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Cenovus Energy predicts increased production in 2026
Cenovus Energy, a Canadian company, forecast a higher crude oil production in 2026 due to the completion of major oil sands project. The company anticipates an upstream production of between 945,000 and 985,00 barrels of oil-equivalent per day (boepd), exceeding its forecast of 805,000 to 845,00 boepd for 2025. The producer said that it would spend C$850,000,000 on the newly acquired Christina Lake North assets acquired from MEG Energy. The Calgary-based company had previously?stated that its capital expenditure will fall to C$4 billion in the next year as major expansion projects are completed, excluding assets of its high-profile C$6 billion takeover MEG Energy. The Canadian oil and gas producer anticipates that total expenditures will be between C$5.0 billion and C$5.3billion in 2026. The projects will also boost production. By 2028, the output is expected to reach about?950,000 Bpd. After delays caused by a regulatory investigation, the deal will bring one of Canada's few remaining oil sands companies into Cenovus.
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Copper prices rise with Fed rate cuts, but there are concerns about the outflow of US stocks
Copper prices rose Thursday after the U.S. Federal Reserve cut interest rates. Meanwhile, continued outflows from U.S. stocks of copper'supported concerns about a tighter supply elsewhere in the world. By 1044 GMT, the benchmark three-month Copper on London Metal Exchange had risen 0.8% to $11,646 a metric ton. The metal used in construction and power is up by 33% this year, after reaching a record high of $11,771 Monday, due to disruptions in mine supply and the outflow of copper?to the U.S. David Wilson, a BNP Paribas analyst, said: "The only thing that has caused copper to rally is the perception of the market that tariffs will be announced on U.S. imports sometime next year and implemented in early 2027." This keeps the CME-LME Arbitrage open and attracts the metals to CME stocks This year, copper prices have soared. BNP Paribas estimates there are also over 500,000 tonnes of copper off the exchange stock in the U.S. The visible global exchange stock is up by over 40% on a year-over-year basis. Wilson stated, "This 'idea' that there is no copper is misleading. But this draw of units of copper into the U.S. creates a perception of tightness in the ex-U.S. tightness." He added that the demand for copper in China, which is the world's largest metal consumer, will decline by a single-digit percentage point year-over-year during fourth quarter. Fed rate cuts of 25 basis points on Wednesday were expected and 'pretty well priced in. The yuan hit a 14-month high versus the dollar following the Fed decision. This made dollar-priced materials more appealing to Chinese buyers. Other LME metals saw aluminium rise 0.3% to $2.874.50 per ton, zinc gain 0.7% to $3,000, lead add 0.2% to $1.982.50 and tin climb 0.9% to $42,280. Nickel fell 0.6%, to $14,565. (Reporting and editing by Leroy Leo; Polina Devitt)
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Oracle AI reality test knocks stock prices, Fed cuts dollar
The world stock market stalled Thursday after cloud computing giant Oracle warned about AI profitability. Bonds remained firm, and the dollar suffered losses following the U.S. Federal Reserve's third interest rate cut. Oracle's failure to meet analysts' profit and sales estimates, and its flagging of a $15 billion AI expenditure caused jitters in many Asian and European heavyweight markets. SoftBank, a partner of Oracle in the U.S. Stargate project and a major shareholder in the U.S. company, also fell over 7.5%. Europe also saw a muted opening, with a drop of 2.5% for Germany's SAP leaving the region's technology indices in the red for a third day running. However, the prospect of lower interest rates globally meant that there were gains elsewhere. ORACLE AT CENTRE OF AI SPENDING DELIBERATION Hargreaves Lansdown's Matt Britzman, an analyst, said that Oracle was at the epicenter of the AI spending debate because it lacks Google, Amazon, and Microsoft's mammoth financial resources. Britzman explained that the markets quickly looked past a massive earnings beat driven by an asset sale and focused instead on 'rising capex' and?weak cash flows. This sparked a broader concern about AI investments not turning into profits as quickly as firms hoped. The Fed's decision to lower its benchmark funds rate by 25 basis points, as was expected, to 3.5% to3.75%, in a split decision of 9-3, had traders concentrating on the global rate outlook. Fed Chair Jerome Powell was balanced in his press conference. He