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Gold prices steady as investors watch US-Iran talks and prepare for inflation data
The gold price held steady on Thursday, as investors remained cautious over the direction of the U.S. Iran ceasefire talks. A key U.S. Inflation report is due later that day and will provide clues about interest rates. As of 0311 GMT, spot gold was not much changed at $4713.79 an ounce. U.S. Gold Futures for June Delivery fell 0.8% to $ 4,736.50. It doesn't appear that gold is doing much at the moment. Brian Lan, Managing Director of GoldSilver Central, said that there is still much speculation about what will happen after the ceasefire. Lan predicted that gold would?consolidate in the near-term between $4,607 to $4,860. Israel's heaviest strike yet on Lebanon, which killed hundreds, prompted a retaliatory threat from Iran. Prices of oil rose on Thursday amid concerns that supplies from the Middle East's key producing region might not resume fully, and doubts about the durability of the two-week ceasefire agreement between the U.S. Since the U.S. and Israel war against Iran began on 28 February, spot gold has fallen more than 10%. Higher energy prices have fueled inflation fears which led to markets reassessing interest rate expectations. Gold that does not yield a return tends to perform well in low interest rate environments. The minutes of the Federal Reserve meeting held on March 17 and 18 revealed that a greater number of policymakers believed that rate increases could be needed to combat inflation that continues to exceed the central banks' 2% target, especially in light of the Iran War. Investors will be watching for the key U.S. indicators of inflation, such as the Personal Consumption Spending data for February, due later today, and the March consumer price data, due on Friday, to get clues about the Fed's future policy. Standard Chartered said in a Wednesday note that "aside from near-term liquidity requirements, we expect gold will continue to rebuild its gains over the next?months, amid heightened geopolitical risks." (Reporting by Pablo Sinha and Noel John in Bengaluru; Editing by Sumana Nandy and Subhranshu Sahu) (Reporting from Noel John and Pablo Sinha in Bengaluru, Editing by Sumana Nady and Subhranshu Sahu.)
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Oil prices rise as investors remain cautious about the US-Iran ceasefire opening up supply
Investors' fears that the supply of oil from the Middle East region, which is a major producer of the commodity, may not be fully resumed amid the doubts about the two-week ceasefire agreement between the U.S.A. and Iran and the fact that the Strait of Hormuz remained restricted led to a rise in the price of crude oil on Thursday. Brent crude futures rose $2.6, or 2.74 percent, to $97.35 per barrel at 0048 GMT. U.S. West Texas Intermediate crude (WTI), however, rose $3.02 or 3.2% to $97.43 per barrel. Both benchmark prices dropped below $100 per barrel during the previous trading session. WTI recorded its largest decline since April 2020?on the expectation that the ceasefire between the U.S., Israel and Iran against Iran will reopen Strait of Hormuz. Waterway that connects Gulf producers like Iraq, Saudi Arabia and Kuwait to global markets. Typically, it carries around 20% of the oil supply. Israel's continued attacks on Lebanon?on Wednesday raised questions about the viability and sustainability of the ceasefire. Iran said it was "unreasonable to continue with negotiations to forge?a permanent peace agreement." On?Wednesday, shippers said that they wanted more clarity about the terms of the truce before resuming their transit through the Strait of Hormuz. Iran, in coordination with its Revolutionary Guards has released maps that guide ships to avoid mines and have designated safe passages. "Transiting through the Strait of Hormuz does not come with a risk-free guarantee." Standard Chartered analysts said that it is at Iran's sole discretion. "Logistical disconnects, security concerns, increased insurance premiums, and operational constraints will mean that very little additional energy will be supplied through the Strait of Hormuz over the next two weeks." According to an oil industry source, regional?oil facilities are also under threat. Iran has continued to strike sites in neighboring countries, including a Saudi Arabian pipeline that was used by the country's military forces to bypass the Strait of Hormuz. Kuwait, Bahrain and UAE have also reported drone and missile strikes. In a recent note, Haitong Futures stated that there are concerns about the stability of the ceasefire.?Israeli strikes against Lebanon's Hezbollah has emerged as a source of disagreement, while attacks across the Middle East continue, and contradictory statements remain regarding the Strait of Hormuz.
