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Ukraine's DTEK invests heavily in battery storage to boost energy security
DTEK, a Ukrainian private energy company, announced on Thursday that it has built the largest battery storage facility in the country to ensure stable electricity supplies as a result of Russian attacks against Ukraine's energy industry. Russia is attacking Ukraine's energy system and denying millions of Ukrainians power. It launched a full scale war against Ukraine 2022. DTEK reported that its total investment for the project was 125 million euro ($146.13million). It said that six battery storage systems were connected to the electricity grid in Kyiv, the capital of Ukraine, and the Dnipropetrovsk region in eastern Ukraine. The combined facilities were built in partnership with Fluence, an American leader in intelligent energy storage. They can store 400 megawatts of electricity, enough to power 600 000 Ukrainian households for 2 hours. DTEK stated that the new systems will increase the safety of the electricity supply, and reduce the risks of accidents and outages. This is especially true in the event of an accident or breakdown of some power generation. Svitlana Grinduk, Ukraine's Energy Minister, said that the energy storage system is as important as the energy production itself in the context of the large-scale attacks against Ukraine's energy systems.
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Cnergyico, Pakistan's largest refiner, will increase fuel oil exports in response to a sharp drop in sales
Vice chairman of Cnergyico, Pakistan's largest oil refiner, said that the company expects fuel oil exports to increase by 35 to 40 percent during fiscal year 2026. This is because high taxes are reducing domestic sales. In June, Pakistan imposed an additional tax of around 40% on domestic fuel oil sales, in addition to a consumption-based tax of 18%. This effectively closed the market for its refiners. Usama Qreshi said on the sidelines APPEC that the company had exported 80,000 tonnes, or 95%, of its production from July until now, compared to 55% for the previous fiscal year which ended in June. Fuel oil sales, which are primarily used by ships, usually make up 10 to 15 percent of a refiner's revenue. Cnergyico exports 247,000 metric tonnes (1.57 millions barrels) per year. An increase of 35-40% would bring the annual exports up to 333,000 to 346,000 tons. Kpler's data showed that Pakistan's fuel exports reached a record high of 242,000 tonnes in August. Qureshi, who spoke in an interview, said that Cnergyico was upgrading its refinery to reduce fuel oil output and increase fuel sales on the domestic market in accordance with Pakistani policy guidelines for upgrading refineries to produce cleaner gasoline. Qureshi said, "We plan to import more sweet crude oil and upgrade the refinery so that it produces cleaner diesel and gasoline. We also plan to establish fuel oil cracking plants to boost gasoline production." Cnergyico imports sour crude from the Middle East with a high sulphur level. Last month, it was Pakistan's very first purchase of U.S. oil. The crude oil produced in the United States is typically low sulphur and produces less fuel oil after refinement. Qureshi stated that domestic sales of fuel oil is typically more profitable than exports. Export revenue is dependent on fuel cracks. The company sold fuel to traders, who then exported it to South Europe, Singapore and United Arab Emirates. Pakistan has significant fuel oil-based electricity generation capacity. However, utilisation of this capacity has plummeted in the last decade due to lower demand for power, increased solar adoption, and increased production from other clean sources, such as nuclear. (Reporting and editing by Clarence Fernandez; Sudarshan Varadhan)
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Elliott says Kansai electric can be more attractive by selling off non-core assets
Elliott Management, an activist investor and Kansai electric power shareholder, has said that the Japanese utility can become a better long-term investment if it sells non-core assets, boosts profitability, and increases shareholder returns. Elliott is now one of the three largest shareholders in Kansai, Japan's largest nuclear power company by number of reactors online. The stake, which ranges between 4%-5%, was disclosed on Wednesday by a source familiar with the situation. In a Wednesday statement released from London, Elliott stated that it looked forward to working closely with Kansai's management team and other key stakeholders in order to enhance the core business of the company. The company's statement stated that "by increasing shareholder returns, unlocking the capital from its non core assets, and improving profitability, We believe the Company can enhance its financing flexibility for future growth, and bolster its attraction as a long term investment proposition." Elliott claimed to have a "significant stake" in Kansai, making it the largest shareholder of Kansai. However, it did not reveal its size. Kansai refused to comment in a letter to on its relationship with individual shareholders. The company stated that it will continue to communicate with its shareholders in a variety of ways. Kansai shares rose 3.1% during afternoon trading in Tokyo. This outperformed the Nikkei Index, which was up 0.65%. Elliott wants Kansai to increase its dividend from 60 yen to 100 yen and to increase share buybacks through the sale of non-core assets. This source, who is not authorized to speak in public, was familiar with the situation. The source claimed that Elliott had identified non-core assets worth over 2 trillion yen (13.58 billion dollars) at the company, including real estate valued at more than 1 trillion yen and a stake in construction firms. Elliott has taken stakes in companies such as Tokyo Gas, Sumitomo Corp, and Dai Nippon Printing, in an effort to increase shareholder value and return on investment. Kansai Electric, besides its energy business, has assets in IT, real estate and other areas. However, it targets nuclear power to be the main source of earnings growth for the near-to mid-term. The company plans to maintain its 60-yen dividend per share for the fiscal year, despite an expected 30% decline in profits. $1 = 147.2800 Japanese yen (Reporting and editing by Jamie Freed).
