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MARKET MOVEMENTS:
–Brent crude oil is down 0.4% at $73.07 a barrel
–European benchmark gas is up 1.7% at 41.71 euros a megawatt-hour
–Gold futures are down 1.3% at $2,618.20 a troy ounce
–LME three-month copper futures are down 1.6% at $8,897.50 a metric ton
TOP STORY:
Woodside, Chevron Agree to Asset Swap
Chevron and Woodside Energy agreed to an asset swap that the companies said will sharpen their focus on the massive liquefied natural gas operations they each operate in Western Australia.
For Chevron, the second-largest U.S. oil company, the deal boosts its ownership in the Wheatstone project that it operates and is a major supplier of supercooled natural gas to Asia.
Global oil giants are projecting a sharp rise in demand for LNG as China and other countries seek to cut carbon emissions by switching from coal to gas.
As part of the asset swap, Woodside will hand Chevron its 13% interest in Wheatstone. Chevron today owns a little over 64% of the operation, one of Australia’s largest resource developments. Woodside will also transfer to Chevron its 65%-operated interest in the nearby Julimar-Brunello project.
OTHER STORIES:
Vermilion Energy Sees Higher-Than-Expected Cash Flow in 2025, Raises Dividend
Vermilion Energy expects to generate more cash than the market forecasts from its operations in 2025 thanks to higher expected output, and plans to increase its dividend.
The Calgary, Alberta energy company is targeting about 1 billion Canadian dollars ($692.1 million) in fund flows from operations and free cash flow of about C$400 million.
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Verde Clean Fuels Shares Rise After $50 Million Equity Investment by Cottonmouth Ventures
Verde Clean Fuels shares were up 13% to $4.22 in premarket trading after Cottonmouth Ventures, a wholly owned subsidiary of Diamondback Energy, agreed to make a $50 million equity investment into Verde.
The investment consists of the purchase of 12.5 million shares of Verde’s class A stock at $4 a share.
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Saipem Gets $900 Mln Contract to Work on Shell’s Nigerian Oil Field
Saipem received a contract worth $900 million from Shell to work on the energy giant’s offshore Bongo North oil field in Nigeria.
The Italian oilfield-services company said Thursday that the contract was award in consortium with Nigeria’s KOA Oil & Gas and Aveon Offshore. The overall value of the contract is about $1 billion, with Saipem’s share amounting to around $900 million, it said.
Adnoc’s XRG Takes Control of German Chemicals Company Covestro
Adnoc’s newly formed business XRG will take over Covestro, the German chemicals company bought by the Abu Dhabi state-owned energy major in October.
XRG, the recently-created natural gas, chemicals and low-carbon energy business, is buying 91.32% of shares in Covestro, Adnoc said Thursday.
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Wood Group Wins Sustainable Aviation Fuel Contract With OMV Petrom
Wood Group said it won a contract with Austrian oil-and-gas company OMV Petrom for fuel production in Europe.
The Scottish energy-services company on Thursday said that under the project, the Petrobrazi refinery in Romania will become the first major production facility for sustainable aviation fuel in the region. SAF is typically refined from biological waste, such as cooking oil, animal fat and agricultural byproducts, rather than crude oil.
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U.K. Regulator Proposes $22.9 Million Fine on Thames Water Over Dividend Rules
The U.K. Water Services Regulation Authority proposed a penalty of 18.2 million pounds ($22.9 million) for Thames Water after saying it broke dividend rules.
The regulator said the penalty relates to interim dividend payments totaling 37.5 million pounds to its holding company in October 2023, and further dividend payments in March 2024 amounting to 158.3 million pounds, from which they received non-cash benefits.
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U.K. Water Companies Can Hike Bills by 36% Over Next Five Years, Watchdog Says — Update
Water companies in England and Wales can raise customers’ bills by an average of 36% over the next five years to help pay for infrastructure improvements needed to prevent sewage spills into waterways, the U.K. regulator said.
Utilities had requested an increase of 44% over the 2025-30 period, but Ofwat set the limit at an average of 31 pounds ($38.98) a year. The increases are significantly higher than the average bill increase of 19 pounds the regulator said it would allow earlier this year.
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YTL Power Shares Rise Sharply After Antigraft Agency Clears Subsidiary of Wrongdoing
YTL Power International shares rose sharply after Malaysia’s anticorruption agency cleared a company subsidiary of wrongdoing.
Shares in the Malaysia-listed company jumped as much as 8.2% and were recently 6.6% higher at 3.90 ringgit, equivalent to 87 U.S. cents, bringing year-to-date gains to 54%. Shares of parent company YTL Corp. also advanced, rising by as much as 9.3% in Thursday morning trade.
