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Petrobras reduces imports and focuses on local production amid U.S. Iran conflict
?Brazil’s state-run petroleum firm Petrobras reduced imports of oil-derived products to 67,000 barrels a day (bpd), in the'second quarter, as it pushed refineries 'to -their -limits amid the U.S./Israel conflict with Iran. Its operational results were released on Tuesday. Petrobras reported that imports of liquefied gas (LNG), and diesel, had fallen by 85% and 42% respectively, compared to a year ago. This was the quarter with the lowest volume of derivatives imported by the company. Petrobras refineries averaged a 102.5% increase in capacity over their nominal capacity between April and May. This reduced the need for imports at a time when prices were high because of the Strait of Hormuz closure. The firm stated that "in the current geopolitical environment, high utilization of refining capacity is crucial for increasing the supply on the domestic market." The state-run company is concerned about the price of diesel and LNG. Brazil's government has approved fuel subsidies, and is pushing for prices to stay low in an election year. Exports of oil and derivatives increased by 41%, despite a decline in imports. Petrobras reported that China received 35% of its oil exports, down from 51% a year earlier, because the Asian nation also "sought to reduce imports" due to the higher prices. The firm said that the higher exports to India and Europe, as well as other Asian countries, offset the lower sales to China. According to the firm's quarterly report on sales and output, Petrobras local oil and LNG production increased by 15%, to 2,69 million barrels per day. Total output, including natural gas and overseas operations, increased by 14%, to 3,34 million barrels equivalents per day. Petrobras stated that the increase in output was boosted by the ramping up of the floating production storage offloading units Maria Quiteria and Alexandre de Gusmao, as well as?the start-up of the P79 unit. The firm reported that local sales of?oil and gas derivatives increased by almost 12% to 3,33 million bpd. Petrobras will release its financial results on August 6. Reporting by Fabio Téixeira, Marta Nogueira, and Andre Romani, in Rio de Janeiro and Sao Paulo, respectively; editing by Chris Reese and Natalia Siniawski, Cynthia Osteri, and Cynthia Osteri
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Three people are killed in a drone attack on a bus in Russia's Belgorod Region
Three people were killed by Ukrainian drones on Tuesday in the border region of Belgorod, Russia. Another 19 were injured in an attack 'on a bus' that was denounced by Moscow's Foreign Ministry. Two people were killed by a drone attack on a small business in a border village, according to regional authorities. A drone attack outside of the main city of the region, also known as Belgorod, killed another person. All but one of the injured passengers were taken to hospital for treatment after the bus was attacked in the town of Shebekino near the Ukrainian border. Moscow accuses Ukraine of launching systematic attacks against buses in various Russian regions. Maria Zakharova, spokesperson for the Russian Foreign Ministry, said that the latest strike demonstrated Ukraine's "maniacal persistence" in attacking public transport and taking revenge against the people of Ukraine because they were failing at the front. The Russian authorities in eastern Ukraine's Donetsk region, which are occupied by the Russians, said that?five people had been injured Tuesday after what they called a?"Ukrainian?drone strike on a bus. Russian authorities blamed Ukraine as well for an attack on a bus carrying Belarusian kids to a holiday site last month, in which a woman was killed and six children were injured. The Ukrainian military has denied the accusations. Rod Nickel (Reporting and Editing)
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US stocks are mixed as key tech earnings are announced by the Fed
U.S. stock markets were mixed Tuesday, ahead of the Federal Reserve's much-anticipated interest rate decision on Wednesday and key corporate earnings announcements. Investors dumped chipmakers over concerns about Chinese competition, and the 'funding' of the AI boom. However, the fall was reduced during New York trading. Boeing and Coca-Cola's gains helped offset the tumbling of chip stocks in advance of Apple and other tech company quarterly reports this week. However, the tech-heavy Nasdaq composite ended the day lower. What is the reason for this shift to non-tech names?" Ross Mayfield is an investment strategy analyst with Baird, based in Louisville, Kentucky. The labor market is still churning along, and there are signs that consumer spending in many places is increasing. The Dow Jones Industrial Average grew 1.03%, to 52 747.53. The S&P 500 rose 0.22%, to 7,429.22. And the Nasdaq Composite dropped 0.22%, to 24,876.91. Asian chipmakers were the main culprits of the earlier sell-off on Tuesday. South Korea's KOSPI plunged?more than 10 percent to a 3-month low. This triggered a circuit breaker on its way down, as it headed for its biggest monthly drop on record. It even exceeded the declines that occurred during the Asian Financial Crisis in 1997. The index has lost more than one third of its value since June. The MSCI All Country World Price Index dropped 0.33% from 1098 to 1104. It was at its lowest level since June 26. Investors are concerned about the circular funding and stretched valuations in this sector, after a spectacular rally in AI-linked stocks. After a report stating that China was manufacturing its own immersion deep ultraviolet (DUV), lithography machines at home, the latest decline followed. Meanwhile, CXMT's stock market debut Monday was a strong one for Chinese chipmaker CXMT. This fueled concerns over increased competition in memory chip industry. Dorian Carrell is the head of Schroders' multi-asset income. He said that there are concerns over the cost of borrowing