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ADNOC Drilling reports a 19% increase in profits on Services Strength
ADNOC Drilling, a division of Abu Dhabi’s state oil company, reported on Wednesday a 19% increase in the second quarter profit, supported by a strong performance in oilfield services and an expansion into unconventional drilling. According to the financial statement of the company, the net profit increased to $351 millions in the three-month period ending June 30 from $295million a year ago. Revenue increased by 28%, to $1.2 billion. ADNOC Drilling's CEO Abdulla Ateya Al Messabi said that the company had achieved "record financial results and operational results" as it continued to expand its fleet and provide oilfield services. Al Messabi who became chief executive of the company last month said that the company is pursuing M&A, especially in the U.S. ADNOC Drilling increased its unconventional and integrated drilling operations to support ADNOC’s production targets, resulting in a 121% increase in oilfield services revenue. "Unconventional Drilling, which didn't contribute in Q2 of last year, has now become a major contributor." In an interview, Chief Financial Officer Youssef Salm said that we have drilled more than 60 wells. We expect to drill just under 100 wells by the end of the year. The company increased its net profit guidance for 2025 to $1.375 from $1.35 billion, while the ceiling remains at $1.45 billion. ADNOC Drilling’s board has approved a second quarter dividend of $217 millions, which is in line with its first-quarter payout. EBITDA for the company increased to $545 millions in the third quarter from $472million a year ago. Gross profit increased to $573 from $506 millions. Salem stated that despite rising costs, the margins of Salem's company remain strong due to long-term contracts, which give us full visibility on prices, and our constant optimization of costs through technology. (Reporting and editing by Joe Bavier; Yousef Saba is the reporter)
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UK regulator reviews alternative energy pricing for consumers
Ofgem, the British energy regulator, announced on Wednesday a review of how costs are allocated throughout the energy system. This includes alternative pricing models for consumers, in order to better adapt to a more renewable energy supply. The UK has set a goal to decarbonise the power sector in its entirety by 2030. This will require a reduction of its dependence on gas-fired plants, and accelerated growth in renewable energy capacity. Ofgem stated that a less reliance on gas prices will reduce the variable costs in the energy system. Jonathan Brearley, Ofgem's chief executive, said that fixed costs could increase, including those for upgrading the energy grid to provide cleaner and more reliable power to homes. Energy bills are used to pay for system costs. Electricity and gas bills are separate. Ofgem stated that, given the anticipated system changes, and the increasing proportion of household energy costs than before, it was now the right time to examine potential alternative models for how bill payers are charged. It added that this included ensuring increased fixed costs did not adversely impact vulnerable and low-income customers. The regulator made it clear that at this stage, they are only looking for opinions and not making any recommendations. Nora Buli, reporting from Oslo; Nina Chestney, editing.
