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EIA: US crude stocks rise as refineries start maintenance
The Energy Information Administration reported on Thursday that U.S. crude inventories increased last week, as refineries prepared for maintenance, and gasoline stocks decreased ahead of the long Labor Day Weekend. The EIA reported that crude inventories increased by 2.4m barrels, to 420.7m barrels for the week ending August 29. This was compared to analysts' expectations based on a poll of a 2m barrel draw. John Kilduff of Again Capital said, "This report is a bit bearish with the crude build." He added that refineries would be reducing production for maintenance in autumn, which could put pressure on crude stock levels. After the release of these data, U.S. crude oil prices remained unchanged at $63.51 as of 12:12 pm. ET (1612 GMT). Brent crude oil prices fell 0.8% to $67.05. The EIA reported that crude stocks at Cushing, Oklahoma's delivery hub, rose by 1.6 millions barrels in the past week. Data showed that net U.S. crude oil imports increased last week by 434,000 barrels a day. Refinery crude production fell by 11,000 barrels per day and refinery utilization rates dropped by 0.3 percentage points in the past week, to 94.3%. The EIA reported that gasoline stocks dropped by 3.8 millions barrels last week, to 218.5million barrels. This was compared to expectations of a 1.1million-barrel withdrawal. The data revealed that distillate stocks, which includes diesel and heating oil rose by 1.7m barrels last week, as opposed to expectations of a 600k barrel drop.
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Sources say that China Concord's floating oil facility has arrived in Venezuela to support the project.
According to two sources, and based on images, the first floating crude production facility for a $1 billion China Concord Resources Corp project in Venezuela is now in Lake Maracaibo. This is Venezuela's second-largest output region. The Chinese firm, CCRC is aiming to increase production at two oilfields located in western Venezuela – Lago Cinco, and Lagunillas Lago – and hopes to reach 60,000 barrels a day by the end next year, up from 12,000 bpd. This is a rare boost for a Chinese private firm in an OPEC-sanctioned country that has been struggling to attract foreign investments. CCRC began negotiating its participation in oilfields last year with the state company PDVSA, under a production-sharing contract of 20 years. The company has sent Chinese oilfield developers to help reopen 100 wells quickly. According to vessel tracking data, photos and videos, the jackup Alula is a self elevating offshore platform that arrived from China's Zhoushan Port. Last weekend, it was guided by a towboat under the bridge of Lake Maracaibo on its way to Lagunillas. The Sao Tome & Principe flagged jackup is a large piece of infrastructure that has been installed on Lake Maracaibo for the first time in many years. The U.S. imposed its first sanctions against Venezuela in 2019. PDVSA, Venezuela's Oil Ministry and the PDVSA did not respond to comments immediately. Sources told us last month that Lago Cinco, and Lagunillas Lago, are expected to produce both light and heavy crude oil. The lighter crude will be delivered to PDVSA, and the heavier crude will go to China. PDVSA has stabilised oil production at around 1,000,000 bpd in Venezuela this year. Last month, exports reached a new high of 966 500 bpd.
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OPEC's oil production increased in August, according to a survey
A survey released on Thursday found that OPEC oil production increased in August following an OPEC+ production agreement. This was primarily due to the United Arab Emirates' and Saudi Arabia's higher production. According to the survey, the Organization of the Petroleum Exporting Countries (OPEC) pumped 27,84 million barrels of oil per day in July, an increase of 360,000 barrels per days over the revised total for the month of July. The United Arab Emirates, and Saudi Arabia, were the countries that saw the biggest increases. OPEC+ - which includes OPEC, its allies, including Russia - is accelerating the plan to undo its latest layer of production cuts. Some members must also make additional cuts to compensate earlier overproduction. This should, theoretically, limit the impact of price hikes. According to an agreement between eight OPEC+ member countries covering August output, five of the OPEC-members - Algerian, Iraqi, Kuwaiti, Saudi Arabian and UAE - had to increase output by 416,000 bpd, before the effects of compensation cuts totaling 178,000 bpd. According to the survey the actual increase of the five was 310,00 bpd. Many outside sources place the output of Iraq and the UAE higher than what the countries themselves claim. Other estimates, like those from the International Energy Agency (IEA), say that they pump significantly more. The survey aims at tracking supply on the market. It is based upon data provided by LSEG (a financial group), information from companies that track flow, such as Kpler and information from sources within oil companies, OPEC, and consultants. (Additional reporting and editing by Louise Heavens, Ahmad Ghaddar)
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Australian Prime Minister Albanese talked to Trump about minerals and security.
