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Former Lukoil CEO and Iraqi PM discuss possible solutions to US sanctions
The office of the Iraqi prime minister said that Mohammed Shia al-Sudani, met with former CEO of Russia’s Lukoil on Monday to discuss how to resolve disruptions in the oil company’s operations following U.S. Sanctions. Sources told us last week that Lukoil declared force majeure on its West Qurna-2 oil field in southern Iraq. This is the largest fallout from the sanctions imposed last month against Russian oil companies as U.S. president Donald Trump pushed to end the conflict in Ukraine. Sudani told Vagit Aliekperov Iraq was committed to stable oil markets worldwide, according to a press release from his office. It added that the West Qurna-2 operation continues to produce approximately 480,000 barrels of oil per day. This field, Lukoil’s most valuable foreign asset, accounts for roughly 9% Iraq’s oil production. In the statement, Alekperov was incorrectly described as "head" of Russia's Lukoil. Alekperov - Russia's richest man - resigned from his position as Lukoil CEO in 2022, after Britain imposed sanctions on him. In what capacity did he speak on behalf of Lukoil? Officials have warned Lukoil that if the conditions of force majeure at West Qurna-2 continue for more than six months, they could stop production and abandon the project. Officials on the ground said that production was continuing as normal, but warned that output could slowly decline if issues with finances are not resolved quickly. Sources said that payments to Lukoil were frozen, and crude allocations canceled, as Iraq sought a way to maintain the oil field without violating sanctions. (Reporting and writing by Ahmed Rasheed, Elwely Elwelly, Editing by Joe Bavier.)
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Congo bans trade in minerals from war-torn east
The mines ministry announced that the Democratic Republic of Congo extended for another six months the ban on trading minerals from dozens of sites of artisanal gold mining in the conflict-hit provinces of North and South Kivu. The extension increases compliance pressure on global supply chain for tin tantalum and titanium, which are key inputs to the electronic, automotive, and aerospace industries. According to an order signed by Mines Minister Louis Watum Kabamba on November 3, the ban introduced in February is still in effect because there is evidence that the illegal supply of mines funds armed groups in eastern countries. The order was posted on social media by the Ministry of Industry and Trade on Sunday. It applies to 38 sites that produce coltan (cassiterite), wolframite (wolframite), and cassiterite (wolframite) - all ingredients used to make tin tantalum, and tungsten in Masisi Territory in North Kivu, and Kalehe Territory in South Kivu. M23 rebels, backed by Rwanda, and other armed group have taken over significant territory in the mineral-rich east of Congo. The M23 offensive this year has resulted in the deaths of thousands and displacement of hundreds of thousands. According to U.N. expert and rights groups, mineral wealth is a major factor in fueling violence, as combatants use gold, cassiterite, and coltan to fund their operations. In December 2024, the U.N. reported that revenues from smuggled mineral sales were used to fund military operations and sustain a war-economy. The order from the Mines Ministry prohibits sourcing or exporting from the mines in question. It also states that they could be subject to independent audits, either by the Ministry or international organizations such as the U.N. Congo filed criminal complaints against Apple subsidiaries in France and Belgium in 2024. They alleged that the supply chains contained minerals stolen from conflict zones despite Apple’s disclosures made under U.S. laws. Apple has denied these allegations and said that it had instructed its suppliers to cease purchasing minerals from Congo and Rwanda. The U.S. courts also heard claims that Apple, Google, Tesla, Dell, and Microsoft were relying on cobalt from Congo mines under abusive conditions, but those lawsuits were dismissed. Reporting by Congo Newsroom; writing by Maxwell Akalaare Adombila, editing by Rob Corey-Boulet & Susan Fenton
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Elkann of Stellantis urges EU to permit averaging 2030 car emission targets over five years
John Elkann, Chairman of Stellantis, urged the European Commission to give more flexibility to carmakers on emission targets. He said that interim goals set for 2030 should be averaged out over several years. Elkann stated in an interview with Politico, that the industry would be allowed to achieve targets over a period of five years from 2028-2032. This is similar to the arrangement made by the Commission for the 2025 goal it decided earlier this year to spread out across 2025-2027. He said that the proposal would be applicable to both light commercial vehicles and passenger cars. He said that the light commercial vehicle should be regulated differently, with different carbon emission targets. Stellantis' chairman also reiterated his proposals, including a large scrappage scheme that would remove older and more polluting vehicles from European roads. This would help reduce emissions and boost the growth of the region, while offering incentives to make cars on sale cheaper in this area. Elkann stated in the interview that Stellantis did not want to change the EU target of zero exhaust pipe emission for new cars by 2035 but instead wanted plug-in hybrids and range extenders to be available after this date. Elkann asked the Commission to include these changes in its package of proposals, which it will present later this month as part of the review of EU carbon emission regulations for the automotive industry. (Reporting and editing by Jan Harvey; Giulio Piolovaccari)
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Court of Auditors says that EDF fleet maintenance will cost more than 100 billion Euros by 2035.
