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Sources say that OPEC+ will consider a further increase in oil production on Sunday
OPEC+ is expected to consider increasing oil production during a Sunday meeting, according to two sources who are familiar with the discussion. The group wants to regain its market share. OPEC+ would also be able to start unwinding a second layer, a cut of around 1.65 million barrels a day or 1.6%, of global demand more than a full year earlier. On Sunday, eight OPEC+ nations will hold a virtual meeting to determine the output for October. OPEC+ is the Organization of the Petroleum Exporting Countries, plus Russia and its allies. Some analysts and a source from OPEC+ said that there is a possibility that OPEC+ may pause its increases in October. The OPEC+ official said that a final decision had not yet been made. OPEC's headquarters in Saudi Arabia and its authorities did not respond immediately to comments. OPEC+'s increased production has not lowered oil prices. The group's actual increases have been less than the pledges, as some members have compensated for overproduction while others struggle to increase output due to capacity limitations. Brent crude traded near $68 per barrel on Wednesday. This was down more than 1% for the day, but it is up from an April 2025 low near $58. OPEC+ has been reducing production to support oil prices for several years. This year, it reversed its course to gain market share. It was prompted in part by President Donald Trump's calls for OPEC production to be increased to control gasoline prices. The eight countries raised their production for September by 547,000 bpd at their last meeting, reversing the largest chunk of cuts in output. They also increased output for the United Arab Emirates, which amounted to around 2.5 million bpd. (Reporting by Alex Lawler and Olesya Astakhova; Additional reporting by Ahmad Ghaddar and Yousef Saba; Editing by Dmitry Zhdannikov and Bernadette Baum) (Reporting and editing by Dmitry Zhdannikov, Bernadettebaum and Dmitry Zhdannikov; Additional reporting by Ahmad Ghaddar; Yousef Sabah; and Bernadettebaum and Dmitry Zhdannikov)
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Venezuelan currency exchanges switch to crypto when dollars are scarce
A dozen sources claim that Venezuela's government has begun to allow the private sector to use dollar-linked cryptocurrencies for currency exchanges, due to the US restrictions on oil exports. The sanctions imposed by the United States on Venezuela, which are described by the Venezuelan government as an "economic war", prevent many transactions. Companies that want to purchase raw materials abroad are forced to exchange their local bolivars into dollars, generated from the oil trade, foreign card transactions, and the central bank injecting them into the exchanges. Oil revenue has dropped in recent months. The United States Treasury Department issued Chevron last month a restricted license allowing the company to export oil again after a three-month hiatus. However, this license prevents any payments to be made to the government and reduces the amount of dollars that can be exchanged. According to sources in the financial and private sector who requested anonymity for fear of repercussions, Venezuelan authorities have allowed more USDT (a digital currency known as Tether), whose value was pegged to U.S. dollars and is designed to maintain stability. Digital currencies are a great way to keep the economy running during sanctions. This includes the production of food and other basic products. Cryptography is used by some businesses to open up new operations when one closes. According to another source, the use of cryptocurrency will increase. Sources told us last year that the state-owned oil company PDVSA gradually increased its digital currency use and moved sales to USDT since last year. Tether has not responded to a comment request, but stated last year that it respects U.S. Treasury’s list of sanctioned organizations. The Ministry of Communications and the Central Bank did not respond to any questions. However, Vice President Delcy Rodriguez stated during a meeting in August with businesspeople that "nontraditional mechanisms of exchange market management" were being implemented. She gave no further details. Sources said that a small number of banks are selling the cryptocurrency, USDT in most cases, to certain businesses for bolivars. Businesses must use a digital wallet that has been approved by authorities to receive the value. The crypto can be used to pay for domestic or international services or sold by businesses. Ecoanalitica, a local analyst firm, estimates that $119,000,000 in cryptocurrency was sold to the private sector during July. According to private and financial sector estimates, the Venezuelan central banks has injected $2 billion in the currency exchange market during the first seven months this year, which is 14% less compared to the same period of last year. Analysts estimate that the restrictions on Chevron's license could further reduce the availability foreign currency. According to data from vessel tracking and company documents, oil exports fell by about 10% in July compared to the previous month. "The exchange rate is always limited," said Orlando Camacho. He is a close friend of the ruling party, and also the head of an association for medium-sized businesses. "The companies' role is to also guarantee foreign exchange by their exports." Rod Nickel is responsible for the reporting and editing.
