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S&P 500, Nasdaq snap losing streaks after jobless claims rise

  • Weekly jobless claims rise in line with estimates
  • Moderna, Pfizer up as FDA authorizes updated COVID boosters
  • Exxon climbs after boosting buyback program
  • Indexes up: Dow 0.55%, S&P 0.75%, Nasdaq 1.13%

Dec 8 (Reuters) – The S&P 500 (.SPX) ended higher on Thursday, snapping a five-session losing streak, as investors interpreted data showing a rise in weekly jobless claims as a sign the pace of interest rate hikes could soon slow.

Wall Street’s main indexes had come under pressure in recent days, with the S&P 500 shedding 3.6% since the beginning of December on expectations of a longer rate-hike cycle and downbeat economic views from some top company executives.

Such thinking had also weighed on the Nasdaq Composite (.IXIC), which had posted four straight losing sessions prior to Thursday’s advance on the tech-heavy index.

Stocks rose as investors cheered data showing the number of Americans filing claims for jobless benefits increased moderately last week, while unemployment rolls hit a 10-month high toward the end of November.

The report follows data last Friday that showed U.S. employers hired more workers than expected in November and increased wages, spurring fears that the Fed might stick to its aggressive stance to tame decades-high inflation.

Markets have been swayed by data releases in recent days, with investors lacking certainty ahead of Federal Reserve guidance next week on interest rates.

Such behavior means Friday’s producer price index and the University of Michigan’s consumer sentiment survey will likely dictate whether Wall Street can build on Thursday’s rally.

“The market has to adjust to the fact that we’re moving from a stimulus-based economy – both fiscal and monetary – into a fundamentals-based economy, and that’s what we’re grappling with right now,” said Wiley Angell, chief market strategist at Ziegler Capital Management.

The Dow Jones Industrial Average (.DJI) rose 183.56 points, or 0.55%, to close at 33,781.48; the S&P 500 (.SPX) gained 29.59 points, or 0.75%, to finish at 3,963.51; and the Nasdaq Composite (.IXIC) added 123.45 points, or 1.13%, at 11,082.00.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022. REUTERS/Brendan McDermid

Nine of the 11 major S&P 500 sectors rose, led by a 1.6% gain in technology stocks (.SPLRCT).

Most mega-cap technology and growth stocks gained. Apple Inc (AAPL.O), Nvidia Corp (NVDA.O) and Amazon.com Inc (AMZN.O) rose between 1.2% and 6.5%.

Microsoft Corp (MSFT.O) ended 1.2% higher, despite giving up some intraday gains after the Federal Trade Commission filed a complaint aimed at blocking the tech giant’s $69 billion bid to buy Activision Blizzard Inc . The “Call of Duty” games maker closed 1.5% lower.

The energy index (.SPNY) was an exception, slipping 0.5%, despite Exxon Mobil Corp (XOM.N) gaining 0.7% after announcing it would expand its $30-billion share repurchase program. The sector had been under pressure in recent sessions as commodity prices slipped: U.S. crude is now hovering near its level at the start of 2022.

Meanwhile, Moderna Inc (MRNA.O) advanced 3.2% after the U.S. Food and Drug Administration authorized COVID-19 shots from the vaccine maker that target both the original coronavirus and Omicron sub-variants for use in children as young as six months old.

The regulator also approved similar guidance for fellow COVID vaccine maker Pfizer Inc (PFE.N), which rose 3.1%, and its partner BioNTech, whose U.S.-listed shares gained 5.6%.

Rent the Runway Inc (RENT.O) posted its biggest ever one-day gain, jumping 74.3%, after the clothing rental firm raised its 2022 revenue forecast.

Volume on U.S. exchanges was 10.07 billion shares, compared with the 10.90 billion average for the full session over the last 20 trading days.

The S&P 500 posted 15 new 52-week highs and three new lows; the Nasdaq Composite recorded 82 new highs and 232 new lows.

Reporting by Shubham Batra, Ankika Biswas, Johann M Cherian in Bengaluru and David French in New York; Editing by Vinay Dwivedi, Sriraj Kalluvila, Anil D’Silva and Richard Chang

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Exclusive: Russian oil cap doubts spur insurer fears of ships left at sea

LONDON/BRUSSELS, Nov 10 (Reuters) – Oil-laden tankers risk being left languishing at sea if insurers do not urgently get clarity on an unfinished G7 and European Union plan to cap the price of Russian crude, two senior industry executives told Reuters.

The Group of Seven (G7), which includes the United States, Britain, Germany and France, agreed in September to enforce a low price on sales of Russian oil.

U.S. officials said the move, which is due to start on Dec. 5, was aimed at allowing it to continue to flow, heading off a potential price shock after total EU bans were ratified in June.

