REUTERS
"Exclusive: Fed’s Hammack wants clear data before moving on rates, not much data by June"
By Howard Schneider and Ann Saphir
May 9, 2025
Summary
* Hammack makes her first remarks since Fed's rate decision this week
* Not a lot of data to provide clarity by next meeting: Hammack
* Too early to know effects of tariffs, other policies
PALO ALTO, California, May 9 (Reuters) - The Federal Reserve needs more time to see how the economy responds to U.S. President Donald Trump's tariff and other policies before figuring out the right response, Cleveland Federal Reserve President Beth Hammack said on Friday, noting that much of the administration's sweeping agenda remains unclear.
"I stand ready to move whenever we have clear and convincing evidence, but ... given the overall breadth of the policies that have been discussed and put in place, I think there's a real question about what those impacts are going to look like, and so it may take longer," Hammack said.
"There's not a lot of data between now and June," when the Fed next meets to set interest rates, she said in an interview on the sidelines of a monetary policy conference at Stanford University's Hoover Institution in which she elaborated on the Fed's current dilemma.
While the latest data showed the U.S. economy contracted at a 0.3% annualized rate last quarter, for example, most analysts feel that's not a clear signal of the economic direction because of distortions driven by trade policy; to Hammack, the economy has been resilient and the jury is still out on its future course.
"It is all premature to me -- I think everything is very fluid and I think we need to really wait and see how the data play out," she said.
Likewise she and her fellow policymakers have noted the strength of the job market, where the unemployment rate stands at a low 4.2%, but also acknowledge the risks to it as businesses begin thinking about the fallout from new tariff policies.
If the impact of tariffs lifting prices proves to be limited and the economy weakens, "we'd want to really focus on the employment side of our mandate," she said.
The Fed this week left short-term interest rates in the 4.25%-4.5% range, where they have been since December.
While tariffs raise the risk of both higher inflation and higher unemployment, Fed Chair Jerome Powell said, it’s not yet clear by how much, or for how long, or in what order, and with trade negotiations underway and the full scope of levies unknown, it’s too early to know how the Fed should respond.
Contacts in Hammack's district are laying contingency plans to shrink their workforce if demand weakens, she said.
But for now firms are hanging on to their workers after years of finding it hard to hire, she said.
"People don't know which way it will settle out," she said.
On inflation, she said, tariffs could prompt only one-time price increases.
But she said some businesses say they plan to make a series of price adjustments over time as they learn what level of import taxes they face -- a process that could itself last until well into the summer.
The longer the issues play out, Fed officials worry, the more risk there is that inflation becomes persistent.
That would require tighter Fed policy.
"It's important for us to sit back and make sure we're thinking about all of the different policies, because they do work in different directions, right?"
"The spending policies, deregulation, all of these tariffs could have different consequences," she said.
"And so it's important for us to look at it holistically."
Reporting by Ann Saphir; editing by Diane Craft
https://www.reuters.com/business/feds-h ... 025-05-09/
THE DAILY NEWS
Re: THE DAILY NEWS
REUTERS
"Ex Fed's Warsh highlights a path to lower rates, takes a fresh dig at the Fed"
By Ann Saphir and Howard Schneider
May 9, 2025
Summary
* Warsh says Fed would sacrifice the labor market to fight inflation
* Warsh is seen as a front-runner to be the next Fed Chair
* Remarks made at Hoover Institution, linked to Bush-Reagan Republicanism
Palo Alto, California May 9 (Reuters) - Kevin Warsh, an apparent frontrunner to be U.S. President Donald Trump's pick to be the next chair of the Federal Reserve, on Friday suggested a possible pathway to the lower policy rates that Trump has repeatedly pressed the current Fed Chair Jerome Powell to deliver, and delivered a fresh dig at the Fed's conduct of monetary policy.
A large and often growing Fed balance sheet can work at cross-purposes with the Fed's main policy lever of setting short-term borrowing rates, Warsh told a monetary policy panel at Stanford University's Hoover Institution, but "if the printing press could be quiet, we could have lower policy rates."
Warsh served as Fed Governor from 2006 until 2011, when he quit because he opposed the Fed's continued balance sheet expansion as central bank overreach that encouraged the expansion of the nation's debt.
The Fed is currently reducing its balance sheet.
