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India is prepared for unprecedented demand for coal power in the summer
The 'Coal Ministry' said that India had enough coal to meet what was expected to be a 'unprecedented spike in demand over the summer months. This comes after the gas supply disruptions caused bythe U.S./Israeli war against Iran. In a statement, the Ministry of Energy said that the total coal supply in the country was 210 million tons. This would be enough to?fuel consumption for 88 days. South Asia still depends on coal to generate three-fourths?of its electricity, despite a record-breaking increase in renewable energy production. India is expected to increase its coal power use in order to meet summer demand, after the Middle East conflict has affected the country's natural gas supplies, mostly from Qatar. According to the ministry, coal stocks in the country's power stations were 54.05 millions tons, which would be enough to last about 24 days at the current consumption rate. Coal India produces three quarters of India's production and had a record-breaking 121.4 million tons in its pithead stock as of March 9. The statement said that "Coal production, supply and consumption continue to be higher than the consumption in the fiscal year ending March 31". India's increased domestic production also led it to increase the blending of domestic coal into power plants that were designed to operate with imported coal. Reporting by Sethuraman NR and Tanvi Mehta; Editing and YPrajesh by Andrei Khalip
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OPEC confirms large Saudi oil production increase ahead of Iran War, but holds forecasts steady
OPEC announced?on?? Wednesday that Saudi Arabia increased its oil production sharply in February, ahead of U.S. & Israeli attacks on Iran. It also maintained its forecasts regarding a relatively strong growth in global oil demand this year. Sources familiar with the plan stated in February that Saudi Arabia increased output and exports in preparation for a possible U.S. strike against Iran, which could disrupt Middle?East supply. The attack occurred on February 28, and the ensuing conflict caused oil exports to be disrupted, production to stop and prices to soar. In a report published on OPEC's website, Saudi Arabia informed the group that its February supply was 10,111 million barrels of oil per day. Meanwhile, OPEC reported that production reached 10.882 millions bpd. The Saudi Arabian kingdom reported a January production of 10,10 million barrels per day. Saudi Arabia has intervened on the oil markets for years, either adding barrels when there are disruptions in supply or reducing output when oversupply is detected. Sources said that the February increase echoed last year's contingency plan, when they moved more oil into storage. OPEC, citing secondary source, also reported that the output of OPEC+ (which includes the Organization of the Petroleum Exporting Countries and other producers like Russia) averaged 42.72 mbpd during February, an increase of 445,000 bpd over January. The "supply to market" is usually the sum of exports, domestic refineries and power plants plus oil that has been shifted into storage. Saudi Arabia's supply to the market in February stayed close to?OPEC+ quota despite production being well above target. OPEC has not changed its prediction that the world's oil demand will increase by 1,38 million bpd - this year. Its estimate of 2026 demand remains higher than other analysts, including those at the International Energy Agency. In the report, OPEC stated that it was too early to tell if the current geopolitical developments would have any impact on economic growth. The OPEC+ agreement to maintain output targets for the first three months of the year was not a factor in the?Saudi Arabian and OPEC increase in February. The next forecast update from the IEA is due Thursday. Alex Lawler is the reporter. (Editing by Louise Heavens, Mark Potter and Mark Potter).
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Aluminium rallys focus on Middle East supply disruptions
After a brief drop in prices triggered by Donald Trump's comments on the Iran war, aluminium prices rose?on Wednesday. Benchmark aluminium at the London Metal Exchange was 1.1% higher, trading at $3.442 per metric ton. It reached $3,544 per ton earlier this week, its highest level since April 2022. Trump predicted on Monday that the conflict would be over well before the four-week timeline he set out. Due to the closing of the Strait of Hormuz, the war has effectively frozen shipments and posed a threat to global supplies of aluminium for use in packaging, construction and transport. Around seven million metric tons of aluminium smelting is located in the Middle East, which represents 9% of global smelting capacity. Aluminium?Bahrain, or Alba, one of the largest smelters in the world, announced force majeure last week to warn customers of delays. Meanwhile, Qatalum, a smelter in Qatar, began to shut down. Aluminium stocks in LME approved warehouses are a further source of concern about supply. On Tuesday, the number of cancelled warrants, or metals earmarked for deliveries, was 177,325, which is 40%, up from 9% the previous day, before the Middle East turmoil began. Fears about a shortage of aluminium have led to a 'premium 'or 'backwardation in the cash contract for the three-month future on the LME. Concerns about global economic growth are putting pressure on industrial metals as a whole, due to soaring oil and dollar prices. Dollar-priced materials become more expensive for holders of currencies other than the dollar, which could reduce demand. Lead retreated by 0.5% at $1,933.5. Tin was down by 0.7% to $50,100. Nickel fell 0.6% to $17.375.
