2025-11-03 11:28

Investment needed in Abu Dhabi, Iraq, Libya to meet demand, BP CEO says BP CEO optimistic about long-term oil demand despite short-term uncertainty TotalEnergies CEO highlights India's growing oil demand as a new driver ABU DHABI, Nov 3 (Reuters) - Oil supply growth outside OPEC+ could decline by April, while demand remains robust, BP's (BP.L) , opens new tab Chief Executive Murray Auchincloss said on Monday. "There is a supply increase that's come outside of OPEC+," Auchincloss said. "We think that finishes in about February, March, April, and then it's likely that we see flat to declining production after that time period outside of OPEC+." Sign up here. Future oil prices will depend on three factors: OPEC+ decisions, Chinese stockpiling and the impact of sanctions, Auchincloss said at the ADIPEC energy conference in Abu Dhabi. “It’s a pretty serious sanctions environment right now, which is dampening supply,” he said. Despite short-term uncertainty, he remains optimistic about long-term demand, citing growth from aviation and petrochemicals. The comments come after OPEC+ - a group of oil-producing nations including Saudi Arabia and Russia - on Sunday agreed a small oil output increase for December and a pause in increases in the first quarter of next year as the producers' group moderates plans to regain market share due to rising fears of a supply glut. Oil prices have dropped about 13% this year. Auchincloss said he sees a long-term case for investment in oil and the industry has to expand in places such as Abu Dhabi, Iraq and Libya to keep up with demand growth. TotalEnergies (TTEF.PA) , opens new tab CEO Patrick Pouyanne said annual oil demand growth was rising steadily at around 1%. He said China’s oil demand growth has slowed to around 300,000 from 600,000 barrels per day five years ago, but India is emerging as a new driver with 200,000 barrels per day in growth. Both executives, who spoke on the same panel, emphasized the need for continued investment. "OPEC is unwinding part of its capacity, so the quicker they unwind the quarter, the less they will have spare capacity," Pouyanne said. "We could face a situation with a lower price, less investment, less spare capacity, and then prices will go up again." https://www.reuters.com/business/energy/bp-ceo-expects-non-opec-oil-supply-growth-could-decline-by-april-2025-11-03/