On Friday, Warsh offered an added criticism of the Fed, saying there is no "cruel choice" between the Fed's two objectives of stable prices and full employment, a reference to the idea long prevalent among many central bank policymakers that the cost of bringing down inflation is harm to the job market.
"What it means is, we don't have to push the unemployment rate up to get the inflation rate to fall," Warsh said on the sidelines of the conference.
"At the Fed, when they talk about how we get inflation down, what they really mean is, how do we get the unemployment rate up ... we need to throw people out of work to get the inflation rate to come down, which is nonsense."
"But that's embedded in economic thinking, including at the Fed."
The idea that a "cruel choice" is "nonsense" is actually largely consistent with how the Fed has conducted policy over the last several years, as it brought inflation down from 40-year highs without pushing the unemployment rate above the rate that most economists feel is consistent with full employment, opens new tab.
Powell has repeatedly said he does not feel the current labor market is a source of inflation, suggesting that crushing the job market would do little to lower inflation.
Warsh made his remarks at a conference and an institution steeped in Bush-Reagan Republicanism, now out of favor as Trump and his ideas have come to dominate the party.
The conference was convened in part to celebrate John Taylor, a Bush economic adviser and author of one of the most famous monetary policy rules; Condoleezza Rice, Bush's Secretary of State, spoke on Thursday.
Warsh himself was a Bush appointee to the Fed but also has close family ties to Trump through his wife - the daughter of Trump's former donor Ronald Lauder.
He shared the stage on Friday with Fed Governor Christopher Waller, a Trump appointee who has also been mentioned as a possible candidate for Fed chair.
Waller has said he's prepared to lower rates swiftly should tariffs drive a slowdown in the economy and send the unemployment rate upward.
Asked what the Fed should do now, if its inflation and employment mandates come into tension, Warsh demurred.
"Well, that's a longer discussion," he said, heading back into the conference to hear the next speakers.
Reporting by Ann Saphir; Editing by Aurora Ellis
https://www.reuters.com/business/ex-fed ... 025-05-09/
"Ex Fed's Warsh highlights a path to lower rates, takes a fresh dig at the Fed"
By Ann Saphir and Howard Schneider
May 9, 2025
Summary
* Warsh says Fed would sacrifice the labor market to fight inflation
* Warsh is seen as a front-runner to be the next Fed Chair
* Remarks made at Hoover Institution, linked to Bush-Reagan Republicanism
Palo Alto, California May 9 (Reuters) - Kevin Warsh, an apparent frontrunner to be U.S. President Donald Trump's pick to be the next chair of the Federal Reserve, on Friday suggested a possible pathway to the lower policy rates that Trump has repeatedly pressed the current Fed Chair Jerome Powell to deliver, and delivered a fresh dig at the Fed's conduct of monetary policy.
A large and often growing Fed balance sheet can work at cross-purposes with the Fed's main policy lever of setting short-term borrowing rates, Warsh told a monetary policy panel at Stanford University's Hoover Institution, but "if the printing press could be quiet, we could have lower policy rates."
Warsh served as Fed Governor from 2006 until 2011, when he quit because he opposed the Fed's continued balance sheet expansion as central bank overreach that encouraged the expansion of the nation's debt.
The Fed is currently reducing its balance sheet.
On Friday, Warsh offered an added criticism of the Fed, saying there is no "cruel choice" between the Fed's two objectives of stable prices and full employment, a reference to the idea long prevalent among many central bank policymakers that the cost of bringing down inflation is harm to the job market.
"What it means is, we don't have to push the unemployment rate up to get the inflation rate to fall," Warsh said on the sidelines of the conference.
"At the Fed, when they talk about how we get inflation down, what they really mean is, how do we get the unemployment rate up ... we need to throw people out of work to get the inflation rate to come down, which is nonsense."
"But that's embedded in economic thinking, including at the Fed."
The idea that a "cruel choice" is "nonsense" is actually largely consistent with how the Fed has conducted policy over the last several years, as it brought inflation down from 40-year highs without pushing the unemployment rate above the rate that most economists feel is consistent with full employment, opens new tab.
Powell has repeatedly said he does not feel the current labor market is a source of inflation, suggesting that crushing the job market would do little to lower inflation.
