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Congo's army, Burundian allies halt southern M23 rebel march
As they attempted to push south Friday, the Rwandan-backed rebellions that have swept eastern Congo in this week were met with resistance by the army and allies of Rwanda including Burundian forces. This was confirmed by a Congolese source and an official. Rwanda denies that it sent troops to the neighbouring Democratic Republic of Congo where U.N. inspectors reported in December that thousands of Rwandan soldiers were deployed in support of M23 rebel group. On Tuesday, the rebels seized control of Goma, a city in the volatile and mineral-rich eastern region. Jean Jacques Purusi, the governor of South Kivu, said that the latest M23 offensive along the western shores Lake Kivu was checked within the last two days. Around 1,500 soldiers, including the Burundians, the local militias, and the Burundians, have been deployed to protect the town of Nyabibwe, on the road towards Bukavu. The person who has direct knowledge of the current situation, but declined to be named for security reasons, said. The United Nations has already stated that there is a risk of escalation in the Congo conflict between Rwanda and Burundi. In two major Congo conflicts that lasted from 1996 to 2003, millions of civilians perished - mainly from malnutrition or disease. Willy Nangaa, spokesman for M23, said that the rebels had been fighting Burundian forces in Goma to defend the city and other cities over the past few weeks. A diplomat from Africa said that the situation is alarming. "The regionalization risk is real." In eastern Congo, the Rwandans, Congoleses and Burundians are already fighting each other. The capture of Goma served as a warning to the international community. They now realize the danger," said the diplomat. The Burundi military declined to comment this week on the developments in Congo where it was present at a government request. Burundian officials said that their government has received an increasing number of requests from Congolese authorities in the last two years for support to the Congolese Army. The official stated that "our country has also suffered a heavy cost, and we have asked both of our neighbours to negotiate and sign a ceasefire." The Government is looking for Volunteer Fighters Authorities in Bukavu recruited civilian volunteers to protect the city as the next likely target of the armed group. Albert Kahasha - a former rebel officer and former army officer - told a rally on Thursday to recruit volunteers to fight. Sources said that fighting around Mukwinja (located 70km north of Bukavu), a city with over one million residents, was slowing down the rebel advance on Friday morning. Sources at the U.N. estimate that there are several thousands Burundian soldiers in eastern Congo. They are deployed to support the Congolese Army. Rwanda informed the U.N. Security Council on Sunday that there are 10,000 Burundian soldiers in eastern Congo. U.N. warned on Thursday that the absence of peacekeepers from the United Nations in South Kivu increases the likelihood of escalation of fighting. It also said there had been reports of Rwandan troops crossing into Congo, in the direction Bukavu. Rwanda did not respond immediately to a comment request. Feeling Surrounded M23 claims to exist in order to protect the ethnic Tutsi people of eastern Congo from Rwandan Hutu remnants who were involved in Rwanda's genocide in 1994, which resulted in over one million Tutsis as well as moderate Hutus being killed. The Congolese Government describes the rebels, as "terrorist proxies of Rwanda", who are out to pillage Congo's minerals. M23, a well-trained and professionally armed rebel group led by Tutsi, is the latest in an illustrious line of Tutsi movements that have emerged in Congo's volatile east borderlands following two wars in succession caused by the Rwandan genocide. Bukavu fell to rebels for the last time in 2004 when dissidents led by Tutsi General Laurent Nkunda refused their integration into national army. Rights groups accused the rebels of committing rapes and killing civilians. On Thursday, at the packed Bukavu football stadium, residents of the city chanted and pledged "Free Goma", while the crowd chanted. "It's been thirty years since we were victims of war, and yet nothing has been done. Fiacre Kalugusha said, "Today, the youth is standing up to fight on the frontlines." Bukavu residents reported on Friday that people in the city had started stocking up food, batteries and torches, or fled along the road toward the Burundi border. Helene, who lives in Bukavu, said that gunshots can be heard throughout the city. This also reinforces the psychosis. "We feel like we are surrounded by the M23 and it's scary."