In a telephone call with Donald Trump, the Australian Prime Minister Anthony Albanese on Thursday evening discussed ways for Australia and United States to collaborate on vital minerals. This was confirmed by his office. Albanese’s office released a statement saying that the two leaders discussed ways to collaborate on important minerals and trade "in both nations' interests". It added that they also discussed the importance shared security interests. Albanese said on social media it was "a warm and constructive conversation." Albanese was reelected leader of the center-left Labor Government in a national election in May. He has yet to meet Trump after a scheduled meeting on the sidelines the G7 Summit in Canada in June, which Trump cancelled, was cancelled. Albanese will travel to the United States to attend the United Nations General Assembly in September. The call transcript did not mention that Australian officials were trying to arrange a meeting between Trump and Albanese while Albanese was in the United States. Richard Marles, the Deputy Prime Minster of Canada, visited Washington last week to meet with Vice President JDVance. He said on Monday that he was expecting a meeting between leaders "in a not too distant time." Australia's largest trading partner is China, not the United States. The Trump administration is pressing Australia to increase defence spending to 3.5% from the current 2%. At the same time, the Pentagon is reviewing the trilateral AUKUS partnership. The United States, Australia and Britain announced details in 2023 of their plan to sell Australia U.S.-made nuclear-powered attack subs by the early 2030s and to build submarines later to counter China's Indo-Pacific ambitions. Albanese stated in April that Australia would create a strategic reserve to separate itself from a Chinese-dominated market. ? (Reporting and editing by Timothy Heritage and Rod Nickel, Sydney)
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Vale, a Brazilian company, has reopened a key mine and plans to invest $12 Billion in Minas Gerais
The Brazilian mining company Vale announced on Thursday that it would invest 67 billion Reais ($12.36 Billion) in its operations in Minas Gerais by 2030. This announcement was made at a ceremony marking the reopening a major mine in the town of Ouro Preto. Vale stated in a press release that the majority of investments would be focused on expanding filtering and dry-stacking of iron ore waste tailings. Vale is aiming to reduce its use of dams at local operations from 30% to 20%. The company has set this goal after two tailings dams collapsed in Minas Gerais, killing hundreds of people and causing severe environmental damage. The miner reopened Capanema's iron ore mine on Thursday, after 22 years of inactivity. It will operate without water for processing, producing no tailings, and eliminating the need for dams. "Capanema represents the new phase in mining in Minas Gerais, and it reinforces our commitment towards a more responsible process of production," Vale Chief executive Gustavo Pimenta stated. Vale, one of the largest iron ore producers in the world, said that it would invest in modernizing five operational complexes. This includes improvements in geotechnical structures management in mines, connectivity and fleet renewals in Minas Gerais. Vale said Capanema would add 15 million metric tonnes per year to Vale’s iron ore production and help it achieve its goal to produce between 340 and 360 million tons of ore next year. (Reporting and writing by Roberto Samora, Editing by Rod Nickel).
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Was the US attack on a Venezuelan vessel, which resulted in the death of a man, legal?
On Tuesday, the U.S. Military killed 11 people on a vessel that was in the Caribbean. President Donald Trump claimed that the vessel carried illegal drugs and belonged to the drug cartel that he had designated as a terrorist group responsible for killings in the United States. Here is an overview of the legal basis for the attack. PRESIDENTIAL POWER OF USE OF MILITARY According to the Constitution, Congress has the power to declare a war, but it is the president who is in charge of the armed services. Presidents from both parties have carried out military operations overseas without the approval of Congress. According to a memo from the Office of Legal Counsel that provides advice to Presidents, presidents have justified limited military force when it was in national interest and wasn't restricted or war-like. WHERE THE ATTACK PERMITTED BY US LAW Presidents generally order attacks against enemy combatants or terrorist groups such as al Qaeda, or militants like the Houthis, who attacked U.S. ships in Yemen. The use of military forces in Tuesday's assault is a first. Trump claimed in a post on social media that the boat was carrying illegal drugs, and it would be the U.S. Coast Guard's responsibility to intercept them. Legal experts say that if the Coast Guard was fired on when they tried to stop the boat, then the Coast Guard would have been justified in defending itself. Trump however posted on social media a video that appeared to show an air strike destroying a boat speeding by. The administration failed to provide any proof that the United States were under imminent attack, or that the vessel was armed. They also did not identify the targets of the terror attack on the boat, as previous presidents did