Chevron Triples Low-Carbon Investment, but Avoids 2050 Net-Zero Goals

Oil producers globally are under mounting pressure from investors and governments to join the fight against climate change and sharply cut greenhouse gas emissions by mid-century, with U.S. majors lagging efforts by European companies.

Chevron said half of its spending will go to curb emissions from fossil fuel projects. A total of $3 billion will be applied for carbon capture and offsets, $2 billion for greenhouse gas reductions, $3 billion for renewable fuels and $2 billion for hydrogen energy.

Chevron is not ready to commit to net-zero targets. Chief Executive Michael Wirth told investors on Tuesday that the company does not want to “be in a position in which we lay out ambitions that we don’t believe are realistic and deliverable.”

Just a minority of its shareholders currently support a strategy used by European oil companies to invest in less-profitable solar and wind power, he added.

“The board is looking to see, how do you deliver a strategy that meets the needs of shareholders today and the expectations of shareholders for the future?” the CEO said. Directors may re-address a net-zero goal later this year with the company’s climate report, Wirth said.

European oil producers have set plans to shift away from fossil fuels with larger investments in renewables and 2050 emission targets. U.S. oil producers Chevron, Exxon Mobil Corp and Occidental Petroleum sought to reduce carbon emissions per unit of output while backing carbon capture and storage, and doubling down on oil.

BP Plc has said it will invest $3 billion-4 billion a year in low-carbon projects by 2025 and shrink oil and gas production by 40% in the next decade. Royal Dutch Shell Plc in February set annual investments of $2 billion-3 billion in clean energy.

Chevron maintained its goal of paring greenhouse gas intensity by 35% through 2028 compared to 2016 levels from its oil and gas output.

It said it would expand renewable natural gas production to 40 billion British thermal units (BTUs) per day and increase renewable fuels production capacity to 100,000 barrels a day to meet customer demand for renewable diesel and sustainable aviation fuel.

“We expect to grow our dividend, buy back shares and invest in lower-carbon businesses,” Wirth said.

Chevron aims to increase hydrogen production to 150,000 tonnes a year to supply industrial, power and heavy duty transport customers and raise carbon capture and offsets to 25 million tonnes a year by co-developing regional hubs.

Environmentalists said Chevron’s focus is on offsetting emissions from oil and gas output, not reducing oil output.

“Chevron’s new announcement does not represent a particularly large strategic shift,” said Axel Dalman, an associate analyst with climate change researcher Carbon Tracker. “The main item is that they plan to spend more on ‘lower-carbon’ business lines.”

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sabrina Valle in Houston, Arunima Kumar in Bengaluru; additional reporting by Laura Sanicola in New York; Editing by Arun Koyyur, Will Dunham, David Gregorio and Mark Porter)

Louisiana Grain Terminal Reopens After Hurricane Ida as Nicholas Rains Arrive

Global grain trader Cargill Inc said it had reopened its Westwego, Louisiana, grain export terminal and on Monday unloaded its first grain barge since Ida came ashore on Aug. 29 and crippled shipments from the busiest U.S. grain export hub.

Cargill is the latest major grain trader to revive export operations after Ida devastated the region’s power grid and damaged some of the nearly dozen grain terminals dotted along the Mississippi River from Baton Rouge to the Gulf of Mexico.

Heavy rains from Nicholas lashed storm-battered Louisiana again on Tuesday after coming ashore on the Texas Gulf Coast, bringing the threat of floods and more power outages. The storm was expected to move over Louisiana, Mississippi and the Florida panhandle through Thursday.

Power was finally restored to Cargill’s heavily damaged terminal in Reserve, Louisiana, on Monday for the first time since Ida, but the company is still assessing damages from that storm and developing “phased reopening plans,” Cargill spokeswoman April Nelson said.

Cargill is monitoring rains from Nicholas on Tuesday, but it has not confirmed any impact on recovery efforts, Nelson said.

Rival exporters Louis Dreyfus Co and Archer-Daniels-Midland Co have been loading export shipments for several days, while a facility owned by Bunge Ltd remains shuttered, according to the companies and shipping sources.

CHS Inc and Zen-Noh Grain, which also operate large grain terminals near the Louisiana Gulf Coast, did not immediately respond to requests for comment on their recovery efforts.

U.S. grain exports hit their lowest level in years last week as shippers struggled to restart their facilities at the Gulf, where some 60% of U.S. crop exports exit the country.

The U.S. corn harvest is starting, meaning more grains will be available to move in coming weeks.

Nine grain vessels were loading for export at Gulf terminals and floating rigs this week, up from just three late last week, a barge broker said.

Louisiana state officials said rains from Nicholas are complicating the recovery from Ida, particularly in flooded parishes and those still without power, and in areas along flood-swollen rivers.

“We’ve gone through this sort of thing in the past, where we will get two storms at a time during the peak of hurricane system,” said Mike Strain, commissioner of the Louisiana Department of Agriculture. “It complicates matters.”

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Karl Plume in Chicago, additional reporting by P.J. Huffstutter in Chicago, Editing by Franklin Paul and Aurora Ellis)

Oil Rises to Six-Week High as U.S. Supply Concerns Dominate

Those price gains came even though the Organization of the Petroleum Exporting Countries (OPEC) trimmed its world oil demand forecast for the last quarter of 2021 due to the Delta coronavirus variant.

Brent futures rose 59 cents, or 0.8%, to settle at $73.51 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 73 cents, or 1.1%, to settle at $70.45.

That was Brent’s highest close since July 30 and WTI’s highest close since Aug. 3.

“Hurricane Ida’s impact is lasting more than the market expected and as some oil production capacity remains shut this week, prices are rising on supply not being restored and therefore not reaching refineries that have restarted operations quicker than producers,” said Nishant Bhushan, oil markets analyst at Rystad Energy.