and the amount of leverage required. He added, "We're now seeing questions about the profitability of semiconductors in Asia." The earnings this week of "Magnificent 7" members Microsoft.com, Amazon.com Meta, and Apple will be an important test for the market rally. This is especially true after Alphabet, Tesla, and other companies spooked investors with their negative cash flow reports last week. OIL SLIDES; U.S. Rate Move? The continued decline in oil prices and Treasury Yields has helped to ease some nerves before the Fed's rate announcement on Wednesday, which will be at the end of its two-day conference. The surge in oil prices, fueled by renewed fighting between the U.S. and Iran, last week had raised expectations of a rate hike, as policymakers struggled with an inflation rate that is stubbornly higher than the Fed's 2% target. Oscar Munoz is the head of U.S. Economics at TD Securities. He wrote in a report that "Higher oil costs due to Middle?East tensions" have increased inflation risk and strengthened the case for a hike. However, he believes more evidence will be needed before a majority can support it. The price of oil has fallen this week after Washington abruptly suspended?airstrikes against Iran on Saturday. Oman presented Iran with a Gulf-backed plan to manage the Strait of Hormuz that included?collecting fees for its use, according to a Gulf source on Tuesday and a Western diplomatic. Fed funds futures now price in a 32% probability of an increase on Wednesday. This is down from a 38% chance on Monday. U.S. crude dropped 4.14% to $79.16 per barrel. Brent was down 5.01% at $83.93 a barrel. The yield on the benchmark U.S. 10 year notes dropped 3.88 basis points to 4.602% from 4.641% at late Monday. The euro rose 0.18% against the dollar to $1.1387. The Japanese yen fell 0.07%, to 163.85 dollars, just above the four-decade low. Markets are on edge, fearing that Japan will intervene in the currency pair, especially if the Bank of Japan holds rates this week, and triggers another yen decline.
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Saudi Arabia claims to have intercepted drones that were launched by Iraq and targeted oil facilities
Saudi Arabia announced 'on Tuesday' that its air defenses intercepted and destroyed a number of drones that were launched from Iraqi territory in an attempt to 'target?oil?installations in the kingdom’s Eastern Province. This was the second attack of this kind in less than a week, and it raises the stakes as Riyadh tries to pressure Iraq to stop its territory being used as a launching pad against Saudi oil installations. Turki al-Maliki, a spokesperson for the Saudi Defense Ministry, said on X that drones had been 'launched by militias backed by Iran from Iraqi soil. Al-Maliki stated that Saudi Arabia retains the 'legitimate right to defend themselves and their 'national capabilities, and to respond "at a time and place appropriate to them. Iraqi Prime Minster Ali al-Zaidi, who ordered a Monday investigation into the incident and said that Iraq would not allow its land to be used against neighboring nations, also ordered a probe. Saudi Arabia's oil pipelines have been repeatedly targeted by missiles and drones during times of increased tensions in the region. Riyadh has attributed these attacks to Iran-backed groupings, but Tehran denies involvement. Saudi Arabia's foreign ministry called on the Iraqi government to do everything possible to stop Iraqi territory being used to launch attacks. Saudi Arabia's oil export and production infrastructure is located in the Eastern Province. (Reporting and editing by Mark Porter, Sanjeev miglani, and Muhammad Al Gebaly)
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Gold drops as dollar hovers around one-month high, Fed meeting in focus
The dollar was a major factor in the gold price's decline on Tuesday. Investors were waiting for the Federal Reserve to announce its interest rate decision this week, and the comments of Chairman Kevin Warsh, who would give them a hint as to the policy outlook. Gold spot fell by 1.2%, to $4.026.49 an ounce at 2:25 pm EDT (1825 GMT), having touched its lowest level since the 21st of July earlier in that session. ?U.S. Gold futures for August deliveries fell 0.9%, settling at $4.038.70. The U.S. Dollar has been stable near its 'one-month-high,' making the greenback price of bullion more expensive for overseas buyers. David Meger is director of metals at High Ridge Futures. He said that "Elevated Energy Prices remain a concern for Fed Members, and?the anticipated hawkishness by the Fed has pushed interest-rate hike expectation and the U.S. Dollar higher, applying pressure to the?gold markets." Bullion prices have fallen by about 24% in the last few months since the U.S.-Israeli War with Iran began late February. This is due to expectations that inflation-driven war could cause interest rates to rise for longer. Gold is often seen as a hedge against inflation. However, when rates rise, it can have a negative impact on the metal. Investors are now awaiting the Fed's decision on rates and Warsh’s comments Wednesday. The traders see a 70% chance that policymakers will hold rates steady on the Wednesday meeting, and 75% of a rate increase at the September central bank meeting. The U.S. The Personal Consumption Spending data for June is due Thursday and will also provide more clues about?the monetary policies. Commerzbank has lowered its year-end forecast for gold by $300 per ounce to $4,500. It added that a sustained return of gold ETF investors, and a recovery of gold prices, are unlikely without a change in interest rate expectations. Donald Trump, the U.S. president, said that Washington and Iran were having "good discussions" on Monday. He also stated that a possible resolution was likely. He said that if the negotiations fail, U.S. airstrikes would resume. Iran also made similar remarks about retaliation. Silver spot fell by 2.2%, to $57.11 an ounce. Platinum eased by 1%, to $1605.80. Palladium dropped by 2.3%, to $1261.91.