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CleanTech Lithium begins partner search in Laguna Verde after Chile contract agreement
CleanTech Lithium will formally begin the search for "a strategic partner" for its Laguna Verde Lithium project after publishing a prefeasibility report later this month. The process is expected to take between nine and twelve months, according to Chief Executive Ignacio Mehech. The timeline provides a better idea of how fast the London-listed firm hopes to progress one of only a few private-sector projects in Chile that are moving forward. New supply has not been forthcoming despite high long-term expectations. CleanTech announced on Tuesday it had 'agreed contractual terms with Chile’s mining ministry for an exclusive lithium operating contract (CEOL)?for Laguna Verde. This is its flagship project located in northern Chile. Before it can be signed, the decree must still be ratified by Chile's comptroller-general. Mehech said that the process of finding partners would begin as soon as the company releases its pre-feasibility report, which is expected to be released in the next few weeks. "That's what allows a company to review a project seriously," he added, adding that the firm was searching for a partner who would provide both equity and debt assistance. He said that potential partners include automakers, mining companies, battery manufacturers or cathode producers. Mehech stated that the next steps for the company after the CEOL will be to complete the feasibility study and advance the environmental permitting, along with the search for a partner. He said that these processes could run parallel, and the company may be able to make an investment decision within the next two years. Mehech did not provide any further details, but said that the terms of the CEOL were in line with those previously awarded in Chile. Mehech stated that the company expected the review by the comptroller to be fairly straightforward because the mining ministry had already addressed the issues raised during previous contract reviews. The company expects to ratify in the second quarter. CleanTech previously reported a resource estimation for Laguna Verde of 1.9 million metric tonnes of lithium carbonate. However, the company stated that this figure could be revised due to an area adjusted in the contract. (Reporting and editing by Andrea Ricci; Kylie Madry)
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McGeever: Higher oil prices cloud Wall Street's optimistic earnings outlook
Investors might need to reconsider their optimistic 2026 earnings estimates for U.S. corporations, even if Iran's war is over soon. The consensus forecast for 2026 for oil was a bit bearish while Wall Street's earnings predictions were surprisingly optimistic. This has not changed. According to LSEG data as of Friday, the full-year earnings growth estimate for 2026 was nearly 16%. This is up from 14% in 2017 and 12% last year. Those rosy forecasts assumed an average 'oil price' this?year of $60 per barrel – an expectation that vanished into thin air when the U.S. and Israeli strikes on Iran took place on February 28, along with the subsequent disruption in supply. The oil market has seen wild volatility. Crude oil recorded its largest weekly increase on record last weekend, and continued to rise to almost $100 a barrel in this week's trading before falling on hopes of a quick end to the war. The damage has been done. The global energy system, which was finely tuned, has been completely upended. Infrastructure has also been damaged and the anticipated supply glut has disappeared. The average oil price this year is likely to be higher than what businesses budgeted for at the beginning of the year. The companies will absorb a portion of the increase and consumers will feel it. In either case, corporate profits will be squeezed. RUPTURE THE FORECASTS In a December poll, the average consensus forecast for Brent crude in 2026 was $61.27 a barrel, with the oversupply expected offset any possible disruption of supply from the brewing U.S.Iran tensions. This would have been a 7% drop from the average price of $68.20 in 2025. The forecasts were subsequently discarded. Analysts at HSBC raised their forecasts for Brent crude to $80 per barrel in 2026 from $65 per barrel and U.S. West Texas intermediate crude to $76 per