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Russell: Crude oil will be driven by geopolitics and mismatch in supply-demand over the long-term, not supply-demand.
Two long-term shifts will affect the global crude oil markets, including how cargoes are transported and priced. First, it is a question of supply and demand. The vast majority of growth in demand comes from Asia while the growth in supply comes largely from Americas outside the United States. Second, energy markets are increasingly subject to political influences. This increases the risk that large blocks of supply will be cut off from the demand centres. As was seen when Europe stopped buying Russian oil after Moscow invaded Ukraine. The oil market will be forced to adapt to these two factors, including longer vessel journeys, the need to obtain suitable crude for refinery configurations, and pricing new flows. Analysts from Argus media presented a presentation at this week's APPEC oil meeting in Singapore that highlighted the shift to new production coming out of Americas. Argus reported that crude from the Americas represented 85% of the incremental supply globally from non-OPEC non-OPEC from 2024 until 2030. This amounted 3.63 million barrels a day (bpd). The United States is expected to increase its output only modestly in the coming years, despite being the largest oil producer in the world. Canada, Brazil and Guyana are the largest contributors, followed by Argentina, Suriname and Suriname. Mexico's contribution is expected to decline as fields mature. Argus reported that the East of Suez market is the most likely to see a demand increase, in contrast to the growth of the supply. India will be the leading country, with a gain of two million bpd expected from 2024 until 2030. China, on the other hand, is expected to lose 100,000 bpd due to its rapid electrification of its fleet. Argus predicts that oil demand will rise by 1 million bpd from 2024 to 30 in the Middle East and Africa, as well as by 600,000 bpd for Latin America. The East of Suez market is expected to grow at 90%, which is the most important thing. According to commodity analysts Kpler, there is evidence that flows are increasing from the Americas towards Asia. Volumes reached a record quarterly high of 4,09 million bpd during the period of April to June. The second quarter saw an increase of 3.6 million barrels per day (bpd) compared to the first. This meant that Asia's seaborne oil imports were about 16% derived from the Americas. CHALLENGES It's reasonable to assume that moving crude oil from the Americas into Asia, even though it will cost more, is feasible. The new grades are more difficult to deal with, as they tend to be lighter and sweeter with the exceptions of Canada's heavy oil. There will likely be an excess of sweet, light crudes, at a moment when electrification is increasing and the demand for gasoline, which is the main product of such grades, is decreasing. How much oil will cost if more oil is moved from America to Asia? Will West Texas Intermediate (WTI), the benchmark for light crude, become more important than Brent? Or will cargoes be priced more based on the delivered to Asia basis instead? How will geopolitics affect crude markets in the long term? Donald Trump, the president of the United States, has made it very clear that energy is a tool he uses to achieve his political goals. He makes commitments to purchase U.S. crude oil and liquefied gas a key part of any trade negotiations he holds with other countries. While this could boost the purchases of U.S. oil by countries who have signed deals, like Japan and South Korea; it will also mean that countries without an agreement, like China and India, would likely shun U.S. fuel. Although crude markets are free of politics, there is a good chance that they will become more polarised over the next few years. Importing nations may be forced to choose between Trump-approved suppliers and those who he does not approve. Trump's ability to change allegiances quickly could complicate oil flow while he is in office. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, who is also an author. (Editing by Stephen Coates).
