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Sources say Valero, a US refiner, will import up to 6 million barrels Venezuelan crude oil in March.
Valero Energy will buy up to 6.5 millions barrels of Venezuelan oil in March for its Gulf Coast refining plants, making it 'the top foreign refiner since the United States captured Nicolas Maduro, in January. Valero is one of the first U.S. oil refiners that resumed imports after the United States signed a landmark $2 billion oil deal with Venezuela's interim government, and started to ease sanctions. If Valero can buy 10 or more cargoes of Venezuelan crude next month, which is equivalent to 210,000 barrels a day, then it will surpass U.S. oil giant Chevron in the United States as the largest refiner. This would be the highest amount of Venezuelan crude oil Valero has processed since the United States sanctioned Venezuela's oil industry in January 2019. Sources told us last month that Chevron, which is the only U.S. oil company producing in Venezuela, will increase its exports to 300,000 barrels per day (bpd) in March from 220,000 in January. Chevron refines about half of its exports in its refineries and sells the remainder to other U.S. refining companies. Valero receives a large share of the Venezuelan oil that Chevron sells to U.S. refining companies. Six sources claim that Chevron will supply Valero most of the oil the refiner plans to import in March. Valero also has negotiated a few?cargoes with trading houses, including Trafigura. Trafigura was the first company authorized by the U.S. Government last month to trade Venezuelan oil alongside Chevron. According to a shipping schedule seen by the. Sources warned that the loading schedules are not finalized, and may still be revised. The sources spoke under condition of anonymity in order to discuss confidential information. Vitol, Trafigura and Trafigura have declined to make any comments. Chevron PDVSA and Chevron did not respond immediately to requests for comments. A spokesperson for Valero referred to remarks made by executive Randy Hawkins following the release of its fourth quarter earnings on January 29, 2019. Hawkins said that Valero is in discussions with Venezuelan oil sellers and expects it to be a large portion of the heavy-crude purchased in February and march. Valero had a long-term agreement with PDVSA to purchase crude oil before U.S. sanctioned. Valero’s total refinery capacity for Venezuelan crude was around 240,000 bpd, before the expansion of its 435,000 bpd Port Arthur, Texas refinery, scheduled to take place in 2023. Hawkins stated that the company expects to now be able to?process a much greater?volume? of Venezuelan crude oil. VENEZUELA IMPORTS RAMP UP The United States Secretary of Energy Chris Wright stated in Caracas that Venezuela's oil exports and production are expected to increase "dramatically" in the next few months. After production cuts were reversed last month, the country's oil output reached 1 million barrels per day (bpd) this month. Exports jumped to 800,000 bpd during January. Wright, NBC News' correspondent on Thursday, said that oil sales in Venezuela under U.S. management have reached $1 billion since Maduro was captured. Another $5 billion will be deposited into a U.S. controlled fund over the next few months. Since January, the United States has issued 'general licenses' authorizing oil exports to Venezuela, fuel supplies, equipment for oil and natural gas production, oilfield extensions, and new investments. According to three sources, Valero is considering purchasing oil directly from PDVSA using the new authorizations. This could allow them to increase their volumes. PDVSA has so far refused to sell to companies that do not have individual U.S. licensing, as there are still questions about what is allowed and what is prohibited, according to sources.
