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Sources say that Canada's South Bow has cut its crude trading team and is now focusing on the contracted pipeline volumes.
Three people said this week that Calgary-based South Bow, a pipeline company, has reduced the size of the crude trading team in order to increase the volume of oil sold under contract via its pipeline systems while reducing the amount of crude traded. South Bow was spun off from Canadian pipeline company TC Energy as part of a strategy to reduce TC's debt in October 2024. South Bow fired two traders on 4 April, the people reported. TC Energy had already laid off a member of its team in June 2012, before the spin-off. The crude trading team has been reduced to two people from five in the latest layoffs. South Bow's spokesperson declined to comment for this article on employee issues. Sources said that the company was looking for more stable revenue through the contracted volumes it ships through its pipeline system, as the Trans Mountain pipeline's start-up in Canada has left it with less trading opportunities. South Bow's fourth quarter earnings report stated that it expects EBITDA from its marketing unit (which includes its crude trading teams) to be negative in 2025. It will fall $30 million, from $12 million, in 2024. The company expects its normalized EBITDA total to be around $1.01 billion in 2024, as opposed to $1.09 billion today. This is partly due to the fact that Canada's much-anticipated Trans Mountain pipeline expansion began operations. Trans Mountain Pipeline transports crude oil from Alberta to the Pacific Coast of Canada for export. Bevin Wirzba, CEO of South Bow, explained in March that the pipeline would take arbitrage opportunities away from South Bow. The company's quarterly earnings report stated that the uncertainty of tariffs and increased pipeline capacity in Canada would also impact marketing earnings. South Bow expects to secure 90% of its EBITDA by 2025 through commitments. Wirzba stated in an investor call that "with a contracted strategy these dollars of EBITDA would be more valuable to shareholders due to their consistency." South Bow operates a 750,000 barrels per day Marketlink pipeline, which transports crude oil from Cushing, Oklahoma to the U.S. Gulf Coast through the Gulf Coast Extension of the Keystone Pipeline. Sources said that the company would reallocate spot capacity available on Marketlink, which it had previously used to increase contracted shipments for third-party clients. South Bow's stock last traded at about $32.30, according to LSEG. The stock had recovered some of its losses from Tuesday, when it fell to a low of $31.10, after South Bow closed the Keystone pipeline following an oil spill. (Reporting and editing by Liz Hampton, Himani Sarkar, and Georgina McCartney from Houston)
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Discounts on heavy crude oil from Western Canada are narrowed
Western Canada Select (WCS), a heavy crude from Canada, was trading at a discount to West Texas Intermediate (WTI), the benchmark North American futures contract. The discount narrowed Friday, despite the fact that the Keystone pipeline between Canada and the U.S.A. was still shut for the fourth day in a row. WCS for delivery in May at Hardisty, Alberta settled at $9.60 per barrel below WTI according to brokerage CalRock. It had settled at $9.85 below the U.S. benchmark Thursday. Keystone, the oil pipeline that connects Canada and the U.S., was closed on Tuesday following an oil spillage in North Dakota. South Bow, the owner and operator for the 4,327 km (2,689 miles) pipeline, said on Friday that they were still investigating the cause and did not have a timetable for restart. * Although the WCS discount increased in the immediate wake of the Keystone shut down, it remains historically low due to U.S. sanctioned countries producing heavy crude, such as Venezuela and lower heavy crude exports by Mexico. Canadian heavy crude differentials tend to shrink when oil prices in the world are low, partly because lower prices lead to less competition among Canadian producers for pipeline space. This week, global oil prices fluctuated dramatically as traders reassessed the geopolitical risk of the crude market due to President Donald Trump's new tax regime. (Reporting from Amanda Stephenson, Calgary; Editing and proofreading by Sandra Maler).
