Latest News
-
Concerns about supply from Iran, Russia and Canada cause oil prices to rise
Early Tuesday morning, oil prices in Asia rose on supply concerns. Iran is set to reject the U.S. proposal for a nuclear deal that would ease sanctions on Iran, a major oil producer. Meanwhile, wildfires in Canada have affected production. Brent crude futures rose 55 cents or 0.85% to $65.18 per barrel at 0000 GMT. U.S. West Texas Intermediate Crude was up 59 Cents, or 0.94 %, to $63.11 per barrel after rising by around 1% in the previous session. Both contracts rose by nearly 3% the day before after OPEC+ decided to limit the increase in production in July to 411,000 barrels a day. This was lower than the market expected and similar to the rise in previous months. Tuesday's prices were supported by geopolitical tensions. Iran is set to reject the U.S. proposal for settling a decades-old dispute over nuclear energy, an Iranian diplomat told Reuters on Monday. The proposal, he said, does not address Tehran's concerns or soften Washington’s stance regarding uranium enriched. If the nuclear talks between Iran and the U.S. fail, this could lead to continued sanctions against Iran. This would limit Iranian oil supply and support oil prices. The conflict between Russia and Ukraine has continued to fuel supply concerns as well as geopolitical risks. A wildfire in Alberta, Canada, has caused a temporary shut-down of oil and gas production. This could lead to a reduction in supply. Wildfires have impacted the production of oil sands by more than 344,000 barrels per day (bpd) in Canada, which is about 7%. The huge jump in oil prices Monday was mainly due to relief that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, which included Russia, had not increased production more than they did in the two previous months. In a note, Daniel Hynes said that investors had unwound the bearish positions built up before the weekend's meetings.
-
Officials say that Russian attacks have killed at least five people in the east of Ukraine.
Officials said that Russian shelling on Monday killed at least 5 people in eastern Ukraine's frontline areas. Vadym Filashkin, governor of Donetsk Region, focal point of Russian military's slow western advance, stated that one person died and two were injured in the city Kramatorsk. If Russian forces continue to advance through the Donetsk Region, this city will be a major target. Filashkin reported that three more people were injured and two killed in Illinivka, a town located further south. Prosecutors in Kharkiv, further north, said that two women were murdered in a village to the south of Kupiansk. The village has been under Russian attacks for several months. Last month, the mayor of Kupiansk said that his city had been 90% destroyed.
-
Alberta wildfires interrupt 7% of Canada’s oil production
Calculations show that wildfires in Canada's oil producing province of Alberta affected the production of more than 344,000 barrels of oil sands per day, or approximately 7% of Canada's total crude oil output. Over the weekend, at least two thermal oil-sands producers south of Fort McMurray, the hub of the industry in Canada's north, evacuated their workers and shut down production. Canadian Natural Resources announced that it had evacuated its Jackfish 1 site and halted production of approximately 36,500 Bpd. Cenovus Energy announced that it had evacuated all non-essential staff from the Christina Lake oil sands facility and had shut down production of approximately 238,000 barrels per day. The company stated on Sunday that it was not aware of any damages to its infrastructure, and expects its Christina Lake operations to resume in the near future. MEG Energy announced on Friday that it had evacuated its Christina Lake facility. The company continued to produce at the site, but said that Saturday the fires had caused a power failure that was delaying the startup of Phase 2B operations. This represents approximately 70,000 barrels of production per day. Wildfires also have affected Alberta's conventional oil and gas production. Aspenleaf Energy was forced to stop production due to a fire burning in the north of the province near Swan Hills. Canada produces approximately 4.9 million barrels per day. According to provincial data, Alberta has 49 active wildfires. Manitoba has 24 active fires. Saskatchewan has 16. According to the AirNow page of the U.S. Environmental Protection Agency, Monday's air quality in parts of Minnesota, North Dakota and Wisconsin reached unhealthy levels. In 2023, Canadian fires will blanket the U.S. East Coast with smoke. This will force millions of Americans indoors. Alberta Premier Danielle Smith announced on Monday that 400,000 hectares (988.422 acres), up from 9,000 last week, had now burned across the province. She added that nearly 5,000 people had been evacuated and that the government has reactivated its cabinet committee for emergency management due to concerns about the worsening situation in the province. Smith told Saskatoon reporters, "We have to be able respond quickly." According to the Canadian Interagency Forest Fire Centre, as of June 1 a total area of 1.4 millions hectares had burned across Canada. Manitoba warned 17,000 people last week to leave the remote northern part of the province due to wildfires. In the last decade, wildfires have affected oil and gas production in Canada. Suncor Energy, Canada’s second largest oil sands company, temporarily halted production at its Firebag Complex due to an adjacent fire. Alberta's wildfires will burn more than 100 times in May 2023. This means that companies will shut down at least 319,000 barrels equivalent to oil per day or 3.7% of Canada’s total production. In 2016, thousands were evacuated from Fort McMurray as a wildfire destroyed a large part of the town. This forced companies to cut their oil production by one million barrels a day.
