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Russell: The increase in oil production by OPEC+ is not relevant for the time being, but for the future.
The decision of the core members to increase crude?oil quotas in September is easy to dismiss as a meaningless act, given the disruptions caused by?Iran's conflict. As long as the Strait of Hormuz is largely closed, and as long as there are no solutions to the threats to the Bab el-Mandeb, the oil-exporting groups will have little chance of being able to deliver what they agreed to produce. Saudi Arabia, Russia and Kuwait are among the seven OPEC+ members who have agreed to voluntary cuts in output. Algeria, Kazakhstan, Kazakhstan, Algeria, Kuwait, Kuwait, Saudi Arabia and Oman also agreed. The United Arab Emirates left the Organization of Petroleum Exporting Countries (OPEC) in May. This is the final phase of the rollback of the 1.65 million bpd cut in supply originally agreed upon in 2023. The production quotas don't matter for the time being. According to the latest survey, the eight OPEC members with quotas produced 20.276 millions bpd in June, which is 6.246million bpd less than the target. According to OPEC, Russia, the largest non-OPEC group member, produced 8.928 millions bpd during June. This was almost one million bpd less than its agreed quota. OPEC+’s decision to reverse voluntary production cuts has little weight on the current market. However, it highlights the challenges that oil exporters and buyers face. Three options The crude oil market is currently facing three scenarios, but it is unclear which one is most likely. First, Iran and the United States must reach a deal that allows unhindered and sustained passage through the Strait of Hormuz. Second, the conflict is sporadic, with periods when it 'elevates,' followed by hope of a pact and a truce, before these hopes are dashed, and drone and missile strikes resume. Third, the ladder of escalation continues. U.S. president Donald Trump orders strikes on civilian and energy infrastructure, and Iran responds by doing the exact same thing against Gulf states, including Saudi Arabia, Kuwait, and Iraq, that host U.S. base. Crude oil futures markets appear to be priced largely for the first option. Brent benchmark contracts fell 6.8% to $83.98 per barrel in early Asian trading on Monday. The price is 34% lower than the peak reached in the Iran conflict on April 30 of $126.41 per barrel. It is also only 16% above the $72.48 closing price on February 27, the day before Israel and the U.S. launched their strikes against Iran. Crude oil will likely drop quickly from its current level if the first option is chosen. OPEC+ will likely be able to increase production fairly quickly, and put more barrels 'on the market? at a time other producers are trying to maximize exports. A comprehensive peace agreement would also allow Iran to sell its crude oil openly, meaning that only Russian petroleum may be subjected to Western sanctions. If the second option prevails over the next few months, then the OPEC+'s decision to increase output is rendered largely insignificant. The question then becomes how well the Saudi exports through the Red Sea, the United Arab Emirates and the Gulf of Oman can compensate for the lost volume of oil from the Strait of Hormuz. This scenario will likely cause crude oil to be volatile, driven by headlines about Trump's tweets on social media. Markets hope that the third scenario will never happen, as it would mean long-term damage to the Middle East's energy infrastructure. This could lead to global economic pain as the world adjusts as up to 20% of its crude oil and liquefied gas supplies are lost. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
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Stocks rise on hopes of peace with Iran, but crude prices fall; yen firms after the intervention
?Signs of U.S.-Iran relations easing once again have set Wall Street on a positive course for August. Crude prices are up and stock futures are rising, as investors prepare for another week stuffed with economic and earnings data. S&P Futures were up 0.6% and Nasdaq Futures 0.4% in pre-market trading. The oil prices dropped sharply, while European stock exchanges continued to climb. The yen strengthened to its highest level in three months after the U.S. confirmed a joint intervention by Japan and the U.S. Brent crude futures fell $4.40 or more than 5% to $83.52 per barrel after U.S. president Donald Trump announced that talks with Iran will take place on Monday. He had previously called off an assault on Iran in order to pursue a plan to reopen Strait of Hormuz. European stocks rose by 0.4% in the first week of August. The German DAX set an