Warsh made his remarks at a conference and an institution steeped in Bush-Reagan Republicanism, now out of favor as Trump and his ideas have come to dominate the party.
The conference was convened in part to celebrate John Taylor, a Bush economic adviser and author of one of the most famous monetary policy rules; Condoleezza Rice, Bush's Secretary of State, spoke on Thursday.
Warsh himself was a Bush appointee to the Fed but also has close family ties to Trump through his wife - the daughter of Trump's former donor Ronald Lauder.
He shared the stage on Friday with Fed Governor Christopher Waller, a Trump appointee who has also been mentioned as a possible candidate for Fed chair.
Waller has said he's prepared to lower rates swiftly should tariffs drive a slowdown in the economy and send the unemployment rate upward.
Asked what the Fed should do now, if its inflation and employment mandates come into tension, Warsh demurred.
"Well, that's a longer discussion," he said, heading back into the conference to hear the next speakers.
Reporting by Ann Saphir; Editing by Aurora Ellis
https://www.reuters.com/business/ex-fed ... 025-05-09/
Re: THE DAILY NEWS
REUTERS
"Container shipping firms cull Asia-US service as Trump tariffs collapse trade"
By Lisa Baertlein
May 9, 2025
Summary
* Scheduled weekly service withdrawals show impact of US trade policies
* MSC, COSCO and others deploy fewer ships from China to US
* Container ship operators also cancelling individual voyages
LOS ANGELES, May 9 (Reuters) - Major container shipping companies are suspending at least six scheduled weekly routes between China and the United States as President Donald Trump's punishing tariffs on the world's top exporting country collapse trade, maritime consultants said.
The ships on those routes have the combined capacity to deliver 25,682 40-foot containers stuffed with toys, tennis shoes, car parts and things U.S. manufacturers use to produce goods each week - or more than 1.3 million 40-foot containers a year, based on capacity data provided in customer advisories.
The service cuts, coupled with cancellations of individual voyages, come as hulking container ship operators move to mitigate fallout from Trump's erratic trade policies.
Policy makers, economists, and business owners have become increasingly hungry for information on ocean trade, responsible for 80% of the world's commerce, because it is a gauge of global economic health.
"This is not the precursor, it is the proof of a drop in economic activity," Simon Sundboell, CEO of Danish maritime data provider eeSea, said of the container vessel capacity reductions now underway.
The route suspensions include scheduled weekly services operated by MSC, Zim and the Ocean Alliance that includes Cosco, Evergreen, CMA-CGM and Orient Overseas Container Line, Sundboell said.
Four of the service cuts affect West Coast ports, one impacts the East Coast and one hits the Gulf Coast, he said.
The container shipping companies culling those services either declined to comment or did not immediately respond.
Maersk and Hapag-Lloyd's Gemini Alliance have not suspended services - even though both partners experienced significant tariff-related China to U.S. booking cuts in April and have swapped out some ships for smaller vessels.
Representatives from the U.S. and China are meeting this weekend in Switzerland after more than two months of stalemate over trade.
BLANKETY BLANK
Global shipping companies use service suspensions and cancellations of individual voyages, known as blank sailings, to shelter profits by ensuring they do not have more ships on the water than are needed by customers.
That reduces unnecessary overhead costs and keeps supply and demand in balance, supporting competing off-contract spot rates.
Blank sailings increased significantly after the COVID pandemic upended global trade in 2020 - and are part of why global container ship operators have been enjoying record profits.
Major U.S. retailers like Amazon.com and Walmart, which account for nearly half of global container trade, responded to Trump's 145% tariffs on China last month by pausing or cancelling factory orders after those import duties more than doubled the cost of goods made in China.
Canceled, or blanked, individual voyages on the vital Transpacific route from Asia to North America surged from 9% in week ended March 30 to 24% in week ended May 4, maritime consultancy Drewry said in a podcast earlier this week.
Drewry's data shows blank sailings reduced capacity on the Asia to West Coast North America routes by 20% in April and 12% so far in May.
The cuts hit slightly harder on the North American East Coast, reducing 22% in April and 18% thus far in May, the consultancy said.
MSC, the world's largest container ship operator, in April canceled 30% of its scheduled Transpacific voyages - more than any other container carrier, said Daniela Ghimp, project manager for ocean freight rate benchmarking at Drewry.
