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Sources say that OPEC+ is set to increase oil production again in June.
Four sources familiar with the matter said that eight OPEC+ nations will likely agree on Saturday to a further accelerated increase in oil production for June. This is the latest step of a plan designed to undo the most recent layer of cuts made by the group. The eight countries increased their output by 411,000 barrels a day in May. This decision, along with the U.S. tariffs on trade, helped drive oil prices to a 4-year low below $60 per barrel. After moving the meeting from Monday to today, the countries will hold an online discussion to decide on June's output at 1000 GMT. Four sources told Reuters that a similar hike to the one approved in May is likely to be approved by the four countries for June. Oil prices dropped over 1% Friday, as traders prepared for more OPEC+ supplies. Concerns about an economic slowdown due to a trade conflict between the U.S. Brent crude futures closed Friday at $61.29, down 84 cents or 1.4%. This week, it was reported that Saudi Arabian officials, de facto leaders of OPEC+ and allies, had informed industry officials and other officials that they were unwilling to support oil markets by cutting further supplies. Sources have reported that Riyadh is angry because Kazakhstan and Iraq are producing more than their OPEC+ target. Helima Croft, an analyst at RBC Capital Markets, also said that she didn't think a decision had been finalized but "discussions seem to be leaning towards another three-month hike". Croft added, "Compliance appears to be a key focus. Kazakhstan, Iraq, and Russia continue to miss their targets for compensation. OPEC+ (which includes the Organization of the Petroleum Exporting Countries, as well as allies like Russia) is reducing output by more than 5 million bpd. Many of these cuts will remain in effect until the end of the year 2026. The group intends to hold a full-ministerial meeting on the 28th of May. (Reporting and editing by Barbara Lewis, Maha El-Dahan, and Ahmad Ghaddar)
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US worker safety agency informs employees of terminations
The Trump administration terminated employees late Friday of a worker safety and health agency, which provides services and research for coal miners and firefighters, despite pleas from a Republican lawmaker to keep its programs. According to a copy of these notices, the National Institute for Occupational Safety and Health employees received notices of reduction in force that stated the job losses would be necessary to reshape workforce of Department of Health and Human Services. The union representing NIOSH's employees reported that, while nearly all employees were put on administrative leave during February, around 40 employees who were responsible for coal mining and firefighter safety had been asked to temporarily return to work a few days earlier. Two of these employees have been terminated. U.S. U.S. After regular business hours, the Department of Health and Human Services (which oversees NIOSH) did not respond immediately to a comment request. A spokesperson said earlier this week that NIOSH functions will join multiple agencies in the new Administration for a Healthy America. It is not known if any of the terminated staff will be relocated. Last month, it was reported that the NIOSH key services had been halted, which meant vital health and safety programmes for coal miners were no longer available, including mobile health screenings and lung screenings. Another program, to move miners with black lung to less dusty areas of a mine, has also been discontinued. In the past decade, black lung disease has resurged among coal miners of all ages. The President Donald Trump is leading a high profile campaign to revive coal use and mining in the U.S., which was declining.
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PD Ports Outlines Plans to Develop UK Offshore Wind Hub
U.K.-based PD Ports has outlined its plans to develop one of the U.K.’s largest offshore wind manufacturing and installation hubs - the Teesport Offshore Gateway.The proposed project could unlock 180 acres of development potential for a range of offshore manufacturers, assembly, marshalling and supply chain support services.Representing a multi-million-dollar investment in the River Tees, the Teesport Offshore Gateway would include an up to 1 km long deep-water riverside quay, permitting unrestricted access to the North Sea and suitable for both floating and fixed bottom offshore wind development. Set within the heart of PD Ports’ Teesport industrial port complex, the U.K.’s sixth largest port, the site offers a strategically located position for development, supported by quality infrastructure, strong road and rail links and a skilled workforce. While the plans are at an early stage and subject to a variation of existing deep water berth development consents, it is anticipated that development of Teesport Offshore Gateway could cost in the region of $267 million and would secure critical port facilities in support of the Government’s offshore wind development ambitions.PD Ports is looking to engage with the offshore renewables sector to explore the potential of the proposals, working with original equipment manufacturers (OEM), developers, the UK Government and industry experts to shape the strategic direction of the site and identify opportunities for collaboration and funding. It is hoped that by announcing the initiative at an early stage, insight from the offshore sector will aid the design of more detailed plans to meet future industry requirements. The site has already secured both planning consent and marine consent, subject to amendments, to extend an existing riverside berth to develop the 15.5m deep-water mooring, which would be large enough to accommodate all current and planned offshore installation vessels available globally.The creation of a new deep-water berth for Teesport will also future-proof the port, opening up wider opportunities for additional bulk and container facilities, in support of PD Ports’ existing Teesport Container Terminal and the Tees Bulks Quay. “As the U.K. and the wider world turns its attention to large-scale renewable energy sources, here at PD Ports we see the opportunity – and the responsibility – to play our part by offering an offshore wind development site that is perfectly positioned to unlock the capability of our region, not only as a hub for trade and industry, but also to deliver the clean energy revolution.“Teesport and the River Tees has everything required to successfully operate what we believe will be one of the largest offshore wind manufacturing and assembly hubs on the east coast of the UK, offering unrivalled access to the North Sea.“Although these proposals are at an early stage, we are confident that this development will support the UK Government’s ambitions for future offshore wind power generation,” said Frans Calje, chief executive officer of PD Ports.
