More U.S. LNG heads to Europe despite output constraints

By Marianna Parraga

HOUSTON (Reuters) – U.S. producers of liquefied natural gas (LNG) boosted exports to Europe in September even as a plant outage kept overall shipments below the average for the first eight months of 2022, Refinitiv Eikon data showed on Monday.

A June fire at the United States’ second-largest exporter Freeport LNG has the country’s output below its full processing capacity even as demand and prices for the superchilled gas soar on European buyers seeking alternatives to Russian gas.

A total of 87 cargoes departed from U.S. ports last month carrying 6.3 million tonnes (mt) of LNG, according to preliminary tanker tracking data. The total was slightly greater than August’s 6.25 mt, but below the more than 7 mt per month exported earlier this year.

Almost 70% of the cargoes, or 4.37 mt, headed to Europe, up from the 56% and 63%, respectively, in the previous two months. The higher shipments to Europe left fewer cargoes for Asia, Latin America and the Caribbean last month.

U.S. spot natural gas prices at the Henry Hub rose in September to $7.88 per million British thermal units (mmBtu), the highest since 2008, as soaring global prices kept demand for U.S. LNG strong.

European gas prices averaged a much higher $57.90 per mmBtu the same month during tension over Nord Stream 1 and 2 pipeline leaks in the Baltic Sea.

U.S. energy firms sent 11.5 billion cubic feet per day (bcfd) of gas to the country’s seven big liquefaction plants in September to be turned into LNG for export during growing concerns over gas provision in Europe.

The Nord Stream outages “will inevitably affect Europe’s gas supply this winter,” Rystad Energy analyst Emily McClain said in a note to clients. “But even more concerning is the impact on gas storage inventories ahead of next winter.”

In August, Freeport LNG postponed the partial reopening of its facility to November, with a goal of reaching full capacity by March 2023.

After Freeport goes back to normal, the U.S. export capacity is not expected to rise much until new terminals are completed. The Cove Point LNG facility in Maryland is expected to go offline this month for planned annual maintenance.

But globally, investment in new LNG infrastructure is set to increase to $42 billion in 2024, according to Rystad research. That investment would be 20 times the amount in 2020 when just $2 billion went to LNG developments.

The new facilities will help double total LNG supply to about 636 million tonnes in 2030, Rystad said.

(Reporting by Marianna Parraga; Editing by Josie Kao)

Factbox-Over 560,000 still without power in Florida after Hurricane Ian

(Reuters) – Over 560,000 homes and businesses were still without power in Florida on Monday, four days after Hurricane Ian crashed across the state on Sept. 28-29.

The death toll from the storm climbed past 80 as embattled residents in Florida and the Carolinas faced a recovery whose costs are expected in the tens of billions of dollars, and some officials faced criticism over their response.

Insurers, meanwhile, were bracing for a hit of up to $57 billion as they try to assess the damage from Ian in Florida and South Carolina, according to risk modeling firm Verisk.

Utilities have restored service to most customers affected by the storm. Ian knocked out power to more than four million customers in Florida.

The storm also left more than 1.1 million homes and businesses without power in North and South Carolina after hitting those states on Sept. 30-Oct. 1. Power has already been restored to customers in the Carolinas.

The utility with the most outages remaining, Florida Power & Light Co (FPL), said it expects complete restoration to 95% of customers who remain without power by Friday, Oct. 7. FPL is a unit of Florida energy company NextEra Energy Inc.

Major outages by utility:

Power Company State/Pro Out Now Customers Served

vince

NextEra – FPL FL 369,100 5,280,000

Lee County Electric Co-op FL 180,700 238,000

Duke – Florida FL 17,200 1,766,000

Total Out 567,000

Source: PowerOutage.us and power companies

(Reporting by Brijesh Patel in Bengaluru and Scott DiSavino in New York; editing by David Evans and Mark Potter)

Turkey-Libya preliminary deal prompts Greece, Egypt to push back

TRIPOLI (Reuters) -Libya’s Tripoli government signed a preliminary deal on energy exploration on Monday, prompting Greece and Egypt to say they would oppose any activity in disputed areas of the eastern Mediterranean.

Libya’s eastern-based parliament, which backs an alternative administration, also rejected the deal.

Speaking at a ceremony in Tripoli, Turkish Foreign Minister Mevlut Cavusoglu and Libyan Foreign Minister Najla Mangoush said the deal was one of several in a memorandum of understanding on economic issues aimed at benefiting both countries.

It was not immediately clear whether any concrete projects to emerge would include exploration in the “exclusive economic zone” which Turkey and a previous Tripoli government agreed in 2019, angering other eastern Mediterranean states.

That zone envisaged the two countries sharing a maritime border but was attacked by Greece and Cyprus and criticised by Egypt and Israel.

“It does not matter what they think,” said Cavusoglu when asked if other countries might object to the new memorandum of understanding.

“Third countries do not have the right to interfere,” he added.

Greece’s foreign ministry said on Monday that Greece had sovereign rights in the area which it intended to defend “with all legal means, in full respect of the international law of the sea.”

It cited a 2020 pact between Athens and Egypt, designating their own exclusive economic zone in the eastern Mediterranean, which Greek diplomats have said effectively nullified the 2019 accord between Turkey and Libya.

“Any mention or action enforcing the said ‘memorandum’ will be de facto illegitimate and depending on its weight, there will be a reaction at a bilateral level and in the European Union and NATO,” the Greek foreign ministry said in a statement.

An Egyptian foreign ministry’s statement said on Monday that Foreign Minister Sameh Shoukry received a phone call from his Greek counterpart, Nikos Dendias, where they discussed the developments in Libya.

They both stressed that “the outgoing ‘government of unity’ in Tripoli does not have the authority to conclude any international agreements or memoranda of understanding,” the Egyptian foreign ministry’s statement added.

