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Oil prices tumble again on US-Iran deal; S&P 500 falls
Oil prices dropped more than 5% Tuesday, continuing this week's losses, on hopes that a U.S. Iran deal will end the Middle East war and allow oil to flow through the Strait of Hormuz. Meanwhile, technology shares weighed on the S&P 500 & Nasdaq. The details of the U.S.-Iran interim agreement began to emerge. U.S. president Donald Trump said it would rule out Tehran acquiring a nuclear weapon, and an official from the U.S. stated that it allowed Iran to immediately sell oil after signing. Brent crude futures dropped $4.21 or 5.1% to settle at 78.96 per barrel. U.S. West Texas Intermediate crude (WTI crude) fell $4.70 or 5.8% to $76.05. SpaceX's stock valuation soared above that of Amazon and briefly overtook Microsoft's, amidst a frantic trading day driven by the newly listed option contracts of the company. SpaceX, which began trading on the Nasdaq last Friday, was up 4.8% for the day. Bruce Zaro is the managing director of Granite Wealth Management, Plymouth, Massachusetts. He said that the second quarter U.S. earnings are still a few weeks away. Nvidia, the most valuable AI chip maker in the world, surprised investors by tapping into the bond market for $25 billion. The company stated that the money would be used to fund general corporate needs and that the debt sale was a benchmark for future issuance. Nvidia shares dropped 2.4%. Investors also remained cautious in advance of the Federal Reserve policy update scheduled for Wednesday afternoon. Some investors were concerned that new Fed Chair Kevin Warsh might adopt a more hawkish stance at his first meeting. It is expected that the Fed will hold rates at between 3.50% and 3.75%, but it could also drop its easing policy. The Dow rose for the second day in a row. While the S&P 500, Nasdaq and other major indices ended the day lower, the Dow closed at a record high. The S&P 500 saw a decline in technology, but a rise in financials. A semiconductor index fell 5.7%. The Dow Jones Industrial Average rose by 328.64, or 0.6%, to 51,999.67. The S&P 500 dropped 42.94, or 0.5%, to 7,511.35. And the Nasdaq Composite fell 307,60, or 1.15, points to 26,376.35. MSCI's index of global?stocks fell by 2.98 points or 0.26% to 1,128,30. The pan-European STOXX 600 rose by 0.25%, and closed at a record high. The dollar fell in foreign exchange due to the optimism surrounding a possible peace agreement with Iran. The dollar index (which measures the greenback versus a basket including the yen, the euro and others) fell by 0.14%, to 99.55. Meanwhile, the euro was up 0.16%, at $1.1609. The Japanese yen fell 0.06% to 160.43 dollars after the Bank Of Japan raised its benchmark rate as expected by 25 basis points, reaching 1%. Reserve Bank of Australia held rates at 4.35%, in an unanimous decision. This was its first pause of the year despite high inflation. The Australian dollar was barely changed at $0.707 The yield on the 10-year U.S. Treasury bill was down 4.5 basis points at 4.424%. The auction of $13 billion in 20-year notes was successful. 20-year yields, which peaked at 4,938% on the trading day, are now at 4.93%. Gold spot rose by 0.59%, to $4331.14 per ounce. Reporting by Caroline Valetkevitch and Amanda Cooper, both in New York; Additional reporting from Alun John and Gregor Stuart Hunter, both in London; Editing by Jacqueline Wong and Rod Nickel; Jamie Freed.
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IG4 is aiming to take control of Brazil's Raizen as it approaches Moelis, Journey and Moelis
Three people with knowledge of the situation say that independent investment 'bank Moelis & Company, and financial consultancy 'firm Journey Capital are advisers of creditors of ethanol and sugar producer Raizen. They received a 'non-binding offer?from the private equity firm IG4 on Monday evening to purchase credits and control. Two of them warned?that any agreement remains far from sure, and one said that creditors are unlikely?to reach a decision any time soon. One of the creditors said that they accepted Raizen’s offer to convert their debt into equity because it was the 'best alternative available', but would not like to be shareholders. The person who said this stated that the success of the proposal will depend 100% on the conditions set forth by IG4. IG4, Moelis, and Journey Capital declined comment. IG4 recently became cocontroller of petrochemical company Braskem along with oil giant Petrobras. It is now'seeking to buy control of Raizen. This company?just announced a?65 billion reais (12.7% billion) debt restructuring, which was the 'largest non-court debt restructuring in Brazil. The people who spoke to IG4 said that the company is known for pursuing co-control or control over its acquisitions. IG4 would 'likely' move forward with the offer if they'secured at least 50% plus 1 of the restructured credit, according to the sources.