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Shareholder returns from Big Oil show a split in production strategies
Big Oil's earnings for the first quarter of 2018 show a clear division in how companies are positioning themselves to weather a downturn caused by the drop in oil prices, which reached a four-year-low in April. Investors focused on the question of whether companies would reduce share repurchases because lower crude prices would mean that they would have less cash available to fund these programs. Investors' interest in the oil sector is largely driven by buybacks and dividends. Exxon Mobil, a US oil company, and Shell in the UK kept up their share buybacks. Chevron, a U.S. oil company, and BP (a UK-based oil company) said that they would decrease buybacks during the second quarter. The differences reflect where each company is at in its business cycle. Exxon's Guyana oilfield has produced prolifically, making it the largest offshore oil discovery in more than a decade. Exxon, a major player in both the Permian basin, the largest U.S. oilfield in terms of production, and in Guyana, has increased its production by 20 percent year-over-year. Exxon CEO Darren Woods said that both areas are highly lucrative and the company is trying to reduce its operational costs. Woods stated in the first-quarter earnings report of his company that "in this uncertain market our shareholders can have confidence in knowing that we are built for it." This week, oil prices fell to their lowest monthly level since 2021 as investors priced the impact of U.S. President Donald Trump’s trade policies on the global economy and fuel demand. Exxon had a net debt-to-capital of 7%. Kim Fustier of HSBC's European Oil and Gas Research said that Exxon was the only integrated company to not have increased its net debt in the third quarter. Chevron's oil and gas production in the first quarter of the year was the same as the previous one, due to a combination of growth in Kazakhstan and Permian and a loss from the sale assets. In an attempt to streamline the business and reduce costs by up to $3 billion, Chevron announced earlier this year that it would be laying off up to 20 percent of its employees. Chevron wants to get into the Guyana game by acquiring Hess, one of Exxon’s minor partners in the project. Exxon has been in arbitration for that deal and claims the right of refusal over Hess stake in the project. Exxon bought $4.8 billion worth of shares in the first quarter. This puts it on track to reach its annual goal of $20 billion. Chevron announced that it would reduce its buybacks from $3.9 billion to $2 billion-$3.5 billion during the current quarter. This is a reduction of $3.9 billion made between January and march. Jake Behan is the head of capital market at Direxion, a financial products company. He said that Exxon was able to maintain its buybacks due to low production costs, while Chevron reduced theirs as oil prices fell. Shell impresses, BP disappoints In Europe, Shell’s first-quarter results exceeded analyst expectations. The company announced that it would buy $3.5 billion of shares in the next three month, marking the 14th quarter in a row of a program worth at least $3 billion. BP's profit fell by 48% to $1.4 billion, missing earnings expectations. It also reduced its share buyback from $1.8 billion a quarter to $750 millions a quarterly. Biraj Borkhataria is an analyst with RBC Capital Markets. He said that after the disappointing results BP may miss consensus expectations by 20% for the second quarter earnings. He wrote: "The combination (of a weaker free cash flow), higher leverage and patchy implementation leaves us more conservative on the name in comparison to peers." After a failed effort to aggressively move towards a low-carbon business model, the British oil major has shifted its strategy back to oil and gas. BP underperformed before the recession, which made it a possible takeover target. Shell CEO Wael Sawan stated on Friday that he would prefer to buy more shares of his own company than bid for BP. Shell's investment budget for the year was between $20 billion to $22 billion, while BP announced that it would cut its spending by $500,000,000, to a budget of $14.5 billion. BP has also said it may sell more assets this year, upping its forecast for sales to between $3 and $4 billion from $3 billion. Reporting by Sheila Dang, Houston; Shadia Nasralla, London; editing by Rod Nickel
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The US jobs report and signs of an easing in trade tensions have led to a rise in world stocks.