2025-11-03 10:59

SOFR seen rising sharply above fed funds rate in November, December Fed did not do more to ease liquidity tightness, analysts say Central bank's reinvestment of MBS proceeds into T-bills not a surprise Treasury's aggressive bill issuance to pressure repo market NEW YORK, Oct 31 (Reuters) - The Federal Reserve's decision on Wednesday to begin winding down its long-running balance sheet runoff has done little to ease concerns about near-term liquidity strains in the roughly $4 trillion U.S. overnight repurchase market. U.S. repo futures continue to reflect expectations of elevated overnight funding rates over the next two months, despite the U.S. central bank's announcement that it will reinvest all proceeds from its maturing mortgage-backed securities (MBS) into Treasury bills. Analysts estimate the reinvestment will amount to $15 billion in T-bill purchases per month. Sign up here. In halting the drawdown of its still-sizable balance sheet, the Fed cited signs of tightening liquidity that have driven repo rates higher over the past few months. Since launching quantitative tightening, or QT, in June 2022 to unwind emergency stimulus measures introduced during the COVID-19 pandemic, the Fed has slashed the size of its balance sheet from a peak of roughly $9 trillion to about $6.6 trillion. The Fed's increased demand for Treasury bills is expected to significantly shrink their net supply to private investors in 2026, likely driving prices higher and yields lower. This dynamic could help alleviate supply pressures and stabilize overnight funding rates. Still, the initial reaction in the futures market pointed to expectations of a higher Secured Overnight Financing Rate (SOFR) - an overnight repo rate - in November and December, relative to the effective federal funds rate, the central bank's key policy rate. The fed funds rate reflects the cost of unsecured overnight loans between banks used to meet reserve requirements. "The key takeaway here is that the Fed is not alarmed by recent front-end developments, and does not see a need for any dramatic adjustments in its operations," said Lou Crandall, chief economist at money market research firm Wrightson ICAP. SOFR stood at 4.27% on Thursday, while the effective fed funds rate , reported with a one-day lag, was 4.12% late on Wednesday. The one-month SOFR-fed funds futures spread is a key liquidity stress indicator: the more negative it is, the tighter repo funding conditions are perceived to be. Following the Fed's policy decision this week, that spread hit minus 11.5 basis points (bps) for the November contract, a record gap. For December, the spread dropped to minus 12.5 bps, also an all-time low . The numbers suggested that investors in the futures market expect SOFR to trade 11.5 bps and 12.5 bps higher, respectively, than the fed funds rate by the end of November and December. FED COULD HAVE DONE MORE "The market was largely priced in for an announcement on the end of QT, and we got that, but we didn't get anything that was out of left field for dovish risks," said Jan Nevruzi, U.S. rates strategist at TD Securities in New York. "The Fed ended QT with a month delay, so that doesn't really help for November. We also didn't get anything that was a surprise on the upside: they could have said ... that they're also thinking about reserve management purchases, which could have meant another $20, $30 billion a month in reinvestments." Repo rates are also currently elevated due to the end of the month on Friday, which also happens to be the end of the year for Canadian banks, making funding tight for a non-quarter reporting period like October. Analysts said Canadian banks are lenders in the U.S. repo market. Overnight rates tend to spike at the end of the month, quarter or year, as primary dealers, mostly large banks, withdraw from acting as middlemen in repo transactions due to higher balance sheet costs that make them look bloated during those reporting dates. Pressures in repo markets are also largely due to aggressive bill issuance by the Treasury to build its cash balance after the U.S. debt ceiling was lifted over the summer. The increased bill issuance has raised the need for repo financing to absorb all those Treasuries in the market. "I don't think QT would have had much of an immediate effect on repo rates whether you ended it or not," said Joseph Abate, head of rates strategy at SMBC Nikko Securities in New York. Yet the Fed's planned reinvestment of MBS proceeds into T-bills was not a surprise. Dallas Fed President Lorie Logan, who previously ran the New York Fed's open market operation, had suggested in a speech in February this year that the central bank's portfolio of Treasuries was significantly overweight longer-term securities and underweight short-dated bills. She noted that moving toward a more neutral mix would mean holding relatively more bills. T-bills are currently just less than 5% of the Fed's Treasury holdings. "A bill-heavier portfolio can do more maturity transformation trades where you replace the bills as they run off with longer-dated securities which bring down term rates," SMBC's Abate said. An increase in bill holdings enhances the Fed's operational flexibility and helps minimize the portfolio's unintended influence on market rates beyond its QT objectives, he added. https://www.reuters.com/business/feds-t-bill-pivot-expected-ease-supply-rate-futures-flag-tight-funding-2025-10-31/