Further disruption from bad weather could be around the corner, with the U.S. National Hurricane Center projecting Tropical Storm Nicholas will scrape along the South Texas coast on Monday and make landfall near Corpus Christi later tonight.

Royal Dutch Shell began evacuating staff from a U.S. Gulf of Mexico oil platform and other firms began preparing for hurricane-force winds.

Even though OPEC said further oil demand recovery would be delayed until next year when consumption will exceed pre-pandemic rates, analysts noted OPEC and its allies, including Russia, a group known as OPEC+, were still increasing output.

“Despite near-term risks to the demand outlook, OPEC+ is continuing to increase its output by 400,000 barrels per day each month, in line with what it agreed in July,” said Craig Erlam, senior market analyst, UK & EMEA at OANDA.

In addition to the OPEC demand forecast, other bearish factors weighed on Monday’s oil price gains, including rising U.S. shale output, potential supply increases from planned releases of oil from strategic reserves in the United States and China, and the possibility Iran could be closer to selling oil to the world again.

U.S. oil output from seven major shale formations is expected to rise by about 66,000 bpd in October to 8.1 million bpd, the highest since April 2020, according to the Energy Information Administration’s monthly drilling productivity report.

Traders noted China’s planned release of oil from strategic reserves could boost supplies available in the world’s the second biggest oil consumer.

The U.S. government agreed to sell crude oil from the nation’s emergency reserve to eight companies including Exxon Mobil, Chevron and Valero, under a scheduled auction to raise money for the federal budget.

Hopes of fresh talks on a wider nuclear deal between Iran and the West were raised after the United Nations atomic watchdog reached an agreement with Iran on Sunday about the overdue servicing of monitoring equipment to keep it running.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Bozorgmehr Sharafedin in London and Naveen Thukral and Florence Tan in Singapore; Editing by Marguerita Choy, Mark Potter and Nick Zieminski)

U.S. Grain Exports Sink as Gulf Terminals Struggle to Recover From Ida

Weekly U.S. Department of Agriculture (USDA) grain inspections data, an early indicator of shipments abroad, showed the volume of corn weighed and certified for export last week was the lowest in 8-1/2 years as no grain was inspected along the Louisiana Gulf Coast, the busiest outlet for U.S. crops.

Soybean inspections were up only slightly from the prior week’s seven-year low as only a single large bulk grain ship bound for top importer China was loaded last week in the Pacific Northwest and none at the Gulf, USDA data showed.

Ida crippled overseas grain shipments just weeks before the start of the Midwest harvest and the busiest period for U.S. crop exports, sending export prices soaring and stoking global worries about food inflation.

Most of the nearly dozen large grain terminals dotted along the Mississippi River from Baton Rouge to the Gulf of Mexico escaped the storm with only minor damage, but the region’s devastated power grid has hobbled the recovery.

More than 50 bulk vessels were lined up along the lower Mississippi River on Monday waiting to dock and load with grain once terminals reopen, and only a handful of ships had moved over the weekend, according to an industry vessel lineup report and Refinitiv Eikon shipping data.

The vessel Yangze Navigation was docked at Zen-Noh Grain terminal in Convent, Louisiana, on Monday waiting to be loaded with corn, the shipping data showed. Another vessel, the Darya Aum, docked over the weekend and was awaiting its soybean cargo at a terminal owned by Louis Dreyfus Co near Baton Rouge that was able to start loading vessels last week.

Archer-Daniels-Midland Co, one of the world’s biggest grain traders, restarted operations on floating midstream rigs that transfer crops from barges onto bulk ships.

The USDA’s Federal Grain Inspection Service (FGIS) said late last week that its New Orleans field office is still recovering from the storm and that its inspectors are working with exporters to provide official grain inspection and weighing services. The agency has no estimate as to when inspections will fully recover, FGIS said in an emailed statement.

FGIS inspectors checked just 138,189 tonnes of corn in the week through Sept. 9, down 85% from the same week a year ago, USDA data showed. Soybean inspections totaled 105,368 tonnes, down 94% from the same week a year earlier.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Karl Plume in Chicago; Editing by Paul Simao)

Oil Rallies to $73 on Tight U.S. Supplies, Biden-Xi Call

About three quarters of the U.S. Gulf’s offshore oil production, or about 1.4 million barrels per day, has remained halted since late August. That is roughly equal to what OPEC member Nigeria produces.

“The market is back to focusing on the tighter supply situation globally, and that is giving it a boost,” said Phil Flynn, senior analyst at Price Futures group in Chicago. While China is releasing oil from its strategic petroleum reserve, the amount is more than offset by reduced production in the Gulf of Mexico, Flynn added.

Brent crude rose to settle at $1.47, or 2.3%, to $72.92. The session high was $73.15 a barrel. U.S. West Texas Intermediate (WTI) crude rose $1.58, or 2.3%, to $69.72.

Both grades posted a small gain on the week. Brent has rallied 41% this year on supply cuts by the Organization of the Petroleum Exporting Countries and some demand recovery from the pandemic.

Oil and equity markets also got a boost from news of a call between U.S. President Joe Biden and his Chinese counterpart Xi Jinping. The call raised hopes for warmer relations and more global trade, analysts said.

“The Biden-Xi phone call has had the same effect on oil markets as it has on other asset classes,” said Jeffrey Halley, analyst at brokerage OANDA.

The United States added rigs in the latest week, energy service provider Baker Hughes said, indicating production may rise in coming weeks.

On Thursday, both crude contracts fell more than 1% after China said it would release crude oil reserves via public auction to help ease high feedstock costs for refiners.

