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Stocks surge on positive earnings; sanctions against Russia boost oil
The global stock market got a boost Thursday thanks to a series of positive earnings reports that helped offset some of the gloom in Wall Street due to a lacklustre performance by tech megacaps. Oil prices also rose following U.S. sanction against Russia. Oil prices rose 5% following Washington's sanctions against major Russian companies Rosneft, and Lukoil for the Ukraine conflict. The STOXX 600 index rose 0.3% for the day, as positive earnings helped to boost the domestic indices. The MSCI All-World Index, however, fell 0.1% and is now heading towards its third consecutive day of decline. Chinese stocks recovered from a drop of 1.1% to close at 0.3%. Sources said that the White House is considering a plan of reducing software exports to China as a retaliation to Beijing's recent round of export restrictions on rare earths. Investors are on the defensive as Trump's Asia trip (next Monday) is causing geopolitical tensions, according to Charu Chanana of Saxo Bank, Singapore. Positive Earnings Surprises As earnings season begins, global equity markets are beginning to ease off their record highs. Although there have been some disappointing results or outlooks for megacaps, the majority of companies have so far surpassed analysts' expectations. Futures for the S&P 500 index and Nasdaq lost 0.1% of their gains, reversing previous gains. Tesla, the first company of the Magnificent Seven to announce earnings, saw its shares drop around 3% on Thursday in premarket trade after it missed profit expectations despite record revenue for the third quarter. There was still plenty of tech to be excited about. Shares of IonQ Computing, Rigetti Computing, and D-Wave Quantum jumped more than 20% after a report in the Wall Street Journal stating that the U.S. Government is in negotiations with several quantum-computing firms to exchange stakes for federal funding. After Donald Trump imposed sanctions on Ukraine, oil rose up to 5.5% and reached a two-week-high of $66.04 per barrel. The EU approved the 19th set of sanctions against Moscow, which included a ban on Russian gas imports. Last week, Britain imposed sanctions on Rosneft and Lukoil. DO NOT UNDERESTIMATE THE MAGIC OF RATE CUTS Investors' firm belief that the Federal Reserve will soon be on a rate-cutting frenzy helps to ease some of the anxiety over geopolitical tensions and trade conflicts. The markets show that traders expect U.S. interest rates to fall from 4% now to 3% in June. "Never underestimate a Fed which cuts rates, and also the magic word: ending QT," IG Chief Market Analyst Chris Beauchamp, referring the central bank's programme of quantitative tightening, in which it reduces its holdings of Government Bonds to tighten up credit conditions. The dollar index which compares the U.S. dollar to six other currencies, rose 0.1% last week. It has been steadily rising since August when it hit a three-and-a half year low. Investors are more confident that the Fed will protect the economy. Gold, on its way to its largest weekly decline since May, rose 0.5% in the last 24 hours at $4,114 per ounce. Overnight, the price briefly approached $4,000 as investors took profits before this week's U.S. inflation report.
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Russia's Nornickel maintains 2025 nickel production forecast
Nornickel (Russia), one of the largest nickel producers in the world and the biggest palladium producer, maintained on Thursday its nickel production forecast for 2025, which is 196,000-204,000 tons. Nornickel reported that nickel production rose 18% in the third quarter compared to the previous three month period, when the company reduced shipments from its Dudinka Port in the Arctic because of seasonal flooding. Nornickel explained that the increase in raw material processing was due to the higher volume of materials processed during second quarter. The company also said that palladium production fell 6% to 617,00 ounces in the third quarter. This was due to a halt in navigation at Dudinka Port because palladium is a metal with a longer cycle of production. The company blamed the decline of nickel and palladium in the first nine month of the year of 4% and 6 % respectively on the need to upgrade Western mining equipment. Evgeniy Fedorov, Nornickel's Chief Operation Officer said that the adjustment was a result of a temporary drop in ore production due to the gradual switch to new mining equipment by Polar Division under the program for import substitution. (Reporting and writing by Anastasia Lyrchikova, editing by Andrew Osborn and Kirsten Donovan).
