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The Gulf countries benefit from higher oil prices before Fed policy
The major Gulf stock markets rose early on Tuesday as a result of a rise in oil prices. Investors were also awaiting the Federal Reserve's meeting to discuss monetary policy. Oil, a key financial market catalyst in the Gulf, gained over $1 per barrel on technical factors, and after bargain hunters reacted to OPEC+'s decision to increase output, which had sent prices lower the previous session. However, concerns remained about the outlook for a surplus of oil on the market. Saudi Arabia's benchmark stock index rose 0.3%. This was boosted by the 0.7% increase in Saudi Arabian Mining Company, and a 0.3% rise in Saudi National Bank, the country's largest lender. Saudi Aramco, the world's largest oil company, added 0.2%. Separately the budget airline of the Kingdom, flynas - backed by billionaire prince Alwaleed Bin Talal - plans to launch a public offering this month. It will be the first IPO for a Gulf carrier in almost two decades. Dubai's main stock index rose by 0.4%. This was led by Emaar Properties, a blue-chip developer that gained 1.1%. In Abu Dhabi the index rose by 0.2%. We will closely monitor the Fed's decision to raise interest rates on Wednesday, as well as Jerome Powell's remarks. Since last December, the Fed's policy rate has been in a range of 4.25% to 4.50%. The Fed's actions impact the monetary policy of the Gulf where the majority of currencies, including the Riyals, are pegged with the U.S. Dollar. Qatar National Bank, the Gulf's largest lender, rose 1%, while the Qatari Index was up 0.3%. Despite this, there is still caution due to the renewed concern about U.S. Tariffs and their possible impact on economic growth. Donald Trump, the U.S. president, announced on Monday that he plans to announce pharmaceutical tariffs in the next two week.
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EU is preparing its response to the US tariffs expansion by keeping all options open
Maros Séfcovic, European Trade Commissioner, said that the European Union is prepared to counter the numerous U.S. Tariffs on EU Imports during President Donald Trump’s 90-day pause. The EU Trade chief stated that U.S. Tariffs cover 70% of EU Goods Trade to the United States. This could increase to 97% if further U.S. Investigations into Pharmaceuticals, Semiconductors and other Products are conducted. Sefcovic stated that a solution negotiated with the United States was the EU's preferred and clear outcome. He said in a European Parliament debate that the U.S. must now show it is willing to move forward towards a fair, balanced solution. The EU27 faces import tariffs from the US of 25% on steel, aluminium, and cars. "Reciprocal" tariffs are also in place at 10% for most other goods. These tariffs could increase to 20% following President Donald Trump's 90 day pause. Sefcovic stated that the European Union will use the pause up until the 8th of July to prepare rebalancing and level-playing field measures if the talks fail. Sefcovic stated that "all options are still on the table." Sefcovic said that the European Union had suspended its own countermeasures in response to steel tariffs, to allow for negotiation. However, they appeared to have made limited progress. Sefcovic added that the European Union will also be on guard against any possible import surges caused by trade diverted due to Trump's tariff walls. He said a taskforce set up to monitor diversion of trade would produce its initial results in mid-May. (Reporting and editing by Sharon Singleton; Philip Blenkinsop)
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Uniper, a German company, has recovered more claims from Gazprom.
Uniper said Tuesday that it had recovered more claims from former Gazprom main supplier during the first quarter. This is the latest update in the ongoing legal dispute between the two groups. According to EU officials, the news comes at a time when the European Union will publish plans to phase out the remaining gas supply agreements with Russia in the bloc by the end 2027. Uniper is locked in a legal battle with Russia's Gazprom. The two have been at odds since the delivery of its natural gas stopped in 2022. This forced Berlin to bail out the German utility for 13.5 billion euros ($15.3 billion). Uniper won a significant legal victory in the last year, when an arbitral tribunal awarded damages of more than 13 billion euro for gas volumes that were not supplied by Gazprom. Uniper's first-quarter report, published Tuesday, included the "revenue from enforcement activities against Gazprom export", which is Russian firm's export division. The utility refused to comment on how much money was made or other details about it. It only said that any claims that were realised would be transferred to Germany as part of the bailout agreement. Uniper has repaid state aid to the tune of 3.1 billion Euros, including 530 millions euros in payments withheld from Gazprom. A St. Petersburg court ruled last year that Gazprom export could demand more than 14 billion Euros from Uniper if it pursued arbitration. Uniper was able to assert claims against Gazprom Austrian division based on previous court decisions. This caused the business to declare insolvency by 2023. Gazprom declined to comment on a question. Reporting by Tom Kaeckenhoff and Christoph Steitz. Vladimir Soldatkin contributed additional reporting. Friederike Heine, Mark Potter and Friederike Hine edited the article.