Dendias posted on Twitter about his phone call with Shoukry, saying both sides challenged the “legitimacy of the Libyan Government of National Unity to sign the said MoU,” and that he will visit Cairo for consultations on Sunday.

Turkey has been a significant supporter of the Tripoli-based Government of National Unity (GNU) under Abdulhamid al-Dbeibah, whose legitimacy is rejected by the Libyan parliament.

Parliament Speaker Aguila Saleh, seen as an ally of Egypt, said the memorandum of understanding was illegal because it was signed by a government that had no mandate.

The political stalemate over control of government has thwarted efforts to hold national elections in Libya and threatens to plunge the country back into conflict.

(Reporting by Ahmed Elumami in Tripoli, Ayman al-Warfali in Benghazi and Ali Kucukgocmen in Istanbul; Additional reporting by Angeliki Koutantou in Athens, Nayera Abdallah in Cairo;Writing by Angus McDowall; Editing by Ed Osmond and Chizu Nomiyama)

U.S. Supreme Court to hear Turkish lender Halkbank’s bid to avoid charges

By Nate Raymond

WASHINGTON (Reuters) – The U.S. Supreme Court on Monday agreed to hear Turkish state-owned lender Halkbank’s bid to avoid criminal charges of money laundering, bank fraud and conspiracy for allegedly helping Iran evade economic sanctions in a case that has strained American relations with NATO ally Turkey.

The justices took up Halkbank’s appeal of a lower court’s decision rejecting the bank’s contention that it was immune from U.S. prosecution under a 1976 law called the Foreign Sovereign Immunities Act, which limits the jurisdiction of American courts over lawsuits against foreign countries, because the business is majority-owned by Turkey’s government.

Federal prosecutors in New York in 2019 brought charges against Halkbank, accusing it of participating in a scheme to launder about $20 billion of Iranian oil and natural gas proceeds in violation of U.S. sanctions against Iran.

The bank pleaded not guilty to charges of bank fraud, money laundering and conspiracy over allegations that it used money servicers and front companies in Turkey, Iran and the United Arab Emirates to evade sanctions.

Turkish President Tayyip Erdogan has called the U.S. government’s decision to charge the bank an “ugly, unlawful” step and has pushed for the case to be dropped.

The charges stemmed from an investigation that first became public with the 2016 arrest of Reza Zarrab, a Turkish-Iranian gold trader who U.S. prosecutors said had close ties with Erdogan. Zarrab pleaded guilty and testified at trial against Mehmet Hakan Atilla, a Halkbank executive who was arrested in 2017, subsequently convicted of helping evade U.S. sanctions and sentenced to 32 months in prison.

After being indicted, Halkbank sought the dismissal of the charges on the grounds that the Foreign Sovereign Immunities Act rendered it immune from prosecution as an arm of Turkey’s government. A trial judge and the New York-based 2nd U.S. Circuit Court of Appeals disagreed, finding that Halkbank could be prosecuted because its alleged misconduct involved commercial activity not covered by sovereign immunity.

Halkbank appealed to the U.S. Supreme Court, calling the prosecution “unprecedented” and saying that the 2nd Circuit’s ruling “green lights future indictments of any sovereign state.”

The U.S. Justice Department countered that the Foreign Sovereign Immunities Act addresses only civil cases, not criminal prosecutions, and even if it did, the case fell within the law’s exceptions for cases involving commercial activities.

A trial was delayed awaiting action by the Supreme Court.

Halkbank’s shares ended Monday’s session up 9.89%.

Separately, five Turkish banks, including Halkbank and two other state lenders, suspended use of the Russian Mir payment system in the past two weeks after the U.S. Treasury targeted the head of the system’s operator with new sanctions and warned those helping Moscow to skirt them.

The suspensions come as Western nations grow concerned over increased economic ties between Russia and Turkey, which opposes the sanctions on principle but has promised they would not be circumvented in the country.

(Reporting by Nate Raymond in Boston; Editing by Will Dunham)

Sweden sends diving vessel to probe leaking Nord Stream pipelines

By Johan Ahlander and Terje Solsvik

STOCKHOLM/OSLO (Reuters) -Sweden sent a diving vessel on Monday to the site of Russian gas pipelines in the Baltic Sea that ruptured last week following blasts in the area, to probe an incident that has added new tension to Europe’s energy crisis.

Europe is investigating what caused three pipelines in the Nord Stream network to burst in an act of suspected sabotage near Swedish and Danish waters that Moscow quickly sought to pin on the West, suggesting the United States stood to gain.

Nord Stream, which runs from Russia to Germany, has been at the centre of a growing gas supply crisis in Europe, which until recently relied heavily on Russian fuel, sending prices soaring.

Several European Union states have triggered emergency plans that may lead to rationing as they race to find alternative supplies, while Britain now faces a “significant risk” of gas shortages this winter, the regulator said.

“The coast guard is responsible for the mission, but we are supporting them with units,” a spokesperson for the Swedish navy, Jimmie Adamsson, told Reuters. “The only one we are naming is HMS Belos, which is a submarine rescue and diving vessel.”

Sweden’s prosecution authority said in a press release that it had designated the area as a crime scene.

A spokesman for the Swedish coast guard confirmed in an email that there was now an exclusion zone of five nautical miles around the leaks.

Earlier, the Swedish coast guard said Nord Stream 1 had stopped leaking, but an overflight suggested gas was still draining out of Nord Stream 2 and bubbling to the surface over a 30 metre (32 yard) radius.

The Kremlin doubled down on allegations that the West was to blame for the ruptures on Monday, saying that the United States was able to increase sales and prices of its liquefied natural gas (LNG) as a result.

Washington has strongly denied any involvement. European countries suspect sabotage, but have declined to say who could be behind it.