The French Court of Auditors reported on Monday that EDF, a French utility, will have to invest over 100 billion euros (116 billion dollars) between 2014-2035 in order to extend the lifespan of its fleet of nuclear reactors. EDF must balance these costs against the cost of building six additional next-generation (EPR2) nuclear reactors. The final cost estimate is expected by the end the year, with an investment decision in the second half 2026. According to the court, EDF should be able to profit from the renovations if the production forecasts are met. It added that the renovation costs should also remain competitive in comparison to the EPR2 programme of construction, as this is seen to be a way of replacing some reactors which will not meet requirements for an extension. EDF has declined to comment. EDF is expecting to produce between 350-370 terawatts hours of electricity by 2026-2027. This will be higher than in recent years, following a major maintenance program in 2022. Bernard Fontana, the new CEO of EDF, has said that he hopes to have his fleet producing 400 TWh again by 2030. France's nuclear fleet is responsible for 70% of the country's electricity production. This has helped to lower the power prices in France compared to neighbours such as Germany and Britain, which rely heavily upon gas-fired plants.
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Dollar firmer as copper slips in macro concerns
The copper price fell on Monday due to a stronger dollar, the fading of hopes for a further Federal Reserve rate reduction, and macro-economic concerns. As of 1036 GMT, the benchmark three-month price for copper at the London Metal Exchange had fallen by 0.5% to $10,797.50 a metric ton. Metals used in construction, manufacturing and power are considered to be a good indicator of global economic health. In a note, Neil Welsh, the head of metals for Britannia Global Markets said that the base metals market was largely defined as a quiet one, with participants waiting on delayed U.S. data and clarity regarding monetary policy. Fed policymakers are concerned about inflation and question whether another rate reduction is needed before the end the year. The U.S. announced that it would begin releasing economic data, including the September job report, which had been delayed due to the government shutdown. The dollar index grew by 0.1%. The dollar index rose 0.1%. The sentiment is also being held back by the macro signals coming from China, which is the world's largest metals consumer. Recent industrial data have been mediocre even though major infrastructure and green-energy investments are supporting long-term industrial metals demand. Tom Price, an analyst at Panmure Liberum, said that the decline in copper was all macro-related. If you compare the signals for copper, the price is high and limited to a narrow range. All the other signals are also deteriorating. Last time, the cash LME copper contract traded at a discount of $15 per ton to the forward three-month contract This indicates that there is no immediate need for metal. Aluminium dropped 0.6% to $2.842 per ton. Zinc grew 0.2% to $3,000, while nickel fell by 0.9% to $14.755 after reaching its lowest level since April. Tin rose 0.2% to $35,790. After 42,025 tonnes of lead were deposited into the LME warehouse system in Kaohsiung, lead prices fell 0.3%, to $2,056. (Reporting and editing by Rashmi aich, Shilpi majumdar and Shilpi Aich; Additional reporting by Dylan Duan, Lewis Jackson and Lewis Jackson)
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Ethiopia reports three deaths in Marburg virus epidemic
Ethiopia's Health Ministry announced on Monday that three people have died after contracting the Marburg virus. Three more deaths may be related to this highly contagious disease. Ethiopia confirmed an outbreak of Marburg on Friday in a city in Southern Ethiopia Region, a highly contagious, haemorrhagic disease. At least six cases were identified. The ministry released a statement saying that the reference laboratory of the Ethiopian Public Health Institute has confirmed three... deaths from the virus. The ministry added that three additional deaths are being investigated to determine if they have a connection with the virus. The ministry didn't give an updated number of confirmed cases, but did say that 129 people in contact with those cases were isolated and being monitored. Marburg is a virus from the same family as Ebola. It can cause severe headaches, and even lead to hemorrhaging. In previous outbreaks, Africa has seen fatality rates of up to 80%. This is usually within 8-9 days after the onset of symptoms. The disease is spread by contact with body fluids, such as blood and saliva, or handling wild animals infected with the virus. Reporting by Dawit Endshaw; writing by Elias Biryabarema. Editing by George Obulutsa, Bate Felix and George Obulutsa.
