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Sources say that the Russian Tyumen oil refinery stopped operations on July 25, after a drone attack.
Two industry sources confirmed on Tuesday that the?Tyumen?oil refinery in western Siberia stopped oil processing on 25 July following an attack by a Ukrainian drone. The domestic fuel market has been experiencing a worsening shortage since May when Ukraine intensified its attacks on oil refineries to undermine Russia's military efforts. Local Russian authorities said on Saturday that an 'Ukrainian drone attack' sparked the fire at a refinery located more than 2,000 kilometers (1,200 miles), from Ukraine. Sources said that following the attack, a diesel hydrotreater as well as a unit for producing high-octane gas caught fire. The sources declined to give a timeframe for when the refinery could be back in operation. RI-Invest?which owns?the refinery?did not immediately respond?to a request for a comment. The refinery's nominal capacity is around?9 millions metric tons annually, or 180,000 barrels a day. According to estimates, it processes approximately 6 million?tons crude oil annually and produces?about 0.5million?tons gasoline and 2.8million tons diesel. (Reporting and Editing by Jan Harvey).
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The Fed's rate decision is in the spotlight as gold falls against a dollar that remains firm
Investors waited for the Federal Reserve to announce its policy decision at the end their two-day meeting in this week. They wanted insight into the direction U.S. rates will take. Spot gold dropped 0.8% at $4,042.29 an ounce as of 0843 GMT. U.S. gold contracts for August delivery fell 0.8%, to $4.042.80. "Gold has held to a very tight range since late June based on the support in $4,000 region, which suggests at some stage there will be a breakout," said Rhona Connell, StoneX's head of market research. Connell said: "Fundamentally the physical markets are still very quiet, while professionals are contorting over the interaction between interest rates, oil and the dollar. All of these are important drivers." The U.S. Dollar held at an all-time high on Tuesday, making bullion priced in greenbacks?expensive to buyers abroad. Donald Trump, the U.S. president, said on Monday that Washington is having "good discussions" with Iran, and that there was a possibility of a resolution to their conflict. He warned, however, that if the talks failed, strikes would be resumed. The oil prices fell on Tuesday and hovered around their one-week-low amid?hopes of a resolution to the U.S./Iran conflict. The Federal Reserve is expected to raise interest rates due to the rising energy prices. Gold is often seen as a hedge to inflation. However, due to its non-yielding nature, it loses some of its appeal when interest rates rise. Trump said on Monday that the U.S. must have the lowest interest rate in all of the world. According to the CME FedWatch Tool, market participants are preparing for tomorrow's?Fed decision on interest rate. About 34% of participants anticipate a 25 basis-point increase. Also, traders have priced in a 79% probability of an interest rate increase at the September meeting of the central bank. Silver spot fell by 1.4%, to $57.56 an ounce. Platinum dropped 0.8%, to $160776. Palladium was down 1.5%, to $1272.71. (Reporting by Sukanya Mitra in Bengaluru; Editing by Vijay Kishore)
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TotalEnergies and Eni approve Cyprus Gas Field for LNG startup in 2028
TotalEnergies announced on Tuesday that France's TotalEnergies, and Italy's Eni, have 'approved' the development of 'the Cronos gas field' in Cyprus, which will supply Europe with natural gas liquefied. Production is expected to begin in 2028. The two companies will share the 2.8 million tons of LNG expected to be produced by the field. After losing their access to Russian gas and oil in 2022, the European countries are now focusing on their own resources. Cronos is the name of a large?natural gas find in Block 6 in Cyprus' exclusive economic zones in the Mediterranean Sea. It was discovered by Eni and TotalEnergies in a joint venture. The project, estimated to contain more than 3 trillion cubic feet of gas, will pipe and process reserves at Eni's facilities in Egypt for export to Europe via the Damietta?terminal. Cronos, as Cyprus' first gas project, will help develop a regional gas hub in the Eastern Mediterranean by leveraging Egypt’s infrastructure, said TotalEnergies CEO Patrick Pouyanne. He added that "this new gas route will help Europe to be more secure in terms of its energy supply by diversifying the LNG sources." Reporting by Hugo Lhomedet, Gdansk; Francesca Landini, Milan; America Hernandez, Paris. Editing by Milla Nissi-Prussak, and Louise Heavens.
