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This week, France will launch an ambitious drive to electrify the country
The French government will unveil an ambitious energy plan in the coming week. According to Prime Minister Sebastian Lecornu, this will include doubling France's electricity consumption by 2030. Lecornu announced this goal 'on Saturday.' It will require a major change in the French energy mix, as electricity only accounts for around 30% of the total energy consumed and is mostly generated by renewables and nuclear. The French heavy industry, transportation and aviation still rely on fossil fuels. Their sluggish electricity demand has also led to little change in the adoption of cleaner energy sources. Why it Matters EDF, the state-owned utility, would benefit from a higher electricity demand. This would also encourage the growth of solar energy and new uses of electricity, such as electric vehicles and hydrogen electrolysers. It would also require costly infrastructure projects and a major upgrade to France's grid. Demand growth will be much higher than originally forecast. When the government announces details, it will be expected that it will explain how it can overcome these obstacles. By the Numbers Data from the consultancy Kpler revealed that French electricity demand increased by 5% annually between 1960 and 2000. It then declined to a growth rate of 1% per annum until 2010, and since then has been mostly flat. Hamza Aourach, Kpler's chief power analyst and a former economist at the World Bank, stated that Lecornu's plan would require French electricity consumption to increase by 20% annually over a period of four years despite 'a weaker economy'. Grid operator RTE forecasts that the demand for electricity will increase between?40% to 45% by 2035. KEY QUOTES Roland Lescure, French Minister of Energy, said last week that "power demand does not meet expectations". Aourach, Kpler's Aourach, said that the goal was "extremely ambitious if not impossible". (Reporting and editing by Forrest Crellin, America Hernandez, and Alexander Smith).
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PowerChina and Lilama awarded a $974 million contract for the construction of LNG power plants by Vietnam
EVN, the state-owned utility in Vietnam, has announced that it has awarded a $974 million contract to a 'consortium consisting of PowerChina & Lilama' for the construction of an LNG-fired plant. EVN announced in a statement that the Quang Trach II power plant, located in central?province Quang Tri, will have a 'capacity' of 1,612 Megawatts. Southeast Asia is looking to increase its power generation capacity in order to keep up with its growing economy. It grew by 8% last fiscal year. "This plant will help ensure energy security, improve the reliability of the power -system and fulfill Vietnam's commitments towards reducing greenhouse gases," EVN stated. Vietnam, where coal power plants account for more than 40%?of electricity production, has committed to achieving net-zero emission by 2050. EVN announced that the plant would use turbines manufactured by General Electric?Vernova. EVN said that the plant will be fully operational in 2030.
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Hapag-Lloyd's 2025 EBIT is at the upper end of its guidance
Hapag-Lloyd, the German container shipping company, announced on 'Monday' that its earnings for the full year before?interest? and taxes fell?to?$1.1?billion. This was at or above its expectations, citing preliminary figures. This was lower than the $2.8 billion reported in 2024, and compares to a target range between $600 million and $1 billion. The group stated in a "unscheduled" release that an 8% increase in transportation volumes was offset by a 8% decline in the average freight rate. Earnings were impacted by higher costs as a result of rerouting ships via the Cape of Good Hope, and the start-up costs for a collaboration between rival Maersk called 'the Gemini Network. It said that Gemini-related savings began to kick in during the second half 2025, and will be fully realized by 2026. Hapag-Lloyd will publish its detailed results for the year and outlook on March 26, 2019.
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Kremlin warns that the fuel situation on Cuba is critical and accuses US officials of suffocating the island
The Kremlin stated on Monday that Cuba's fuel situation is critical. Cuba has?unveiled a plan that will protect essential services and?ration fuel. Cuba outlined its plans for navigating the crisis on Friday, as the communist government dug its heels to defy a U.S. attempt to cut off the?oil supplies to the Caribbean Island after declaring Cuba an "unusual and?extraordinary" threat to U.S. security. "The situation in Cuba has indeed become critical." We are aware of it. Dmitry Peskov, Kremlin spokesperson, told reporters that the Kremlin maintains intensive contact with its Cuban friends via diplomatic channels and other means. Russia is trying to re-establish its own damaged ties with the United States, as U.S. president Donald Trump attempts to broker an agreement to end his war in Ukraine. The Kremlin has made it clear that they are unhappy with Washington's treatment towards Cuba. "The suffocating tactics employed by the United States have caused many problems for the country." Peskov said that he and his Cuban counterparts are discussing possible solutions to these problems or, at the very least, how to offer all assistance. He was responding to a question regarding reported jet 'fuel shortages, and if that would affect Russian tourists wanting to leave Cuba - a long-time ally of Moscow. Viktor 'Coronelli', the Russian ambassador to Cuba told RIA last week that Moscow has supplied oil to Cuba on a regular basis in recent years and will continue to do so. Reporting by Felix Light, Editing by Andrew Osborn
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FedEx and Advent-led consortium will buy parcel locker company InPost for $9.2 billion.