Wall Street and European shares rallied, and U.S. Treasury Yields surged Friday as investors' risk appetite was boosted by a positive employment report and indications that China is willing to negotiate tariffs. The three major U.S. indexes all advanced by more than 1% in the session. Financials, transports, and microchips, which are sensitive to the economy, outperformed the overall market. The three indexes all rose this week. The S&P 500 has posted nine consecutive sessions of gains. This is its longest winning streak since over twenty years. According to the Labor Department's report, the U.S. economy created more jobs last month than was expected, and wage inflation was below consensus. This prompted a rise in U.S. Treasury benchmark yields. Paul Nolte is a senior wealth advisor and market strategist with Murphy & Sylvest, located in Elmhurst. He said, "The jobs data was very positive; it shows that the economy's doing well." "There is still discussion about the impact of tariffs but, so far, this data hasn't shown up in many of the numbers." China's Commerce Ministry announced that Beijing was evaluating Washington’s offer to have talks about President Donald Trump’s crippling tariffs. This could signal a possible de-escalation in the market-shaking trade war. Jed Ellerbroek is a portfolio manager with Argent Capital Management, St. Louis. He said that both China and the U.S. were taking small but consistent steps towards negotiation and reconciliation. "It seems the spiraling-out-of-control phase ended." Ellerbroek said that "the market doesn't believe the current tariffs will last very long." The latest quarterly earnings report shows that the lack of clarity surrounding U.S. China trade duties contributed to a marked decline in long-term expectations for U.S. companies. Apple and Amazon.com released their quarterly earnings on Thursday night with disappointing estimates, including Apple’s estimated $900,000,000 in tariff costs. These reports have taken some of the wind out of the sails for the Magnificent 7 group of megacap stocks related to artificial intelligence, which enjoyed a recovery this week. General Motors has warned that earnings will be hit by $4-5 billion dollars and American Airlines has withdrawn its profit forecasts. The Dow Jones Industrial Average rose by 564.47, or 1.39 %, to 41.317.33, the S&P 500 gained 82.49, or 1.47 %, to 5,686.63 while the Nasdaq Composite climbed 266.99, or 1.51% to 17,977.73. European shares surged as investors regained confidence after a busy week of earnings, fueled by renewed hopes for Sino-U.S. Trade Negotiations and strong employment data. The MSCI index of global stocks rose by 13.23 points or 1.58% to 848.38. The pan-European STOXX 600 Index rose 1.67% while Europe's broad FTSEurofirst 300 Index rose 36.55 point, or 1.75%. Emerging market stocks increased by 23.83 points or 2.14% to 1,135.80. MSCI's broadest Asia-Pacific share index outside Japan closed up by 2.44% to 595.08 while Japan's Nikkei gained 378.39 or 1.04% to 36,830.69. Treasury yields increased as investors reduced their bets that the Federal Reserve would cut rates in June due to strong employment numbers. The yield on the benchmark U.S. 10 year notes increased 7.7 basis points from 4.231% to 4.308% late Thursday. The 30-year bond rate rose by 5.2 basis points, from 4.737% to 4.7889% late Thursday. The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve (Fed), rose by 12.5 basis points, to 3.826% from 3.701%, late Thursday. Dollar dropped in wake of positive U.S. employment report. The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) fell by 0.14%, while the euro rose 0.12%, reaching $1.1304. The dollar fell 0.3% against the Japanese yen to 144.99. Crude continued to fall as investors positioned ahead of a decision expected by OPEC+ boosting output. U.S. crude dropped 1.60%, settling at $58.29 a barrel. Brent, however, settled at $61.29 a barrel, down by 1.35%. The gold price reversed gains earlier and was headed for a loss of a week amid eased trade tensions. Spot gold dropped 0.24% to $3232.60 per ounce. U.S. Gold Futures increased 0.47% to an ounce of $3,225.00.