Kremlin-controlled Gazprom also said flows could resume at the last remaining intact pipeline in the Nord Stream 2 network, a suggestion likely to be rebuffed given Europe blocked Nord Stream 2 on the eve of Russia’s invasion of Ukraine in February.

“If a decision is made to start deliveries through Nord Stream 2’s line B, natural gas will be pumped into the pipeline after the integrity of the system has been checked and verified by supervisory authorities,” Gazprom said.

The suggestion follows remarks by Russia’s deputy prime minister on Sunday that the Nord Stream network could be repaired, given time and enough funds.

NORWAY SENDS SOLDIERS

Nord Stream has been a flashpoint in the energy standoff between the West and Moscow that has pummelled Western economies and fuelled a cost-of-living crisis.

Russia steadily reduced gas flows via Nord Stream 1 this year before halting them altogether at the end of August, blaming technical difficulties caused by Western sanctions. European countries said Moscow was using energy as a weapon.

Nord Stream 2 was never operational, and Western countries have resisted calls from Russia to drop their opposition to the project.

Jolted by the Nord Stream ruptures, European countries have started strengthening security and surveillance around critical infrastructure that could be vulnerable to attack.

Norway, Europe’s main gas supplier and a major oil exporter, said it had deployed soldiers to guard major onshore oil and gas processing plants.

Italy has strengthened surveillance and controls on underwater energy and telecommunications cables, a source told Reuters.

Focus has also turned to the security of other gas supply lines. Eni, the biggest importer of Russian gas in Italy, at the weekend said Russia had halted all gas flows through the Tarvisio entry point, though its chief executive on Monday blamed the halt on short-term technical issues.

The stoppage of flows through the Tarvisio entry point “has absolutely nothing to do with geopolitical factors. It is due to the fact that Gazprom would have to pay a monetary guarantee for the transport of gas from Austria to Italy that was not there before,” Claudio Descalzi said.

European Union countries meanwhile are trying to forge a consensus on a gas price cap, which is opposed by some countries including economic powerhouse Germany.

EU country leaders are set to ask the European Commission to propose a cap using “workable solutions”, according to a draft statement seen by Reuters.

Hungary, which has been at loggerheads with Brussels and criticised Western sanctions on Russia, on Monday secured a deferral on payments for its winter gas supply.

(Reporting by Reuters bureaux; Writing by Matthias Williams; Editing by Jan Harvey and David Gregorio)

U.S. Supreme Court spurns coal executive’s challenge to mine-explosion conviction

By Nate Raymond

WASHINGTON (Reuters) – The U.S. Supreme Court on Monday turned away former Massey Energy Co CEO Donald Blankenship’s bid to overturn his conviction on a charge of criminal conspiracy stemming from a 2010 West Virginia mine explosion that killed 29 coal miners.

The justices declined to hear an appeal by Blankenship, who served a one-year sentence after being found guilty in 2015 of a single misdemeanor charge, of a lower court’s rejection of his arguments that the conviction should be tossed due to prosecutorial misconduct. Blankenship, 72, had faulted federal prosecutors for failing to turn over to his lawyers before the trial evidence he considered favorable to his defense.

Once dubbed West Virginia’s “king of coal” for his working-class background and tough approach to business, Blankenship helped build Massey into Appalachia’s largest coal producer, with more than 7,000 employees and more than 40 mines.

A jury found him guilty of a misdemeanor charge of conspiring to violate federal mine safety standards while opting not to convict him on other charges. Blankenship, who also was fined $250,000, was released from prison in 2017. He mounted an unsuccessful campaign as a Republican for the U.S. Senate in 2018.

A fire caused by a methane or natural gas leak likely set off the April 2010 blast at Massey’s now-closed Upper Big Branch mine, located about 40 miles (65 km) south of the West Virginia city of Charleston, according to federal investigators. The death toll was the highest in a U.S. mine accident since 91 workers died in a 1972 Idaho silver mine fire.

Massey was acquired in 2011 by Alpha Natural Resources Inc for about $7 billion.

Blankenship in 2018 sought to overturn his conviction after completing his prison term and while preparing for his Senate campaign, noting that prosecutors belatedly turned over evidence that he should have received before the trial.

Those records included citing memos summarizing interviews with high-ranking Massey employees and internal U.S. Mine Safety and Health Administration documents that prosecutors had not turned over to his lawyers before trial as required.

The U.S. Justice Department’s Office of Professional Responsibility conducted an investigation and concluded that prosecutors committed professional misconduct, exhibited “poor judgment” and were “deficient” in performing their duties.

A federal magistrate judge in 2019 recommended that Blankenship’s conviction be overturned, saying the federal prosecutors had violated his constitutional rights to a fair trial by withholding the evidence.

A U.S. trial judge rejected that recommendation and upheld the conviction, as did the Richmond, Virginia-based 4th U.S. Circuit Court of Appeals in 2021, finding that the withheld evidence would not have affected the verdict.

(Reporting by Nate Raymond in Boston; Editing by Will Dunham)

Europe braces for heavy oil refinery outages amid tight supplies

(This Sept. 29 story is refiled to fix typo in analyst’s name in 5th and 7th paragraphs)

By Ahmad Ghaddar and Rowena Edwards

LONDON (Reuters) – A heavy oil refinery turnaround season in Europe this autumn, plus French strike action, is set to push diesel prices higher and tighten supplies ahead of a European Union ban on Russian refined products which is due to come into force early next year.

In October, around 1.5 million barrels per day (bpd) of crude refining capacity is expected to be offline in Europe for planned and unplanned maintenance, Energy Aspect estimated.

This figure compares with 1.1 million bpd of offline capacity in September, and is above the 2015-2019 average for this period. In November, offline capacity is expected to reach 600,000 bpd.