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Venezuela's PDVSA signs deal with Repsol for oil and gas production
Officials from Venezuela's PDVSA state oil company and Spanish energy group Repsol have signed a "crude and gas agreement" to boost production in the northwestern part of Venezuela. Hector Obregon, PDVSA president, said that at an event held at the Government Palace, the deal offers "exploration" opportunities on the eastern shores of Lake 'Maracaibo where the two companies already operate the Petroquiriquire Joint?Venture, which could add 20,000 barrels of light crude per day to the current average production of around 40,000?bpd. In comments broadcast by state television, he said that the additional crude would supply the Paraguana Refining Center, which is located in Falcon State, and help fuel economic growth. Repsol announced in April that it had reached a deal?with Venezuelan authorities and PDVSA in order to regain control over its oil assets. The agreement also includes plans to triple the output of Venezuelan oil operations in three years, and to ensure payment mechanisms. Washington eased sanctions against Venezuela's energy sector after the capture of?President Nicolas Maduro by the U.S. in January. It issued general licenses that allowed international energy companies to operate oil and?gas projects. Reporting by Fabiola Aramburo, Writing by Daina Beth Solon and Sanjeev Mikleni; Editing by Daina-Beth Solomon and Sanjeev Micleni
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Hezbollah thinks Iran won't sign the final nuclear agreement if Israel remains in Lebanon
Hezbollah stated on 'Tuesday' that it believes Iran won't sign a final deal with 'Washington unless Israel leaves 'Lebanon', after Iran's top diplomat'said Israel's 'continued troop' presence in Lebanon will be considered a violation of the U.S. -Iran Memorandum of Understanding. Israeli troops continue to occupy territory in southern Lebanon they captured during their three-month-long air and ground campaign against Hezbollah. The campaign began when the Iran-backed Hezbollah fired on Israel in support of Tehran, starting in?March 2. The fighting in Lebanon has slowed down but not completely since the Iran-U.S. Memorandum of Understanding. Israel also said that troops will remain in Lebanon's south. Hezbollah is against Israel's occupation. The group's media said on Tuesday that it believed Iran would require an?Israeli pullout as part of the next U.S.Iran talks. These are set to begin after both parties formally sign their memorandums of understanding this Friday. These talks will address sensitive issues such as the future of Iran’s nuclear program. Hezbollah media office: "We think there won't be a nuclear deal between Iran & the United States without Israel withdrawing." This was the first time that the group had linked Israel's departure?to an possible nuclear deal. The statement said that an Israeli withdrawal was not a condition for the talks, but rather a result. It claimed that it had been assured by Iran that any Israeli violation of the ceasefire in Lebanon would affect those upcoming negotiations. Abbas Araqchi, Iran's foreign minister, said that the end of regional conflict must also include the end?of conflict in Lebanon and "the end" of "occupation" of Lebanese land. He said: "A full end to the war cannot be achieved without the withdrawal of Israeli troops from the territories that they have occupied during this war." Araqchi said that any Israeli attack on Lebanon or continued occupation of Lebanese lands "will be considered, in our opinion, a violation to the memorandum." Reporting by Maya Gebeily from Beirut, and Parisa hafezi from Dubai. Editing by Alison Williams and Alexandra Hudson.
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Thyssenkrupp spins off its largest division by sales, the Materials Trading Division.
Thyssenkrupp announced on Tuesday that it plans to spin-off its Materials Trading division, which accounts for almost a third in the total sales of the German conglomerate. This announcement has been reported by and is part of the company's ongoing efforts to "turn itself into a holding company". The company has divested its hydrogen and marine divisions through individual stock listings in the past. Thyssenkrupp shareholders will vote on the issue of spinning off 49% in an extraordinary shareholder meeting scheduled for August 7. Jefferies analysts estimate that the segment has an enterprise value of EUR3.6 billion ($4.2 billion). Around 15,500 people work in the division that buys, processes and sells materials like steel and alloys. It also manages their warehouses. This division accounts for 17% of Thyssenkrupp’s total employees and EUR11.4 billion or almost a third of its sales. Thyssenkrupp stated that if approved, the separate listing would occur before the end the year. Thyssenkrupp's CEO Miguel Lopez stated that?tk Accelis?had made "impressive progress" in the past few years, calling it a "fully-integrated materials distributor and powerful supplier chain service provider". The German labour union IG Metall said that worker rights were secured in the reorganisation. This follows previous concerns. "IG Metall has strengthened and secured?key safeguards in difficult circumstances. Ingo Kloetzer, a representative of IG Metall, said that without?our negotiation, workers' rights in key areas would be greatly weakened.