And with just three weeks to go, time is running out to fully convince the shipping services industry it will work.

Concerns are centred around a scenario in which insurers discover that oil in transit at sea, which was believed to have been sold below the price cap, was in fact sold above it.

This would trigger the withdrawal of insurance cover as well as a refusal by buyers to accept delivery, leading to financial and logistical headaches and risking environmental dangers.

“If the time is too short, I think everyone will have a Plan B to de-risk, terminate, stay away, not maybe conclude any new contracts until there is some clarity,” said George Voloshin, Global Anti-Financial Crime Expert at ACAMS, the Association of Certified Anti-Money Laundering Specialists which consults with oil industry bankers, traders and insurers.

If insurance was withdrawn mid-voyage, buyers and traders would have to figure out what to do with a stranded cargo potentially exposed to sanctions, complicating a strategy to deprive Russia of funds over its invasion of Ukraine.

“It will probably be quite messy,” Voloshin said.

A European Commission official said the EU is aware that much more additional detail will be needed as time runs short for businesses to learn about their obligations, but that the issue must be dealt with at the G7 level.

The official spoke to Reuters on condition of anonymity because they are not authorized to speak about the matter.

U.S. State Department Ambassador James O’Brien, who heads the coordination of sanctions against Russia, said G7 countries will be ready with all the operational details and that technical talks were underway on pricing and governance.

‘SANCTION ISLANDS’

But if information gaps remain on the cap, it is possible oil-filled tankers could be left without insurance and marooned near ports, posing a major safety issue for nearby countries in the event of a spill, as well as any cleanup costs.

“In that situation, the vessel will go off risk and financial and technical services will be withdrawn and no one is going to take delivery of the cargo,” Mike Salthouse, head of claims at British-based global ship insurer North, told Reuters.

“This would be a bad development as no one will want uninsured ships sitting off coasts,” he added.

Salthouse said an owner of a ship which was potentially not earning anything for many months “will price that into any decision they make about carrying cargo in the future”, adding that this was likely to act as a disincentive.

“If that happens too often, it will run contrary to what the EU/G7 Coalition is trying to achieve.”

Although the EU ratified the price cap last month, insurers point to still unpublished legal details which must align with incomplete but more detailed U.S. Treasury guidance, especially over guarantees that insurers will not face surprise obstacles in the middle of a ship’s voyage.

“We need regulation in the G7 community which is similar, that is, the U.S. – where we have interim guidelines in the meantime – the U.K. and the EU,” said Lars Lange, secretary general of the International Union of Marine Insurance (IUMI).

“We fear that if we get different regulations from these three ‘sanction islands’ we will struggle to comply with all at the same time,” Lange said, adding that any vessels which are spurned by ports pose serious consequences.

The IUMI and the separate International Group insurance association have let G7 and EU governments know that their guidelines must include guarantees that the proof that a Russian cargo was sold in line with the cap is all that an owner is required to check before agreeing to load and carry the cargo.

Editing by Alexander Smith

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Exxon’s record-smashing Q3 profit nearly matches Apple’s

  • Oil firm smashes Wall Street forecasts with $19.7 billion profit
  • Exxon’s fossil-fuel bets eclipse rivals Shell, TotalEnergies
  • Company projects flat oil output this year on Russia losses

HOUSTON, Oct 28 (Reuters) – Exxon Mobil Corp (XOM.N) on Friday smashed expectations as soaring energy prices fueled a record-breaking quarterly profit, nearly matching that of tech giant Apple.

Its $19.66 billion third-quarter net profit far exceeded recently raised Wall Street forecasts as skyrocketing natural gas and high oil prices put its earnings within reach of Apple’s (AAPL.O) $20.7 billion net for the same period.

As recently as 2013, Exxon ranked as the largest publicly traded U.S. company by market value – a position now held by Apple. Exxon shares rose 3% to $110.70, a record high that gave it a market value of $461 billion.

Oil company profits have soared this year as rising demand and an undersupplied energy market collided with Western sanctions against Russia over its invasion of Ukraine. U.S. exports of gas and oil to Europe have jumped and promise to set all-time profit records for the industry.

The top U.S. oil producer reported a per-share profit of $4.68, exceeding Wall Street’s $3.89 consensus view, on a huge jump in natural gas earnings, continued high oil prices and strong fuel sales.

“Where others pulled back in the face of uncertainty and a historic slowdown, retreating and retrenching, this company moved forward, continuing to invest,” Chief Executive Darren Woods told investors. Its quarterly profits “reflect that deep commitment” as well as higher prices, he added.