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Japan announces two offshore wind auction sites in Hokkaido
Japan's land and industry ministers designated Matsumae, and Hiyama areas, off the northern island Hokkaido as promotion zones for offshore wind auctions. The goal is to boost the country's goals of renewable energy. In a joint announcement, the Ministry of Land, Infrastructure, Transport and Tourism and the Ministry of Economy, Trade and Industry announced that the government would develop guidelines for using the zones and hold a public auction to select operators for energy project. The next auction date was not provided. By 2040, Japan wants to reach 45 gigawatts in offshore wind power, which will help reduce the country's dependence on fossil fuels, its CO2 emissions, and enhance national security. The progress of the auctions has stagnated. The trading house Mitsubishi Corp., which won the first government-sponsored major auction for 2021, warned in February of the rising costs that forced them to rethink their plans. Industry insiders believe that Japan will likely sweeten the terms offered to developers for the construction of a huge offshore wind farm sector. The country is looking to refocus its energy goals in response to a global slump caused by projects suffering from escalating costs and delays. (Reporting and editing by Louise Heavens, Yuka Obayashi)
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German Olympic champion Dahlmeier severely injured in Pakistan mountaineering crash
A rockfall struck the German biathlete, Laura Dahlmeier, who is a double Olympic champion. She was attempting to climb a 6,094 metre peak in Pakistan's north when she was seriously injured. Faizullah Faraq said that the accident happened on Monday, when Dahlmeier, a resident of Gilgit-Baltistan, was struck by a landslide. The spokesperson added that the bad weather prevented a helicopter from reaching the scene. Faraq said that the rescue operation was underway, with the help of the Pakistani army. According to the Alpine Club of Pakistan - a National Mountaineering and Sport Climbing Federation - this incident took place around noon on Sunday, July 28 at an elevation of about 5,700 metres. In a press release, the government said Dahlmeier, 31 was climbing with her partner, when an unexpected rockfall struck her. She suffered significant injuries. The spokesperson for the government identified her climbing partner as Marina Eva Krauss. Vice president of the Albine Club, Karrar Haidri, said that Dahlmeier had suffered a serious injury. Dahlmeier, who retired in 2019 at age 25, was the first woman biathlete ever to win both the sprint and pursuit medals at the same Olympics. Her management did. The German ZDF broadcaster reported that an overflight by helicopter on Tuesday found no signs life. The current monsoon rains have caused heavy flooding in the country's mountainous north. Several local tourists were killed. The National Disaster Management Authority of Pakistan reports that 288 people have died in Pakistan due to flooding and other rain-related incidents since the monsoon began in late summer. Reporting by Mushtaq in Peshawar and Asif in Islamabad; editing by Kirsti and Ken Ferrell.
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Japan's nuclear regulator has cleared Hokkaido Elec Tomari reactor's safety review
The Nuclear Regulation Authority of Japan approved on Wednesday the safety review for Hokkaido Electric Power’s No.3 nuclear reactor at the Tomari Nuclear Power Station after more than 12 years. This was a requirement to restart its operations. The reactor was closed in 2012, as part of an overall push to improve safety following a massive earthquake that occurred the year before. This earthquake disabled cooling systems in Tokyo Electric Power Co’s Fukushima Daiichi Plant and caused the worst leakage of radioactive materials in 25 years. A spokesperson for the NRA said that at its regular meeting it concluded that the safety measures in the Tomari reactor met new regulatory standards, and that the plant passed the test. Now, the focus will be on obtaining local community approval for restart. Hokkaido Electric aims to finish construction of the seawall by March 20, 2027, and restart the 912 megawatt reactor as quickly as possible after that. Japan is heavily dependent on imports of fossil fuels. The government wants to see nuclear power play a larger role in the energy mix for the country and its energy security. Currently, the country operates over a dozen nuclear reactors with a combined power of 12 gigawatts. Many other reactors are being relicensed to meet the stricter safety standards that were implemented following the Fukushima catastrophe. Japan had 54 reactors in operation before 2011. Japan wants nuclear power to account for 20-22% (of its total electricity) by 2030, despite the difficulties the industry has faced since then. Nuclear power will account for 8.5% in 2023. (Reporting and editing by Jan Harvey; Yuka Obayashi)
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Earnings in the Gulf are below expectations.