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Japan's Kyushu region is hit by a major earthquake
A quake with a preliminary magnitude of 7.1 hit Japan's southern Kumamoto Prefecture on Tuesday. It knocked out the power to thousands of homes, stopped rail services, and triggered warnings about tsunamis and aftershocks. The area where the quake occurred is home to many companies, including Sony, the world's biggest contract chipmaker. Sony's spokesperson confirmed that the company is?checking on the situation. TSMC didn't immediately respond to a?request for comment. The Japanese government has issued emergency earthquake alerts for Kumamoto and Nagasaki prefectures as well as Kagoshima and Fukuoka. These are all located on Japan's southern Kyushu Island. The Japan Meteorological Agency said that a tsunami warning was issued for a wave measuring 1 m (3.2 feet). Japan is one the most earthquake-prone nations in the world, with an earthquake occurring every five minutes. Japan, located along the "Ring of Fire", a series of volcanoes and oceanic trenches that partially surround the Pacific Basin region, is responsible for about 20% of all earthquakes of magnitude 6 or higher in the world. According to an official count, a massive earthquake that struck Kumamoto ten years ago killed 275 and injured 2,739 people. Kyushu Electric Power reported that 40,000 homes lost power due to the quake. JR Kyushu, a railway company, said it suspended all services including bullet trains. The nuclear regulating authority in Japan said that there were no irregularities at the nuclear power stations. (Reporting and writing by Anton Bridge, Kantaro Kommiya and Mariko Katsumura; editing by Chang-Ran and Kate Mayberry; Writing by John Geddie)
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Major Gulf bourses are in red as they await Fed decision and Iran talks
The major Gulf stock markets fell in early trading on Tuesday as investors awaited U.S. Federal Reserve policy decisions and developments in the Iran Conflict, although ongoing corporate earnings provided some support. The majority of Gulf?Cooperation Council nations,?including?UAE?, have their currencies pegged against the U.S. Dollar and closely follow the Fed?s policy, exposing them to the direct effect of monetary tightening on the world?s largest economy. The Fed ends its two-day session on Wednesday. CME FedWatch?shows that 62% of policymakers are likely to keep rates the same, and 38% are expecting a minimum 25-basis point increase. This is up from 16% one week ago. The markets are also pricing in an 81% probability of a rate increase at the meeting scheduled for September. Donald Trump urged the Fed on Monday to lower rates. He argued that the United States should have the lowest borrowing costs in the world. Saudi Arabia's benchmark stock index fell 0.4%. This was due to a 0.6% drop in the oil giant Saudi Aramco, and a 1.2% decline in Saudi Arabian Mining Co. Yemen's Iran aligned Houthi group said that it had attacked several crude oil transportation and supply facilities linking eastern Saudi Arabia with Yanbu, an important Red Sea oil export hub. Zain Saudi Arabia, however, saw its share price rise by 1.4% after it reported a profit increase of more than 60% in the second quarter. Dubai's main stock index fell?0.5% due to a 1.5% drop in the sharia compliant lender Dubai Islamic Bank. Alpha Dhabi Holding, a major Abu Dhabi-based company, lost 0.8%. Fertiglobe, a?fertilizer company, reported a sharp rise in its quarterly profit. The Qatari Index was down by 0.1%. Trump warned that the U.S. would resume strikes if negotiations fail. He said that Washington was having "good talks" and that a possible deal to end the conflict with Iran was in sight. Iran said it would retaliate if any more attacks were made. (Reporting and editing by Andrei Khalip in Bengaluru. Ateeq Sharif is based in Bengaluru.