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First Foundation Up at 496MW Offshore Wind Farm in France
Eoliennes en Mer Dieppe Le Tréport (EMDT), a joint venture Ocean Winds, Sumitomo Corporation, and Banque des Territoires, has installed the first wind turbine foundation for the 496 MW offshore wind farm, being built in Normandy.The 496 MW offshore wind farm is located 17 km off Dieppe and 15.5 km from Le Tréport.Once fully operational, it will generate electricity equivalent to the annual consumption of about 850,000 people, roughly half the population of the Seine-Maritime department.The first steel jacket foundation was installed on September 9 by the vessel Innovation, operated by Belgium’s DEME Group, following delivery from Cherbourg.Measuring 48 and 55 meters in height, the steel jacket foundations are positioned on piles previously driven into the seabed as an essential step before the installation of the future wind turbines.The foundations were manufactured in Spain by Navantia Seanergies and transported by the vessel Seaway Albatross.The milestone follows the installation of the offshore substation earlier 2025. Foundation works will continue in multiple phases through 2026 before the installation of 62 wind turbines, Ocean Winds said.Ocean Winds Installs Substation for 496MW French Offshore Wind Farm
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Floating Offshore Wind Test Center Planned for Japan
Japan aims to start planning a national floating wind test centre next year, a senior industry official said, vowing to pursue a path of wind power growth despite a recent setback when Mitsubishi quit three projects.Mitsubishi-led consortia 8058.Tdropped plans last month to build 1.8 gigawatt (GW) in three offshore windmills won in Japan's first major state auction in 2021, dealing a blow to the sector seen as key to cutting dependence on imported fuels."We must conduct verification tests in Japanese waters as Japan's ocean and weather conditions differ from those in Europe," said Masakatsu Terazaki, chairman of the Floating Offshore Wind Technology Research Association(FLOWRA).In an interview on Tuesday, he told Reuters the association planned to discuss details such as functions and equipment, while also stressing the necessity for such a centre to the government.Japan should work with Scotland's national floating wind test centre, the EMEC, and Norway's Marine Energy Test Centre, the METCentre to draw on their extensive experience, he added.Japan runs seven offshore wind farms, two small floating turbines among them, with a total capacity of 253 megawatt (MW) at end-2024, the Japan Wind Power Association says, but it bets on large projects to boost energy security.The country is targeting 45 GW of offshore wind pipeline by 2040, with the latter target including 15 GW or more of floating wind across its vast exclusive economic zone (EEZ), the world's sixth largest.FLOWRA, set up last year, groups 21 domestic companies, such as liquefied natural gas (LNG) buyers JERA and Tokyo Gas 9531.T. It has signed cooperation pacts with Britain and Norway, among others, for floating wind technology studies.Britain has the world's second biggest installed offshore wind capacity after China while Norway runs Hywind Tampen, the largest floating offshore wind farm in operation to date.Japan aims to have a pipeline of the first large-scale floating wind project in fiscal 2029, a target to which FLOWRA is contributing, Terazaki said.Electricity demand is seen growing 6% in Japan by 2035, driven by data centres and semiconductor plants. While nuclear power and LNG will help, renewables are essential, he added.Terazaki said his biggest concern was that Mitsubishi's withdrawal is undermining momentum for offshore wind, but stressed the sector was vital to meet rising power demand and achieve Japan's carbon neutrality goals."Japan lacks large land (for more solar and onshore wind), and has no (fossil fuel) resources, but has a vast EEZ. There is no reason not to use it," he said."Setbacks are not unique to Japan - Netherlands, UK were faced with similar challenges. It's part of the growth process."(Reuters)
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Iron ore is on the move ahead of a key China data release
Iron ore futures prices were volatile on Thursday before China, the world's largest consumer of iron ore, released a series of data that will likely determine the direction of demand. As of 0341 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange was down by 0.19%. It stood at 800.5 yuan (US$112.41) per metric ton. As of 0331 GMT, the benchmark October iron ore traded on Singapore Exchange was $106.65 per ton lower. China will release key data on Monday. This includes information about the economy, property and industrial metals. First Futures analysts said that a tight supply-demand balance of the main steelmaking ingredient will likely support ore prices. The focus remains on whether Beijing will enforce production cuts in all of China for the rest of the year, to rebalance the market which has been affected by overcapacity. The ore price was supported by an improving demand, after some Chinese steelmakers ramped up production after reducing output to prepare for a military display on September 3. However, falling steel margins as well as accumulated stocks posed a significant downside risk. Analysts said that prices of Coking coal, coke, and other steelmaking components rose by 1.7% and 0.99%, respectively, after the latest mine accident raised fears about more stringent safety measures which could limit supply. The benchmarks for steel on the Shanghai Futures Exchange are mixed. Hot-rolled coil, wire rod and rebar were little changed. Stainless steel was down 0.23%.