The busier maintenance schedule is likely to be related to the COVID-19 pandemic.

“Given all the Covid-related restrictions, social distancing etc, it’s likely that not a lot of extensive works were actually carried out but rather just essential maintenance,” Energy Aspect’s Livia Gallarati said.

Maintenance outages next month include Eni’s Sannazzaro refinery in Italy, Repsol’s Tarragona refinery in Spain, and Galp Energia’s Sines refinery, among others.

“The European diesel market is looking a bit softer than we had expected say this time last month,” Gallarati said, adding that the consultancy has softened its European demand forecast as economic pressures mount.

Europe has also been upping its diesel imports from other regions like the Middle East and Asia, with September arrivals hitting a three-year high of 1.6 million barrels per day, based on data from oil analytics firm Vortexa.

But while higher imports and a softening demand outlook are helping to ease the pressure on diesel markets, widespread refinery outages in France, partly due to strike action, could tighten supplies again.

One European trader said that while the market has priced in, and to a large extent prepared for the planned outages, it is the unplanned outages that could cause problems for the oil products market.

“The issue is unexpected outages like the French strikes,” he said.

Walkouts over pay and unplanned maintenance have resulted the temporary shutdown of four out France’s six oil refineries in the week to 28 September.

This has taken offline 740,000 bpd, or over 60% of France’s refining capacity.

Exxon Mobil, which operates two of the shut plants, told Reuters it had temporarily put limitations in place for customers, saying this was in accordance with the terms of its supply contracts.

Benchmark European diesel profit margins hit a two-week high of about $50 a barrel on Wednesday, based on Reuters assessments, driven by the French strikes.

Analysts expect the shutdowns to tighten refined product supply if they drag on.

“The wave of strikes in France took the market by surprise and there is uncertainty about its duration,” OilX analyst Neil Crosby said.

“Overall, we remain constructive diesel cracks come Q12023 as the market will struggle to replace lost Russian supplies,” Gallarti said, adding that Europe stands to lose 500,000-600,000 bpd of Russian diesel due to sanctions.

The European Union will stop buying all Russian crude oil delivered by sea from early December, and will ban all Russian refined products two months later, in protest over Moscow’s invasion of Ukraine. 

“We struggle to see [diesel] stocks building massively from where we are,” Woodmac analyst Mark Williams said.

“We expect prices to really spike … mid-January, probably February, but we may see a spike little bit earlier as the market starts to panic,” he added.

(Editing by Jane Merriman)

Silver Tests Resistance At $20.50 As Big Rally Continues

Key Insights

  • Silver rallied as gold/silver ratio declined to 83.
  • Other precious metals also enjoyed strong support today. 
  • WTI oil moved towards the $83 level as OPEC+ plans to cut oil production by more than 1 million bpd.

Silver Gains More Than 7% As Gold/Silver Ratio Declines To Multi-Month Lows

Silver gained strong upside momentum and settled above the $20.00 level amid a broad rally in commodity markets. Gold/silver ratio declined towards the 83 level, providing significant support to silver.

Silver

Currently, silver is trying to get above the resistance at $20.50. In case this attempt is successful, silver will move towards the next resistance level, which is located at $20.80. A move above the resistance at $20.80 will open the way to the test of the $21 level. If silver manages to settle above this level, it will head towards the next resistance at $21.35.

On the support side, the nearest support level for silver is located at $20.30. If silver declines below this level, it will move towards the next support at $20.00. A successful test of the support at $20.00 will push silver towards the support at $19.80.

Other precious metals also enjoyed strong demand today. Platinum managed to get back above the $900 level, while palladium tested the $2250 level.

Meanwhile, gold settled above the resistance at $1675 and tested the next resistance level at $1690.

The rapid decline in Treasury yields served as the key driver for today’s moves. Weaker dollar also provided material support to precious metals. In addition, it looks that there was some pent-up demand for precious metals, which was realized today.

WTI Oil Rallies As Traders Wait For OPEC+ Cuts

WTI oil moved towards the $83 level as traders reacted to OPEC+ plans to cut oil production by more than 1 million bpd.

OPEC+ is worried that the slowdown of the world economy will cut demand for oil and push prices below the $80 level. Saudi Arabia is ready to act, which is bullish for oil markets.

However, it remains to be seen whether production cuts will be sufficient to change the current trend in the oil markets.

Natural Gas Remains Under Strong Pressure

Natural gas declined below the support at $6.55 and is testing the next support level at $6.30 as demand remains weak due to cooler weather and damage from Hurricane Ian.

Traders believe that the next EIA report will show that working gas in storage continues to increase at a robust pace. The fundamental situation is bearish, and it looks that natural gas has a chance to get to the test of summer lows at $5.35 in the next few weeks.

Copper Continues To Trade Near The $3.40 Level

Copper  remains stuck near $3.40 despite global market optimism. Copper traders remain focused on the slowdown of the world economy, which will reduce demand for copper.

Today’s market action indicates that copper does not have enough buyers at current levels. In case global market pull back in the upcoming trading sessions, copper may move towards the recent lows near $3.25.

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

EU leaders to call for gas price cap to curb inflation -draft statement

By Jan Strupczewski and Kate Abnett

BRUSSELS (Reuters) -European Union leaders will ask the EU’s executive arm on Friday to work out how to tackle soaring inflation through a cap on gas prices in a bid to address the root cause of the EU’s problems, draft conclusions of the summit showed.

The call for an EU gas price cap, which Germany, Austria, the Netherlands, Hungary and Denmark have opposed, comes as the 27-nation EU is scrambling for a joint response to the unfolding cost-of-living crisis, caused by the collapse of Russian gas deliveries in retaliation for the EU’s support for Ukraine.