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US EPA to cut staff back to 1980s levels and dissolve the research office
As part of an overhaul of the U.S. Environmental Protection Agency, the agency announced on Friday plans to cut its budget by $300,000,000 in fiscal year 2026. It also plans to reduce its staffing levels to those of 1980s and dissolve its Research and Development office. The reorganization will consolidate key offices and reflect President Donald Trump's executive order to reduce regulatory red tape, promote energy development, and cut down on bureaucracy. In a press release, EPA Administrator Lee Zeldin stated that the reorganization would bring needed efficiencies in incorporating science into rulemaking and sharply focus on our work to provide the cleanest air and water possible for our communities. The agency has said that its staffing levels will drop to a level seen last in the 1980s when Ronald Reagan was president of the United States and the EPA was headed by an administrator critical of the agency. In 1984, there were just over 11,400 EPA staffers. By 2024, that number will rise to 15,100. After weeks of speculation, Zeldin announced the cancellation of EPA grant money worth billions. Major changes to the agency's structure include shifting scientific research from the Office of Research and Development to different program offices, such as a new office of applied science that would align research with the politically-appointed administrator's policy priorities. Researchers at ORD had warned against dissolving ORD's research unit, arguing that it would undermine the scientific independence of the organization. It said that the EPA would also raise issues such as cybersecurity, emergency response and water reuse and conservancy. (Reporting and editing by Leslie Adler, Ni Williams, and Valerie Volcovici)
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HSBC Asset Management global head of Sustainability to depart
HSBC announced on Friday that the top executive in sustainable finance at its asset management division will be leaving the company. This is the latest departure from the bank during a period of restructuring under the new chief executive. Erin Leonard's departure as global head of sustainability for HSBC Asset management follows that of Celine Herweijer who left the bank at the end last year. The bank is reassessing its environmental, social, and governance policies under Georges Elhedery, CEO. Both before and after Donald Trump's election, there has been a growing pushback in the United States against ESG. HSBC is one of the mid-sized banks that focuses on international corporations. Many financial firms have reduced their commitments to climate change and other issues. Leonard was the head of HSBC Asset Management’s Sustainability Office. This office, created in 2021, is responsible for managing the sustainable investment efforts and strategy. She was also in charge of the company's diversity, equity and inclusivity initiatives. A spokesperson for asset manager stated that the responsibilities of this office had been spread across the other businesses in the asset management division. Other sustainability-related initiatives have been consolidated under the Responsible Investment team led by Cathrine de Coninck-Lopez, the spokesperson added. Leonard was also a member of Asset Manager's Management Committee, but it is unclear if she was removed from this position. HSBC refused to comment. Elhedery, who assumed the role of CEO six months ago, has made a significant impact on the bank by cutting the number of senior managers in the bank and restructuring the operating divisions. By the end of 2026, the bank will have saved $1.5 billion annually. This is equivalent to 8% of its total staff costs. HSBC angered campaigners by abandoning its goal of reaching zero emissions in its entire business by 2030 due to the slow pace of changes in the real-economy. The bank said to shareholders that it is committed to becoming a zero-emission bank by 2050. It has also begun to review its emission targets linked to loans and associated policies. The bank also hired new executives including Danny Alexander, a former UK politician to lead a new unit focusing on infrastructure financing and project finance related to the low carbon transition. HSBC Asset Management will manage $179 billion by 2024 in ESG and Sustainable Investment Strategies. It is a member of the Net Zero Asset Management initiative, a U.N. backed group of asset management companies working to align investment to net zero. (Reporting and editing by Virginia Furness, Simon Jessop, and Nia William)
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Stocks rise on positive jobs data and signs of trade tensions easing