-
Ivanhoe to restart flooded Congo copper mine partially in late June
Ivanhoe Mines announced on Monday that it will restart a closed section of the Kakula Copper Mine in the Democratic Republic of Congo, which was shut down due to underground seismic activity. After tremors damaged underground infrastructure and caused flooding, the Canadian miner temporarily halted operations at its Kakula mine. Ivanhoe said it plans to resume operations in the west side of the Kakula Mine, where the pumping equipment has been working. Ivanhoe stated that the eastern section of mine will resume operation once the water pumping is complete. Ivanhoe's shares in Toronto rose by as much as 7.7%. After installing temporary underground pumping equipment, the company claimed to have stabilized water levels. Ivanhoe stated that additional pumping equipment was ordered to remove all water from the mine. Vancouver-based miner Ivanhoe initially suspended certain mining activities on 20 May after the Kakula underground mine was struck by frequent underground earthquakes. Ivanhoe has confirmed that mining and ore processing at the nearby Kamoa mine are not affected. Last year, the Congo mines produced approximately 437,000 metric tonnes of metal. Ivanhoe suspended last week its production forecast for this coming year. It had been originally set between 520,000 to 580,000 metric tonnes of copper.
-
Trump's tariffs on steel and aluminum are a reality
U.S. president Donald Trump intends to double tariffs for steel and aluminum imports from Wednesday to 50%, increasing pressure on global producers of steel and intensifying his trade war. Why is Trump doubling tariffs? Trump wants to encourage and support investment in the domestic production of aluminum and steel, two essential materials for construction. Aluminium is used in transport and packaging. These tariffs are already causing higher prices for consumers of steel and aluminum, as well as a decline in manufacturing. Meanwhile, the hurdles, such higher electricity prices, are very high. About a quarter (25%) of the steel used in America is imported. The majority of this comes from Mexico and Canada, our neighbours. The vast majority of aluminium imported into the United States comes from Canada. In fact, Canada exported 3.2 millions tons of aluminum to the United States in 2013. What has been the impact of tariffs on U.S. prices? The physical market premium covers freight, taxes and other costs. On Monday, the premium AUPc1> increased by 54% to 58 U.S. Cents per lb ($1,279 per metric ton) from Friday. The premium has increased by more than 120% this year. Goldman Sachs estimated that the premium needed to increase to $0.68 to $0.70 per lb in order to reflect the import tariff of 50%. COMEX steel prices for hot rolled coils (HRCs) rose 6%, reaching a new session high of $910 per short ton ($1,003 per metric ton). Josh Spoores, Director of Steel Americas Analysis for consultancy firm CRU, said: "The U.S. imports steel at a net rate, and we need imports to meet demand." This action will not prevent imports, but it will raise prices for domestic steel consumers, including manufacturers, in the U.S. The Institute for Supply Management's (ISM) data showed that U.S. Manufacturing, which is heavily dependent on imported raw materials for its production, contracted for the third consecutive month in May to a six-month minimum, and factories continued to lose jobs. Will the Tariffs Support U.S. Production? Analysts say that higher steel and aluminum prices will boost profits of local U.S. producers like Nucor. However, building smelters may take up to five years or more. This would mean the completion of these smelters is likely to be beyond Trump's presidency. Trump said that Nippon Steel would invest billions in modernizing U.S. Steel mills, with the aim of buying U.S. Steel. This will increase production. Emirates Global Aluminium announced last month plans to build the United States' first new primary aluminum production plant since 1980. The plant will have a capacity of 600,000.00 tonnes of primary aluminum per year. Century Aluminum, with federal funding, is also looking to build a "green" low carbon aluminium smelter. Industry sources say that power prices pose another problem for companies trying to produce aluminum in the United States. They were also the reason behind the closing of many U.S. Smelters due to difficulties in agreeing on competitive long-term power purchase contracts because of a variety of factors, including volatile markets and regulations.
