2025-05-29 21:57

BOGOTA, May 29 (Reuters) - Colombia's investment in exploration and production (E&P) of hydrocarbons could jump some 8% this year to reach $4.68 billion, Colombia's leading industry group said on Thursday, warning this would not prevent a drop in gas production. The Colombian Oil and Gas Association (ACP) said the resources would however, maintain the South American nation's current levels of crude oil production. Sign up here. Investment last year was $4.33 billion, according to the ACP. "Today more investment is required to produce the same amount of oil, due to the natural depletion of the fields and the complexity of the operating environment," ACP President Frank Pearl said. "For gas, we are not managing to either increase production or replenish reserves, which is double the challenge when it comes to energy self-sufficiency," he added. The ACP estimated that $740 million would be invested in exploration this year, while $3.94 billion would go toward production so the country can keep pumping between 760,000 and 770,000 barrels of oil equivalent per day, similar to the 772,000 boepd recorded in 2024. However, it predicted that gas output would decline to 905 million cubic feet per day, compared to 959 million cubic feet last year. Since coming into office in 2022, President Gustavo Petro has sought to reduce the country's dependence on fossil fuels, a major contributor to the nation's economy, and move towards solar and wind energy projects. https://www.reuters.com/business/energy/colombia-oil-gas-ep-investment-could-jump-8-2025-industry-group-says-2025-05-29/

2025-05-29 21:51

Bill could impose 20% tax burden on foreign investors' passive income Demand for US Treasuries, dollar may weaken Some analysts raise more bearish US market outlook NEW YORK/LONDON, May 30 (Reuters) - Wall Street analysts are cautioning that a tax targeting foreign investors in the U.S. budget bill progressing through Congress could end up weighing on demand for U.S. Treasuries and the dollar. The U.S. House of Representatives has approved a sweeping tax and spending bill that includes the possibility of imposing a progressive tax burden of up to 20% on foreign investors' passive income, such as dividends and royalties. Sign up here. The levy, included in section 899, would be paid by entities such as sovereign funds and companies with businesses in the U.S. or individuals from countries that impose taxes the U.S. considers unfair, including digital service taxes. "We see this legislation as creating the scope for the U.S. administration to transform a trade war into a capital war if it so wishes," George Saravelos, head of FX research at Deutsche Bank, said in a note on Thursday, adding the new tax could have an adverse impact on demand for U.S. Treasuries. If passed by the Senate, the rising tax rate on foreigners' investments would come at a time global investors have started to question so-called "U.S. exceptionalism," or its unique ability to outperform other financial markets, due to a growing fiscal deficit and a new trade policy based on tariffs. Financial services firm Brown Brothers Harriman (BBH) said in a note the new tax rate was "playing with fire." "It would deter foreign investment in U.S. assets at a time when the country faces increasing reliance on foreign capital to finance its ballooning debt. Clearly, this is not good for the dollar," said Elias Haddad, BBH's senior markets strategist. If it is also approved by the Senate, it could raise $116 billion in taxes over 10 years, the Congressional Budget Office said, based on estimates produced by the Joint Committee on Taxation. Still, revenues would be nearly flat in 2032 and the provision could turn into losses in 2033 and 2034, according to the calculations. Nomura said there would likely be a push back against the new tax rate or negotiations to seek exemptions for Treasuries and agency mortgage-backed securities, as the bank considers the burden on overseas investors could have unintended consequences for those assets. Rajeev Thakkar, chief investment officer and director at PPFAS Mutual Fund, said an increase in tax rates on investors "may reduce their appetite somewhat." DOLLAR WEAKNESS Geoff Yu, EMEA macro strategist at BNY in London, said that based on his observation of investor flows, there had not been an immediate reaction. "Treasuries are offering value right now - you're getting higher yields, the dollar is weaker," he said, which are both compensating for other factors. U.S. 10-year Treasury yields are trading at around 4.4% . Others noted a more bearish longer-term outlook for U.S. markets. Morgan Stanley said in a note that the new tax would weaken the dollar, as it would reduce foreign appetite for U.S. assets. The U.S. currency is down roughly 8% this year against a basket of other major currencies and is on track for its worst year since 2017. According to law firm Davis Polk, nations that could be considered "discriminatory foreign countries" include many that are part of the European Union, as well as India, Brazil, Australia and the United Kingdom. International companies with subsidiaries in the U.S., which employ 8.4 million workers, also fear the higher tax burden could make it more difficult to operate in the world's biggest economy. In a recent statement, the Global Business Alliance, which represents foreign companies in the U.S., said a tax hike would threaten investments in the country. The White House did not immediately comment on the impact of the new tax burden. https://www.reuters.com/business/finance/wall-street-fears-foreign-tax-budget-bill-may-reduce-allure-us-assets-2025-05-29/

