Saudi Aramco to Return $31 Billion to Shareholders, Government Despite Profit Dip — Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is down 0.7% to $75.74 a barrel

--European benchmark gas is up 3.5% to EUR36.74 a megawatt-hour

--Gold futures are down 0.3% to $2,435.00 a troy ounce

--LME three-month copper futures are down 0.3% at $8,830.50 a metric ton

TOP STORY:

Saudi Aramco to Return $31 Billion to Shareholders, Government Despite Profit Dip

Saudi Aramco plans to pay $31.05 billion in dividends to the Saudi government and its shareholders despite a fall in second-quarter profit.

Saudi Arabia's national oil company on Tuesday posted a quarterly net profit of $29.07 billion, down from the $30.83 billion it reported for the same period last year, after it sold less crude oil and its refining margins weakened, offsetting robust oil prices in the quarter.

The result was higher than the $27.7 billion the market had forecast, according to a median estimate provided by the company.

"Our strong results reflect our resilience and ability to adapt through market cycles," Chief Executive Amin H. Nasser said.

OTHER STORIES:

Why Californians Have Some of the Highest Power Bills in the U.S.

California is doing all it can to expand renewable energy production and rebuild its electrical infrastructure after flaws led to a series of devastating wildfires.

The state's big utilities are spending billions to bury power lines and insulate wires, while at the same time moving quickly away from fossil fuels by building big solar and wind farms and transmission lines to carry the power.

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Duke Energy Swings to Profit, Revenue Tops Views

Duke Energy reported a profit in its second quarter, as higher sales volumes and improved weather helped drive revenue above expectations.

The Charlotte, North Carolina, electric power and natural gas holding company on Tuesday posted net income $900 million, or $1.13 a share, swinging from a loss of $220 million, or 32 cents a share, in the same quarter a year ago.

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Marathon Petroleum 2Q Revenue Climbs with Higher Midstream Rates, Volumes

Marathon Petroleum recorded a smaller profit but higher revenue and better-than-expected adjusted earnings in the second quarter.

The oil company posted a profit of $1.52 billion, or $4.33 a share, compared with $2.23 billion, or $5.32 a share, in the same quarter a year ago.

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AngloGold Ashanti Swings to Profit and Backs Production Guidance

AngloGold Ashanti reported a swing to net profit for the second quarter of the year and backed its full-year production guidance.

The gold miner said Tuesday that net profit for the quarter ended June 30 was $253 million, compared with a loss of $83 million for the comparable period a year earlier.

MARKET TALKS:

Gold Futures Regain Ground After Monday's Unusual Sell-off -- Market Talk

1054 GMT - Gold futures rise 0.4% to $2,454.4 a troy ounce, recovering ground from Monday's broader market sell-off, when it sank as low as $2,403.8 an ounce. The precious metal was dragged down by the general panic at the start of the week despite its safe-haven characteristics, say Commerzbank analysts in a note. It is possible gold investors see growing hopes that the Federal Reserve will cut U.S. interest rates more than twice in 2024--which would boost gold's desirability--as unrealistic, or the precious metal's unusual weakness may lie in it being sold in sell-off phases to compensate for losses in other assets, Commerzbank says. This type of behavior has happened before in 2008 and 2020, but the price weakness didn't last long and gold recovered losses after a short time, Commerzbank adds. (joseph.hoppe@wsj.com)

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Palm Oil Falls Amid Stronger Ringgit, Market Uncertainty -- Market Talk

1028 GMT - Palm oil fell, extending Monday's losses. Declines were driven by appreciation of the Malaysian ringgit against the U.S. dollar, as that makes it more expensive for importers to buy palm oil using U.S. dollars and reduces their purchasing power, Lim Tai An, Darren, commodities strategist at Phillip Nova, said in a note. The global equity market rout also weighed on sentiment, Lim added. The Bursa Malaysia Derivatives contract for October delivery fell MYR80 to MYR3,707 a ton. (kimberley.kao@wsj.com)

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Saudi Arabia's Crude Price Hike to Asia Fell Short of Expectations -- Market Talk