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China's Cosco considers legal action against Peru after it sets price controls on megaport
Cosco Shipping, a Chinese port operator, could launch legal proceedings in Peru if the local regulator determines that the prices at Cosco’s Chancay Megaport must be controlled. The firm stated this in a Friday statement. Cosco insisted that Chancay was a competitive market, despite INDECOPI's ruling to the contrary. Chancay has also stated that the Peruvian port authority previously acknowledged its competitiveness. The Peruvian transport agency announced on Thursday that it will regulate the rates at the port, after the market watchdog found the terminal to be operating without enough competition. Chancay, located north of Lima and offering non-stop trips to Asia and back, is now home to the largest ships on South America's Pacific Coast. During the Asia-Pacific Economic Cooperation summit (APEC), held in Lima, in November, Peruvian president Dina Boluarte, and Chinese president Xi Jinping inaugurated the port's initial phase. (Reporting and editing by Natalia Siniawski; Reporting by Marco Aquino)
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Prices of oil are set to fall for the second consecutive week due to US-China trade conflict
The oil prices fell for the second consecutive week on Friday, amid investor concerns about a recession caused by the growing trade war between China and the United States. Brent crude futures fell 25 cents or 0.39% on the day to $63.08 per barrel at 1312 GMT, while U.S. West Texas Intermediate Crude dropped 30 cents or 0.50% to $59.77. Brent and WTI will both decline by 3.8% and 3.5% respectively this week, after losing about 11% each last week. Brent fell below $60 per barrel this week, its lowest level since February 2021. Analyst Giovanni Staunovo of UBS said that "China's retaliation, coupled with increased U.S. Tariffs, has weighed on the market sentiment, and driven oil prices down." China announced Friday that, starting Saturday, it will increase its tariffs on U.S. products from 84% to 125%, an increase from the previous announcement of 84%. This follows a Thursday tariff hike by U.S. president Donald Trump, who raised them from 145% to 150%. Trump paused the heavy tariffs this week against dozens of trading partners. But a dispute between two of the largest economies in world is likely to disrupt trade routes and reduce global trade, which will impact global economic growth. Ole Hansen is the head of commodity strategy for Saxo Bank. He said that even though the tariffs on China were delayed by 90-days, the damage to the market had already been done. Prices are now struggling to recover stability. BMI analysts expect prices to remain under pressure, as investors evaluate ongoing trade negotiations, and the rising tensions between Washington, D.C., and Beijing. Energy Information Administration of the United States lowered their global economic growth predictions on Thursday and warned that tariffs may have a significant impact on oil prices. It lowered its U.S. oil demand and global oil consumption forecasts for both this year and next. A poll shows that China's economic growth in 2025 is likely to be lower than last year, due to the U.S.'s tariffs, which are increasing pressure on China, the world's largest oil importer. Director of the United Nations trade agency, said that the impact of tariffs on developing countries could be "catastrophic". ANZ Bank analysts predict oil consumption will fall by 1% if the global economy growth falls below 3%. Senior commodity strategist Daniel Hynes said. Varga, of PVM, said that oil prices fell on Thursday, as traders focused primarily on tariffs and largely avoided the new U.S. sanctions against Iran. On Thursday, the U.S. placed sanctions on a network of Iranian oil traders that included a crude oil storage facility in China. Iran's foreign ministry has said that the U.S.-Iran nuclear talks scheduled for Saturday in Oman will get "a real chance" from Iran. Reporting by Robert Harvey, Sudarshan Varadhan, Arunima Kumra, Kirby Donovan, David Goodman. Editing by David Goodman.
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The US Energy Secretary says that we can stop Iran from exporting oil
Chris Wright, the U.S. Energy secretary, said that President Donald Trump could increase pressure on Iran by stopping its oil exports. This would be part of his plan to put pressure on Tehran regarding its nuclear program. Trump's return to the White House in January, after his first term, when he rescinded the United States' 2015 power agreement with Tehran and imposed restrictions on its oil sales, has once again brought a more aggressive approach towards the Middle Eastern country over its nuclear activities. Wright said during a trip to Abu Dhabi that he believed Gulf allies were very concerned about an Iran with nuclear weapons and that they shared the U.S. conviction that such a result would be in no one's interest. According to data from the industry, Iranian oil exports have recovered under Joe Biden who was elected president after Trump's second term. They are still showing no signs of decline in 2025. China, which is opposed to unilateral sanctions, purchases the majority of Iran's oil shipments. "That is actually quite doable." Wright replied, "President Trump did it during his first term." Wright was asked about how the United States could enforce its maximum-pressure policy against Tehran. We can track the ships that leave Iran. We know their destination. We can stop Iran from exporting oil. I won't discuss the exact method of how this will happen. "But can we completely turn the screws against Iran," he replied when asked if they would stop Iranian ships on the sea. On Friday The United States gave "a real chance" to the high-level nuclear talks on Saturday with China after Trump Threatened bombing if discussions failed. Wright predicted that the markets' concerns about the economic growth would be proved wrong. Yousef SABA in Abu Dhabi, Alex Lawler writing in London and David Evans and Mark POrter editing.