The companies announced on Monday that a consortium led by FedEx investors and InPost investors had agreed to purchase the parcel locker business in a deal worth 7.8 billion euros ($9.2 billion). This will allow InPost to expand its reach throughout Europe, while giving FedEx the opportunity to access the locker network. The 15.60 euro offer price per share is a 17% premium over InPost's Friday closing price, but below InPost 2021 IPO's 16 euros. The Amsterdam-listed shares opened at a 14% increase, trading at highs of May 2025. Hein Pretorius is the chair of InPost’s supervisory board. He told journalists that "InPost intends to enter into commercialisation agreement with FedEx, which will enable both businesses to benefit from complementary strength and a common vision." He added that the two companies would not merge their operations, but rather remain independent competitors. InPost announced last month that it received a preliminary takeover offer from an unknown party. This increased its share price. The company operates in nine countries, including Poland, and has one of Europe's largest networks of automated parcel machines. Since listing in 2021 it has met a tepid confidence from the market as domestic competition grew and investments to expand quickly held back profits growth. Last year, a series of deals included the purchase of Yodel (a British delivery company) and acquiring a Spanish delivery firm. In recent years, the European expansion has been largely financed by earnings and revenue growth in Poland. The joint statement stated that the group would aim to expand its footprint under private ownership in France, Spain Portugal, Italy Benelux, and Britain, Europe’s largest ecommerce market. InPost will be less dependent on short-term expectations of the market and can implement its strategy more efficiently, according to the statement. FedEx, holding company Advent, and InPost CEO Rafal Bzoska’s investment vehicle, A&R, each own 37%, while PPF, an investment firm owned by the Czech Kellner Family, owns the remaining 10%. Advent, A&R, and PPF own stakes in InPost. Advent bought a majority share in 2017, but it has reduced its ownership since then to 6.5%. A&R owns 12.49%, and PPF 28.75% according to the?InPost site. InPost will retain its name and management structure, as well as its headquarters in Poland. Both parties anticipate that the transaction will be completed in the second half this year. The company said that shareholders who represent 48% of the outstanding shares are irrevocably committed. They also stated that 80% of the share capital must be accepted to make this deal a reality. In a note sent to investors, Erste Group equity analysts said that the proposed price was likely to be seen by most as moderately attractive and not opportunistic. Trigon analysts' reaction to the news said that the price could be increased if it is not enough to satisfy minority shareholders.
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Wall Street Journal, February 9,
These are the most popular stories from the Wall Street Journal. These?stories have not been?verified and we cannot vouch for the accuracy of these stories. A consortium consisting of the U.S. private equity firm Advent International, the logistics company FedEx and investment companies A&R & PPF have agreed to buy Polish parcel delivery provider InPost. The deal is worth $9.22 billion. Innovent Biologics, a Chinese drugmaker, has partnered with Eli Lilly to develop a new treatment that could earn?upwards of $8.5 billion through milestone payments. - Grocery giant Kroger is planning to hire Greg Foran as its new chief executive. Foran was previously a top executive at Walmart. The UK's NatWest is set to purchase Evelyn Partners for 2.7 billion pounds (3.67 billion dollars) in order to enhance its?savings & investment?offerings. A Hong Kong court has sentenced Jimmy Lai (78), a former tycoon and outspoken critic of China's Communist Party to 20 years behind bars.
