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Harbour Energy announces annual loss and urges UK windfall tax reform before 2030
Linda Cook, Harbour Energy's CEO, warned that if the UK's windfall taxes were not repealed by 2030 it would cause irreversible harm to the oil and gas industry in Britain. This was after the company's 2024 earnings saw a spike due to a tax increase. Harbour, Britain's largest North Sea oil and natural gas producer, has reported a $93 million loss for 2024 compared to a $45 million profit in 2023. Its tax bill is more than doubled, from $571 millions a year earlier, to $1.31 million. LSEG data shows that the pre-tax profit for 2017 was $1.22billion, which is below analysts' estimates of $2.03billion. Harbour's shares fell 14% to 184p by 1021 GMT. North Sea producers claim that the UK Energy Profit Levy, first introduced in 2022 after a spike in energy prices due to Russia's invasion in Ukraine, has hurt profits and created uncertainty for investments. Since the EPL was introduced, we have had an effective tax rate higher than 100% every year. Cook told a press conference that the EPL does not only tax windfall profits but all our profit. Britain announced on Wednesday that it plans to revamp the windfall tax system on oil and gas companies once the current levies expire in 2030. It also pledged to turn the North Sea into an energy hub. In October, the government increased the tax from 35% to 38%, bringing the headline rate for the sector up to 78%, making it one of the highest rates in the world. The government is asking for feedback from industry and other stakeholders until 28 May on possible policy options, including taxing "excess revenues". The consultation did not include any specific price thresholds. Cook stated, "We are eager to engage. Our message will be to work with Treasury to create a fair and stabile fiscal regime. We hope to have this in place by 2030." Harbour has said that despite the difficult environment, it does not plan to move its listing from Britain over to the United States. The group's revenues in 2024 will be around $6.22 Billion, up from $3.75 Billion the previous year. This is primarily due to higher production and post-hedging realized European natural gas prices. (Reporting and editing by Arunima in Bengaluru. Sumana and Emelia Sithole Matarise).
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Germany investigates Argus Media and S&P Global regarding fuel pricing concerns
After an initial investigation that raised concerns about pricing and competition, Germany's antitrust regulator said it was investigating whether the price information services provided on the wholesale fuel market by Argus and S&P Global had any impact. Prices are often linked to wholesale contracts, and this can have an indirect impact on retail prices. These are provided by agencies that report prices, such as S&P Global Commodity Insights and Argus media. They are based on transactions reported. Neither Argus Media nor S&P Global Commodity Insights, (Platts), were immediately available to comment. The cartel office urged for stronger regulations last month after a review of oil market prices revealed that they were based on limited information and susceptible to manipulation. In a Thursday statement, Andreas Mundt said, "We are seeing indications that there is a structural disruption in the wholesale fuel trade." The office will use the new powers it obtained in 2023 in order to investigate if there is a significant and continuing disruption of competition in individual markets or across all markets. If confirmed, it will address its causes. (Reporting from Riham Alkousaa, Ahmad Ghaddar and Miranda Murray in London)
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The bond market continues to sell off after a seismic shift in German spending
The world financial markets were still in a phase of radical readjustment on Thursday, after U.S. president Donald Trump's shaking up of the transatlantic relations prompted a half-a trillion-euro seismic shift in German infrastructure and defense spending. The European Central Bank is preparing to lower its interest rates later. Normaly, that would be enough to grab the attention of traders. This was the most important thing to remember, even though the global bond market is still in full swing. The 10-year German Bund yield has seen its largest increase since the 1990s. Bund yields are now up by 10 basis points to 2.88% after reaching as high as 2.929 on Wednesday. The euro rested at a four-month high, while European stocks took a break after a 10% rise this year. Jim Reid of Deutsche Bank said that the Bund yield spike on Wednesday was the largest move since German unification. This is a seismic change of epic proportions, and only nimble and fast-money investors have responded thus far. Overnight, the global implications became apparent. The yield on Japan's 10-year bond, a key factor in the cost of borrowing worldwide, has reached a 16-year high. In addition, the yield on U.S. Treasury notes 10-years also rose for a 3rd day despite increasing bets that Federal Reserve rates will continue to fall. The focus remained on the global economic war, after Tuesday's 25% tariffs on Mexican and Canadian imports were imposed along with new duties on Chinese products. On Wednesday, however, the White House announced that President Trump will exempt Mexican and Canadian automakers from their respective countries' tariffs for a month so long as they comply with existing free-trade rules. This had boosted U.S. stock prices and bolstered Asian markets. MSCI's broadest Asia-Pacific share index outside Japan rose 1.25% while Tokyo's Nikkei closed 0.8% higher. China's blue chip index grew by 1.4%, while Hong Kong's Hang Seng Index soared over 3% and reached its highest level in three years. The Hang Seng has risen by 20% this year and is the best-performing major stock market worldwide. RESPONSE OF THE ECB After the massive rearmament campaign in Germany and Europe, the ECB was expected to cut interest rates. The euro remained steady at $1.08, just below the four-month high it reached in early Asian trading. The euro is expected to rise by more than 4% in the coming week, which would be its best performance since March 2009. Julien Lafargue is the chief market strategist of Barclays Private Bank. He said that this (ECB meeting) could be very exciting given the current circumstances. Lafargue stated that the bank is close to reaching the "neutral" interest rate level after recent reductions. "Christine Lagarde, will be asked how the ECB plans to respond," Lafargue added, to the European increase in defense spending. Gold prices in commodities were unchanged at $2,921.39 an ounce, as traders awaited the U.S. Non-Farm Payrolls Report on Friday to get hints on the Federal Reserve’s policy direction. The oil prices have been trying to recover after stumbling this week. This was due to a bigger than expected increase in U.S. crude stock, OPEC+'s plans to boost output, and U.S. Tariffs on important oil supplies. Brent futures hovered near a three-year low reached on Wednesday.
