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After Trump's comments about an 'armada moving to Iran', supply concerns have prompted a rebound in oil prices
The oil prices rose on Friday, after U.S. president Donald Trump renewed his threats against a major Middle Eastern producer in?Iran. This sparked fears of military action which could disrupt supply. Brent crude futures for the month of March increased by 35 cents or 0.55% to $64.41 per barrel. U.S. West Texas Intermediate Crude rose 33 cents or 0.56% to $59.69 per barrel at 0243 GMT. Both contracts fell by about 2% Thursday. After Trump informed reporters on Air Force One that the U.S. had an "armada", heading towards Iran, he hoped not to have to use this weapon. He also warned Tehran against resuming its nuclear program or killing protesters. A U.S. official announced that warships, including an aircraft carrier as well as guided missile destroyers, will be arriving in the Middle East within the next few days. Iran is the fourth-largest producer of oil in the Organization of Petroleum Exporting Countries. It also exports a lot of oil to China, the world's second largest consumer of petroleum. Brent and WTI will gain 0.6% in the coming week after the prices rose earlier this week due to Trump's threats of invasion Greenland. This could destabilize the trans-Atlantic Alliance. However, they dropped on Thursday when he backed off any military action. Trump has retracted his statement that Denmark, which controls Greenland, NATO, and the U.S. have reached an agreement to allow "total acces" to Greenland. Prices also'softened' on Thursday after bearish government data showed that stockpiles of oil in the U.S. - the world’s largest?oil consumer - grew last week due to a slowdown in fuel demand. U.S. Energy Information Administration released data on Thursday that said "crude inventories increased by 3.6 millions barrels during the week ending January 16". This was more than the analysts' polled prediction of a 1.1 million-barrel increase. The API trade group, according to market sources, reported a 3-million barrel build on Wednesday. The U.S. Martin Luther King Jr. holiday fell on Monday, so both agencies released their reports one day later than normal. Helen Clark (Reporting; Christian Schmollinger, Editing)
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Six people are confirmed missing following a landslide on a New Zealand campsite
Authorities confirmed on Friday that six people were missing after a landslide ripped through a campground in New Zealand's North Island. Emergency crews continue to search the rubble. The landslide was caused by heavy rains on Mount Maunganui, on the east coast of the island. It happened at 9:30 am (2030 GMT Wednesday) and brought soil and rubble to the campsite where families were spending their summer holidays in Tauranga. Tim Anderson, the Police District Commander for Tim Anderson's district, said at a press conference that authorities are working to locate three additional people to add to the six who have been confirmed as missing. "We don’t believe they are?here, but we still have to do this inquiry," he said. New Zealand officials did not report any deaths in the camp. Police said that two?people were killed in a landslide on Thursday, in the nearby suburb of Papamoa. In an X-post, Chinese Ambassador Wang Xiaolong stated that one of the victims was a Chinese national. Mahe Drysdale, the Mayor of Tauranga, told Radio New Zealand the search and rescue teams had remained at the campsite all night but had not made any progress in locating missing persons. Images show a campsite with a number of structures and recreational vehicles crushed. Drysdale explained, "We are here with the families. As you can imagine just the uncertainty of where they might be and when we may have a final result is very hard." Drysdale stated that the area was still unstable. Emergency Management and Recover Minister Mark Mitchell told Radio New Zealand that the environment was challenging. He said that police were examining whether some campers had left the area without notifying authorities. New Zealand Police Commissioner Richard Chambers told the New Zealand Herald that the size of the disaster, and the dangers at the site may delay rescue efforts. Chambers stated that it could take days to get answers. "We understand everyone is anxiously waiting for their loved one and for answers, but we must also be very careful," Chambers added. Heavy rains this week flooded the east coast of North Island and caused extensive damage. Some of the most severely affected areas remained closed, rendering some North Island towns unreachable by land. Civil defence in Tairawhiti District warned people against walking on landslides in order to get water and food at welfare hubs. They feared that more landslides could occur. (Reporting from Lucy Craymer, Wellington; Christine Chen, Sydney; Editing done by Cynthia Osterman and Tom Hogue).