barrel from $61 per barrel on Tuesday. This represents increases of 23% and 25 %, respectively. The U.S. Energy Information Administration also raised its forecast for 2026 Brent crude to $79, up from $58 last month. This is a 36% rise. Energy price increases will have a significant impact on the economy. Fuels such as gasoline, jet fuel and fertilizer will be more costly, and this will affect industries like transportation, manufacturing, metals and retail. Joe Brusuelas is the chief economist of RSM US LLP. He says that as prices increase, consumers are affected and corporate earnings suffer. It's a GAS! Goldman Sachs equity strategists believe that the impact of "modestly higher" oil prices on S&P500 earnings will be relatively muted. However, an extended period of disruption in supply or uncertainty is much more dangerous to economic activity. They say that for every percentage point of decline in the real U.S. growth rate, S&P 500 earnings could drop by 3-4%. According to other estimates, a 30% increase in oil prices can knock 4% off the earnings of S&P 500, with the most severe impact felt in transportation, consumer discretionary, and industrial sectors. Around 70% of the U.S. economy is based on consumer spending. Energy costs are likely to rise sharply, and household budgets will be squeezed. Alarm bells have already started to ring. According to data from the American Automobile Association, average gasoline prices in the United States are now above $3.50 per gallon. This is up 17% since the start of the war. Of course, there's also a negative side. Energy sector profits are likely to grow by double digits if oil prices continue to rise. Energy only makes up 4-5% of the total S&P500 earnings, so it is unlikely that this will offset any margin losses elsewhere. AI ARMS RACES - EVEN MORE EXPENSIVE TODAY There is an incredibly large dispersion between the 11 sectors in current earnings growth forecasts for 2026. The energy sector EPS was minus 1,2% as of Friday. This is the gloomiest and only forecast that points to a decline in profits. Tech's 2026 EPS estimate was 35.9% - comfortably the highest of all sectors, and up from 30,8% in January 1. In recent years, tech has contributed the majority of earnings growth for the S&P 500. Higher energy prices will hurt the mega-cap companies leading the race for artificial intelligence. UBS analysts predict that capex expenditures by "hyperscalers", this year, will reach $770 billion. Construction and operation of data centers may become more expensive. Investors are already worried about future returns. The cost of?energy is likely to increase significantly, which will further exacerbate their concerns at a time where risks in many other sectors have also increased. 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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Germany releases oil reserves to combat the energy price spike caused by Iran war
Katherina Reiche, Germany's Economy minister, said that the International Energy Agency has recommended the release 400 million barrels from its stockpiles. This is the largest?such move? in IEA's history. Reiche confirmed to reporters in Berlin that the government intends to limit petrol price increases to one per day at filling station and introduce "more stringent antitrust regulations of the sector." She did not provide a definite time frame for these measures but said that the United States, Japan and other countries would contribute the most to the release. Reiche stated that the situation is tense as oil supplies are strained due to the Strait of Hormuz being virtually impassable. Reiche, speaking about the IEA request, said that Germany would comply and contribute its share because it supports the principle of mutual solidarity which is the most important to the IEA. According to a statement by Reiche's Ministry, Germany will contribute 2,64 million tons. This is equivalent to 19.51 million barrels. Reiche said that there is no shortage of supply in Germany. Germany is legally required to maintain a reserve of oil, oil products and petroleum products that will 'cover 90 days demand. The IEA has taken this step as a number of countries are struggling with soaring oil prices in the wake of the U.S./Israeli war against Iran. (Reporting and editing by Holger Hansen, Matthias Williams and Thomas Seythal).
