Category Archives: Commodities

BP boss could be in line for special bonus of up to £11.4m

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Firm set for clash with investors over possible payout to Bernard Looney from three-year share award plan

BP is set for a clash with investors after it emerged that its chief executive could be in line for a special bonus of up to £11.4m. The payment, in shares, would be on top of his £1.38m salary and annual bonus for 2022.

Strong growth in BP’s share price means Bernard Looney is set for a multimillion-pound payout from a three-year share award plan set up in 2020, when countries around the world were in lockdown and the company was cutting jobs amid a global collapse in demand for oil.

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Shell and Vitol accused of prolonging Ukraine war with sanctions ‘loophole’

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Exclusive: Ukrainian economic adviser urges energy firms to heed deadline to halt trade of ‘Russian-origin oil products’

The oil company Shell and energy trader Vitol have been accused of prolonging the war in Ukraine by exploiting a “loophole” in the EU sanctions regime to bring products derived from Russian oil into Europe through Turkey.

Oleg Ustenko, the economic adviser to the Ukrainian president, Volodymyr Zelenskiy, has urged the energy companies to commit to a deadline to halt the trade of a “Russian-origin oil products” to reduce Vladimir Putin’s war coffers, the Guardian can reveal.

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Glencore shareholders to receive almost £6bn after record profits

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Mining and commodities firm’s pre-tax profit climbed 60% to £28.2bn last year, up £10.6bn on 2021

Glencore will give almost £6bn to shareholders after the mining and commodities company reported record pre-tax profits of more than £28bn in 2022, boosted by rocketing oil and coal prices.

The Switzerland-based group, whose market capitalisation makes it one of the largest FTSE 100 companies, announced a payout of £5.9bn ($7.1bn) to shareholders, including dividends and a new £1.2bn share buyback programme.

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Calls for bigger windfall tax after Shell makes ‘obscene’ $40bn profit

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Sunak government under pressure after gas prices fuel ‘outrageous’ doubling of profits at Anglo-Dutch group

The government is under pressure to rethink its windfall tax on energy companies after Shell reported one of the largest profits in UK corporate history, with the surge in energy prices sparked by Russia’s invasion of Ukraine pushing the oil company’s annual takings to $40bn (£32bn).

Opposition parties and trade unions described Shell’s bonanza, the biggest in its 115 year history, as “outrageous” and accused Rishi Sunak of letting fossil fuel companies “off the hook”.

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UK energy bills to fall to about £2,200 from July as wholesale gas costs drop

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Mild weather in Europe reduces gas demand but bills will remain higher than 2021 energy price cap

Annual energy bills are expected to fall to about £2,200 from July in a fillip for the government and households struggling with ballooning costs.

The energy consultancy Cornwall Insight has predicted that, excluding government subsidies, typical annual household energy bills will have fallen from £4,279 now to £3,208 from April, and then will ease to roughly £2,200 for the remainder of the year.

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Hopes of sharp fall in household energy bills as HSBC cuts gas price forecast

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Bank slashes predicted 2023 European wholesale price by 30% as mild weather reduces demand

HSBC has slashed its forecasts for future wholesale gas prices in response to mild weather in Europe – raising hopes of a sharp decline in household energy bills.

The bank cut its 2023 forecasts for the price of gas traded in Europe by about 30% and its forecast for 2024 by 20%.

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Shell expects to pay about $2bn in UK and EU windfall taxes for last quarter

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Firm said in October it had not paid any UK windfall taxes because of heavy investment in North Sea

Shell has revealed it expects to pay about $2bn (£1.7bn) in UK and EU windfall taxes for the final quarter of 2022 – the first time it has paid UK tax for five years.

The oil company had previously sparked anger in October when it said it had not paid any UK windfall taxes because of heavy investment in the North Sea.

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Jeremy Hunt tells business leaders energy support is ‘unsustainably expensive’ – as it happened

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Business groups fear government will halve energy support after March, while commuters face more disruption on the railway

Households in the UK spent £1.1bn more on groceries in December than a year earlier, taking Christmas spending to a record £12.8bn, but got fewer items in their baskets as rampant inflation hit home.

Many stocked up on alcohol to enjoy while watching the men’s football World Cup, with sales of beer reaching the highest level for the year on the day of England’s quarter-final against France on 10 December.

This was a big drop. Mortgage approvals fell by 11,800 in November, the biggest fall since April 2020 and are at their lowest level since June 2020. This is not the news the housing market was hoping for in the first week of the new year.

Mortgage approvals are the key lead indicator for housing transactions, lower mortgage approvals today means fewer housing transactions tomorrow. A reduction in housing transactions will hurt all those businesses that are involved in the home-moving process, but the absence of forced sellers implies that house prices will not fall as far or as fast as housing transactions.

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RMT chief threatens rail strikes could continue beyond May – business live

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Mick Lynch says strikes could carry on into spring unless a reasonable offer is made to the RMT union; transport secretary denies blocking a deal

Huw Howells, head of manufacturing and industrials at Lloyds Bank corporate & institutional banking, said:

Manufacturers start 2023 on somewhat uncertain ground as December shows a fifth month of contraction.

There are silver linings in the supply chain, but unknowns remain for 2023, making forecasting difficult as manufacturers balance demand and supply.

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Why are wholesale gas prices falling and will it cut UK bills?

