2024-09-13 18:35

Sept 13 (Reuters) - About 42% of crude production and over 52% of natural gas output in the U.S. Gulf of Mexico were offline in the aftermath of Hurricane francine, the U.S. Bureau of Safety and Environmental Enforcement (BSEE) said on Friday. There were 732,316 barrels per day of oil and 973.2 million cubic feet of natural gas still offline two days after Francine hit the coast. The lost oil production was up from Thursday's 730,00 barrels and natural gas production was down from 992 million cubic feet as energy firms turned the taps back on. Francine has been moving northwest to the Mississippi River since Thursday night, hitting portions of the Mississippi Delta, Alabama, western Georgia and the Florida panhandle with heavy rainfall, the U.S. National Hurricane Center said. The U.S. Gulf of Mexico accounts for about 15% of all domestic oil production and 2% of natural gas output, according to federal data. Sign up here. https://www.reuters.com/business/energy/about-42-us-gulf-mexico-oil-output-shut-due-francine-2024-09-13/

2024-09-13 17:32

Canadian dollar falls 0.1% against the greenback For the week, the loonie weakens 0.2% Wholesale trade rises 0.4% in July 2-year yield hits a 2-year low at 2.950% TORONTO, Sept 13 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Friday as investors raised bets on an oversized interest rate cut from the Federal Reserve, a move which could raise speculation about the Bank of Canada easing in larger steps. The loonie was trading 0.1% lower at 1.3595 per U.S. dollar, or 73.56 U.S. cents, not far off the three-week low it touched on Wednesday at 1.3622. For the week, it was down 0.2%. The U.S. dollar (.DXY) , opens new tab fell against a basket of major currencies after media reports fueled the debate about the Fed beginning its interest-rate-cutting campaign with a half-percentage-point reduction, rather than a quarter-point move. "A half-point cut will weigh on the USD broadly but may also stoke expectations that the BoC could up the pace of easing, even if it is unlikely to at this stage," Shaun Osborne, chief currency strategist at Scotiabank, said in a note. The Canadian central bank has cut three times since June, moving in quarter-point increments. Its benchmark rate is at 4.25%. Canadian consumer price index data for August, due on Tuesday, could also guide expectations for the pace of BoC rate cuts. Analysts forecast inflation slowing to an annual rate of 2.1% from 2.5% in July. Friday's domestic data was more upbeat than expected. It showed wholesale trade growing by 0.4% in July from June, compared with forecasts for a 1.1% decline. Canadian bond yields eased across the curve, tracking moves in U.S. Treasuries. The 2-year was down 5.2 basis points at 2.950%, trading at its lowest level since August 2022. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-weakens-amid-oversized-fed-rate-cut-uncertainty-2024-09-13/

2024-09-13 14:09

BUENOS AIRES, Sept 13 (Reuters) - Brazil's central bank will raise its benchmark rate by 25 points next Wednesday at what will likely be the start of a short tightening campaign to quash persistent inflationary trends, moving the opposite way to its peers, a Reuters poll found. The move would unwind a 25 basis-point cut implemented in May, the last in a series of reductions that brought the Selic rate to 10.50% from a cycle-high of 13.75%. In June and July, the rate was kept unchanged at 10.50%. Members of the bank's monetary policy committee, known as Copom, will probably reinforce their concern about inflation staying above target amid worsening expectations for the direction of consumer prices. The forecast hike by Banco Central do Brasil (BCB) would come on the same day that the U.S. Federal Reserve is expected to launch a series of rate cuts with a first reduction of 25 basis points. That would take the BCB's Selic up 25 basis points to 10.75% on Sept. 18, according to 36 of 40 economists polled Sept. 9-12. Three saw no change, and one saw a bigger 50 basis-point hike. "Given a highly uncertain local scenario, even taking into account an improvement of the external environment, there is still a greater probability of Copom starting a tightening cycle," Guide Investimentos economists wrote in a report. "The market impact of the central bank's most recent communications leads us to believe the most efficient way to combat high inflation expectations is to act beforehand so it can end early" any tightening drive. Yield curve prices have indicated strong chances of potential hikes since BCB chief Roberto Campos Neto mentioned a possible gradual adjustment last month. Even President Luiz Inacio Lula da Silva, usually opposed to rate hikes, signalled he may support such an approach at some future point. Inflation deviated further from the official target recently driven by rising prices in services related to a firm job market. Despite some relief last month, the trajectory remains troubling, with energy costs growing as hydroelectric output falls due to dry weather conditions. Twenty-seven of 30 respondents who answered an extra question on what the central bank's next move would be after this month's decision forecast another hike at November's meeting. The three who saw rates staying unchanged on Sept. 18 expected a later cut. In response to a question on the size of move they expected after next week, the calls of 25 respondents expecting both a 25 basis-point increase on Sept. 18 and a hike two months later were narrowly split, with 13 forecasting a 50 basis-point move and 12 an extra quarter percentage-point. The central bank will continue adjusting the Selic to a cycle-high of 11.50% in the first quarter of 2025, followed by the start of an easing drive, the survey suggested. (Other stories from the Reuters global economic poll) Sign up here. https://www.reuters.com/markets/rates-bonds/brazil-central-bank-hike-rates-by-25-basis-points-sept-18-2024-09-13/