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Copper prices fall as bets on rate hikes weigh down on demand
The copper price fell on Tuesday as investors assessed a possible pause in the 'U.S. Strikes?on Iran. By 0700 GMT, the benchmark three-month price of copper at the London Metal Exchange had fallen by 0.4% to $13,678 per metric tonne. The Shanghai Futures Exchange's most traded copper contract fell 0.13% to 104,810 Yuan ($15.487.03) per ton. The market awaits the outcome of the U.S. Federal Reserve's meeting on Wednesday and weighs the impact that a reduction in oil prices will have after the lull between U.S.-Iran fighting. Analysts from Chinese broker Galaxy Futures stated that "as tensions between the United States and Iran ease, crude oil prices have fallen. However, expectations of more Federal Reserve rate increases?have increased." According to CME FedWatch, 62% of market participants believe that the Fed will keep interest rates steady, and 38% expect a minimum 25 basis point increase. This is up from just 16% one week ago. Copper market fears that higher rates will dampen economic activity and reduce demand. Red metal has benefited from the expectation of increased demand for AI infrastructure, electric vehicles and electrification. Stock markets that are jittery also weigh. On Tuesday, chipmakers led Asian stocks?down? on concerns about funding requirements of the AI boom. Galaxy Futures analysts stated that "with the?market entering into a week of heavy earnings reporting, sentiment remains fairly cautious." Aluminum was up by 0.19% at the SHFE and down by 0.44% at the LME. Total stocks in LME registered warehouses On Monday, the lowest level since 1998 was reached. Other?LME Metals: Zinc lost 0.43%;?lead fell 0.16%; nickel dropped 0.71% and tin lost 1.56%. On the SHFE, zinc fell 0.3%, while lead was unchanged, nickel dropped 1.35%, and tin declined 1.33%. $1 = 6.7676 Chinese Yuan Renminbi (Reporting and editing by Varun H. K. and Mrigank. Dhaniwala).
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India's summer crops planting accelerates as the monsoon returns
A revival of monsoon rainfall has led to a rapid increase in the planting of summer-sown grains such as rice, cotton and soybeans across a large part of India. This has helped reduce a?earlier deficit in sowing caused by?below normal rainfall. India is the largest rice exporter in the world, with about 40% of the global total. It's also the biggest importer for vegetable oils like palm oil, sunflower oil and soyoil. Indian farmers usually sow summer crops between June and July, after the annual'monsoon' reaches Kerala in the south. The monsoon was three days late this year and its progress across the western farming regions stalled about two weeks. According to the Ministry of Agriculture and Farmers Welfare, the summer crop sowing at the end June was almost a quarter less than it had been a year before. However, the'shortfall' has now narrowed down to less than 5 percent. The data from the Ministry showed that farmers had planted summer-sown crop on 78.7 millions hectares by July 24 compared to 82.6 million acres a year ago. Data showed that the area under rice cultivation was 23.4 million ha, down from 24 million ha last year. We waited for rain to transplant the seedlings. Krishna Beuraa is a farmer in Konark, Odisha. "After we received good rains this month, paddy planting began," he said. India's monsoon rainfall deficit has decreased to 16%, from nearly 40% by the end of June. However, some regions still face rainfall deficits as high as 40%. Farmers planted soybeans in 11.4 million acres, down 3% compared to a year earlier. The area of corn planted was 7.8 million acres, down 9.7% compared to the same time last year. Cotton planted area dropped 4%, to 9.87m hectares. Sugar cane increased 1.5%, to 5.76m hectares. (Reporting and editing by Ronojoy Mazumdar; Jatindra dash and Rajendra Jadhav)
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Gold falls as dollar strength weighs on gold; attention turns to Fed meeting
The gold price?fell Tuesday as a result of a stronger dollar, while markets awaited the Federal Reserve's next policy decision to get clues about interest rate expectations. Gold spot fell by 0.6% at $4,051.07 an ounce to $726 GMT on Saturday after rising by as much as 1% Monday. U.S. Gold Futures for August Delivery fell 0.6% to $4051.60. Dollars held near a month-high, making bullion priced in greenbacks more expensive for holders other currencies. Ilya Spirak, global macro manager at Tastylive, said that the market was just waiting for Fed signals. The Fed's?two day policy meeting will be concluded on Wednesday. The Fed's expectations to keep interest rates steady are at 62%. According to CME FedWatch however, 38% of market participants anticipate at least a 25% rate increase. The markets are pricing in a 81% chance that the central bank will raise rates at its meeting in September. Donald Trump, the U.S. president, called on the Fed on Monday to lower interest rates. He said that the U.S. would have the lowest rate of interest in the world. Trump said that the U.S. and Iran were having "good discussions"?and there was a possibility of a?deal to'resolve?their conflict. He warned, however, that if negotiations did not produce results then strikes would be resumed. Saudi Arabia, Jordan, and Iraq reported drone attacks on Sunday, indicating that Tehran was testing the pause. Spivak stated that if the Fed meeting does not produce language which sets the groundwork for a rate increase in September, then gold will likely rally?above $4.200 per ounce. Silver spot fell by 1.6%, to $57.48 an ounce. Platinum lost 0.6%, to $1.611,48, and palladium dropped 1.4%, to $1.274.10. (Reporting and editing by Varun H. K., Ronojoy Mazumdar, and Subhranshu S. in Bengaluru.)