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Asia Diesel Spot Premiums Hit Two-Year High on Firm Fundamentals
Asia's 10ppm sulphur diesel spot premiums LSEG data on Thursday showed that oil prices surged to a 2-year high. This was boosted by a strong first-month market and a reaction from the markets to new U.S. sanctions against two Russian oil exporters. The data revealed that spot market premiums were around $2.22 per barrel. This was an increase of more than $1.60 from September 1. However, there were few deals on the window for cargoes with a 10ppm quality. Last seen at these levels was in early October of 2023. Multiple trade sources reported that the 10ppm diesel premiums are on an upward trend since early September. This is due to limited supplies in the first month, which coincide with planned refinery maintenance, and regional production problems. The traders also said that several procurement tenders held by Southeast Asia-based buyers in early October were supportive. LSEG data also showed that front-month spreads had reached a slightly higher level than a 3-month high, of almost $2 a barrel. Traders say that the 6% increase in ICE Gasoil Futures today afternoon was also a positive factor for Asian markets. The east-west spreads have widened back to a discount of slightly over $41 per metric tonne, which is a month-wide discount. (Reporting and editing by Tomasz Janovski and Harikrishnan Nair.)
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Dow exceeds losses estimates with cost-cutting and new US capacity
Chemicals company Dow reported a smaller-than-expected adjusted quarterly loss in the third quarter on Thursday, as cost cuts and higher volumes from new U.S. Gulf Coast assets helped offset weakness in global chemical prices. In premarket trading, Dow shares were up 6.5% to $23,10. The company said that it had achieved more than half its $6.5 billion planned near-term cash assistance, including $1 billion of capital expenditure cuts and an accelerated delivery of costs reduction targets by the end of 2026. Jim Fitterling, Dow's CEO, said that Dow's cost-discipline and its new polyethylene and alkoxylation facilities in the U.S. Gulf Coast have helped to lift margins in key markets. The global chemical market is still under pressure due to the weak demand, increasing production costs and stricter environmental regulations. This is especially true in Europe. Companies are forced to review their strategies and optimize their operations. Dow says that addressing regional challenges including European shutdowns will result in an adjusted core profit increase of nearly $200 millions beginning mid-2026. The company forecasts a fourth-quarter net sale of $9.4 Billion, which is below the analysts' expectation of $10.2 Billion. Fitterling reported in September that it had observed stable volumes and strong export capabilities, as well as low-cost positions, during the third quarter of the year, in the United States. He said that after a drop in prices due to uncertainty over tariffs during the second quarter, the market for polyethylene is now poised to move upwards. According to data compiled and analyzed by LSEG, the Michigan-based firm reported an adjusted loss per share of 19 cents for the quarter that ended on September 30. This was lower than analysts' estimates of a loss average of 29 cents. The company's quarterly net sales were $9.97 billion. This was below the analysts' average estimate of $10.23billion. (Reporting and editing by Tasimzahid and Krishna Chandra Eluri in Bengaluru)
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F-35s, fixing and fires: Ukraine, Gaza Wars threaten climate
Climate damage: Russia must pay! Rebuilding Gaza will increase emissions Massive gaps in military emissions data Emma Batha Researchers estimate that the first three years of the conflict generated 237 million tons of greenhouse gasses (GHG). This is equivalent to the annual emissions of Belgium Austria and Ireland combined or 120 million cars running on fossil fuels. This is pushing us into the wrong direction, at a time we need to drastically cut emissions," said Lennard de Klerk of Climate Research, the lead author of a report that tallied the war's emission, published in this month. De Klerk stated that the cost of climate damage due to the war, in which hundreds and thousands of people were killed on both sides, already exceeded $43 billion. When post-conflict rebuilding is taken into account, a separate study on the Israeli-Hamas conflict in Gaza estimated the carbon footprint of the first 15 month's war topped 32 millions tons. This is equivalent to the annual emissions from Ivory Coast. Benjamin Neimark led the research of UK and U.S. based experts. The projected reconstruction emissions were a real shock. This was a shocking revelation and it made us sit up. The groundbreaking studies will be presented at the sidelines next month's COP30 Climate Summit in Brazil. Researchers say that conflicts and climate changes create a destructive