In focus next week will be revisions to the oil demand outlook for 2022 from OPEC and the International Energy Agency. OPEC will likely revise down its forecast on Monday, two OPEC+ sources said.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Florence Tan in Singapore and Sonali Paul in Melbourne; Editing by Elaine Hardcastle, Edmund Blair and David Gregorio)

Harvard University to End Investment in Fossil Fuels

In a letter posted on Harvard’s website, President Lawrence Bacow said the school’s endowment had no direct investments in fossil fuel exploration or development companies as of June and will not make such investments in the future, “given the need to decarbonize the economy.”

The university’s indirect investments in the fossil fuel industry “are in runoff mode,” he added. The indirect investments, made through private equity funds, make up less than 2% of the endowment, Bacow wrote.

Recently valued at about $42 billion, the most of any university, the school’s endowment has been under pressure for years from students, alumni and other activists to sell off its fossil fuel holdings as a way to slow climate change.

Others have called such moves only posturing. In May an activist fund took a different tack and won three seats on ExxonMobil Corp’s board, vowing to reform the leading oil company’s climate record.

Representatives for the Cambridge, Massachusetts school did not immediately provide further details.

For most of the past decade previous Harvard officials had resisted calls to sell fossil fuel stocks but more recently changed course under new leaders including Bacow, president since 2018.

Internal pressure for divestment has also grown, including from young members elected to one of Harvard’s leadership boards last year on a divestment platform.

Divest Harvard, one of the activists groups, on Twitter described the move as “a massive victory for our community, the climate movement, and the world — and a strike against the power of the fossil fuel industry.”

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Ross Kerber in Boston; Editing by Richard Pullin)

China Announces Release of Crude from Strategic Reserve with Explicit Aim of Lowering Prices

Crude oil prices took an intraday hit on Thursday after China surprised traders with a first-time intervention in the global market, announcing the release of crude from its strategic reserve with the explicit purpose of lowering prices.

The announcement came shortly after the country reported a jump in factory-gate inflation on Thursday. Surging energy costs in China are becoming a political headache for government officials, which likely prompted the unprecedented move. High oil prices are not the only concern, coal and natural gas prices are also rising, leading to electricity shortages in some provinces that have forced some factories to cut production.

International-benchmark Brent crude plunged as much as $1.36 a barrel to $71.24 in London, erasing earlier gains. U.S.-benchmark West Texas Intermediate had a similar reversal to the downside.

China’s Factory Inflation Hits 13-Year High as Materials Costs Soar

China’s factory gate inflation hit a 13-year high in August driven by roaring raw materials prices despite Beijing’s attempts to cool them, putting more pressure on manufacturers in the world’s second-largest economy, Reuters reported.

The producer price index (PPI) rose 9.5% from a year earlier in August, the National Bureau of Statistics (NBS) said on Thursday, faster than the 9.0% increase tipped in a Reuters poll and the 9.0% reported in July. That was the fastest pace since August 2008.

China’s economy has recovered strongly from last year’s coronavirus slump but has been losing steam recently due to domestic COVID-19 outbreaks, high raw material prices, tighter property curbs and a campaign to reduce carbon emissions, Reuters reported.

China to Auction Off State Oil Reserves to Help Refiners

China’s state reserves administration said on Thursday it would release crude oil reserves to the market via public auction to ease the pressure of high feedstock costs on domestic refiners, Reuters wrote.

The release will be made in phases and is mainly for integrated refining and chemical plants, the National Food and Strategic Reserves Administration said in a statement. That potentially rules out the participation of some smaller, independent refiners known as “teapots”.

The move will “better stabilize domestic market supply and demand and effectively guarantee the country’s energy security,” the administration added, without specifying the volume of crude it would sell or when.

No Long-Term Effect on Prices Expected

The move by China to offer relief from higher oil prices by releasing crude from its strategic reserve is a first-time event and may be the only time it makes such as move as Beijing, the world’s biggest crude oil importer, is famously secretive about its strategic petroleum reserve (SPR).

Prices may feel some short-term pressure, but the decision should have a limited effect over the long-run. Most energy experts expect to see limited further draws in China’s onshore crude inventories this year and a resumption of higher imports into year-end due to increased seasonal demand.

For a look at all of today’s economic events, check out our economic calendar.

Gold Back Below $1,800!

Ugh, the recent rally in gold prices was really short-lived. As the chart below shows, the price of gold increased after the publication of disappointing nonfarm payrolls on Friday. However, it declined as soon as on Tuesday, and on Wednesday it slid below $1,800.

I have to admit that I expected a more bullish performance. To be clear: I was far from opening champagne. For instance, I pointed out that the tapering of quantitative easing remained on the horizon, and I expressed some worries that gold’s rally was rather moderate despite the big disappointment of job gains:

Another caveat is that gold failed to rally above $1,835 despite softened expectations of the future path of the federal funds rate

However, I thought that the likely postponement of the Fed’s tightening cycle in the face of weak employment data would allow gold to catch its breath for a while. Well, it did, but only for a few days.

The quick reversal is clearly bearish for gold. Sure, without disappointing job numbers, the yellow metal could perform even worse. However, the inability to maintain gains indicates gold’s inherent weakness in the current environment.

Of course, the recent decline in gold prices was at least partially caused by new developments in the financial markets, namely: the strengthening in the US dollar and the rise in the bond yields. So, one could say that earlier bullish news was simply outweighed by later bearish factors.

However, please note that the US dollar strengthened and the interest rates rose amid an increase in risk aversion. The fact that gold, which is considered to be a safe-haven asset, drops when investors become more risk-averse, is really frustrating.

What’s more, some analysts pointed out that the dollar strength and higher yields were not enough to account for the plunge in gold prices – so, it seems that the momentum is simply negative and gold wants trade lower, no matter the fundamentals.

