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Investors weigh the impact of Iran's war ending and Hormuz reopening on oil prices as they stabilize.
Investors questioned whether the Iran War will end and the Strait of Hormuz will reopen. Brent crude futures rose 47 cents (0.6%), to $79.43 per barrel. U.S. West Texas Intermediate was up 48 cents (0.6%), to $76.53 per barrel as of 0038 GMT. The benchmarks for both fell 5% on Tuesday, a second consecutive session. They reached three-month lows in hopes that a U.S. Iran deal would allow oil to flow through the Strait. Oil markets fell on the expectation that the Strait of Hormuz will reopen after the?peace accord, but traders held back further sales pending more details, said Hiroyuki Kikukawa. Kikukawa is the chief strategist of Nissan Securities Investment. He added that WTI will likely remain volatile between $10 above and below $80 per barrel. Tuesday, details of the interim peace agreement began to emerge. U.S. president Donald Trump said it would 'rule out' a nuclear weapon for Tehran. A U.S. official stated that it would allow Iran oil sales upon signing. The not-yet-public memorandum extends the tenuous ceasefire that was announced in April for another 60 days, allowing talks to lead to a permanent truce. The deal would see the United States lift its blockade on Iran's ports while Tehran would allow oil tanker traffic to flow through the Strait which has been effectively blocked since U.S.-Israeli strikes?on February 28, 2009. Officials in the industry say it will take weeks, even months, to return to levels of production and refinement that existed before World War II. Israel has disassociated itself from the April ceasefire as well as the latest U.S. Iran agreement, increasing uncertainty about whether the new truce is going to hold. Lebanon's National News Agency reported that Israeli drone strikes on three vehicles in the southern Lebanon killed at least four people, and injured others. Trump has issued a rare public rebuke to Israel's military tactics. Data showed that China's crude throughput in may?fell by 9.1% over the past year, to its lowest level in nearly four years. This also indicated that refiners are starting to draw down on stockpiles in the face of the Iran War. According to sources, the American Petroleum Institute's report revealed that U.S. crude stockpiles fell by 8.3 million barrels during the week ending June 12. The Energy Information Administration is expected to release official figures at 10:30 am. This exceeded the expectations of a 4.6-million barrel draw. ET (1430 GMT), on Wednesday. Reporting by Yuka Obabayashi, Editing by Sonali Paul
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Russian-held Crimea restricts motorcycle use, claiming they sound like drones
Moscow-installed officials in Crimea have banned motorised vehicles such as quad bikes, motorcycles and scooters from being used at night. They claim that they sound like drone attacks. The peninsula's Russian-installed Governor, Sergei Aksyonov said that the ban would be enforced between 8 p.m. to 6 a.m. on Wednesday. He called it a temporary measure for the protection of military and important facilities. The moped's noise interferes with the operation of defense systems. "Their engines sound like drones,"?Oleg?Kryuchkov, Aksyonov’s advisor, said on Telegram separately on Tuesday. "The enemy is enlisting your children for nighttime rides." The Crimea ban does not apply to larger vehicles or cars. Ukraine recently intensified drone attacks against?Crimea - home to Russia's Black Sea Fleet - targeting the peninsula’s supply routes, causing a fuel shortage as the holiday season begins. Mikhail Razvozhayev said that the limit of 20 litres of fuel (5.3 gallons of gasoline) per car would remain at local petrol stations, in a Telegram message posted late Tuesday. Sources say that a Ukrainian drone attack on Tuesday halted the operations of the oil refinery in Moscow, adding to the damage done by the strike and spreading the fuel crisis further into the country. On Wednesday morning, Sergei Sobyanin, the Mayor of Moscow, said that Russian defence systems had shot down 10 drones headed for Moscow overnight. Donald Trump, the U.S. president, said that Russia should make peace in Ukraine after a "very successful" meeting with President Volodymyr Zelenskiy on Tuesday. His comments sparked cautious optimism from G7 leaders about the possibility of a peace agreement. (Reporting and editing by Lincoln Feast in Tokyo. Reporting by Jekaterina Glubkova.