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Asia stocks surge ahead of Bank of Japan's rate decision
Early Asian trading on Friday saw tepid gains ahead of the Bank of Japan meeting. It is widely expected that it will?keep rates at current levels. The Nikkei was 0.2% higher, and MSCI's broadest Asia-Pacific share index outside Japan gained 0.4%. S&P 500 futures traded in a range of gains and losses. They last moved up by 0.1%. The Wall Street stocks extended their recovery for the second day on Thursday after U.S. president Donald Trump backed down from earlier threats to impose tariffs on European products and denied that he would take?control of Greenland through force. The S&P 500 rose 0.5%, and the Nasdaq Composite rose 0.9%. Analysts from Societe Generale stated in a report that "markets have welcomed this shift with a'rebound in risk assets, and a flattening government bond yields." However, policy uncertainty is still high. "There are more twists and changes likely." The yen fell 0.1% against the dollar before the BOJ meeting. This was after the government released data earlier in the day that showed Japan's core prices for consumer goods rose 2.4% from December of last year, as expected by analysts. The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, has remained at 98.329 after Thursday's biggest one-day drop in six weeks. Fed funds futures indicate a 96% implied probability that the U.S. Federal Reserve is likely to keep rates unchanged at its next 2-day meeting, scheduled for January 28. This was little changed compared to a day before. The yield of the 10-year Treasury Bond in the United States was up by 0.2 basis points at 4.247%. The dollar sank to its lowest levels of the year, and precious metals markets broke records. Gold rallied for the fifth consecutive day, rising 0.3% to $4.951.47 an ounce. Silver was up 1.7%, at $97.85. Korean stocks led gains in Asia. The Kospi rose for a third consecutive day by 1,1%, after it crossed the 5,000-mark for the first time. This was a landmark that President Lee Jae Myung promised to achieve through market reforms, and tax measures, to close the so-called 'Korea Discount. Intel, which struggles to meet demand for AI data centres' server chips, forecast revenue and profits below market expectations on Thursday. Shares fell 11% after hours trading. Brent crude futures last rose 0.4% to $64.30 per barrel. This was after Trump's more lenient tone toward Greenland, Iran, and other geopolitical issues eased concerns about supply disruptions. Bitcoin rose 0.3% to $89,499.47 while Ether climbed 0.2% to $2,948.14. (Reporting and editing by Christian Schmollinger; Gregor Stuart Hunter)
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Will the world reduce its $27 trillion "long USA" position? McGeever
The "Sell America' trade is back in the news, and even though it may quieten down after reports of U.S. president Donald Trump's possible Greenland deal it's safe to assume that it won't?go away. We've done this before. Last year, the term "de-dollarization", which was coined by Trump's tariffs-based trade war, became a buzzword. Investors were worried that they would reduce their exposure to U.S.-based assets. This?didn’t happen. U.S. Treasury official figures show that foreigners purchased a net of $1.27 trillion in U.S. Securities during the first eleven months of last year. This was primarily due to a flood of private investors swept up by the artificial-intelligence frenzy. November seems like it was a long time ago. Trump's flurry of controversial policies since then – which has effectively overturned the U.S. - European alliance and the rules-based order of the past 80 years – have revived the talk of shorting Uncle Sam. According to the latest official count, the U.S. has many assets that can be sold. The net value of these assets is around $27.6 billion. This is the difference between $68.9 trillion in U.S. assets held by foreign investors and $41.3 trillion in foreign assets held by Americans. This is America's Net International Investment Position (NIIP). This is the biggest ever, both in terms of nominal value and GDP share. This means that the world has a net "long" position of $27,6 trillion. This is a very lopsided position, especially in the equity segment, and it's increasingly seen as "Sword of Damocles", hanging over U.S. market. The world must decide whether it wants to continue to hold a stretched position or if they want to start reallocating. Mutually Assured Financial Destroyance Answers won't come quickly. Some Scandinavian pension funds are reducing their holdings in U.S. Bonds, but, as Treasury Secretary Scott Bessent noted somewhat disparagingly this week, these funds are too small to "move the needle." This debate has revived the concept of "mutually guaranteed financial destruction," which was previously linked to fears that China would dump its Treasuries in order to increase U.S. yields, and harm Washington. Now it is being applied to Europe. The China example, however, is "instructive". Beijing has reduced its exposure in Treasuries over the past few years without the yield spike that was feared, thanks in large part to the strong demand for Treasuries from European countries such as Britain, Belgium, and Ireland. George Saravelos, a Deutsche Bank analyst, estimates that European nations hold $8 trillion in U.S. stocks & bonds. This is almost twice the amount of assets held by the rest of world. It may be that Europe no longer views the U.S. as a reliable partner. However, establishing new strategic partnerships, supply-chain network, and trade links takes time. It would be difficult and risky to decouple from the U.S. in a short time. There are few markets that are as liquid or as large as the U.S., and to avoid American stocks would be to ignore many of the world's most innovative, valuable companies. Sarah Bauerle Danzman is a senior fellow