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Holiday schedule for US economic and other data
Presidents Day, which falls on February 16, will impact the schedule for the release of major economic, energy and commodities reports in Washington for the week beginning February 15. The schedule is below. The times are in GMT/EST. Treasury announcements may be subject to change. Monday, February 16, 2019 Presidents Day. Closed: Federal government offices, Federal Reserve and International?Monetary Fund, stock and Bond markets. Tuesday, February 17, 2019 National Association of Home Builders releases U.S. Housing Market Index, February, 1000/1500 Conference Board releases Employment Trends, January 1000/1500. Rescheduled event from February 9. Treasury Dept. Treasury Dept. The U.S. Department of Agriculture releases weekly U.S. Export Inspections for Grains, Oilseeds, 1110/1600. Note: this week's inspections are delayed from Monday because of the holiday. Treasury Dept. Treasury Dept. Due to the holiday, this sale has been delayed. National Oilseed Processors Association releases U.S. monthly soya crushings, 1120/1700 Treasury Dept. Treasury Dept. Wednesday, February 18, Mortgage Bankers Association releases weekly Mortgage Application Survey, 0700/1200 Redbook releases weekly retail sales index 0855/1355. Note: this is a delayed update from Tuesday. Commerce Dept. Issues Durable Goods Report for December. Housing Starts Report for December. 0830/1330. Note: The Housing Starts report includes initial November estimates Federal Reserve releases Industrial Production for January, 0915/1415 Treasury Dept. Treasury Dept. Treasury Dept. Treasury Dept. Treasury Dept. Treasury Department issues Treasury International Capital Report for December, 16:00/2100 American Petroleum Institute releases weekly national petroleum reports, 1630/2130. Due to the holiday, Tuesday's report has been delayed. Thursday, February 19, 2019 Weekly Jobless Claims Reports by the Labor Dept. Weekly Jobless Claims Reports, 0830/1330 Commerce Dept. releases Advance Economic Indicators for December; International Trade?for December, 0830/1330 Commerce Dept. releases Advance Economic Indicators (AED) for December; International trade?for December 0830/1330 National Association of Realtors releases Pending Home Sales for the Month of January, 1000/1500 Energy Information Administration (EIA), 1030/1530, releases weekly U.S. Underground Natural Gas Stocks. Treasury Dept. Treasury Dept. Treasury Dept. Treasury Dept. Freddie Mac issues weekly U.S. mortgage rates, 1200/1700 EIA releases weekly petroleum stock and output data, 1200/1700. NOTE: time change from Wednesday due to holiday. Treasury Dept. Treasury Dept. Federal Reserve releases weekly balance sheet 1630/2130 Friday, February 20, 2019 Commerce Dept. No time limit is set for the Permit Revisions issued by Commerce Dept. NOTE: Report will include the initial November estimates. Commerce Department issues an advance (first estimate) of U.S. Q4 Gross Domestic Product; issues Personal Income for December, 0830/1330 Commerce?Dept. USDA Releases Weekly Export Sales, 0830/1330. Due to the holiday, export sales are released on Fridays. Commerce Department releases Single-Family Home Sales for December, 1000/1500. Commerce Department releases Single-Family Homes Sales for December, 1000/1500. Report will include November initial estimates Treasury Dept. Treasury Dept. USDA Cattle on Feed monthly, 1500/2000
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CORRECTED - S&P 500 slightly down as inflation and tech drop
The S&P 500 barely closed higher on Friday. Technology and communications services were down due to lingering fears of AI disruption, but equity markets gained support from optimism that cooling inflation data will support Federal Reserve rate cuts. The CME Group's FedWatch tool showed that U.S. consumer price increases were lower than expected in January. This led traders to increase the probability of a 25-basis point cut in interest rates in June from 48.9% to 52.3%. This is a very good number. This suggests we are still far from the Fed's 2% target, but that inflation is not increasing. Peter Cardillo is the chief market economist of Spartan Capital Securities, New York. Preliminary data shows that the S&P 500 rose 2.32 points or 0.03% to 6,835.08 while the Nasdaq Composite fell 52.04 points or 0.23% to 22,545.11. The Dow Jones Industrial Average increased 47.44 points or 0.10% to 49,499.42. Recent equity markets have retreated from record highs as fears about disruption by artificial intelligence fuelled a'selloff' in sectors from software to insurance and trucking companies. On Friday, the S&P 500 index for software and services closed at 0.9% while the S&P 500 technology