Investors were watching global trade developments and the looming U.S. deadline for tariffs as they watched major Gulf stock markets in early trading on Wednesday. Investors have become more cautious since trade talks between China and the U.S. ended without a substantive agreement. The tariff policies of U.S. president Donald Trump continue to cause concern about global growth. Potential slowdowns in consumption and trade could threaten energy demand, and the fiscal security of Gulf economies that are dependent on oil. Saudi Arabia's benchmark stock index fell 0.1% due to a series of unbalanced earnings in key sectors. Halwani Brothers dropped 3.8% and Nahdi Medical fell 4.5% following the companies' reported drop in second-quarter profit. Halwani’s profit collapsed by nearly 85%. Dubai's benchmark stock index was flat after reaching a near two-decade-high in the previous session. This was due to a drop of 1.9% in Mashreqbank which reported a 17% decline in profit year-on-year for its second quarter. The Abu Dhabi Index edged lower on mixed earnings that dampened investor appetite and disrupted the momentum from the previous weeks robust results. Americana Restaurants International (ARI) and ADNOC Drilling (ADNOC) both added 0.5% after ARI's second quarter earnings increased year-on-year, but fell short of estimates. The latter kept its full-year forecast unchanged despite solid gains. Qatar's benchmark indices fell 0.1% amid a broad-based drop as investors locked in profits after a recent rally which pushed the index up to a two-and-a half-year high. Qatar Islamic Bank, which fell by nearly 1%, led the losses. Investors in the region were focused on the U.S. Federal Reserve policy announcement, which is due later that day. The Fed is expected to keep interest rates the same, but markets are prepared for possible dissension by central bank officials who may favor lower borrowing costs. The Fed's position has significant implications for Gulf economies. Most currencies in the region are pegged to U.S. dollars, which makes it a key anchor of regional monetary stabilty. (Reporting and editing by Mrigank Dahniwala in Bengaluru)
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Mercedes-Benz reduces its profit forecast due to US tariff impact
Mercedes-Benz cut its forecasts for annual sales and profit margins on Wednesday. The company cited a $420 million hit from U.S. Tariffs in the second-quarter. The German luxury automaker expects to achieve a profit margin between 4% and 6% in its car business for this year, and a group revenue that is "significantly lower" than the levels of 2024, for both its cars and vans. In February, before the U.S. Tariff Changes, the company said that they expected the profit margin of its car division this year to be 6-8%, after 2024 earnings had fallen 30%, with a 40% drop in the auto business. In April, it retracted that guidance. It said that if tariffs were excluded, the unit's outlook for margins would have been lower than the original guidance. Mercedes shares fell 1.5% at the opening of Frankfurt trading. The results reflect the wider impact of Trump's policy on tariffs, which saw European automakers being hit with higher U.S. Import taxes this year. Volkswagen's Porsche luxury brand cut its profitability target for the full year on Wednesday. The U.S. and the EU reached a framework agreement on trade on Sunday. It imposed a 15% tariff on the majority of EU goods, half the rate that was threatened. This prevented a larger trade war between these two allies who account for nearly a third the global trade. Mercedes reported that the impact of tariffs on its adjusted operating profit margin (EBIT) in the second quarter was 150 basis points. According to calculations, this amounted approximately to 362 million euro ($418) according to Mercedes. The trade agreement was welcomed by Chancellor Friedrich Merz, as it avoided a trade war that would have severely hurt Germany's export driven economy and large auto sector. BENEFIT OF A TRADE DEAL Morningstar analysts said in a Monday research note that Mercedes was among the biggest beneficiaries of the U.S. EU trade deal because it imports more from Europe than Mexico or Canada. The company also manufactures cars at its U.S. factory in Tuscaloosa (Alabama). The second-quarter operating profit of the company has more than doubled, to 1,99 billion euros (2.30 billion dollars). In a press release, the company said that tariffs and efficiency measures, as well as a 750-million-euro impact from a sale of an Argentine plant and reorganization, further lowered their reported EBIT or operating profit to 1.27 billion euro. The company's revenue dropped by 9%, to 33.15 Billion Euros. This was due to lower sales of cars and vans as well as tariffs. Jefferies stated in a report that the sales and operating profit numbers were "no surprises", pointing out lower volume, price and sales figures in China. It had announced earlier this month that unit sales in China would decrease by 10% and 19% respectively in the first quarter and second quarter of 2025, compared to last. Due to the intensified local competition, both the company and other German automakers are facing a decline in China.