at Atlantic Council. She says, "There is no way to restructure global economics without creating a great deal of wealth destruction." "Everyone is aware of this, and that's why Trump was able to make such a strong statement." Remember the Deficit? It is unlikely that there will be a mass exodus, but the pace of the inflows must slow down enough to reduce the value of U.S. investments and undermine the narrative of "American exceptionalism". The U.S. must plug its massive deficit in the current account. This gap has shrunk dramatically over the past two quarters. Trump's trade protectionist policies may ensure that it continues to shrink. Net capital inflows from abroad of at least $1 trillion a year are still needed. The inflows were significant last year, but could they be sustained? Treasury figures reveal that 663 billion dollars of the net $1.27 trillion in U.S. Securities bought by foreigners during the first eleven months of the year was invested in stocks. This is more than triple the $205 million that was bought during the same time period in 2024. Brad Setser is senior fellow at Council on Foreign Relations. He says, "The world has a long way to go before it reaches the U.S." "People don't need to be persuaded to keep their U.S. investments, but to buy more." It may be difficult to convince the world right now to stay with the U.S., given the geopolitical storm emanating from Washington. The financial balance may also start to shift as the global regime changes. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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New ETF tracks US stocks most appealing to retail investors
The two firms announced Thursday that Defiance ETFs has launched with Futurum Equities a 'new exchange-traded funds aimed at providing access to stocks they believe will be of most interest to individual investors. This group is becoming a more significant force on the U.S. Stock Market. The Defiance Retail Kings ETF is an actively managed portfolio that will include between 30 and fifty stocks. This team believes it will appeal to self-directed retail investors interested in high-growth investment opportunities. The ETF's supporters say that the fund does not attempt to capture the latest vagaries in the meme stock universe. This is characterized by dramatic rallies and equally sharp reversals of what were thinly traded, small-cap companies which have attracted attention from social media financial influencers. Sylvia Jablonski is the chief investment officer at Defiance. She said, "These are companies we believe will be around in 10 or 20 years, and that a new investor generation is particularly interested in following." Initial portfolios include companies such as Micron, Palantir Technologies and Robinhood, an online brokerage that caters for these self-directed investors. Oklo is another holding. It's a small nuclear reactor manufacturer that has emerged as a way of playing the AI boom, and resulting surge in power demand. Its stock price has increased by 170% in the past 12 months. Recent market turmoil has highlighted the growing importance of a?group? of investors that Defiance and Futurum Equities are trying to track, and whom they also view as?logical buyers? of the new ETF. According to JPMorgan Chase's latest report, published on Thursday, tracking their activity, investors invested $12.9 billion in U.S. stocks, funds and mutual funds during the week ending Wednesday. This is nearly twice the average weekly investment of $6.7 billion over the past 12 months. Vanda Research's Wednesday report shows that buying activity on Tuesday was especially strong. The firm tracked $1.8 billion in purchases made even though stocks were falling. The firm reported that it was the largest day of net individual investor purchases since October last year. (Suzanne McGee, Providence, RI. Editing by Diane Craft.
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Striking workers force production halt at Chile's Mantoverde mine
The company and mine's biggest union announced on Thursday that production at Capstone Copper’s Mantoverde Copper and Gold Mine in northern Chile has been largely halted following the shutdown of the mine’s?desalination?plant amid a nearly 3-week labor strike. The union claimed that production had been stopped, but later the company stated that production was continuing but would likely stop in the near future. The union claimed that a 'group of striking workers' took control of the desalination facility that supplies water to the mine. It added that the union had not approved the takeover. Capstone said in a statement released on Thursday that the takeover began on Sunday night, when individuals entered a desalination facility, located 40 km (25 mi) away from the mine and interfered with its electrical system. This led to a disruption in the water supply for Mantoverde. Capstone stated that striking union members were currently blocking access and preventing the restart of operations at its desalination facility. It added that it was seeking legal support to gain access to the plant. The company stated that the water on site at Mantoverde was?used for essential services. Oxyde operations are expected to continue through tomorrow. Sulphide operations have been temporarily suspended. Capstone said that sulphide operations would be suspended at this point unless water is restored. The strike started on Friday, after Union No. The strike began on Friday after Union No. The union, which has?645 members as its membership, announced on Jan. 7, that they expected a long strike. Mantoverde, which is owned 70% by?Capstone Materials and 30% by Mitsubishi Materials, was renamed in 2012. It was predicted that the mine would produce between 29,000 to 32,000 metric tonnes of copper cathodes by 2025. Reporting by Fabian Cambero, Santiago; Pooja Menon, Bengaluru. Editing by Vijay Kishore and Brendan O'Boyle.
