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Sources say that Indian refiners are looking at Russian oil, as the discounts on it have increased.
Three people familiar with the matter confirmed on Thursday that Indian state refiners are now contacting trading firms to inquire about purchasing Urals crude oil from Russia as the discounts have increased. This comes ahead of Friday's high-profile summit between U.S. leaders and Russian counterparts. Indian refiners, including Indian Oil Corp., Hindustan Petroleum Corp., Bharat Petroleum Corp. and Mangalore Refinery Petrochemical Ltd., halted their Russian oil purchases in the last month, as discounts shrank. State refiners in India, who account for 60% of the country's refining capacity of 5.2 million barrels of oil per day, purchase Russian oil delivered. Sources said that spot discounts for Russian Urals crude oil delivered to India in the month of October had increased to $2.70 per barrel from $1.50 to $1.50 per barrel in late July. The larger discount means that Urals is cheaper to deliver than in July. India was the biggest customer of Russian oil shipped by sea from 2022 onwards, after Western nations shunned Russian crude and imposed sanctions against Moscow due to its invasion of Ukraine. Last month, U.S. president Donald Trump threatened to sanction buyers of Russian products unless Russia agreed to a peace agreement with Ukraine. Trump and Russian president Vladimir Putin will discuss an possible deal to end Ukraine's war when they meet in Alaska on Friday. One of the sources stated that they would wait to see the results of the Trump-Putin negotiations, which will give them some indications. Vetsa Gupta (the finance director of Bharat Oil Corp) told an analyst conference call on Thursday that the company will continue to use Russian oil for up to 35% its processing requirements if new sanctions are not imposed. BPCL’s Russian oil purchase slowed down in July, as discounts decreased, he said. In order to replace the lower Russian oil supply, Indian refiners are now buying on-demand from Brazil, West Africa and the United States. Russian Urals crude oil is sold at a lower price than Brent crude oil. Brent crude oil is a widely-used benchmark for oil pricing. More than a third (35%) of India's total oil purchases are Russian. Private companies such as Reliance Industries, Nayara Energy and others have contracts for a certain period of time to purchase Russian oil.
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FTSE 100 pauses following three-day rally, GDP data is in focus
The FTSE 100 index was almost flat in Britain on Thursday, as gains in defence stocks were offset by declines in mining and energy shares. Investors also assessed the latest GDP figures. The blue-chip index fell 0.06% at 1018 GMT after three consecutive days of gains. The domestically focused midcaps index also dropped 0.1%. Investors analyzed Wednesday's British GDP for the second quarter. The data showed that the economy slowed down less than expected, despite U.S. tariffs on trade and a weaker job market. George Brown, Schroders' senior economist, believes that a large part of the slowdown can be attributed to the fact that manufacturers have frontloaded goods during the previous quarter in order to avoid tariffs. He said that the slowdown should be alleviated in the third quarter despite a more difficult global trade environment. We expect the Bank of England will keep rates at current levels for the rest of the year. Energy sector led the FTSE 100 down by 1.3% Harbour Energy, Shell, and BP all fell more than 1%. The industrial metals sector also fell 1% due to the weakness of copper and iron ore. Aerospace and Defence Index led the gains with a 2.2% increase. Centrica, British Gas's owner, rose 2.5% among individual stocks after it announced that it would jointly purchase National Grid Grain LNG Terminal with U.S. based Energy Capital Partners at a cost of about 1.5 billion pounds (2.04 billion dollars). The insurer Aviva's stock rose 3.5%, reaching a record high of 17 years after it raised its interim dividend. It also reported a 22% increase in the half-year operating profits. This boosted the index for life insurance by 1.6%. Admiral Group rose 4.8%, after reporting a 67% increase in its half-year profit before tax. Diploma, a distributor of technical products, fell by 3.4% when finance chief Chris Davies quit over personal conduct concerns. Ragini Mathur, Rashika Singh and Sahal Muhammed in Bengaluru reported the story. Additional reporting was by Rashika Sing.
