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Saudi Arabia increases Arab Light June OSP in Asia
Saudi Arabia, which is the largest oil exporter in the world, has increased its prices to Asian buyers despite the fact that crude prices fell on Monday, after the producer group OPEC+ agreed over the weekend to another accelerated increase in output. Saudi Aramco, the state oil company, raised its official June selling price of its flagship Arab Light crude from $0.20 to $1.40 per barrel over the average Oman and Dubai price. The increase in price follows two consecutive months of decreases, and is despite the downward pressure on crude oil prices due to concerns over more supply entering a market that's clouded by uncertain demand. OPEC+ members, which include allies such as Russia and the de facto Saudi Organization of Petroleum Exporting Countries, agreed to increase oil production for a second month in a row, increasing output by 411,000 barrels / day (bpd) in June. The combined increases from the eight OPEC+ members for April, may and June will total 960,000 bpd. This represents a 44% reduction of the 2.2 millions bpd in voluntary cuts that the group agreed to phase out between December 2026.
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Fortuna eyes Guinea investments after Burkina Faso exit, CEO says
Fortuna Mining, a Canadian company, is looking to expand into Guinea, after leaving Burkina Faso where it was plagued by regulatory instabilities and high security costs due to jihadist threats. Ganoza stated that Fortuna is currently not established in Guinea but is actively looking for gold-mining opportunities. They are conducting site visits, meeting with the authorities and visiting mining sites. Jorge Ganoza, in a video call, said: "We would consider investing in Guinea today." He said that a portion of the growing exploration budget of the mining firm will be allocated to Guinea, where there is "a lot of space for discovery". These comments show how mining companies respond to the changing landscape of West Africa where governments run by military forces are revising their mining codes and trying to reduce the threat from jihadists. Since 2020, military coups have taken place in Burkina Faso, Mali and Niger. The new leaders introduced new mining codes in order to increase the local control of the sector, while at times using hardball tactics. Malian authorities arrested foreign executives in recent months and seized gold stocks during negotiations with mining firms. Niger seized an uranium mine run by France in December, and Burkina Faso’s junta promised to seize more foreign-owned industrial mining companies last month. Guinea, which borders Mali on the southwest side, has a military-led government as well - Mamady doumbouya, who seized power 2021, but it does not face the same threat from jihadists. The government of the country has not changed its mining code but it has placed pressure on foreign companies, including by threatening to revoke their licenses if they do not meet a strict construction deadline for a giant iron ore deposit in Simandou. Ganoza stated that "we don't have the same situation as we do today in Mali, Burkina Faso, or Niger." BURKINA EXIT Fortuna announced its exit from Burkina Faso last month with the sale to a local private company of the Yaramoko Gold Mine for $130 Million. Ganoza said that despite the fact that Fortuna will lose approximately 70,000 gold ounces from the sale of the mine, the deal is "a very compelling one" due to the mine's limited reserves. Ganoza stated that the annual security costs of the company had risen to $7 million due to jihadist attacks. He said that in other jurisdictions, such costs range between $200,000 to $300,000. Ganoza stated that Fortuna was forced to "completely fly in, fly out" for all staff, as ground transportation is too dangerous. He said that Burkina Faso was "pricing itself out of the market", by demanding a 30% state share in mining companies in the revised code for mining adopted in July 2024. Fortuna has left Burkina Faso, following Endeavour who left last year. Ganoza stated that Fortuna will invest $51 million globally in exploration and development projects this year, compared to $41 million by 2024. He said that in addition to Guinea, Fortuna will also be expanding its operations in Ivory Coast where the flagship Seguela mine is located. Maxwell Akalaare Adombila (Reporting and Editing by Portia Corey-Boulet, Robbie Corey Boulet and Jan Harvey).
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Data shows that Russia's LNG imports fell 4.6% year-on-year in January to April.
LSEG released preliminary data on Monday showing that Russia's LNG exports in the first quarter of this year fell by 4.6% compared to a year ago, reaching 10.4 million metric tonnes. Due to U.S. sanctions over the conflict in Ukraine, Russia has been unable to increase LNG exports. The new Arctic LNG 2 facility has effectively been frozen due to the Western sanctions. U.S. president Donald Trump said that he wants the EU to purchase more U.S. LNG, and he will make it more available. According to LSEG, Russia's exports of LNG fell by 9% in April, from 2.75 to 2.5 million tonnes compared to the same month a previous year. In April, supplies to Europe fell 14.3%, to 1.2 millions tons, due to sanctions on transshipment that took effect in March. Around 19% (or more) of Europe's natural gas is still imported from Russia via the TurkStream pipeline or LNG shipments. The European Union also has a nonbinding target to stop Russian fossil fuel imports before 2027. Novatek's Yamal plant reduced total exports by 1.8% on an annual basis in April, to 1.64 millions tons. The plant's supply has been stable at 6.6 millions tons in the first four month of the year. Sakhalin-2 (controlled by Gazprom) exported 880,000 tonnes from the Pacific Island in April. This was also fairly steady compared to the same period a year earlier. The project's exports have increased to 3.6 millions tons from 3.5 in January-April of 2024. (Reporting and writing by Oksana Kobieva; editing by David Evans.)