Exxon led record gains among oil majors in the second quarter and has leapfrogged Shell Plc (SHEL.L) and TotalEnergies SE (TTEF.PA) with earnings almost twice as big from continued bets on fossil fuels as competitors shifted investment to renewables.

Reuters Graphics Reuters Graphics

Exxon banked $43 billion in the first nine months of this year, 19% more than in the same period of 2008, when oil prices traded at a record level of $140 per barrel.

Earnings from pumping oil and gas tripled last quarter while profit from selling motor fuels jumped tenfold compared with year-ago levels. Natural gas sales to Europe and soaring demand for diesel fuel led the company’s better-than-expected results.

“The refining businesses – both in the U.S. and international – was the star performer,” said Peter McNally, an analyst at Third Bridge.

Those rising fuel profits have renewed calls by U.S. President Joe Biden for companies to invest the windfall from this year’s energy price run-up in production rather than buy back their own shares.

Exxon will maintain its $30 billion share buyback through 2023 while increasing dividends, Chief Financial Officer Kathryn Mikells told Reuters. On Friday, it declared a fourth-quarter per-share dividend of 91 cents, up 3 cents, and will pay $15 billion to shareholders this year.

Exxon said its U.S. oil and gas production from the Permian Basin was near 560,000 barrels of oil and gas per day (boepd), a record. Production for the year will increase about 20% over 2021, said CEO Woods.

“We’re optimizing and adjusting our development plans,” he told analysts, with the full-year production gain below the 25% increase Exxon had forecast in February.

Results also were helped by an almost 100,000-boepd increase over the previous quarter in Guyana, where Exxon leads a consortium responsible for all output in the South American nation.

But its withdrawal from Russia reduced its overall production forecast for the year by about 100,000 barrels per day. Exxon said its Russian assets were expropriated.

“We are going to end up at about 3.7 million barrels a day for the full year,” Mikells said, down from a 3.8 million bpd goal set in February.

Reporting by Sabrina Valle; Editing by Ana Nicolaci da Costa, Jonathan Oatis and Marguerita Choy

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Shell reports drop in profit to $9.45 billion, hikes dividend

  • Shell to boost dividend by 15%
  • Announces plans to buy further $4 billion in shares
  • Profit hit by weak LNG trading and refining

LONDON, Oct 27 (Reuters) – Shell (SHEL.L) on Thursday posted a third-quarter profit of $9.45 billion, slightly below the second quarter’s record high, due to weaker refining and gas trading, and said it will sharply boost its dividend by the end of 2022 when its CEO departs.

The British oil and gas giant also extended its share repurchasing programme, announcing plans to buy $4 billion of stock over the next three months after completing $6 billion in purchases in the second quarter.

Shell said it intends to increase its dividend by 15% in the fourth quarter, when Chief Executive Officer Ben van Beurden will step down after nine years at the helm. The dividend will be paid in March 2023.

It will be the fifth time that Shell will have raised its dividend since slashing it by more than 60% in the wake of the 2020 COVID-19 pandemic.

Shell shares were up nearly 6% by 1430 GMT, compared with a 3.5% gain for the broader European energy sector (.SXEP).

Van Beurden will be succeeded by Wael Sawan, the current head of Shell’s natural gas and low-carbon division.

With a profit of $30.5 billion so far this year, Shell is well on track to exceed its record annual profit of $31 billion in 2008.

The strong earnings were likely to intensify calls in Britain and the European Union to impose further windfall taxes on energy companies as governments struggle with soaring gas and power bills.

Van Beurden said the energy industry “should be prepared and accept” that it will face higher taxes to help struggling parts of society.

Shell’s shares have gained more than 40% so far this year, lifted by soaring oil and gas prices in the wake of Russia’s invasion of Ukraine in February and amid tightening global oil and gas supplies.

French rival TotalEnergies posted a record profit in the third quarter.

Reuters Graphics Reuters Graphics

LNG WOES

Shell’s quarterly adjusted earnings of $9.45 billion, which slightly exceeded forecasts, were hit by a sharp 38% quarterly drop in the gas and renewables division, the company’s largest.

Earnings for the second quarter were a record $11.5 billion.

The world’s largest trader of liquefied natural gas (LNG) produced 7.2 million tonnes of LNG in the period, 5% less than in the previous quarter, mainly due to ongoing strikes at its Australian Prelude facility.

Its gas trading business was hit this quarter by “supply constraints, coupled with substantial differences between paper and physical realisations in a volatile and dislocated market.”

Earnings from the refining, chemicals and oil trading division also dropped sharply by 62% in the quarter due to weaker refining margins.

Shell said it would stick to its plans to spend $23 billion to $27 billion this year.