Indeed, neither the negative real interest rates, nor curbed dollar, nor high inflation were able to get gold to rise decisively this year. Nor the recent weak nonfarm payrolls that lifted the expectations of a more dovish Fed and the postponement of normalization of the monetary policy.

Implications for Gold

What does it all mean for the yellow metal? Well, the recent volatility in the gold market reminds us that in fundamental analyses it’s smart not to draw too far-reaching conclusions from the immediate price reactions and to look beyond the hustle and bustle of the trading pits. It also confirms that I was right, writing in the recent Fundamental Gold Report that “a long quiet summer has ended, and a more windy fall has started”.

Now, I have to point out that fundamental factors turned out in recent days to be more positive for the gold market than a few weeks ago. The announcement of the Fed’s tapering will be likely postponed from September to November 2021. Indeed, yesterday’s remarks of the New York Fed President John Williams at St. Lawrence University suggest that the FOMC may continue its wait-and-see approach this month and taper later in 2021:

There has also been very good progress toward maximum employment, but I will want to see more improvement before I am ready to declare the test of substantial further progress being met. Assuming the economy continues to improve as I anticipate, it could be appropriate to start reducing the pace of asset purchases this year.

Meanwhile, the economic activity has slowed down, partially because of the spread of the Delta variant of the coronavirus. For example, the recent edition of the Beige Book says that:

Economic growth downshifted slightly to a moderate pace in early July through August (…) The deceleration in economic activity was largely attributable to a pullback in dining out, travel, and tourism in most Districts, reflecting safety concerns due to the rise of the Delta variant, and, in a few cases, international travel restrictions.

Given that inflation remains high, the slowdown in economic growth will push the economy into stagflation, which should be a positive macroeconomic environment for gold.

Having said that, more bullish fundamentals without positive momentum could not be enough. As I’ve written earlier, gold has recently shrugged all the bullish factors off – it’s focused now on the economic normalization after the pandemic recession and the upcoming Fed’s tightening cycle. So, it seems to me that gold needs more than the postponement of tapering (think about next economic crises, the decline in economic confidence, or the abandonment of monetary policy normalization) to rally decisively. Until this happens, it is likely to continue its struggle.

If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!

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Arkadiusz Sieron, PhD
Sunshine Profits: Effective Investment through Diligence & Care

 

Oil Settles Up 1% on Low U.S. Output After Hurricane

Brent settled up 91 cents, or 1.3%, at $72.60 and U.S. West Texas Intermediate (WTI) crude settled up 95 cents, or 1.4%, to $69.30 a barrel.

Producers in the Gulf are still struggling to restart operations nine days after Ida swept through the region with powerful winds and drenching rain.

About 77% of U.S. Gulf production remained offline on Tuesday, or about 1.4 million barrels per day (bpd). About 17.5 million barrels of oil have been lost to the market so far.

The Gulf’s offshore wells make up about 17% of U.S. output.

“Refinery operations appear to be making a quicker recovery,” ING analysts said in a note.

Capacity of about 1 million barrels per day (bpd) was temporarily closed, down from a peak of more than 2 million bpd, ING said, citing the latest situation report from the Department of Energy.

Traders will be closely watching inventory data from the American Petroleum Institute industry group due later on Wednesday and the U.S. Energy Information Administration on Thursday for a clearer picture of the storm’s impact on crude production and refinery output.

Analysts polled by Reuters expect, on average, that crude stocks fell by 3.8 million barrels in the week to Sept. 3, and they anticipate gasoline stocks were down by 3.6 million barrels and distillates down by 3 million barrels.

“It’s possible the loss of refining demand and the amount of crude oil might somewhat cancel itself out,” said Bob Yawger, director of energy futures at Mizuho.

The EIA said on Wednesday it expected U.S. crude oil production to fall by 200,000 barrels bpd to 11.08 million bpd in 2021, a bigger decline than its previous forecast for a drop of 160,000 bpd.

Prices were also supported as protesters in Libya blocked oil exports at Es Sider and Ras Lanuf, an oil engineer at each of the ports said, although other engineers said production at fields that supply the terminals was unaffected.

Meanwhile, the U.N. atomic watchdog criticised Iran for stonewalling an investigation into past activities and jeopardizing important monitoring work, possibly complicating efforts to resume talks on reviving a nuclear deal.

The negotiations between world powers and Iran have been paused for almost three months since the election of a new radical president in Iran, reducing prospects of Tehran being able to resume oil exports.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Bozorgmehr Sharafedin in London, Sonali Paul in Melbourne and Florence Tan in Singapore Editing by Jason Neely, Mark Potter, Paul Simao and David Gregorio)

Oil Slides on Demand Concerns, Strong Dollar

U.S. West Texas Intermediate crude settled down 94 cents or 1.4% from Friday’s close at $67.35 a barrel, and touched a session low of $67.64. There was no settlement price for Monday due to the Labor Day holiday in the United States.

Brent crude futures settled down 53 cents, or 0.7%, a $71.69 a barrel, after falling 39 cents on Monday.

John Saucer, vice president of crude oil markets at Mobius Risk Group in Houston, said a stronger dollar and Saudi Arabia’s move on Sunday to cut October official selling prices (OSPs) were pressuring crude. A strong dollar makes oil more expensive for holders of other currencies.

“People read the Saudi price change as a sign of Asian demand fading and the scale of the cut was larger than expected,” Saucer said.

Saudi Arabia cut the price for all crude grades sold to Asia by at least $1 a barrel. The move, a sign that consumption in the world’s top-importing region remains tepid, comes as lockdowns across Asia to combat the Delta variant of the coronavirus have clouded the economic outlook.

Data released on Friday also showed the U.S. economy in August created the fewest jobs in seven months as hiring in the leisure and hospitality sector stalled amid a resurgence in COVID-19 infections.

However, oil prices found some support from strong Chinese economic indicators and continued outages of U.S. supply from Hurricane Ida.