intraday record, and last closed 1.4% higher. Bruno Schneller is the managing partner of multi-family office Erlen Capital Management. He said that "for equity markets, fundamentally, the picture remains positive". "Earnings are generally holding up well and companies with strong price power and resilient business models continue outperforming." Florian Ielpo's research from Monday, the head of macro for?Lombard Odier Investment Managers noted that over half of S&P 500 companies had reported earnings, and 86% of them exceeded earnings expectations. Investors have also considered possible consolidation in the healthcare industry, following a report that Bristol Myers Squibb, AstraZeneca and others had begun preliminary merger discussions about creating the largest drugmaker in the world, valued at nearly $400 billion. AstraZeneca's shares dropped almost 7% at one point on the reports of a possible tie-up. Asian stocks have struggled to start the month after a turbulent and wild July, when investors worried about massive capital expenditure on AI. Japan's Nikkei closed down 1%, while South Korea KOSPI fell more than 5%. The MSCI world stock index was flat as a result. YEN BEAR COWER FOLLOWING JOINT INTERVENTION The Japanese yen gained over 0.5%, reaching 156.77 against the U.S. Dollar after earlier that day it had reached its highest level since early May (155.2), putting traders on high alert for another round of intervention. Japan's Finance Ministry confirmed on Monday that the U.S. and Japan have conducted coordinated yen buying and will not hesitate to continue. This rare bilateral measure was taken to stop the yen from falling to its lowest level in 40 years. U.S. Treasury Secretary Scott Bessent said that the United States will consider in the coming months increasing the size of Federal Reserve's temporary dollar liquidity repurchase facility, describing the tool as an "important backup". Matt Simpson, a senior market analyst with StoneX, said that Besent's comments carry more weight than his intervention. It?feels safe to bet that the Japanese currency has reached its trough for the year. In these?markets, the words 'joint interventions' are a very important term. Trump said that the United States helped Japan support the yen on Sunday as a gesture of friendship and in order to benefit the global economy. Tokyo's unilateral intervention between late April to early May only caused a?brief yen recovery, while the Bank of Japan rate hike in the month of June provided little support. This highlights the challenges policymakers are facing due to rising oil prices, and the widening interest rate differential with other major economies. Before the recent interventions, the yen was anchored near 40-year lows at around 164 dollars per yen in recent weeks. Data from a US regulator showed that net short yen position had reached?roughly $12,5 billion, which is the highest level in two years. The regulator revealed. Bessent has repeatedly called for the Bank of Japan to increase interest rates. As oil prices dropped, yields on U.S. Treasury bonds fell elsewhere. The 30-year bond yield fell by over 5 basis points, to about 5.22%. This is a slight decline from the 19-year peak it reached last week. Investors were confused by the Iran War and the Federal Reserve's policy outlook in July. Reporting by Nell Mackenzie and Ankur Banerjee from London; Editing by Barbara Lewis, Kevin Liffey
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Thyssenkrupp aims to complete the spin-off of its Materials Trading Unit by October end.
Thyssenkrupp said on Monday that it expects the planned'spinoff' of its tk -accelis division, which deals with materials trading, to take effect at the end October. This was according to comments for a upcoming shareholder meeting posted on the company website. Thyssenkrupp said it will register?the spinoff? in the relevant commercial registries by the end of August. Thyssenkrupp, aiming to become a holding firm, announced plans in June to spin off its division, which accounts for almost a third of group sales. At an extraordinary meeting, shareholders will vote on whether or not to spin-off 49% of division. In an interview with Handelsblatt published on Monday, Ilse?Henne, the CEO of the unit, said: "We have already had very positive discussions" Henne told The Paper that the spin-off will allow the unit to drive their 'own growth' in high-margin industries, with the expansion planned focusing primarily on North America. Henne stated that 'additional to organic growth', Henne also said growth through acquisitions was on the table. The Supervisory board of?tk Accelis Group AG and?Co. KGaA, according to Monday's remarks, will consist of a total 10 members.