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VEGOILS - Palm ends lower due to profit taking; Indonesian Group pushes for B50 delay
Malaysian palm futures ended lower on Thursday after four sessions of gains. Investors booked profits while an Indonesian industry group reportedly lobbied the government to postpone the B50 biofuel mandate. The benchmark contract for palm oil delivery in October on the Bursa Derivatives exchange lost 30 ringgit or 0.68% to 4,405 Ringgit ($1,046.32) per metric ton. A local news website quoted Eddy Martono, the chairman of the palm oil industry GAPKI as saying that the plan could lead to a decrease in palm oil exports. GAPKI was told that it did not submit a written request, but a government official denied having received such a proposal. Anilkumar bagani, the head of research for Mumbai-based Sunvin Group's vegetable oil broker Sunvin Group, said that futures were trading lower on the back of profit taking amid talks of a (GAPKI), which requested officials to delay (B50) as the industry was not ready. Dalian's palm oil contract, which is the most active contract, fell by 1.09%. Chicago Board of Trade soyoil prices were also down by 0.9%. As palm oil competes to gain a share in the global vegetable oils industry, it tracks price changes of competing edible oils. A leading trade group reported that India's palm-oil imports fell in July due to cancellations of import contracts. Meanwhile, soyoil exports soared by a third year, boosted by the arrival of June consignments and competitive prices. A circular posted on the Malaysian Palm Oil Board's website on Wednesday showed that Malaysia increased its crude palm oil price reference for September, which increases the export duty to 10%. The palm's trade currency, the ringgit, fell 0.12% in value against the dollar. This made the commodity more affordable for foreign-currency buyers. $1 = 4.2100 Ringgit (Reporting and editing by Harikrishnan Nair, Vijay Kishore).
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Indian miner IREL looks for partnerships with Japan and South Korea to produce rare earth magnets
A source familiar with this matter has confirmed that India's state owned miner IREL wants to work with Japanese and South Korean firms to begin commercial production of rare-earth magnets as part of its efforts to reduce reliance upon China. The company is looking at both Japan and South Korea for rare earth processing technology, potentially through government-to-government channels, the source said, declining to be named as the discussions are not public. Source: The miner plans to formalise discussions with other countries about rare earth mining and technologies partnerships, and seek IREL approval for commercial magnet production in this year. IREL, as well as the Department of Atomic Energy that oversees the firm, has not responded to any requests for comments. India lacks the commercial scale facilities required to refine and separate all rare earth elements into high purity levels. China, which controls most of the global rare earth mining industry, suspended the export of a variety of rare earths, including magnets, in April. This disrupted the supply chain for automakers, semiconductor manufacturers, and aerospace companies, among others, who use these materials. Source: IREL also approached Toyotsu Rare Earths India - a unit of Japanese trading company Toyota Tsusho - to ask for help in reaching companies in Japan that process rare earth materials. Sources said that IREL met with Toyotsu in order to determine whether or not it could work with Japanese magnet manufacturers. One proposal involved the possibility of a Japanese firm setting up a factory in India. Toyota Tsusho India and Toyotsu Rare Earths India have not yet commented. The Ministry of Economy, Trade and Industry of Japan, which is responsible for rare earths, has not responded to an email seeking comment. Reports in June stated that India had asked IREL, the rare earth exporter to Japan for 13 years to suspend an agreement to conserve supplies at home. The source stated that IREL was willing to supply neodymium oxid, a rare earth element, to a technology partner who would produce magnets, and then send them to India. Sources said that the state miner has the ability to produce 400-500 tons of neodymium per year, and noted that production could increase based on the terms of collaboration. IREL plans to expand its domestic mining and processing of rare earths. In India, the mining of rare earths is limited to IREL. This company supplies materials for nuclear energy and defence applications. Source: The company is also looking at potential rare earth mining in Argentina, Australia and Malawi, as well as Myanmar.
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Officials say that at least 12 people are believed to have died in the sudden and heavy rain in Indian Kashmir.
An official reported on Thursday that at least 12 people are believed to be dead, and many more may have been trapped by sudden heavy rains in Indian Kashmir. The disaster happened in Chasoti, Kishtwar District. It was a stopover on a popular pilgrimage trail. The disaster comes just a few days after a heavy mudslide and flood engulfed a whole village in the Himalayan State of Uttarakhand. Omar Abdullah said, "The news from the affected area is accurate and grim, but the information is coming slowly." In a blog post, Omar Abdullah stated that the chief minister of India’s federal territory Jammu and Kashmir was unable to verify the accuracy of the reports. On television, pilgrims were shown trembling in terror as the water flooded their village. Local TV stations reported that flood waters had washed out community kitchens for pilgrims. According to the Indian Meteorological Department a cloudburst is a sudden and intense downpour that produces over 100 mm of rain (4 inches) in one hour. This can cause sudden flooding, landslides and destruction, especially during the monsoon season in mountainous areas. Reporting by Fayaz, writing by Shilpa jamkhandikar. Editing by YPrajesh.