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Palmettos end higher but caution over US tariffs cap gains
Malaysian palm futures rose Thursday, following the movement of rival oils in Dalian and Chicago, but caution about U.S. Tariffs limited gains. The benchmark contract for palm oil delivery in May on the Bursa Derivatives Market gained 63 ringgit (1.43%) to close at $4,480 ringgit (1,012.43) per metric ton. Anilkumar bagani, research head at Mumbai-based Sunvin Group, says that the market remains cautious due to confusion regarding U.S. Tariffs on Mexico and Canada. The direction of the soy oil, rapeseed, and canola futures are also unclear from the North American, European, and Asian markets. Chinese futures, however, were trading slightly higher this morning." Dalian's soyoil contract with the highest volume gained 0.92%. Palm oil prices in Dalian rose by 1.93% while soyoil prices at the Chicago Board of Trade increased by 0.37%. As palm oil competes to gain a share in the global vegetable oil market, it tracks price changes of competing edible oils. GAPKI (the Indonesia Palm Oil Association) released data on Thursday showing that Indonesia exported 29.54 millions metric tons of palm products in the last year. This represents an 8.3% decline on the previous year. A survey found that Malaysia's palm oil stocks in February were at their lowest level for nearly three years due to production disruptions from floods. A minister revealed that palm oil plantations have been infested in two states of Malaysia, the second largest producer in the world. The country is recovering from flooding which has disrupted its production. The price of oil rose after heavy selling drove the market down to its lowest level in many years. However, tariff uncertainty and an increasing supply outlook limited gains. Palm oil is a better option as a biodiesel feedstock because crude oil futures are more stable. The palm ringgit's trade currency, the U.S. Dollar, has slightly strengthened, making the commodity more expensive for buyers who hold foreign currencies.
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Infestations in two states of Malaysia have affected palm oil production
A minister revealed that palm oil plantations have been infested in two states of Malaysia, the second largest producer in the world. The country is recovering from flooding which has disrupted its production. Plantation and Commodities minister Johari Abdul-Ghani stated in a Wednesday parliamentary response, which was then published on Thursday, that leaf-eating pests have been reported to be attacking in Peninsular Malaysia. Johor, Perak and Perak account for 1.01 million of the 5.61 million acres of oil palm plantations. In recent months, floods have affected the country's output. The result is that it has hit a six-month low. Perak is experiencing an increase in oil palm crop threats. He said that to address the situation, a budget of 5 million Ringgit ($1.13million) was requested in order to intensify control efforts against this increasingly widespread outbreak. He added that the Malaysian Palm Oil Board is taking steps to control the infestation, including spraying biopesticides and planting beneficial plants. Reporting by Ashley Tang, Editing by Sonia Cheema. $1 = 4.4220 ringgit
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Trump tariffs on Mexican fuel oil will send it to Asia and Europe in March
Analysts and trade sources said that Mexican fuel oil cargoes will be heading to Asia and Europe in this month due to higher prices. Traders also plan on diversifying after U.S. president Donald Trump imposed import tariffs this week. Pemex, the state energy company in Mexico, usually sells its heavy crude oil and high-sulfur fuel oil to U.S. Gulf Coast refining plants for processing. However, a 25 percent tariff imposed by Washington on Mexican products on Tuesday has caused cargoes to be diverted. Data from shipping analysts Kpler and Vortexa and trade sources show that Mexico's HSFO exports to Asia and Europe will increase in March. This is the first time in at least five months. Kpler data from this week showed that two Mexican fuel oil cargoes, totaling 145,000 metric tonnes, or 920.750 barrels, will land in Singapore by late March. Meanwhile, Europe is expected to receive four shipments totaling 188,000 tons this month. The sources in the trade said that strong HSFO prices have drawn Mexican supplies. The spot prices of Singapore 380cst HSFO, the benchmark for the region, have risen in recent sessions. Meanwhile, refiners' profit margins on producing this fuel reached a rare premium last month. "Europe is the more natural outlet for Mexican oil." A fuel oil trader in Asia said that with the current strength of Singapore, perhaps more (oil can) flow here. HSFO is blended with marine fuel in bunker hubs like Singapore and Rotterdam. Pemex and its trading arm did not immediately respond to a comment request. "We could see fuel oil cargoes diverted to the U.S. East Coast and possibly increase European arrivals this month from Mexico," said Vortexa Analyst Xavier Tang. He added that the tariffs would likely displace a significant portion of U.S. HSFO imported from Mexico. Kpler data shows that the next Mexican fuel oil cargo to be shipped into the U.S. will be transported by Constellation, a tanker of Panamax size, and is expected to discharge in Houston on Friday. Traders said that the volume of goods diverted from Asia to Europe will depend on Washington's tariff adjustments or suspensions, and on emission tax in Europe. Another Asia-based fuel oil dealer said that if the U.S. tariff on imports remains at 25%, cargoes will likely head east. An European trader stated that traders would also take into account the EU emissions trading systems (ETS) tax in calculating arbitrage to Rotterdam. The trader said that "ETS prices are low, but if they rise, it will become more important in arbitrage calculations." A source at PMI Comercio Internacional (Pemex's international trading arm) said that it would be easier to sell HSFO in Asia than Europe. They declined to name the sources as they were not authorized to speak with media.