China’s crude oil imports rose 8% in August from a month earlier, customs data showed, while China’s economy got a boost as exports unexpectedly grew at a faster pace in August.

In the Gulf of Mexico, around 79% of oil production remained shut, or 1.44 million barrels per day, a U.S. regulator said on Tuesday, more than a week after Ida hit.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Ahmad Ghaddar in London and Yuka Obayashi in Tokyo; Editing by Jane Merriman, Edmund Blair and David Gregorio)

Over 80% of Oil Output in Gulf of Mexico Still Offline a Week After Ida

Energy companies have been struggling to resume production after Ida damaged platforms and caused onshore power outages. About 1.5 million barrels per day of oil production, or 84%, remains shut, while another 1.8 billion cubic feet per day of natural gas output, or 81%, was offline, the Bureau of Safety and Environmental Enforcement said.

A total of 99 oil and gas production platforms remain evacuated, down from the 288 originally evacuated.

“The entire region is still struggling with resupply,” said Tony Odak, chief operating officer of Stone Oil Distributor, which supplies fuel to the offshore industry. “The refiners are coming back up slowly, but there is so much infrastructure that needs to be brought back online and inspected as well.”

Five refineries in Louisiana remained shut on Monday, accounting for about 1 million barrels-per-day of refinery capacity, or about 6% of the total U.S. operable refining capacity, the Department of Energy said.

All three refineries in the Baton Rouge area and one near New Orleans have begun to restart, accounting for 1.3 million bpd of refining capacity, DOE said. However, the refiners will not produce at full rates for several days.

Operations remain limited at the Louisiana Offshore Oil Port (LOOP) marine terminal, and repairs are under way, DOE said.

Royal Dutch Shell Plc, the largest U.S. Gulf Coast producer, on Sunday began redeploying staff to its Enchilada and Salsa platforms.

The region is still struggling with power outages, after Ida knocked out power to more than 1 million people last week. As of Monday morning, there were still about 573,000 outages due to Ida, including 568,000 customer outages remaining in Louisiana, DOE said.

The U.S. Coast Guard said on Monday it was investigating nearly 350 reports of oil spills in and along the U.S. Gulf of Mexico in the wake of the storm.

The lower Mississippi River and New Orleans ports were reopened to traffic and cargo operations, allowing the resumption of grain, metal and energy shipments.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Stephanie Kelly in New York; Additional reporting by Liz Hampton in Denver; Editing by Sandra Maler and Matthew Lewis)

Guinea Bauxite Prices Rise After Coup, Mines Report no Immediate Impact

Guinea is the world’s second-biggest producer of the raw material that is refined into alumina, a substance used to make aluminium metal, and is the top supplier to China.

Guinean bauxite for delivery to China was last assessed by Asian Metal at $50.50 a tonne, up 1% from Friday and the highest since March 16 last year. Prices are up about 16% this year.

The ousting of Guinea President Alpha Conde by an army unit on Sunday also extended a rally in aluminium prices to multi-year highs and boosted shares in aluminium producers Norsk Hydro and Rusal.

The unrest did not have any immediate impact on bauxite operations, which are key to Guinea’s economy as its main foreign currency earner. The country produced 88 million tonnes of bauxite last year, according to mines ministry statistics.

“It is highly unlikely that the coup will have any major short-term impact on exports, which are always at the lowest part of the cycle in September with stockpiles depleted as the rainy season comes to an end,” said Guinea bauxite industry specialist Bob Adam.

“Any incoming government will want to make sure that it doesn’t jeopardise future earnings and investment.”

Coup leader Mamady Doumbouya on Monday said that a curfew imposed in mining areas had been lifted.

Guinea’s top bauxite producer Société Minière de Boké (SMB) did not immediately reply to a request for comment.

A spokesperson for Aluminium Corp of China (Chalco), the world’s biggest producer of alumina, said its bauxite business in Guinea was operating normally.

Singapore’s TOP International Holding, which owns two bauxite mines in Guinea, said operations were continuing “with minimal disruption” and the situation at sites in Boke and Boffa was stable.

A Compagnie des Bauxites de Guinée (CBG) spokesperson said its mines had not been affected by the turmoil.

U.S. aluminium giant Alcoa, joint owner of CBG, said it is monitoring the situation closely and is not aware of disruption to bauxite exports.

Rusal, which owns the Compagnie des Bauxites de Kindia (CBK) in Guinea, did not immediately respond to questions on whether its operations had been disrupted.

For a graphic on Guinea’s bauxite production, click: https://tmsnrt.rs/3l1NSxW

AngloGold Ashanti said its Siguiri gold mine in Guinea was operating normally.

“We’re monitoring the situation and are in close contact with the leadership of our mine in Guinea, which is operating normally,” the gold miner said in a statement. Siguiri produced 117,000 ounces of gold in the first six months of this year.

The coup casts further doubt on the future for Guinea’s many iron ore mine projects.

Rio Tinto, which is developing part of Guinea’s huge Simandou iron ore project alongside Chinalco, declined to comment on how the overthrow might affect its plans in the country.

Andrew Gadd, senior steel analyst at CRU Group, said: “Sourcing the finances for Simandou has proved very difficult and the uncertainty generated by the current developments will challenge the commitment of interested parties.”

Guy de Selliers, chairman of the Société des Mines de Fer de Guinée (SMFG), which is developing the Nimba iron ore project, said: “Irrespective of who is in charge, they will want this project to happen because it is good for the country.”