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The Russian rouble is weakening towards 80 dollars per rouble, with the Putin-Trump summit in focus
The Russian rouble weakened from a week-high on Thursday, falling to 80 per dollar. This was aided by the hope of positive U.S. - Russia talks this coming week. However, it was held back by reduced FX intervention by government and declining export revenue. Since U.S. president Donald Trump gave Russia until August 8 to reach a peace agreement in Ukraine, or else face increased sanctions, the Russian markets are tense. The attention is now focused on the meeting between Trump, and Russian President Vladimir Putin, in Alaska on August 15. Maxim Timoshenko, of Russian Standard Bank, said that it was impossible to predict what would happen at this meeting. This means that the rouble's rate may be volatile in the days ahead. According to LSEG, based on quotes obtained over the counter, at 0930 GMT the rouble had fallen 0.5% to 79.85 dollars and was 0.3% weaker against the Chinese yuan (the most traded currency in Russia). Brent crude oil, the global benchmark for Russia’s main export, rose 0.4% to $65.87 per barrel. This month, Russia's net sales of foreign currencies decreased, which reduced support for the rouble. Timoshenko said that the deferred demand of imports, declining export revenue and budget issues were also factors in the decline of the rouble.
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Dollar suffers as stocks take a break and the Fed's rate cuts continue.
Investors paused the global stock rally on Thursday as they awaited the release of data from the U.S. Producer Prices later that day, which may reveal how tariffs impact inflation trends. MSCI's global stock index flattened, after reaching all-time highs for the previous two sessions. An equivalent measure of Asian stocks outside Japan was near its highest level since September 2021. Futures markets indicated that Wall Street stocks would have a quiet start after leading global shares to record highs all week. They also hit records on both Tuesday and Wednesday. The global rally is fueled by the strong U.S. technology earnings and the speculation that Federal Reserve rate reductions will protect businesses and consumers from White House tariffs. CME's FedWatch shows that traders now consider a September rate cut to be almost certain. The U.S. Administration continues to press the Fed to ease up more quickly. Treasury Secretary Scott Bessent stated on Wednesday that Fed funds rates, which have been in the range of 4.25-4.5% since last December, could be reduced by up to 175 basis points. Investors said that the monthly U.S. job data was surprisingly low on August 1. However, a U.S. Producer Prices report due out later on Thursday may shift the focus of the market to the risk of tariffs driving inflation up too high for Fed rate cuts. A Bank of America survey conducted this week found that 70% of global investors believe U.S. Stagflation will become the dominant narrative in the market within three months. "Inflation has started to show up." It's still not huge, but it could continue to grow in the coming months. Investors on the U.S. Treasury market are becoming more concerned about the impact of higher inflation for longer periods. This could be a threat to the value of fixed-interest coupons in bonds with a longer maturity date. The yield on two-year Treasury bonds, which tracks monetary policy bets and is a good indicator of the market, was 3.67% Thursday. This is down from 3.95% around the start of August. The yield differential between the 30-year Treasuries and the 2-year notes has risen to 112bps, up from 95bps in August. SOGGY DOLLAR The U.S. Dollar struggled to recover from a two week low against a basket major currencies, while the Japanese yen saw a broad-based gain and reached its highest level in three weeks of 146.38 per US dollar. Bessent had previously said that the Bank of Japan was behind in addressing inflation risks. The BOJ's underlying inflation rate, which is based on wages and domestic demand, is below the target. It also wants to know more about how U.S. Tariffs will affect exporters. The euro was trading at $1.16722, a slight decline from the two-week high of the previous day, while European government bonds largely tracked movements in Treasuries. Germany's 10-year yield fell 2 basis points to 2.66%. Eyes on Ukraine The commodities markets were relatively quiet ahead of the summit between U.S. president Donald Trump and Vladimir Putin, his Russian counterpart. Trump threatened on Wednesday "severe consequence" if Putin refused to agree to peace in Ukraine. He also floated the concept of a second meeting that would include Ukrainian president Volodymyr Zelenskiy. Brent crude, a global oil benchmark, traded around $65.86 per barrel on Thursday. This is just a couple of months off its two-month low, and it was down from nearly $70 at the beginning of August. The spot gold price, which tends to rise when investors are focused on geopolitical risk, dropped about 0.5% to $ 3,3925 per troy-ounce. Goldman Sachs analysts stated in a client note that if there is no progress on a ceasefire, the White House could reimpose sanctions against Russian oil. However, this would only lead to a "limited" risk of disruptions to supply. J.P. Morgan analysts said that a peace agreement could boost the euro against dollar, but cautioned that the bar to achieve a ceasefire is high. Reporting by Naomi Rovnick and Jaspreet Klra, both in London; editing by Muralikumar Aantharaman and Kim Coghill.