in similar attacks. Trump's claim that the Tren de Aragua cartel was operating the boat does not mean the drug cartel is at war with America in the same manner as other terror organizations, such as al Qaeda. Legal experts say that many people will see the attack as extrajudicial murder because the victims on the boat are civilians. What about international law? In order to achieve international peace and stability, the Charter of the United Nations requires that members refrain from using or threatening force against other nations. The charter recognizes that member states have a right to self-defense. Trump claimed that Tren de Aragua, which is under Venezuelan President Nicolas Maduro's control, was controlled by the United States. Legal experts say that this does not meet international law, as there is no evidence of an imminent attack by Tren de Aragua or of past attacks. Venezuelan officials also denied that the group was active in Venezuela. International law is still a subject of debate for legal experts, who said that the right to self-defense in relation to non-state actors was a controversial issue. Officials in the Trump administration said that the vessel was located in international waters. However, if the vessel had been flagged by a country then the attack would have occurred within its territory. This would be a major escalation. Officials from the administration have not confirmed if this vessel is flagged. Who can challenge the legality of an attack? Some opponents may not challenge the attack, given that Venezuela's government and Tren de aragua have been declared international pariahs. Pentagon officials said that this could change if there are more attacks. Members of Congress criticized the attack, and lawmakers placed limits on the use of force by the president. In recent decades, Congress has ceded its war-making powers to the president. The legal challenges to the authority of the president to execute the strike in the U.S. courts will probably face high hurdles. U.S. court generally defers to the president in matters of foreign affairs and security. Families of victims could bring civil lawsuits in the United States for damages, but it would take years and be very expensive. Legally, such attacks carry the risk that the government will kill an American. Anwar al Awlaki was a U.S. born al Qaeda militant. The Obama administration claimed it had the right to kill him because he posed a continuing imminent threat. U.S. lawsuits were filed after the deadly drone strike. The attack can be challenged before an international tribunal such as the Inter-American Court of Human Rights. This has led some countries to acknowledge past abuses, even though the United States was not a member of the court. Legal experts say that while the attack may not result in successful legal challenges, Washington's international relations could be soured and it would become more difficult to work with other countries to implement drug and immigration policies.
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Bond markets shine as shares recover from China's sell-off
The world stock market was mostly higher on Friday as the Federal Reserve made dovish remarks and an auction of Japanese 30-year bonds went smoothly. This helped to calm recent fears in the government bond markets. Chinese bourses fell overnight, on reports Beijing was trying to cool down a red hot stocks rally. FTSEurofirst's 300 index ticked higher by 0.4%, while S&P 500 futures and Nasdaq futures grew by 0.1%. This was due to a easing of concerns about the rising cost of long-term borrowing in countries like France, Britain and America. The oil prices continued to fall after a report that OPEC+ officials were looking to increase output targets at the weekend. Meanwhile, the dollar was slipping ahead of Friday's important jobs report. The increase in jobless claims was a welcome appetiser, but traders were happy to keep the powder dry. In recent days, several key Federal Reserve officials have raised expectations for an imminent U.S. interest rate cut. The money markets now price in a near-100% probability that one will be announced at the Fed meeting in less than two weeks. Derek Halpenny, head of global markets research at MUFG, said: "The markets are now a bit more convinced that the Fed will cut rates this month. This has led to a modest decline in bond yields." He said that the Chinese equity market drop had affected the Australian and New Zealand dollars in FX markets a little, but it was mostly a matter of "consolidate" and "wait" for Friday's employment numbers. The German 30-year bond rate fell to 3.3% as European bond buyers pushed it down. France's bond yield was down slightly more, at 4.40%. It had hit 4.523% Tuesday, its highest level since June 2009. This was due to fears that the government might collapse again. SALEFORCE SHARES SLUMP Salesforce's shares fell by nearly 7% in the hours before market opening after Wall Street analysts were disappointed with its third-quarter revenue due to the slow monetization rate of AI-powered product. The AI euphoria that has driven U.S. stock indexes up to record highs has subsided since Nvidia's and other companies' numbers have failed to impress investors. China was the focus of overnight action following a report stating that regulators are preparing measures to cool equity markets. Beijing bluechips dropped as much as 2,6%. The tech-heavy