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Ukrainian Energy Minister: Power system has had its most difficult day since 2022
Ukraine's energy network on Thursday experienced its most difficult day since a widespread power outage hit the system in November - 2022. The situation is still "extremely difficult, Energy Minister???Denys?Shmyhal? said. In the nearly four-year old war, Russia has been targeting Ukraine's energy systems. But the attacks intensified recently, causing heavy damage to networks and knocking power and heat out for large swathes. The power was cut to thousands of apartment blocks in Kyiv during two nights of strikes this month. Shmyhal is also the first deputy premier and he said that the recent difficulties were due to a number of factors, including constant shelling, damage to transformers and generating equipment. He wrote: "Today was the worst day for the Ukrainian power system since November 2022's blackout." The situation is very difficult. The crews were forced to resort to emergency shutdowns." He said that the most difficult conditions were in Kyiv, its surrounding area, and in the southeastern Dnipropetrovsk Region. Shmyhal reported that 165 emergency brigades worked during the daytime in the capital. The city had just experienced its?2,000th alert of an air raid since the Kremlin's invasion in February 2022. The wintry weather made their operations more difficult, as nighttime temperatures dropped to -10 Celsius. Vitali Klitschko, the mayor of Kyiv, said that 2,600 apartment blocks were still without heat two days after last night's attacks. However 600 buildings had heating restored. He said that power cuts were still in place, even though the water supply had been fully restored. Last week, President Volodymyr Zelenskiy declared an emergency in the energy industry and asked the government to develop a plan for dealing with disruptions. After a meeting on energy, Yulia Shvyrydenko stated that the government is working to provide Kyiv's residents with generators and alternative energy sources. (Reporting and Editing by Bill Berkrot.)
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Oil drops 2% after Trump toned down his threats towards Greenland and Iran
The oil price dropped by about 2% on Thursday, reaching a new low. This was after U.S. president Donald?Trump backed down on his threats against Greenland and Iran and on positive developments that could help end Russia's war in Ukraine. Brent futures dropped $1.18 or 1.8% to settle at $64.06 per barrel. U.S. West Texas Intermediate crude (WTI), however, fell $1.26 or 2.1% to settle at $59.36, which is a new one-week low. Trump claimed that he had secured permanent U.S. access in Greenland through a deal with NATO. The head of the alliance said allies must increase their commitment to Arctic Security to counter threats from Russia and China. Diplomats say that European Union leaders will also rethink their relationship with the U.S. during an emergency summit scheduled for Thursday, after Trump's threats of tariffs, and possibly military action, to take Greenland, severely shook the confidence in the transatlantic partnership. Ole Hansen is the chief commodity analyst for Saxo Bank. He said that there has been a reduction in risk premiums due to the Greenland fiasco and also decreased Iran supply risks. Trump said that he also hoped for no further U.S. military actions in Iran but added that the U.S. will act if Iran resumes their nuclear program. Iran is the third largest crude oil producer in the Organization of Petroleum Exporting Countries, behind Saudi Arabia and Iraq. Tony Sycamore is an analyst at online broker IG. He says that with less tension in Greenland and Iran the oil price should remain around $60 a barrel. RUSSIA AND UKRAINE After talks with Trump at Davos, Ukraine's President Volodymyr Zelenskiy said that the terms of Ukraine's security guarantees had been finalized. However, the crucial issue of its war?with Russia has not yet been resolved. Trump has pressed Ukraine to secure peace following nearly four years war, despite little sign that Russia is willing to end the fighting. By increasing the amount of fuel available globally, a deal that brings peace to Ukraine and lifts sanctions against Russia, which is the third largest crude producer in terms of volume, could lower oil prices. The French Navy intercepted in the Mediterranean a Russian oil tanker suspected of being a part of a Shadow Fleet that allows Russia to export its oil despite sanctions. According to data released on Thursday, the Russian oil production fell by 0.8% last year to 10,28 million barrels of crude oil per day (bpd). This represents around a 10th of global output. Trading houses Vitol & Trafigura, a second sanctioned OPEC-member, were exporting fuel in Venezuela under a U.S. backed deal after the capture of Venezuelan president Nicolas Maduro. Drafts of a proposed law reform in Venezuela would allow foreign and domestic companies to operate oilfields independently through a new model of contract, commercialize the output, and receive sales proceeds even if they are minority partners of PDVSA. A U.S. official stated on Thursday that the Trump administration allows China to buy Venezuelan crude oil, but not at the "unfair and undercutting" prices Caracas was selling the crude before the U.S. ousted Maduro. Oil prices could be reduced by increasing oil exports from Venezuela. Forecasts for European corporate health have also been cut, which has a negative impact on oil prices. Amin Nasser is the chief executive officer of Saudi Arabia’s Aramco, which is the world’s largest oil producer. He said that global oil glut predictions were'seriously overstated' as global oil stocks have been depleted and demand continues to grow. US OIL INVENTORIES Oil futures continued to lose money on the back of a larger-than-expected increase in crude storage. Energy Information Administration in the United States (EIA), said that energy firms added more than 3.6 million barrels to storage during the last week of January. This is more than triple what analysts predicted. EIA & API released their reports one day later than normal due to Monday's Martin Luther King Jr. holiday in the U.S. Scott DiSavino reported from New York, and Anna Hirtenstein from London. Sam Li and Siyi Liu contributed additional reporting from Beijing and Singapore. Editing by Joe Bavier (with Will Dunham, Mark Potter, and David Gregorio).
