2025-12-11 07:41

Witkoff visit helped resolve misunderstandings, Russia says US seizes oil tanker off Venezuela's coast IEA trims its 2026 market surplus forecast HOUSTON, Dec 11 (Reuters) - Oil prices fell on Thursday as investors focused on Russia-Ukraine peace talks and eyed large surpluses in U.S. gasoline and diesel inventories. Brent crude futures settled at $61.28 a barrel, down 93 cents or 1.49%. U.S. West Texas Intermediate crude finished at $57.60 a barrel, down 86 cents or 1.47%. Sign up here. For most of the session, Brent and WTI were down more than $1 and nearly 2%, falling past lows last seen in October. "The market has been weighed under by significant surpluses in gasoline and diesel inventories," said Andrew Lipow, president of Lipow Oil Associates. "You're seeing that play out in poor refining margins." The U.S. Energy Information Administration reported on Wednesday that gasoline inventories rose by 2.5 million barrels in the previous week and distillate stockpiles grew by a similar amount. The prospect of a possible peace agreement between Russia and Ukraine also appeared to be driving the market lower. Such a deal would likely increase the supply of Russian oil that is currently off the market for most of the world. "There was a little bit of support following news of the drone strikes," said Phil Flynn, senior analyst with the Price Futures Group. "But there seems to be some movement on a possible path to peace between Russia and Ukraine. That took the support out of the market." Ukrainian drones struck an oil rig belonging to Russia in the Caspian Sea for the first time, halting the facility's extraction of oil and gas, a source at the Security Service of Ukraine told Reuters on Thursday. The leaders of Britain, France and Germany held a call on Wednesday with U.S. President Donald Trump to discuss Washington's latest peace efforts to end the war in Ukraine, in what they said was a "critical moment" in the process. Russian Foreign Minister Sergei Lavrov said on Thursday that a visit to Moscow this month by U.S. envoy Steve Witkoff had resolved misunderstandings between the two countries. Lavrov added that Moscow had handed over Russia's proposals on collective security guarantees for Ukraine to Washington. STEEP DISCOUNTS DEMANDED ON VENEZUELAN CRUDE Both benchmarks had settled higher a day earlier after the U.S. said it seized an oil tanker off the coast of Venezuela, as escalating tensions between the two countries raised concerns about supply disruptions. "So far, the seizure has not trickled down to the market, but further escalation will impose heavy crude price volatility," said Emril Jamil, a senior oil analyst at LSEG. The seizure was announced by Trump, whose administration did not name the vessel. British maritime risk management group Vanguard said the tanker, named Skipper, was believed to have been seized off the coast of Venezuela. Traders and industry sources said Asian buyers were demanding steep discounts on Venezuelan crude, pressured by a surge of sanctioned oil from Russia and Iran and heightened loading risks in the South American country as the U.S. boosts its military presence in the Caribbean. The International Energy Agency upgraded its 2026 global oil demand growth forecasts while trimming its supply growth predictions in its latest monthly oil market report on Thursday, implying a slightly narrower surplus next year. The Organization of the Petroleum Exporting Countries, which also released its monthly report on Thursday, kept its forecasts for 2025 and 2026 world oil demand growth unchanged. https://www.reuters.com/business/energy/oil-extends-gains-after-us-seizure-tanker-off-venezuela-2025-12-11/

2025-12-11 07:40

Dec 11 (Reuters) - Britain's Drax (DRX.L) , opens new tab said on Thursday it could repurpose existing infrastructure and grid links at its Yorkshire power station to run a data centre as soon as 2027, using resources once dedicated to coal. "Drax is preparing a planning application to support the potential option for a first phase data centre of about 100 megawatts on land identified at Drax Power Station," it said in a statement. Sign up here. The company also said it expects to report full-year 2025 core profit around the top end of the market estimates, as the UK's power generation demand grows. Analysts expect Drax to report a core profit of between 892 million pounds and 909 million pounds ($1.19 billion and $1.21 billion) for 2025, according to a company-compiled consensus. ($1 = 0.7482 pounds) https://www.reuters.com/world/uk/drax-plans-turn-coal-era-infrastructure-into-data-centre-by-2027-2025-12-11/