2024-09-13 12:47

Mitsotakis urges EU to create bloc-wide energy market regulator Power prices in Greece more than doubled from April to August EU needs 584 billion euros to upgrade power grids this decade ATHENS/BRUSSELS, Sept 13 (Reuters) - Greece's prime minister has asked the EU to urgently respond to soaring power prices in central and eastern Europe, which Athens said are being exacerbated by Russian attacks on Ukraine's energy infrastructure. In a letter to the European Commission, seen by Reuters, Kyriakos Mitsotakis asked Brussels to create a bloc-wide regulator with powers to inspect energy markets across the EU, and urged the Commission to support cross-border infrastructure projects to transfer power between countries. Power prices in Greece more than doubled from 60 euros per megawatt hour in April to 130eur/MWh in August, the letter said. "We cannot explain convincingly to our citizens why the price they pay is rising so suddenly. This is politically unacceptable," the letter said. Mitsotakis blamed the price spike, which has also affected countries including Romania and Bulgaria, on factors including soaring temperatures this summer, power infrastructure outages, and hydropower reservoirs dried out by climate change-fuelled drought. But he said an additional burden has come via Ukraine, which has become increasingly reliant on power imported from other European countries. Russian attacks have knocked out half of the country's power generating capacity this year, Ukrainian officials have said. The EU agreed an upgrade of its power market rules last year to try to encourage more fixed-price contracts with power generators and protect consumers from volatile energy markets. But the price of power in Europe - even in countries which have rapidly increased local renewable energy production - is still often pegged to gas-fuelled power plants, which can expose prices to sharp fluctuations in fuel markets. Gaps in interconnector capacity between countries and congestion in local electricity grids can also push up prices. "The new Commission should take up the task of pushing through more cross-border capacity," Mitsotakis said. The EU will need to invest 584 billion euros in upgrading its power grids this decade, by the bloc's own estimates, to overhaul decades-old infrastructure and ensure grids can carry larger shares of renewable energy. The letter was first reported by the Financial Times. Sign up here. https://www.reuters.com/world/europe/greece-asks-eu-urgent-response-soaring-power-prices-letter-shows-2024-09-13/

2024-09-13 11:59

LONDON, Sept 13 (Reuters) - Egypt's recent tender seeking 20 cargoes of liquefied natural gas (LNG) to cover winter demand after a steep decline in domestic gas output has been fully awarded, four trading sources told Reuters on Friday. This is the first time Egypt has issued a tender to cover winter demand since 2018. The most populous Arab country has returned to being a net importer of natural gas this year, buying more than 50 cargoes so far this year and abandoning plans to become a reliable supplier to Europe. The tender, which was issued by the Egyptian General Petroleum Corporation (EGPC) and closed on Sept. 12, aims to cover demand for the fourth quarter of 2024 and was awarded on a six-month deferred payment basis. "Despite the geopolitical challenges in the region and market tightness, EGPC received offers from more than 15 major players at very competitive rates that were 30%-40% less than expected market prices," a trading source said. "Offers were around a $1-plus per million British thermal unit (mmBtu) premium to the TTF, without the financial cost, which is around $0.60/mmBtu...this is far less than market expectation of a premium over $2/mmBtu." Three other trading sources said the tender was awarded at a premium of between $1.70 and $1.90 to the benchmark gas price at the Dutch TTF hub. The deals are for 17 cargoes to be delivered between Oct. 4 and Nov. 29 to Egypt's floating terminal in the Red Sea port of Ain Sukhna and three cargoes to Aqaba port in Jordan. Winners of the tender included TotalEnergies (TTEF.PA) , opens new tab, Shell (SHEL.L) , opens new tab, BP (BP.L) , opens new tab and commodities traders Glencore [RIC:RIC:GLEN.UL] and Gunvor [RIC:RIC:GGL.UL]. Saudi Aramco (2223.SE) , opens new tab won a few cargoes, as did smaller commodities trader Hartree. Egypt’s domestic gas output fell to a six-year low in May and is expected to drop by a further 22.5% by the end of 2028, consultancy Energy Aspects said, with power consumption expected to jump by 39% over the next decade. Egypt's natural gas balance is expected to tighten further in 2025, with natural gas production expected to continue dropping amid underinvestment, data intelligence firm Kpler said. "Egypt is expected to require more LNG next year but needs to prioritise securing additional LNG import capacity, particularly if Jordan's FSRU charter is not renewed in 2025," said Kpler's Laura Page. Saudi Arabia and Libya have financed the purchase of gas cargoes worth at least $200 million to help Egypt to contend with a deepening energy crisis, sources told Reuters. Sign up here. https://www.reuters.com/business/energy/egypts-tender-20-winter-lng-cargoes-fully-awarded-sources-say-2024-09-13/

2024-09-13 11:58

BRUSSELS, Sept 13 (Reuters) - European Union member states can increase the funds they pay to farmers, the European Commission said on Friday, after protests by farmers earlier in the year forced policymakers to scale back climate rules. The Commission said it would allow EU member states to pay higher advances of Common Agriculture Policy funds to farmers, which would allow them to receive up to 70% of direct payments in advance starting in October, and up to 85% in advance payments for area and animal-based interventions under rural development. Such payments are currently 50% and 75%, respectively. "EU farmers continue to face liquidity problems, notably due to extreme weather events which have had an impact on yields in recent years, as well as high interest rates on European financial markets and high prices of agricultural inputs and commodities," the commission said in a statement. The Commission has taken similar measures before, notably in 2020 in response to the coronavirus pandemic. Earlier this year, farmers blockaded roads to demand action on low incomes, cheap food imports, burdensome regulations and unfair competition from abroad. Key portions of EU policy have been impacted as Brussels seeks to assuage farmers. The EU withdrew a law to lower the use of pesticides, delayed a target for farmers to leave some land fallow to increase biodiversity and discarded a goal to reduce farming emissions from its 2040 climate roadmap. Sign up here. https://www.reuters.com/world/europe/eu-allows-member-states-boost-farmer-payments-after-protests-2024-09-13/