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EU adds international CO2 credits as part of next climate goal
A draft of the proposal revealed that the European Commission would propose on Wednesday an EU climate goal for 2040, which for the first will allow countries to utilize carbon credits from developing countries to meet a small share of their emission goals. The draft seen by said that the European Union executive will propose a legally binding target to reduce net greenhouse gas emission by 90% by 2040 from 1990 levels. This is to keep the EU on track to achieve its core climate goal of reaching net zero emissions in 2050. The draft EU proposal, however, includes flexibility that will soften the 90% emission target for European industry, following pressure from France, Germany and other governments, including Italy, Poland, and the Czech Republic. Prior EU emission targets were based solely on domestic emission reductions. The draft reflects Germany's public position that up to three percentage points of 2040 targets can be covered through carbon credits purchased from other countries via a U.N. supported market. This reduces the effort required for domestic industries. The draft stated that the carbon credits will be phased-in from 2036. "EU will propose legislation setting robust and high integrity standards and criteria, as well as conditions on origin, timing, and use of these credits," it said. The report said that countries would be given more flexibility in choosing the sectors of their economy that contribute most to the 2040 target. Climate change has made Europe one of the fastest-warming continents in the world. A heatwave that hit the continent this week caused wildfires, disruption and chaos. But Europe's aggressive policies to combat the temperature increase have stoked the tensions among the 27 member bloc. The European Commission's climate agenda is a way for the European Commission to improve Europe’s competitiveness and safety. However, some governments and legislators say that industries already struggling with high energy prices and U.S. tariffs cannot afford stricter emission rules. The draft stated that "Decarbonisation not only is crucial for the environment, but it can also be a key driver of growth in the economy when integrated with policies on industrial, trade, and competition." Un spokesperson for the Commission declined to comment on this draft which may change before publication. Carbon credits can be generated through projects that reduce CO2 emission abroad, such as forest restoration projects in Brazil. These carbon credits then raise money for these projects. Investigations have revealed that some credits did not deliver the claimed environmental benefits. The EU's Climate Science Advisors oppose counting them towards 2040 and say that spending money on carbon credits from abroad would divert investment away from local industries. EU legislators and countries must agree on the 2040 target. This lawmaking process may take many years, but by mid-September the EU must submit to the U.N. its new 2035 climate goal - which should be derived directly from the current 2040 target - as the Commission had stated. (Reporting and additional reporting by Michel Rose, editing by Barbara Lewis.)
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Oil prices remain unchanged as OPEC+ increases weigh on the market
The price of oil futures was little changed on Tuesday as the markets considered the expectations for more supply next month from major producers, a weaker U.S. Dollar and a mix bag of economic indicators and market indicators coming from the U.S. Brent crude rose 2 cents to $67.13 a bar at 0345 GMT while U.S. West Texas Intermediate Crude fell 1 cent, down to $65.44 a bar. Brent oil has fluctuated between a high and a low of $69.05 per barrel since June 25. This is because concerns about supply disruptions have diminished following the ceasefire agreement between Iran and Israel. Sources said that American Petroleum Institute data released late Tuesday showed U.S. crude inventories had increased by 680,000 barrels over the past seven days, at a period when stocks are typically low during the summer season. "Today's oil prices are influenced by a combination of factors, including a potentially increasing OPEC+ production, unclear U.S. stock signals, an uncertain geopolitical scenario, and macro policy ambiguity," stated Phillip Nova Senior Market Analyst Priyanka Sahdeva. Investors have already factored in the planned increases by the Organization of the Petroleum Exporting Countries (OPEC+), which includes Russia. They are not likely to be caught off guard again soon, said Ms. Sher. Four OPEC+ source told us last week that the group will increase output by 411,000 barrels a day when it meets next month on July 6. This is a