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Chemical manufacturer Covestro reduces its profit forecast for 2025 and plans to increase local production
Covestro, a German chemical company, cut its core profit forecast for 2025 on Tuesday and announced that it would continue to produce in the same area as it sells. This is because higher U.S. import tariffs are threatening the earnings of the chemical manufacturer. The company has narrowed its range of expected earnings before interest tax, depreciation, and amortization for 2025 to 1 billion to 14 billion euros ($1.13b to $1.59b). The company had forecasted EBITDA to be in the range of 1.0-1.6billion euros. Covestro and LyondellBasell announced that they had both permanently closed their Propylene Oxide Styrene Monomer production units at the Maasvlakte plant in the Netherlands. It said last year it hoped by the end 2028 to save 400 millions euros on material and personnel costs worldwide, with less than half of this coming from Germany. The CFO Christian Baier said that local production would save money because "many of our products cannot be transported across oceans, and they are associated with high transport costs." This includes Asia and the United States. After an unprecedented drop of order volumes due to high energy prices and inflation since 2022 the energy-intensive chemical sector could face U.S. tariffs at least 10%. Covestro's EBITDA dropped 50% in January-March to 137 millions euros, but exceeded analysts' average estimates of 125million euros according to a consensus provided by the company. Early trading saw shares fall by 1.1%. A regulatory filing posted on the website of the European Commission in April indicated that EU antitrust regulators were expected to decide by 12 May whether or not they would approve ADNOC, Abu Dhabi's state-owned oil company, for its planned 15.9 billion euro acquisition of Covestro ($17.2 billion).
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India's April Diesel Exports are likely to have reached the lowest level for over a decade.
Analysts and trade sources said that India's diesel imports in April likely reached their lowest level for over a decade as Reliance, a major exporter, cut refinery output to maintain equipment at a time of robust domestic demand. India, Asia's third largest diesel exporter, exported approximately 1.15 million metric tonnes (9.69 millions barrels) of this industrial and transportation fuel during April, according to a combination of data from LSEG Kpler Vortexa, and two other trade sources. According to official data, this would be the lowest level since February 2012. It is also a substantial drop from the nearly 1-1/2-year high of 2,83 million tonnes registered in March. The official export figures for April will be released in the last weeks of May. Charles Ong, senior analyst at LSEG Oil Research, wrote that the unexpectedly low Indian oil exports for April led to limited supplies being sent to Asia and Europe. India's drop in exports has partially supported Asia's 10-ppm spot gasoil premium For most of April, the price of oil rose to its highest level for more than three months. Prices jumped from 16 cents to $90 per barrel. Reliance Industries in Jamnagar, western India, which operates the largest refinery complex in the world, closed some of its units in April for maintenance. According to two sources and LSEG, the company's exports of diesel fell to 800,000 tonnes in April. Reliance didn't immediately respond to an inquiry for comment. Data shows that Mangalore Refinery and Petrochemicals sold just one cargo in April. Normally, the company exports three cargoes of 65,000 to 70,000 tons per month. One refinery source said that the rest was likely sold on domestic markets. He added that the higher jet fuel margins in India encouraged refiners to produce more aviation than diesel. The discount between jet-fuel and 10ppm gasoil in April was around 80 cents per barrel, down from over $1 per barrel in March. Two sources say that exports for May are expected to increase to 2 million tonnes, due to Reliance's return to production. One of them stated that MRPL would begin maintenance on one of its crude units which will limit diesel exports.
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Data shows that the price of oil in Russia is at a two-year low and 40% below the budgeted amount.