2025-12-11 07:25

TOKYO, Dec 11 (Reuters) - Japanese markets could be jolted next year if the central bank finds itself "behind the curve" in taming inflation, according to BlackRock (BLK.N) , opens new tab Japan’s chief investment strategist Yuichi Chiguchi. The Bank of Japan is widely expected to increase its key policy rate next week by a quarter percentage point to 0.75%, still well below an inflation rate that is around 3%. If price growth accelerates into the second half of 2026, the BOJ could be forced into a faster tightening cycle, Chiguchi said. Sign up here. “They will have to chase it," Chiguchi said of BOJ policymakers. "This behind-the-curve scenario is one situation the markets hate the most." Even so, the world's largest asset manager maintains a bullish stance on Japanese equities for next year after a blockbuster run in 2025 that carried the Nikkei share index to an all-time high. Euphoria over artificial intelligence has been a major driver for shares globally, and Japanese suppliers to the industry are poised to benefit further from "massive investment" in the sector, Chiguchi said. The nation's financial sector is expected to be another pillar for growth, even factoring in possible accounting losses on holdings of Japanese government bonds (JGBs). JGBs have plunged recently, with 10-year yields reaching an 18-year high of 1.97% last week, driven partly by fiscal concerns surrounding Prime Minister Sanae Takaichi's stimulus plan. The yield could potentially rise to 2% or 3%, but it would not be a headwind for growth, Chiguchi said. “The impact on the real economy would not be overly negative, while the reflationary environment would generally be favourable for corporate activity," he said. https://www.reuters.com/world/asia-pacific/japan-markets-face-behind-curve-rate-risk-faster-inflation-blackrocks-chiguchi-2025-12-11/

2025-12-11 07:15

Fed outcome less hawkish than expected Dollar soft; euro, sterling hit new highs Fed to start buying Treasury bills to manage market liquidity Souring risk mood sends Aussie, cryptos sliding SNB leaves rates steady, franc strong NEW YORK/LONDON, Dec 11 (Reuters) - The U.S. dollar stumbled on Thursday, hitting multi-month lows against the euro, Swiss franc, and sterling and extending losses from the previous session, after the Federal Reserve delivered a less hawkish outlook than some had expected. The Swiss franc drew support from the Swiss National Bank's decision to hold interest rates steady. The dollar fell 0.6% versus the franc to 0.7947 , after earlier touching its lowest since mid-November. Sign up here. The greenback briefly found support earlier in the session as Asian shares and U.S. futures slid after disappointing earnings from U.S. cloud computing giant Oracle (ORCL.N) , opens new tab reignited fears that surging AI infrastructure costs could outpace profitability. But that support faded in the U.S. session. The euro was last up 0.4% at $1.1740 after earlier hitting its highest since October 3. Sterling was last flat on the day at $1.3387 after earlier touching its highest level in roughly two months. The dollar also weakened against the yen, shedding 0.3% to 155.61 yen . The Fed lowered rates on Wednesday by 25 basis points, but, as the move was widely expected, the reaction reflected much more the broader messaging, projections and the voting split. "The market had more hawkish-leaning expectations going into the Fed meeting and I don't think (Fed Chair Jerome) Powell was especially dovish, but he kind of left the door open for further cuts," said Vassili Serebriakov, FX strategist at UBS in New York. That was in stark contrast with the message given by the Australian central bank chief and an influential European Central Bank policymaker suggesting their next moves would be rate hikes. "We've seen quite aggressive, hawkish repricing of expectations outside of the U.S. like Australia, Canada, even Europe -- even ECB (European Central Bank) expectations were more hawkish seemingly validated by some ECB comments as well," Serebriakov said. "So it's the Fed being a little more dovish versus what was expected, but there's also the contrast between the Fed and other central banks in the G10 where expectations are turning more hawkish." The dollar was also pressured earlier by data showing that initial jobless claims increased by the most in nearly 4-1/2 years last week. Initial claims for state unemployment benefits jumped 44,000, the biggest increase since mid-July of 2021, to a seasonally adjusted 236,000 for the week ended December 6, the Labor Department said. LIQUIDITY INJECTION Also weighing on the dollar, U.S. Treasuries attracted bids and pushed yields lower after the Fed announced it would start buying short-dated government bonds from December 12 to help manage market liquidity levels, with an initial round totalling some $40 billion in Treasury bills. That's on top of the $15 billion that the Fed will reinvest in T-bills starting this month from its maturing mortgage-backed securities (MBS). The combined $55 billion in liquidity injection from the Fed is a positive for market sentiment and risky assets but negative for safe-haven assets such as the dollar. Away from the dollar, the Swiss franc strengthened after the Swiss National Bank left its policy rate unchanged at 0% and said a recent agreement to reduce U.S. tariffs on Swiss goods had improved the economic outlook, even as inflation has somewhat undershot expectations. The euro fell 0.2% against the Swiss franc to 0.9331 . While the strength of the franc is causing problems for the SNB by weighing heavily on inflation, the SNB's chairman Martin Schlegel reiterated that the hurdle for negative rates is high. Elsewhere, the Australian dollar was hurt by data showing employment in November fell by the most in nine months. The Aussie dollar dipped 0.2% to US$0.6663 . Bitcoin , often viewed as a barometer of risk appetite, was hurt by the tech selloff and briefly slid back below the $90,000 level. It was last hovering slightly above that point, down 1.5% at $91,008. Ether was down more than 4% at $3,200. https://www.reuters.com/world/asia-pacific/dollar-slides-fed-dents-hawks-markets-eye-two-more-rate-cuts-2025-12-11/