similar amount as what was agreed upon for May, June and even July. According to Kpler data, the market has already seen the effects of previous OPEC+ increases. Saudi Arabia, which is the largest oil exporter in the world, increased its shipments by 450,000 bpd in June from May. This was the highest level in over a year. Sachdeva said that, "With geopolitics at a minimum for the moment, oil futures are likely to trade in a tighter band this week as global economic worries persist. An easing dollar is the only exception which could extend any upward momentum." The greenback The number of people who are unemployed has fallen to its lowest level in three and a half years A weaker dollar could support prices, as it would encourage buyers to pay in other currencies. Tony Sycamore is an analyst at IG. He said that the Federal Reserve's interest rate reductions in the second half will be influenced by the non-farm payroll data released on Thursday. Lower interest rates would spur economic activity, which in turn would boost oil demand. The Energy Information Administration will release official data on the U.S. stockpile of oil by Wednesday morning at 10:30 am ET. ET. (Reporting and editing by Christian Schmollinger; Trixie Yap, Singapore; Sudarshan Varadahan in Singapore)
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PTTEP Hires Velesto’s Jack-Up Rig for Drilling Campaign off Malaysia
Malaysia’s oil and gas services Velesto has secured a drilling contract for its NAGA 5 jack-up drilling rig by PTTEP HK Offshore and PTTEP Sarawak Oil, collectively referred as PTTEP, for its 2025 - 2026 drilling campaign in Malaysia.Under the contract, Velesto will assign NAGA 5, one of its premium jack-up rigs, to drill a firm 15 wells with operations scheduled to commence in June 2025.The latest award follows Velesto’s recent announcements for NAGA 4 and NAGA 8 in May 2025, further strengthening the group’s fleet utilization outlook.Velesto continues to benefit from rising regional demand for jack-up rigs and anticipates a more active second half of 2025, supported by a robust tender pipeline and stable client activity.NAGA 5 is a premium independent-leg cantilever jack-up drilling rig with a rated operating water depth of 400 feet and drilling depth capability of 30,000 feet.“We thank PTTEP for their continued confidence and the opportunity to support their drilling operations in Malaysia. Our focus remains on safe, reliable execution, driven by consistent delivery across campaigns.“With several rigs under long-term contracts, we remain committed to operational discipline and value-driven execution that creates sustainable returns for our shareholders,” said Megat Zariman Abdul Rahim, President of Velesto.
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Copper gains as traders continue to ship ahead of potential US tariffs
On Wednesday, copper prices rose at the London Metal Exchange (LME) and Shanghai Futures Exchange, as traders were expected to continue to rush metal shipments into the U.S. before potential import tariffs. This would further reduce inventories that are already very low. As of 0105 GMT the most traded copper contract on SHFE rose 0.62%, to 80,520 Yuan ($11238.43), per metric ton. This is the highest price range in 2025 so far, around the second half of March. The LME's three-month copper also increased 0.12%, to $9,945.5. Low copper inventories in the SHFE and LME, along with the continued shipment to the U.S. prior to the imposition on import tariffs, have supported the price. Copper Stocks Copper inventories in LME-registered storage shed 66% between the middle of February and now stand at 91 250 tons. In the warehouses monitored, the SHFE has also seen a 66% drop in stock since early March. The summer months are usually the time when copper inventories in China tend to increase due to a low season demand. ANZ reported that "U.S. Treasury Sec. Scott Bessent stated that Washington's negotiation with Beijing would focus first on reciprocal duties, and then on duties on raw materials such as copper." "A delayed tariff decision would justify a premium for U.S. Copper, giving traders more shipping time before levies are implemented." SHFE aluminium rose 0.61%, to 20,685 Yuan per ton. Tin gained 0.4%, to 268,420 Yuan. Lead increased by 0.2%, to 17,170 Yuan. Nickel grew by 0.16%, to 120,580 Yan, while Zinc fell 0.4%, to 22,165 Yan. LME aluminium rose 0.33%, to $2607 per ton. Lead gained 0.2%, to $2042, while zinc grew 0.06%, to $2715.5. Click or to see the latest news in metals, and other related stories. Data/Events (GMT 0900 EU Unemployment May Rate ($1 = 7.1647 Chinese Yuan) (Reporting and Editing by Rashmi aich; Reporting by Hongmei Li)
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Investors weigh Fed rate stance as they assess US data and gold prices.