cycle. Not only do wars cause climate change but climate change also fuels conflict in fragile areas as the competition for water and other resources intensifies. WILDFIRES De Klerk was surprised that wildfires accounted for a fifth (of the war's) carbon footprint after Russia's invasion in 2022. Unrelenting shelling caused thousands of fires that ravaged farmland and forests. Some of these fires were likely made worse by landmines or unexploded ordnance scattered across the landscape. According to the report of the Initiative on GHG Accounting of War (an international research team headed by de Klerk), nearly 850,000 hectares of land were burned last year. He said that the amount of rain was more than 20 times higher than the average annual rainfall. The summer of 2024, due to climate changes, was exceptionally dry. This allowed fires to spread. As the Gaza war expanded, missile attacks across the Lebanon-Israel frontier also caused fires that destroyed forests and farmland. Firefighters in war zones face many dangers, as in Ukraine. RECONSTRUCTION Emissions have also increased due to the destruction of energy infrastructure both in Ukraine and Gaza. The Russians' attacks on oil depots have caused tons of fuel to burn, and the gas and electricity infrastructure has released powerful GHGs such as methane or sulphur-hexafluoride (SF6) which has a potential global warming 24,000 times higher than CO2. Solar panels provided a quarter (one of the largest shares) of Gaza's electricity before Israel attacked the enclave in October 2023. The destruction of solar infrastructure has led to a greater reliance on diesel generators, which are polluting. Neimark stated that the carbon footprint from post-war reconstruction of Gaza, which has seen the deaths of 68,000 people, will dwarf the emissions caused by the conflict. According to U.N. estimations, Israel's intensive bombardment destroyed over 90% of Gaza's housing, and has turned it into a wasteland. 60 million tons worth of debris were created. Concrete and steel are used in huge quantities to rebuild homes and infrastructure. These materials have a high carbon footprint. Neimark said that the loss of farmland and orchards, as well as shrubland in an area already susceptible to climate change effects, has increased the risk of desertification. The two wars have also increased global emissions far from the frontlines. Commercial flights have been forced to reroute due to airspace closures, increasing fuel consumption. De Klerk stated that flights from London to Tokyo take nearly three hours more. The Middle East unrest has also disrupted the international shipping in the Red Sea. This is due to the longer routes, and the increased speed of sailing. MILITARY DATA HOLE This new research about Gaza and Ukraine is a part of an overall push to increase transparency regarding global military emissions. Even during peacetime, the carbon footprint of armies is large - from maintenance of bases to transporting troops and equipment. Military exercises, weapons production, and military exercises all add up. According to the Conflict and Environment Observatory (a UK non-profit), about 5,5% of greenhouse gas emissions are attributed to militaries around the world. However, countries are not required by international climate bodies to report their military emission. Experts warn that the lack of data could lead us to underestimate the amount of emissions needed to keep the temperature rise to 1.5 degrees Celsius. Many countries are increasing their defence spending to respond to multiple crises. This is causing concern that this will increase emissions from military equipment and divert funds away from climate change efforts. Climate scientists say that militaries should be required to report their emissions. Neimark stated that "we can't begin making meaningful cuts until we have adequate baselines."
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Valero Energy's profit beats expectations for the third quarter on higher margins
Valero Energy, a U.S. refiner, surpassed Wall Street's expectations on Thursday for its third-quarter profits. This was due to a rebound in the refining margins. After two years of record profits, the refining margins rebounded in 2024 from their multi-year lows. This was due to refiners taking advantage of supply shortages that were caused by geopolitical tensions affecting Ukraine. U.S. refinery profit margins measured by the 3-2-1 Crack Spread In the third quarter, grew by nearly 29% in average compared to a year ago, aided by high diesel and gasoline margins, boosted both from robust demand and low inventory. The company reported that its average daily throughput volume increased to 3.1 millions barrels in the third quarter from 2.9million bpd one year ago. Valero’s refining profit per barrel was $13.14 compared to $9.09 one year ago. According to LSEG data, the company's adjusted profit for the three-month period ended September 30 was $3.66, compared to analysts' expectations for $3.05.