-
Trump's proposal will lift Biden's limits on Alaskan oil drilling
On Monday, the administration of U.S. president Donald Trump proposed rolling back Biden's limits on oil drilling in Alaska. This area is the largest undeveloped public land tract in America. This move is in line with Trump's energy agenda, which includes reducing regulations on oil and gas production and increasing domestic fuels. The Alaska National Petroleum Reserve is made up of 10.6 million acres (4.39 million hectares). NPR-A is the name given to a 23 million-acre (9,3 million-hectare) area of Alaska's North Slope, which was designated in 1923 for emergency oil supplies by the U.S. Navy. In the 1970s, the land was made available for commercial development. It is now administered by the Interior Department Bureau of Land Management. The Interior Department stated that the Biden-era regulation was in conflict with the 1976 Naval Petroleum Reserves Production Act which authorized oil and natural gas leasing. Interior Secretary Doug Burgum stated in a press release that Congress was clear in its intent to create the National Petroleum Reserve (NPR) in Alaska for responsible development in support of America's energy independence. The 2024 rule did not follow this mandate. It prioritized obstruction over production, and undermined our ability to harness American resources at a critical time for energy independence. It was reported that the Interior Department of the Biden administration had finalized a regulation in April last year to prevent oil and gas development within 40% of Alaska’s National Petroleum Preserve. This would protect the habitats of polar bears and caribou, as well as the way of living of Indigenous communities. Environmental groups praised the Biden Rule for protecting habitats, cultural resources and the U.S. economy. But Alaska officials claimed that the restrictions would result in job losses and increase the U.S.'s dependence on foreign resources. According to the U.S. Energy Information Administration, Alaska's North Slope is responsible for just under 3% of U.S. crude oil production. (Reporting and editing by Nichola Gardner and Timothy Gardner)
-
Petrobras Brazil has cut gasoline prices for first time since 2023
Petrobras, the state-owned oil company of Brazil, has announced that it will lower gasoline prices for distributors starting Tuesday. This is the first time since October 2023 that the price of the fuel has been reduced. Petrobras announced in a Monday statement that gasoline prices would drop by 5.6%, to an average of 2.85 reais ($0.5005)/litre. This represents a 0.17-reais reduction per litre. According to ANP data, gasoline sales in Brazil increased 4.6% from April of last year, and reached 3.81 billion litres. Gasoline sales in the first four months of the year totaled 14.74 billion litres. This is a 3.5% increase compared to 2024. Last year, sales declined compared to the previous year. Petrobras, since 2023 has implemented a new price policy to prevent the transfer of international volatility to the domestic market. Petrobras' last price adjustment occurred in July 2024 when it raised gasoline prices 7%. Petrobras will reduce its prices, but it won't be immediately felt by consumers. This is because the price reduction will be dependent on factors like tax collection, ethanol blends, and margins for distribution and retail. $1 = 5.6939 Reais (Reporting and writing by Marta Nogueira, Editing by Aida Pelaez-Fernandez, Susan Fenton).
-
Botswana will cut its growth forecast due to the prolonged downturn in the diamond market
A senior official in the financial ministry said that Botswana's economic growth projection for 2025 will be cut to zero because of a prolonged decline in the diamond industry. The budget deficit is also expected to increase due to the reduced diamond revenues. Botswana has the highest value of diamonds in the world. Its economy is heavily dependent on diamond exports which contribute to around 30% of its national revenue and 75% of its foreign exchange earnings. Ndaba Gaolathe, the finance minister, had forecasted a 3.3% increase in this year's budget in the 2025 Budget announced in February. This was based on the expected recovery in the diamond industry. He had predicted a budget deficit of 7.56 % of the gross domestic product for the financial year 2025/26, which runs from April to march. This was lower than his previous estimate of 9% GDP. Tshokologo Alex Kganetsano, permanent secretary at the Ministry of Finance, told a meeting of the Parliamentary Audit Committee on Monday that these estimates are no longer achievable. Kganetsano stated that "in view of the events since...February, we will revise downwards this growth projection." We have a preliminary number of almost zero percent. However, this figure must be vetted internally before it can be made public. The International Monetary Fund predicts that Botswana’s economy will contract by 0.4% in this year. The Botswana economy is expected to contract by 3% this year, mainly due to the downturn in the diamond markets. However, the government was expecting mineral revenues to increase significantly, including diamonds. This would have helped it avoid another recession. Kganetsano stated that "the trend does not seem to be improving, but rather it is a deteriorating." He added, "As a result of the slowdown in inflows, we are sitting on unpaid invoices for government suppliers." He said that a significant drop in revenue has led to massive liquidity issues, which threaten the financial sustainability and viability of government operations. (Reporting and editing by Alessandro Parodi, Susan Fenton and Brian Benza)
U.S. manufacturing ETFs win possessions as financiers bet on 'reshoring'.