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After US inflation, stocks drop and the dollar edge up; oil is in focus
?Global shares fell and the dollar remained steady on Wednesday after data showed U.S. Inflation picked up in February as expected.?Most investors focused on?the price of oil and the possibility that the U.S. and Israeli?war 'on Iran? could have a long-term effect on economic growth. The Labor Department reported that the consumer price index increased 0.3% in the month of February. This was in line with expectations and higher than the 0.2% rise in January. CPI increased 2.4% over the past year, matching expectations. The core rate, which excludes energy and food prices, rose at 2.5% in line with predictions. The dollar gained 0.1% versus a basket currencies, while U.S. stocks futures fell 0.1%. The report fails to capture the sharp rise in gasoline prices since the Middle East war began 12 days ago. The markets already indicate that traders are concerned about the rising likelihood of central banks raising interest rates. "February's numbers of inflation were going in the right directions, but the Middle East conflict has changed the course." We will see inflation instead of deflation due to energy. As the fertiliser markets are in chaos, food prices could be showing signs of an acceleration of inflation. Oil had another volatile session, but the price movements were muted in comparison to Monday's record-breaking price swings. Three sources told reporters on Wednesday that the International Energy Agency would recommend releasing 400 million barrels, a record amount for the IEA. This will help to bring down prices. Japan and Germany have announced that they will begin releasing reserves. Brent crude futures rose by around 4% to $91 per barrel after rising earlier by up to 6%. The MSCI All-World Index eased by 0.1% as European shares fell, resulting in a 0.7% drop for the STOXX 600. Investors are on edge, as the Middle East conflict could freeze global energy trading and cause a price spike. This is a threat that world leaders have been scrambling to mitigate. Since the start of the U.S. - Israel war, Iranian threats against vessels have prevented ships from entering the Strait of Hormuz. Christine Lagarde, President of the European Central 'Bank said that the ECB will do all it can to control inflation to prevent a repeat occurrence of the energy price shock in 2022. Several ECB officials are in favour of a wait and see approach before taking any action. The euro dropped 0.2% to $1.1591 while the pound remained unchanged at $1.341. The dollar rose 0.3% to 158.51 after the yen fell further. BOND YIELD?SURGE ADDS ADDS TO OVERHEATING RESPONSES Due to the fear of continued energy price pressures, bond yields have risen this week. This has 'added to worries about other market segments at risk of being overheated, such as private credits and vast investments in AI project. The Financial Times, citing its sources, revealed that JPMorgan Chase JPM.N was reducing the value of loans held by private credit groups, and tightening lending in the sector. Investors have pulled out of private credit vehicles including BlackRock’s HPS Corporate Lending Fund, which has a $26 billion value. They are concerned about the deteriorating quality of credit, particularly in light AI-led disruptions within the software industry. U.S. Treasuries dropped again on Wednesday. The yield on the benchmark 10 year note increased by nearly 5 basis points, to 4.183%. Rae Wee contributed additional reporting from Singapore, and Pooja Maclean, Bernadettebaum, William Maclean edited the story.
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The Iran-related energy spike reduces the room for rate reductions in emerging markets
Oil prices spiked due to the war in Iran, and for now this has halted any monetary easing efforts by emerging market central bankers from Poland to Turkey. This is because policymakers are coping with an increase in inflation expectations as well as a rise in risk aversion. After a series of shocks, from the COVID outbreak to Russia's invasion in?Ukraine, that have shook markets, slowed growth, and fueled inflation, central banks are finally becoming more optimistic about global economic resilience?and easing price pressures. The dollar gained ground, and U.S. Treasury Yields rose as a proxy of borrowing costs in emerging markets. The outlook for global economic growth and inflation in a period of geopolitical instability remains uncertain, even though some of these moves have been reversed. Before the outbreak of the war in late February, ten out of fifteen major central banks in emerging markets were expected to lower policy rates in the following six months by at least ten basis points. JPMorgan's calculations show that on Tuesday, this number was down to six. The amount of easing expected for those who are still expected to reduce rates has also been reduced. "Central banks in emerging markets will likely signal an