Wall Street and European shares surged on Friday, while the dollar fell as investors' risk appetite was boosted by a positive U.S. Employment Report and signs that China is willing to negotiate tariffs. The three main U.S. indexes rose sharply, with the more sensitive sectors of financials, transportations, and microchips performing better than the overall market. The three indices are all headed to weekly gains. According to the Labor Department's report, the U.S. economy created more jobs last month than was expected, and wage inflation was below consensus. This prompted a rise in U.S. Treasury benchmark yields. Paul Nolte is a senior wealth advisor and market strategist with Murphy & Sylvest, located in Elmhurst. He said, "The jobs data was very positive; it shows that the economy's doing well." "There is still discussion about the impact of tariffs but, so far, this data hasn't shown up in many of the numbers." China's Commerce Ministry announced that Beijing was evaluating Washington’s offer to have talks about President Donald Trump’s crippling tariffs. This could signal a possible de-escalation in the market-shaking trade war. Jed Ellerbroek is a portfolio manager with Argent Capital Management, St. Louis. He said that both China and the U.S. were taking small but consistent steps towards negotiation and reconciliation. "It seems the spiraling-out-of-control phase ended." Ellerbroek said that "the market doesn't believe the current tariffs will last very long." The latest quarterly earnings report shows that the lack of clarity surrounding U.S. China trade duties contributed to a marked decline in long-term expectations for U.S. companies. Apple and Amazon.com released their quarterly earnings on Thursday night with disappointing estimates, including Apple’s estimated $900,000,000 in tariff costs. These reports have taken some of the wind out of the sails for the Magnificent 7 group of megacap stocks related to artificial intelligence, which enjoyed a recovery this week. General Motors has warned that earnings will be hit by $4-5 billion dollars and American Airlines has withdrawn its profit forecasts. The Dow Jones Industrial Average climbed 586.76, or 1.4%, to 41.339.67. The S&P 500 rose by 93.31, or 1.57%, to 5.697.77. And the Nasdaq Composite jumped 322.93, or 1.8%, to 18.035.16. European shares surged as investors regained confidence after a busy week of earnings, fueled by renewed hopes for Sino-U.S. Trade Negotiations and strong employment data. The MSCI index of global stocks rose by 14.11 points or 1.69% to 849.31. The pan-European STOXX 600 Index rose 1.67% while Europe's broad FTSEurofirst 300 Index rose 36.55 point, or 1.75%. Emerging market stocks increased by 23.31 points or 2.10% to 1,135.28. MSCI's broadest Asia-Pacific share index outside Japan closed up by 2.4% to 594.90. Japan's Nikkei gained 378.39, or 1.04% to 36,830.69. Treasury yields increased as investors reduced their bets that the Federal Reserve would cut rates in June due to strong employment numbers. Treasuries were also under pressure because of fears that Japan would use its massive U.S. Debt holdings to negotiate in trade negotiations. The yield on the benchmark U.S. 10 year notes increased 9.7 basis points from 4.231% to 4.328% late Thursday. The 30-year bond rate rose by 6.5 basis points, from 4.737% to 4.8021% late Thursday. The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve (Fed), rose by 14.1 basis points, to 3.843% from 3.701%, late Thursday. Dollar dropped in wake of positive U.S. employment report. The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) fell by 0.08%, reaching 100.06; the euro rose by 0.04%, at $1.1295. The dollar fell 0.25% against the Japanese yen to 145.06. Crude continued to fall as investors positioned ahead of a decision expected by OPEC+ boosting output. U.S. crude dropped 1.60%, settling at $58.29 a barrel. Brent, however, settled at $61.29 a barrel, down by 1.35%. The gold price reversed gains earlier and was headed for a loss of a week amid eased trade tensions. Spot gold dropped 0.49% to $3.224.39 per ounce. U.S. Gold Futures increased 0.47% to an ounce of $3,225.00.
Goldman Sachs predicts a 410,000-bpd increase in OPEC+ supply for June
Goldman Sachs said on Friday that it expects OPEC+ will announce a second consecutive supply increase for June on July 1 due to the modest compliance of Kazakhstan, lower than expected OECD inventory levels, and Saudi Arabia’s ability to deal with lower oil prices.
The Wall Street bank expects the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to announce a 410,000-barrel-per-day (bpd) increase in supply for June in its meeting on Saturday, from its prior estimate of 140,000 bpd, according to a note.
Three sources said on Friday that the OPEC+ summit was moved from Monday to Saturday. Three sources told Friday that the expected increase will be three times higher than the December level to begin unwinding of cuts.
Goldman Sachs' previous OPEC forecast was based on a substantial increase in compliance with the production cuts. However, Kazakhstan's compliance is only modest, according to it.
Moreover, inventories for the Organisation for Economic Co-operation and Development countries (OECD) for April fell short of the bank's expectation by 28 million barrels because supply missed in Venezuela and U.S. shale.
Goldman Sachs economists also found that Saudi Arabia can survive lower oil prices.
Goldman Sachs stated that "this week's decline in oil prices and the increases in implied volatility, put skew and put spread suggest that the central expectation of the market has also converged towards a 410,000 bpd rise."
Brent crude settled at $61.29 a bar on Friday, and West Texas Intermediate crude (WTI) futures at $58.29 a bar. This is the biggest weekly loss since the end March.
Goldman's oil price forecast is unchanged. It expects Brent to average $63 per barrel and WTI to average $55 for the rest of 2025. Brent will be $58 in 2026 and WTI will be $55.
The bank predicted that a global slowdown, or a complete reversal in the voluntary OPEC+ reductions of 2.2 million bpd could push Brent into the 40s by 2026 and even below $40 under an extreme scenario. (Reporting and editing by Marguerita Chy in Bengaluru)
(source: Reuters)