Shell’s cash flow in the third quarter dropped sharply to $12.5 billion from $18.6 billion in the second quarter due to a large working capital outflow of $4.2 billion as a result of changes in the value of European gas inventories.

Shell’s net debt rose by around $2 billion to $46.4 billion due to lower cash flow from operations and to pay for a recent acquisition. Its debt-to-capital ratio, known as gearing, also rose above 20%.

Reuters Graphics

Reporting by Ron Bousso and Shadia Nasralla; editing by Jason Neely, Simon Cameron-Moore and Paul Simao

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Shadia Nasralla

Thomson Reuters

Writes about the intersection of corporate oil and climate policy. Has reported on politics, economics, migration, nuclear diplomacy and business from Cairo, Vienna and elsewhere.

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Russia’s Sechin says Taiwan will return to China ‘on schedule’

  • Sechin: China will get Taiwan on time
  • Sechin praises Saudi Arabia
  • Sechin says BP a ‘shadow’ shareholder
  • BP: continuing to pursue an exit

BAKU, Oct 27 (Reuters) – Igor Sechin, chief executive of Russian oil giant Rosneft (ROSN.MM) and one of Vladimir Putin’s closest allies, on Thursday heaped praise on China’s leaders and said Taiwan would return to its “native harbour” on time.

Sechin said that decisions taken by the 20th Communist Party Congress, which cemented Xi Jinping position as the most powerful Chinese leader since Mao Zedong, would provide for a new level of development for the country.

The deepening “no limits” partnership between the rising superpower of China and the natural resources titan of Russia is one of the most intriguing geopolitical developments of recent years – and one the West is watching with anxiety.

“The position of (China’s) leadership is highly respected, which calmly and openly, without false premises, sets out its positions, even on the most difficult issues, such as the problem of Taiwan, which in this regard can be assessed as somewhat exaggerated,” Sechin told an international economic forum in Baku, previously held in Italy’s Verona.

He said U.S. attempts to create its own complex microchip industry showed that “Taiwan’s return to its native harbour” was “on schedule”.

Taiwan’s Foreign Ministry condemned the comments, saying only the island’s people could decide their future.

“Neither our government, people nor the international community can accept absurd remarks that are in China’s cortege or demean Taiwan’s sovereign status,” it said in a statement.

China claims democratically governed Taiwan as its own territory and has ramped up military and political pressure against the island over the past two years. Taipei strongly rejects Beijing’s sovereignty claims.

Russia has repeatedly warned the United States against meddling in China’s affairs while President Vladimir Putin has explicitly backed Xi over the fate of the island where the defeated Republic of China government fled in 1949 after losing the Chinese civil war to Mao’s communists.

BP’S DIVIDEND

Sechin said Rosneft had transferred $700 million in second-half 2021 dividends into special accounts for BP (BP.L), which remained Rosneft’s “shadow” shareholder despite a decision to leave the company following the start of what Moscow calls its “special military operation” in Ukraine.

BP said its position on Russia has remained unchanged.

“In February we announced our decision to exit Rosneft and our other Russian businesses – we continue to pursue that,” it said in emailed comments.

Sechin also said that Saudi Arabia’s position on the global oil market was “reasonable” and based on analysis of oil supply and demand.

The United States, he said, had tried to persuade Saudi Arabia to postpone oil output cuts as part of OPEC+.

“Today, the energy policy of the (Joe) Biden administration is solving exclusively pre-election tasks with a planning horizon of two weeks, given that the elections to the U.S. Congress are on November 8,” Sechin said.

“This includes attempts to persuade Saudi Arabia to at least postpone the announcement of this decision until the elections.”

The OPEC+ group of global leading oil producers, which includes Saudi Arabia and Russia, agreed this month to cut its combined output by 2 million barrels per day despite opposition from the United States, which wants lower fuel prices.

Saudi Arabia rejected criticism of an OPEC+ decision to cut its oil production target despite U.S. objections and said that Washington’s request to delay the cut by a month would have had negative economic consequences.

Reporting by Nailia Bagirova and Olesya Astakhova; Additional reporting by Ron Bousso and Ben Blanchard in London; Writing by Vladimir Soldatkin; Editing by Guy Faulconbridge, Nick Macfie and Mike Harrison

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World is in its ‘first truly global energy crisis’ – IEA’s Birol

SINGAPORE, Oct 25 (Reuters) – Tightening markets for liquefied natural gas (LNG) worldwide and major oil producers cutting supply have put the world in the middle of “the first truly global energy crisis”, the head of the International Energy Agency (IEA) said on Tuesday.

Rising imports of LNG to Europe amid the Ukraine crisis and a potential rebound in Chinese appetite for the fuel will tighten the market as only 20 billion cubic meters of new LNG capacity will come to market next year, IEA Executive Director Fatih Birol said during the Singapore International Energy Week.