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Venezuela's Rodriguez announces an 'adequate increase' in wages starting May
Venezuela's acting president?Delcy Rod said on Wednesday that her government will make a'responsible' increase to workers' wages on 'May 1'. Her administration is looking to leverage the 'oil' and mining developments in order to improve workers' pay. She did not provide a number for the increase in wages. Venezuela's minimum wage is 130 bolivares a month, which is equivalent to a few cents. However, many public workers earn much more, thanks to bonuses and other payments, to the tune of $150 if they are lucky. The immediate, medium-term, and long-term goal of the government is to gradually and steadily restore workers' wages through productive growth, particularly in the mining and hydrocarbons sectors. These sectors generate immediate revenue after a resurgence in production. Venezuela will continue to "move forward" on this path as it gains more resources. Rodriguez reiterated a call to end U.S. Sanctions against the South American nation. Since the U.S. captured Nicolas Maduro during a raid on Caracas earlier this year, relations between the two countries have been warming. Since then, the Trump administration has been working with Rodriguez to 'expand U.S. involvement in Venezuela's mining and oil sectors. Rodriguez, who supported recent legislative measures to allow more private and foreign investment in both sectors, stated that the government would establish a commission to determine which assets are strategic to the state. He also said anyone calling for privatization of the state oil company PDVSA will be disappointed.
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Trump's sudden Iran reversal reveals limits to his leverage
Donald Trump's dramatic retreat from his chilling threats?to wipeout Iran's civilisation has exposed the limits and rising risks of the U.S. President's unpredictable negotiating style. Trump's decision to back down on Tuesday and accept a ceasefire lasting two weeks - which some critics called "TACO" or "Trump always cries out" – was the biggest step to date in de-escalating the 40-day war that has shaken the Middle East, and disrupted the global energy markets. Trump's claim of a?victory? over Iran was based on a mix of maximalist demands and erratic language, as well as increasingly extreme threats. Trump went further than ever on Tuesday morning, when he warned Iran via social media: "A whole civilization will perish tonight if it doesn't reach a deal." Trump reversed his threat, which experts claim could have been war crimes. He announced a truce agreement mediated by Pakistan just two hours before the deadline he set for Iran to open up the Strait of Hormuz. In his post, he claimed that the U.S. has "already achieved and exceeded all military objectives." Analysts say that despite Trump's triumphalist rhetoric, Iran will likely emerge from this conflict as a persistent problem for Washington. It is militarily weaker but has a more hardline leader, de facto control of the vital waterway used to ship oil, and a stockpile buried of highly enriched nuclear material. Trump has hailed himself as a master negotiator ever since his days as a real estate developer, but some analysts claim he can limit himself with his negotiating approach and undermine U.S. credibilities on the international stage. Jon Alterman, a Washington-based think tank member at the Center for Strategic & International Studies, said that "the president was trapped by himself and his hyperbole." "He couldn't have destroyed Iranian culture, and the costs to even appear to try would have massive." This approach comes with an additional risk: that the adversaries, including China and Russia, will become aware of it. The surprise factor is fading, said a Republican legislator who was in touch with the White House Tuesday night. He was referring to Trump’s habit of reversing his position after making tough-sounding statements. Karoline Leavitt, White House Press Secretary, denied that Trump had given in. She told reporters on Wednesday that Trump's language was part his "tough negotiation style" and the world should take his words "very seriously." EXTREME NEGATIVE POSITIONS Trump is known for taking extreme positions in negotiations, then reversing them. Analysts said that at times this strategy appeared to be deliberate, while other times it seemed random, with the administration reverting in response to pressure from the financial markets or MAGA's political base. Trump's new stance on Iran was prompted by a rise in U.S. gas prices and his own deteriorating approval ratings. The term "TACO", which is derived from the phrase "Tariff Adjustment" (or "TACO"), dates back to around a decade ago. Faced with a loss of $6.5 trillion in U.S. stocks over the course of just four days, Trump lowered the hefty duties he announced at his "Liberation Day", event held at the White House, days earlier. Few weeks later, he reversed another set of punitive measures against China. Both times, after Trump's reversals, the stock markets - that Trump often cites to gauge his performance – rallied fervently. The S&P 500 index rose 2.5% on Wednesday following the ceasefire declaration, as per usual. Trump has also backed down on his threats to seize Greenland, a NATO member country, from Denmark and his desire to take over the war-ravaged Gaza. His deadlines to secure a ceasefire in the Gaza war between Israel and Hamas did yield results, but his ultimatums that the Palestinian militant group disarm went?unheeded. Trump's second-term military threats have gone far beyond the 2017-2021 presidential term. A special forces raid led to the capture in January of Nicolas Maduro, and an improved U.S.