said that he did not "believe a rate increase is anyone's baseline case", and new language on "the amount?and timing of" further rate adjustments suggested a possible pause. The euro briefly broke through the chart resistance, and was able to move above $1.17. Alexandre Drabowicz, CIO of Indosuez Wealth Management, said that the bar for a further rate cut by the U.S. in the next few months is now quite high. It will likely be determined based on the state of the job market. He said, "We expect another cut to occur in the first half." Forecasting the second half of the year is "too hard", but with Donald Trump's new Fed chair expected to be in place by May, "it will definitely lean towards more cuts." Drabowicz said, "This is still a situation where we maintain a cautious outlook on the U.S. Dollar." Bonds received a boost after the Fed announced that it would begin buying short-term Treasuries on Friday in order to help support liquidity. Benchmark U.S. two-year yields dropped by 3.52%, while benchmark 10-year yields declined by?about 4 basis point to 4.12%. The benchmark 10-year German yields were down by one basis point to 2.85% after reaching 2.894% Wednesday, the highest level since March. The money markets were volatile in the last few weeks. This led to an increase in short-term interest rates due to the tightening of liquidity. Jack Chambers, Senior Rates Strategist at ANZ, said: "The Fed doesn't want to see this type of thing continue as it inhibits monetary policy transmission." DOLLAR SLIDES The yen remained firm in anticipation of the Bank of Japan's meeting next week, where an increase is expected. In Asia, the yen reversed its recent decline and rose to $155 in trade on Thursday. The euro reached a two-month peak of $1.1707 after Christine Lagarde, the president of the European Central Bank, said that another upgrade to European growth projections is possible. Analysts at ING wrote in a report that the next important indicator will be November's non-farm payrolls released on 16 December. They asked whether a low number could keep the market price of two more rate cuts?in 2020 intact. The EUR/USD may not be able to reach 1.1800, but it could still have a run up to that level. The oil prices have also fallen after they rose on Wednesday, following the seizure by the United States of a tanker carrying a banned oil off the coast of Venezuela. This heightened tensions between Caracas and the United States, raising concerns about possible supply disruptions. Brent and U.S. Crude Futures both fell by about 1.2% to $62.15 a barrel and $58.44, respectively. Gold and Bitcoin also moved lower, down to $4,216 per ounce and $90.358, respectively.
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US threatens to cut South Sudan aid due to humanitarian fees
Ammu Kanampilly NAIROBI (Dec. 11) - On Thursday, the United States threatened to reduce their foreign aid to South Sudan unless Juba lifted what they said were illegal?fees? on humanitarian shipments. In a remarkably pointed statement entitled "Time to Stop Taking ADVANTAGE of the United States," U.S. Bureau of African Affairs alleged that South Sudan's Government "imposed exorbitant charges on humanitarian shipments", and "obstructed U.N. Peacekeeping Operations". South Sudan's Minister of Humanitarian Affairs did not respond immediately to a comment request. The U.S. is the biggest humanitarian donor in South Sudan. This year, it has made rapid and 'deep' cuts to its foreign aid. Since 2011, the 12 million-strong country has been devastated by war. Foreign donors have consistently objected to efforts?by South Sudanese officials to?collect tax on humanitarian imports. The U.S. said that "these actions constitute egregious breaches of South Sudan's obligations under international law." "We urge the government in transition to stop these actions immediately. The United States would then begin a "comprehensive review" of its foreign assistance to South Sudan, with the possibility of significant cuts. Since the end of a five-year war in South Sudan in?2018, which killed approximately 400,000 people, armed conflict has continued in large parts of South Sudan. U.N. Investigators said, however,?in a September report that corruption by the?political elitists was the main driver of a humanitarian crisis where most South Sudanese are?facing crisis levels of food insecurity. Juba disputed this conclusion and attributed the country's problems with humanitarian aid to the conflict in Sudan, climate change, and disruptions of oil exports due to the war. Reporting by Ammu Kanampilly, Editing by Aaron Ross and Aiden Lewis
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Construction sector in Germany expects Infrastructure Fund to drive turnaround