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China's copper production set to fall by a rare amount in September as tax changes hit scrap supply
Analysts predict that China's refined production of copper in September will experience a rare decline, the first since 2016. This is due to newly implemented tax regulations which are limiting the supply. According to research agencies Shanghai Metals Market, Mysteel and Benchmark Minerals Intelligence, September's output of the world's biggest producer and consumer refined copper will drop by 4 to 5% compared to August's levels. Analysts said that this, along with the expectation of a U.S. Federal Reserve rate cut, may support copper prices. Analysts noted that the decline in copper scrap anodes occurred during a typical seasonal demand peak, because new tax rules made smelting it into anodes less lucrative. Anodes are an important input for the processors who produce refined copper. This is used widely in construction, manufacturing, and power infrastructure. SMM data revealed that the number of anode-producing smelters will increase to five from three in September, a month ago, adding to the drop in production. In the past, when refiners needed to maintain production, they could obtain some anode-copper from smelters. Right now, anode supply is tight and limiting refined output," said Yongcheng Zhao. According to SMM, the operating rate of smelters that are fed scrap copper or anode-copper is expected to drop by 8.3 percentage point month-on-month in September to 59.9%. According to two analysts, who spoke under condition of anonymity because they were not authorized to speak to the media, equipment maintenance could reduce consumption of copper concentrat, which is a key input to smelters. This would help to prevent spot processing fees from falling more dramatically, said these analysts. They added that this could give Chinese smelters a bit of leverage when they negotiate with miners to determine the contract price for the next year in November. A shortage of mining material has caused processing fees to fall into negative territory. A persistent and acute concentrate shortage has forced some smelters to stop operations outside of China due to the arrival of new smelting capacities worldwide. Analysts expect the dip in output to continue through October. This will not stop annual production from reaching a record level this year.
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French electricity production is reduced due to a strike over wages and pensions
Data from EDF showed that the electricity output of the French utility was cut by 2.6 gigawatts on early Wednesday morning. This was due to workers cutting power production as part of an industrial action aimed at pensions and wages in the gas and power sector. The industrial action is expected to expand in the next few weeks due to the low approval rating of the government. It faces a vote of confidence on Monday. The data revealed that nuclear power production fell by 2.1 GW, with three reactors being affected. Hydropower production also decreased by 510 megawatts. France's total nuclear capacity is 57 GW, and it produces 70% of its annual electricity. Data from grid operator RTE indicated that France will remain a net exporter of power throughout the day. The affected supply at 0900 GMT was 4,2% of the total production. A spokesperson for Belgian Gas Terminal Operator Fluxys stated that the industrial action in the gas sector has only had a small impact on certain work currently being done. The spokesperson stated that there was no impact on output flow rates, nor on the ship unloading or truck loading operations. Dunkirk LNG is the second-largest terminal in continental Europe. It's the only one that connects directly to two markets, Belgium and France. This terminal accounts for around 20% of the annual gas consumption of both countries. (Reporting and editing by Barbara Lewis, Philippa Fletcher and Forrest Crellin)
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Pope Leo opens a Vatican-run eco-training centre in response to climate change
Pope Leo is opening a new Vatican-run eco-training centre in the Italian countryside this Friday. Catholic officials claim that it's an initiative to encourage leaders around the world to tackle global climate change. The center, which is spread over 55 hectares of land (136 acres), on the expansive grounds of a papal villa from the Renaissance era in Castel Gandolfo includes gardens, vocational-training facilities, and education opportunities for local kids. Rev. Manuel Dorantes, the U.S. priest who directs the centre, stated that the Vatican wants set an example of how countries should pursue initiatives to protect the environment. If we, the smallest state in the world can do it, what potential is there for states larger than us? He said. "Our world could be different if you and I work together." The "Borgo Laudato Si" ecological project was announced by late Pope Francis in 2023, a strong advocate of environmental protection. According to officials, the large area of the centre represents approximately 55 percent (or more) of all land owned by Vatican. The centre was named after Francis's major document from 2015, the first papal document to endorse the scientific consensus on climate change. It also urged nations that they reduce their carbon emission. Leo, as the first U.S. Pope, has also stressed the environmental teachings of the Church. The new pontiff approved in July a unique rite that allows priests to offer Masses urging Catholics to care for the Earth. Castel Gandolfo, on the shores Lake Albano, is located about an hour south of Rome. The new centre, which is located in the same building as where Leo spent his summer holidays this year, has been a place where popes spend their vacations since centuries. The greenhouse at the center of the institute was built to mimic the colonnade on St. Peter's Square in the Vatican. Officials have announced that visiting groups can learn about organic agriculture in the greenhouse or attend classes in a 10-room facility adjacent. Tourists who book a tour will be able to purchase local agricultural products including organic olive oil and cheese produced by 60 cows that live on site. (Reporting Joshua McElwee, additional reporting by Claudia Chieppa, editing by William Maclean).