The gold price fell on Wednesday, as investors waited for U.S. employment data and assessed Federal Reserve Chairman Jerome Powell's cautious approach to rate cuts. However, a weaker greenback helped limit losses on bullion priced in dollars. As of 0217 GMT spot gold fell 0.2% to $3,330.68 an ounce while U.S. Gold Futures dropped 0.3%, falling to $3,340.60. Holders of other currencies can now afford to buy bullion because the U.S. Dollar index has fallen to its lowest level in over three years. Gold prices have been consolidating since posting their strongest gains in the past two weeks. "The overall trend bias continues in favour of the upside at this time," said Ilya SPivak, Tastylive's head of global macro. Powell said that the U.S. Central Bank will "wait and see" how tariffs impact inflation before it lowers interest rates. This is a further rejection of President Donald Trump's demand for immediate rate cuts. The number of U.S. jobs opened in May was unexpectedly higher, but the decline in hiring is a sign that the labour markets has shifted down gear due to the uncertainty surrounding the Trump administration’s tariffs against imports. Investors will now be awaiting the U.S. ADP Employment data due later today, as well as nonfarm payroll numbers on Thursday, for more insight into the labour market. Spivak stated that the biggest risk to gold is an unexpectedly high (NFP) result, but this seems unlikely. The U.S. Senate Republicans passed Trump's tax and spending bill Tuesday by a narrow margin. It is a package that cuts taxes, reduces social safety net programs, increases military expenditures, while adding $3.3 billion to the national debt. Trump was optimistic on Tuesday regarding a possible trade agreement with India, but sceptical about a similar deal with Japan. He also said that he would not consider extending the deadline of July 9 for countries to reach trade agreements. Spot silver fell 0.1% per ounce to $36.01, platinum dropped 0.4% at $1,344.91, and palladium rose 0.4% to $ 1,104.92.
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Investors' expectations for the OPEC+ summit have not changed much in terms of oil prices
The price of oil futures was little changed on the day of Wednesday, as investors were cautious ahead of this week's meeting of major producers to decide output levels for August. Brent crude rose 1 cent to $67.12 a bar at 0124 GMT. U.S. West Texas Intermediate Crude fell 5 cents, falling to $65.40 a bar. Analysts said that demand expectations were boosted on Tuesday by a survey conducted by the private sector, which showed that factory activity in China, world's largest oil importer, increased in June. Brent oil has fluctuated between a high and low of $68.40 and $66.34 a barrel since June 25 as fears of disruptions to supply in the Middle East region producing region have diminished. Oil prices are in a tight range, as there is less geopolitical uncertainty and more nervousness about what OPEC might do to increase production. This was said by Phil Flynn. Senior analyst at Price Futures Group. The price has been held down by the expectation that the Organization of the Petroleum Exporting Countries (OPEC+) and its allies, including Russia, will increase their crude oil production in August by a similar amount to the large increases agreed upon in May, July, and June. Four OPEC+ members told four sources last week that the group intends to increase output by 411,000 barrels a day when it meets next month on July 6. According to Kpler data, the market has already seen the effects of previous OPEC+ increases. Saudi Arabia, which is the largest oil exporter in the world, increased its shipments by 450,000 bpd in June from May. This was the highest level in over a year. According to American Petroleum Institute figures, the crude oil inventory in the U.S. has increased by 680,000 barrels over the last week. The Energy Information Administration will release official data on Wednesday, 10:30 am ET. ET. Tony Sycamore is an analyst at IG. He said that the non-farm payrolls numbers due Thursday will determine the timing and depth of the interest rate reductions by the Federal Reserve in the second half this year. Lower interest rates would spur economic activity, which in turn would boost oil demand. Investors also watch trade negotiations in advance of the tariff deadline set by U.S. president Donald Trump on July 9. Trump said on Tuesday that he does not plan to extend the deadline. (Reporting from Sudarshan Varadahan in Singapore, Editing by Christian Schmollinger).