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Russian rouble strengthens vs dollar despite US oil sanctions
Analysts say that the Russian rouble could be supported in the short term by the United States' sanctions against Russia's largest oil companies. In his latest policy change on Moscow's conflict in Ukraine, U.S. president Donald Trump imposed sanctions against Rosneft (Russian oil company) and Lukoil (Indian oil company). This caused global crude prices to increase by over 4%. India also considered cutting Russian imports. The rouble had been trading flat against the Yuan at the Moscow Stock Exchange at 0950 GMT. Sofya Donnets, T-Investments, said that sanctions are a factor in foreign currency revenues. However, until November 21, a rapid inflow of currencies is possible as sanctioned firms bring in money. She added, "We expect some volatility in the short term." The U.S. gave Rosneft, Lukoil and their subsidiaries until November 21, to end operations. Analysts at VTB said that "Lukoil will be more inclined than Rosneft to repatriate their funds back to Russia. This includes not only the current revenue in foreign currencies but also previous accumulated resources." This could be a major support for the rouble in the future." The Russian stock exchange fell by 3.5%. Lukoil was among the top five losers with its shares dropping by more than 4%. Rosneft's shares dropped by 3%. Around half of Russia's oil production is produced by these two companies. Analysts say the measure may force Russia to discount its oil further on the world market to offset the risk secondary U.S. sanctions. However, this could be mitigated if global oil prices rise, which would support the rouble. (Reporting and editing by Ed Osmond, Gleb Bryanski)
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Greek divers remove ghost nets that destroy marine life
Divers have been working to remove abandoned fishing gear, or "ghost nets", from the coastline of Sapientza Island. These nets silently choke marine ecosystems. These nets are draped like curtains on the seabed and trap unknowing sea creatures. They slowly decompose into microplastics and poison the water and choke life. Divers worked quickly and efficiently to attach inflatable lift bags onto the heavy nets. Alexander Stavrakoulis said, as he scanned the horizon: "The ghost net creates a zone that is dead -- a zone where nothing lives." "Life is becoming outdated. It is important to remove these ghost nets as soon as you can. The legacy of farm-fishing threatens many of the sites in Sapientza. It is known for its pristine water and rich marine biodiversity. Aegean Rebreath, an environmental group, launched the cleanup in order to remove ghost nets at known hotspots. The nets are invisible to casual swimmers. They drift along with the currents and entangle everything they come into contact with. Plastics that are too small to be seen but toxic to eat can become microplastics as they degrade. Stavrakoulis said, "We can't just sit back and watch the sea life disappear." We have a duty to act. It's a great way to give back to the environment. George Sarellakos (46), founder of Aegean Rebreath, claimed that Greece's decades-old legal gaps had allowed abandoned fishing farms and discarded equipment to destroy marine habitats without being checked. He said: "Years have passed, but this phenomenon is still not addressed by any policy." What we need is an actual legal framework to prevent this from happening again. (Reporting and writing by TV, edited by Patricia Reaney; Ivana Sekularac).
The palm oil industry in Indonesia is gripped by fear as the military seizes plantations
In late June, Indonesian soldiers wearing fatigues entered a palm oil plantation in Borneo and displayed a sign declaring that the estate was under government control.
The Melati Hanjalipan Plantation is a perfect example of a military-backed takeover which has shocked the 16 million-strong workforce and the world's largest palm oil producer. Agrinas Palma Nusantara is the new state-owned palm oil firm that has a land area of 9.1 million acres. Nearly half was transferred to it, making it the largest palm oil company in terms of size. This crackdown, ordered by the President Prabowo Subianto, is the largest structural change to Indonesia's palm oil industry. It has put a total 5 million hectares of land under military surveillance. This is approximately 30% of Indonesia's palm oil land and is larger than the Netherlands.
Agrinas could be given the territory, but industry experts claim that they are not equipped to manage it.
Agrinas and the president's office did not respond when asked for comments.
Prabowo, who has been in power since October 2024, told his cabinet that he was determined to eliminate corruption cases that could not be investigated.
COMPANIES UNDER SIGE
Former special forces commander Prabowo has expanded the role of the military in civil affairs, reigniting fears that Indonesia will return to its authoritarian Suharto era. He appointed retired generals to Agrinas board, and created a taskforce of soldiers, police, and prosecutors, which will target plantations that operate in areas designated as forests, according to a presidential decree from January and the company website.
Questions about the seizures were not answered by the task force, the Indonesian defence ministry or the military.
In interviews with 12 company executives, growers in Indonesia, and five industry observers, including the most respected analysts of the sector, there was widespread concern about the future of their operations and the impact the crackdown would have on the global supply. Sources at three of Indonesia’s largest palm oil producers have confirmed that they have reduced their fertiliser usage and regular upkeep of areas at risk of takingover. This could affect future yields.