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Officials say that four people were killed in Russian attacks on eastern Ukrainian towns
Officials and prosecutors reported late Tuesday that Russian 'attacks' on cities in Ukraine’s east and south-east had killed four people and set a residence and shopping centre ablaze. In the Donetsk Region, which is the center of Ukraine's frontline, prosecutors said that three people died in two bombings in the city of Slovansk. Five people were also injured. Sloviansk forms part of the "fortress belt" heavily defended by military forces and is seen as a key location in containing a slow-moving Russian attack on Donetsk. National police in?the southeast Ukrainian city of Zaporizhzhia? said that a wave dozens of drones had killed one man and injured seven other people. Online pictures showed flames on the roof and inside of a building. At least one façade was reduced to rubble. Regional Governor Ivan Fedorov confirmed that there were five attacks?on the city. Fire broke out at a home and shopping centre, and an education institution was damaged. Could not independently verify these reports. Russia and Ukraine deny that they deliberately targeted civilians during the war which began with Russia's full scale invasion of Ukraine in 2020. Reporting by Ron Popeski, Oleksandr Kozoukhar and Mark Porter; editing by Jamie Freed and Mark Porter
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Oil prices tumble again on US-Iran deal; S&P 500 falls
Oil prices dropped more than 5% Tuesday, continuing this week's losses, on hopes that a U.S. Iran deal will end the Middle East war and allow oil to flow through the Strait of Hormuz. Meanwhile, technology shares weighed on the S&P 500 & Nasdaq. The details of the U.S.-Iran interim agreement began to emerge. U.S. president Donald Trump said it would rule out Tehran acquiring a nuclear weapon, and an official from the U.S. stated that it allowed Iran to immediately sell oil after signing. Brent crude futures dropped $4.21 or 5.1% to settle at 78.96 per barrel. U.S. West Texas Intermediate crude (WTI crude) fell $4.70 or 5.8% to $76.05. SpaceX's stock valuation soared above that of Amazon and briefly overtook Microsoft's, amidst a frantic trading day driven by the newly listed option contracts of the company. SpaceX, which began trading on the Nasdaq last Friday, was up 4.8% for the day. Bruce Zaro is the managing director of Granite Wealth Management, Plymouth, Massachusetts. He said that the second quarter U.S. earnings are still a few weeks away. Nvidia, the most valuable AI chip maker in the world, surprised investors by tapping into the bond market for $25 billion. The company stated that the money would be used to fund general corporate needs and that the debt sale was a benchmark for future issuance. Nvidia shares dropped 2.4%. Investors also remained cautious in advance of the Federal Reserve policy update scheduled for Wednesday afternoon. Some investors were concerned that new Fed Chair Kevin Warsh might adopt a more hawkish stance at his first meeting. It is expected that the Fed will hold rates at between 3.50% and 3.75%, but it could also drop its easing policy. The Dow rose for the second day in a row. While the S&P 500, Nasdaq and other major indices ended the day lower, the Dow closed at a record high. The S&P 500 saw a decline in technology, but a rise in financials. A semiconductor index fell 5.7%. The Dow Jones Industrial Average rose by 328.64, or 0.6%, to 51,999.67. The S&P 500 dropped 42.94, or 0.5%, to 7,511.35. And the Nasdaq Composite fell 307,60, or 1.15, points to 26,376.35. MSCI's index of global?stocks fell by 2.98 points or 0.26% to 1,128,30. The pan-European STOXX 600 rose by 0.25%, and closed at a record high. The dollar fell in foreign exchange due to the optimism surrounding a possible peace agreement with Iran. The dollar index (which measures the greenback versus a basket including the yen, the euro and others) fell by 0.14%, to 99.55. Meanwhile, the euro was up 0.16%, at $1.1609. The Japanese yen fell 0.06% to 160.43 dollars after the Bank Of Japan raised its benchmark rate as expected by 25 basis points, reaching 1%. Reserve Bank of Australia held rates at 4.35%, in an unanimous decision. This was its first pause of the year despite high inflation. The Australian dollar was barely changed at $0.707 The yield on the 10-year U.S. Treasury bill was down 4.5 basis points at 4.424%. The auction of $13 billion in 20-year notes was successful. 20-year yields, which peaked at 4,938% on the trading day, are now at 4.93%. Gold spot rose by 0.59%, to $4331.14 per ounce. Reporting by Caroline Valetkevitch and Amanda Cooper, both in New York; Additional reporting from Alun John and Gregor Stuart Hunter, both in London; Editing by Jacqueline Wong and Rod Nickel; Jamie Freed.
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IG4 negocia o controle da Raizen com Moelis e Journey
O banco ?de investimentos independente Moelis & Company e ?a consultoria financeira Journey Capital, assessores dos credores ?da produtora de ?acucar e ?etanol Raizen, receberam ?ofertas nao vinculantes da gestora de private equity IG4 na noite de segunda-feira para adquirir creditos e o controle da empresa, de acordo com tres pessoas familiarizadas com ?o assunto. Duas delas, entretanto, alertaram que qualquer acordo ainda esta ?longe de ser certo, sendo que uma acrescentou que os credores ?dificilmente chegarao a uma decisao em breve. Ainda, uma das tres pessoas disse ?que os credores aceitaram a proposta da ?Raizen de converter ?divida em participacao acionaria por ser a melhor alternativa disponivel naquele momento, mas que prefeririam nao permanecer como acionistas. "Portanto, (o sucesso da proposta) vai depender 100% das condicoes oferecidas pela IG4", disse a ?pessoa. IG4, Moelis e Journey Capital nao quiseram comentar. A IG4, que recentemente se tornou ?co-controladora da petroquimica Braskem ao lado da gigante do ?petroleo Petrobras, ?busca adquirir o controle da Raizen, que acaba de concluir uma reestruturacao de ?divida de cerca de R$65 ?bilhoes com credores locais e internacionais, a maior reestruturacao extrajudicial ja registrada no ?Brasil. Conhecida por buscar o ?controle ou co-controle de ?suas aquisicoes, a IG4 so avancara com a oferta se garantir ao menos 50% mais um dos creditos reestruturados, disseram as pessoas.