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The race to find a solution in the deadlock plastic pollution talks
The talks to create the first legally-binding treaty in the world to combat plastic pollution could end without a deal, as countries rush to find a possible compromise on the last day of Geneva's negotiations. The talks reached their conclusion on Thursday, after the countries that wanted an ambitious plastics convention rejected the draft text on Wednesday. Panama, Kenya and France, among others, expressed their frustration at the removal of key articles from the text that covered the entire life cycle of plastic pollution, from the production of the polymers to disposal of the waste. They also emphasized the dangers to human health. Some oil-producing countries are opposed to limiting the production of virgin polymers derived from coal, petroleum and gas. Others want to limit it and have tighter controls on plastics and hazardous chemicals. Zaynab Sadan, of the World Wildlife Fund said that it was unlikely that all countries would be able bridge their differences. She added that an agreement had never been so far off in almost three years of discussions. Panama called the new text "repulsive", and demanded a complete rewrite. Saudi Arabia, who is opposing major curbs on trade, has said that nothing can be agreed until the scope of the treaty is defined. After a failed meeting of the Intergovernmental Negotiating Committee (5 INC) in South Korea at the end of last year, more than 1,000 delegates gathered in Geneva to begin the sixth round. The OECD warns without intervention that plastic production will triple in 2060. This will further choke oceans and harm health. It will also exacerbate climate change. Giulia CARLINI, Senior Attorney for Environmental Health Program at the Center for International Environmental Law CIEL said: "It is very important that we spend every hour of the final day of negotiations finding a text that will deliver on the promise of ending plastic pollution." COMPROMISE The Norwegian Minister for Climate and Environment, Andreas Bjelland Eriksen (co-chair of High Ambition Countries Group), said that all parties must compromise. "We're willing to discuss every article, like three or six, in order to come up with a package that is good for everyone," said he, pointing out a potential willingness to revisit restrictions on chemicals and manufacturing. Ross Eisenberg is the president of America's Plastic Makers which is part the American Chemistry Council. The Council, who supports a deal that does not limit plastic production, has warned the U.S. could refuse to ratify any treaty containing provisions banning chemicals or restricting plastic production. But Colombian legislator Juan Carlos Loazada said that no deal was better than one that is watered-down. Unilever is among the 300 companies that have called for a global treaty to harmonize rules. Ed Shepherd, Senior Sustainability Manager for Unilever said: "If we do not achieve that level of harmonization we will risk fragmentation and increased costs." (Reporting from Olivia Le Poidevin in Geneva and Emma Farge; additional reporting from Alexander Marrow in London, editing by Giles Elgood).
Dollar firms as gold prices fall; investors watch U.S. economic reports
Gold prices fell on Thursday, despite expectations that the Federal Reserve will cut interest rates in September. This was due to a slight increase in the U.S. Dollar Index.
As of 0848 GMT, spot gold was down 0.3% at $3,346.19 an ounce. U.S. Gold Futures for December Delivery were down 0.4% at $3,393.80.
Gold is now more expensive to holders of currencies other than the dollar, as it rose by 0.04%.
Nitesh Sha, commodities strategist for WisdomTree, said that the marginal drop in gold from this morning can be attributed to a slightly stronger dollar.
Shah said that gold is still supported by signs that the Federal Reserve can cut interest rates.
After new data showed that U.S. inflation rose at a moderate rate in July, Treasury Secretary Scott Bessent stated that a half-point reduction was possible in light of recent weak employment figures.
Gold that does not yield is more attractive in an environment with low interest rates.
The benchmark 10-year Treasury yields in the United States are also near an all-time low.
Investors will be closely monitoring U.S. Economic Data scheduled for later that day, such as the U.S. Producer Price Index (PPI) and the weekly jobless claims to get a better idea of the Fed’s monetary policies.
Shah continued, "The rate reductions are fairly priced in. But towards the end this year, we'll see a movement upwards on the gold market as concerns about higher debt really start to push the metal higher."
While U.S. president Donald Trump warned of "severe penalties" if Russian President Vladimir Putin did not agree to peace, he also said that they could be quickly followed by another meeting that would include the head of Ukraine.
The spot price of silver fell 0.6%, to $38.26 an ounce. Platinum rose 0.1%, to $1341.35, and palladium jumped 1%, to $1133.40. (Reporting and editing by Bernadettebaum in Bengaluru)
(source: Reuters)