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Investors see the beginning of a tectonic move away from US markets
The global money flows are being upended by a historic trade war, the proposed European fiscal bazooka of $1.2 trillion and China's rise as the leader in the tech race. This could be a turning point, with investor capital moving away from the United States. China released more stimulus on Tuesday and pledged to make greater efforts in order to mitigate the impact of a escalating U.S. Trade War. The likely next German government had agreed to the largest overhaul of fiscal policy since the reunification. German bonds plunged in the biggest sell-off in decades on Wednesday as the 30-year yields jumped by a quarter percentage point. The selloff continued on Thursday. The U.S. trade war, which began this week, is hurting the mood both inside and outside of the world's largest economy. Investors have bet heavily on the "U.S. exceptionalism" for the past three years. The country has been ahead of other countries in terms of economic growth, stock market prices, artificial intelligent and many other areas. Tim Graf, State Street Global Markets' head of macro strategy in EMEA, said: "The U.S. has changed, and the world is now saying that we must adapt, as the U.S. no longer is a reliable trade partner. We have to look after our own defence needs." A rare divergence on global stock markets has been fueled by the change in sentiment. The S&P 500 index has fallen 1.8% in the past year. However, European shares have risen almost 9% to a new record high. Tech stocks in Hong Kong are up nearly 30%. The euro has soared above $1.07 for the first time in four months, and many banks have backed away from their calls to drop it to parity with the dollar. According to weekly data released by the Commodity Futures Trading Commission, investors have cut their bullish dollar bets in half since the inauguration of U.S. president Donald Trump in January. Dario Perkins is the managing director of global macro for TS Lombard. The aggressiveness and threat of tariffs by Trump has forced other countries to spend even more. In his first 44 working days, Trump has completely rewritten the playbook of foreign relations that had been in place since 1945. He's also launched a trade war with his largest trading partners, and forced European leaders into a radical rethinking of how they fund security. The U.S. economic growth is slowing down due to tariffs and trade uncertainties. Companies that are more susceptible to slower growth have started to show cracks. In the past month, an index of U.S. bank stocks has dropped 8% while its European counterpart has increased 15%. Investors are diversifying away from the U.S. markets by pouring money into Europe. Spending Big The dollar looks less attractive as Europe and China are poised to spend large amounts. "We were long the dollar versus the euro, and we closed this position more than a week back. Mark Dowding is chief investment officer of RBC's BlueBay Fixed Income team. The behaviour of Trump has reduced the appeal of U.S. assets generally. The government has taken several steps to encourage spending at home after investors sold Chinese assets in the past year. As the economy slowed, and wealthy consumers closed their wallets, it took several measures to encourage domestic consumption. Many still saw China as an uninvestable country in the absence a jumbo-stimulus plan, as tensions from a real estate bubble burst that affected both companies and homeowners remained. Lipper data shows that the almost uninterrupted outflows of China-focused funds following Trump's victory in November have reversed to some $3 billion in early February. Megacap tech stocks are a major draw for the U.S. Stock Market. Nvidia has been a leader in the AI investment revolution, and is one of the most valuable companies on the planet. It was not until late January that a low-cost Chinese AI model, previously unknown, made a serious impact on the AI arms race. DeepSeek's appearance has not only challenged assumptions about AI costs and efficiency, but also revealed how far behind Western companies China was. Hong Kong tech stocks are up 24% since January 27. A basket of U.S. megacaps is down 12%. Yang Tingwu is vice general manager at asset manager Tongheng Investment. He said that China's stock markets are already immune to increased U.S. Tariffs, as the growing strength of China is supporting domestic assets. Yang stated that "China's technological clout has expanded if you look at TikTok or Xiaohongshu, as well as DeepSeek." In response to the imminent sale of TikTok U.S. operations, American users are rapidly migrating to Xiaohongshu. For some, the dollar's appeal will last over time due to a resilient U.S. economic climate and higher interest rates. Nate Thooft is the CIO of Multi-Asset Solutions & Global Equities for Manulife Investment Management. He said: "I think there's a change in play. We view it as a tactic versus a major secular shift." Recently, he upgraded his maximum underweight position on European stocks to neutral.