sector dropped 0.5%. Friday's inflation data encouraged investor hopes for Fed rate cuts after Wednesday's stronger-than-expected January jobs data sowed doubts. Phil Orlando, the chief market strategist of Federated Hermes, predicted that trading would be more volatile in the coming months. This was in light of AI concerns, looming mid-term elections for the United States in November, and Kevin Warsh, who is expected to replace Fed Chair Jerome Powell in May. Orlando said that the inflation data was better than anticipated and the trend continues to be lower. He said that historically, when a Fed leader transition occurs in a midterm year, it has caused the market to hit "double-digit" air pockets. Megacap tech'stocks' were weak, with Applied Materials and Apple Inc. providing a big boost. The S&P 500 index's 11 major industries were led by the defensive utilities and real estate sectors. The healthcare sector also saw a rise in shares of Dexcom, Moderna and other companies after they reported their fourth quarter earnings. Shares of Applied Materials surged after the company forecast revenue and profits for its second quarter that exceeded Wall Street's expectations. Arista Networks, a provider of networking equipment, also gained in the session as it forecasted annual revenues that were above expectations. White House trade advisor Peter Navarro'said that there was no basis for reports that the 'administration planned to reduce steel and aluminium tariffs. Steel Dynamics and Nucor were among the steelmakers that came under pressure. Alcoa shares fell, as did Century Aluminum. Reporting by Sinead carew in New York; Johann Cherian, Twesha dikshit and Purvi Agarwal in Bengaluru, and editing by Shilpa Majumdar and Pooja desai.
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Oil prices rise slightly as US inflation data and optimism about OPEC's supply outweigh OPEC's concerns
The oil prices have risen marginally on 'Friday, after data revealed a slowdown in U.S. inflation. This has helped to offset concerns about supply as OPEC+ is 'leaning toward a resumption of production increases. Brent crude futures settled 23 cents or 0.3% higher at $67.75 per barrel while U.S. West Texas intermediate crude settled 5 cents or 0.08% more at $62.89 Both benchmarks have posted weekly losses after suffering near 3% drops on Thursday. Brent fell by about 0.5% and WTI dropped by 1% during the week. U.S. consumer price increases were lower than expected in January, thanks to cheaper gasoline and a moderated?increase in rental inflation. Looks like inflation has stabilized. It's a good thing that interest rates will continue to fall. Dennis Kissler is the senior vice president for trading at BOK Financial. He said that as interest rates begin to fall, it will be a positive for the economy. He added that "the negative will be if OPEC increases production a bit more." Investors reacted negatively to a report that OPEC was leaning toward a resumption of oil production increases in April. This is due to the upcoming peak'summer fuel demand and firmer crude price owing to tensions between U.S. and Iran relations. Baker Hughes reported that oil rigs in the U.S. fell from 409 to 399 this week. Prices of oil had risen earlier in the week due to fears that the U.S. might attack Middle Eastern oil producer Iran because of its nuclear program. Prices fell on Thursday after U.S. president Donald Trump said that Washington might reach a deal with Iran in the next month. U.S. officials announced on Friday that the Pentagon is sending a plane?carrier to the Middle East from the Caribbean. This would mean two aircraft carriers in the area as tensions between Iran and the United States rise. Russia said that the next round in peace talks over Ukraine would take place next Monday. Kissler added that negotiations with Iran and Russia will be near-term market movers. He also said that global crude supplies are ample in the short-term and crude futures have likely been baked in a geopolitical premium of $5 to $7 per barrel. On Friday, the U.S. eased sanctions against?Venezuela’s energy sector by issuing two licenses that will allow global energy firms to operate oil & gas projects in OPEC member Venezuela and other companies to negotiate new contracts for fresh investment. Chris Wright, the U.S. Secretary for Energy, told NBC News that oil sales from Venezuela controlled the U.S. totaled over $1 'billion and will reach $5 'billion in the next few months. The U.S. Commodity Futures Trading Commission reported on Friday that money managers increased their net long U.S. Crude futures and option positions during the week ending February 10. Reporting by Arathy S. Somasekhar and Robert Harvey. Editing by Susan Fenton and Kirby Donovan.