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IG4 is aiming to take control of Brazil's Raizen as it approaches Moelis, Journey and Moelis
Three people with knowledge of the situation say that independent investment 'bank Moelis & Company, and financial consultancy 'firm Journey Capital are advisers of creditors of ethanol and sugar producer Raizen. They received a 'non-binding offer?from the private equity firm IG4 on Monday evening to purchase credits and control. Two of them warned?that any agreement remains far from sure, and one said that creditors are unlikely?to reach a decision any time soon. One of the creditors said that they accepted Raizen’s offer to convert their debt into equity because it was the 'best alternative available', but would not like to be shareholders. The person who said this stated that the success of the proposal will depend 100% on the conditions set forth by IG4. IG4, Moelis, and Journey Capital declined comment. IG4 recently became cocontroller of petrochemical company Braskem along with oil giant Petrobras. It is now'seeking to buy control of Raizen. This company?just announced a?65 billion reais (12.7% billion) debt restructuring, which was the 'largest non-court debt restructuring in Brazil. The people who spoke to IG4 said that the company is known for pursuing co-control or control over its acquisitions. IG4 would 'likely' move forward with the offer if they'secured at least 50% plus 1 of the restructured credit, according to the sources.
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Venezuela's PDVSA signs deal with Repsol for oil and gas production
Officials from Venezuela's PDVSA state oil company and Spanish energy group Repsol have signed a "crude and gas agreement" to boost production in the northwestern part of Venezuela. Hector Obregon, PDVSA president, said that at an event held at the Government Palace, the deal offers "exploration" opportunities on the eastern shores of Lake 'Maracaibo where the two companies already operate the Petroquiriquire Joint?Venture, which could add 20,000 barrels of light crude per day to the current average production of around 40,000?bpd. In comments broadcast by state television, he said that the additional crude would supply the Paraguana Refining Center, which is located in Falcon State, and help fuel economic growth. Repsol announced in April that it had reached a deal?with Venezuelan authorities and PDVSA in order to regain control over its oil assets. The agreement also includes plans to triple the output of Venezuelan oil operations in three years, and to ensure payment mechanisms. Washington eased sanctions against Venezuela's energy sector after the capture of?President Nicolas Maduro by the U.S. in January. It issued general licenses that allowed international energy companies to operate oil and?gas projects. Reporting by Fabiola Aramburo, Writing by Daina Beth Solon and Sanjeev Mikleni; Editing by Daina-Beth Solomon and Sanjeev Micleni
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Hezbollah thinks Iran won't sign the final nuclear agreement if Israel remains in Lebanon
Hezbollah stated on 'Tuesday' that it believes Iran won't sign a final deal with 'Washington unless Israel leaves 'Lebanon', after Iran's top diplomat'said Israel's 'continued troop' presence in Lebanon will be considered a violation of the U.S. -Iran Memorandum of Understanding. Israeli troops continue to occupy territory in southern Lebanon they captured during their three-month-long air and ground campaign against Hezbollah. The campaign began when the Iran-backed Hezbollah fired on Israel in support of Tehran, starting in?March 2. The fighting in Lebanon has slowed down but not completely since the Iran-U.S. Memorandum of Understanding. Israel also said that troops will remain in Lebanon's south. Hezbollah is against Israel's occupation. The group's media said on Tuesday that it believed Iran would require an?Israeli pullout as part of the next U.S.Iran talks. These are set to begin after both parties formally sign their memorandums of understanding this Friday. These talks will address sensitive issues such as the future of Iran’s nuclear program. Hezbollah media office: "We think there won't be a nuclear deal between Iran & the United States without Israel withdrawing." This was the first time that the group had linked Israel's departure?to an possible nuclear deal. The statement said that an Israeli withdrawal was not a condition for the talks, but rather a result. It claimed that it had been assured by Iran that any Israeli violation of the ceasefire in Lebanon would affect those upcoming negotiations. Abbas Araqchi, Iran's foreign minister, said that the end of regional conflict must also include the end?of conflict in Lebanon and "the end" of "occupation" of Lebanese land. He said: "A full end to the war cannot be achieved without the withdrawal of Israeli troops from the territories that they have occupied during this war." Araqchi said that any Israeli attack on Lebanon or continued occupation of Lebanese lands "will be considered, in our opinion, a violation to the memorandum." Reporting by Maya Gebeily from Beirut, and Parisa hafezi from Dubai. Editing by Alison Williams and Alexandra Hudson.