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Oil falls, Taiwan dollar soars at the start of a central bank-heavy weekend
Oil prices dropped on Monday, after the oil-producing group OPEC+ decided to increase oil production. Meanwhile, Taiwan's dollar surged up to nearly three-year-highs as world markets began a week of central banks. The world's stocks are mostly flat, with European shares just below their one-month highs while U.S. stock futures have dropped. Public holidays in Japan and China slowed down trading. Brent crude and U.S. West Texas Crude futures both fell by more than 1% following a decision made by OPEC over the weekend to increase oil production. This sparked concerns about the possibility of more supply entering a market that is already skewed by an uncertain outlook for demand. This week, the markets were focused on the meetings of the U.S. Federal Reserve, the Bank of England and other central banks in large and developing markets. They are waiting to see what the major central bankers think about the growth and inflation outlook following the increased uncertainty caused by the U.S. Tariff policy. Donald Trump, President of the United States, said that on Sunday, the United States met with many countries including China to discuss trade deals. His main priority for China was to get a fair deal. In recent days, optimism about a possible de-escalation in trade tensions between China and the U.S. has helped boost markets. European shares are trading at levels just below those seen before Trump’s major tariff announcement on April 2, which roiled markets. Jan von Gerich, Nordea’s chief market analyst, said that if trade agreements do not meet expectations there will be downside risk for the markets. The S&P 500 index is around 17% higher than the lows it reached last month. U.S. film and TV production companies that shoot overseas dropped in premarket trade after Trump announced on Sunday a 100% tax on films produced outside of the U.S., but provided little clarity about how the levies will be implemented. Netflix has fallen over 3% while Walt Disney and Warner Bros. Discovery and Warner Bros. both fell by 1.5% each. Berkshire Hathaway's Class B shares also fell after Warren Buffett announced at the weekend that he would step down as CEO. TAIWAN DOLLAR SURFACE The Taiwan dollar was the star of the currency market after two straight sessions of strong gains against the U.S. dollar. The Taiwan dollar rose by around 3%, reaching a high of 29.59 US dollars. Last trading was at 30.14. The almost 6% increase in the last two trading sessions has fuelled speculation about a revaluation to gain U.S. concessions on trade and highlights a wider re-rating the economic prospects of the region. The Taiwan dollar has appreciated at a rate I have never seen before, said a senior executive in the financial sector of Taiwan. He spoke on condition that he remain anonymous as he was not authorized to address the media. The central bank allows hot money to enter Taiwan. The dollar fell 0.7% to 143.93 Japanese yen, while the euro rose 0.3% to $1.1336 in London, despite a UK holiday. The Australian dollar rose to its highest level in five months, at approximately $0.6494. This was a lackluster reaction to the Labor Party's victory at Saturday's Australian elections. The market is focused on this week's Federal Reserve meeting, where rates are expected to remain unchanged. Trump said that he will not remove Jerome Powell from his position as Federal Reserve chair before the end of Powell's term in May 2026. He called Powell "a total stiff", and repeated calls to the Fed for interest rate reductions. Nordea's von Gerich said, "The Fed is the main event and what is going on in politics is not forgotten." In Europe, attention was focused on Romania, where the hard-right eurosceptic George Simion has won the first round in Romania's presidential rerun election on Sunday. Political observers claim that a Simion win could isolate Romania, destabilize NATO's east flank and erode private investments, where Ukraine has been fighting a Russian invasion for three years.