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Repsol, a Spanish company, appoints a new global head of trade
Robert Harvey and Pietro Lombardi MADRID/LONDON - Spanish energy giant Repsol has appointed Juan Romero to its global head of trading. A spokesman told? On Friday. The company announced that Juan Romero would replace Jose Antonio Correa who retired. This news was not previously announced. Repsol is expanding its trading division, as part of its strategy to transition from a traditional oil and gas company into a multi-energy provider. This shift comes at the same time as it considers a reverse merger for its upstream portfolio. Romero, who has a LinkedIn profile, worked for Repsol in Madrid and Houston, where he traded crude oil and fuels. Repsol announced that several other oil trading bosses would be taking on new roles in the wake of this?change. Inaki Mateo, who is currently Gomis' global head of bunkers and heavy products, will take over Gomis’ current role. Carolina Franco will take over the role Mateo is leaving, as global head of middle distillates. (Reporting from Robert Harvey in London, and Pietro Lombardi at Madrid; editing by Lisa Shumaker.)
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IMF discusses electricity tariff revisions with Pakistan
The International Monetary Fund has been in contact with Pakistani authorities to discuss a proposed revision of electricity tariffs, according to a statement released by the fund on Saturday. It added that the burden should not fall solely on lower and middle income households. In a statement, it said: "We will continue to discuss with the authorities whether proposed tariff revisions comply with these commitments and evaluate their impact on macroeconomic stability including inflation." Analysts said that the proposed tariff overhaul would 'lift inflation and ease pressure on industry' as Pakistan seeks to comply with conditions under its $7 billion Extended Fund Facility. The EFF is an IMF longer-term loan programme that helps countries to address their deep-seated weaknesses in the economy and balance of payments problems on a medium-term basis. The consumer price index in Pakistan is heavily influenced by electricity. This makes tariff adjustments very sensitive, especially at a time when inflation has dropped sharply from its peak of near 40% in 2023 but remains a major political and economic issue. The circular debt that has weighed on Pakistan's energy sector for years -- a series of unpaid bills, subsidies and other obligations accruing across the?generation companies and distributors as well as the government -- is what led to repeated tariff increases since 2023 under IMF-supported reforms. The Fund said that the accumulation of circular?debt in the power sector has been contained by programme?targets and improved performance on recoveries and loss-prevention. Reporting by Ariba?Shahid in Karachi, writing by Kanjyik?Ghosh in Barcelona and editing by Diane Craft.
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White House: Trump's metal tariffs will not change unless the president announces it
Trump administration officials stated on Friday that there will be no changes to President Donald Trump's tariffs on steel and aluminum, as well as thousands of products made with the metals. In response to a Financial Times article that said the administration planned to reduce tariffs on certain steel and aluminium goods, with possible exceptions, a White House official stated that Trump would "never compromise on reinvigorating domestic manufacturing, which is crucial to our national security and economic stability, especially steel production." Officials said the administration is implementing a "nimble and nuanced tariff program" to boost U.S. steel, aluminum, and other manufacturing sectors. The official stated that any speculation about a change in our current tariff system is based on supposition unless it has been officially announced by the Administration. Scott Bessent, Treasury Secretary, said on CNBC that "I do not think that the FT's reporting today is great," but that it could be modified. Bessent stated that "if anything is done I think it will be some clarification on some incidental items, but again, the decision will be made by the president." The U.S.?Commerce Department spokesperson did not respond immediately to a?request for comment regarding the FT article, which cited anonymous sources as saying the Trump administration is reviewing tariffs and will exempt certain items. The U.S. Trade Representative did not respond immediately either. CNBC reported White House Trade and Manufacturing Advisor Peter Navarro told the network, off camera, that there was in fact no basis for the FT's report that the Administration was planning to?"reduce the tariffs on steel and aluminum". The Commerce Department is responsible for the Section 