European steelmakers comment on EU Steel Action Plan
The European Commission announced a plan of action on Wednesday to improve the competitiveness of Europe's steel industry and protect it from U.S. steel and aluminum tariffs. This prompted reactions from industrialists, analysts and think tanks.
The EU's Clean Industrial Deal includes a Steel and Metals Action Plan, which aims to revitalize its industries so that they can compete with their Chinese and U.S. competitors.
Steelmakers in Europe, who have complained for years about the cheap imports from China, now warn of a possible influx of steel surplus into the region due to the U.S. tariffs.
REACTIONS TO EU'S "STEEL ACTION PLANS"
STEELMAKER ARCELOMITTAL
AdityaMittal, CEO of the group, said: "We are encouraged by this direction as outlined in today's Steel and Metals Action Plan."
"Details published by the Steel and Metals Action Plan demonstrate that they understand the urgent situation and are prepared to tackle some critical structural issues including trade defense, loopholes within the Carbon Border Adjustment Mechanism and the lack regulation to drive the demand for low carbon steel." It is now necessary to take rapid action to stop unfair trade, resource dumping and unfair trade.
"It is also important to address the high energy prices which makes it difficult for industry to progress with significant decarbonization project."
THYSSENKRUPP STEEL GERMANY:
The Steel Action Plan is a major step in ensuring the competitiveness of the European Steel Industry and its decarbonization.
"It is noteworthy that the European Steel Industry is given a clear priority for trade protection. This is vital to ensuring its competitiveness."
Effective protection is necessary to protect jobs and level the playing field in the face of global excess capacity and unfair trade practices.
APERAM LUXEMBOURG BASED STEEL GROUP
"Aperam supports any long-term initiative that will ensure robust protection of the EU's Steel Sector against the negative impact of excess steel production in Asia after the current safeguard measures expire on June 20, 2026."
The key issue is how the European Commission will turn this high-level plan of action into concrete legal actions: urgent action is required and so proposed measures must quickly and effectively be implemented.
"We believe that, in particular, trade defense can and should be implemented now, without waiting for the future post-safeguards instruments that will enter into force on July 2026."
FINNISH STAINLESS STEELMAKER OUTOKUMPU:
Outokumpu is happy that the European Commission has recognized steel as one of Europe’s key industries, and is taking action to improve its competitiveness.
The Steel & Metals Action Plan clearly identifies challenges facing the European steel industry, but there are still no solutions for some of these challenges.
"The industry is still threatened by global excess capacity and global distortions from China, and other countries." Outokumpu stated that these challenges must be addressed with more assertive measures, including the replacement of current safeguards by more effective ones from July 2026.
NORWEGIAN ALUMINIUM HYDRO PRODUCER:
With the increasing tariffs on aluminum, there's a risk that Europe could become a dump for producers of aluminium looking for new markets. It could lead to the EU implementing safety measures for aluminum."
Norway is a major supplier of raw materials for European industry. It produces about 40% of the aluminum needed by the EU.
EUROPEAN STEAM ASSOCIATION EUROFER
"With today's Steel and Metals Action Plan the European Commission sends a clear signal: a stronger European Union requires a stronger European steel industry", Dr Henrik Adam said, President of the European Steel Association.
The Action Plan highlights key areas of concern for our industry, from addressing unfair trade and closing loopholes within the Carbon Border Adjustment mechanism to recognising steel scrap's strategic and environmental value. It's now time to implement real solutions by taking ambitious measures.
"Despite positive proposals by the Commission, the elephant in room remains energy. The high energy prices are not just affecting steel and metals, but also dragging down the entire European industrial value chain. "It is vital to continue working on reducing energy costs."
MAXIME KOGGE IS AN ANALYST WITH ODDO BHF
After a disappointing result from the safeguard review, published last week, it is encouraging to observe the EU going further to tackle import pressure by introducing a melt and pour rule and committing itself to replace the safeguard with another similar mechanism after 2026. This is despite WTO rules theoretically preventing such a scheme.
The proposed changes to CBAM is also positive, as the Commission appears to be intent on addressing the structural flaws in the existing mechanism. "However the concrete actions won't be announced until 2025, and the implementation is in large part in the hands the member states who may have other priorities at the moment." (Reporting and editing by Alexandra Hudson, with additional reporting by Eric Onstad. Pratima Deai, Julia Payne, Philip Blenkinsop and Christoph Steitz.
(source: Reuters)