Germany raised the temperature of the debate last Thursday by announcing a 200 billion support package for its firms and households as electricity prices, linked to gas prices, went up tenfold this year, inflation hit a record high of 10% and the 19 countries sharing the euro are heading into a recession.

Others in the EU cannot afford help of such size — France has put together 67 billion euros and Italy 68 billion. Berlin’s move triggered concern in the European Commission and EU capitals about the fairness of competition in the EU market.

Comparing the external shock of the energy price crisis to the COVID-19 pandemic, EU officials are calling for a joint EU response that would help all countries deal with the problem without compromising fair competition rules.

An EU-wide agreement on a cap on gas prices, if it gets enough backing, could be one such joint response.

“Our efforts to ensure the security of supply and to reduce energy prices need to be continued,” the draft conclusions of EU leaders, seen by Reuters, said.

“We invite the Commission to work, as a matter of urgency, on … proposing workable solutions to reduce prices through gas prices cap,” said the draft, which could still change before it is published on Friday.

In what looks like a response to the German support scheme, euro zone finance ministers, meeting in Luxembourg, will belatedly, pledge in a statement on Monday to better coordinate national support measures between countries in the future.

“Given the strong spillovers in the European energy markets, we will coordinate our measures to preserve the level playing field and the integrity of the single market,” a draft statement of the ministers, seen by Reuters, said.

“We should seek to avoid the energy price shock to develop into second round effects and more persistent acceleration of inflation,” the draft said.

EU countries on Friday approved a set of bloc-wide measures including windfall profit taxes, to cushion consumers from soaring energy bills. But states are split over their next move, which leaders will debate at their meeting in Prague.

A majority of the 27 countries want an EU-wide cap on gas prices. Fifteen countries last week urged the Commission to propose one, and some – including Poland and Italy – are now drafting their own proposal. Other countries are opposed.

The Commission has not yet proposed a cap and raised concerns over the idea – suggesting countries instead consider narrower price caps, such as one targeting gas used for power generation only.

But while the EU searches for more bloc-wide measures, some, like Germany, are pushing ahead with national measures.

“Without a common European solution, we seriously risk fragmentation,” Commission President Ursula von der Leyen said on Saturday.

(Reporting by Jan Strupczewski, Kate Abnett, editing by Marine Strauss and David Evans)

Dutch food company HAK to pause operations in January as energy costs bite

AMSTERDAM (Reuters) – HAK, a major seller of conserved foods such as peas, beans and apple sauce in the Netherlands, is to temporarily halt production this winter due to high energy costs, with a spokesperson saying the pause would last six weeks from January.

Dutch national broadcaster NOS cited HAK director Timo Hoogeboom as saying the decision would not lead to empty grocery store shelves as the company keeps extra supply in case of disruption.

A household name in the Netherlands, HAK was sold to Russia’s KDV Group by NPM Capital last year for an undisclosed sum.

According to Dutch Chamber of Commerce records, HAK and related companies had sales of 100.2 million euros ($98 million) and operating profit of 10.2 million euros in 2021.

“If companies have to sell under their cost price for months on end, then things will turn out badly,” NOS further quoted Hoogeboom as saying.

Earlier on Monday the Union of Dutch Fruit and Vegetable Processors (VIGEF) called for the government to either impose a cap on gas prices, as Germany has done, or offer support for companies.

“It’s of importance to do this in line with other countries around us, to guarantee the continued existence of this industry and its supply chain, and to ensure that healthy food from Dutch soil remains affordable and available,” VIGEF said.

Food packed in cans and jars is usually heated to help reduce the need for artificial preservatives.

In addition, VIGEF estimated that the cost of metal and glass used in such packaging has risen to 25-35% of its members costs, from 5%, while farmers are also struggling with higher fertiliser prices among other rising costs.

“It is not possible to keep absorbing these costs,” VIGEF said.

($1 = 1.0233 euros)

(Reporting by Toby Sterling; Editing by Kirsten Donovan)

Britain at ‘significant risk’ of gas shortages this winter, says regulator

LONDON (Reuters) -Britain faces a “significant risk” of gas shortages this winter and a possible emergency due to the conflict in Ukraine and limited supplies in Europe, the energy regulator has said.

Although Russia only meets about 4% of Britain’s gas needs, a disruption in supply to Europe has contributed to driving up British prices and makes it harder for Britain to secure gas from others.

In a letter to power company SSE, regulator Ofgem said Britain faced the possibility of a “gas supply emergency” in which gas supplies to some gas-fired power plants are curtailed, which can stop them from generating electricity.

Responding to the publication of the letter, Ofgem said in an email: “This winter is likely to be more challenging than previous ones due to the Russian disruption of gas supplies to Europe.”

In the event of gas supply issues the regulator and Britain’s National Grid could be forced to curb supply of gas to gas-fired power stations to make sure enough supply remains available to households.

“We need to be prepared for all scenarios this winter,” Ofgem said in the email.

“As a result, Ofgem is putting in place sensible contingency measures with National Grid ESO (Electricity System Operator) and GSO (Gas System Operator) as well as the government to ensure that the UK energy system is fully prepared for this winter,” Ofgem said.

SSE had contacted Ofgem for clarity over imbalance charges which could see power generators forced to pay for failing to produce promised electricity, if emergency measures meant they did not get the gas they needed.

Gas-fired power plants were responsible for more than 40% of Britain’s electricity production last year while the fossil fuel is also used to heat around 80% of British homes.

Britain’s National Grid said in July there could be periods where electricity supply is tight this winter, given uncertainty over supplies of Russian gas to Europe, but that it expects to be able to meet demand.

National Grid is expected to announce its winter outlook on Thursday.