Data showed that the price of oil in Russia in roubles had fallen to its lowest level in two years, below the 4,000-rouble mark per barrel, and was 40% less than what the federal budget planned. This increased pressure on the Kremlin which is already struggling with a growing budget deficit. Global oil prices are down over 10% for six sessions in a row, and over 20% in the past year since U.S. President Donald Trump’s tariff shocks in April prompted more bets that global economic growth would slow. The oil prices also fell following the Organization of the Petroleum Exporting Countries' (OPEC) decision to increase output. This group, led by Russia and known as OPEC+, has accelerated the production of crude oil. Calculations show that the average price for Russia's Urals and ESPO blends dropped on May 2, to $48.92 a barrel or 3,987 roubles. This is 40% less than the 6,726 roubles originally planned by the government. According to data, this is the lowest level since May 2023. The price of the Russian oil blend used to tax is still below the government's recently revised forecast at 5,281 roubles a barrel. Trump said that Vladimir Putin, the Russian president, was more inclined to peace following the recent drop in oil prices. Last week, the fall in energy prices, which accounts for one-third of the federal budget's proceeds, led the Russian government to increase the estimate of the budget deficit for 2025 to 1.7% of the gross domestic product, from 0.5%. It was a response to a reduction of 24% in the forecasted energy revenue due to expectations that oil prices would remain low for a long period. Russia has already increased its state defence spending by a quarter to 6.3% in 2025, the highest since the Cold War. The country is still fighting in Ukraine and this war is now in its 4th year. Analysts believe the government has no choice but to raise taxes, cut some social spending that is sensitive, and borrow heavily to balance budgets in the future without cutting defense spending. According to data, the average Russian oil price per barrel has been falling in recent months. It was 5,079 Roubles in March to 4,562 Roubles in April. Reporting and Editing by Andrew Osborn
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Dalian iron ore prices flatten as China's data is weakened by hopes for a Sino-US trade agreement
Dalian iron-ore futures were unchanged on Tuesday as investors weighed the hopes that trade tensions between China and the United States would ease against disappointing Chinese economic data. The daytime trading price of the most traded September iron ore contract at China's Dalian Commodity Exchange was 704.5 yuan (US$97.58). As of 0708 GMT, the benchmark June iron ore traded on Singapore Exchange was $97.45 per ton up 0.92%. The U.S. president Donald Trump announced on Sunday that the U.S. was meeting with a number of countries for trade agreements, including China. This boosted sentiment, and sent Chinese stocks higher Tuesday. China's Commerce Ministry announced on Friday that Beijing was "evaluating" Washington's offer to hold discussions over Trump's tariffs of 145%. A private sector survey revealed that China's service activity expanded at its slowest rate in seven months during April due to uncertainty caused by U.S. Tariffs. Hexun Futures, a broker, stated that the steel market is worried about overseas recession risk sparked off by tariffs. Anti-dumping measures will negatively impact future steel demand. Mysteel, a consultancy, reported that production among Chinese blast-furnace steel producers increased during the period April 25-30. Hexun stated that downstream demand will be weaker in May as domestic demand shifts to a low-season and external demand faces challenges due to the tariffs. Steelhome data revealed that the total stockpiles of iron ore across Chinese ports increased by 2.24% in a week to 136.8 millions tons on April 30. Coking coal and coke, which are both steelmaking ingredients, were down by 1.73% and 2.8% respectively. The benchmark steel prices on the Shanghai Futures Exchange were flat. Rebar fell by 0.61%; hot-rolled coils dropped by 0.19%; stainless steel rose around 0.4%, and wire rod was flat. $1 = 7.2200 Chinese Yuan (Reporting and editing by Sumana Nandy, Rashmi aich and Michele Pek)
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Ghana Joint Venture talks halted by AngloGold Ashanti and Gold Fields
AngloGold Ashanti, Gold Fields and the Ghanaian government have agreed to suspend talks on merging their two mines, Iduapriem and Tarkwa, which are adjacent. The companies announced this Tuesday, nearly two years after they first announced the plan. Ghana's government has yet to decide whether or not to approve the regulatory approval for the plan to combine two mines that would have created Africa’s largest gold mine. The companies decided to stop discussing the joint venture in order to concentrate on improving their current performance, as a standalone entity, at each of their sites. Gold Fields stated in a separate press release that, while the combination of both mines was "compelling", each miner would continue to focus on its respective operations "on an individual basis". According to the joint venture agreement, Gold Fields would own 60% of the combined operation and AngloGold 30%, respectively. The government would hold 10%. It was estimated that the joint operation would produce 900,000 to 600,000 pounds of gold annually in the first five-year period and over an estimated 18 years.
Interfax reports that the Russian economy ministry has cut its Brent price forecast for 2025 by almost 17%.
Interfax reported on Monday morning that the Russian economy ministry had reduced its forecast of the average price for Brent crude in 2025 from the amount it thought the price would be in September by almost 17%.
Interfax reported that in the ministry's baseline scenario for economic forecasts of 2025, the average price of Brent is expected to be $68 per barrel, down from $81.7 per barrel in the September forecasts.
The Ministry of Finance estimates that the price of Urals, Russia’s main blend, is $56 per barrel, compared to the $69.7 per barrelle on which Russia based its budget for 2025.
The agency quoted a ministry representative as saying, "We think that this is an estimate which is fairly conservative."
Oil and gas revenues account for a third (or more) of the budget.
In April, the Russian central bank had warned that due to a lower global demand, oil prices may be lower for several years than expected.
Urals prices dropped to their lowest level since 2023 early April, trading at around $53 a barrel. They traded below $60 per barrel last week.
The ministry said that it did not expect a recession to occur due to the trade wars of U.S. president Donald Trump and believes global growth will be slightly higher than 2% this year.
Interfax quoted the representative of the ministry as saying: "The world's still bigger than the United States. So some flows will be directed."
The Ministry maintained its forecast of 2.5% for the gross domestic product (GDP) growth in Russia and raised its inflation forecast from 4.5% to 7.6%.
The rouble is also expected to be slightly stronger this year than it was previously forecasted, with an average of 94,3 roubles for every dollar, compared to an earlier prediction of 96.5.
(source: Reuters)