2025-05-29 21:48

May 29 (Reuters) - Wells Fargo (WFC.N) , opens new tab said on Thursday it has signed a deal to sell its rail equipment leasing business to a newly formed joint venture between railcar lessor GATX Corporation (GATX.N) , opens new tab and Brookfield Infrastructure (BIP.N) , opens new tab. The deal, which the U.S. banking giant said will not have a material impact on its financial position or earnings, includes the entire rail operating lease assets valued at around $4.4 billion, as well as the rail finance lease portfolio. Sign up here. "This transaction is consistent with Wells Fargo's ongoing strategy of simplifying our businesses and focusing on products and services that are core to our clients," said David Marks, executive vice president, Wells Fargo Commercial Banking. In a separate statement, GATX and Brookfield Infrastructure said the rail operating lease portfolio includes roughly 105,000 railcars. Additionally, Brookfield Infrastructure has also agreed to acquire Wells Fargo's rail finance lease portfolio, composed of roughly 23,000 railcars and around 440 locomotives. GATX will initially own 30% and Brookfield Infrastructure 70% of the joint venture, with the former having the option to acquire full ownership over time. GATX will have commercial and operational control, and manage all joint venture assets. The companies said they expect the deal to close in the first quarter of 2026 or sooner. https://www.reuters.com/business/finance/wells-fargo-signs-deal-sell-44-billion-rail-assets-portfolio-2025-05-29/

2025-05-29 21:29

HOUSTON, May 29 (Reuters) - Enterprise Products Partners (EPD.N) , opens new tab on Thursday said its ethane and butane exports could be hurt by a U.S. Department of Commerce requirement that it apply for a license to export to China. The United States has ordered a broad swathe of companies to stop shipping goods, including ethane and butane, to China without a license and revoked licenses already granted to certain suppliers, Reuters reported on Wednesday. Sign up here. Enterprise, which owns and operates marine export terminals that handle ethane and butane, said in a regulatory filing it was evaluating its procedures and internal controls and could not determine if it will be able to obtain a license. Enterprise's marine export terminal on the Houston ship channel loaded about 213,000 barrels per day of ethane in 2024, of which about 85,000 BPD, or 40%, were exported to Chinese markets, Enterprise said. https://www.reuters.com/business/energy/enterprise-products-says-its-china-exports-could-fall-due-license-requirement-2025-05-29/

2025-05-29 21:12

TRIPOLI, May 29 (Reuters) - Three suspects have been detained for allegedly storming the Libyan state oil firm's headquarters in Tripoli, the country's attorney general said on Thursday, a day after its rival government in the east threatened to declare force majeure on oil fields and ports citing assaults on the firm. The National Oil Corporation is based in Tripoli under the control of the internationally-recognized Government of National Unity. The parallel government in Benghazi in the east is not internationally recognised, but most oilfields in the major oil producing country are under the control of eastern Libyan military leader Khalifa Haftar. Sign up here. The NOC has previously denied its corporation's headquarters were stormed, calling it "completely false" and quoted its acting chief as calling it "nothing more than a limited personal dispute that occurred in the reception area." But the eastern-based government has threatened to also temporarily relocate the NOC's headquarters to "safe cities" such as Ras Lanuf and Brega, both of which it controls. "The public prosecution reviewed the evidence of the storming of the Corporation's headquarters, inspected the scene, reviewed the video footage recorded at the time of the incident and heard the testimonies of those present," the attorney general said in a statement. The three suspects were handed over by the defence ministry, which was asked "to arrest the remaining contributors to the incident," the attorney general said. The national output of crude oil in the past 24 hours reached 1,389,055 barrels per day, the NOC said on Wednesday, reflecting normal levels. Libya's oil output has been disrupted repeatedly in the chaotic decade since 2014 when the country divided between two rival authorities in the east and west following the NATO-backed uprising that toppled Muammar Gaddafi in 2011. https://www.reuters.com/business/energy/three-suspects-detained-storming-libyas-state-oil-firm-attorney-general-says-2025-05-29/