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Israeli drone strikes kill four in southern Lebanon
The National News Agency of Lebanon (NNA), reported that Israeli drones targeted three vehicles on the southern border of Lebanon, killing four and injuring several others. In a double-tap attack, two people were killed when a drone struck a car at Mayfadoun village. The second strike was made after the villagers gathered. The agency reported that two more people were killed in a drone attack on the town Shoukin. The fighting in Lebanon between Israel-backed Hezbollah and Iran has decreased but not stopped completely since the announcement on Monday of an interim agreement between the United States, Iran and Iran. According to NNA's report, Israeli drones hovered above Beirut, while the Israeli military continued its assault on southern Lebanon. The Israeli military did not immediately comment on the reported attacks. Israeli troops have continued to occupy large areas of southern Lebanon, and have destroyed dozens of villages and removed their inhabitants. Israel's army said in a press release that it intercepted Hezbollah rockets fired at a southern Lebanon area where Israeli soldiers were conducting operations. Israel's military said that it also struck the launcher which fired some of these rockets. Israeli soldiers identified a suspicious vehicle and fired a warning shot at it before launching a strike to "eliminate the threat". Since Hezbollah launched strikes against Israel on March 2 in support of Tehran, Lebanon has become entangled in the regional conflict centered around Iran. According to the?Lebanese government, Israel launched an offensive which has resulted in more than 3,820 deaths and around 1.2 millions people being displaced. According to Israeli military announcements, at least 28 Israeli soldiers have died in Lebanon during the latest conflict. Four Israeli civilians were also killed by Hezbollah. Hezbollah did not say how many fighters were killed. Reporting by Maya Gbeily, Editing by Gareth Jones
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The U.S. uses an Iranian smuggling technique to sneak oil from the Gulf
US military has conducted a number of secretive oil transfers between ships to maintain Gulf energy exports. They have used aerial and water drones, as well as helicopters, in an operation that guides convoys to waiting tankers. The US military operation near the Strait Of Hormuz uses a technique that Iran has long used to avoid sanctions. Eleven people with knowledge of the operation identified two specific locations for the oil transfer - one off Fujairah, in the United Arab Emirates, and the other off Sohar's port in Oman. According to satellite images and shipping data, the transfer began in early May. At least 116 vessels were involved. Satellite imagery shows that as recently as Tuesday morning 12 pairs of ships were seen side by side in the Gulf of Oman. Eight of them off the coast of Sohar, Oman, and four near Fujairah. Images from last week show that on June 11, the activity peaked and 17 pairs of vessels were seen simultaneously transferring oil at both sites. Four sources, including an ex-U.S. official who was aware of the attack, said that the Apache helicopter shot down by Iran on the 9th, which sparked retaliatory U.S. bombings, played a role in the mission. Six pairs of tanker vessels were grouped together on satellite imagery in a small area near the port of Sohar, the day that the Apache helicopter was shot down. Could not confirm the role of the Apache in the operation. A U.S. Defense official responded to questions by saying that no Central Command forces were involved in the offshore ship-toship oil transfer operations. U.S. officials confirmed that a drone boat rescued both crew members. Previously, the Apache's involvement in the operation, the extent of the transfers and how they operate, as well as the Apache's role, had not been reported. Centcom was contacted by the White House. The Iranian government has not responded to inquiries about the transfer operation. These two locations, located in the Gulf of Oman, near the exit of Strait of Hormuz are very close to the borders drawn by the Persian Gulf Strait Authority. This is a new Iranian body established to manage the Hormuz Strait. The Islamic Revolutionary Guard Corps may use drones and missiles to attack ships that do not comply with Iran’s orders. Fujairah has experienced repeated Iranian attacks during this U.S. led operation. According to British maritime risk management company Vanguard, a "unknown projectile", which struck a tanker near the coast of Oman, hit 'this past weekend. Vanguard stated in a press release that the crew was safe, and the impact had caused some cargo leakage but not environmental damage. The statement did not say whether the tanker had been involved in a transfer from ship to ship. Iran's response to the U.S./Israeli conflict was to effectively close the Strait of Hormuz. This is where roughly a fifth of the world's oil consumption passes. This caused the largest global energy disruption in history, and sparked inflation all over the world. Ship-to-ship transfers are part of Trump?administration efforts to restore normal oil flow from the Gulf, even though they're risky and inefficient. Donald Trump, the U.S. president, said that Friday would be the reopening of Strait of Hormuz under a framework agreement with Iran announced earlier this week. Details are still vague. It was not possible to determine if the announced agreement had affected oil transfers. An investigation published on May 20 revealed that Iran had established its own system to guide ships through the Strait. This involved island checkpoints and diplomatic