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MORNING BID AMERICAS - Much 'to Do' about yen interventions
What is important in the U.S. and international markets today by Mike Dolan Editor-at-Large of Finance and Markets The yen strengthened further on Monday, as the U.S. government and Japanese government confirmed their first joint interventions since 2011 to "prop up" the ailing currency. The timing and the impact of this move will be closely examined. Below, I'll go into more detail about that. Listen to the latest episode of the Morning Bid podcast. We discuss the 'historic' intervention, U.S. earnings growth, and the latest news on Iran. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. MUCH "TO DO" ABOUT THE YEN INVESTIGATION There are many questions regarding the timing of Friday’s joint yen-intervention. Last week, the Bank of Japan delayed a second interest rate increase, in part because of the recent earthquake that struck the country. Perhaps Tokyo and Washington were worried about the impact of this decision on the yen. There's also the possibility of a Federal Reserve interest rate increase as early as next month. Scott Bessent revealed that the U.S. will spend between $5 and $10 billion. Both sides are determined to continue the effort, whether it is successful or not. The fallout could 'aggravate U.S. Bond yields, on the assumption that Japan - the largest overseas creditor of the U.S. Government - would liquidate Treasuries in order to raise dollars to sell. Bessent said, however, that a Fed Repo facility was activated using Japan's bonds as collateral. Treasuries are also benefiting from the latest pause by President Trump in his bombing of Iran. This comes at a time when he is claiming that fresh talks will take place between both sides on Monday. Oil prices fell over 5% as a result of the recent development, to below $84 a barrel. Asia's stock markets began the week with a loss, as South Korea's volatile KOSPI fell more than 5% after a record rally on Friday. Wall Street futures were higher before the bell. This week, the U.S. employment report for July will be released, and the U.S. earning season continues, with companies like Palantir AMD, SpaceX, and AMD reporting. LSEG data shows that the S&P 500 aggregate annual profit growth reached a staggering 47% in second quarter. This is almost twice as much as was predicted a month earlier, thanks to the combination of Big Tech's AI push and a record-breaking quarter for Big Oil and Big Banks. In recent decades, this level of growth was only surpassed by the rebound from the pandemic recessions and the banking crash. There's no recession this time, but there was one in the past. The staggering growth in earnings helps to explain why dip-buying, sectoral rotation and not cashing out are preferred responses to the recent volatility on Wall Street. AstraZeneca's shares dropped sharply Monday after reports that merger talks were underway with Bristol Myers Squibb. This would have created one of the largest drugmakers in the world with a combined worth of $400 billion. Chart of the Day The U.S. & Japan bought?yen last week against the dollar & euro in their first joint action since 2011. They promised to take more action if and when needed. The yen briefly reached its highest levels since early May, after the U.S. and Japan intervened last week. Sanae Takaichi has been in office for nine months and during that time, currency weakness has become a feature of her tenure as Prime Minister. The Bank of Japan's perceived pressure to not raise interest rates and the recent fiscal spending of Japan have all been factors. But so has speculation over how Japan will finance the hundreds of billions of dollars of U.S. investment pledged in the bilateral trade agreement between the two nations. Watch today's events * U.S. ISM manufacturing PMI for the month of July (10 am EDT) Palantir: * U.S. Corporate earnings Want to receive Morning Bid every morning in your email? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed here are the author's. These opinions do not represent those of News. News is bound by the Trust Principles to maintain integrity, independence and freedom from bias. (By Mike Dolan).
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Greek crews continue to fight wildfires northwest of Athens
On Monday, hundreds of Greek firefighters fought a wildfire north of Athens for a fourth consecutive day after strong winds fanned the flames that destroyed thousands of hectares and pine forests and ruined homes. A Greek and a Danish citizen died after a helicopter crash on Sunday, after they had a close call with another helicopter in mid-air. The crew of a second firefighting helicopter, consisting of a Greek and Briton, also survived the incident. It occurred near the seaside village of Psatha about 40 miles south of Athens. Images showed that 21 aircraft and strong firefighting units were deployed early Monday near the communities Kandili, and?Agia Skepi as plumes of black smoke and flames enveloped lush pine forests. A Greek fire brigade official said that local authorities used heavy machinery to create fire breaks in order to prevent the wildfires from spreading. Wildfires have ravaged Europe this summer, following a period of record heat and low rainfall. Scientists say that the fast-changing climate has exacerbated these conditions. France and Spain were?particularly hard-hit, although the destructive fires there have abated at the weekend. Faulty power lines The Sunday air crash comes after a bleak week for the Greek emergency services. On July 29, three firefighters died in separate incidents on Crete and the Peloponnese, a startling beginning to a season of fires that had been, by local standards, relatively mild. The Greek authorities are trying their best to determine the cause of a mid-air collision between two helicopters. They were both flying low and the rotorblades of one appeared to hit the undersides of the other. Kostas Katsafados, Deputy Climate Crisis -Minister, told ERT that the impact of climate change is causing an unequal fight. Strong winds in recent days prevented water bombers from dumping seawater into the affected area. This left 'ground forces' to battle the fires alone. The Greek fire brigade reported that a preliminary investigation indicates the cause of the recent fire outbreak, which started in the area of Boeotia northwest of Athens and spread to a pine forest near Athens, was sparks from vibrating conductors of a private power line carrying electricity from wind turbines. Two Greek nationals - an electrical engineer and a contracting firm - have been arrested on felony charges for arson. In recent years, Greece's wildfires have been primarily caused by faulty power lines. This is more than arson or negligence. (Additional reporting and writing by Angeliki Kooutantou, Renee Maltezou, LefterisPapadimas. Editing by Susan Fenton.