2025-11-03 09:48

Dollar has lost value broadly Stocks at record highs, AI boom roars Gold, bitcoin profit as investors seek non-dollar assets Bond yields rise on worries over government finances Nov 4 (Reuters) - In the year since Donald Trump's election as U.S. president, global financial markets have had to navigate policy shocks and unprecedented uncertainty and high volatility, with stocks, gold and crypto hitting record highs. After Trump defeated Democratic rival Kamala Harris on November 5, 2024, the dollar roared higher, along with stocks and bitcoin, while Treasury yields rose, as investors priced in the likelihood of greater strain on U.S. finances. Sign up here. Since then, the U.S. administration has struck deals on trade, while upending global supply chains and decades of post-war international diplomacy. Investors are learning to ride out the unpredictability, including clear ways to trade Trump's tendency to amp up threats only to later back down. The so-called TACO trade - "Trump always chickens out" - has become a feature. Here is a snapshot of where major markets are now, compared to when Trump was elected. UP THE BIT, DOWN THE GREEN The dollar has offered the clearest reflection of how the rest of the world has reacted to Trump's erratic approach. It surged after the election, as investors bought into the idea that a Trump-fuelled spending splurge would fuel the economy, but it has lost a net 4% in value since then. Trump's tariffs on trade partners and uncertainty over their impact have driven investors to find alternatives. His crypto-friendly policies, which have drawn scrutiny over unprecedented conflict of interest, have sent bitcoin to a record high of $125,835.92 in October. Geopolitical tensions and tariffs have also driven gold, a classic safe-haven, to a record $4,381 an ounce in October. Demand for dollars is unlikely to wane any time soon as when financial market turbulence or geopolitics heats up, it is often investors' first choice, or "the cleanest dirty shirt", as Piotr Matys, senior FX analyst at In Touch Capital Markets, says. CHECKING IN ON STOCKS Stock markets everywhere have hit record highs this year, powered in large part by enthusiasm over artificial intelligence and the prospect of lower global interest rates. Trump's April 2 "Liberation Day" tariff announcement was a first major test and it hit markets hard. The MSCI World Index (.MIWD00000PUS) , opens new tab tumbled 10%, but has since rebounded to record highs, gaining over 20% since Election Day. The S&P 500 (.SPX) , opens new tab is up 17% since last November, thanks to AI fever, while in Europe, defense stocks have been at the heart of the rally, as Trump forced regional governments to spend more on their own security, while war rages in Ukraine. Tech-fueled rallies and a softer dollar have boosted equities in Japan, South Korea, and China too. TESLA – AN ELECTRIC YO-YO Trump's relationship with Elon Musk, the world's richest man, was a key driver of Tesla stock in the weeks after the election. Musk had spent over $250 million backing Trump's reelection bid last year and even joined his campaign trail. Musk's fortune swelled, as shares in his EV maker almost doubled in less than two months to hit a record high of $488.5. But the honeymoon did not last. After Musk launched Trump's budget-slashing Department of Government Efficiency (DOGE) in January, Tesla's brand loyalty rate dropped dramatically as the CEO's flirtation with politics spooked buyers, contributing to a drop in deliveries for two consecutive quarters. Tesla shares hit a low in April before rebounding as tensions between Musk and Trump spilled into the open, culminating in a split by late May. Despite the turbulence, the world's most valuable carmaker has outperformed struggling legacy rivals, including Detroit's GM (GM.N) , opens new tab, Ford (F.N) , opens new tab and Stellantis (STLAM.MI) , opens new tab. BOND YIELDS RISE Since Trump's election, bond yields have surged across major economies, reflecting investor concerns over rising government borrowing and the sustainability of public finances. One of the concerns among investors in U.S. Treasuries was the likely cost of funding Trump's planned tax cuts. His "One Big Beautiful Bill", which passed in July, is expected to increase the federal deficit by around $3.8 trillion in the coming 10 years. However, with the Federal Reserve cutting rates and inflation seemingly contained, 30-year Treasury yields are up just 14 basis points at 4.66% since last November. The rise in Japanese government bonds (JGB) has been more aggressive, with 30-year yields up nearly 85 basis points to record highs while French and German 30-year yields are up 62 and 59 bps, respectively, since November 5, 2024. BALANCING TRADE One of Trump's key areas of focus is the U.S. trade balance, something he says is proof America is being "ripped off" by partner countries and that tariffs, aside from being "the most beautiful word in the dictionary" are the only way to correct it. Trump's tariffs have driven up the cost of doing business and made planning more complicated. But they are eroding the trade deficit. The most recent data shows it hit a two-year low of $60.2 billion in June, and the deficit with China shrank by 70% over five months to its lowest level in over 21 years. Similarly, the U.S.-EU trade balance spiked ahead of the tariff announcement before declining. This suggests that "the trade war may be hurting the EU more than it does China," which has a stronger back-up plan than the Europeans, said Ipek Ozkardeskaya, a senior analyst with Swissquote. https://www.reuters.com/business/autos-transportation/tariffs-tacos-dollars-global-markets-year-trump-20-2025-11-03/