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India's renewable energy output increases at the fastest rate in three years
In the first half 2025, India's renewable energy output grew at its fastest rate since 2022. According to an analysis of daily load dispatch data by the federal grid regulator, renewable power output increased 24.4% from January to June 2025 to 134.43 kilowatt-hours (kWh). In June, the share of renewables (excluding hydropower) reached a new record of over 17%. India's coal-fired electricity generation fell by nearly 3% during the first half of this year, as growth in overall power output slowed down to just 1.5%. Electricity production will grow 5.8% by 2024. A milder summer, due to an earlier-than-expected monsoon, and slowing economic activity have reduced coal demand, resulting in record domestic stockpiles and lower imports by the world's second-largest consumer of the fossil fuel behind China. According to Vikram V., vice president for corporate ratings at Moody's ICRA, renewable generation in India will continue to increase. This year, India is expected to add 32 gigawatts of renewable capacity, compared to about 28 GW by 2024. Government data shows that India has added 16.3 GW in wind and solar power capacity during the five months to May. After a long slowdown, the nation of South Asia has increased its wind and solar capacity. This is after it missed its target for 2022 of 175 GW. The country now wants to reach 500 GW non-fossil energy capacity, including nuclear and hydro power by 2030. This is nearly twice the current 235.6GW. S&P Global Commodity Insights stated in a report that "we believe this target is achievable but, in our base scenario, the goal may shift to 2032". Grid modernisation and energy-storage investments are crucial to support renewable integration. (Reporting from Sudarshan varadhan and Sethuraman NR, both in Singapore; editing by Shinjini ganguli).
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US Senate budget bill cuts money for filling oil reserves
The U.S. Senate budget bill, passed on Tuesday, reduces the amount of money that can be used to replenish the Strategic Petroleum Reserve despite the fact that President Donald Trump promised on the first day of his second term in office to fill it to "the top". Joe Biden, former president, sold 180 million barrels of SPR, the highest amount ever, following the Russian invasion of Ukraine. SPR was at its lowest point in 40 years when oil imports were more important to the U.S. The budget bill reduced the amount of money available for crude oil purchases in order to replenish the SPR from $1.3 billion to $171 millions. This is only enough money to purchase about 3 million barrels, instead of the 20 million barrels that are currently available at current prices. Rapidan Energy, an energy consultancy, informed clients that funding had been affected by the Senate’s need to cut budgets elsewhere, as they softened the green energy cuts in the House version. It was not clear when the U.S. House would vote on this bill. Trump stated on Tuesday that the SPR will be filled when market conditions are favorable, but he did not specify when or how. Even scheduled oil deliveries to the SPR after Biden purchased some crude last summer are seven months behind schedule. Biden had scheduled deliveries of 15.8 million barrels to the SPR between January and May. Only 8.8 million barrels have been delivered so far to the SPR, which the Trump administration has blamed on maintenance. The Senate bill kept a measure to cancel 7 million barrels in congressionally-mandated sales. Later in the year, lawmakers could repeal further mandated sales through legislation. SPR currently has approximately 403 million barrels. This is a far cry from the 727 millions barrels that it had in 2009, when it was the largest ever. The SPR is the largest oil reserve in the world. Under Biden's leadership, the U.S. achieved record oil production. Trump wants to increase this.
OPEC+ most likely to extend production cuts in June: Kemp
Saudi Arabia and its allies in OPEC+ are most likely to keep oil production unchanged for a further three months when ministers examine output allotments on June 1.
The tightening up of petroleum materials and deficiency of stocks widely prepared for at the start of the year has failed to materialise up until now.
If OPEC+ (Organization of the Petroleum Exporting Countries and allies) authorities had hoped to increase production into a. tightening market characterised by rising oil prices they are. likely to be irritated.
Crude stocks, futures costs and calendar spreads are all at. comparable levels to a year ago, making a significant boost in. output unlikely.
The group might nevertheless choose it needs to rescind a few of. in 2015's output cuts to pre-empt an additional increase in production. from the United States, Canada, Brazil and Guyana and prevent. yielding more market share.
However current market conditions suggest any increase is likely to. be symbolic, in the lack of a wholesale shift in method to. boost volumes and accept lower prices.
PRICES AND SPREADS
Front-month Brent futures have averaged $84 per barrel so. far in May putting them precisely in line with the average since. the start of the century after changing for inflation.
Costs have increased by just $6 per barrel, or 7%, compared. with a year ago when the group was preparing production cuts to. increase them.
Brent's six-month calendar spread has actually sold an average. backwardation of $3.54 (86th percentile for all months since. 2000) so far in May compared with $1.81 (60th percentile) this. month in 2023.