Vitol, Trafigura accelerate Venezuelan oil sales under US-backed $2 bln supply deal
Trafigura, a trading house, sold a 'cargo' of Venezuelan oil, to a Spanish refiner. Vitol, a rival, was preparing to export Venezuelan fuel as shipments from the OPEC nation accelerated, according to oil industry sources.
U.S. officials reported that Vitol, Trafigura and other companies obtained their first U.S. licensing to load and export Venezuelan crude oil earlier this month. Initial sales reached $500 million or approximately 11 million barrels last week, they said. U.S. officials said that other companies, such as U.S. giant Chevron, were waiting for Washington's exemptions from U.S. sanctions against Venezuela before expanding exports.
According to industry sources and shipping data, the trading companies have taken crude cargoes, stored them at terminals located in the Caribbean and then offered the Venezuelan oil to refiners based in the U.S.A., Europe, and India.
Trafigura completed its first crude oil sale this week to a customer, the Spanish company Repsol. Vitol has also negotiated cargoes for?U.S. Sources said that Vitol has negotiated cargoes to?U.S. refiners such as Phillips 66, Valero, and its own Saras refinery.
Vitol and Trafigura have declined to comment.
The sales indicate that the historic 50-million barrel supply deal between Caracas? and Washington is accelerating and that millions of bbls of Venezuelan crude oil are now flowing to refiners around the world after several years of not being able to buy it because of U.S. sanctions.
U.S. officials claim that Venezuela received higher prices than before sanctions for the oil purchased by Vitol or Trafigura. During the sanctions period, the country was forced to offer steep discounts in order to entice buyers to risk violating U.S. restrictions regarding the facilitation of Venezuelan oil exports.
Vitol & Trafigura have paid a $15 discount to Brent crude, up from the previous discount of $30 per barrel. Brent traded at $63 per barrel on Thursday. Venezuela would receive about $48 per barril compared to around $33 under sanctions.
The higher price of the 50 million barrels Venezuela agreed to sell in the U.S.-backed agreement would generate an additional $750 million.
FUEL OIL TO BE DEPART
Two sources claim that Vitol executives instructed their business partners to inspect terminals run by the state-run PDVSA in Venezuela, including Amuay, El Palito and Amuay, in order to?load fuel oil there in the next few days.
Refineries can produce fuel oil that is suitable for use in power generation. The OPEC nation produces high-sulphur residue fuel oil that it used to'sell to customers in Asia.
Shipping data revealed that Vitol has another cargo of fuel due to arrive soon in Venezuela. This cargo contains naphtha which Venezuela needs to blend with its heavy crude. The crude is diluted, which makes it easier to transport and less viscous.
PDVSA has not responded to a comment request.
Venezuela had previously imported naphtha, but these shipments were halted in December when U.S. president Donald Trump imposed an oil blockade into and out Venezuelan waters.
Venezuela has stored millions of barrels of fuel and crude oil on land and in vessels due to a U.S. blockade of oil that began in late December in an effort to put pressure on Maduro's government.
Independent figures show that the PDVSA was forced to reduce production due to the increasing stocks. Production fell to 880,000 barrels a day in early January from 1,16 million bpd late November.
Sources said that PDVSA sent millions of barrels, including fuel oil and residual fuel, to waste pools located in the western region of the country to avoid closing down its domestic refineries.
Three sources from the company said that the PDVSA's oil production cuts will be reversed in the next few days if exports increase.
(source: Reuters)