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Phillips 66 reports smaller-than-expected fourth quarter loss on renewables strength
Refiner Phillips 66 reported a smaller-than-expected loss on Friday as strength in its renewables segment offset a sharp decline in refining margins. The renewable fuels segment posted a profit of $28 millions for the quarter, compared with a loss $11 million a year ago. After the Russian invasion of Ukraine caused supply shortages, the U.S. refinery industry enjoyed exceptional profits over a two-year period. A post-pandemic surge in demand also helped to boost margins. New refining capacity will be available at the end 2023. This will cause margins to return back to normal and put pressure on refiner profit. The 3-2-1 crack spread is a measure of the quarterly U.S. refinery profit margins. The average price of, has dropped by a third from the previous year, reaching as low as $16.04 in mid-December. The realized margin of the company was $6.08 per barrel in the third quarter compared to $13.88 per barrel a year ago. According to data compiled and analyzed by LSEG, on an adjusted basis the company reported a quarterly loss of 15 cents, compared to the average analyst estimate of 23 cents. (Reporting from Tanay in Bengaluru, Editing by Tasim)
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Russia extends the gasoline export license for large companies to end-Feb
The government has granted permission to Russia's biggest oil companies to continue gasoline sales until the end February. This extends a waiver that was due to expire this Friday. The Russian government lifted the temporary ban at the end of November on gasoline exported by the majority of producers. However, the restrictions were extended to other exporters, such as independent traders or re-sellers until January 31. These restrictions will continue to be in effect in February. The first ban on gasoline imports was implemented in March of last year in response to a steep rise in wholesale fuel costs and the threat of a shortage in the domestic market. This excludes fuel supplies to the Moscow led Eurasian Economic Union (a group of former Soviet states), and to other countries, such as Mongolia, with whom Russia has intergovernmental agreements for fuel supply. According to industry sources, the top three gasoline producers in Russia include Gazprom's Omsk oil refinery, Lukoil’s NORSI refinery in Nizhny Novgorod, and Rosneft’s Ryazan refinery. According to industry sources, production at the Ryazan refinery is currently suspended after a Ukrainian drone attacked last week. Nigeria, Libya Tunisia, and the United Arab Emirates are among the top importers of Russian gas. Reporting by Olesya A. Astakhova, Vladimir Soldatkin and Mark Trevelyan. Editing by Mark Trevelyan.
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Tokyo Gas announces 40 billion yen in share buybacks, and plans to do more next fiscal year
Tokyo Gas announced on Friday that it will buy back its own shares up to 40 billion Japanese yen ($259,000,000) by the end March. It plans to continue buying large amounts of stock next year to increase shareholder value. Elliott Management, an activist investor from the United States, has been pressing the company to sell off parts of its real estate portfolio in order to increase shareholder value. Taku Minami, Chief Financial Officer, said at a press conference that "our business portfolio management focuses primarily on increasing business synergy while accelerating the withdrawal of inefficient or low-synergy businesses and assets including real estate". Shinichi Sasayama, the President of Tokyo Gas, said this month that Tokyo Gas is identifying assets with low performance, including its vast portfolio of real estate, which will be sold in order to fund investments for growth. Minami didn't provide any further details about the asset reshuffle including the size or specific assets or businesses that may be divested. He said that the company will announce specific measures to reach its goal of a 8% return on equity in the next fiscal period starting in April in March.