2025-11-03 07:46

DUBAI, Nov 3 (Reuters) - Italy's Eni and Malaysia's state energy firm Petronas said on Monday they had signed a binding agreement to form a jointly owned company combining their upstream oil and gas assets in Indonesia and Malaysia. The new entity, NewCo, will manage 19 assets, 14 in Indonesia and five in Malaysia, with plans to invest over $15 billion in the next five years to develop about 3 billion barrels of discovered reserves and explore a further 10 billion barrels. Sign up here. The agreement was signed at ADIPEC in Abu Dhabi. The move is part of Eni's "satellite" strategy under which the Italian energy group has created several spin-offs centered around specific businesses and has supported their growth to make them independent. In a similar transaction, Eni teamed up with BP (BP.L) , opens new tab in Angola to create their Azule Energy joint venture. The NewCo with Petronas will integrate a portfolio of gas-producing and development assets across Malaysia and Indonesia beginning with an initial production base of more than 300,000 barrels of oil equivalent per day (boe/d). It plans to grow to more than 500,000 boe/d of production in the medium term. It will operate as a financially self-sufficient entity, Eni said in a statement. https://www.reuters.com/business/energy/eni-petronas-form-joint-venture-combine-oil-gas-assets-2025-11-03/

2025-11-03 07:45

ANKARA, Nov 3 (Reuters) - Turkish inflation eased to 32.87% annually and to 2.55% monthly in October, both below expectations, according to official data on Monday that could reinforce the central bank's decision to slow but not stop its rate-cutting cycle. A Reuters poll had forecast annual inflation of 33.24% and a monthly rise of 2.83%. Sign up here. Consumer price inflation (CPI) in the heavily weighted food group came in at 34.9% annually and 3.4% monthly, Turkish Statistics Institute data showed. Driving some of the price pressure, housing inflation topped 50% on an annual basis while clothing topped 12% on a monthly basis. In September the annual rate was 33.3% and the monthly rate was 3.2%, marking the second month in a row that CPI was higher than expected. That prompted the central bank to slow its interest rate easing cycle with a 100-point cut last month to 39.5%. Some analysts had expected the central bank to halt its easing, especially if October inflation was higher than expected. Minutes published on Friday showed the bank warning that risks to disinflation, particularly from food prices, had become more pronounced and that inflation expectations picked up in October, even as the pace of food price increases slowed. Finance Minister Mehmet Simsek said on Friday that it appears difficult to hit the 25-29% forecast range for inflation at the end of this year but added that disinflation would continue strongly in 2026. Producer prices rose 1.63% month on month in October for an annual increase of 27%, the data showed. https://www.reuters.com/world/middle-east/turkey-inflation-dips-below-33-more-than-expected-2025-11-03/

2025-11-03 07:35

LONDON, Nov 3 (Reuters) - A 32-year-old British man accused of stabbing multiple passengers on a train in eastern England was not known to counter-terrorism police or security services, transport minister Heidi Alexander said on Monday. The attack on Saturday evening - which police said was not being treated as terrorism - left 11 people injured, including a member of the train crew who remains in hospital in a critical but stable condition, Alexander said. Sign up here. Five of the injured had been discharged from hospital by late on Sunday. Alexander told Times Radio on Monday that the suspect, who was arrested on suspicion of attempted murder, had not been flagged to counter-terrorism authorities prior to the attack. "I can tell you he was not known to counter-terrorism police, he was not known to security services," Alexander said, adding that she could not comment on whether the man had been known to mental health services. British Transport Police said officers responded within eight minutes of the first emergency call. A knife was recovered at the scene and CCTV footage reviewed by detectives showed a train crew member intervening to stop the attacker. "He literally put himself in harm's way," Alexander said. "There will be people who are alive today because of his actions." The suspect was arrested after the train made an emergency stop at Huntingdon, about 80 miles north of London. Authorities said they were not seeking anyone else in connection with the incident. https://www.reuters.com/world/uk/uk-train-stabbing-suspect-not-known-counter-terrorism-police-minister-says-2025-11-03/