At the same time the recent decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to cut 2 million barrels per day (bpd) of output is a “risky” decision as the IEA sees global oil demand growth of close to 2 million bpd this year, Birol said.

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“(It is) especially risky as several economies around the world are on the brink of a recession, if that we are talking about the global recession…I found this decision really unfortunate,” he said.

Soaring global prices across a number of energy sources, including oil, natural gas and coal, are hammering consumers at the same time they are already dealing with rising food and services inflation. The high prices and possibility of rationing are potentially hazardous to European consumers as they prepare to enter the Northern Hemisphere winter.

Europe may make it through this winter, though somewhat battered, if the weather remains mild, Birol said.

“Unless we will have an extremely cold and long winter, unless there will be any surprises in terms of what we have seen, for example Nordstream pipeline explosion, Europe should go through this winter with some economic and social bruises,” he added.

For oil, consumption is expected to grow by 1.7 million bpd in 2023 so the world will still need Russian oil to meet demand, Birol said.

G7 nations have proposed a mechanism that would allow emerging nations to buy Russian oil but at lower prices to cap Moscow’s revenues in the wake of the Ukraine war.

Birol said the scheme still has many details to iron out and will require the buy-in of major oil importing nations.

A U.S. Treasury official told Reuters last week that it is not unreasonable to believe that up to 80% to 90% of Russian oil will continue to flow outside the price cap mechanism if Moscow seeks to flout it.

“I think this is good because the world still needs Russian oil to flow into the market for now. An 80%-90% is good and encouraging level in order to meet the demand,” Birol said.

While there is still a huge volume of strategic oil reserves that can be tapped during a supply disruption, another release is not currently on the agenda, he added.

ENERGY SECURITY DRIVES RENEWABLES GROWTH

The energy crisis could be a turning point for accelerating clean sources and for forming a sustainable and secured energy system, Birol said.

“Energy security is the number one driver (of the energy transition),” said Birol, as countries see energy technologies and renewables as a solution.

The IEA has revised up the forecast of renewable power capacity growth in 2022 to a 20% year-on-year increase from 8% previously, with close to 400 gigawatts of renewable capacity being added this year.

Many countries in Europe and elsewhere are accelerating the installation of renewable capacity by cutting the permitting and licensing processes to replace the Russian gas, Birol said.

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Reporting by Florence Tan, Muyu Xu and Emily Chow; Editing by Jacqueline Wong and Christian Schmollinger

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Ukrainians try to conserve electricity, endure water outages after Russian strikes

  • Russian strikes destroy Ukrainian power and water facilities
  • Ukraine says it wants to cut power use by a fifth
  • Ukrainians conserve power, some go with out running water
  • Battle for southern city of Kherson looms

KYIV, Oct 20 (Reuters) – Ukrainians conserved electricity and some went without running water to try to ease pressure on the grid and give engineers a chance to rebuild infrastructure destroyed by Russian strikes as Kyiv’s forces advanced towards the city of Kherson.

Although Ukraine is successfully prosecuting counter-offensives against Russian forces in the east and the south, it is struggling to protect power generating facilities and other utilities from Russian air and drone strikes designed to disrupt lives and demoralise people as winter approaches.

The Ukrainian government on Thursday placed restrictions on electricity usage nationwide for the first time since Russia’s Feb. 24 invasion following a barrage of attacks which President Volodymr Zelenskiy said had struck a third of all power plants.

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Under the new energy-saving regime, power supply across Ukraine was on Thursday restricted between 7 a.m. and 11 p.m.

Ukraine’s energy minister said the government was seeking a 20% reduction in energy use and that Ukrainians were responding to the appeal to limit usage.

“We see a drop in consumption,” he said. “We see a voluntary decrease. But when it is not enough, we are forced to bring in forced shutdowns,” Minister Herman Halushchenko told Ukrainian TV.

Russia had carried out more than 300 air strikes on Ukrainian energy facilities since Oct. 10, he added.

Zelenskiy told the nation in a Wednesday night video address: “There is new damage to critical infrastructure. Three energy facilities were destroyed by the enemy today.

“We assume that Russian terror will be directed at energy facilities until, with the help of partners, we are able to shoot down 100% of enemy missiles and drones.”

One of the facilities hit on Wednesday was a coal-fired thermal power station in the city of Burshtyn in western Ukraine.

“Unfortunately there is destruction, and it is quite serious,” Svitlana Onyshchuk, Ivano-Frankivsk’s governor, said on Ukrainian television.

“Please limit your electricity consumption,” Zelenskiy told Ukrainians in the same address to the nation.