De Selliers said that SMFG has political risk insurance through the World Bank’s Multilateral Investment Guarantee Agency.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Helen Reid; Additional Reporting by Melanie Burton in Melbourne, Polina Devitt in Moscow, Mai Nguyen in Singapore and Tom Daly; Editing by Emelia Sithole-Matarise, Jane Merriman and David Goodman)

Nord Stream 2: Russia’s Push to Boost Gas Supplies to Germany

Gas supplier Gazprom will double its export capacity via the Baltic Sea when operations begin, which the project’s operator said it expects by year-end.

Here are some significant moments in Nord Stream 2’s development:

2011

November: Gazprom and Western partners look into expanding the Nord Stream pipeline system by a further 55 billion cubic metres at an initial estimated cost of 9.5 billion euros ($11.3 billion).

2015

June: Gazprom, Royal Dutch Shell, E.ON, OMV, Wintershall and ENGIE agree to build the pipeline.

2016

March: Eight EU governments object on geopolitical grounds.

2017April: Financing agreements are signed.

2018

January: Germany grants permits for construction and operation.

2019

January: The U.S. ambassador to Germany says companies involved in NS 2 could face sanctions.

December: Swiss-Dutch company Allseas suspends pipe-laying.

U.S. President Donald Trump signs a defence policy bill including sanctions.

2020

May: Germany’s energy regulator declines to grant a waiver of EU gas directives to the operators, while an EU court also throws out a challenge to the rules.

Sept. 3: Pressure mounts on Berlin to reconsider support after the alleged nerve agent attack on Kremlin critic Alexei Navalny.

Sept. 23: The world’s largest group of shipping insurers says it will not insure vessels involved in NS 2.

Oct. 1: Denmark gives NS 2 permission to operate in Danish waters.

Dec. 3: The United States unveils a bill targeting companies and individuals helping NS 2.

Dec. 28: NS 2 says it has completed the 2.6 km section in German waters.

2021

Jan 20: Trump on his last full day in office imposes sanctions on Russian pipe-laying ship Fortuna.

German environmental groups file complaints with maritime regulator BSH, effectively preventing further work in Germany for the time being.

Jan. 21: The European parliament passes a resolution calling for a stop to NS 2 completion in response to the arrest of Navalny in Russia.

Jan. 24: Fortuna resumes work in Danish waters.

April 22: The U.S. Senate Foreign Relations Committee advances a bill to pressure companies helping to build NS 2.

May 19: The U.S. State Department waives sanctions around participants of Nord Stream 2, saying it was in the U.S. national interest.

June 4: President Vladimir Putin says Russia has finished laying the first line of the pipeline to Germany.

June 7: U.S. Secretary of State Antony Blinken says completion of Nord Stream 2 is a “fait accompli”, defending the U.S. decision to waive some sanctions and vowing a response if Moscow tries to use gas as a weapon.

June 10: Nord Stream 2 says the project will start preparations to fill the first of two pipelines with natural gas within a few months.

July 22: The United States and Germany announce an agreement on NS 2 under which Berlin also pledged to respond to any attempt by Russia to use energy as a weapon against Ukraine and other Central and Eastern European countries.

July 28: The pipeline operator says NS 2 is 99% complete.

Aug 20: The Biden administration slaps sanctions on a Russian ship and two companies involved in the pipeline.

Putin says there are 15 km (9 miles) left to finish NS 2.

Aug 25: Duesseldorf Higher Regional Court rules that Nord Stream 2 is not exempt from European Union rules that require the owners of pipelines to be different from the suppliers of the gas that flows in them to ensure fair competition.

Sept 6: Russian pipelaying vessel the Fortuna welded the final piece of pipe into place, the project’s operating company said.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Tommy Lund and Bartosz Dabrowski in Gdansk; editing by Jason Neely)

U.S. Offshore Oil Output Lags as Louisiana Refiners Restart After Ida

Energy companies have been coping with damaged platforms and onshore power outages and logistical issues, slowing efforts to restart production. Some 88% of crude oil output and 83% of natural gas production remained suspended. Climate change is fueling deadly and disastrous weather across the globe, including stronger and more damaging hurricanes.

About 1.6 million barrels of crude oil remained offline, with only about 100,000 barrels added since Saturday. Another 1.8 billion cubic feet per day of natural gas output also was shut-in, the regulator said.

A total of 104 oil and gas platforms and five rigs remain evacuated on Sunday, down from the 288 originally evacuated.

Royal Dutch Shell Plc, the largest U.S. Gulf Coast producer, on Saturday was evaluating damage to its West Delta-143 offshore platform, which transfers about 200,000 barrels of oil and gas per day from three offshore oil fields.

The lower Mississippi River and New Orleans ports were reopened to traffic and cargo operations, the Coast Guard said on Saturday, allowing the resumption of grain, metal and energy shipments.

REFINERIES RESTARTING

Four oil refineries in Louisiana have initiated restart processes after Hurricane Ida knocked out most of the state’s oil processing. Five others have yet to resume operations, the U.S. Department of Energy said on Sunday.

Three oil refineries in the Baton Rouge area and one near New Orleans have begun to restart units, the DOE said, without naming the facilities. The four account for 1.3 million barrels per day of U.S. refinery capacity.

Utilities have restored electric power to seven of the impacted refineries since Friday, the DOE said.

Placid Port’s Allen refinery, across the River from Baton Rouge, and Delek’s refinery, at Krotz Springs, have started to resume activity during the weekend, according to industry sources. Both companies did not reply to requests for comments over the past several days.

Marathon Petroleum Corp on Friday said its 578,000 barrel-per-day (bpd) Garyville, Louisiana, refinery, the state’s largest, was in the initial stages of restarting. cut?

Exxon Mobil Corp’s had also resumed operations at its 520,000-bpd Baton Rouge refinery.

Full restoration of normal refinery output will take two to three weeks for refineries in the region, an analyst estimated.

The five refineries still shut in Louisiana account for about 1.0 million barrels per day, or approximately 6% of total U.S. operable refining capacity, the DOE said.