The Premier Alliance, composed of Ocean Network Express (ONE), Hyundai Merchant Marine (HMM) and Yang Ming Marine Transportation, leads so far in May with a 20% blank sailing rate, Ghimp said.
ONE declined comment, while HMM and Yang Ming did not immediately respond.
The full effect of Trump's tariffs will likely be delayed until July, when overall U.S. container import volume could be down 25% or more from the year earlier, said John McCown, senior fellow at the Center for Maritime Strategy.
"Something's gotta give, and I believe either considerably more capacity will have to be culled, or spot rates will start to crash," said Alan Murphy, CEO of supply chain adviser Sea-Intelligence.
Reporting by Lisa Baertlein in Los Angeles; Editing by Marguerita Choy
https://www.reuters.com/world/china/con ... 025-05-09/
"Container shipping firms cull Asia-US service as Trump tariffs collapse trade"
By Lisa Baertlein
May 9, 2025
Summary
* Scheduled weekly service withdrawals show impact of US trade policies
* MSC, COSCO and others deploy fewer ships from China to US
* Container ship operators also cancelling individual voyages
LOS ANGELES, May 9 (Reuters) - Major container shipping companies are suspending at least six scheduled weekly routes between China and the United States as President Donald Trump's punishing tariffs on the world's top exporting country collapse trade, maritime consultants said.
The ships on those routes have the combined capacity to deliver 25,682 40-foot containers stuffed with toys, tennis shoes, car parts and things U.S. manufacturers use to produce goods each week - or more than 1.3 million 40-foot containers a year, based on capacity data provided in customer advisories.
The service cuts, coupled with cancellations of individual voyages, come as hulking container ship operators move to mitigate fallout from Trump's erratic trade policies.
Policy makers, economists, and business owners have become increasingly hungry for information on ocean trade, responsible for 80% of the world's commerce, because it is a gauge of global economic health.
"This is not the precursor, it is the proof of a drop in economic activity," Simon Sundboell, CEO of Danish maritime data provider eeSea, said of the container vessel capacity reductions now underway.
The route suspensions include scheduled weekly services operated by MSC, Zim and the Ocean Alliance that includes Cosco, Evergreen, CMA-CGM and Orient Overseas Container Line, Sundboell said.
Four of the service cuts affect West Coast ports, one impacts the East Coast and one hits the Gulf Coast, he said.
The container shipping companies culling those services either declined to comment or did not immediately respond.
Maersk and Hapag-Lloyd's Gemini Alliance have not suspended services - even though both partners experienced significant tariff-related China to U.S. booking cuts in April and have swapped out some ships for smaller vessels.
Representatives from the U.S. and China are meeting this weekend in Switzerland after more than two months of stalemate over trade.
BLANKETY BLANK
Global shipping companies use service suspensions and cancellations of individual voyages, known as blank sailings, to shelter profits by ensuring they do not have more ships on the water than are needed by customers.
That reduces unnecessary overhead costs and keeps supply and demand in balance, supporting competing off-contract spot rates.
Blank sailings increased significantly after the COVID pandemic upended global trade in 2020 - and are part of why global container ship operators have been enjoying record profits.
Major U.S. retailers like Amazon.com and Walmart, which account for nearly half of global container trade, responded to Trump's 145% tariffs on China last month by pausing or cancelling factory orders after those import duties more than doubled the cost of goods made in China.
Canceled, or blanked, individual voyages on the vital Transpacific route from Asia to North America surged from 9% in week ended March 30 to 24% in week ended May 4, maritime consultancy Drewry said in a podcast earlier this week.
Drewry's data shows blank sailings reduced capacity on the Asia to West Coast North America routes by 20% in April and 12% so far in May.
The cuts hit slightly harder on the North American East Coast, reducing 22% in April and 18% thus far in May, the consultancy said.
MSC, the world's largest container ship operator, in April canceled 30% of its scheduled Transpacific voyages - more than any other container carrier, said Daniela Ghimp, project manager for ocean freight rate benchmarking at Drewry.
The Premier Alliance, composed of Ocean Network Express (ONE), Hyundai Merchant Marine (HMM) and Yang Ming Marine Transportation, leads so far in May with a 20% blank sailing rate, Ghimp said.