The Ukrainian leader was due to address an EU summit later on Thursday. Leaders of the 27 member states will discuss options for more support to Ukraine, including energy equipment, helping restore power supply and long-term financing to rebuild.

BATTLE FOR KHERSON

Cities such as the capital Kyiv and Kharkiv in the northeast announced curbs on the use of electric-powered public transport such as trolleybuses and reduced the frequency of trains on the metro.

DTEK, a major electricity supplier in Kyiv, told consumers it would do its best to make sure outages did not last longer than four hours.

The whole northeast region of Sumy, which borders Russia, said it would go the entire day – from 0700 to 2300 local time – without water, electric transport or street lighting.

“We need time to restore power plants, we need respite from our consumers,” Volodymyr Kudrytskyi, head of grid operator Ukrenergo, told Ukrainian TV.

Russia’s defence ministry said on Thursday it was continuing to target Ukrainian energy infrastructure, a strategy it has stepped up since the appointment earlier this month of Sergei Surovikin – nicknamed “General Armageddon” by the Russian media because of his alleged toughness – as overall commander of what Moscow called its “special military operation”.

Reuters witnesses said five drones hit the southern port city of Mykolaiv on Thursday, but it was unclear where they had exploded.

The Ukrainian military continued to try to press its advance towards the southern city of Kherson, the only regional capital Russian forces have captured since their invasion eight months ago.

The Russian-appointed administration on Wednesday told civilians to leave the city – control of which allows Russia to control the only land route to the Crimea peninsula, seized by Russia in 2014, and the mouth of the Dnipro river.

On Wednesday, Kirill Stremousov, deputy head of the Russia-backed administration in Kherson, wrote on Telegram that Ukraine had launched an offensive towards Novaya Kamianka and Berislav in the Kherson region.

While Ukraine remained tight-lipped about its operations, its military said in an early Thursday update on the Kherson region said 43 Russian servicemen had been killed and six tanks and other equipment destroyed.

The Russian defence ministry on Thursday described a battle in the area which it said its forces had won in the end.

“In the area of the settlement of Sukhanovo, Kherson region, the enemy managed to drive a wedge into Russian units’ defensive lines,” the ministry said.

“Due to the introduction of a tank reserve by the Russian command into battle, as well as ambush actions, the enemy was significantly defeated, and Ukrainian units fled. The position on the front edge of the defensive line has been completely restored.”

Reuters was not able to verify battlefield reports.

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Reporting by Reuters bureaux; Writing by Andrew Osborn; Editing by Angus MacSwan

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Putin boosts Russia’s war footing as battle looms for Ukraine’s Kherson

  • Russia tightens security in seized regions
  • Kherson is evacuated
  • Ukraine calls martial law move meaningless
  • Ukraine to curb electricity nationwide Thursday

KYIV/MYKOLAIV, Ukraine, Oct 19 (Reuters) – President Vladimir Putin ordered all of Russia to support the war effort in Ukraine on Wednesday, as the Russian-appointed administration of Kherson prepared to evacuate the only regional capital Moscow has captured during its invasion.

Images of people using boats to flee the strategic southern city were broadcast by Russian state TV, which portrayed the exodus on the Dnipro river as an attempt to evacuate civilians before it became a combat zone.

The Russian-installed chief of Kherson – one of four Ukrainian regions unilaterally claimed by Moscow where Putin declared martial law on Wednesday – said about 50,000-60,000 people would be moved out in the next six days.

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“The Ukrainian side is building up forces for a large-scale offensive,” Vladimir Saldo, the official, told state TV. “Where the military operates, there is no place for civilians.”

Kherson is arguably the most strategically important of the annexed regions. It controls both the only land route to the Crimea peninsula Russia seized in 2014, and the mouth of the Dnipro, the 2,200-kilometre-long (1,367-mile) river that bisects Ukraine.

Staff at Kherson’s Russian-backed administration were also being relocated to the eastern side of the Dnipro, Saldo said, although he said Russia had the resources to hold the city and even counter-attack if necessary. Russian forces near Kherson have been driven back by 20-30 km (13-20 miles) in the last few weeks.

Eight months after being invaded, Ukraine is pressing major counter-offensives in the east and south to try to take as much territory as it can before winter.

ELECTRICITY CUTS

Russia has intensified its missile and drone attacks on Ukraine’s power and water infrastructure this week in what Ukraine and the West call a campaign to intimidate civilians ahead of the cold winter.

On Thursday, electricity supply will be restricted nationwide between 7 a.m. and 11 p.m., government officials and the grid operator Ukrenergo said. Street lighting in cities will be limited, a presidential aide said on the Telegram messaging app, adding that if electricity use was not minimised, there would be temporary blackouts.