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Russian rouble falls as corporate forex sales decline
On Monday, the Russian rouble fell against the U.S. Dollar and the Chinese yuan as the corporate sales of foreign currencies, which had supported the rouble over the past few weeks, decreased. The rouble fell more than 0.4% against the dollar at 1050 GMT and was down 0.2% against the yuan at 1140 on the Moscow Stock Exchange. The traders believe that the currency sales of Russia's two major oil companies, Rosneft & Lukoil - both sanctioned in the U.S. - have supported the rouble. The traders did, however, note the recent irregularity of corporate forex sales. The U.S. has set a deadline of November 21 for the closing down of transactions with these companies. Many traders think that both companies have repatriated their earnings and converted them into roubles before the deadline. The flows are not logical. It seems to depend on their internal accounting, and perhaps some of their ideas," said a trader who declined to identify himself. According to analysts polled, the rouble is expected to fall to 94.2 dollars per rouble in 12 months. Vladimir Yevstifeev, Zenit Bank, said that most forecasts indicate a gradual weakening in the rouble due to reduced exports and a decrease in volume of currency sales. (Reporting and editing by Joe Bavier; Gleb Brynski)
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EDF, OpCore to develop 4-billion-euro data centre in France
The companies announced on Monday that EDF, a French utility, and OpCore - a joint venture of telecoms group Iliad with InfraVia Capital Partners - have entered exclusive negotiations for the development of a hyperscaled data centre. The project, which would be located on the site of EDF's former coal-fired plant at Montereau-Vallee-de-la-Seine, is expected to cost around 4 billion euros ($4.64 billion) and would create one of Europe's largest computing hubs with several hundred megawatts of capacity. Old power plants in Europe are being converted into data centres, to meet the demand for AI computing. Existing grid connections and industrial sites can be used to accelerate deployment and reduce costs. In a press release, French Economy Minister Roland Lescure stated that "this investment shows France intends lead the artificial-intelligence revolution." "We are reaffirming that we will reindustrialise France, create jobs and make France a digital power." The first phase of the fast-track grid connections scheme in France is expected to be operational by 2027. EDF issued a request for interest in the repurposing of industrial land into strategic digital infrastructure earlier this year. The Montereau plant, which was shut down in 2004 will be redeveloped, with an emphasis on energy efficiency, according to the companies. $1 = 0.8618 Euros (Reporting and editing by Alex Richardson, Joe Bavier).
US data and Nvidia earnings loom as stocks and bonds become jittery
European stocks fell while bond yields dropped on Monday as markets awaited a report of earnings from $5 trillion chipmaker Nvidia, and U.S. employment data that would be released later this week. These could provide direction to the nervous global markets.
The benchmark European index of 600 large stocks fell 0.4% after a global sell-off last week, triggered by concerns over the overvaluation of technology shares and diminished expectations of Federal Reserve rate cuts.
Wall Street was set to open slightly higher with S&P futures rising 0.2% and Nasdaq futures gaining 0.4%.
After hesitant comments from policymakers worried about inflation, the expectation of a U.S. rate cut in December has fallen to less that 50%. This has begun to put pressure, particularly on the stocks of the technology sector which is frothy, and sensitive to rates.
Germany's 10-year bond yield dropped 1.5 basis points to 2.70% after climbing 3 bps Friday when it reached its joint-highest level since October 7, at 2.718%.
All eyes are now on the United States, where the delayed September jobs report on Thursday is expected to confirm private surveys that showed a slowdown on the labour market.
The Fed's more hawkish officials will not change their tune if it only confirms this. The CPI data will be crucial for them, as they are more concerned about inflation risks.
On Monday, the yield on ten-year U.S. Treasury bonds remained at 4,1192%.
On Friday, expectations of a rate cut had been tempered when Kansas City Fed president Jeffrey Schmid and Dallas Fed president Lorie Logan questioned the necessity to reduce rates next month.
US CORPORATE GIANTS' EARNINGS IN CENTER
Home Depot, Target and Walmart report earnings this week in the U.S. Investors are focused on Nvidia, whose performance is seen as a bellwether of the sustainability in this year's remarkable rise in Artificial Intelligence stocks.
Nvidia's shares have increased by about 1,000% in value since the launch ChatGPT, which took place in November 2022. Nvidia's market value surpassed $5 trillion last month after a gain of over 40% year-to date.
The shares of Alphabet, the parent company of Google, also rose 5.6% on Monday in premarket trade after Berkshire Hathaway revealed a stake. Meanwhile the conglomerate associated with legendary investor Warren Buffett announced it had also reduced its stake in Apple.
The U.S. Dollar was slightly higher in foreign exchange. It held the euro at $1.16, and crept up on the other major currencies. Meanwhile, the yen barely responded to Monday's data that showed Japan had experienced an annualized economy contraction of 1.8% for the three-month period ending September.
Gold has dropped to $4,078 per ounce. However, the precious metal's price has increased by 55% in this year, from $2,624 on January 1, as safe-haven demands, geopolitical tensions, and expectations of lower interest rates have boosted its appeal.
Brent crude futures rose to $64.4 per barrel after loading resumed in a Russian hub that had been hit by an attack from Ukraine.
Bitcoin, which in recent months has acted as a barometer for the mood of technology stocks, is suffering its biggest weekly drop since March. It lost more than 10 percent last week. It was up 2% at $95,390 on Monday. Reporting by Lawrence White, London; Tom Westbrook, Singapore; and Jamie Freed and Christopher Cushing.
(source: Reuters)