Financiers are piling into exchange traded funds concentrated on business that are restoring or expanding production in the U.S. and benefiting from federal government subsidies.
Some $2.25 billion has streamed into a little group of ETFs highlighting the so-called reshoring theme this year, bringing their total assets to a record $9.67 billion by the end of August.
Companies keep describing reshoring as a long-lasting driver of their development, and our goal is to find beneficiaries or enablers of that pattern before that theme is mainstream, said Chris Semenuk, who oversees the actively managed Tema American Reshoring ETF, introduced last year.
Its possessions have grown from $6 million in May 2023 to $101.5. million as of the end of August. The fund is up almost 16%. year-to-date, compared to a 17.7% gain in the S&P 500.
Manufacturers have been moving production to the United. States to avoid supply chain snarls and duck stress in between. Washington and Beijing that are drying up financial investment in China.
Congress authorized more than $1 trillion in funding for brand-new. facilities projects in late 2021 and passed a costs that. will offer another $200 billion for chips making the. following summer.
A number of prominent corporate moves have actually also assisted. drive interest, including Taiwan Semiconductor Manufacturing. Co's (TSMC) decision to enhance the size of its. investment in brand-new Arizona fabrication plants to $65 billion or. the federal government's award of as much as $500 million to Century. Aluminium to construct the first aluminum smelter in the. U.S. in 45 years.
BlackRock is the current and largest of the ETF suppliers. competing for investor dollars as interest in the reshoring. theme is sustained by the main function the economy and job development. are taking in the U.S. governmental race. It launched the. iShares U.S. Manufacturing ETF in July.
These stocks might benefit whichever celebration wins the. election, Jay Jacobs, head of thematic and active ETFs at. BlackRock, told Reuters in the latest episode of Inside ETFs.. It's an unusual location of consensus throughout the aisle.
Shares of the ETF have actually climbed 3.5% over the last one month. compared with a roughly 0.9% gain for the S&P 500,. according to LSEG. The new BlackRock fund now has nearly $6. million in possessions.
Strong entertainers in the U.S. production sector consist of. Caterpillar and Eaton Corp., which are up 16.4%. and 27.6% year-to-date, respectively. The S&P 500 industrials. sector, home to a lot of the business whose shares are owned by. the ETFs, is up 13.5% this year.
To be sure, an increase of weaker-than-expected financial information. in current months, including an unanticipated dip in U.S. manufacturing construction costs, has raised issues that. U.S. development might be beginning to soften. The Federal Reserve is. expected to cut rates of interest for the very first time in years at. its Sep. 17-18 meeting in a bid to alleviate financial policy ahead of. any prospective economic slowdown.
At the exact same time, some stocks have become more highly valued. as the wider market has rallied. The industrials sector, for. example, is trading at a forward price-to-earnings multiple of. 26.7, compared with 19.2 a year back.
Wonderfully priced chances are rare;. the type of appraisals we saw in early 2020 are not there any. more, stated Jeff Muhlenkamp, supervisor of the $249 million. Muhlenkamp Fund, a mutual fund.
Nor, he added, is reshoring an automatic ticket to. above-average returns. Business expanding or repatriating. producing centers to the U.S. will likely discover themselves. facing higher labor and basic materials costs.
Whether that will slow the strong growth the funds have. experienced this year remains to be seen. Assets in the $1.5. billion First Trust RBA American Industrial Renaissance ETF. , that made its debut in 2014, have actually tripled in the last. 12 months, while those in the $8.04 billion Worldwide X U.S. Infrastructure Advancement ETF, rolled out in 2017,. have actually grown 50% in the exact same period, according to Morningstar.
The latter fund also has seen year-to-date returns of 26.6%,. outpacing the S&P 500, according to LSEG.
Jacobs sees this as just the start.
If anything, this is more of an entry point for financiers,. he said.
(source: Reuters)