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Demand for gold increases as rate-cut betting and trade tensions lift demand
Gold surged up to a new record high on Tuesday, consolidating gains over the $3,500 key level. This was due to growing expectations that a Federal Reserve rate reduction will be made this month, and the lingering risks of political and economic uncertainty. As of 0821 GMT spot gold was up by 0.1% to $3,537.29 an ounce after reaching a session high of $3.546.99. U.S. Gold Futures for December Delivery gained 0.4%, to $3604.99. The U.S. administration of President Donald Trump said that it would ask the Supreme Court to issue a ruling quickly on tariffs which a U.S. appellate court found illegal last week. The Supreme Court's roadblock and tariff issues will be a test for Trump. Regardless of the outcome, investors can find comfort in gold, according to independent analyst Ross Norman. Rate cuts have become a given, but now questions are being raised about whether they will continue. He added that lower rates would boost economic activity and further weakening the dollar in the U.S., as well as provide a tailwind for gold. Trump has publicly discussed the firing of Fed chair Jerome Powell and has pressed the Fed to reduce interest rates. Last month, Trump attempted to fire Fed governor Lisa Cook. This triggered a legal test that would determine the Fed's capacity to operate without political interference. The U.S. Dollar has been weakened by expectations of rate cuts and concerns over the Fed’s independence. It is now down more than 9 percent since the beginning of the year. This makes gold cheaper for foreign buyers. According to CME Group’s FedWatch tool, investors are pricing in 92% of a Fed rate reduction of 25 basis points at the conclusion of its policy meeting on 17 September. Gold that does not yield is usually a good investment in an environment with low interest rates. The Fed will be looking at the non-farm payrolls figures due this Friday to determine the size of any possible cut. Silver spot fell 0.2%, to $40.83 an ounce. It had reached its highest level since September 2011, in the previous session. Palladium fell 0.4% to 1,138.78 and platinum dropped 0.8% to $1391.80.
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Dutch pension fund PFZW terminates partnership with BlackRock due to conflict over sustainability
The Dutch pension fund PFZW announced on Wednesday that it had ended its relationship BlackRock, a wealth manager. This was part of a revamping of its portfolio to prioritise sustainable investments. The Netherlands' second largest pension fund selected 756 companies for investment and sold its stakes of over 2,600 companies in the last few months. Ellen Habermehl, spokesperson for PFZW, said: "In the next five-year period, we will strive to achieve a balance between our desire for good returns and acceptable risks, as well as sustainability." BlackRock was not selected. BlackRock's Dutch Office did not respond immediately to a comment request. Although many U.S. multinationals have moved away from sustainable business model since Donald Trump's re-election, some of the largest Dutch pension funds continue to believe that sustainability is the best approach for the long term. In an interview with the Dutch newspaper NRC PGGM, the fund's Investment Manager said that its decision to terminate its relationship with BlackRock is due to its reluctance in supporting sustainability resolutions during shareholder meetings. The fund does not want to have its votes in these meetings clash with the votes of the wealth management firms it works with. Sander van Steijn, PGGM's investment expert and NRC commentator, said: "If you don't do it right things can get complicated." PFZW's total assets are around 250 billion euro ($293 billion), with approximately 50 billion euros in investments in shares. Last year, the country's largest pension funds ABP, with 544 billion euro in assets, announced that it would reduce investments with large climate impacts, and instead direct more money to projects and companies that improve society and environment.
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EU drafts plans to prevent carbon border tariff circumvention
A spokesperson for the European Commission said that measures will be proposed this year to stop countries from avoiding its border carbon tariff. Some in Brussels are concerned that Chinese companies could restructure their trade to avoid paying the tax. Carbon Border Adjustment Mechanism, the first carbon border tax in the world, will begin to charge fees for CO2 emissions from imported goods, including steel, aluminum, cement, and fertilisers, starting in January. The system is designed to bring foreign producers up to par with European manufacturers who pay for their carbon emissions through the European Carbon Market. Brussels officials are worried that the system can be circumvented by foreign companies who send low-carbon products into Europe while producing high-carbon goods to sell on other markets. They could avoid the EU carbon tax without changing their production. A spokesperson for the European Commission said that the Commission plans to propose measures to address this risk by the end the year and to extend the carbon border tax to other downstream products. How can we ensure that the Chinese, in particular, will not be able to game this system? A senior EU official stated. The Chinese Foreign Ministry did not respond immediately to a comment request. According to the official, The Commission is looking at measures such as a system where goods are assigned a fixed value for CO2 emissions per country or company instead of calculating specific emission per shipment. They added, "You don't want to let anyone off the hook because they sent us green stuff, but used grey stuff back home and didn't change anything." The industries are pushing for anti-circumvention measures. Last month, the industry group European Aluminium called on the EU to simplify its CO2 levies by assigning the same CO2 emissions rating to all aluminum imports regardless of whether they were manufactured in that country. This would make it easier to enforce the EU levy, but foreign companies could resist. They would lose their ability to reduce their carbon border tax bill directly if they reduced their own emissions. (Reporting from Kate Abnett in Brussels, Additional reporting by Liz Lee and Joe Bavier in Beijing)
LME checks Russian aluminium play but is it video game over? Andy Home
The London Metal Exchange's. ( LME) cautioning shot to those looking to video game the new sanctions on. Russian aluminium appears to have actually worked, for now a minimum of.