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Treasury: Italy to sell assets worth 0.8% GDP by 2027
The Treasury's multi-year budget plan revealed that Italy will sell assets worth close to 1% or more of its gross domestic product by 2027 in order to stabilize its state finances. Giancarlo Giorgetti, Economy Minister of Italy, said that the government will continue to pursue a plan announced in January to sell assets valued at around 20 billion euros (about 23 billion dollars). However he noted that due to current market volatility caused by U.S. Tariff Policy it was necessary to proceed with caution. The Treasury's Document of Public Finance published late Thursday included new debt projections that factored in the sale of assets worth 0.1% of the GDP in this year, 0,2% in 2026, and 0.5% of 2027. According to the latest government projections, Italy's debt is expected to reach 136.6% this year, up from 135.3% by 2024. In 2026, the debt is projected to reach 137.6% before falling to 137.4% by 2027. Since her appointment in late 2022 as Prime Minister, Giorgia Melons has sold stakes in the bailed out bank Monte dei Paschi di Siena (MtP) and energy group Eni to raise more than 4 billion Euros for state coffers. Italy's long-promised plan to divest assets from the state includes selling up to 14% stake in financial conglomerate Poste Italiane. This transaction could be worth nearly 3 billion euro. In the document, it is also mentioned that property sales are expected to reach more than 800 millions euros per year between 2025-2027.
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Bangladesh will buy 50,000 T of rice at the March 27th tender, traders claim
According to traders, the state grain buyer of Bangladesh is believed to have purchased 50,000 metric tonnes of rice at an international tender that closed on March 27. The purchase price was $416.44 per metric ton CIF, according to traders. This was the lowest bid in the international tender. It was thought that the seller is trading house Agrocorp. Bangladesh has a tradition of taking a while to consider the price offered in rice and grain tenders. The contract called for the shipment of non-basmati rice parboiled from all over the world, 40 days after awarding. The reports reflect the assessments of traders, and further estimates on prices and volume are possible later. After a bad year of weather, Bangladesh continues to buy a lot of rice on international markets. Separately, a separate Bangladeshi tender for 50,000 tons rice was closed on Thursday. Michael Hogan reports.
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In March, South Korea purchased approximately 34,632 t of rice from the U.S.
Agro-Fisheries and Food Trade Corporation, a state-owned company in South Korea, purchased approximately 34 632 metric tons (mostly from the United States) of rice at an international auction that closed on March 11th. Traditionally, it takes a while for the corporation to confirm its purchases. The tender sought up to 79.976 tons of rice, but traders reported that only a small amount from Thailand and U.S. Rice was purchased. No consignments from China or Vietnam were bought. They said that the U.S. origin purchases comprised 22,222 tonnes bought at $836.24 per ton, including cost and freight for arrival on or around September 30. Another 5,555 tonnes bought at $796.48 per ton for arrivals between September 1 and Oct. 31. And 5,555 tons purchased at $785.82 per ton for arrivals between August 15 to October 15. The only rice purchased in the United States was medium grain non-glutinous brown rice. They said the rest of the purchase consisted of 1,300 tons non-glutinous long grain milled rice from Thailand, purchased at $579.91 per ton c&f and due for arrival between 1-30 June. This week, the corporation issued a new international tender to purchase approximately 80,000 tons rice that will close on April 15th. The reports reflect the assessments of traders, and it is still possible to estimate prices and volume later. (Reporting and editing by David Evans, Michael Hogan)
Singapore port congestion reveals worldwide ripple impact of Red Sea attacks
Congestion at Singapore's container port is at its worst because the COVID19 pandemic, an indication of how extended vessel rerouting to avoid Red Sea attacks has interrupted international ocean shipping with traffic jams also appearing in other Asian and European ports.
Merchants, producers and other industries that count on enormous box ships are once again battling surging rates, port backups and scarcities of empty containers, even as many consumer-oriented companies aim to develop inventories heading into the peak year-end shopping season.
Global port blockage has reached an 18-month high, with 60% of ships waiting at anchor situated in Asia, maritime information company Linerlytica stated this month. Ships with a total capacity of over 2.4 million twenty-foot equivalent container units (TEUs). were waiting at anchorages as of mid-June.
However, unlike throughout the pandemic, it is not a buying flurry. by house-bound consumers that is overloading ports.