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Dalian iron ore drops as tariff woes overshadow Beijing's stimulus promises
Iron ore futures fell on Thursday, as reports of steel production reductions and trade concerns outweighed the additional stimuli measures designed to boost Chinese consumption. The May contract for the most traded iron ore on China's Dalian Commodity Exchange closed at 773 Yuan ($106.78), a decrease of 0.45%. As of 0708 GMT, the benchmark April iron ore traded on Singapore Exchange was up 0.49% to $100.25 per ton. Analysts at ANZ said that a trade war could be a problem for the market as a decline in export-driven Chinese demand would hurt demand for iron ore. China released more fiscal stimuli on Wednesday. It promised to increase efforts to support the consumption and soften the impact of a escalating US-China trade war. Washington has added 20% to existing tariffs on Chinese goods. The latest 10% increase was implemented on Tuesday and prompted Beijing's response. Some economists are not impressed by the policy measures taken to increase household demand, despite Beijing's renewed focus on consumption. Hexun Futures, a broker, said that the daily average molten output in China is expected to rise to 2.329 millions tons in March. The demand for steelmaking materials has also recovered, he added. Hexun stated that the news of a reduction in steel production intensified downward pressure on prices. China will restructure the giant steel industry by cutting output, despite not announcing any targets in its latest intervention to reduce overcapacity. Coking coal and coke, which are used in the steelmaking process, have both fallen by 0.42% and 0.58 percent, respectively. The Shanghai Futures Exchange also saw gains in other steel benchmarks. The rebar price rose by 0.4%. Hot-rolled coils were up 0.35%, stainless steel climbed 1.28% and wire rod was up 0.09%. $1 = 7.2390 Chinese Yuan (Reporting and editing by Sherry Phillips, Eileen Soreng and Michele Pek)
Sources: Global Aluminium Producer seeks premium of $260/t from Japan buyers in Q2
Two sources involved directly in the pricing discussions said that a global aluminium manufacturer has asked Japanese buyers to pay a premium of $260 a metric tonne for primary metal shipments between April and June, an increase of 14% over the current quarter.
Japan is the largest Asian importer and the premiums it pays for primary metals shipments over the London Metal Exchange Cash Price set the benchmark in the region.
Japanese buyers have agreed to pay $228 per ton as a premium for the quarter January-March
Sources at Japanese trading houses said that the increase in premium was due to concerns that new U.S. Tariffs on Canadian Aluminium could divert supplies from the Middle East, Australia, or other regions which typically serve Asia towards North America and tighten availability in Asia.
The new tariffs of 25% on imports to the United States from Mexico and Canada went into effect on Tuesday. Trump announced last month that he would impose 25% tariffs for all steel and aluminum imports to the United States. This will take effect on March 12.
The source stated that "the jump in the price was surprising, as spot premiums are hovering around $180 a ton in Japan due to sluggishness in demand and the efforts to reduce inventory by March's fiscal year end." She added that the talks could drag on because of the large gap between the buyer and seller expectations.
It took a little longer than usual for the last round of quarterly talks to be concluded.
Due to the sensitive nature of the issue, the sources refused to identify themselves.
Japan's influence on price negotiations has diminished as primary aluminum imports have almost halved in the last two decades due to weak domestic demand. This has caused producers to prioritize the interests of larger volume buyers. (Reporting and editing by Kim Coghill, Subhranshu Sahu.)
(source: Reuters)