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South Africa's Eskom targets no power outages for the next four months
Eskom, the South African utility, said it was optimistic for the power outlook during the winter in the Southern Hemisphere. It aims to avoid any electricity cuts within the next four month if breakdowns remain at current levels. Eskom's problems supplying power to Africa’s largest economy have curbed growth for over a decade. But a turnaround in the plant's performance last year led to no cuts during winter and nine months of its operation. Eskom's Chief Executive Dan Marokane said at a briefing there would be no power cuts until August, if the unplanned outages remained below 13,000 megawatts. This is its base case. The number of days of unplanned power outages will increase to 21 if the outages exceed 15,000 MW. Eskom's nominal generating capacity was over 46,000MW in March 2024. This included coal plants and nuclear power stations, as well as some smaller plants which burn diesel or water to produce electricity. Marokane stated that the power system is more reliable than it was in previous years. He said the 14 days without electricity in January to April of this year were a temporary setback, and that power availability was improving. Marokane said: "This winter's outlook prediction is based on an improved operational performance and overall effectiveness." Reporting by Sfundo parakozov. (Editing by Alexander Winning, Mark Potter and Mark Potter.)
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UN document shows US attempts to undermine global development finance efforts
A document from the United Nations that was seen by revealed that the United States wants to weaken an international deal designed to help developing countries who are struggling with climate change, among other things. The Trump administration is against draft reforms to the global financial system that are intended to assist developing countries. This includes taxation, credit rating and fossil fuel subsidy. The administration wants to remove all mentions of "climate", "gender equality", and "sustainability". The document, which was previously unknown, sheds light on the Trump administration's efforts to impose an "America First", including opposition to efforts that slow climate change and promote diversification, on institutions at the core of solving global systemic crises. The 4th International Conference on Financing for Development, which takes place every decade, will be held in Seville, Spain in June. Its aim is to influence the strategic direction taken by the development finance institutions around the world. At FFD3, countries agreed to expand tax cooperation so that developing nations could set the rules. As of May last year, more than 140 countries are involved. Tom Mitchell, Executive Director of the International Institute for Environment and Development said, "This conference aims to bring together world leaders and set the rules and priorities for funding development goals in the next decade." The U.N. Secretariat assisted the Mexico, Nepal and Zambia Permanent Representatives to compile the negotiating draft of April 11, which is annotated by the positions of all 193 countries involved in the discussion. The document was a bid to dampen further reforms. Scott Bessent of the U.S. Treasury Department had already reacted against the ongoing changes in the World Bank and International Monetary Fund's fight against climate-change. The document shows that the U.S. is looking to remove the reference to "a package of reforms" in relation to sustainable development. It wants to replace the line that promises to "commit reform to the international financial infrastructure" with the pledge to "recognize and enhance its resilience to current and future crises and challenges." These changes in language can be used to support future actions or inactions in discussions by indicating the level of commitment. In an email, Florencia Nino, spokesperson for the U.N. secretary-general Antonio Guterres said that the Secretary-General acknowledged the need to overcome many challenges before the conference. However, he urged all countries to "be at the table focused on solutions in Sevilla," she added. Requests for comments from the White House and Treasury Department were not answered. The State Department declined comment. The U.S. position on development is tougher now under Trump. However, the document negotiated shows that the U.S. remains in favor of initiatives such as developing countries working closer with the private sector and fostering financial literacy and innovation. CLIMATE CHANGE The global reforms aim to help the poorer nations better cope with climate change-related weather disasters and boost economic growth by using low carbon energy instead of traditional fossil fuels. Donald Trump, the president of the United States, has withdrawn from UN climate agreement in Paris. He also slashed U.S. Foreign Development Aid by more than 80%. This was part of an overhaul government led by Elon Musk. The U.S. has objected to several areas in the FFD4 document, including a call to countries to investigate "global solidarité levies", which could include taxes on high-polluting activities or super-rich people to finance sustainable development. The levies, if included, could be discussed in the U.N. tax negotiations this year. They would also support a taskforce led by France Kenya and Barbados, which aims to create such taxes for smaller groups of countries. Russia, Saudi Arabia, and China are also among the countries that object. The document also shows that the U.S. wants to remove a paragraph urging companies to pay taxes to countries where economic activities occur; a section on enhancing tax transparency in developing countries; and a section on phase-out of inefficient fossil fuel subsides. The FFD4 document shows that the U.S. is trying to remove a paragraph about reforming the rating system. It showed that rating agencies should be more lenient with nations who voluntarily restructure debt in order to invest in environmentally friendly projects. Documents show that the U.S. is also against a commitment by countries to receive "adequate funding and uninterrupted at appropriate terms for social protection, and other essential social expenditures during shocks and crisis," according to the document. The draft agreement is likely to be revised as the countries continue their negotiations in May before settling on a final document by mid-June. The U.S.'s position places pressure on other nations to accept a weaker agreement, as the talks are aimed at adopting a deal through consensus. (Reporting and editing by Dawn Kopecki, Rod Nickel and Daphne Psaledakis Additional reporting by Kate Abnett in London and Simon Jessop at Washington)
