MARKET MOVEMENTS:

--Brent crude oil is down 0.6% at $78.87 a barrel

--European benchmark gas is down 2% at EUR38.56 a megawatt hour

--Gold futures are 0.1% higher at $1,994 a troy ounce

--LME three-month copper futures are up 0.3 % at $8,619.50 a metric ton

--Wheat futures are 0.1% higher at $6.19 a bushel

 

TOP STORY:

BP Beats Expectations With $5 Billion Profit After Fending Off Shareholder Challenge

British oil major BP beat expectations in the first quarter on strong results from trading oil and gas, and said Tuesday that it will buy back a further $1.75 billion in shares.

BP's first-quarter underlying replacement-cost profit--a metric similar to net income that U.S. oil companies report--of $4.96 billion exceeded the $4.27 billion average forecast by 25 analysts in a survey compiled by the company. It compared with $6.25 billion a year prior.

The result followed a record-high full-year profit in 2022, and a move by BP in February to scale back earlier targets for reducing its oil-and-gas production.

That 2022 profit of $27.7 billion--by the same underlying replacement-cost measure--and BP's plans to increase spending on oil-and-gas production had made the company a target of some shareholders, including U.K. pension funds, who were angry about its slower-than-planned shift away from fossil fuels.

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OTHER STORIES:

The Air Has Come Out of the Dollar

The U.S. economy no longer looks so exceptional. That is bad news for the dollar.

The greenback has fallen about 8.3% from a peak in September, as tracked by the WSJ Dollar Index, and is experiencing its worst start to the year since 2018.

Investors are betting the U.S. currency has further to fall as the Federal Reserve nears the end of its most aggressive program of interest-rate increases since the 1980s. Also weighing on the dollar: concerns over the banking system, a potential U.S. debt default and expectations, shared by many economists, that the U.S. will slip into recession in the coming months.

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H2 Green Steel Gets EUR1.79 Bln Supply Deal From Italy's Marcegaglia

H2 Green Steel said Tuesday that it has signed a seven-year deal worth around 1.79 billion euros ($1.96 million) to deliver its low-carbon steel to Italian steel group Marcegaglia.

H2 Green Steel plans to produce steel by replacing coal with green hydrogen that is produced using fossil-free energy, reducing carbon-dioxide emissions by up to 95% compared with traditional steelmaking.

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Mitsui & Co. to Keep Pursuing Natural-Gas Project in Russia

The chief executive of Mitsui & Co., a Japanese trading company partly owned by Warren Buffett's Berkshire Hathaway, said Tuesday that his company would continue pursuing a natural-gas project under development in Russia.

Kenichi Hori said the Arctic LNG 2 project in Russia's polar region was an important part of global efforts to increase the supply of natural gas.

Mr. Hori said the project's first train, or exporting facility for liquefied natural gas, was expected to be completed by the end of this year. He said no talks were under way to revise the construction plan but said if there were changes he would announce them.

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MARKET TALKS:

Oil Inches Up Ahead of Fed, ECB Meetings This Week

0749 GMT - Oil prices are edging higher as investors await a busy week of central bank meetings and economic data. Brent crude oil gains 0.3% to $79.52 a barrel while WTI adds 0.2% to $75.821 a barrel. Investors are looking ahead to Wednesday's meeting of the Federal Reserve and what is broadly expected to be another quarter-point rate increase. The European Central Bank meets on Thursday, also to decide on the path of interest rates. Friday's jobs report will also be keenly watched following recent signs that the labor market is loosening. (william.horner@wsj.com)

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Metals Mixed Ahead of Wednesday's Fed Decision

0743 GMT - Metals prices are mixed, with markets looking to major macro events due later this week. Three-month copper is up 0.6% to $8,647 a metric ton, while nickel is down 1% to $24,040 a ton. Gold, meanwhile, is flat at $1,991.60 a troy ounce. "The macro mood is mixed and volatility is low ahead of three big market-moving events," Peak Trading Research says in a note, referring to the Federal Reserve's interest-rate decision due tomorrow, the European Central Bank's decision on Thursday and U.S. nonfarm payrolls on Friday. Investors are pricing in a 25 basis point hike but are hoping it will be the last of this current cycle, which should benefit risk assets and weaken the dollar, Peak Trading Research adds. (yusuf.khan@wsj.com)

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Vale Indonesia Seems Like a Strong Nickel Play

0314 GMT - Vale Indonesia's strong foothold in Indonesia's nickel sector and investment in new growth projects should support its long-term earnings growth, say Maybank analysts Richard Suherman and Etta Rusdiana Putra in a note. The Indonesian mining company is the analysts' top pick in the metal space, as they reckon that China's potential economic recovery could be a major growth tailwind in 2H. Maybank raised its 2023 net profit estimates by 12% to factor in the strength of LME-listed nickel prices year to date. Maybank maintains its buy rating and target price of IDR8,800 on the stock. Shares are down 0.4% at IDR6,950. (yiwei.wong@wsj.com)

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Copper Rises; Uptrend Seen on Low Inventory

0205 GMT - Copper rises in the early Asian session. Bound by price sensitive Chinese consumer dip buying and U.S. recession fears, copper prices have been trapped so far this year between the mid-$8000s and low $9,000s, say Goldman Sachs analysts in a research note. They expect copper prices to rise ahead given that the market is in a "significant deficit phase, with the velocity of global inventory draw from peak seasonal surplus in Q1 to the end of April the highest since 2004." The three-month LME copper contract is up 0.9% at $8,671.00 a ton. (bingyan.wang@wsj.com)

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BHP Leads Big Australian Miners on Copper

0158 GMT - BHP's already-strong copper business is about to be strengthened further by the acquisition of Oz Minerals, due to close Tuesday, UBS analysts say in a note. When it comes to copper, BHP is ahead of Australia-listed rivals Rio Tinto and South32 on a number of key metrics, including projected total copper Ebitda and copper as a proportion of group Ebitda through FY 2030, they say. South32 is expected to have the biggest near-term copper production growth, though. "Copper exposure is sought for leverage to electrification of transport and decarbonization of power grids" although "the universe of ASX listed copper stocks has shrunk post BHP's acquisition of OZL," says UBS. Still, UBS keeps a sell rating on BHP due to a cautious view on iron-ore prices for the next six to 12 months. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

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Write to Yusuf Khan at yusuf.khan@wsj.com

 

(END) Dow Jones Newswires

May 02, 2023 07:00 ET (11:00 GMT)

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