change also fuels conflict in fragile areas as the competition for water and other resources intensifies. WILDFIRES De Klerk was surprised that wildfires accounted for a fifth (of the war's) carbon footprint after Russia's invasion in 2022. Unrelenting shelling caused thousands of fires that ravaged farmland and forests. Some of these fires were likely made worse by landmines or unexploded ordnance scattered across the landscape. According to the report of the Initiative on GHG Accounting of War (an international research team headed by de Klerk), nearly 850,000 hectares of land were burned last year. He said that the amount of rain was more than 20 times higher than the average annual rainfall. The summer of 2024, due to climate changes, was exceptionally dry. This allowed fires to spread. As the Gaza war expanded, missile attacks across the Lebanon-Israel frontier also caused fires that destroyed forests and farmland. Firefighters in war zones face many dangers, as in Ukraine. RECONSTRUCTION Emissions have also increased due to the destruction of energy infrastructure both in Ukraine and Gaza. The Russians' attacks on oil depots have caused tons of fuel to burn, and the gas and electricity infrastructure has released powerful GHGs such as methane or sulphur-hexafluoride (SF6) which has a potential global warming 24,000 times higher than CO2. Solar panels provided a quarter (one of the largest shares) of Gaza's electricity before Israel attacked the enclave in October 2023. The destruction of solar infrastructure has led to a greater reliance on diesel generators, which are polluting. Neimark stated that the carbon footprint from post-war reconstruction of Gaza, which has seen the deaths of 68,000 people, will dwarf the emissions caused by the conflict. According to U.N. estimations, Israel's intensive bombardment destroyed over 90% of Gaza's housing, and has turned it into a wasteland. 60 million tons worth of debris were created. Concrete and steel are used in huge quantities to rebuild homes and infrastructure. These materials have a high carbon footprint. Neimark said that the loss of farmland and orchards, as well as shrubland in an area already susceptible to climate change effects, has increased the risk of desertification. The two wars have also increased global emissions far from the frontlines. Commercial flights have been forced to reroute due to airspace closures, increasing fuel consumption. De Klerk stated that flights from London to Tokyo take nearly three hours more. The Middle East unrest has also disrupted the international shipping in the Red Sea. This is due to the longer routes, and the increased speed of sailing. MILITARY DATA HOLE This new research about Gaza and Ukraine is a part of an overall push to increase transparency regarding global military emissions. Even during peacetime, the carbon footprint of armies is large - from maintenance of bases to transporting troops and equipment. Military exercises, weapons production, and military exercises all add up. According to the Conflict and Environment Observatory (a UK non-profit), about 5,5% of greenhouse gas emissions are attributed to militaries around the world. However, countries are not required by international climate bodies to report their military emission. Experts warn that the lack of data could lead us to underestimate the amount of emissions needed to keep the temperature rise to 1.5 degrees Celsius. Many countries are increasing their defence spending to respond to multiple crises. This is causing concern that this will increase emissions from military equipment and divert funds away from climate change efforts. Climate scientists say that militaries should be required to report their emissions. Neimark stated that "we can't begin making meaningful cuts until we have adequate baselines."
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Valero Energy's profit beats expectations for the third quarter on higher margins
Valero Energy, a U.S. refiner, surpassed Wall Street's expectations on Thursday for its third-quarter profits. This was due to a rebound in the refining margins. After two years of record profits, the refining margins rebounded in 2024 from their multi-year lows. This was due to refiners taking advantage of supply shortages that were caused by geopolitical tensions affecting Ukraine. U.S. refinery profit margins measured by the 3-2-1 Crack Spread In the third quarter, grew by nearly 29% in average compared to a year ago, aided by high diesel and gasoline margins, boosted both from robust demand and low inventory. The company reported that its average daily throughput volume increased to 3.1 millions barrels in the third quarter from 2.9million bpd one year ago. Valero’s refining profit per barrel was $13.14 compared to $9.09 one year ago. According to LSEG data, the company's adjusted profit for the three-month period ended September 30 was $3.66, compared to analysts' expectations for $3.05.
Mount Fuji in Japan sees snowfall 21 days later than normal
The top of Japan's Mount Fuji received snow on its summit for the first winter time ever, according to the Meteorological Agency. This is 21 days later than average, since records started in 1894.
The snowfall this year was two weeks earlier than in 2024 when the snow fell on the 3,776 metre (12,388 ft) peak only on November 7 - the latest date since records began.
The sacred mountain has been a symbol of Japan for centuries. Its snow-capped summit inspired many of Japan's greatest artworks, including Katsushika's "Great Wave Off of Kanagawa", which is now featured on the backside of the 1,000 yen note.
Mamoru Mamatsumoto, of the Kofu Observatory office of the Meteorological Agency, told last year that the cause of the snowfall was unknown.
In August, Japan's highest temperature ever was recorded in Isesaki, a city located northwest of Tokyo. It reached 41.8 degrees Celsius (107.8 Fahrenheit).
According to the Kofu Observatory office of the Meteorological Agency, Fuji's first snowfall is the point in the summer when all or part the mountain is covered with snow or "white looking solid precipitation", as observed from below. (Reporting and editing by Kate Mayberry; Anton Bridge)
(source: Reuters)