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Copper prices rise on the back of falling inventories
Copper prices reached their highest level in over a week Monday, as lower oil costs eased concerns about economic growth and demand. The market was also focusing on dwindling stocks. Benchmark copper prices on the London Metal Exchange were up 0.6% to $13,876 per metric ton at 0903 GMT, after reaching $13,900. This was their highest price since July 22. The drop in oil after U.S. president Donald Trump called off his 'fresh attack' on Iran to seek a deal that would curb Tehran’s nuclear ambitions eased concerns about price pressures, according to traders. Britannia Global Markets stated in a report that "the markets are still headline driven as we begin the week. Energy markets remain the main focus." The underlying fundamental picture for copper appears to be supportive. The inventories in the London Metal Exchange and China Metal Exchange are in a depletion state. The copper stocks registered at the LME have dropped by nearly 40% since May, to 244,025 tonnes. This is their lowest level since February. Since February of last year, producers and traders have shipped copper to the United States, after President Donald Trump threatened to impose import tariffs. This created a premium in U.S. Copper over LME Prices. The U.S. Commerce Department had to finish a review on the copper market before?June 30 but Trump hasn't yet announced any decision regarding tariffs. Nickel prices fell in other parts of the world after Indonesia resumed its exports. This eased supply concerns for the near future. The contract for three months was down by 1.2% at $17,040 per ton. Indonesia's Chief of Staff Dudung Abdurachman said the ban only applied when rare earths was the primary product. The clarification has reportedly reduced the 'fear of prolonged disruptions to Indonesian nickel shipments. Officials have yet to finalise testing procedures and concentration limits. Other metals saw a 1% gain in aluminium to $3.215 per ton. Zinc rose 1.1% to $3.682 and tin remained unchanged at $55,295.
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Oil prices fall on hopes for a peace agreement with Iran and yen firms following intervention
On Monday, oil prices plunged sharply and European stock markets rose as hopes grew of a peace agreement in the Middle East. Meanwhile, the yen strengthened?to an all-time high after the U.S. confirmed a joint intervention to?support a weak currency. Brent crude futures fell $4.50 or more than 5% to $83.40 per barrel after U.S. president Donald Trump announced that talks with Iran would take place on Monday. He had previously called off an assault on Iran in order to pursue a plan to reopen Strait of Hormuz. European stocks rose 0.4% on Monday, kicking off August in a positive note. The German DAX set an intra-day high and closed the day up 1.3%. Bruno Schneller is the managing partner of multi-family office Erlen Capital Management. He said that "for equity markets, fundamentally, the picture remains positive". Companies with resilient business models and strong pricing power continue to outperform. S&P futures increased by 0.5%, while Nasdaq Futures gained 0.6%. Florian Ielpo's research, Monday, as head of macro for Lombard Odier Investment Managers noted, showed that 86% of companies had surpassed earnings expectations. Asian stocks suffered as the new month began, following a turbulent and wild July that saw investors worry about massive investments in AI. Japan's Nikkei fell 1% while South Korea's KOSPI dropped more than 5%. The MSCI world stock index was flat as a result. YEN BEAR COWER FOLLOWING JOINT INTERVENTION The Japanese yen gained over 0.5% to 156.70 US dollars after a sudden movement earlier in the day, when it reached its highest since early May at 155.2. This put traders on high alert for further intervention. Japan's Finance Ministry confirmed on Monday that the U.S. and Japan conducted a coordinated yen buying intervention, and they will not hesitate to continue, as a rare bilateral measure to stop the yen from falling to its lowest level in 40 years. U.S. Treasury Sec. Scott Bessent said that the United States will also consider in the coming months increasing the size of Federal Reserve's Repurchase Facility providing temporary dollar liquidity, calling