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Goldman Sachs lowers its oil price forecast following OPEC+'s decision to increase output
Goldman Sachs has reduced its oil forecast after the Organization of the Petroleum Exporting Countries (OPEC+) and its allies decided to increase oil production. The bank stated this in a Sunday note. The bank expects Brent crude oil to average $60/bbl for the remainder of 2025, and $56/bbl by 2026. This is a $2 decrease from its previous forecast. It also reduced its forecast of West Texas Intermediate crude (WTI) by $3/bbl. Now, it projects that the average price for WTI will be $56/bbl through 2025. OPEC+ decided on Saturday to increase oil output for a second consecutive month. The June production was increased by 411,000 barrels a day despite lower prices and weakened expectations of demand. Goldman Sachs sees the OPEC+ agreement as a long term equilibrium strategy aimed to maintain internal cohesion, and strategically regulate U.S. shale oil supply despite relatively low inventories. The bank has now increased its estimate for the final OPEC+ increase in production to 0.41 million barrels a day (mb/d) from 0.14 mb/d. This revised forecast is based on the group's recent decision and stronger-than-expected economic activity data, suggesting that the expected demand slowdown may not yet be evident enough for OPEC+ to slow the pace of production increases when determining July production levels on June 1, the bank noted. Goldman Sachs is of the opinion that despite the tight fundamentals in the oil market, the high level of spare capacity and the high risk associated with recessions are factors that skew risks for the oil price to the downside. Brent crude futures traded at $60.02 per barrel at 0802 GMT. U.S. West Texas intermediate crude was trading at $56.96 per barrel. (Reporting from Anmol Choubey, Bengaluru; Editing by Louise Heavens).
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French spot prices rise due to higher demand and falling wind output
The French spot price rose on Monday as a result of an expected rise in electricity consumption, while the wind power generation is expected to decrease throughout the region. LSEG data show that the price for French baseload electricity for Tuesday at 0835 GMT was 19 euros ($21.51). This is up from a Friday closing price of 10 euro per MWh for delivery on Monday. Data showed that the German equivalent contract had not yet begun trading. Data showed that the contract for Monday deliveries had not also traded on Friday. In line with the overall bullish trend, France's residual loads are expected to be the most significant gains in the region Tuesday. Riccardo Paraviero, LSEG analyst, stated that the signal for tomorrow was sideways to bullish for Germany. This is due to the higher demand at home and the "significant" increase in residual loads in the neighbouring regions. He added that Germany will be a net-exporter during the sunny hours of Tuesday, due to increased solar power production. LSEG data indicated that the German wind output is expected to drop by 820 megawatts to 13 gigawatts on Tuesday, while French output will be reduced by 1.1 GW down to 9 GW. The data indicated that the German solar generation is expected to increase by 1.6 GW to 13.1 GW on February 2. On Tuesday, power consumption in Germany will increase by 1.3 GW - to 54.2 GW - while in France it is expected to rise by 1.6 GW – to 45.1 GW. The French nuclear capacity has increased by two percentage points, to 63%. The German baseload power for the year ahead increased by 0.2%, to 84 Euros/MWh. In France, it was between 62 and 64.3 Euros. The benchmark carbon contract in Europe was down by 0.8% to 68.24 euro per metric tonne. $1 = 0.8832 Euros (Reporting and Editing by Varun K K; Reporting by Alban Kcher)
Official: India Government finalising response after top court cancels JSW Steel-Bhushan Deal
A government official revealed on Monday that the Indian government had discussed with banks an order by a court to cancel JSW Steel’s four-year old buyout of Bhushan Steel and Power, and was finalising its response.
The Supreme Court nullified JSW’s takeover of Bhushan Steel four years ago, under the country’s insolvency laws, and ordered its liquidation. This affected the deal’s bankers who had been paid.
"I've already discussed (the order with) all lenders." We have taken a stance, we've studied the judgement and we've gotten our lawyers' opinion on the judgment," M Nagaraju said, secretary of India's Department of Financial Services.
We are now deciding in the government how we will approach the judgement. We will be finalising soon."
Bhushan Power had a debt of over 470 billion rupees (5.58 billion dollars) to its creditors at the time it was shortlisted by the Reserve Bank of India in 2017 to be admitted to the country's Insolvency and Bankruptcy Code (IBC).
JSW Steel was the winner of the resolution application with a bid of 197 billion rupees ($2,35 billion) for Bhushan power. The acquisition is expected to be completed by 2021.
JSW Steel shares fell around 1% Monday after dropping 5.5% on Friday.
JSW announced to the exchanges that it would decide its next course of action on Friday.
(source: Reuters)