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Peru to increase public spending in mining regions to curb social conflicts

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© Reuters. FILE PHOTO: Felicita Quispe looks on as trucks pass on a highway used by mining firms, in the community of Chumbivilcas, outside of Cusco, Peru October 13, 2021. Picture taken October 13, 2021. REUTERS/Angela Ponce

LIMA (Reuters) – Peru will increase public spending in mining regions in a bid to de-escalate social conflicts that have impacted mining output, Finance Minister Oscar Graham said on Tuesday.

Peru is the world’s No. 2 copper producer and mining is a key source of tax revenue.

But recent disputes between miners and local communities have forced two key copper mines to temporarily halt operations this year, accounting for a combined 1.5% of the country’s gross domestic product.

“Considering the issue of social conflicts we are going to pass a decentralized investment package in mining zones,” Graham said at the opening of a conference organized by Peruvian mining chamber SNMPE. He did not give a figure for the proposed public spending.

Mining in Peru is concentrated in the historically impoverished Andean region. Local communities there, many of them indigenous, have long complained they have failed to benefit from the mineral riches.

Leftist President Pedro Castillo was elected last year with massive support in mining regions.

MMG Ltd’s Las Bambas copper mine suspended operations on April 20 after two local communities entered company property. Operations remain suspended.

Southern Copper (NYSE:SCCO) Corp’s Cuajone mine resumed operations this month after a 50-day halt.

Commodities

Oil falls 2.5% as U.S. refiners ramp up output, equities retreat

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© Reuters. FILE PHOTO: An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS

By Arathy Somasekhar

HOUSTON (Reuters) -Oil prices fell 2.5% on Wednesday, reversing early gains as traders grew less worried about a supply crunch after government data showed U.S. refiners ramped up output, and as crude futures followed Wall Street lower.

Brent crude settled down $2.82, or 2.5%, at $109.11 a barrel. U.S. West Texas Intermediate (WTI) crude fell $2.81, or 2.5%, to $109.59 a barrel.

Both benchmarks gave up early gains of $2-$3 a barrel following a change in risk sentiment as equity markets fell, said UBS analyst Giovanni Staunovo.

Brent remained at an unusual discount to WTI a day after settling below the U.S. benchmark for the first time since May 2020. Traders and analysts cited strong export demand and tightening U.S. crude stockpiles.

U.S. crude inventories fell by 3.4 million barrels last week, government data showed, an unexpected drawdown, as refiners ramped up output in response to tight product inventories and near-record exports that have forced U.S. diesel and gasoline prices to record levels. [EIA/S]

U.S. gasoline prices fell 5%, two days after touching a record high.

Capacity use on both the East Coast and Gulf Coast was above 95%, putting those refineries close to their highest possible running rates.

“While on the face of it, the report was extraordinarily bullish, they (refiners) are racing to put more refined product on the market… there’s obviously a refiners response,” said John Kilduff, a partner at Again Capital LLC.

The dollar strengthened and global stocks retreated on concerns about economic growth and rising inflation.

Bearish sentiment also followed reports that the United States is planning to relax sanctions against Venezuela and allow Chevron Corp (NYSE:CVX) to negotiate oil licenses with state producer PDVSA.

“The perception that we could see some more supply coming Venezuela coming into the market, along with the equity markets, it’s causing some profit taking in a much-needed technical correction in the crude,” said Dennis Kissler, senior vice president for trading at BOK Financial.

The European Union’s failure to persuade Hungary to lift its veto on a proposed embargo on Russian oil was adding price pressure, although some diplomats expect agreement on a phased ban at a summit at the end of May.

Ongoing supply concerns remained supportive. Russian crude output in April fell by nearly 9% from the previous month, an internal OPEC+ report showed on Tuesday, as Western sanctions on Moscow curbed exports.

On the demand side, hopes of further lockdown easing in China boosted expectations of a recovery. Authorities allowed 864 of Shanghai’s financial institutions to resume work, sources said, and China has relaxed some COVID test rules for U.S. and other travelers.