While limited to Thursday, “we do not exclude that with the onset of a cold weather we will be asking for your help even more frequently,” Ukrenergo said.

Russia has destroyed three Ukrainian energy facilities over the last 24 hours, President Volodymyr Zelenskiy said in his Wednesday night video address.

A Russian missile strike hit a major thermal power station in the city of Burshtyn in western Ukraine on Wednesday, the region’s governor said.

Zelenskiy, who has said a third of his country’s power stations have been hit by Russian strikes, discussed security at power supply plants with senior officials.

“We are working to create mobile power points for the critical infrastructure of cities, towns and villages,” Zelenskiy wrote on Telegram.

“We are preparing for various scenarios,” Zelenskiy said.

PUTIN’S POWERS

In televised remarks to his Security Council, Putin boosted the powers of Russia’s regional governors and ordered the creation of a coordinating council under Prime Minister Mikhail Mishustin to support his “special military operation”.

He said the “entire system of state administration” must be geared to back up the Ukraine effort.

It was unclear what the immediate impact of Putin’s declaration of martial law would be, beyond much tighter security measures in Kherson and the other three regions.

But Ukraine, which along with the West does not recognise Moscow’s self-styled annexations, derided the move. Presidential adviser Mykhailo Podolyak called it “a pseudo-legalisation of (the) looting of Ukrainians’ property.”

“This does not change anything for Ukraine: we continue the liberation and deoccupation of our territories,” he tweeted.

U.S. President Joe Biden said Putin had found himself in a difficult position and his only tool was to brutalize Ukrainian civilians. The U.S. State Department said it was no surprise that Russia was resorting to “desperate tactics”.

Ukrainian and Russian forces exchanged intermittent artillery fire on a section of the Kherson front in the Mykolaiv region on Wednesday, the impacts marked by towers of smoke.

Several Ukrainian soldiers said they were aware of the martial law declaration but were not worried, although they warned a visiting Reuters reporter of the danger presented by Russian drones.

“For sure he’s (Putin) up to no good. We understand that,” said Yaroslav, who declined to give his last name. “But whatever they are doing, we will screw them anyway.”

Oleh, who also withheld his last name, said Russia in the past had warned about what it claimed would be escalatory Ukrainian actions only to carry them out itself.

“We are just concerned about our people in the Kherson region,” he said.

Moscow denies deliberately targeting civilians, though the conflict has killed thousands, displaced millions and pulverised Ukrainian cities.

The Kremlin placed a nuclear umbrella over the regions it says it has annexed, among nuclear threats which Britain’s chief of defence staff Tony Radakin said signalled desperation.

“It is a sign of weakness, which is precisely why the international community needs to remain strong and united,” Radakin said during a speech.

British Defence Minister Ben Wallace met his U.S counterpart in Washington this week to discuss shared security concerns about the situation in Ukraine, a senior defence source said in response to speculation around the sudden trip.

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Additional reporting by Tom Balmforth, Max Hunder and Reuters bureaux; Writing by Andrew Osborn, Philippa Fletcher and Grant McCool; Editing by Andrew Cawthorne, John Stonestreet and Rosalba O’Brien

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Biden to announce emergency oil sales to prevent price spikes

WASHINGTON, Oct 18 (Reuters) – U.S. President Joe Biden will announce a plan on Wednesday to sell off the last portion of his release from the nation’s emergency oil reserve by year’s end and detail a strategy to refill the stockpile when prices drop, administration officials said.

The plan is intended to add enough supply to prevent oil price spikes that could hurt consumers and businesses, while also assuring the nation’s drillers the government will swoop into the market as a buyer if prices plunge too low.

Biden’s efforts to use federal powers to balance the U.S. oil market underscores just how much the war in Ukraine and rampant inflation has upended the plans of a president who came into office vowing to undo the oil industry and move the country swiftly to a fossil-fuel free future.

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It also shows the administration’s desire to keep inflation in check, particularly in the weeks before November congressional elections in which Biden’s fellow Democrats hope to retain control of Congress.

Earlier this year, Biden decided to sell 180 million barrels out of the Strategic Petroleum Reserve (SPR) to combat a potential supply crisis brought about by sanctions on oil-rich Russia following its February invasion of Ukraine.

While the initial plan was to end those sales in November, purchases were slower than expected over the summer and some 15 million barrels remain unsold.

Those will be put up for bidding for delivery in December, a senior administration official said, and extra oil could also be made available if needed.

U.S. President Joe Biden calls for a federal gas tax holiday as he speaks about gas prices during remarks in the Eisenhower Executive Office Building’s South Court Auditorium at the White House in Washington, U.S., June 22, 2022. REUTERS/Kevin Lamarque

“The president’s going to keep a careful eye on announcing today that whatever we’re doing today could continue and see additional SPR releases – if necessary,” senior U.S. energy adviser Amos Hochstein said on Wednesday.