Traders stroked on the LME's stocks of Russian brand. aluminium after the U.S. and UK governments banned exchanges. from taking shipment of Russian metal produced after April 12.
Over half of registered tonnage was cancelled over the. ensuing week, destined for a creative run-around that would see. it re-warranted under more restrictive trading conditions and. locked into a rewarding rent-sharing storage facility deal.
A substantial quantity of that cancelled stock was returned. onto LME warrant last week after the exchange fine-tuned its new. rules around Russian metal delivery.
The physical liquidity increase has relaxed time-spreads, the. benchmark cash-to-three-months period << CMAL0-3 > returning to. contango.
Crisis prevented, although it stays to be seen whether there. are more twists in the LME's long-running Russian aluminium. story.
The exchange is fortunate that physical purchasers, especially. Chinese gamers, are still more than happy to take in excess. Russian metal.
THE GWANGYANG SHUFFLE
The LME stocks raid was concentrated on the South Korean. port of Gwangyang, where 109,125 metric tons of aluminium. inventory were cancelled over the week of April 15, including a. huge 79,850 loads on April 15 itself.
Over 90% of all LME warrants were Russian-brand metal at the. end of March and much of it has actually been sitting in Gwangyang, which. holds around half of all signed up inventory.
Such warrants, currently on exchange at the time of the. sanctions announcement, can be easily traded. Taken off-warrant. and delivered back to the LME, they would have featured. restrictions on UK and U.S. entities or people having the ability to. cancel them once again or take physical delivery.
Likely stuck in the LME system for a prolonged duration, the. metal would have produced an income stream for the warehouse. operator and, by means of a rental-share arrangement, with the entity. re-warranting it.
The LME has relocated to close the prospective loop-hole by making. it much easier to transform re-warranted Russian metal back to its. initial free-trade status.
The exchange has actually also advised warehouse operators that. If they serve to limit, rent-sharing offers aren't allowed. future owners' capability to take physical delivery, which seems to. have been the premise of this particular storage play.
The regulative suggestion appears to have had an impact with. 88,625 lots of aluminium re-warranted at Gwangyang on May 1.
GAME OVER?
This might not be completion of the LME's Russian aluminium legend,. which has actually been running since Russia's full-scale invasion of. Ukraine in 2022.
The current sanctions package, drawing a line between metal. produced before and after April 13, will raise the pressure on. the exchange to make its own call on prohibiting Russian aluminium.
But there still seems to be a lot of metal on the relocation. Omitting the Gwangyang shuffle, there have actually been nearly 106,000. tons of net new cancellations since April 12.
Is this non-Russian metal being taken up? Or has somebody. developed another way of gaming the brand-new sanctions guidelines?
There is also the potential for Russian metal that was. saved off market prior to April 13 to gravitate to LME storage,. something the exchange itself said was a possible result.
Far this hasn't happened however what the LME calls. off-warrant stocks of inventory were a significant 737,000. loads at the end of February, according to the most recent. monthly exchange upgrade.
Considered that Russia's Rusal is such a big producer with sales. of 4.2 million loads in 2023, at least a few of this shadow stock. is most likely Russian metal.
CHINESE IMPORTS
The LME is fortunate that although the United States has now. banned all imports and lots of Western customers are. self-sanctioning, Russian aluminium is still finding a physical. home.
China in specific is taking in what the West won't buy.
The country imported 1.2 million tons of Russian primary. aluminium last year, up from 462,000 in 2022. Undoubtedly, Russian. metal represented 3 quarters of total imports.
The circulation has actually continued into the very first quarter of this year. Russian imports totalled 392,000 lots, matching the rate of the. previous 2 quarters.
Although China is the world's biggest manufacturer of main. aluminium, its big smelter network is now running up versus. the federal government's capacity cap of 45 million loads.
With minimal scope to construct new smelters, other than to. replace older capacity, the country looks capable of soaking up a. growing amount of imported Russian metal. Rusal's output is. low-carbon aluminium produced from Siberian hydro-power, likely. making it appealing as a source of raw material for China's. items manufacturers.
China's cravings for Russian metal offers a market outlet. for both brand-new production and older production that might. otherwise gravitate towards LME storage.
It remains to be seen whether that will prevent. more shuffles of the LME's Russian aluminium pack.
The opinions revealed here are those of the author, a. columnist .
(source: Reuters)