The construction industry in Germany, which has been mired in crisis for many years, is about to 'a'revive, according to the main trade association of the sector. This comes as the German government pours hundreds of billions into a massive plan of infrastructure renewal. The Central Association of the German Construction Industry ZDB forecasts that the sector will see a real increase of 0.6% in turnover this year. This would reverse three years of decline and be followed by an explosive 2.5% growth in 2026. The forecast is for revenues to reach 168 billion euros ($196.61billion) in 2025. This represents a nominal increase of 3% from the year before, and 178?euros by 2026. The INFRASTRUCTURE FUNDS will boost the construction sector ZDB President Wolfgang Schubert Raab stated that "the construction industry has reached its lowest point," pointing out special funds from the 500 billion-euro package for modernising infrastructure as the main driver. After years of falling?figures the confidence in the construction industry is finally returning. The association stated that state investment would primarily drive growth in civil engineering. However, conditions are improving in residential construction. A ZDB survey of 1 500 construction companies found that 56% rated their current business as satisfactory or good. Nearly 70% of respondents expect the situation to be stable or improve in the next few months, compared to just over a half-year earlier. RESIDENTIAL SECTOR TO EXPECT GROWTH FROM 2026 ZDB projects a turnover in'residential construction' of just over 54 billion euros by 2025. This represents a real decline of 4%, after inflation, from the previous year. In 2026 however, revenue is expected to increase to?56.3bn euros, which represents a 1.6% real growth. The association anticipates that between 225,000 and 235,000 housing units will be completed by 2025. This is down from 252,000 units in 2024. Next year, the number of units should drop to between 215,000 and 222,000. The number of new building permits fell by 27% in the year 2023, and another 17% in the following year. ZDB stated that "due to long lead times we don't expect positive numbers until 2027."
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After a report on major U.S. plans, the Kremlin said that Russia was interested in foreign investments
The Kremlin announced on Thursday that Russia is interested in attracting more foreign investment. This comes after the Wall Street Journal reported that the U.S. peace plan in Ukraine included proposals to invest in Russian rare Earths and energy. The Journal reported that the plans, which were detailed in the appendices of peace proposals drafted by U.S. president Donald Trump's administration and given to European counterparts during recent weeks, included proposals to restore Russian supplies to Europe. The Journal reported that U.S. firms would also invest in Russian strategic areas such as rare earth extraction and oil drilling in the Arctic. U.S. businesses and financial firms would then tap into $200 billion in frozen Russian sovereign assets to fund projects in Ukraine. When asked about the Journal article, Kremlin spokesperson Dmitry?Peskov stated that Russia is and has always been open to foreign investments but that Moscow will not engage in megaphone?diplomacy. Peskov said to reporters that he was interested in foreign investment. "As to 'the plans,' we are not engaged in a loud discussion about any plans or projects." He declined to make any comments when asked about the plans for a $200 billion Russian asset. The Journal reported that an unidentified European official compared proposed U.S. and Russian energy deals with the economic version of 1945's Yalta Conference. The Soviet Union, United States, and Britain divided their interests in Europe at that meeting. After the Russian invasion of Ukraine in 2022 many Western investors either left Russia or mothballed investments. Some major stakes have been taken over by Russian investors, or confiscated and given to Russian businessmen. Western European powers, including the U.S. administration of Joe Biden, sought to cripple Russia's economy with the harshest sanctions ever imposed against a major economy. Europe also tried to wean themselves off Russian gas. Ukrainian President Volodymyr?Zelenskiy stated on Wednesday that Ukraine had reached an agreement on the key points of post-war peace. Reconstruction plan In talks with Trump's daughter-in-law Jared Kushner and other top officials, as part of efforts to settle the war that has lasted for nearly four years. (Reporting and writing by Dmitry Antonov, editing by Guy Faulconbridge).