2025-05-29 21:09

ORLANDO, Florida, May 29 (Reuters) - TRADING DAY Making sense of the forces driving global markets Sign up here. By Jamie McGeever, Markets Columnist Tariff ruling and counter-ruling Tariff confusion reigned on Thursday as investors digested a U.S. trade court ruling late Wednesday against most of President Donald Trump's tariffs. They initially cheered the news, but by the time a U.S. appeals court reinstated the duties just before the Wall Street close, that optimism had largely evaporated. In my column today I look at how structurally higher U.S. borrowing costs in the coming years mean the fiscal 'precipice' Washington faces may be even nearer than it seems. More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Courting confusion As if the fog of uncertainty shrouding markets wasn't thick enough, investors' visibility has been dimmed further by a U.S. court ruling that most of Trump's tariffs are unlawful, followed by an appeals court reinstating them while the appeal process unfolds. The administration will likely find other legal avenues to implement its tariffs if need be, so the net effect may ultimately be minimal. But the ruling and appeal could affect Washington's negotiations with major trade partners, timelines, and how countries play their hand. For investors, the upshot is more uncertainty and less clarity. The latest twists come just as it looked like tariff revenues were beginning to pick up. Donald Schneider at Piper Sandler on social media platform X this week estimated that tariff revenues were coming in at an annualized pace of $255 billion, up from a "norm" of about $85 billion, while analysts at UBS on Thursday said tariffs were on track to generate $300-450 billion in annual revenues. Wednesday's court ruling, however, would cut that to below $200 billion. On the other hand, of course, lower tariffs are immediately positive for growth and reduce the likelihood of retaliation from other countries. Senior administration officials downplayed the impact of the trade court block, but it is notable that Trump himself hasn't commented yet. He was busy on Thursday, to be fair. He had a "meaningful" telephone call about trade and tariffs with Japanese Prime Minister Shigeru Ishiba, then later hosted a private meeting at the White House with Federal Reserve Chair Jerome Powell. The two discussed growth, employment, and inflation, and Trump reiterated his view that the Fed is making a "mistake" by not cutting interest rates. The meeting, their first since 2019, comes a day after Fed minutes underscored exactly why policymakers haven't cut rates - unprecedented uncertainty. Before all that, investors on Thursday were also digesting Nvidia's earnings and forecasts, and revised U.S. GDP data. They have an even heavier dose of top-tier data to deal with on Friday, which includes the latest inflation snapshots for Tokyo, Germany and the United States, as well as first quarter GDP readings from India, Brazil and Canada. High yields bring U.S. fiscal 'precipice' even closer Few would disagree that U.S. public finances are deteriorating, but debt Cassandras have been warning of a fiscal day of reckoning for 40 years and it has yet to arrive, so why should this time be any different? The non-partisan Congressional Budget Office's baseline forecast sees federal debt held by the public rising to 117% of GDP over the next decade from 98% last year, and net interest payments rising to 4% of GDP, a sixth of all federal spending. While these eye-watering figures are concerning, it still seems difficult to fathom the United States experiencing a genuine debt crisis where investors turn their backs on Treasuries and the dollar, the two cornerstones of the global financial system. Both should enjoy strong demand – at least for the foreseeable future – even if their prices may need to fall to attract buyers. And in times of extreme crisis, like 2008 and 2020, the Fed can always buy huge quantities of U.S. bonds to stabilize the market. But that doesn't mean investors should ignore the swelling tide of fiscal gloom. We may not see a full-blown debt crisis, but there's a sense that "the fiscal" matters for markets more now than it has for decades. ECONOMIC ASSUMPTIONS To better understand the risk at hand, it's useful to explore the assumptions baked into the current U.S. debt and deficit projections. The CBO's comprehensive fiscal projections are a benchmark for many policymakers and investors. But amid the fog of uncertainty created by U.S. President Donald Trump's trade war, the baseline economic assumptions underlying this outlook may be too optimistic. The CBO assumes that the United States will experience continuous, uninterrupted economic growth over the next decade. While it's true that since 1990 the U.S. economy has twice gone on streaks of more than a decade without experiencing a recession, conditions today - not the least of which is the country's bloated public debt burden - suggest that a repeat is highly unlikely. And in the event of a downturn, U.S. public finances would almost certainly suffer the double whammy of shrinking tax receipts and a surge in benefit payments, pushing the country closer to a fiscal cliff. Of course, an economic downturn would probably also prompt the Fed to lower interest rates, which would likely cause bond yields to fall and offer some relief on debt-servicing costs. But investor angst over the debt may keep market-based borrowing costs higher than they would otherwise be, something that is also not baked into the CBO's central projections. And if government borrowing costs over the next decade are higher than currently projected, the U.S. fiscal picture is even more troublesome than thought. YIELD CURVE ASSUMPTIONS Yield curve assumptions play a major – and often underappreciated – role in U.S. debt sustainability projections. The current CBO projections are based on the expectation that the yield curve will "normalize" in the coming year. They assume that the three-month Treasury yield will fall to 3.2% and the 10-year yield will settle at 3.9%. But what if the yield curve stays near current levels over the next decade, with a three-month rate of 4.40% and a 10-year yield of 4.50%? Chris Marsh at Exante Data crunches the numbers and finds that, in this scenario, federal debt held by the public could rise to 125% of GDP by 2034 and interest payments as a share of revenue would approach 30%. Interest payments as a share of revenues are already about to exceed their late-1980s peak and may end up at the highest level since at least the 1950s. Adding to this concern, Saul Eslake and John Llewellyn at Independent Economics note that if the yield curve does not normalize, the United States could get in the dangerous position where nominal GDP growth remains persistently below the 10-year Treasury yield, meaning debt dynamics would deteriorate because interest payments would outstrip growth. Given that the Trump administration's current budget bill is expected to add nearly $4 trillion to the federal debt over the next decade, the risk of this is especially pertinent today. One consequence of higher-for-longer U.S. interest rates then could be a much-heavier-for-much-longer debt burden. What could move markets tomorrow? Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/world/china/global-markets-trading-day-graphic-pix-2025-05-29/