The increased backwardation indicates traders see the marketplace. somewhat tighter than in 2023 with a greater likelihood. inventories will diminish over the rest of 2024.
But the backwardation has been breaking down in current weeks. and has actually already narrowed from approximately $4.86 (95th. percentile) in April.
Chartbook: Oil costs and stocks
Despite a boost in stress across the Middle East,. causing a temporary rise in the war risk price premium, there. has been no real effect on oil products, and the premium has. mostly faded.
Diplomatic efforts have consisted of dispute in between Iran and. Israel, with no impact on either oil production or tanker. exports from the Persian Gulf.
Tanker traffic has been re-routed from the Red Sea and the. Gulf of Aden around the Cape of Good Want to prevent drone and. rocket attacks from Houthi fighters based in Yemen.
US OIL INVENTORIES
In the United States, business crude stocks are at. nearly the very same level as this time last year and near to the. prior 10-year seasonal average.
Commercial crude stocks amounted to 461 million barrels in. April 26 compared with 460 million barrels a year earlier.
Unrefined stocks were simply 5 million barrels (-1% or -0.11. standard variances) listed below the prior 10-year seasonal average.
There have been no indications of a substantial and sustained draw. down of inventories that would suggest the marketplace has been. under-supplied.
The majority of U.S. crude stocks are held at coastal refineries. and tank farms along the Gulf of Mexico, which is also the. area most closely incorporated with the international sea-borne market.
Gulf of Mexico stocks totaled up to 262 million barrels on. April 26, just 6 million barrels above the same time last year. and 15 million barrels (+6% or +0.57 standard deviations) above. the 10-year seasonal average.
The United States is not the whole international market however given. the effectiveness with which traders move barrels to make use of regional. disparities in between production and usage, it is a great. marker for the global balance.
U.S. crude inventories, global futures costs and to some. level softening calendar spreads all indicate a market relatively. near balance.
Portfolio financiers definitely appear to think so, with approximately. equal advantage and disadvantage dangers to costs.
On April 23, hedge funds and other money supervisors held a net. long position in futures and alternatives connected to crude rates. equivalent to 453 million barrels (46th percentile for all weeks. since 2013).
The position was an increase from 388 million barrels (29th. percentile) at the exact same point in 2023 however was essentially neutral.
Neither fund supervisors nor physical traders are signalling. the need for a boost in production from Saudi Arabia and its. OPEC+ allies in the third quarter.
PRODUCTION POLICY
Senior OPEC ministers and authorities worry the group's. policy is to be proactive and positive.
That may be true when it comes to lowering production to. avert an increase in excess stocks and stabilise prices.
When it comes to increasing production, nevertheless, the group. has actually usually waited till stocks have actually fallen and rates have. already increased considerably.
In this circumstances, stocks and costs close to the. long-lasting average suggest ministers are most likely to decide to keep. output unchanged, based on their behaviour in the past.
In the last years, OPEC+ production cuts have actually propped up. costs and supported continued growth in output from outside the. group specifically in the western hemisphere.
Some members of the organisation have expressed issues. about the loss of market share and pushed to increase. production.
Up until now, Saudi Arabia has led OPEC+ in cutting production to. reduce stocks and boost prices at the cost of volumes.
There are concerns about the long-lasting sustainability of. this method, but so far there's no indication of a fundamental. reconsider.
If ministers ultimately choose the loss of market share has. gone too far, they might cite more powerful projection demand and a. forecasted future decrease in inventories to validate improving. production.
That would expose a major modification in strategy to prioritise. volume over rates and there is no sign of it yet. If OPEC+. nonetheless chooses to reveal an output boost, it is most likely. to be little and symbolic.
Related columns:
- U.S. oil and gas production rebounds after winter season storm. ( May 1, 2024)
- Record U.S. oil and gas production keeps prices under. pressure (March 1, 2024)
- Western Hemisphere oil output rises, with a helping hand. from OPEC (February 21, 2024)
John Kemp is a market analyst. The views expressed. are his own. Follow his commentary on X https://twitter.com/JKempEnergy.
(source: Reuters)