“The president’s also going to be announcing that we are going to replenish the SPR,” he said in an interview with CNN.

Biden will lay out a plan to refill the emergency reserve in the upcoming years, but only at prices at or below a range of $67 to $72 dollars a barrel for West Texas Intermediate
, the U.S. oil benchmark, the senior administration official said.

“There’s no imminent threat of oil collapse,” Hochstein said on CNBC later.

Biden’s hope is to send a signal to both consumers and producers.

“He is calling on the private sector in the United States to do two things. One is take this signal and increase production, increase the investment, and No. 2 is to make sure that as they are taking these profits, as they are benefiting from these markets, that they are continuing to give the consumer the appropriate price,” the official said.

In recent weeks, the oil industry has grown increasingly concerned the administration might take the drastic step of banning or limiting exports of gasoline or diesel to help build back sagging U.S. inventories. They have called on the administration to take the option off the table, a move officials are unwilling to do.

“We are keeping all tools on the table, you know, anything that could potentially help ensure stable domestic supply,” the official said.

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Reporting by Jarrett Renshaw and Steve Holland, additional reporting by Doina Chiacu; Editing by Lincoln Feast, Heather Timmons and Lisa Shumaker

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U.S. could sell oil from emergency reserve this week – sources

WASHINGTON, Oct 17 (Reuters) – The Biden administration plans to sell oil from the Strategic Petroleum Reserve in a bid to dampen fuel prices before next month’s congressional elections, three sources familiar with the matter said on Monday.

President Joe Biden’s announcement is expected this week as part of the response to Russia’s war on Ukraine, one of the sources said.

The sale would market the remaining 14 million barrels from Biden’s previously announced, and largest ever, release from the reserve of 180 million barrels that started in May.

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The administration has also spoken with oil companies about selling an additional 26 million barrels from a congressionally mandated sale in fiscal year 2023, which began Oct. 1, a fourth source said.

The Department of Energy will also release further details on eventually buying the oil back, reflecting the White House’s desire to combat rising pump prices while supporting domestic drillers.

Rising retail gasoline prices have helped boost inflation to the highest in decades, posing a risk to Biden and his fellow Democrats ahead of the Nov. 8 midterm elections, in which they are seeking to keep control of Congress.

Biden said last week gasoline prices are too high and that he would have more to say about lowering costs this week. David Turk, his deputy energy secretary, also said last week the administration can tap the Strategic Petroleum Reserve, or SPR, in coming weeks and months as necessary to stabilize oil.

The administration has spoken with energy companies about buying back oil through 2025 to replenish the SPR, the sources said, after Biden in March announced the biggest sale ever, 180 million barrels, from May to October.

The Energy Department still has about 14 million barrels of SPR oil left to sell from the historic release, because selling was slowed in July and August by holidays and hot weather.

Additionally, the administration is mandated by a law Congress years ago to sell another 26 million barrels of SPR oil in fiscal year 2023, which started Oct. 1, a sale likely to come soon, one of the sources said.

“The administration has a small window ahead of midterms to try to lower fuel prices, or at least demonstrate that they are trying,” said a source familiar with the White House deliberations. “The White House did not like $4 a gallon gas and it has signaled that it will take action to prevent that again.”

Average U.S. gasoline prices hit about $3.89 a gallon on Monday, up about 20 cents from a month ago and 56 cents higher than last year at this time, according to the AAA motor group. Gasoline prices hit a record average above $5.00 in June.

The DOE and the White House did not immediately respond to requests for comment about the sales.

In May, the DOE said it would launch bids late this year for a buy-back of about one third of the 180 million barrel sale. It suggested then that deliveries would be linked to lower oil prices and lower demand, likely after fiscal year 2023, which ends Sept. 30 next year. Two sources said the buy-backs could continue through 2025.

Biden officials in recent months also urged oil refiners including Exxon Mobil (XOM.N), Chevron (CVX.N) and Valero (VLO.N) to not increase exports of fuel and warned them it could take action if plants do not build inventories.

The administration has not taken a potential ban of gasoline and diesel exports off the table although opponents of such a move say it could exacerbate Europe’s energy crisis and raise fuel prices at home.

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Reporting by Jarrett Renshaw, Timothy Gardner, Laura Sanicola and Andrea Shalal; Editing by Sam Holmes

Our Standards: The Thomson Reuters Trust Principles.

Laura Sanicola

Thomson Reuters

Reports on oil and energy, including refineries, markets and renewable fuels. Previously worked at Euromoney Institutional Investor and CNN.

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