-compliant government in Caracas. Trump acted on escalating threats made against the Islamic Republic when he attacked it with Israel on February 28. This was while Washington and Tehran continued to negotiate over the Iranian nucleus program. The question is now whether Trump could still fail to achieve his stated goals, such as 'closing Iran’s path towards a nuclear weapon,' despite tactical military achievements. Iran has denied wanting a nuclear weapon, but still has a large stockpile believed to be mostly underground after U.S. and Israeli air strikes on June. 'MADMAN THEORY' Trump and his advisers have insisted for years that being unpredictable was a negotiation tactic to keep opponents on their heels. Jonathan?Panikoff is a former U.S. deputy intelligence officer for Middle East who now works at the Atlantic Council in Washington. "He brought Iran to the brink and managed to escape at least with the temporary off-ramp that he had hoped would come," said Jonathan?Panikoff, a former U.S. intelligence officer for the Middle East now working at the Atlantic Council think tank in Washington. Alexander Gray, a senior official from the first Trump administration who is now CEO of American Global Strategies, has rejected the idea that this was another example of Trump’s TACO tendencies and stated instead that the heated rhetoric aimed to "escalate to de-escalate". Trump is believed to have embraced parts of Richard Nixon's Madman Theory. This theory, popularized during the Vietnam War, holds that extreme threats will force opponents to negotiate. Nixon wanted the North Vietnamese people to think he was insane and could use nuclear weapons. Mark Dubowitz is the CEO of the Foundation for the Defense of Democracies. A nonprofit research institute that is considered hawkish in foreign policy. He said he agreed with Trump's belief that "you have to literally out-crazy the Iranians" despite the drawbacks. Dubowitz stated that the Madman Theory is not only a bad idea, but it also scares your friends and family. Reporting by Matt Spetalnick and David Brunnstrom; Additional reporting by Andrea Shalal; Patricia Zengerle; Nandita BOSE and Dan Burns. Writing by Matt Spetalnick. Editing by Don Durfee, Nia Williams and Nia William.
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China's record oil purchase propels Brazil's monthly oil exports up to the second highest level
According to Brazilian government data released this week, China purchased a record amount of crude oil from Brazil in March. This brought the South American nation’s total monthly crude exports up to the second highest level ever. The data shows that China imported 1.6 million barrels of crude oil per day from Brazil in March, as the global energy flow has been reshaped by the U.S./Israel war against Iran. The previous record was around 1.46m bpd, which was recorded in May 2020. Brazil exported a total amount of 2,5 million bpd?of crude oil to all markets in March, thanks to China's record purchases. Brazil's crude oil exports increased 12.4% compared to February, making it the second highest volume ever recorded for any month. Only March 2023 was higher. The increase in exports had been?expected', said Bruno Cordeiro, an analyst for StoneX, who specializes in market intelligence. Cordeiro said that India was Brazil's second largest destination for oil exports. It also sought to find a way around the closed Strait through which 20% of the global crude flowed before the war. DIESEL Brazil reduced diesel imports in March by 25% compared to the previous month, reaching 1.05 billion liters. This is a warning sign for Brazil, which relies on diesel imports to meet about a quarter its needs. According to data from the government, the?share of U.S. Diesel in Brazilian imports dropped to less than 1 % in March, down from 8.3 % in February. Cordeiro explained that the U.S. is likely to have redirected fuel to areas where they pay higher prices, such as Asia. Cordeiro reported that Russia's share of the Brazilian market grew from 58% to 75%, but its diesel shipments to Brazil were largely unchanged since February. Reporting by Marta Nogueira and Roberto Samora from Rio de Janeiro, and writing by Fernando Cardoso & Stephen Coates
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New Jersey ends de-facto nuclear power plant moratorium
New Jersey lifted its de-facto moratorium on nuclear energy on Wednesday in the state. The state is grappling with some of the fastest-rising power bills in the United States. Electricity demand is outpacing the addition of new supply. Sherrill’s office released a statement that said the Governor signed legislation to remove a permit requirement that had effectively prohibited nuclear power development for decades. The law required a method for radioactive waste disposal that was unattainable. Instead, the state will issue permits for radioactive-waste storage that comply with federal nuclear regulations. Sherrill, who won the top government position in January after campaigning with the promise to lower utility bills, has now taken the action that will allow nuclear energy to be built in the Garden State. Sherrill said that in order to lower costs, more energy is needed. New Jersey is well-positioned as a leader for next-generation nuclear power to bring this supply. We are open for business. A task force was also created by the governor's office to investigate New Jersey's?potential for building new nuclear energy. The task force is made up of a variety of state government departments as well as PSE&G utility, Holtec nuclear plant parts manufacturer, labor unions, and environmental groups. New Jersey is one of 13 Mid-Atlantic states and Midwest states that are connected to the'regional grid, which has been flooded with requests for electricity from data centers. During the last decade, however the net supply of power in the region has decreased. (Reporting and editing by David Gaffen in New York, Laila Kearney is reporting from New York)