INSTANT VIEW-India's economy grows 6.7% y/y in April-June quarter
India's economy grew by 6.7% in the AprilJune quarter from a year earlier, compared with 7.8%. growth in the previous quarter, government information revealed on. Friday.
A Reuters survey had forecasted a 6.9% growth in India's. gross domestic product for the quarter ending June 30.
COMMENTARY
YUVIKA SINGHAL, ECONOMIC EXPERT, QUANTECO RESEARCH STUDY, NEW DELHI. Above-normal rains this monsoon season, and the strength it. will impart to agri output and rural spending is likely to use. included support to FY25 growth momentum predicated on post-election. pickup in government costs, in addition to broadening of. private-sector capex cycle.
SAKSHI GUPTA, PRINCIPAL ECONOMIC EXPERT, HDFC BANK, GURUGRAM. The GDP print shows that development momentum continued in Q1,. in spite of a normal seasonal slowdown and the election result. Production and building activity stayed healthy. It was. encouraging to see that usage growth is also beginning to. gain momentum.
DEVENDRA KUMAR PANT, CHIEF FINANCIAL EXPERT, INDIA RATINGS AND. RESEARCH STUDY, GURUGRAM. With small amounts in inflation in FY25 and more-than-normal. monsoon, usage need is most likely to get an increase, leading to. a favorable development outlook for the remainder of the quarters.
SUJAN HAJRA, PRIMARY ECONOMIST AND EXECUTIVE DIRECTOR, ANAND. RATHI SHARES AND STOCK BROKERS, MUMBAI. Robust development, coupled with falling inflation, is expected to. support continued outperformance in the Indian equity market.
However, the strong growth figures might prompt the Reserve. Bank of India to preserve the present financial policy rates. throughout 2024.
ADITI NAYAR, CHIEF ECONOMIST, HEAD RESEARCH AND OUTREACH,. ICRA LTD, MUMBAI. We prepare for a back-ended pickup in GDP growth to above 7% in. H2 FY25, boosted by elements such as government capex and bottled-up. rural demand during the festive months.
SACHCHIDANAND SHUKLA, GROUP PRIMARY ECONOMIC EXPERT, LARSEN &&. TOUBRO, MUMBAI. The Gross Value Included (GVA)- Gdp (GDP) divide. has actually stabilized. This hints broader normalization in development. after unidirectional robust growth prints.
While some of the factors might be one-offs, moving forward. both financial and fiscal policy will have an essential role in. supporting growth.
SWATI ARORA, ECONOMIST, HDFC BANK, MUMBAI. Slowdown in GDP became expected. On the positive side,. positive private intake expenditure shows healing in. rural need as evaluated by high frequency signs of. two-wheelers and tractor sales, and FMCG sales data.
For the coming quarters, we anticipate GDP development between 6.5%. and 7.0%.
TERESA JOHN, LEAD ECONOMIC EXPERT, NIRMAL BANG, MUMBAI. Development is seeing some cyclical moderation, however both GVA and GDP. development were much better than our expectation.
Development is now only marginally below the long-term trend. If. this trend sustains for another quarter, we see disadvantage threats. to the RBI's quote of 7.2% GDP development.
GARIMA KAPOOR, FINANCIAL EXPERT, INSTITUTIONAL EQUITIES, ELARA. SECURITIES, MUMBAI. The interruption due to elections and heat wave resulted in small amounts. in services development.
The threat of federal government costs undershooting the budget plan. quotes this year, in the middle of rural city divide in consumption. need, will weigh on full-year GDP price quote.
UPASNA BHARDWAJ, PRIMARY ECONOMIST, KOTAK MAHINDRA BANK,. MUMBAI. While the Q1 FY25 GDP development has actually come in softer than. expectations, the GVA has actually stayed company, with non-farm growth. holding up well.
We retain our GDP growth expectations of 6.9% in FY25,. assisted mainly by rural demand and government costs, while. closely watching the most likely tiredness in urban need, personal. capex and the speed of global slowdown..
(source: Reuters)