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Falls could lower cost of government subsidies and reduce risk of power cuts this winter

Economic forecasters could be forgiven for reading the outlook for 2023 through their fingers as strikes, cost of living pressures and a potential global recession paint a gloomy picture. But wholesale gas prices have offered a sliver of optimism, with a sharp fall in recent days. Here’s why they are tumbling – and what it means for consumers.

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ExxonMobil launches legal challenge to EU’s windfall tax on energy firms

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US oil firm contests legal authority for ‘solidarity contribution’ to raise funds to offset soaring energy prices

ExxonMobil has launched a legal challenge against the EU in an attempt to derail the bloc’s windfall tax on the profits of energy producers.

In a high-stakes political battle as countries across Europe and the wider western world struggle with soaring energy costs and sky-high inflation, the US oil firm said it believed the EU had overreached its powers with the windfall tax.

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EU energy ministers reach agreement on gas price cap

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Months of talks end with ‘dynamic cap’ deal after Germany persuaded by global reference-price condition

EU ministers have agreed a plan to cap the price of gas, ending months of argument over how to handle the cost of soaring energy prices after Russia cut gas supplies to Europe.

“Mission accomplished,” said the Czech minister for trade and industry, Jozef Síkela, who chaired talks between energy ministers, adding that negotiations had not been easy.

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Joe Biden and Rishi Sunak agree to increase gas exports from US to UK

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Leaders announce partnership to reduce global dependence on Russian energy

Joe Biden has agreed a deal to ramp up gas exports from the US to the UK as part of a joint effort to cut bills and limit Russia’s impact on western energy supplies.

Sunak and Biden announced an “energy security and affordability partnership” and set up a joint action group, led by Westminster and White House officials, with the aim of reducing global dependence on Russian energy.

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G7 countries and Australia to cap price of seaborne Russian oil

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Critics including Ukraine say cap of $60 per barrel is still above market value and will not hurt Russia’s war coffers

G7 countries and Australia have agreed to cap the price of Russian seaborne oil, with the aim of reducing Moscow’s income and limiting its ability to finance its war in Ukraine.

But critics, including Ukraine, say the cap of $60 a barrel is still higher than the current market price for Russian crude oil and is unlikely to affect the Kremlin’s war coffers.

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EU states agree $60 a barrel cap on Russian oil after Polish green light

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Poland, which was pushing for low cap, says deal will keep it at least 5% below market rate

European Union member states have agreed to put a $60 a barrel price cap on Russian oil after Poland, which was holding out, gave the green light to the deal.

In an effort to reduce the Kremlin’s income from fossil fuels, the EU has agreed to limit the amount that can be paid for seaborne oil to curtail Moscow’s ability to finance its war in Ukraine.

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BP shares in Kremlin oil firm are ‘blood money’, says Zelenskiy adviser

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British oil giant had said it would ‘exit Russia’ but still owns nearly 20% of state-controlled fossil fuel firm Rosneft

The chief economic adviser to the Ukrainian president, Volodymyr Zelenskiy, has called on BP to exit Russia entirely after the fossil fuel firm was offered a £580m dividend by the oil giant Rosneft.

Oleg Ustenko has written to BP’s chief executive, Bernard Looney, to demand the British company cuts ties with the state-controlled Russian firm nine months after announcing its intention to leave the country.

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Germany agrees 15-year liquid gas supply deal with Qatar

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Racing to wean itself off Russian gas supplies, Germany is set to buy 2m tonnes of liquid gas from Gulf state

German firms have signed a 15-year deal to buy 2m tonnes of liquid gas from Qatar, sending out mixed signals over the priority Germany places on human rights in the Gulf and its commitment to a carbon neutral energy supply.

The deal was announced by state-owned Qatar Energy and deliveries will start from 2026. The gas will be sold by Qatar to the US company ConocoPhillips, which will then deliver it to the LNG terminal in Brunsbüttel, Qatar’s energy minister said in the capital, Doha.

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Annual UK energy bills would have hit £4,279 without emergency support, Ofgem says

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Regulator raises cap for start of 2023 by £730 but government limits typical bill to £3,000 from April

The energy regulator Ofgem has said its price cap will reach £4,279 from January – but households will be shielded by the government’s emergency intervention to keep a lid on bills.

Ofgem said the cap, which is adjusted every quarter, will increase by £730 for the three months from the start of next year. However, the government’s energy price guarantee (EPG) will limit typical household bills to £2,500. Analysts had expected the cap to sit at about £4,200.

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US and Israel blame Iran after drone strikes oil tanker off Oman

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Pacific Zircon, linked to Israeli billionaire, said to have been ‘hit by projectile’ but suffered only minor damage

The US and Israel have pointed the finger at Iran after an oil tanker associated with an Israeli billionaire was struck by a bomb-carrying drone off the coast of Oman.

The drone attack on the Liberian-flagged oil tanker Pacific Zircon happened on Tuesday night off the coast of Oman, a Middle East-based defence official told the Associated Press.

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Oil prices rise after drone attack on tanker owned by Israeli tycoon

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Incident off Oman involved vessel owned by Idan Ofer conglomerate

Oil prices have risen after a tanker owned by an Israeli billionaire was hit by a drone carrying a bomb off the coast of Oman.

The attack on Pacific Zircon, which is owned by Idan Ofer and operated by the Singapore-based Eastern Pacific Shipping, sent Brent crude prices up 65 cents to $94.5 (£79.23). The Liberian-flagged tanker had departed from Sohar, Oman, on Monday afternoon and was destined for Buenos Aires.

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