deals, as well as sometimes fees. STAGGERED Departures and Waypoints Eight sources confirmed that the U.S. Military is in full control of the American transfer operations, including the private security contractor involved with the transfers. According to satellite imagery and one source, tankers are required to sail to a rendezvous point before reaching the strait. They then stagger their departures to be around 3,000-4,000 meters apart. Four sources claim that their transponders and lights have been dimmed. One source said that the Americans "are obviously?watching" you at all times. The oil transfer begins when the tankers pass through the Strait just beyond the zone Iran has designated as its own. Many of the ships are Very Large Crude Carriers (VLCCs). The oil transfers take anywhere between 24 to 40 hours. The VLCCs are then loaded and sail through the Strait. This ship-to ship operation is possible because a few shippers are willing to navigate their vessels through this strait in order to deliver oil to waiting tankers despite the Iranian ban. The operation is dangerous. Noam Raydan is a Washington Institute senior fellow who specializes on maritime risk. He reviewed the findings. Iran has used the ship-to-ship method for years in order to avoid sanctions because it hides the source. Iran usually operates one pair of vessels at a given time to avoid detection, and also because its exports before the war were small. The U.S. led operation, which involves massive transfers, provides Gulf producers with better protection against Iranian retaliatory strikes so that they can move crude oil, condensate, and petroleum products to foreign buyers. The review included more than 12 satellite images, taken between 2 May and 11 June. These showed ship-to-ship transfers that involved state-owned Gulf oil tanker fleets as well as international vessels receiving the?oil. LSEG and Kpler data on shipping reviewed by revealed that tankers in the region met up repeatedly during the same time period. Based on imagery up to June 11, it is estimated that 90 million barrels or petroleum products have likely moved through the offshore system since early May. Based on the tankers carrying capacity, the volumes are still low compared to pre-war levels of approximately 20 million barrels per day that were passed through the Strait. Michael Froman wrote in a Friday note that "as the old rules are weakening, it is ironic that America now takes a page from the playbook used by China, Russia and North Korea. Their so-called dark fleets pioneered this technique precisely to evade U.S. sanctions and UN sanctions." He was referring the practice of sending vessels through the strait with no transponders. Trump made this comment in his comments on June 10, after the downing the Apache. Six sources who had direct knowledge of the operations said that the U.S. supported the?participating ships through a combination aerial surveillance, compliance screening, and monitoring instead of naval escort. No evidence was found that U.S. personnel were directly involved with the transfers. A review of shipping records shows that international tanker operators dominate the receiving side of the operation. Dynacom Tankers, a Greek company, has spoken of its attempts to find innovative ways to ship oil across the strait ever since the conflict began on February 28, 2008. George Procopiou (founder of Dynacom) told the Capital Link Shipping Conference in Athens on June 1 that "freedom of navigation" is essential. No one can impose any tolls, or other burdens. He said, "We're here to serve and Greece has a tradition of breaking blocksades since ancient times." "I won't go into details, but the hints should be enough for you to get my meaning." Dynacom has not responded to an immediate request for comment about the U.S. operations. A maritime source said, however, that the new system poses?its own risk to their industry. The source for maritime security said that there was a lack of reliable data. Transponders that communicate the location of ships are turned off and companies do not report through the usual reporting centers. This increases the risk of collisions between ships traveling at night without lights at speeds which make maneuvering difficult. Four sources with knowledge of the arrangements have confirmed that operators seeking to access the system must undergo a compliance assessment process before they are allocated transit window. This process involves submitting information to the U.S. Navy’s Naval Cooperation and Guidance for Shipping Office in Bahrain. Two preliminary documents of compliance reviewed by? Operators were required to provide geospatial track histories, beneficial ownership disclosures, cargo documentation, and be willing to allow cargo testing. Upon approval, the participating vessels will be assigned transit windows and remain in touch with the U.S. Military Office in Bahrain during the entire voyage. According to the shipping records examined by, Emirati exports make up a significant portion of the U.S. transfers. According to six of the sources, UAE's national oil company ADNOC was among the most active participants. Kuwait Oil Tanker Company is also involved in the transfers. TankerTrackers.com reports that 2.3 million barrels were siphoned off one of their ships on the coast of Sohar, June 6, which was one of the busiest transfer days. Five days later, the receiving ship Sea Ruby was seen off India's south-west coast, bound for China where cargo was to be discharged. Requests for comments from the UAE government, ADNOC, and Kuwait Oil Tanker Company were not answered. Raydan said, "I do not see a solution permanent to all this." "This is only a temporary fix in these exceptional times."
