2024-08-30 17:17

NEW YORK, Aug 30 (Reuters) - U.S. oil consumption slowed in June to the lowest seasonal levels since the coronavirus pandemic of 2020, data from the U.S. Energy Information Administration showed on Friday. Product supplied of crude oil and petroleum products, EIA's proxy for demand, fell 2.7% month over month to 20.25 million barrels per day (bpd) in June. That is the lowest for June since 2020. The sharp decline comes after consumption rose to a seasonal high of 20.80 million bpd in May. Distillate demand was also at its seasonal lowest since 2020, the EIA data showed. Consumption of distillate fuel oil, which includes diesel and heating oil, fell 4.9% from May to 3.59 million bpd in June. Gasoline demand fell 1.7% month over month to 9.12 million bpd in June, EIA said. Crude oil production in the country rose by 25,000 bpd from May to 13.21 million bpd in June, EIA data showed. May output was revised higher by 11,000 bpd from the numbers reported last month. Gross natural gas production in the U.S. Lower 48 states rose to a four-month high of 115.5 billion cubic feet per day (bcfd) in June, according to EIA's monthly 914 production report. That was the first time gas output rose for two months in a row since December 2023 and compares with a monthly record high of 118.2 bcfd also in December 2023. In top gas-producing states, monthly output in June rose to a record high of 35.5 bcfd in Texas and a four-month high of 20.4 bcfd in Pennsylvania. That compares with a monthly record high of 21.9 bcfd in Pennsylvania in December 2021. Sign up here. https://www.reuters.com/markets/commodities/us-oil-demand-june-was-lowest-seasonally-since-2020-eia-says-2024-08-30/

2024-08-30 17:09

Aug 30 (Reuters) - The head of Ukraine's power grid operator Ukrenergo, Vadym Kudrytskyi, is to be dismissed, Forbes Ukraine reported on Friday, citing four sources familiar with the matter. One source said that Kudrytskyi refused to submit his resignation after the decision was made during a meeting with President Volodymyr Zelenskiy, and top officials. Ukrenergo did not immediately reply to a Reuters request for comment. The state-run operator faces the task of keeping Ukraine's electricity grid safe and stable throughout the 2/1-2 years of Russia's full-scale war during which Moscow has targeted the energy sector with multiple strikes. In the latest attack, Russia fired more than 200 missiles and drones on Monday, mostly targeting energy facilities, Kyiv officials said. Ukrenergo is tasked with protecting power facilities and making sure damaged energy infrastructure is restored. Sign up here. https://www.reuters.com/world/europe/ukraines-power-grid-operator-head-be-dismissed-media-reports-2024-08-30/

2024-08-30 15:19

Aug 30 (Reuters) - Federal Reserve policymakers on Friday got fresh confirmation that inflation is continuing to ease, clearing the way for a first interest rate reduction next month as they shift their focus to preventing further cooling in the labor market. The personal consumption expenditures (PCE) price index rose 2.5% in July from a year earlier, the Commerce Department reported, matching the gain in June. Over the most recent three months, the annualized reading on the Fed's preferred gauge of inflation is well below its 2% goal. Fed Chair Jerome Powell said last week that "the time has come" to cut rates, after a battle with decades-high inflation that saw the U.S. central bank raising rates aggressively in 2022 and 2023. It has kept its policy rate in the 5.25%-5.50% range since last July. "The recent price trends confirm that the end of the Fed's inflation fight is coming into view," assuring a rate cut at the Sept. 17-18 policy meeting, Ben Ayers, senior economist at Nationwide, wrote. "The further cooling of inflation could give the Fed leeway to be more aggressive with rate declines at coming meetings, especially if the labor market shows a steep deterioration." After the release of the report, which also showed consumer spending rising solidly, traders kept bets that the Fed will stick to a quarter-percentage-point reduction at first, but deliver a bigger half-percentage-point cut at a later meeting. Financial markets continue to price in the Fed cutting rates by a full percentage point by the end of this year. Most analysts are predicting a bit less, given how strong the economy has been, but say that labor market readings will drive how aggressive the Fed ultimately is. The U.S. central bank has gone "from being an inflation-first Fed to a labor-first Fed," is how economists at Evercore ISI summed up the situation on Friday. The unemployment rate has risen nearly a full percentage point, to 4.3%, since the Fed stopped raising rates a little more than a year ago. That is still low by historical standards but enough for Powell to declare that the Fed would not welcome any further weakening. The focus of investors as well as the Fed now turns to a run of key data before the September meeting, including the release of the U.S. government's employment report for August on Friday and the consumer price index report for August in the following week. Sign up here. https://www.reuters.com/markets/rates-bonds/traders-see-fed-delivering-25-bps-cut-sept-100-bps-by-year-end-2024-08-30/