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Activist Investor Palliser Capital Widens Call for Review of Rio Tinto’s Dual-Listing Status
Activist investor Palliser Capital doubled down on its call for a review of Rio Tinto’s dual listing in London and Sydney, adding that it now has the backing of over 100 shareholders.
The U.K.-based hedge fund said Thursday it plans to move a resolution at the miner’s next annual general meeting which would direct the board to conduct an independent review into whether unification of Rio Tinto’s structure is in the best interests of its shareholders, and to share the review with the market.
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Conagra Brands Lowers Guidance, Citing Sticky Inflation
Conagra Brands pulled back on its earnings outlook for the year after inflation and changes in foreign exchange rates weighed on quarterly revenue.
The food maker known for Healthy Choice frozen meals and Slim Jim meat sticks said it now expects adjusted earnings, which strip out one-time items, of $2.45 to $2.50 a share this year. That’s down from prior estimates for $2.60 to $2.65 a share.
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Sibanye-Stillwater, Franco-Nevada Sign $500 Mln Gold and Platinum Supply Deal
Sibanye-Stillwater said it entered into a $500 million agreement with mining royalty company Franco-Nevada for the long-term supply of gold and platinum from three of its mines in South Africa.
South African mining company Sibanye-Stillwater said Thursday that it will mainly supply gold, a minor component of the basket of metals produced from its South Africa platinum-group-metals operations, and a marginal amount of platinum. The metals will be produced from the company’s Marikana, Kroondal, and Rustenburg operations, it said.
MARKET TALKS:
Palm Oil Falls, Extending Losses — Market Talk
1016 GMT – Palm oil closed lower for its fifth consecutive session of declines. Prices have been weighed by a selloff in rival edible oils and weak Malaysian export demand in the first half of December, analysts at Kenanga Futures write in a note. Palm oil’s sharp premium over soft oils, especially soybean oil, has deterred key buyers like India and China, they add. They see support and resistance for the March futures contract at MYR4,365 and MYR4,585, respectively. The Bursa Malaysia Derivatives contract for March delivery fell MYR17 to MYR4,512 a ton. ([email protected])
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Copper Falls After Fed Signals Rate-Cut Slowdown — Market Talk
0941 GMT – Copper prices fall more than 1% after the Federal Reserve indicated fewer rate cuts next year. “The Fed’s hawkish shift pushed bond yields up, strengthened the dollar to 25-month highs, spiked volatility, and drove important commodity currencies sharply lower,” Peak Trading Research analysts say. “This is a very bearish environment for commodity futures, and, unfortunately, there isn’t much on the calendar through year-end to stem the bleeding.” The three-month LME copper contract trades 1.5% lower to $8,912 a ton. Meanwhile, looming U.S. tariffs on Chinese goods and uncertainties around China’s domestic demand outlook continue to weigh on sentiment. ([email protected])
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Oil Slips as Fed Rate-Cut Outlook Fuels Demand Worries — Market Talk
0924 GMT – Oil prices retreat from the previous trading session after the Federal Reserve signaled fewer interest-rate cuts next year, fueling demand concerns. Brent crude and WTI are both down 0.1% at $73.35 and $69.95 a barrel, respectively. Futures gained 1% on Wednesday after the latest U.S. inventory data showed crude oil stocks fell on higher exports, indicating an uptick in global demand. But the U.S. central bank’s cautious outlook, coupled with widespread concerns about weaker global demand and an anticipated supply surplus, weighed on market sentiment. “The Fed’s hawkish shift dampened an early rebound in oil prices yesterday,” Swissquote Bank’s senior analyst Ipek Ozkardeskaya says. “The barrel of U.S. crude slipped back to $70 per barrel… We anticipate rangebound trading within the $67-$70 per barrel range.” ([email protected])
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Gold Falls on Fed’s Hawkish Shift — Market Talk
0859 GMT – Gold prices fall after the Federal Reserve lowered interest rates by 25 basis points but signaled fewer cuts next year, boosting the U.S. dollar and bond yields. The U.S. central bank expects inflation to be stickier than previously anticipated, with new projections indicating only two quarter-point rate cuts in 2025. At a meeting in September, the Fed had projected four quarter-point cuts. “The Fed’s hawkish shift means we’re going to have to contend with a strong dollar well into 2025,” analysts at Peak Trading Research say. Gold futures trade 0.8% lower at $2,631.20 a troy ounce. Traders now await U.S. GDP and PCE inflation data, which could further shape the path of monetary policy next year. ([email protected])
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Crude Palm Oil Prices Likely Under Pressure — Market Talk
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12-19-24 0841ET