2025-12-11 07:07

Filosa prioritises sales growth over short-term profits Stellantis shifts focus to popular Jeep and Ram models Fleet sales used to boost volumes and maintain production visibility MILAN/DETROIT/PARIS, Dec 11 (Reuters) - New Stellantis CEO Antonio Filosa is prioritising vehicle sales growth over profits including resorting to lower-margin fleet sales and investing in affordable models to recapture market share in North America and Europe and get the world's No. 4 automaker back on track, four sources familiar with the matter told Reuters. Filosa, who took over in June, has launched what one source described as an "emergency room" operation to fix the mess left by his predecessor Carlos Tavares - who sought high margins through a combination of cost-cutting and price hikes that sparked a customer exodus. Sign up here. Tavares was forced out late last year as Stellantis' 2024 sales plunged 15% in the U.S. - the automaker's main profit driver - while industrywide sales rose 2.2%, leaving dealers choking on stale inventory. Filosa's immediate aim is to deliver sales and revenues this year above low analyst expectations - the best of which indicate flat results versus 2024 - the same source said. Early data suggests his strategy is beginning to work, as Stellantis' sales rose 6% in North America in the third quarter, the first increase in eight quarters. Details of Filosa's short-term sales strategy and longer-term brand viability, reported here for the first time, come at a time when the automaker is fighting to regain lost market share. The plans are aimed at restoring credibility with customers, investors and dealers while also keeping car factories running. Reuters spoke to a total of six sources - two company insiders, two outsiders familiar with the matter and two representatives at major Stellantis shareholders - who spoke on the condition of anonymity as they were not authorized to discuss the matter publicly. Stellantis' strategy is rolling out at a time when the auto industry is adapting to U.S. tariffs, while struggling with the expensive transition to electric cars and aggressive Chinese competition. Under Filosa "Stellantis is accelerating actions... to correct past strategic and operational decisions," a company spokesman said. The plan has the backing of major investors - the Agnelli family's Exor (EXOR.AS) , opens new tab, the Peugeot family and the French government -, three sources said. Filosa's tactics include resorting to U.S. fleet sales - lower-margin sales to rental companies, corporations and government agencies that automakers have historically used to offload inventory and pad sales figures, an industry source said, while Stellantis is also investing in the profitable Jeep and Ram models customers want. Filosa is also working on a longer-term problem his predecessor left unresolved: figuring out which of Stellantis' sprawling collection of 14 brands - also including Fiat, Peugeot, Citroen and Maserati - have a viable future, the first source said. The company will also drop ambitious EV sales targets as Filosa makes the U.S. market his top priority, unlike Tavares, who went in the "opposite direction", a source inside Stellantis said. "Filosa absolutely understands what North America brings to the company," said Sam Fiorani, Vice President at research firm AutoForecast Solutions. BACK TO BASICS WITH A FOCUS ON POPULAR JEEP BRANDS AND AFFORDABILITY Formed in early 2021 through the merger of Fiat Chrysler and France's Peugeot maker PSA, Stellantis had bold ambitions to dominate future automotive technology as the world went electric. But the automaker slashed costs and cut popular models like the Jeep Cherokee in the U.S. market to provide the double-digit margins former CEO Tavares promised Stellantis shareholders. Stellantis priced its vehicles too high for customers and allowed rivals like Ford's (F.N) , opens new tab Bronco to eat into the Jeep brand's market share. The company's U.S. market share dropped below 8% so far this year - its lowest on record for Stellantis, and Fiat Chrysler before it, according to car-shopping firm Edmunds - from 12.5% in 2020. Under Filosa, the automaker has ditched direct investments in autonomous driving, Reuters has reported, and hydrogen-powered vehicles in a back-to-basics approach. That also includes scrapping a key Tavares pledge that by 2030 100% of Stellantis' European sales and 50% of its U.S. sales will be EVs. The group has already re-introduced popular models like the Cherokee and the powerful 'Hemi' eight-cylinder gasoline engine in the U.S. market. More affordable models are planned to recapture share lost to rivals offering competitive entry-level vehicles. Filosa said this month Stellantis' sequence of product launches will bring sales growth that is "highly sustainable and progressively better quarter by quarter." "They've made a bunch of missteps in the past few years," AutoForecast's Fiorani said. "They need to rebuild the lineup... revive Dodge or somebody with a product that comes in under $30,000." A company source said Stellantis is confident it can regain lost U.S. market share, but did not provide specific targets. Marco Santino, a partner at consultancy Oliver Wyman, said restoring Stellantis' U.S. market share to 2021 levels is feasible. "That is a credible target for North America, where the group has encountered challenges," Santino said, "but where its overall structure has basically remained the same." Filosa is reshaping Stellantis' leadership, promoting trusted Italian and Brazilian managers from his time at FCA and Stellantis in Latin America. He is also hiring managers, engineers and tech experts to beef up ranks depleted under Tavares, two sources said. SACRIFICING MARGINS Corporate fleet sales, discouraged under Tavares, are being used to rebuild Stellantis' volumes and keep plants running, the industry source said. While fleet margins are lower than for retail sales, they help maintain visibility and prop up production if "done well," AutoForecast's Fiorani said. "If nobody's driving a particular model, retail buyers won't know it exists without expensive advertising," he said, meaning that if consumers see a car on the road or drive it as part of a rental fleet they are more likely to take a closer look at it. U.S. dealer Harry Criswell, president of Criswell Automotive that operates 12 dealerships in Virginia and Maryland, said Stellantis is listening more to commercial and fleet dealers. "They want to sell cars," Criswell said. "They want to make... much better quality cars than they have been making." Filosa is ready to sacrifice short-term margins while investing in better products to prove Stellantis can still build popular cars, three of the sources said. In October, Stellantis announced a $13 billion investment in the U.S. market to boost sales and offset tariffs. Major Stellantis investors know real fixes will take years and are willing not to press Filosa on profitability, for now, three sources said, including both shareholder sources. Filosa in October said a 6%-8% margin on adjusted operating income (AOI) was a "reasonable target for the mid-long term". Stellantis' adjusted operating income margin is expected to hit low single-digits this year. Most analysts do not expect anything above 5% in 2027 - versus around 13% in 2022 and 2023. But shareholder patience may run thin if profit margins do not tick up soon after sales rise. A source close to a major investor said while boosting sales was a "good thing, you also need margins to fund future investments." "ONE PLUS ONE DOES NOT EQUAL TWO" Even before Stellantis' creation, Tavares, then CEO of PSA, warned the auto industry was entering a "Darwinian" period where only the most agile brands would survive. But though as Stellantis CEO he repeated his Darwinian refrain, Tavares never touched any of the automaker's 14 brands. Unlike the U.S., where Stellantis' brands have different customers but share the same dealers, in Europe the merger of FCA and PSA brought together overlapping brands, which makes regaining lost market share there much harder, Oliver Wyman's Santino said. "That's a tougher goal for Europe," he said. "In this case one plus one does not equal two". Brands like Peugeot and Opel compete in similar product segments, while premium brands DS and Lancia have minimal market share. So Filosa is assessing all 14 brand's long-term viability, a source familiar with the matter said. His options could include axing some brands, especially overlapping European ones. The next few months will be critical. Strong year-end U.S. sales could buy Filosa time to deliver a long-term strategy and reassure investors Stellantis is not in structural decline. "Are they where they need to be? No, not even close," Criswell Automotive's Criswell said. "But I think they've made remarkable progress in a short period of time." https://www.reuters.com/sustainability/climate-energy/inside-stellantis-ceos-emergency-room-rush-recapture-market-share-2025-12-11/