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UK minister rejects Thames Water rescue, nationalisation more likely
The British government rejected a PS10billion ($13billion) rescue plan for Thames Water. This increases the likelihood that the country's biggest water provider will be nationalised. Emma Reynolds, the Environment Minister said that she was "early in her assessment" of the proposals from creditors. She added that Ofwat would have the final word. The ruling should be made this summer before Thames runs out cash in the second half of this year. This is the only proposal on the table. The utility has been fighting off financial collapse for years, battling with PS20 billion in debt, heavy fines due to sewage pollution, and an aging infrastructure. BackLash Sewage Reynolds, a member of the House of Representatives, said that the plan would unfairly shift costs to consumers and delay environmental improvements. Reynolds was responding to public anger caused by years' worth sewage spills as well as rising bills. "We'll be ready for any eventuality, including SAR," said she, referring the special administration regime of the government, which is a temporary form of public ownership. The group of creditors, which included Invesco, Elliott Management, and Silver Point Capital?, said it didn't recognise Reynolds' characterisation. The spokesperson warned that SAR will require government support in the billions. SAR will keep the water flowing for Thames Water's 16,000,000 customers in London and Southern England. However, it could add to the public debt and discourage foreign investors from investing if there are large write-downs. Reynolds said that SAR can be triggered by either insolvency, or serious violations of license conditions including environmental standards. SYMBOLS OF FAILURE Thames Water is now a symbol of the failures in Britain's privatised sector for water. It has been blamed by some for the pollution of rivers, while its previous owners piled it up with debts and paid dividends. The government has declared the sector to be broken and is working towards a?overhaul, including plans for an alternative regulator that will replace Ofwat. Ofwat weighs the creditor plan, and balances record fines, including PS123 million in last year, against warnings of investment drying up without regulatory leniency. Last year, the U.S. Private Equity firm KKR walked out of a takeover offer amid uncertainty?over possible fines. Reynolds said that she is not convinced either by the creditors' demand to lower performance standards. The creditors plan would inject PS3,35 billion into Thames Water alongside a new PS6.55billion debt facility. PS9.4billion of debt will be written off. The plan, if approved by Ofwat, would need to be signed off by the High Court, and any changes in licences would have to go through a public consultation. Ofwat has not responded to the request for comment immediately. Thames Water stated that a market-led approach was the best solution to achieve its turnaround.
IG4 negocia o controle da Raizen com Moelis e Journey
O banco ?de investimentos independente Moelis & Company e ?a consultoria financeira Journey Capital, assessores dos credores ?da produtora de ?acucar e ?etanol Raizen, receberam ?ofertas nao vinculantes da gestora de private equity IG4 na noite de segunda-feira para adquirir creditos e o controle da empresa, de acordo com tres pessoas familiarizadas com ?o assunto.
Duas delas, entretanto, alertaram que qualquer acordo ainda esta ?longe de ser certo, sendo que uma acrescentou que os credores ?dificilmente chegarao a uma decisao em breve.
Ainda, uma das tres pessoas disse ?que os credores aceitaram a proposta da ?Raizen de converter ?divida em participacao acionaria por ser a melhor alternativa disponivel naquele momento, mas que prefeririam nao permanecer como acionistas. "Portanto, (o sucesso da proposta) vai depender 100% das condicoes oferecidas pela IG4", disse a ?pessoa.
IG4, Moelis e Journey Capital nao quiseram comentar.
A IG4, que recentemente se tornou ?co-controladora da petroquimica Braskem ao lado da gigante do ?petroleo Petrobras, ?busca adquirir o controle da Raizen, que acaba de concluir uma reestruturacao de ?divida de cerca de R$65 ?bilhoes com credores locais e internacionais, a maior reestruturacao extrajudicial ja registrada no ?Brasil.
Conhecida por buscar o ?controle ou co-controle de ?suas aquisicoes, a IG4 so avancara com a oferta se garantir ao menos 50% mais um dos creditos reestruturados, disseram as pessoas.
(source: Reuters)