(Reporting by Susanna Twidale and Sachin Ravikumar; editing by William James and Deepa Babington)

Eni CEO hopes halt to Russian gas flows will be resolved this week

By Giselda Vagnoni

ROME (Reuters) -The head of Italy’s Eni said he expects a halt to Russian gas flows to the company to be resolved by the end of this week, saying it had been caused by regulatory issues in Austria and not by geopolitics.

Russia has slashed gas deliveries to Europe since the West imposed sanctions over Moscow’s invasion of Ukraine in February, sparking a broad energy crisis.

However CEO Claudio Descalzi insisted that the drop in flows from Russia’s Gazprom via the Tarvisio entry point in northern Italy flagged on Saturday “has absolutely nothing to do with geopolitical factors”.

“It is due to the fact that Gazprom would have to pay a monetary guarantee for the transport of gas from Austria to Italy that was not there before,” he said, adding that the guarantee amounts to 20 million euros ($19.6 million).

Eni was checking whether the Italian group could replace Gazprom or the Austrian operator for the physical handover of Russian fuel which was already in Austria, he said.

Despite the latest stoppage, gas supplies to Italy have outstripped domestic demand, allowing some shippers to sell gas outside the country, taking advantage of higher prices at the Netherlands’ Title Transfer Facility (TTF) hub, Descalzi said.

To avoid some gas going to foreign markets, Italy could step up additions into the country’s storage, moving towards 100% of capacity, Descalzi said. Other European countries have heavily ramped up their stockpiling of gas ahead of winter.

Gas flows have recently been arriving through Tarvisio at a rate of around 20 million metric cubes a day, equal to 10% of total imports to Italy, he added.

($1 = 1.0226 euros)

(Reporting by Giselda Vagnoni; Writing by Francesca Landini, Cristina Carlevaro and Federico Maccioni; Editing by Agnieszka Flak and Jan Harvey)

Natural Gas Price Forecast – Natural Gas Markets Continue to Plunge

Natural Gas Technical Analysis

Natural gas markets are selling off again on Monday, as we are now well past the 200-Day EMA region. This is an area that had previously been a bit of trouble, so it does make a certain amount of sense that we would see continuation in selling now that we are beyond it. The $6.00 level is an area that a lot of traders are going to be aiming for now, and therefore it’s worth noting as a potential target.

With that being said, we may get there quicker than I originally thought. I think at this point you are looking at this through the prism of selling rallies, as the reality of the inability of Americans to supply Europe with all of its natural gas hits home.

Even if we do rally from here, I’m relatively comfortable with the idea of fading moves to the upside as well. After all, the 50-Day EMA is now starting to slope lower, and I think that will cause a certain amount of psychological resistance as well. The size of the candlestick does tell me that there is a bit of concern at the moment, and at this point I would expect continuation more than anything else but would welcome an opportunity to pick up “cheap US dollars” against this commodity.

That being said, this market is extraordinarily volatile and you need to be conscious of the fact that relief rallies can rip your face off if you are not paying attention. Be cautious with your position size, because quite frankly that’s where you can get into serious trouble in this type of volatile commodity.

Natural Gas Price Forecast Video for 04.10.22

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

Spanish power provider Holaluz cuts gas sales as prices soar

By Emma Pinedo

MADRID (Reuters) – Spanish power provider Holaluz has stopped selling gas as market prices soar and will instead focus on providing customers with green electricity, the company said on Monday.

Barcelona-based Holaluz, which mainly fits rooftop solar panels and sells power from green energy producers, has also sold gas for heating since 2015.

The company said it had always intended to close the gas business in favour of sustainable alternatives, but “the extraordinary and volatile market situation in the current unprecedented context of gas prices has accelerated the decision”.

On Friday, European Union countries approved emergency measures aimed at pulling down prices that are stoking inflation and inflicting sky-high bills on consumers.

Holaluz co-founder Carlota Pi told Reuters that Holaluz’s gas offer was not good enough following spikes in prices triggered by Russia’s invasion of Ukraine.

She said there was a growing gap between the prices that could be offered under the regulated tariff, which is set quarterly by the government, and those that could be found on the free market.

Holaluz is a relatively new entrant to a market dominated by larger, established utilities, and listed on the growth segment of the Spanish stock market in 2019.

It said the measure to put an end to 70,000 gas contracts will reduce its EBITDA, a measure of core earnings, by 3.9 million euros ($3.8 million), in 2022. It was originally expecting core earnings of 20 million euros.

Next year the impact will be about 6 million euros, it said.

“We are going to absorb this loss because it is better for our customers, otherwise an average Spanish family of four in a flat of 80 square metres with heating and hot water would have to pay 600 euros in a single month when the regulated tariff allows you to pay 150 euros per month,” Pi said.

($1 = 1.0250 euros)

(Reporting by Emma Pinedo; additional reporting by Jesús Aguado; editing by Isla Binnie and David Evans)

Inflation, Recession, and a China-U.S. Crisis—OctaFX Takes a Look

Pandemics and health crises, political tensions, war flashpoints popping up, Western sanctions on significant European and Asian economies, and grave tensions between nuclear powers all have had their toll on the financial markets worldwide. The rattling of current affairs and world politics does not seem to seize anytime soon. The international broker OctaFX expert team is convinced it’s time to keep some accompanying phenomena in mind.

Return With a Vengeance — Inflation

Turkey is drowning in an inflation rate of over 78 per cent. The Australian government agencies expect a 5 per cent inflation rise in 2022. Southeast Asian countries have also experienced an inflation hike. For example, this July marked a 7-year inflation rate peak for Indonesia, where the rate surged to 4.9 per cent, surpassing the central bank forecasts. As of this writing, the United States of America officially have an annual inflation rate of 8.3 per cent. In June, the rate was even at 9.1 per cent—a 40-year high from its rates back in 1981–1982.

Such growth is significant since it indicates systemic changes to be established soon, manifesting across the board and worldwide.