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Gold prices rise as the dollar weakens ahead of Fed decision
Gold prices rose on Wednesday as investors waited for the Federal Reserve to announce its policy and make comments that might provide more clues about the timing of their next moves. As of 0828 GMT, spot gold rose 0.2% to $3,331.03 an ounce. U.S. Gold Futures climbed 0.1% to $3,328.30. Gold became less expensive to holders of other currencies after the dollar index fell by 0.1%. "There is a combination of factors that are holding gold prices back." "From a geopolitical perspective, we seem to be making some progress in the tariff negotiation but no one is willing to commit to anything," StoneX analyst Rhona o'Connell stated. After two days of constructive talks between the U.S. and China in Stockholm, officials will continue to monitor the negotiations between the U.S. and China. Both sides have agreed to extend their 90-day truce on tariffs. Investors were reassured by the trade agreements reached with Japan and the European Union last week. This week, the risk sentiment on the stock market has also been lifted. The Fed is expected to maintain rates on Wednesday despite President Donald Trump's repeated calls for them to be lowered. The markets will be watching Fed Chair Jerome Powell for further clues about the rate path. The markets have priced in two cuts by year's end, which is probably too mild. "The Fed will not yield to political pressure, but it will be fascinating to see if the vote is unanimous today," O'Connell stated. In an environment of low interest rates, gold tends to perform well. Other than that, silver spot fell 0.4% per ounce to $38.04, platinum dropped 1% to 1,381.69, and palladium dropped 0.5% to 1,252.40. (Reporting by Brijesh Patel in Bengaluru; Editing by Ronojoy Mazumdar)
Oil prices remain unchanged as OPEC+ increases weigh on the market
The price of oil futures was little changed on Tuesday as the markets considered the expectations for more supply next month from major producers, a weaker U.S. Dollar and a mix bag of economic indicators and market indicators coming from the U.S.
Brent crude rose 2 cents to $67.13 a bar at 0345 GMT while U.S. West Texas Intermediate Crude fell 1 cent, down to $65.44 a bar.
Brent oil has fluctuated between a high and a low of $69.05 per barrel since June 25. This is because concerns about supply disruptions have diminished following the ceasefire agreement between Iran and Israel.
Sources said that American Petroleum Institute data released late Tuesday showed U.S. crude inventories had increased by 680,000 barrels over the past seven days, at a period when stocks are typically low during the summer season.
"Today's oil prices are influenced by a combination of factors, including a potentially increasing OPEC+ production, unclear U.S. stock signals, an uncertain geopolitical scenario, and macro policy ambiguity," stated Phillip Nova Senior Market Analyst Priyanka Sahdeva.
Investors have already factored in the planned increases by the Organization of the Petroleum Exporting Countries (OPEC+), which includes Russia. They are not likely to be caught off guard again soon, said Ms. Sher.
Four OPEC+ source told us last week that the group will increase output by 411,000 barrels a day when it meets next month on July 6. This is a similar amount as what was agreed upon for May, June and even July.
According to Kpler data, the market has already seen the effects of previous OPEC+ increases. Saudi Arabia, which is the largest oil exporter in the world, increased its shipments by 450,000 bpd in June from May. This was the highest level in over a year.
Sachdeva said that, "With geopolitics at a minimum for the moment, oil futures are likely to trade in a tighter band this week as global economic worries persist. An easing dollar is the only exception which could extend any upward momentum."
The greenback
The number of people who are unemployed has fallen to its lowest level in three and a half years
A weaker dollar could support prices, as it would encourage buyers to pay in other currencies.
Tony Sycamore is an analyst at IG. He said that the Federal Reserve's interest rate reductions in the second half will be influenced by the non-farm payroll data released on Thursday.
Lower interest rates would spur economic activity, which in turn would boost oil demand.
The Energy Information Administration will release official data on the U.S. stockpile of oil by Wednesday morning at 10:30 am ET. ET. (Reporting and editing by Christian Schmollinger; Trixie Yap, Singapore; Sudarshan Varadahan in Singapore)
(source: Reuters)