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Aluminum and copper prices drop on possible Trump tariffs
Prices of aluminium and copper fell in London Friday, as a result of a stronger dollar. The markets were preparing for U.S. Tariffs to be imposed on Canada and Mexico by the United States as early as this Saturday. The London Metal Exchange's (LME) three-month copper was down by 0.8% to $9,055.50 per metric ton at 1106 GMT, while aluminium fell 1.1% to 2,598. LME copper is on course for a fall of 2.4% this week. This will be its worst week in over two and a half months. However, it remains set to record its first monthly increase since September, with a gain of 3.3% in January. "One down, and 11 more to go." Alastair M. Munro, broker at Marex, said that January 2025 reminded him of the turbulent nature of the first month of the year. Donald Trump, the president of the United States, reiterated on Thursday his threat to impose 25% tariffs on imports from Canada or Mexico. This helped boost the U.S. dollar, making metals priced in dollars more expensive for buyers with other currencies. This also increased the overall level of uncertainty, which drove more investors to safe-haven investments. "The truth is that the majority of fund interest lies elsewhere, in commodity markets such as agriculture, energy and precious metals, where they have a better picture. Munro explained that our space is dominated by high-frequency traders. The recent concerns about global economic growth also affect industrial metals. U.S. inflation figures on Friday are expected to give clues as to the interest rate outlook. The U.S. Federal Reserve kept rates unchanged on Wednesday and said that it would not rush to reduce them until inflation and job data indicated otherwise. Other metals saw a 0.9% drop in LME zinc to $2,767.50 per ton. Lead fell by 0.7% to 1,953 and tin dropped 0.6% to $30,005. Nickel was down 0.9% to $15,255. Chinese metals consumers are closing their main markets for Lunar New Year until February 5. Reporting by Polina Devlin in London, Editing by David Goode)
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Exxon exceeds Q4 expectations with higher Permian and Guyana output
By Sheila Dang HOUSTON - Exxon Mobil beat Wall Street's fourth-quarter profit estimate on Friday as higher oil and natural gas production offset lower prices for oil and lower refining margins. Profit for the fourth quarter was $7.39 Billion. According to LSEG, profit per share was $1.67. This beat analyst expectations of $1.56. The number one oil producer in the United States reported total earnings of $33,46 billion for full-year 2024, down from $38.57 billion the year before. The No. After closing the acquisition of Pioneer Natural Resources, in May, the company became the largest U.S. oilfield in 2024. Exxon has boosted its profits due to low production costs and lucrative projects in Guyana, despite the lower oil price and the decline in profits from fuel. The company announced earlier this month that lower oil refining profits would reduce earnings between $300 and $700 millions compared to third quarter. Even though demand for gasoline and Diesel lagged expectations, the startup of new oil refining companies by other companies in Asia & Africa resulted in a higher global fuel supply. Kathryn Mikells, Exxon's Chief Financial Officer said in an interview that the refining industry is still under pressure due to the increased supply. She said, "That is what we are watching as we look forward to 2025." The company had previously stated that impairments would cost around $600 million during the fourth quarter. Mikells explained that the charges are a result of selling non-strategic investments, such as a joint venture with Nigeria. She said that the largest U.S. producer of oil continues to anticipate a decision in September on its arbitration challenge against Chevron's purchase of oil producer Hess. Chevron would be able to gain a foothold on Guyana's petroleum projects if it proceeds. Exxon, CNOOC and Hess, the partners of Hess in the Guyana joint venture, claim that they have the contractual right to purchase Hess’ stake. In 2024, the total return to shareholders via dividends and buybacks was $36 billion. This is up from $32 in 2012. Exxon’s $36.2 billion in free cash flow covered the shareholder distributions. This is a key part of Big Oil’s strategy to attract investors. Sheila Dang, reporting from Houston; Simon Webb and Michael Perry, editing)
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EU lifts gas price cap in energy crisis
The European Union's gas price cap, which was introduced during the Russian gas crisis of 2022, will expire this Friday. It has not been activated since its conception. The cap would apply if the gas prices rose to an unusually high level, in response to months of rising energy prices due to Russia's cutting of gas supplies following its invasion of Ukraine. The cap is designed to kick-in if European Gas Prices reach 180 Euros per Megawatt Hour - a price level that the benchmark EU hasn't reached since 2022 when the energy crisis hit Europe. On Friday, the benchmark front-month contract for gas at the Dutch TTF Hub was trading above 52 Euros/MWh - its highest price since late 2023 but still well below the prices of the energy crisis in 2022. The European Commission's decision that the price cap will expire signifies the end of Europe's worst energy crisis. Gas storage in the EU is full despite cold snaps and other countries have increased their non-Russian supplies. One EU diplomat stated, "We never got to the point where we had to test the effectiveness of the instrument again." Germany was among the countries and industries that were divided on this issue. They were concerned about how it could disrupt energy markets, or hinder Europe's ability in attracting gas supply from competitive global markets. Eurogas, the industry association, said that it supports the gradual phase-out of the emergency measures implemented during the energy crises. Andreas Guth, Eurogas's head of business development said: "It is hard to determine the true effectiveness of these actions and they could create market distortions." Italy and other countries wanted the EU price cap to be kept, but redesigned to lower prices.