There is a down-to-earth aspect to all of this, as well. How is the ordinary individual supposed to react to such global processes? The financial and trading expert Gero Azrul gives an critical edge for investors and traders in this regard: ‘Within this unprecedented economy, we must rely on and deepen our skills—especially with risk management and sound psychology. In these financial markets, we need to have confidence in what we can control personally rather than trying to control external factors.’

The Two Goliaths — Correlation Between EUR and USD

Both national currencies, the European euro and the U.S. dollar, are world reserve currencies, although the latter is the undisputed frontrunner. Since 1999 the exchange rate showed the euro to be stronger than the U.S. dollar. Now the euro weakened to be almost on par with its American counterpart. The last time the market experienced such a match was in 2002’s fourth quarter, nearly 20 years ago.

The U.S. Federal Reserve (Fed) has been much more explicit in its intentions to combat the rising inflation than the European Central Bank (ECB). For instance, the Fed started raising interest rates in March 2022, while the ECB waited for another four months—until July—to follow suit. One main reason for this crucial disparity in monetary policymaking and the ECB’s reluctance to be hawkish is that higher rates may provoke a public debt crisis.

All the while, the European proximity to the war in Ukraine also had its share in the euro’s weak performance.

Many issues caused the euro’s sliding performance against the U.S. dollar: Political upheaval in Italy that led to a September general election bringing a new centre-right coalition, farmers’ strikes across Europe, and energy and natural gas price hikes.

In conclusion, the macroeconomic environment is not looking good. And inflation is not the only reason: the Purchasing Managers’ Index (PMI) is constantly dropping, and a significant slowdown of the world economy’s total amount of output produced and supplied in the last quarters is all but confirmed. It doesn’t matter how much the English Wikipedia article’s definition of ‘Recession’ is manipulated—a recession for the U.S. indeed still is.

Although recession fears are also spreading globally, the demand for the safe-haven U.S. dollar remains somewhat durable—the result is that the Foreign Exchange currency pair EURUSD keeps pushing lower.

It should not go unmentioned that the British pound sterling has recently plummeted in direct comparison to the U.S. dollar, as well, mimicking the euro’s recent weak performance with a slight delay and arriving below 1.07 U.S. dollars per currency unit.

Are New Paradigms on the Horizon?

In the past weeks, news of Middle Eastern energy giant Iran applying for the BRICS membership soon arose. BRICS is a close assembly of the five major emerging economies of the world—Brazil, Russia, India, China, and South Africa. A few days ago, even Algeria, which is also rich in natural resources like oil and gas, officially announced its plans to join the alternative supranational association.

BRICS is all the more interesting because, amidst the world economic trembles felt by most countries, this year, its members announced a new innovative basket reserve currency for their global ecosystem of the economic corporation. The currency basket’s content naturally comprises the Brazilian real (BRL), South African rand (ZAR), Russian ruble (RUB), Chinese renminbi (CNY), and Indian rupee (INR). This idea goes back to their first summit in Yekaterinburg in 2009.

Just by its mere existence, this new global reserve currency will contest the U.S. dollar’s historical supremacy as the world reserve currency so far.

Furthermore, the 22nd Shanghai Cooperation Organisation (SCO) summit in Uzbekistan revealed a deeper and more serious approach to the aspects mentioned above—the list of participants was only slightly modified, with China again at its helm.

With complete independence from Western preferences, Asian countries like India, Russia, Kazakhstan, Pakistan, Kyrgyzstan, Tajikistan, and Uzbekistan agreed to invest trillions and billions of U.S. dollars in infrastructure and trade projects—realised in the coming years.

These efforts for autonomy are already accompanied by escalating political tensions between Beijing and Washington, DC, as the visit of the U.S. House of Representatives speaker, Nancy Pelosi, to Taiwan on 2 August indicated. Beijing saw this diplomatic act as an apparent breach of the One-China policy the U.S. officially subscribed to—until lately, at least. Sanctions from China’s side and further hostilities with Taipei and Washington D.C. can be expected.

These tectonic movements in the global financial infrastructure and plain politics will also majorly impact the Foreign Exchange market—possibly leading to fascinating paradigm shifts.

About OctaFX

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In the APAC region, it managed to capture the ‘Decade Of Excellence In Forex Asia 2021’ award and the ‘Best Forex Broker Malaysia 2022’ by Global Banking And Finance Review, World Finance, and Cfi.Co, respectively.

EU antitrust watchdog in talks with Germany over 200 billion euro support plan

BRUSSELS (Reuters) – The European Commission, which oversees EU antitrust policy, said on Monday it was talking with Germany about its energy support package, which critics say will distort competition in the bloc by giving an advantage to German business.

The 200 billion euro ($195.24 billion) “defensive shield”, including a gas price brake and a cut in sales tax for fuel, is designed to protect companies and households from the impact of soaring energy prices.

“We are fully committed to preserving a level playing field and a single market, and avoiding harmful subsidy races,” a European Commission spokesperson told a news conference when asked about the German package.

“What I can say is that we are in contact with the German authorities on this matter,” the spokesperson continued, without elaborating, but noting that it was talking to other national authorities too.

The Commission, which supervises competition policy in the 27-nation EU, rules on whether state aid is legal or not after being notified by members of their plans.

The EU commissioner for the internal market, Frenchman Thierry Breton, reacted to the German plan in a tweet on Friday, saying the EU needed to be vigilant about the level playing field and asked what room for manoeuvre other EU members had.

The German package dwarfs what other EU governments have set aside. Support measures are also a headache for the European Central Bank in its fight against inflation, which has hit 10%.

Euro zone finance ministers meeting in Luxembourg on Monday were expected to pledge that national financial shields against soaring energy costs will be temporary and targeted.