Agrinas was formed by Agrinas, a company that has been seized of assets. The executives have requested anonymity out of fear of government reprisals.
What can a business do if the government uses military or police? Who do we protest to? "Do you think we'll dare?" One executive replied: One executive said.
Eddy Martono, chairman of the industry group GAPKI, said that the "uncertainty" could cause a drop in production as early as this year.
'KING OF THE THIEVES
Melati Hanjalipan is two hours away from Sampit, through remote terrain with poor mobile reception and dust clouds following passing trucks. Sabarani, the cooperative's head, said that under state control there is a bleak future for this 106-hectare plantation, as monthly fruit bunches production has already dropped to 23 metric tonnes from an average of 80-100 tons.
He said that their caretaker partner did not want to maintain the plot because of its legal dispute.
Why is the state turning into the kings of thieves? He asked.
Sabarani admitted to managing the plot, which was cleared by a Dutch timber company for 20 years without any proper documents. The cooperative had an expired local government permit, but when the central government reclassified it as forest they did not secure a Forest Area Utilisation Permit.
This is similar to the experience of smallholders, who began planting on ancestral land before they were told that they were invading forests.
An association that represents them reported that seizures have also affected tens and thousands of small plantations operated by transmigrant farm workers resettled in the country under former strongman leader Suharto.
Sabarani stated, "We do not want to join Agrinas if we aren't legal." "We do not want to be used to work for Agrinas but be illegal," Sabarani said.
MILITARY RUN PLANTATIONS Prabowo believes that the military-run plantations are essential for achieving food and energy independence within five years.
Agrinas has been tasked to achieve his ambition of producing a diesel made entirely of palm oil, and controlling at minimum 30% of the domestic market for cooking oils.
Agrinas, a newly formed company, was given the palm brief by Prabowo in March. It had no prior experience. The lawyer for the company showed pictures and videos of armed troops arriving at Duta Palma Group plantations, which were the subject of a money laundering case. Agrinas was given the lands. Sutomo stated that it plans to manage three million hectares by 2029. In September, he said, "My job used be to run around and go undercover. But now I'm told to take care palm oil."
"This is an honor, a mandate even though I know nothing."
INDUSTRY’S BIGGEST NAME The task force has focused its attention on some of the biggest names in the industry. The forestry ministry listed subsidiaries of Singapore-based Wilmar as well as SD Guthrie and Sinar Mas Group.
Wilmar reported that despite challenges, the company had seen a 5% rise in production of fresh fruit bunches during the first half. However, full-year results are dependent on "resolutions to various issues" between Indonesian authorities.
The company said it had engaged with Agrinas in a few plantations, and supported the regulation of illegal plants.
Cargill stated that it was aware of the ongoing reviews and is in a constructive dialogue with authorities. SD Guthrie declined to comment on requests, but said in August that 3% of their planted area had been affected. First Resources and Musim Mas declined comment. Golden Agri, parent company of Sinar Mas did not respond.
COMPLEX LEGAL MAZ
Seizures bring to light decades of murky legality in land. Deforestation, unclear rights to land, changing rules, and inconsistent enforcement have plagued Indonesia's palm-oil sector since the 1990s boom.
Three senior executives say many growers have documents relating to Jakarta disputes, and are faced with opaque processes for regularising permits.
Investors are increasingly concerned about companies that have been certified as sustainable.
This could have a long-term impact on production, especially since growth has already slowed down due to the ageing of trees and the moratorium on new permits for primary forests.
Globally, a significant production shortfall could have repercussions on the global edible oil market. The markets are already constrained as Jakarta converts more palm into biodiesel.
Sjafrie Sjamsoeddin is the leader of the task force and has stated that Agrinas must be prepared to ensure production does not decrease, but should actually increase.
Top analysts at an industry event in Mumbai warned that seizures will continue to decline if they continue.
Thomas Mielke, a forecaster at Oil World, said: "We assume Indonesia's production to rise by 0.7 millions tons next year. However, I wouldn't be surprised if it turns out that the increase is much smaller because investments are being cut."
Dorab Mistry, an industry analyst, echoed these concerns: "The threat to nationalisation leads immediately to lower yields."
(source: Reuters)