2025-12-11 07:06

HONG KONG, Dec 11 (Reuters) - Hong Kong's de-facto central bank lowered on Thursday its base interest rate by 25 basis points to 4.0%, in line with a cut by the U.S. Federal Reserve, but major lenders declined to pass on the reduction to customers. Hong Kong's monetary policy moves in lock-step with the United States as the city's currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar. Sign up here. It was the third easing by the Hong Kong Monetary Authority (HKMA) this year and followed a similar cut late in October. After the cut announced on Thursday, HSBC and Bank of China (Hong Kong) said they would maintain their best lending rates in Hong Kong at 5%. Standard Chartered Bank said it would keep its Hong Kong dollar best lending rate unchanged at 5.25%. All three lenders kept their savings rates unchanged. The banks did not provide reasons, but HKMA CEO Eddie Yue told reporters that lenders would take into consideration factors including interbank rates and the cost of capital when making decisions on interest rates. "Many banks had mentioned in their rate cut last time that the current savings rates are getting close to zero," Yue said. The Federal Reserve lowered the benchmark policy rate by a quarter of a percentage point in a widely expected move, but indicated it would likely pause its easing cycle at the next policy meeting in January. "An interest rate cut always has a positive impact on the economy and housing market," Yue said. "However, the pace of future rate cuts remains quite uncertain, which may influence the interest rate environment in Hong Kong," he added, urging the public to carefully manage interest rate risks when making financial decisions. https://www.reuters.com/world/asia-pacific/hong-kong-central-bank-cuts-interest-rate-tracking-fed-move-2025-12-11/