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US stocks rise ahead of Fed decision and tech earnings
U.S. stock prices rebounded on Tuesday from their earlier lows ahead of the release of important corporate earnings and the Federal Reserve’s highly anticipated interest rate decision on Wednesday. Investors dumped chipmakers over concerns about Chinese competition, and funding for the AI boom. Gains in other sectors have offset the decline in chips stocks during the U.S. session. The Dow Jones Industrial Average rose by 1.29%, to 52881.21, while the S&P 500 gained 0.37% at 7,440.40. The Nasdaq Composite increased by 0.04% at 24,940.99. The Asian chipmakers are at the core of the earlier selloff on Tuesday. South Korea's KOSPI plunged more than 10%, hitting a three-month high. This triggered a circuit breaker on its way down, as it headed?for the largest monthly drop on record. It surpasses the declines that were suffered during the Asian Financial Crisis in 1997. The index has more than tripled its value in the past 12 months, but it's lost more than a quarter of that value since then. The MSCI All Country World Price Index fell by 0.26%, to 1105. It had previously dropped to 1098. Investors have been concerned about circular funding and stretched valuations in the AI sector after a strong rally in this year. The latest decline followed a report that China was manufacturing its own immersion deep ultraviolet (DUV), lithography machines. Meanwhile, the strong debut of Chinese chipmaker CXMT on the stock market on Monday fueled concerns about increased competition in memory chip industry. Dorian Carrell is the head of Schroders' multi-asset income. He said that there are concerns about the costs and the amount of leverage required. He added: "We're now seeing questions about the profitability of semiconductors, especially in Asia." The earnings this week of "Magnificent 7" members Microsoft.com, Amazon.com Meta, and Apple, which are also companies that spend the most on AI will be seen by many as a test for the market rally. This is especially true after Alphabet, Tesla, and other tech giants spooked investors with their negative cash flow reports last week. OIL SLIDES, U.S. Rate MOVE EYED The continued decline in oil prices, Treasury yields and other financial indicators helped calm nerves before the Fed's rate announcement on Wednesday. The surge in oil prices, fueled by renewed fighting between the U.S. and Iran, has raised expectations that a rate?hike could be imminent as policymakers struggle to combat inflation, which remains stubbornly higher than the Fed's 2% target. Oscar Munoz is the head of U.S. Economics at TD Securities. He wrote in a report that "Higher oil costs due to Middle East tensions have increased inflation risk and?strengthened case for a rate increase, but more evidence will be needed before a majority supports it." The price of oil has dropped this week, following the abrupt suspension by Washington on Saturday of its airstrikes against Iran. Oman presented Iran with a Gulf-backed plan to manage the Strait of Hormuz and collect voluntary fees, according to a Gulf source on Tuesday. Fed funds futures now price in a 32% probability of a rate hike on Wednesday. This is down from Monday's 38%. The yield on benchmark U.S. 10 year notes dropped 4.09 basis points from?4.641% at the end of Monday. The euro rose 0.23% against the dollar to $1.1393. The Japanese yen fell 0.02%, to 163.75 dollars, just above the four-decade low. Markets are on edge, fearing that Japan will intervene in the currency pair, especially if the Bank of Japan holds rates this week, and triggers another yen decline.