1026 GMT - Saudi Arabia's price increase for September loadings of its flagship crude to Asian customers signals confidence about demand but falls short of market expectations, according to analysts. State-owned Saudi Aramco lifted its official selling price for Arab Light to Asia by 20 cents to $2 a barrel above the Oman/Dubai average, against estimates of a 50 cent increase, according to DNB Markets' Helge Andre Martinsen. Meanwhile, Aramco's decision to slash its Arab Light price by $2.75 a barrel for customers in northwest Europe might be an indication that Saudi Arabia is trying to increase its market share, the senior energy analyst says in a note to clients. (giulia.petroni@wsj.com)

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Europe's Gas Prices Regain Ground on Middle East Disruption Fears -- Market Talk

0825 GMT - European gas prices bounce back on Tuesday, boosted by concerns over supply disruptions in the Middle East as fears of an Iranian retaliatory attack on Israel grow. Benchmark Dutch TTF trades 2% higher at EUR36.19 a megawatt hour, after plunging in the previous trading session amid a broader selloff in global financial markets. Stronger demand for liquefied natural gas in Asia is also supporting prices, drawing more supply to the continent and leaving Europe with lower volumes. According to analysts, the market is also keeping a close eye on Russia, following reports that an LNG carrier docked at the Arctic LNG 2 project, indicating a potential restart of activities despite U.S. sanctions. (giulia.petroni@wsj.com)

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Oil Regains Some Ground After Sharp Selloff in Global Markets

0739 GMT - Oil prices are regaining some ground after sliding in the previous session amid concerns over weak demand and a sharp global markets selloff. Brent crude is up 0.2% at $76.46 a barrel, while WTI trades 0.4% higher at $73.25 a barrel. "Investors have been exiting commodities in recent weeks, [as] highlighted in positioning data," ING analysts say in a note. "This souring in speculative appetite comes despite oil fundamentals still looking supportive." Growing fears of a full-scale war in the Middle East and overnight data showing U.S. service sector activity rebounded in July are now providing some support to prices. Reports that production at Libya's Sharara oil field-the country's largest-has been completely halted due to protests at the site is also offsetting some of the macro bearishness, according to analysts. (giulia.petroni@wsj.com)

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Iron Ore Falls, May See Rebound Soon -- Market Talk

0306 GMT - Iron ore falls in early Asian trade. Markets are still weighing mixed signals about China's economy which dampen sentiment about demand for materials like iron ore, but fundamentals will likely improve gradually over time, analysts at Galaxy Futures write in a note. From a valuation perspective prices of the steelmaking material have scope to rebound, they add, while an expected rise in demand for steel should also lend support. The most-traded iron-ore contract on the Dalian Commodity Exchange is 0.6% lower at CNY786.50/ton. (kimberley.kao@wsj.com)

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Malaysia's Palm Oil Exports in July likely Rose Significantly -- Market Talk

0129 GMT - Malaysia's palm oil exports in July likely rose 27% on month to 1.53 million tons, say CIMB Securities analysts Ivy Ng Lee Fang and Lim Yue Jia in a note. Palm oil inventory likely fell 2% on month to 1.79 million ton, below July's historical average for palm oil stock level over the past decade of 1.88 million tons, on higher-than-expected exports amid more competitive pricing, they say. CPO output is expected to rise 12.9% on month to 1.82 million tons in July, significantly higher than past 10-year average of 1.66 million tons, mainly due to improved productivity, they add. Malaysian Palm Oil Board's official data are due Aug. 12. (yingxian.wong@wsj.com)

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Copper Rises as Supply Concerns Remain -- Market Talk

0105 GMT - Copper rises in early Asian trade. Base metals were not immune from the global selloff with copper down as much as 4%, ANZ Research analysts say in a note. However, challenges in copper mine supply could keep the concentrate market tight, the analysts say. This could subsequently reduce the output of refined copper, particularly in China, they add. The three-month LME copper contract is 0.8% higher at $8,962.50 a ton. (amanda.lee@wsj.com)

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Lithium Prices May Not Have Hit Bottom -- Market Talk

0042 GMT - Lithium isn't out of the woods yet, says UBS analyst Levi Spry, after a plunge in prices for the battery metal. "We had hoped Tianqi's decision to take the extra 200,000 [metric tons] was a sign things might be improving, but with spot trading at US$870/ton, more needs to play out before the market rebalances," Spry says in a note. UBS has a FY 2025 lithium-price forecast of US$1,000/ton, just below consensus of US$1,015/ton, he says. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

Write to Barcelona Editors at barcelonaeditors@dowjones.com

(END) Dow Jones Newswires

August 06, 2024 09:17 ET (13:17 GMT)

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