US inflation slows broadly in April
US consumer price gains eased in April, with core inflation posting the smallest gain in three years, signs the economy is slowing in the face of high borrowing costs.
The consumer price index (CPI) rose by an annual 3.4pc in April, easing from 3.5pc over the prior 12-month period, the Labor Department reported on Wednesday. Core CPI, which strips out volatile food and energy, rose by 3.6pc, slowing from 3.8pc the prior month.
The easing inflation comes as the Federal Reserve has pushed back the expected start of interest rate cuts after holding its target rate at a 23-year high since July 2023 as the US economy has continued to grow and generate jobs at greater than expected rates. Job growth however slowed to 175,000 in April, the lowest since October 2023, and job openings and wage gains have also slowed while a measure of manufacturing has contracted.
The CME FedWatch tool boosted the probability of Fed rate cuts in September to about 72pc today from about 65pc on Tuesday.
The energy index rose by 2.6pc over the 12 months ended in April, accelerating from 2.1pc. The gasoline index slowed to an annual 1.2pc in April from 1.3pc
The food index rose by an annual 2.2pc, matching the prior month. Shelter slowed to 5.5pc from 5.7pc.
Services less energy services slowed to 5.3pc from 5.4pc. Transportation services accelerated to an annual 11.2pc, led by insurance costs, from 10.7pc in the 12 months through March.
On a monthly basis, CPI inflation slowed to 0.3pc in April from 0.4pc the prior two months. Core inflation slowed to 0.3pc from 0.4pc the prior three months. Energy held flat at a monthly 1.1pc.
Services less energy services slowed to a monthly 0.4pc gain from 0.5pc.
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Riyadh monetises Aramco with new share sale
Riyadh monetises Aramco with new share sale
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US shale wastewater could be new source of lithium: UoP
US shale wastewater could be new source of lithium: UoP
London, 31 May (Argus) — Wastewater from shale operations in Pennsylvania could provide up to 40pc of US lithium demand if tapped, according to a study from the University of Pittsburgh (UoP). Wastewater produced from oil and gas extraction in the region is rich in lithium and could provide an environmentally sound way to extract lithium without needing large open-pit mines or brine fields, with the added benefit of recycling water resources. "This study estimates that Marcellus Shale-related Li yields have potential to make a significant contribution to US domestic consumption with a set of reasonable, conservative assumptions," according to the research article published in Scientific Reports last month. "Wastewater from oil and gas is a burgeoning issue," National Energy Technology Laboratory researcher Justin Mackey said. "Right now, it's just minimally treated and re-injected. But it has the potential to provide a lot of value. After all, it's been dissolving rocks for hundreds of millions of years — essentially, the water has been mining the subsurface." Large oil companies have recently invested into lithium extraction, potentially bringing their technological knowledge and shale experts and applying them to a new industry. Norwegian state-controlled Equinor recently invested into underground lithium brine extraction in Canada and ExxonMobil expects to produce from brines in Arkansas by 2027. US lithium resources have been expanding with large discoveries in the past few years. Large clay deposits have been found in the McDermitt Caldera region on the Nevada-Oregon border, as well as multiple underground brine resources at the Smackover formation, Arkansas. The former attracted the ExxonMobil investment. The US geological survey estimates US lithium reserves at 1.1mn t, the fifth largest in the world after Chile, Australia, Argentina and China ( see graph ), with negligible production in 2023. By Thomas Kavanagh Global lithium reserves (USGS) t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Aramco looks to woo global investors with share sale
Aramco looks to woo global investors with share sale
Dubai, 31 May (Argus) — The rationale for state-controlled Saudi Aramco's decision to launch a secondary public offering is not only to provide funds to the Saudi government for its massive socio-economic transformation plan but also to broaden the company's shareholder base among local and international investors, chief executive Amin Nasser said. Aramco revealed yesterday that it plans to sell 1.545bn shares, equivalent to about 0.64pc of the company, in a secondary public offering due to kick off on 2 June. The shares are expected to be priced in a range of 26.70-29 Saudi riyals ($7.12-$7.73) each, which means the firm could raise $12bn at the top end. Proceeds could be as high as $13.1bn at the top end of the range if Aramco chooses to exercise an over-allotment option, which would allow the sale of around 1.7bn shares. Aramco's closing share price on 30 May stood at SR29. "The offering provides us with an opportunity to broaden the shareholder base among both Saudi and international investors," Nasser said. "It also offers us an opportunity to further increase liquidity and to increase global index weighting." The offering has been years in the making. Aramco's initial public offering (IPO) in 2019 raised a record $29.4bn. The secondary offering will test international investment appetite for fossil fuels in the face of growing concerns over global climate targets. Nasser points to four key performance-related reasons as to why he views Aramco as an attractive investment opportunity. The first is the company's competitive advantage due to scale, cost efficiency and low upstream carbon intensity. The second is Aramco's differentiated growth opportunities across upstream, downstream, carbon capture, hydrogen and renewables. The third is its financial strength and the fourth its dividend distribution policy. "We distributed a record $98bn in 2023 and we anticipate distributing over $124bn of dividends in 2024. This would represent an almost 30pc increase from 2023," Nasser said. Proceeds from the offering will help fund Saudi Arabia's Vision 2030 initiative, a government programme which aims to achieve increased diversification economically, socially and culturally. Saudi Arabia's finance minister Mohammed al-Jadaan suggested last month that the country may make changes to its plans, including delays or acceleration for some projects. Saudi Arabia recorded a sixth straight quarterly budget deficit in January-March this year, as spending outpaced revenue on the back of lower energy prices and curbs on its crude production. The launch of the secondary offering on 2 June coincides with an Opec+ ministers' meeting to decide whether to extend the group's current voluntary crude supply cuts into the second half of the year. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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