Rather, ship timetables are being interrupted with missed. sailing schedules and fewer port calls, as vessels take longer. routes around Africa to avoid the Red Sea, where Yemen's Houthi. group has actually been attacking shipping considering that November.
Ships are therefore offloading bigger quantities at the same time at big. transhipment centers like Singapore, where cargoes are unloaded and. reloaded on various ships for the last leg of their journey,. and giving up subsequent voyages to catch up on schedules.
( Carriers) are trying to manage the situation by dropping. packages at transhipment hubs, said Jayendu Krishna, deputy. head of Singapore-based consultancy Drewry Maritime Advisors.
Liners have actually been building up boxes in Singapore and other. hubs.
Average Singapore freight offload volume jumped 22% between. January and May, significantly impacting port efficiency,. Drewry stated.
SERIOUS BLOCKAGE
Singapore, the world's second-largest container port,. has actually seen particularly severe blockage in current weeks.
The average wait time to berth a container ship was 2 to. three days, Singapore's Maritime and Port Authority (MPA) stated. in end-May, while container trackers Linerlytica and PortCast. said hold-ups might last as much as a week. Usually, berthing should. take less than a day.
Neighbouring ports are likewise supporting as some ships skip. Singapore.
The strain has shifted to Malaysia's Port Klang and Tanjung. Pelepas, said Linerlytica, while wait times have also climbed up at. Chinese ports, with Shanghai and Qingdao seeing the longest. hold-ups.
Drewry expects congestion at significant transhipment ports to. stay high, but expects some alleviating as providers add. capacity and restore schedules.
Singapore's MPA stated that port operator PSA had re-opened. older berths and lawns at Keppel Terminal and would open more. berths at Tuas Port to deal with prolonged waits.
Maersk, the world's second-largest container. carrier, stated this month it would skip 2 westbound cruisings. from China and South Korea in early July due to extreme. blockage in Asian and Mediterranean ports.
PEAK SEASON
The yearly peak shipping season has also gotten here earlier. than anticipated, worsening port congestion, carriers and. research firms stated
This seems to be driven by restocking activities,. particularly in the U.S., and by customers delivering items early. in anticipation of more powerful demand, stated Niki Frank, CEO of DHL. Worldwide Forwarding Asia Pacific.
Container rates, meanwhile, have surged, raising the risk of. another wave of rate boosts for purchasers like the. post-pandemic inflation spike which central banks are still. trying to tame.
Rates had actually stabilised into April but in May there was a. significant increase in ocean freight exports of Chinese. e-commerce, electrical cars, and eco-friendly energy-related. goods, Asia-focussed freight forwarder Dimerco said.
The peak season, which typically begins in June, was. advanced by a full month, triggering ocean freight rates to skyrocket.
Container import volume at the 10 largest U.S. seaports in. May increased 12%, fuelled by the second-highest regular monthly import. volumes considering that January 2023, stated information provider Descartes.
( U.S.) customers are continuing to spend more than last. year, and merchants are stocking up to meet demand, stated. Jonathan Gold, a National Retail Federation vice president.
Ocean imports into Europe from Asia are also showing indications. of a re-stocking season running into peak season - pressing rates. to 2024 highs, Judah Levine of freight platform Freightos said.
Container freight prices from Asia to the U.S. and Europe. have tripled because early 2024.
Rates from Asia and Singapore to the U.S. East Coast are at. their greatest since September 2022, while rates into the U.S. West Coast are greatest given that August 2022, freight platform. Xeneta said.
Some industry players believe part of the reason for the. bottlenecks at China ports is fuelled by U.S. importers hurrying. to purchase Chinese products such as steel and medical items that. will be subject to high tariff walkings from Aug. 1.
But freshly enforced U.S. tariffs would affect only about 4% of. Chinese imports to the U.S., said Jared Bernstein, chair of the. Council of Economic Advisers.
Gene Seroka, executive director of the Port of Los Angeles,. the largest U.S. gateway for Chinese ocean imports, also expects. a minimal effect.
We might see some of this freight been available in, however it is not going. to be a deluge, he said.
Concerns about possible strikes at U.S. ports this year. might also be pulling the peak season forward, while DHL stated. German port strikes were contributing to the gridlock.
All of those interruptions will likely imply greater prices for. customers, experts caution.
These are big monetary hits for carriers to absorb,. stated Peter Sand, primary analyst at Xeneta.
(source: Reuters)