ONE declined comment, while HMM and Yang Ming did not immediately respond.
The full effect of Trump's tariffs will likely be delayed until July, when overall U.S. container import volume could be down 25% or more from the year earlier, said John McCown, senior fellow at the Center for Maritime Strategy.
"Something's gotta give, and I believe either considerably more capacity will have to be culled, or spot rates will start to crash," said Alan Murphy, CEO of supply chain adviser Sea-Intelligence.
Reporting by Lisa Baertlein in Los Angeles; Editing by Marguerita Choy
https://www.reuters.com/world/china/con ... 025-05-09/
Re: THE DAILY NEWS
REUTERS
"Trump to sign order discouraging criminal enforcement of regulatory offenses"
By Jeff Mason and Jody Godoy
May 9, 2025
WASHINGTON, May 9 (Reuters) - President Donald Trump plans to sign an executive order discouraging criminal enforcement of regulatory offenses, in a bid to combat the overcriminalization of federal regulations, a White House official told Reuters on Friday.
Trump's order is meant to ease the burden on small businesses that do not have the same compliance resources as large corporations, according to a draft the official shared.
The executive order would have agencies publicly post a list of regulatory violations that can trigger criminal charges, and guidance on the circumstances under which they would refer violators for prosecution.
The order would discourage prosecutors from filing charges not on the lists, and charges that do not require prosecutors to prove the defendant had criminal intent.
One such law has been used to prosecute executives for misbranded or adulterated food and drugs.
The order would not apply to immigration or national security.
The reach of federal criminal statutes has long been a target of criticism for some conservatives and business groups.
Reporting by Jody Godoy in New York and Jeff Mason in Washington; Editing by Leslie Adler and Chizu Nomiyama
https://www.reuters.com/world/us/trump- ... 025-05-09/
"Trump to sign order discouraging criminal enforcement of regulatory offenses"
By Jeff Mason and Jody Godoy
May 9, 2025
WASHINGTON, May 9 (Reuters) - President Donald Trump plans to sign an executive order discouraging criminal enforcement of regulatory offenses, in a bid to combat the overcriminalization of federal regulations, a White House official told Reuters on Friday.
Trump's order is meant to ease the burden on small businesses that do not have the same compliance resources as large corporations, according to a draft the official shared.
The executive order would have agencies publicly post a list of regulatory violations that can trigger criminal charges, and guidance on the circumstances under which they would refer violators for prosecution.
The order would discourage prosecutors from filing charges not on the lists, and charges that do not require prosecutors to prove the defendant had criminal intent.
One such law has been used to prosecute executives for misbranded or adulterated food and drugs.
The order would not apply to immigration or national security.
The reach of federal criminal statutes has long been a target of criticism for some conservatives and business groups.
Reporting by Jody Godoy in New York and Jeff Mason in Washington; Editing by Leslie Adler and Chizu Nomiyama
https://www.reuters.com/world/us/trump- ... 025-05-09/
Re: THE DAILY NEWS
REUTERS
"US oil and gas rig count falls to lowest since January, Baker Hughes says"
By Scott Disavino
May 9, 2025
Summary
* Total rig count falls six to 578, oil down five, gas steady Gulf of Mexico rig count drops to lowest since September 2021
* Permian shale rig count hits lowest since December 2021
May 9 (Reuters) - U.S. energy firms this week cut the number of oil and natural gas rigs operating to their lowest since January, energy services firm Baker Hughes said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, fell by six to 578 in the week to May 9.
Baker Hughes said this week's decline puts the total rig count down 25, or 4% below this time last year.
Baker Hughes said oil rigs fell by five to 474 this week, their lowest since January, while gas rigs were unchanged at 101.
In the Gulf of Mexico, drillers cut three rigs, bringing the total count down to nine, the lowest since September 2021.
In the Denver-Julesburg (DJ)-Niobrara shale in Colorado and Wyoming, Nebraska and Kansas, drillers cut one rig, reducing the count to 5, the lowest since January 2021.
In the Permian shale in West Texas and eastern New Mexico, the nation's biggest oil-producing shale basin, drillers cut two rigs, leaving 285 rigs, the lowest since December 2021.
In New Mexico, drillers cut four rigs, bringing the total down to 96, the lowest since April 2022.