increasing 'wait and watch' approach pending resolution to the conflict related uncertainty with Iran," said Petar Athanasov. He is Co-Head, Sovereign Research and Strategy for Gramercy Funds Management. Emerging Europe Shifts from Easing to Possible Tightening Not only emerging markets. In the past week, bets on rate cuts for the U.S. Federal Reserve have been drastically reduced. The shift is most apparent in emerging Europe where the market prices for the Czech Republic and Hungary, as well as Poland, indicate a possible tightening of the markets in the next six-month period. In recent days, policymakers in Poland have admitted that the room to lower rates has shrunk. Their counterparts in Hungary and Czech Republic also acknowledged the risks and uncertainty reverberating out of the 'Iran conflict. Juan Orts, CEEMEA Economist, Societe Generale, said that energy imports were a major factor. He said that Poland and Hungary, for example (in Central and Eastern Europe), are very sensitive to the oil price. A BALANCING STEP BETWEEN GROWTH PROBLEMS AND INFLATION RISKS Analysts said that the uncertainty surrounding crude oil and the overall rise in energy prices are at the core of the global balancing act emerging markets face, as they must weigh the concerns about rising price pressures versus the impact on the growth. James Lord, Global Director of FX Strategy and Emerging Markets at Morgan Stanley said: "It is a negative shock to growth." It's a tax on consumption and could lead central banks to tighten policy due to inflation risks. Markets in Latin America have priced in less easing, but the central bank is still expected, due to anaemic economic growth, to cut rates. The central bank stopped an aggressive tightening process last July, and since then has kept the benchmark interest rate at 15% - the highest for nearly two decades. Turkey is another flashpoint. As an energy importer, Turkey is highly susceptible to inflation pressures. The central bank will publish its rate announcement on Thursday. Atanasov, of Gramercy, said: "We expect CBRT to respond by pausing their rate-cutting cycle in order to await further developments regarding the duration of the conflict as well as the economic ripple effects." The Middle East conflict and its knock-on effect may cause central banks to pause or slow down rate cuts in the short term. However, the future is less clear. In 2021-2022, as economies were still recovering from the pandemic, and suddenly facing shocks relating to the outbreaks of the Ukraine War, central banks in emerging markets were the first to raise rates and combat inflation pressures. Many of their counterparts in developed economies believed that the situation was temporary. Lesetja Kganyago, South African Reserve Bank Governor, said that the central bankers' judgment on the impact of energy prices and inflationary fallouts will again be crucial. He said that underestimating the?persistence of inflation could lead to a more aggressive and costly policy in the future. However, taking action early on would make it easier for policy makers to take smoother actions over time. Kganyago stated that 2021/2022 was a lesson to be learned. "The central bankers who acted early discovered that they did not have to act aggressively... in one go, as was the case with the central banks which only reacted during the second half 2022."
Brazil's Raizen secures $12.6 billion out-of-court debt restructuring deal
Brazilian sugar and ethanol ?producer Raizen said on Wednesday it had reached an ?out-of-court agreement with ?creditors and bondholders ?to restructureapproximately ?65.1 billion reais ($12.61 billion) in debt obligations.
The company is a joint-venture between Shell, an oil giant listed in London, and Brazilian conglomerate Cosan. It has been in talks for months to find ways to improve its capital structure and reduce its debt.
Raizen stated in a?security filing that creditors who hold 47% of the company's unsecured debt had already endorsed this plan. The company has 90 days to get enough?support to receive final approval. After that, the new 'payment terms' will apply to all covered claims.
Raizen, the world's biggest sugar producer, was under increasing pressure because of a combination that included high capital expenditures, bad weather and wildfires which damaged harvests and decreased cane crushing?volumes.
Last week, the company indicated that it would pursue an out of court restructuring to resolve its debt crisis. This had led to "significant uncertainty" regarding its ability to continue operating.
According to the filing on Wednesday, the restructuring plan may involve a reorganization of the company's?shareholder capital, the conversion of a part of its outstanding credit into equity, as well as new debt issuances and asset sales.
Raizen stated that the agreement does not impact 'obligations towards customers, suppliers, distributors, or other commercial partners. Operations will continue to run as normal.
(source: Reuters)