STAR 50, which soared almost 30% last month fell more than 6% on its worst day since the beginning of April. Wall Street futures pointed to a smooth restart. The next payrolls will not be until Friday but traders can listen to the hearing for Stephen Miran. He is Donald Trump's choice to replace Adriana Kugler, who resigned from the Fed board. Jim Reid, Global Head of Macro Research at Deutsche Bank, said that it would be interesting to see senators question Miran about his views on Fed Independence, especially since Trump has tried to fire Fed official Lisa Cook, and has criticised Fed Chairman Jerome Powell repeatedly. Miran stated in his testimony, posted on the Senate Banking Committee website Wednesday, that he intended "to preserve" this independence. The auction of Japanese 30-year bonds that took place in Tokyo over night was a success, despite the concerns about Fed independence. The Nikkei ended the day 1.5% higher, after recovering from its biggest one-day drop since April. India's benchmark Sensex index rose by as much as 1% when markets reopened following the government's decision to lower taxes on several items in an effort to boost consumption and counter U.S. Tariffs. The Federal Reserve's "Beige Book", released on Wednesday, painted a mixed image of the U.S. economic situation. This appeared to confirm monetary policymakers concerns. Analysts from ING described it as "bleak", and warned that it was "littered" with warnings regarding the inflationary effects of import tariffs. In early U.S. trade, the yield on 10-year Treasury bills dipped to 4.18%. The 2-year yield was at its lowest since May. The dollar rose 0.2% to 148.45 yen, staying within the range of trading it has been in since August began. The dollar was slightly higher at $1.1650 against the euro. Brent crude fell another 1.4%, to below $67 per barrel. Gold also slipped 0.5% back after reaching a record high on Wednesday of 3,578.5 ounces. (Editing by Kevin Liffey).
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Femsa and Raizen end their partnership in Brazil
They announced on Thursday that Brazil's Raizen, and Mexico's Femsa, have decided to end their partnership, established in 2019, through the joint venture Grupo NOS, which operates an extensive network of convenience shops across Brazil. In response to operational challenges and high levels of debt, sugarcane processor Raizen has embarked on a divestment plan. The Brazilian company said that the agreement, which was described by both parties as amicable, did not include any cash considerations. Raizen will also receive 1,256 Shell Select convenience stores and Shell Cafe convenience shops. Femsa will receive 611 Oxxo shops, a distribution centre located in the state of Sao Paulo, as well as Grupo Nos’ existing debt and cash. This decision is in line with Raizen’s strategy to simplify and recycle its portfolio, said the Brazilian firm. It's a joint venture of oil giant Shell and conglomerate Cosan. In a separate announcement, Femsa confirmed that it will now control 100% Oxxo Brasil. This move signals to both firms the ability to concentrate on their respective strategies. "We are committed to expanding and strengthening Oxxo on this dynamic market. Femsa continues to place Brazil at the forefront of its long-term growth strategies, according to Jose Antonio Fernandez Garza. Oxxo stores, which are ubiquitous in Mexico, have become popular in Brazil in recent years. They are now found in many cities including Sao Paulo. Femsa predicted last year that Brazil would become a major global player. As big as a market The chain will be as big as Mexico in a few short years. (Reporting and Editing by Aida Pelaez-Fernandez, Nick Zieminski).
IIR reports that Nigeria's Dangote Refinery gasoline unit may be closed for two to three months.
IIR Energy, a company that monitors the industry, told its clients on Thursday that repairs may cause the gasoline unit of Nigeria's Dangote refinery, which produces 650,000 barrels per day, to be closed for 2-3 months. This could result in a tighter market for gasoline.
The unit was shut down around August 29 due to catalyst leaks. IIR Energy stated that the refinery intends to try to restart the Residue-Fluidized Catalytic Crushing Unit (RFCCU), which produces 204,000 bpd, on September 20, although major repairs and replacement of equipment could keep the unit closed for months.
First reported on Wednesday, Dangote’s RFCCU is expected to close for at least two week.
Dangote didn't immediately respond to an inquiry for comment.
A gasoline dealer said that the market for motor fuel is already strong.
The trader stated, "This only adds fuel to a fire."
The U.S. futures crack spread
Philip Jones-Lux is a senior analyst with Sparta Commodities. He noted that the current and future outages will be enough to offset seasonal demand declines.
Dangote's refinery, which started processing crude in 2024, significantly reduced the Europe-West gasoline export trade. According to Kpler, EU and UK gasoline imports to Nigeria dropped from an average of 200,000 bpd per year in 2024 to 120,000 bpd during the first half this year.
The plant has also sent two cargoes of gasoline to the U.S. East Coast. They are expected to arrive later this month in the New York region. This is a significant milestone, as observers had been closely watching to see if the plant could produce fuel that met U.S. Standards.
(source: Reuters)