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Environmentalists appeal judge’s ruling on ioneer’s Nevada lithium project
Environmental groups appealed on Wednesday a 'federal judge ruling' in favor of ioneer Rhyolite Ridge's lithium and boron project, claiming that the proposed Nevada mine would cause a rare 'wildflower' to go extinct. Below are some details. The Biden administration has approved the mine for 2024. Its decision is "science-based." Last month, a?federal court judge rejected environmentalists' claims that the U.S. government approved the project in an improper manner. The 9th U.S. Circuit Court of Appeals in San Francisco heard the appeal on Wednesday. Circuit Court of Appeals in San Francisco, stating that the mine's approval had been "flawed since the beginning." Environmental group Great Basin Resource Watch said that the Rhyolite Ridge Mine is a dangerous project, especially in light of the global biodiversity crisis. * Ioneer, a company based in Australia, said that it was?confident? the judge's decision would be upheld on appeal. Chad Yeftich, spokesperson for ioneer, said: "We are committed to the rigorous and years-long review which underlies our federal permit." * There is no hearing date set for the appeal. * On Wednesday, shares of ioneer listed in New York rose by about 1%. (Reporting and editing by Ernest Scheyder)
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Sources say that Exxon will be performing spring and end-of-year overhauls of its Beaumont refinery in Texas.
Exxon Mobil Corp is planning overhauls at its Beaumont, Texas refinery that produces 612,000 barrels per day - in the spring and the end of the year, according to people familiar with the plant's operations. Sources said that Exxon will shut down the 60,000 bpd coker in May for an overhaul. The planned overhaul is expected to continue until June. Sources say that in December, the fluid catalytic 'cracker', which produces 120,000 bpd of gasoline, will be closed for an overhaul, along with two hydrotreaters, lasting until January. Cokers are used to convert residual 'crude oil' into fuels, or petroleum coke that can replace coal. According to the U.S. Energy Information Administration, the Beaumont refinery has the third largest crude oil processing capacity in the U.S. Kelly DaVila, spokesperson for Exxon, declined to comment on the operational details of the refinery. Beaumont's FCCU is 3.3% of the FCCU capacity on the U.S. Gulf Coast. About 60% of U.S. FCCU is produced by refineries in Texas and Louisiana. According to EIA, the refinery's coker capacity is equivalent to?7.4% U.S. Gulf Coast coking capability. Reporting by Erwin Seba, Editing by Nathan Crooks & David Gregorio
Ampol and Viva will boost fuel supply by leveraging the export credit agency of Australia.
Australia's export credit agency will underwrite spot market purchases by Ampol and Via?Energy through its largest suppliers. This was announced by Prime Minister Anthony Albanese on Thursday.
The new laws were passed by the parliament last week to allow Export Finance Australia (EFA) to finance fuel imports as a response to shortages caused by the Iran War.
Since the U.S. and Israel war against Iran began late in February, Australia has been experiencing localised shortages.
Albanese said at a press conference that "Export Finance Australia has agreed to terms with two of our largest suppliers...to enable them to?bring more petrol to Australia".
This is an additional supply in Australia that they can source. As part of the agreement, government can decide where that supply will go.
Albanese also plans to travel to Singapore on Friday to meet with Prime Minister Lawrence Wong as part of diplomatic efforts to boost fuel supply.
Energy Minister Chris Bowen stated that volatile oil prices, and "speculations about what will happen in Middle East", had made purchasing more risky for companies.
He said that the arrangement would allow companies to purchase fuel that they otherwise wouldn't be able to buy, and to do so for Australians.
Oil prices fell?below $100 a barrel? on Wednesday after news of a two-week ceasefire. They rose on Thursday, however, amid fears that Middle East supply may not be fully resumed due to the?Strait of Hormuz being largely blocked.
Bowen stated that the government would not dictate to Viva and Ampol where they could get their fuel.
"Obviously, the closer you are to Australia, the faster it will be for you to arrive here, whether from Singapore, Korea, or Malaysia. Bowen added that there are also opportunities to be found in North America, and Mexico specifically. (Reporting and editing by Sonali Paul in Sydney, Christine Chen is reporting from Sydney)
(source: Reuters)