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Gold nears record highs as US data shows signs of rate cuts
The gold price remained near its record highs on Thursday as the Federal Reserve's interest rate is expected to be cut by the Federal Reserve next week. Investors were awaiting U.S. consumer prices due later that day. As of 0233 GMT, spot gold remained at $3,636.59 an ounce. Bullion reached a new record of $3,673.95 per ounce on Tuesday. U.S. Gold Futures for December Delivery declined by 0.1%, to $3676.40. The recent rise in gold is due to weak macro-economic data from the United States. Both the massive revisions of the labor data and the positive surprise with the PPI readings have led to expectations that rates will be lowered at a faster pace than expected, said Marex analyst Edward Meir. U.S. Producer Prices unexpectedly declined in August, due to lower margins for trade services and modest increases in goods prices. Investors will now be focusing on the U.S. Consumer Price Index data due at 1230 GMT. A poll predicts a 0.3% increase monthly in August, following a 0.2% increase in July. CPI growth is forecast to be 2.9% compared to 2.7% in July. Meir stated that unless the CPI surprises negatively it will continue to drive prices up. The expectation of monetary ease has been reinforced by the weaker-than-expected data on nonfarm payrolls last week and revised estimates that show 911,000 less jobs were created in the year through March. Investors will also be watching the weekly data on jobless claims, which is due at 1230 GMT. This information can provide additional insight into U.S. employment. According to the CME FedWatch tool, it is widely expected that the Fed will cut interest rates next week by 25 basis points. Investors have also factored in a small possibility of a 50-basis point reduction. Gold is a good investment in low interest rate environments because it does not pay any interest. The administration of U.S. president Donald Trump appealed Wednesday against a ruling by a federal court that temporarily prevented the dismissal Lisa Cook, Fed Governor. Silver spot was down 0.1% to $41.09 an ounce. Palladium dropped 0.1% and platinum remained at $1,386.75. (Reporting and editing by Sherry Jacob Phillips in Bengaluru, Anmol Choubey from Bengaluru)
Oil prices fall on fears of weak US demand and oversupply
The oil prices fell a little on Thursday due to a weakening demand in the United States, and a general oversupply risk. This was in contrast to the concerns over the attacks in the Middle East as well as the Russian war in Ukraine.
Brent crude futures fell 14 cents or 0.21% to $67.35 a barge by 0433 GMT. U.S. West Texas Intermediate Crude futures dropped 15 cents or 0.24% to $63.53.
The benchmark contracts increased by more than $1 on Wednesday, following Israel's attack the day before on Hamas leaders in Qatar. Poland also scrambled their own air defences and NATO to shoot down suspected Russian Drones that had entered its airspace while an attack was being carried out on western Ukraine.
These gains continued the upward trend in oil prices that has been going on for most of this month, after they reached a low of three months on September 5.
The market has now turned its attention to the supply-and demand balances. Rising oil stocks, declining producer prices, and a slower labour market all point to a softening U.S. economic.
The Energy Information Administration reported that U.S. crude stocks rose by 3.9 millions barrels during the week ending September 5. This was against the expectation of a drawback of 1 million barrels. Gasoline inventories also increased, adding 1.5m barrels against an expectation of a drawback of 200,000 barrels.
Due to the weaker economy, it is expected that U.S. Federal Reserve will cut interest rates in the next week.
Stephen Brown, Capital Economics' deputy chief economist in North America, wrote in a report that the FOMC was likely to vote next week for a 25bp rate cut due to the improving labour market. However, a rare triple dissension in favor of a 50bp increase could grab the headlines.
On Thursday, the European Central Bank is expected to keep its interest rate unchanged.
On the supply-side, the Organization of the Petroleum Exporting Countries (OPEC+) and its allies decided on Sunday to increase production starting in October.
The increase is smaller than some previous months, but it still adds to the weakness of the oil market. The EIA announced this week that oil prices will drop dramatically in the months to come as rising production will lead to a large build-up of oil inventories.
Eurasia Group said that despite lower oil prices and stagnant oil demand growth, oil producing countries, led by OPEC+, have been adding barrels. This suggests an imbalance will likely form by 2025, which will push the market to oversupply, and drive crude oil prices even lower," Eurasia Group consultant stated in a report. (Reporting and editing by Tom Hogue, Edwina Gibbs and Katya Glubkova)
(source: Reuters)