European Commission President Ursula von der Leyen said in a speech on Saturday that the European Union needed to find a common response to the crisis of energy costs.

“Without a common European solution, we seriously risk fragmentation,” she said.

($1 = 1.0244 euros)

(Reporting by Philip Blenkinsop; Editing by Jan Harvey)

Greek economic rebound to slow next year as energy costs curb growth- draft budget

By Lefteris Papadimas and Renee Maltezou

ATHENS (Reuters) -Greece’s economy is projected to grow at a slower pace next year after a strong rebound this year thanks to tourism, as soaring energy costs and inflation are expected to curb domestic demand and exports.

The country’s economic output is seen increasing by 2.1% next year from 5.3% this year, based on the government’s 2023 draft budget published on Monday.

Next year, Greece is expected to achieve a 0.7% of gross domestic product primary surplus – which excludes debt servicing outlays – from a 1.7% budget deficit in 2022.

The primary surplus target for 2023 is achievable even in a more unfavourable scenario “due to the resilience of public revenues and the margin of fiscal restraint”, National Bank’s senior economist Nikos Magginas told Reuters.

Greece emerged in 2018 from a decade-long debt crisis that forced the country to sign up to three international bailouts. Its economic performance is pivotal as it aims to return to investment grade next year.

The country’s economy is growing more than expected in 2022, powered by strong tourism revenues, domestic demand and a spike in investments. However, consumer spending has faced challenges, with inflation hitting its highest rate in three decades.

“The 2023 budget is being drafted under conditions of extremely high uncertainty, regarding geopolitical developments at a global level,” finance minister Christos Staikouras and deputy finance minister Theodore Skylakakis said in a statement, referring to the war in Ukraine and its impact.

The country’s public debt, the highest in the euro zone, is seen dropping to 161.6% of GDP from 169.1% of GDP this year, according to the draft budget submitted to parliament.

The draft budget forecast annual inflation will ease to 3% by the end of 2023, from 8.8% this year. Unemployment is also seen dropping to 12.6% next year from 12.9% this year. [L8N3130KY]

The forecasts for growth and inflation have a high degree of uncertainty and may be revised by the European Commission before the submission of the final draft of the budget, the finance ministers said.

Greece expects tourism revenues in 2022 to top 18 billion euros ($17.57 billion), beating the sector’s record performance in 2019, before the COVID-19 pandemic brought travel to a standstill.

But the conservative government has promised to keep spending the biggest part of the fiscal outperformance on energy subsidies to support households and businesses from ballooning power bills amid an energy crisis exacerbated by the war in Ukraine.

($1 = 1.0246 euros)

(Editing by Ed Osmond and Jane Merriman)

Spain’s Economy Minister hopes to convince Germany to stop opposing gas price cap

MADRID (Reuters) – Spain’s Economy Minister said on Monday she hoped her country’s Prime Minister Pedro Sanchez will be able to convince his German counterpart to drop the opposition to a proposed gas price cap.

“I am sure this will be discussed in the summit between Spain and Germany on Wednesday, and I hope we do convince Germany to move in this direction,” Economy Minister Nadia Calvino said in an interview with Bloomberg TV, referring to the upcoming meeting between Sanchez and Germany’s Olaf Scholz.

(Reporting by David Latona, editing by Inti Landauro)

Factbox-Key targets in Greece’s 2023 draft budget

ATHENS (Reuters) – Greece submitted its 2023 draft budget to parliament on Monday, projecting the economy will expand by 2.1% next year after a strong rebound this year on better tourism and pent-up demand.

Below are the government’s key targets and projections:

***********************************************************

2023 2022

GDP GROWTH (%) 2.1 5.3

GDP (bln eur) 220.9 209.9

PRIVATE CONSUMPTION (%) 1.3 7.2

PRIMARY BUDGET BALANCE (% of GDP) 0.7 -1.7

INFLATION (EU-HARMONISED) 3.0 8.8

UNEMPLOYMENT (%) 12.6 12.9

GENERAL GOV PUBLIC DEBT (% of GDP) 161.6 169.1

(bln eur) 357.0 355.0

INTEREST PAYMENTS ON DEBT (% of GDP) 2.5 2.8

(bln eur) 5.5 5.9

———————————————————-

Source: Finance Ministry

(Reporting by Lefteris Papadimas and Renee Maltezou, editing by Ed Osmond)

Khan urges green investment, snipes at Truss policies

By Gloria Dickie

LONDON (Reuters) – The mayor of London urged business leaders on Monday to invest in climate solutions, saying the British capital would need another 75 billion pounds ($84.05 billion) in investment to meet its climate goals.

Noting infrastructure crippled by extreme heat to homes damaged in wildfires, Sadiq Khan warned that “no one will be able to claim with any credibility that we were not given fair warning.”

Taking aim at the new conservative government of Prime Minister Liz Truss, the mayor said that “while the doors of Whitehall might be closing to climate action, the doors of City Hall will remain wide open for as long as I’m in office.”

Since taking office, Truss has reversed a ban on drilling for natural gas and announced fiscal plans to cut the highest rate of income tax – a policy the government reversed on Monday – as part of a package of financial measures that last month sent sterling and British government bonds into meltdown.

Khan said during his opening address at the Reuters IMPACT climate conference in central London that his city was working to reach net-zero emissions by 2030 to “avoid a catastrophic climate crisis.” The city’s activities include investing in green jobs and infrastructure, decarbonising buildings, opening more cycling lanes to discourage driving and promoting electric vehicles.

But London would need more help, he said.

“In excess of 75 billion pounds of investment is needed,” Khan said. “We simply cannot deliver this without the private sector.”

($1 = 0.8923 pounds)

(Reporting by Gloria Dickie; Editing by Katy Daigle and Louise Heavens)