232 tariffs on national security that Trump doubled in the last year, which include steel and aluminum. Trump is pivoting to address the 'rising cost of living' for Americans in a midterm election year. In its annual fiscal report, the Congressional Budget Office said that U.S. consumer's are paying 95% of Trump tariffs through increased prices for imported goods and domestically manufactured goods. The American Iron and Steel Institute on Friday urged the Trump administration to maintain the steel and aluminum tariffs, arguing that government-subsidized excess steel capacity in China and ?elsewhere was a threat to U.S. national ?security. The Section 232 tariffs imposed on steel by President Trump were "essential" to prevent the overcapacity fueling new surges in harmful imports to the U.S. Market, which would pose a grave threat to American National Security and undermine the health the American Steel Industry," AISI president Kevin Dempsey stated in a press release. (Reporting and editing by Philippa, Andrea Ricci, and Nick Zieminski; Reporting by David Lawder)
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Trump announces he will travel to Venezuela following a'very positive' relationship with the interim president
President Donald 'Trump said on Friday that the United States' relationship with Venezuela is "very good". He also stated his intention to visit Venezuela. Trump's praise of Venezuela's interim leader Delcy Rodrguez follows the U.S. arrest of Venezuelan president Nicolas Maduro, in January. The Trump administration also wants to increase oil deals with Venezuela. Trump said to reporters at the White House that he would be visiting Venezuela, but he didn't give any further details. Trump noted that the United States "work very closely" with Rodriguez to ensure?access? to oil. Trump said, "I would rate the relationship we currently have with Venezuela as a ten." When asked if he would recognize Rodriguez as an official government, Trump replied, "Yes, we've done that." We are dealing directly with them and they have really done a fantastic job. The White House didn't?immediately answer a question about whether the official U.S. position towards Rodriguez's Government has changed. In recent weeks, Trump administration officials made it clear that the U.S. does not recognize Rodriguez's interim government as legitimate. Chris Wright, the U.S. Energy secretary, said in Venezuela that Rodriguez was the "interim President"? working with the United States. Wright said in an interview with CNN that the U.S. would not "tell Delcy her future role" in future elections, leaving this decision to 'the Venezuelan people. In an interview with NBC News this week, Rodriguez called Maduro "the legitimate president" of Venezuela.
Dollar weakness propels gold 1% greater, US data in focus
Gold rates climbed up 1% on Tuesday, assisted by a fall in the U.S. dollar and as China's reserve bank contributed to its gold reserves for a 2nd straight month, while the market awaited U.S. financial information to evaluate the Federal Reserve's policy course.
Area gold was up 0.9% at $2,659.29 per ounce, as of 9:53 a.m. ET (1453 GMT). U.S. gold futures rose 1% to $ 2,673.00.
The dollar is off its highs, which is assisting gold, stated Daniel Pavilonis, senior market strategist at RJO Futures.
The U.S. dollar index was close to a one-week low following a Washington Post report that suggested President-elect Donald Trump's tariff policies will not be as aggressive as guaranteed, which Trump later on denied.
The caveat is awaiting the brand-new administration to take over ... The outlook for stickier inflation is still common, which paired with all of the external political concerns going on is still keeping the rare-earth elements markets raised, Pavilonis said.
Uncertainty surrounding the tariff policy in the added to Trump's inauguration on Jan. 20 has sustained issues about future moves in U.S. policy.
Investors have actually been pricing in a scenario where proposed tariffs might inflame U.S. inflation, restricting the Fed's ability to cut rates and thereby pushing gold.
While bullion is thought about a hedge versus inflation, high rates reduce the non-yielding asset's appeal.
Traders await Friday's U.S. jobs report for policy clues, along with job openings data due later on in the day, ADP employment and the minutes from the Fed's December conference on Wednesday.
Meanwhile, China's central bank included gold to its reserves in December for a 2nd straight month, following a resumption in November after a six-month hiatus, main data revealed.
( China's purchase is) an advancement likely to lend ongoing assistance to the precious metal's cost, said Ricardo Evangelista, senior expert at ActivTrades.
Area silver gained 1.1% to $30.29 per ounce, platinum added 2.4% to $950.23 and palladium increased 0.6% to $925.57.
(source: Reuters)