The restart timelines in New Orleans may take longer due to flooding and ongoing power supply issues, the DOE said. Utility provider Entergy Corp on Saturday said some of the refinery locations may be without power until Sept. 29.

Elsewhere in the Gulf of Mexico, a private dive team on Sunday was attempting to locate the source of a suspected oil spill spotted in the Bay Marchand area, the U.S. Coast Guard said.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sabrina Valle; additional reporting by Erwin Seba; Editing by Lisa Shumaker)

 

Oil Slips as Weak U.S. Jobs Report Gives ‘Reality Check’

Losses were capped by concerns that U.S. supply would remain limited in the wake of Hurricane Ida, which cut production from the U.S. Gulf of Mexico.

Brent crude futures settled lower by 42 cents, or 0.58%, at $72.61 a barrel. U.S. West Texas Intermediate (WTI) crude futures were down 70 cents or 1%, at $69.29.

Both benchmark oil contracts were largely steady for the week, with U.S. crude up 0.80%.

“Prices slipped on the employment report, which was clearly impacted by the Delta variant,” said John Kilduff, a partner at Again Capital in New York. “This was a reality check that the coronavirus is still impacting demand,” he added.

Non-farm payrolls missed expectations with an increase of 235,000 jobs amid a softening in demand for services and persistent worker shortages as COVID-19 infections soared. Economists polled by Reuters had forecast non-farm payrolls would increase by 728,000 jobs.

Meanwhile oil and gas production in the U.S. Gulf of Mexico remained largely halted in the aftermath of Hurricane Ida, with 1.7 million barrels, or 93%, of daily crude output suspended, according to offshore regulator the Bureau of Safety and Environmental Enforcement.

“I would expect production to come back online in the course of the next week, versus refineries coming back online over the next two weeks,” said Bob Yawger, director of energy futures at Mizuho in New York. The lag in refinery restarts could cause an uptick in crude supplies, weighing on the market.

Some analysts see room for further price gains after the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, stuck to a plan to add 400,000 barrels per day (bpd) to the market over the next few months.

The United States welcomed the move and pledged to press the exporter club to do more to support economic recovery by unleashing production.

(Additional reporting by Roslan Khasawneh in Singapore and Sonali Paul in Melbourne and Noah Browning; Editing by Louise Heavens, Steve Orlofsky and David Gregorio)

U.S. Pegs Farm Income at Eight-Year High Amid Strong Corn, Soy Prices

A surge to eight-year highs in U.S. corn and soybean prices this spring has brightened the financial outlook for farmers even as aid payments from the federal government are declining. Crop prices have pulled back from peaks reached in May but remain historically high due to tight global supplies and robust imports from China.

Rising profits have increased farmers’ demand for land, tractors and tools, providing an economic boost to rural towns.

The USDA’s latest forecast is positive for equipment manufacturers such as Deere & Co, AGCO Corp and CPM Holdings, Moody’s Investors Service said in a note.

Farmers in recent years relied on aid payments from the federal government to offset financial losses linked to the U.S.-China trade war and COVID-19 pandemic. However, direct government payments are forecast to fall by 38.6% to $28 billion in 2021 due to reduced COVID-19 relief, after increasing by 103.5% in 2020 compared to 2019, according to the USDA.

In February, the USDA predicted net farm income, a broad measure of profits, would fall 8.1% in 2021 due to lower government payments and higher expenses.

Farmers’ production expenses will increase by 7.3% to $383.5 billion in nominal terms this year, according to the USDA. Spending on nearly all types of expenses is expected to rise, the agency said, as U.S. consumers grapple with inflation across a range of products.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Tom Polansek; Editing by Mark Porter)

 

Oil Rises On Economic Recovery Hopes, Weaker Dollar

Brent crude ended up $1.44, or 2%, at $73.03 a barrel. West Texas Intermediate (WTI) crude settled up $1.40, or 2%, to $69.99 a barrel.

The rally briefly pushed U.S. crude futures above the 50-day moving average for the first time in a month, a signal of bullishness for investors. In addition, later-dated crude contracts rallied more than the front-month, another sign that market participants expect demand to rise as supply declines.

In the United States, crude inventories dropped by 7.2 million barrels last week, the Energy Information Administration said on Wednesday.

“There are good reasons for this rally – we have 1.5 mln barrels still offline in the Gulf, yesterday’s crude number was down 7.2 million barrels and storage was at its lowest level since September 2019,” said Robert Yawger, director of energy futures at Mizuho.

The number of Americans filing new claims for jobless benefits fell last week, while layoffs in August dropped to their lowest level in more than 24 years, suggesting the labor market was charging ahead despite new COVID-19 infections.

Optimistic about the global economic recovery, the Organization of the Petroleum Exporting Countries and allied producers including Russia, together known as OPEC+, raised its demand forecast for 2022.

On Wednesday, the group agreed to continue a policy of phasing out record production reductions by adding 400,000 barrels per day (bpd). It did not take up entreaties from the United States to accelerate removal of those supply curbs.

Hurricane Ida, meanwhile, has shut about 80% of the Gulf of Mexico’s oil and gas output. Oil refineries in Louisiana could take weeks to restart, which will sap crude demand, but that could be offset by slow ramp-up of production offshore due to damage to key support facilities.

“Crude oil processing will probably take considerably longer to recover from the outages than crude oil production, which suggests that crude oil stocks will increase in the coming weeks,” said Commerzbank analyst Carsten Fritsch.

India’s gasoline demand is set to hit a record this fiscal year as more people hit the road after easing of COVID-19 curbs.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Bozorgmehr Sharafed in in London and Aaron Sheldrick; Editing by Mark Potter, David Gregorio and David Evans)

World Food Prices Jump in Aug, Cereal Harvest Outlook Cut – FAO

The Rome-based Food and Agriculture Organization (FAO) also said in a statement that worldwide cereal harvests would come in at nearly 2.788 billion tonnes in 2021, down on its previous estimate of 2.817 billion tonnes but still up on 2020 levels.