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Silver reaches new highs; gold falls after Fed split vote on rate cuts
Gold edged lower on Thursday, as traders ?weighed the U.S. Federal Reserve's divided vote on a quarter-percentage-point ?interest ?rate cut, while silver climbed to yet another record high. As of 0947 GMT, spot gold was down 0.2% at $4,220.09 an ounce. U.S. Gold futures for delivery in February rose 0.5% to $4247.50 an ounce. It's an overpositioning in gold, in anticipation of the rate reduction, which actually happened, and you're experiencing some selling pressure," said Ross Norman, independent analyst, adding that gold fundamentals remain intact. In a rare split vote, the Fed cut interest rates a quarter percentage point on Wednesday. However, it signaled a pause in further easing while officials assess the direction of inflation and job market. Gold is a good example of an asset that benefits from lower interest rates. After the two-day gathering, most policymakers projected that there would only be one rate reduction in 2026. Jerome Powell, Fed chair, did not give any indication as to when a second cut could occur. Donald Trump, the U.S. president, said that on Wednesday the Fed could have cut rates even more. Trump will announce the next Fed chair in early 2019. White House economist Kevin Hassett is considered a frontrunner. Investors will be awaiting the November non-farm payrolls data and the unemployment rate, which are due on December 16th. This information could provide further insight into what next moves may be made by Fed. Spot silver increased 0.5% to $62.09 an ounce after hitting a new record high of $62.99 earlier in the session. This brings its year-to date gain to 115%. Silver's fundamentals are still incredibly positive. The critical minerals list is a huge tailwind, and there's a possibility we could see some stockbuilding. This would increase the market's tightness. Norman concluded. Palladium increased 0.3%, to $1480.03, and platinum rose 0.8%, to $1669.73. (Reporting and editing by Kate Mayberry in Bengaluru, with Pablo Sinha reporting from Bengaluru)
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EUROPE GAS prices edge higher due to low wind output
The Dutch and British wholesale prices of gas rose slightly on Thursday morning, as lower wind power production forecasts increased demand for gas by?gas-fired?power plants. However, prices were still close to their?20-month lows. LSEG data shows that the benchmark Dutch front-month contract was up 0.23 euros at 26.98 Euro per megawatt hour or $9.25/mmBtu at 0845 GMT. The contract reached an intra-day minimum of?26.55 euro/MWh, on Wednesday. This is a level that has not been seen since April 20,24. The Dutch February rate was 26.98 Euros/MWh on Wednesday, up 0.18 euros. The British February 'contract' was up 0.61 cents at 69.96 pence/therm. In a daily note, LSEG analyst Saku Jussila said that the demand for non-local distribution zones in Northwest Europe (which includes 'power plant demand) is expected to increase by 242 gigawatt -hours/day in the days ahead,?at 3.138GWh/d. This will be due to a drop in wind energy output on Friday. After prices reached new 19-month lows, technical buying also provided some support. According to LSEG, the relative strength indices (RSI) for the Dutch front-month contracts have been below 30 in this week. This is a technical threshold that indicates a stock, commodity, or other asset may be due an upward correction. The market is still weak in terms of fundamentals. Mind Energy analysts said that temperatures in Germany are expected to be above average or at least not below normal until Christmas. The benchmark contract on the European carbon markets was 1.02 euro higher, at 83.43 Euros per metric ton. (Reporting and Editing by Louise Heavens, Susanna Twiddale)
Australia announces first new oil and gas acres in many years
The Australian government released on Thursday its first offshore oil and natural gas acreage available for auction since 2022.
The five areas are located in the Otway Basin, offshore of?Victoria in Commonwealth waters. They were announced a day after?the Victorian Government offered state waters for companies to bid on. In 2020, over 40 areas - most of them in the north - were put up for bids. By 2022, there were only 10.
Canberra hopes that the offer will prevent a future shortage of gas on Australia's east coast.
Madeleine King, Resources Minister, said: "Exploration will be key to meeting our commitments of net-zero energy and supporting Australian industry and households."
The Otway Basin is considered an old oil and gas basin, not a new one. It has infrastructure such as pipelines and onshore processing plants where any new gas finds can be connected.
Australia is about finish its gas market review. It aims to correct shortfalls on the domestic east coast while continuing to export liquefied gas from the east coast.
ConocoPhillips, along with its junior partner 3D Energi, announced a discovery of gas in the Otway last week. They have since begun drilling the second 'well' as part of their exploration campaign. The U.S. firm has a stake in one of three LNG export consortiums in Queensland that are being reviewed by the Australian government.
Samantha McCulloch CEO of Australian Energy Producers, a lobby group for oil and gas producers, said: "This week we have seen a welcome recognition by the Victorian and Federal governments that continued exploration is crucial to maintaining a pipeline of gas supply project to meet our long term energy needs."
The companies can now bid for the land with applications closing in June of next year. Helen Clark, Thomas Derpinghaus and Helen Clark contributed to this report.
(source: Reuters)