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Commodities

U.S. extends application deadline for nuclear power rescue program

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© Reuters. FILE PHOTO: Spent fuel storage is seen at the San Onofre Nuclear Generating Station near San Clemente, California, U.S., April 21, 2022. REUTERS/Nichola Groom

WASHINGTON (Reuters) – The U.S. Department of Energy said on Wednesday it has extended a deadline by 47 days, to July 5, for nuclear power plants to apply for federal funding to keep them running.

The first stage of the program is aimed at saving two plants, one in California and one in Michigan. The Biden administration wants to keep nuclear generators online because the industry generates more than half the country’s carbon-free electricity.

The DOE statement came two days after two industry trade groups, Edison Electric Institute and Nuclear Energy Institute, sent a letter to Energy Secretary Jennifer Granholm requesting the extension on behalf of their members.

“We received a request to extend the application period, which could keep at-risk reactors online, delivering much needed clean energy to the grid,” DOE’s assistant secretary for nuclear energy, Kathryn Huff, said in the statement.

Under the program, which was launched last month, owners of nuclear reactors that are scheduled to retire can apply for a portion of $6 billion in available funding.

Entergy Corp (NYSE:ETR)’s Palisades plant in Michigan, which may be eligible for the funding, is due to shut down on May 31. The Diablo Canyon facility in California, owned by PG&E (NYSE:PCG) Corp, is scheduled to retire in 2025.

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Commodities

Oil falls 2% as U.S. refiners ramp up output, equities retreat

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© Reuters. FILE PHOTO: An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS

By Arathy Somasekhar

HOUSTON (Reuters) -Oil prices reversed course and fell over 2% on Wednesday after government data showed U.S. refiners ramped up output, easing worries of a supply crunch, and as traders took cues from a drop in equities market.

Brent crude was down $2.41 cents, or 2.4%, at $109.52 a barrel at 12:05 a.m. ET (1605 GMT), while U.S. West Texas Intermediate (WTI) crude fell $2.5 cents, or 2.2%, to $1 09.85 a barrel.

Brent settled below WTI on Tuesday – the first time since May 2020 – and was still unusually trading at a discount due to strong export demand and tightening U.S. crude stockpiles.

U.S. crude inventories fell by 3.4 million barrels last week, government data said, an unexpected drawdown as refiners ramped up output in response to tight product inventories and near-record exports that have forced diesel and gasoline prices to record levels in the United States. [EIA/S]

Capacity use on both the East Coast and Gulf Coast was above 95%, putting those refineries close to their highest possible running rates.

“While on the face of it, the report was extraordinarily bullish, they (refiners) are racing to put more refined product on the market… there’s obviously a refiners response,” said John Kilduff, a partner at Again Capital LLC.

Both benchmarks also gave up earlier gains of $2-$3 a barrel following a change in risk sentiment as equity markets fell, said UBS analyst Giovanni Staunovo.

The dollar strengthened and global stocks retreated on Wednesday as concerns about economic growth and rising inflation soured sentiment.

Bearish sentiment also followed reports that the United States is planning to relax sanctions against Venezuela and allow Chevron Corp (NYSE:CVX) to negotiate oil licences with state producer PDVSA.

“The perception that we could see some more supply coming Venezuela coming into the market, along with the equity markets, it’s causing some profit taking in a much needed technical correction in the crude,” Dennis Kissler, senior vice president for trading at BOK Financial said.

The European Union’s failure to persuade Hungary to lift its veto on a proposed embargo on Russian oil was adding price pressure, although some diplomats expect agreement on a phased ban at a summit at the end of May.

Ongoing supply concerns, however, were still supportive. Russian crude output in April fell by nearly 9% from the previous month, an internal OPEC+ report showed on Tuesday, as Western sanctions on Moscow curbed exports.

On the demand side, hopes of further lockdown easing in China have boosted expectations of a recovery. Authorities allowed 864 of Shanghai’s financial institutions to resume work, sources said on Wednesday, and China has relaxed some COVID test rules for U.S. and other travellers.

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