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Apple rallies as the dollar rises in anticipation of tariffs
Mike Dolan gives us a look at what the U.S. market and the global markets will be like this week. As January comes to an end, the world markets are bracing for the U.S. tariff increases that could come as early as this weekend. This is causing the dollar to rise in anticipation while interest rates in Europe continue to fall. Apple, the most valuable company in the world, rallied by 4% before today's bell despite the currency market's anxiety. Index futures added to the gains made on Wall Street Thursday. Apple's positive outlook for the future was impressive, even though it missed its quarterly earnings target. Donald Trump, the U.S. president, stole the show yet again yesterday late as he kept the markets guessing on the size of the 25% import tariffs promised on Saturday for Canada and Mexico. We may or we may not. "We're going make this determination probably tonight," Trump replied when asked if the tariffs would include Canadian and Mexican oil. Trump stated that the level of North American duty "may or not" increase over time. He said this to encourage the two biggest U.S. trading partner to stop illegal migration and shipments of the drug fentanyl. The Canadian dollar has fallen to near-five-year lows, after a loss of 1% during a week of lowering the Bank of Canada's rate. The Mexican peso recovered from the steep drop it had experienced in the previous session, but was still on course for its worst performance weekly since October. The dollar rose more generally, while the euro hit 10-day lows after the European Central Bank cut interest rates by a quarter-point on Thursday. The ECB's easing efforts were justified by the news that the German and French economies contracted in the fourth quarter of last. In addition, January inflation data from France and Germany's main states was also below expectations. Sources at the ECB said that another rate cut will likely be implemented in March, without much opposition from policymakers. This is before the debate on future easing intensifies. Some reports suggested that the central bank might stop referring to its monetary policies as "restrictive", after the March decision. European stocks continued to rise to new heights in the midst of earnings season. Novartis was up 2.4% following a big quarterly income boost. The S&P500's near 8% dollar gain in January is nearly twice as much as the gains of euro zone stocks. The earnings deluge on Wall Street and the curveball from China this week on the DeepSeek AI model has distracted some from the macro-political picture. Intel's report also received a positive response overnight. IBM's 13% increase in earnings on Thursday was its largest daily percentage gain since 1998. IBM lost 6% to Microsoft due to cloud computing concerns, but it also saw a 13% gain. Big Oil dominates the corporate updates of Friday. Chevron's earnings were below expectations as its refining division suffered a first-time loss since 2020 due to weak margins. The Fed was on hold and the economic data were mixed. The fourth-quarter growth in gross domestic product slowed down to 2.25 percent, as was expected following the trade report of the previous day, but jobless claims for each week fell more than predicted. The Fed will release its preferred personal consumption expenditures inflation indicator (PCE) on Friday. The annual core PCE inflation rate should have remained at 2.8%. Treasury yields in other countries were slightly higher than 4.5%. Investors sought out gold as a safe haven due to increased U.S. trade concerns. The following developments should help to guide U.S. stocks on Friday:
French Budget Talks on Right Track, Finance Minister Says
French Finance Minister Eric Lombard stated on Friday that the talks to pass the budget for 2025 through the parliament are "on track" although some compromises might still be required.
Lombard told TF1 TV that the government would continue to pursue its goal to bring the deficit in the public sector to 5.4% of the gross domestic product by the end of this year.
Lombard spoke as a group of French legislators met for the second day of their meeting on Friday, to finalize the text of the much-delayed 2025 budget bill. This is crucial to restore investor confidence in the country's finances.
Seven senators and seven lower-house members were in a closed-door discussion to reach a compromise on the bill before it is brought to the floor of the lower-house next week. This could lead to a motion of no confidence against the government.
"I hear that the discussions are proceeding in a positive spirit ....I have faith in lawmakers. They are aware of the gravity of the situation. Lombard stated, "I think we're on the right track."
Francois Bayrou, the Prime Minister of France, wants the deficit in the public sector to be reduced to 5,4% or GDP by 2025. Last year it spiraled higher as the tax revenue fell short and the spending increased faster than expected.
Lombard stated that the 5,4% target is "an commitment" made by the French government and the European Union, which will not be changed.
Investors have been rattled by France's inability to reach a budget agreement for 2025, while business confidence and consumer confidence has also been slashed. The government had to make concessions worth billions of Euros in order to pass a bill that would have a chance to be passed. (Reporting and editing by Toby Chopra, Geert de Clercq, Sudip K-Gupta)
(source: Reuters)