this tool an "important backup". Matt Simpson, senior market analyst at StoneX, said that Besent's comments carry more weight than his intervention. It feels like the Japanese yen is at its lowest level for the year. "Joint Intervention" is a phrase that has a lot weight on these markets, and it's rarely used." Trump said that the United States helped Japan to 'prop up the yen' as a show of friendship and in order to help the global economy. Tokyo's unilateral intervention between late April to early May caused only a short?yen recovery, whereas a rate increase in June by the Bank of Japan gave little support, underlining the challenges policymakers face due to rising oil prices and an interest-rate gap with other major economies. Before the recent interventions, the yen was rooted at a 40-year low of 163.99 dollars per yen, and net short positions were around $12.5 billion. This is the largest amount of money that has been held in the yen in the past two years. Masahiko loo, senior fixed-income strategist at State Street Investment Management, said that 155 is the next level to watch. Bessent's?actions and comments, in which he repeated his call for further interest rate hikes from the BOJ, have brought monetary policy into focus. Elsewhere, ?U.S. Treasury yields fell as oil prices dropped. The 30-year bond yield fell 4.5 basis point to around 5.23%. This is a slight decline from the 19-year high reached last week. Investors were confused by the Iran War and the Federal Reserve's policy outlook in July. Reporting by Nell Mackenzie and Ankur Banerjee, both in London; editing by Muralikumar Anantharaman and Jacqueline Wong.
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UK bond yields drop as oil prices fall on renewed hope for a peace agreement with Iran
British government bond yields fell 'on Monday, as oil prices dropped by $4 per barrel after U.S. president Donald 'Trump announced that he would be resuming talks with Iran and calling off military strikes. At 0715 GMT, the yields on two-year gilts, which are sensitive to interest rate forecasts in the short-term, fell by?around nine basis points to 4.325%. This was a greater fall than that of German or U.S. government bonds. The 10-year gilt yields fell?below 5 percent, falling by?8 basis points to 4.975%. Meanwhile, the 30-year gilt rates were also 8 basis points lower at 5.702%. Michiel Tukker is ING's senior UK and Euro zone rates strategist. The relationship between rates and oil prices is not easing. Tukker said that the longer oil prices are elevated, the greater the chance of a second-round inflation effect. Suban Abdulla reported; David Milliken edited.
India's ONGC will reserve half of its new oil storage space for strategic reserves
Suresh Gopi, India's junior oil minister, told lawmakers that the Oil and Natural Gas Corp would reserve half of their planned 1,75 million metric tons (about 13,000,000 barrels)oil-storage facility in order to meet strategic needs for the country. ONGC is India's largest oil explorer and announced last month plans to build a strategic?petroleum storage facility at Mangaluru, Karnataka, where its Mangalore Refinery & Petrochemicals subsidiary operates a refinery that can process 300,000 barrels of crude oil per day.
New Delhi has expanded its Strategic Petroleum Reserve with private participation.
Indian regulations allow commercial use of a portion of the existing SPR storage in southern India, built at three different locations: Mangaluru (in southern India), Padur (in central India) and Vizag (5.33 million tons). The Indian Strategic Petroleum Reserves Ltd. (ISPRL) manages these storage facilities.
MRPL already leased the half of the?1.5million ton Mangaluru SSPR.
Gopi said India also has the ability to store crude oil, petroleum products, and offshore facilities to meet 74 days' worth of its net crude import requirements, including inventories in refinery tanks, offshore installations, and its 35,000 km (22,000 mile) pipeline network.
India is planning to build a strategic storage facility of about 4 million tons at Chandikhol, in the eastern state of Odisha. A new facility of 2.5 million tons will be built at Padur, in southern India.
Gopi stated that ISPRL had?acquired land for the Chandikhol Project, which is estimated at 90 billion Indian Rupees (944.44 million dollars).
(source: Reuters)