2024-08-30 14:44

Aug 30 (Reuters) - U.S. consumers see inflation continuing to moderate in the next year, with a gauge of price growth expectations published on Friday at the lowest level in August since late 2020. The University of Michigan's monthly consumer sentiment index survey showed households' one-year inflation expectation at 2.8%, down from 2.9% in July and now the lowest since December 2020. The five-year outlook for price growth was unchanged at 3.0%. The wider survey showed a modest improvement in consumer sentiment this month, with the uptick having significant political overtones as the Nov. 5 U.S. presidential election approaches. The overall sentiment index edged up to 67.9 in August from July's eight-month low of 66.4, snapping a four-month slide. The increase largely came from self-described political independents, Joanne Hsu, the director of the University of Michigan's Surveys of Consumers, said in a statement. "Sentiment this month reflects a slight rise in sentiment among independents, as Democrats and Republicans offset each other almost perfectly," Hsu said. "Democrats exhibited a large 10% increase in sentiment while Republicans posted an equally sized decline." Hsu said the patterns reflect "a sea change" in election expectations this month, with Vice President Kamala Harris taking over as the Democratic presidential candidate after President Joe Biden bowed out of the race. In July, University of Michigan data showed 51% of consumers expected Republican nominee Donald Trump to win the election, versus 37% for Biden, Hsu said. That has since flipped and now 36% of consumers expect Trump to win compared with 54% for Harris. Sign up here. https://www.reuters.com/markets/us/us-consumers-near-term-inflation-expectation-lowest-since-2020-umich-data-shows-2024-08-30/

2024-08-30 14:06

Aug 30 (Reuters) - Intel's shares rose more than 3% in early trading on Friday, as a report of the struggling chipmaker exploring options that could include a merger or a split induced some investor enthusiasm after one of the stock's worst slumps in decades. The company is working with investment bankers and considering various options such as separating its flagship product business from its money-losing manufacturing unit, Bloomberg News reported on Thursday. Intel is also discussing potentially scrapping some factory projects, the report said. Building and expanding chip production sites is at the core of Intel's turnaround efforts focused on becoming a contract manufacturer for other chip firms - a capital intensive undertaking that has strained the company's finances. Intel's market value was set to rise by more than $4 billion on Friday, after falling below the $100 billion mark earlier in August for the first time in three decades. The report provided some relief to investors, many of whom see Intel splitting its business as an ideal option as the company trudges through the AI era and trails chipmakers like Nvidia (NVDA.O) , opens new tab and AMD (AMD.O) , opens new tab. Intel's shares have fallen about 60% so far this year, compared with a less than 2% year-to-date drop for AMD. Nvidia's shares have more than doubled in value this year. Intel's disappointing quarterly report earlier in August, coupled with the company pausing its dividend and announcing layoffs impacting 15% of its workforce, have deepened the stock's slump. The stock is trading at about 24 times expected earnings, compared with a price-to-earnings ratio of 30.6 for AMD. Nvidia trades at 33.7 times expected earnings. Sign up here. https://www.reuters.com/technology/intel-rises-report-chipmaker-exploring-options-stokes-investor-enthusiasm-2024-08-30/

2024-08-30 13:44

Aug 30 (Reuters) - Shares of Dell Technologies (DELL.N) , opens new tab rose 4% on Friday, after robust demand for its artificial intelligence-powered servers prompted the company to raise its full-year earnings and revenue forecasts. Dell, which supplies servers and related infrastructure to enterprises, bolstered its AI push through a partnership with chip giant Nvidia (NVDA.O) , opens new tab earlier this year. With Nvidia's tech stack, Dell is attracting mid-sized customers to upgrade their servers with AI capabilities. "Dell's beat was entirely due to AI servers, with storage and PC revenues both coming in below consensus," Bernstein analysts wrote in a note. They said 80% to 90% of the company's server customers appear to be tier 2 cloud services providers and new deal opportunities appear to be competitive bids against Super Micro Computer (SMCI.O) , opens new tab. Revenue from Dell's infrastructure solution group, which includes sale of servers, rose 38% over the year earlier in the second quarter. Demand for AI-optimized servers, including the flagship PowerEdge XE9680, rose 23% sequentially to $3.2 billion, the company said on Thursday. Its AI pipeline now appears to be $11 billion to $13 billion, up from an estimated $8 billion to $10 billion in the first quarter, according to Bernstein. Overall, Dell earned $1.89 per share on an adjusted basis and posted revenue of $25.03 billion, both exceeding LSEG estimates. At least three brokerages raised their price targets after the results. The stock has a median target price of $155, with 19 of the 22 analysts rating it "buy" or higher, according to LSEG data. At $115, Dell shares are down 36% since their all-time high in May. Sign up here. https://www.reuters.com/technology/dell-shares-jump-ai-server-demand-boosts-results-forecasts-2024-08-30/