FAO’s food price index, which tracks international prices of the most globally traded food commodities, averaged 127.4 points last month compared with 123.5 in July.

The July figure was previously given as 123.0.

On a year-on-year basis, prices were up 32.9% in August.

FAO’s cereal price index was 3.4% higher in August from the previous month, with lower harvest expectations in several major exporting countries shunting up world wheat prices by 8.8% month-on-month, while barely surged 9.0%.

By contrast, maize and international rice prices declined.

FAO’s sugar index rose 9.6% percent from July, pushed up by concerns over frost damage to crops in Brazil, the world’s largest sugar exporter. Good production prospects in India and the European Union helped mitigate these concerns to a degree. Vegetable oil prices rose 6.7%, with palm oil prices hitting historic highs due to continued concerns over production levels and resulting inventory drawdowns in Malaysia. Quotations for rapeseed oil and sunflower oil also rose.

Meat prices edged up slightly in August, as strong purchases from China supported ovine and bovine meat prices and solid import demand from East Asia and the Middle East lifted poultry prices, FAO said.

The dairy price index edged slightly lower on the month.

FAO said the fall in its estimate for world cereal production this year was triggered by persistent drought conditions in several major producing countries.

Among the major cereals, the forecast for wheat production saw the biggest downward revision — down 15.2 million tonnes since July to 769.5 million tonnes — due mainly to adverse weather conditions in the United States, Canada, Kazakhstan and Russia.

The forecast for world cereal utilization in 2021/22 was cut by 1.7 million tonnes from July to 2.809 billion tonnes, still 1.4% higher than in 2020/21.

The estimate for world cereal stocks by the close of seasons in 2021/22 was lowered by 27.0 million tonnes since July to 809 million tonnes, pointing to a decline of 0.9% on stock levels registered at the start of the period, FAO said.

For a look at all of today’s economic events, check out our economic calendar.

(Editing by Crispian Balmer)

Oil Steadies; OPEC+ Sticks to Gradual Output Hikes

Brent crude fell 4 cents to settle at $71.59 a barrel. U.S. West Texas Intermediate (WTI) crude rose 9 cents to settle at $68.59 a barrel.

Brent had plumbed a session low of $70.42 a barrel, while WTI fell as low as $67.12 a barrel.

The Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, agreed to stick to a policy from July of phasing out record output cuts by adding 400,000 barrels per day (bpd) a month to the market.

Still, the group revised up its 2022 demand outlook and faces U.S. pressure to raise production more quickly.

“While the effects of the COVID-19 pandemic continue to cast some uncertainty, market fundamentals have strengthened and OECD stocks continue to fall as the recovery accelerates,” OPEC+ said in a statement.

OPEC+ has fulfilled a goal of removing excess oil from the global market and it is important to keep the market balanced, said Russia’s top negotiator, Alexander Novak.

U.S. gasoline stocks rose by 1.3 million barrels last week, the Energy Information Administration said. Analysts had expected a 1.6 million-barrel drop. Rising coronavirus infections could curtail demand in the United States in coming weeks, along with seasonal declines after summer driving season wanes.​

“The gasoline build came as Tropical Storm Henry shut traffic on the East Coast which was a big hit to summer driving season,” said Bob Yawger, director of energy futures at Mizuho in New York.

The jump in gasoline inventories came even as product supplied, a measure of demand, topped 22 million bpd for the first time ever, EIA said.

U.S. crude inventories fell by 7.2 million barrels last week to 425.4 million barrels. Analysts had expected a 3.1 million-barrel drop.

U.S. crude prices are expected to remain under pressure as offshore oil and gas production in the Gulf of Mexico gradually recovers. However, reviving Louisiana refineries shut by Hurricane Ida could take weeks, analysts said.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Stephanie Kelly in New York; Additional reporting by Noah Browning in London, Florence Tan in Singapore and Sonali Paul in MelbourneEditing by Edmund Blair, David Goodman and David Gregorio)

U.S. Offshore Oil Output Inches Back as Infrastructure Woes Slow Recovery

The shut-ins, equivalent to 80% of U.S. Gulf crude production and 83% of U.S. Gulf natural gas output, have been lengthier than typical after a storm as severe power outages, flooding and other damage from Ida’s 150-mph winds have complicated energy companies’ efforts to resume operations.

Staff at 249 oil and gas production platforms and nine rigs in the area have not returned to work, compared with 288 evacuated platforms on Sunday before the storm’s landfall, the offshore regulator said.

About 1.7 million barrels per day (bpd) of refining capacity, several pipelines, terminals and ports also remain out of service after Ida. More than two dozen oil tankers scheduled to discharge imported crude for Louisiana refineries or load oil for exports anticipate delays, according to tanker tracking data and shipping sources.

The Gulf’s oil production was fully re-established roughly 10 days after tropical storms Marco and Laura last year, but it could take two or more weeks after Ida, analysts estimated.

“Due to the size and strength of Ida, it will take operators some meaningful time to assess any damages before sending personnel back offshore,” said Mfon Usoro, senior energy analyst at Wood Mackenzie.

Among the obstacles is damage at Port Fourchon, the base for the largest U.S. privately owned crude terminal, the Louisiana Offshore Oil Port. It is also the largest hub for pipelines transporting up to 1.8 million barrels of oil per day produced on the U.S. side of the Gulf.

“Port Fourchon is a massive logistics support base for offshore operations. Unfortunately, it took a direct hit on Sunday,” Usoro added.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Marianna Parraga and Sabrina Valle; Editing by Cynthia Osterman)