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What can oil prices tell you about the market? Not a lot: Bousso
The global oil market is experiencing a series of price spikes due to geopolitical tensions and the opaque stockpiling. Western sanctions and tightening Western sanction are also causing traders to be in the dark. Prices may not accurately reflect the physical fundamentals of commodities due to the growing influence of unpredictable external forces on this world's most liquid and largest commodity market. In fact, it appears that the global oil markets are struggling to find a balance between supply and demand. The International Energy Agency predicts that oil production will exceed demand this year by 3.7 millions barrels per day, which is more than 3%. Prices tell a very different story. Brent crude prices have fluctuated in recent weeks but remain above $65 per barrel. The forward curve also shows a steep backwardation. This is a characteristic structure that's usually associated with a tight supply. What is the explanation? The uncertainty surrounding events in the Middle East played a part over the last few weeks. Oil prices have risen to $70 per barrel due to the risk of U.S. strikes against Iran and the potential for the conflict to spread across the entire region. The CBOE crude volatility index is at its highest level since last June's 12-day Israel-Iran conflict. U.S. and Iranian tensions will only be a short-term issue, unless they spiral out of control. However, other long-term trends could obscure the picture of supply and demand for many months. STOCKS ARE BUILDING Stocks are increasing globally, which is a sign of an oversupplied marketplace. Geopolitical fragmentation creates regional divergences which complicate this equation. Morgan Stanley predicts that global crude oil inventories will rise by 730 million barrels in this year, a total of 520 million barrels. According to ROI estimates, the bulk of the stockpile was in China. The country has placed around 800,000 barrels per day into storage during the last year. This figure indicates an increase of over?300 millions barrels by 2025. China's exact crude reserves and storage capacity are still unclear. The strategic reserves of China are largely hidden underground, beyond the reach of satellites. This makes it difficult to know how much is actually in storage and how much can be added. China's purchasing strategy is also uncertain. Beijing is known to cut back on purchases when prices increase, so the stockpiling may have been slowed after recent price increases near $70 per barrel. The market doesn't know. This opacity is a major blindspot for the oil markets and has changed?the way that rising storage levels are interpreted. In the past, the oil price has closely followed changes in inventories of countries that are members of Organisation for Economic Co-operation and Development, notably those from America and Europe which have long been dominant forces on global demand. A rise in stockpiles was generally considered negative. Martijn Rats is an analyst with Morgan Stanley. According to him, the buildup of Chinese stocks in the OECD countries has been interpreted as a bullish sign, indicating a strong demand, which offsets any negative signals from the OECD stockpiles. This could explain why the crude oil prices have not fallen despite a rise in global inventories. CONFUSION GEOPOLITIQUE Western sanctions against several oil producing nations complicate this picture. Kpler reports that China, India, and Turkey will import around 3.5 millions bpd of crude oil from Venezuela, Iran, and Russia in 2025. This picture is changing, however, following the European Union's ban on fuels refined using Russian crude which took effect on 21 January and President Donald Trump increasing pressure on India in order to reduce Russian oil purchases. India has cut its Russian crude imports by about 1 million barrels per day this year. This is down from 1.6 millions bpd a decade ago. According to Trump, India also promised to reduce further purchases. These changes are forcing market adjustments. Western restrictions have increased demand for barrels that are not sanctioned and for tankers that comply with the regulations, increasing costs for refiners. This is especially true in Asia where there is a high reliance on seaborne crude because of limited production. Since early January, Asian refinery margins are smaller than those of Europe. The former has averaged around $6 per barrel this year, while the latter has averaged $9. The main reason for this difference is logistics costs. Keshav Lhiya is the CEO of HiLo Analytics. He said that freight was a significant regional differentiator in 2018. According to LSEG, freight rates for a VLCC?sailing between the Middle East and West Africa into Asia are up nearly 150% from the beginning of the year. Shipping costs for Asian refineries can exceed $3 per barrel, while they are closer to $2 in Europe. The restrictions are also causing an accumulation of crude oil that has been sanctioned at sea, as sellers struggle to locate buyers. Russia, Iran, and Venezuela are responsible for 30% of the crude oil in transit (1.3 billion barrels) -?which is higher than the share they export. This indicates slower discharge rates because traders struggle to place barrels. This leads to a market which appears both oversupplied and unusually tight. This tension is a reflection of a market that is increasingly driven by geopolitics, and by the behavior of opaque stockpilers. Oil prices will likely remain out of synchronism with the measured supply until transparency is improved or political risks are reduced. You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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Trump Administration appeals the ruling on releasing New York City Tunnel funds
According to a court filing, the U.S. administration of President Donald Trump appealed on Sunday against a decision that required the Transportation Department unfreeze federal funds for the $16 billion Hudson Tunnel Project in New York. U.S. district judge Jeannette Vargas issued a preliminary order on Friday requiring the federal government release funds to a project that will overhaul critical rail infrastructure throughout New York and New Jersey. On?Sunday, the Trump administration filed an appeal notice. The Transportation Department announced in September that funding was frozen pending an assessment of the project's conformity with the new federal bans on race and gender-based discrimination in contracting decisions. Sources claim that Trump offered to unfreeze funds last month in exchange for Democrats' support to rename Washington Dulles Airport, and New York Penn Station, after him. Democrats strongly criticised?the proposal. The Gateway Project is intended to repair and build a new commuter tunnel between Manhattan, New Jersey and repairs a century old tunnel that's used by over 200,000 passengers and 425 trains every day. Vargas made her decision hours after New York City and New Jersey announced that construction would cease due to a lack of funding. The Hudson Tunnel, which was heavily damaged by hurricane Sandy in 2012, requires frequent emergency repairs, causing travel to be disrupted on the nation's most heavily used passenger rail route. The Gateway Development Commission issued a statement Friday, after Vargas' ruling. As soon as the funds are released, our workers will be back at work and we'll restart operations on site. Under former president Joe Biden, the project received federal funding of about $15 billion. So far, nearly $2 billion has already been spent. Helen Coster, Sergio Non and Jamie Freed edited by Edmund Klamann.