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South Africa tribunal approves Equinix data centres despite activist objections
Cape Town's municipal authorities have approved the proposal of?Equinix to build two data centres within the city despite protests by environmental groups and activists over water use, electricity consumption, and other aspects. The U.S. listed company's planned development of the King Air Industria region is a significant step forward, especially as the demand for data centre infrastructure in Africa continues to rise. The proposed data centres are expected to need around 170 megawatts in power, making it one of the biggest projects being planned for South Africa. Teraco is Africa's biggest data-centre provider. It has stated that it has 189 MW critical power capacity on its campuses. The South African Housing Assembly, a grassroots movement, and the UK-based technology advocacy organization Foxglove were represented by Legal Resources Centre during the?tribunal proceedings. The groups claimed that there was insufficient information provided about the environmental footprint of the project and its resource requirements. "We've seen this playbook used by U.S. Big Tech companies time and time again: show up in a neighborhood, tell the residents as little as you can about the damage the data center will cause and then leave them to pick up all the pieces," said Rosa Curling, Foxglove's co-executive Director. The groups claimed they were evaluating a possible appeal. A spokesperson for Equinix confirmed that the company has purchased land in Cape Town, but it had not submitted a?site?development plan. A site development plan is a part of South Africa's planning system. It outlines how a project approved will be set up and operated. The spokesperson stated that "should we decide to move forward with any developments, we are committed to being transparent and will provide all stakeholders with detailed information in a timely manner." We understand the unique role we play in the communities where we operate and we work with local utilities, leaders of government and other stakeholders early on in the planning process to understand local priorities, listen and inform our decisions. Mark Potter edited the article.
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The 400 million ASML "printers" key to the AI chip boom
ASML is Europe's most valuable firm thanks to its dominance of lithography systems. These are?huge?chip printing? machines that cost up to $400 million and are essential to companies driving the?AI boom. Chipmakers have expanded their capacity quickly due to AI advances and the global expansion of data centers. ASML supplies memory chip makers such as SK Hynix and Micron, as well to TSMC which manufactures chips for Nvidia. In the middle of the product range, the company faces new competitors from China. It is also being pressured by the United States regarding exports of certain tools to?Asian nations. The Dutch company's success is due to the innovative technology it uses. How to tell apart your DUV, EUV and High NA ASML is a leading manufacturer of deep ultraviolet (DUV), extreme ultraviolet (EUV), and lithography machines. These machines are named after the wavelengths of light that they use to zap the microcircuitry of chips on silicon wafers. ASML's market share in the DUV segment, where tools that cost around $60 million each are made to produce chips for industrial and consumer electronics, is above 80%. This puts it ahead of its Japanese rivals Nikon and Canon. It is the only company in the world that has the monopoly on the EUV technology. However, rivals from China and the United States are trying to create alternatives. Standard EUV tools cost about $200 million, and are used in the production of AI chips and cutting-edge memory. ASML is testing its newest "High NA", EUV tools. These will be used in new generations of AI chip with smaller features over the next five years. So far, only a few have been produced. Each one is estimated to cost between $350 million and $400 million. The technology: HUGE MACHINES WORKING ON NANOSCALE The standard EUV machine for Nvidia chip production is about the size and weight of a school bus. It uses a complex system that includes lasers, magnets and mirrors to create microscopic circuitry on silicon wafers. The AI chips are mapped out by shining light patterns onto silicon wafers. Each wafer contains about 100 AI chips. The EUV wavelength measures 13.5 nanometers. A human hair is between 80,000 and 100,000 micrometers thick. LENSES AND MIRRORS The German industrial company Trumpf uses some of the most powerful lasers to blast tin droplets at a rate 50,000 times per sec. The light is guided into the heart by a system of mirrors manufactured by German optical systems maker Zeiss. These mirrors have surfaces that are smoother than those found in space telescopes. They are also kept in vacuum. Magnetically levitated stage move wafers faster than 3 meters/second, with acceleration and deceleration forces more than 15x that of gravity. How are ASML's huge machines delivered? The EUV machines, which are assembled in Holland, are then packaged into 40 containers and transported by cargo planes to the customer's chip fabrication plant. ASML expects to sell 65 systems this year, and 85 by 2027.
Rio Tinto reports highest first-half profit in four years due to copper strength
Rio Tinto posted on Wednesday its highest underlying half-year earnings in four years. A surge in profits in its copper division, and higher commodity price more than offset the softer earnings of iron ore.
The world's biggest iron ore producer announced?underlying earnings? of $6.85billion for the six-month period ended June 30. This is up 43% from $4.81billion a year ago and in line with Visible Alpha's consensus estimate?of $6.80billion.
The copper division's EBITDA grew by 84% to $5.7 billion, largely due to a?higher production from its Mongolian operations.
Iron ore remains the largest contributor to earnings for the group, generating a underlying EBITDA $6.8 billion. This is down 1% compared to a year ago.
The company announced its highest quarterly dividend in four-years at $2.11, up from $1.48 a year earlier.
Anglo-Australian Mines kept unchanged its production and sales projections for 2026.
Rio stated that it was on track to "unlock" $5 to $10 billion in cash through portfolio management and infrastructure initiatives. Opportunities to release $5 billion by 2026 are already being pursued.
The company has maintained its goal to reduce Scope '1 and 2 emissions from 2018 levels by 50% by 2030. However, it warned that the achievement of 'the goal depends on a timely delivery of renewable energy projects by third parties and commercial agreements which cannot be guaranteed.
(source: Reuters)