What can oil prices tell you about the market? Not a lot: Bousso
The global oil market is experiencing a series of price spikes due to geopolitical tensions and the opaque stockpiling. Western sanctions and tightening Western sanction are also causing traders to be in the dark.
There are questions about the accuracy of prices reflecting physical fundamentals due to the growing influence of unpredictable external forces on one of world's most liquid and largest commodity markets.
In fact, it appears that the global oil market is struggling to find a balance between supply and demand. The International Energy Agency predicts that oil production will exceed demand this year by 3.7 million barrels per day, which is more than 3%.
Prices tell a very different story. Brent crude oil prices, which are the benchmark for all other crude oils, have fluctuated in recent weeks. However they remain stable at over $65 per barrel.
The forward curve also shows a steep backwardation. This is a characteristic structure that's usually associated with a tight supply.
What is the explanation? The uncertainty surrounding events in the Middle East played a part over the last few weeks. Oil prices have risen to $70 per barrel due to the risk of U.S. strikes against Iran and the potential for the conflict to spread across the entire region.
The CBOE crude volatility index is at its highest level since last June's 12-day Israel-Iran conflict.
U.S. and Iranian tensions will only be a short-term issue, unless they spiral out of control. However, other long-term trends could obscure the picture of supply and demand for many months.
STOCKS ARE BUILDING
Stocks are increasing globally, which is a sign that the market is oversupplied. Geopolitical fragmentation creates regional divergences which complicates this simple equation.
Morgan Stanley predicts that global crude stocks will rise by 730 million barrels in this year, or 520 million barrels. According to ROI estimates, the bulk of the stockpile was in China. The country has placed around 800,000 barrels per day into storage during the last year. This figure indicates an increase of over 300 million barrels by 2025.
China's exact crude reserves and storage capacity are still unclear. The strategic reserves of China are largely hidden underground, beyond the reach of satellites. This makes it difficult to know how much is actually in storage and how much can be added.
China's buying strategy is also uncertain. Beijing has a tendency to reduce its purchases when prices increase, so the stockpiling may have been slowed after recent price increases near $70 per barrel. The market doesn't know.
This opacity is a major blind spot for the oil markets and has changed the way that rising storage levels are interpreted.
In the past, oil prices were closely tied to changes in inventories of countries that are members of the Organisation for Economic Co-operation and Development, notably those from America and Europe which have long been dominant forces on global demand. A rise in stockpiles was generally considered negative.
Martijn Rats is an analyst with Morgan Stanley. He says that the buildup of visible OECD inventory signals a negative price signal, but the Chinese stockbuildups are perceived as a bullish sign, indicating heightened demand, which offsets this.
This could explain why the crude oil prices haven't dropped despite an increase in global inventories.
CONFUSION GEOPOLITIQUE
Western sanctions against several oil-producing countries are complicating the picture.
Kpler reports that China, India, and Turkey are importing 3.5 million barrels per day (bpd) of Venezuelan, Iranian, and Russian crude. This is expected to increase to 4.5 million by 2025. This picture is changing following the ban imposed by the European Union, which took effect on 21 January, on imports from?fuels refined using Russian crude and President Donald Trump increasing pressure on India to reduce Russian oil purchases.
India has cut its Russian crude imports by about 1 million barrels per day this year. This is down from 1.6 millions bpd a decade ago. According to Trump, India also promised to reduce further purchases.
These changes are forcing market adjustments. Western restrictions have boosted the demand for barrels that are not sanctioned and for tankers that comply with regulations. This has increased costs for refiners in Asia because of limited production.
Since early January, Asian refinery margins are smaller than those of Europe. The former averages around $6 per barrel this year while the latter is $9. The main reason for this difference is logistics costs.
Keshav Lhiya is the CEO of HiLo Analytics. He said that freight was a significant regional differentiator in 2018.
According to LSEG, freight rates for a VLCC sailing from the 'Middle East' or?West Africa to Asia has risen by nearly 150% in the past year.
Shipping costs for Asian refiners can exceed $3 per barrel, while they are closer to $2 in Europe.
The restrictions have also led to an increase in the amount of crude oil that is being sold at sea, as the sellers are struggling to find buyers.
Russia, Iran and Venezuela are responsible for 30% of the crude oil in transit. This is a far greater share than they have exported. It also indicates a slower rate of discharge as traders struggle to position the barrels.
This leads to a market which appears both oversupplied and unusually tight.
This tension is a reflection of a market that is increasingly driven by geopolitics, and by the behavior of opaque stockpilers.
Oil prices will likely remain out of sync until transparency is improved or political risks are reduced.
You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
(source: Reuters)