The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past couple of years prompted energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output.
Even though analysts forecast oil prices would decline for a third year in a row in 2025, the U.S. Energy Information Administration (EIA) this week projected crude output would rise from a record 13.2 million barrels per day (bpd) in 2024 to around 13.4 million bpd in 2025.
That increase in production, however, was lower than the EIA's outlook in April due to lower oil price forecasts as U.S. tariffs increase the chances of weaker global economic growth and oil demand.
On the gas side, the EIA projected an 88% increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14% price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020.
The EIA projected gas output would rise to 104.9 billion cubic feet per day (bcfd) in 2025, up from 103.2 bcfd in 2024 and a record 103.6 bcfd in 2023.
Oil and gas drilling permit applications in Texas, the top U.S. oil-producing state, hit a four-year low in April amid concerns that rising OPEC+ supplies and a trade war will continue to hit crude prices, consultancy Enverus said on Thursday.
Operators in Texas submitted 570 new drilling permit applications in April, down from 795 in March and the lowest number since February 2021, according to Enverus.
Shale producer Diamondback said on Monday it will drop three rigs in the second quarter, and could reduce activity further if oil prices fall more.
Rival Coterra Energy is reducing its 2025 Permian activity by three rigs, while producer Matador Resources is dropping one drilling rig by the middle of 2025.
Reporting by Scott DiSavino; Editing by Marguerita Choy
https://www.reuters.com/business/energy ... 025-05-09/
"US oil and gas rig count falls to lowest since January, Baker Hughes says"
By Scott Disavino
May 9, 2025
Summary
* Total rig count falls six to 578, oil down five, gas steady Gulf of Mexico rig count drops to lowest since September 2021
* Permian shale rig count hits lowest since December 2021
May 9 (Reuters) - U.S. energy firms this week cut the number of oil and natural gas rigs operating to their lowest since January, energy services firm Baker Hughes said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, fell by six to 578 in the week to May 9.
Baker Hughes said this week's decline puts the total rig count down 25, or 4% below this time last year.
Baker Hughes said oil rigs fell by five to 474 this week, their lowest since January, while gas rigs were unchanged at 101.
In the Gulf of Mexico, drillers cut three rigs, bringing the total count down to nine, the lowest since September 2021.
In the Denver-Julesburg (DJ)-Niobrara shale in Colorado and Wyoming, Nebraska and Kansas, drillers cut one rig, reducing the count to 5, the lowest since January 2021.
In the Permian shale in West Texas and eastern New Mexico, the nation's biggest oil-producing shale basin, drillers cut two rigs, leaving 285 rigs, the lowest since December 2021.
In New Mexico, drillers cut four rigs, bringing the total down to 96, the lowest since April 2022.
The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past couple of years prompted energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output.
Even though analysts forecast oil prices would decline for a third year in a row in 2025, the U.S. Energy Information Administration (EIA) this week projected crude output would rise from a record 13.2 million barrels per day (bpd) in 2024 to around 13.4 million bpd in 2025.
That increase in production, however, was lower than the EIA's outlook in April due to lower oil price forecasts as U.S. tariffs increase the chances of weaker global economic growth and oil demand.
On the gas side, the EIA projected an 88% increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14% price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020.
The EIA projected gas output would rise to 104.9 billion cubic feet per day (bcfd) in 2025, up from 103.2 bcfd in 2024 and a record 103.6 bcfd in 2023.
Oil and gas drilling permit applications in Texas, the top U.S. oil-producing state, hit a four-year low in April amid concerns that rising OPEC+ supplies and a trade war will continue to hit crude prices, consultancy Enverus said on Thursday.
Operators in Texas submitted 570 new drilling permit applications in April, down from 795 in March and the lowest number since February 2021, according to Enverus.
Shale producer Diamondback said on Monday it will drop three rigs in the second quarter, and could reduce activity further if oil prices fall more.
Rival Coterra Energy is reducing its 2025 Permian activity by three rigs, while producer Matador Resources is dropping one drilling rig by the middle of 2025.
Reporting by Scott DiSavino; Editing by Marguerita Choy
https://www.reuters.com/business/energy ... 025-05-09/
Re: THE DAILY NEWS
REUTERS
"US oilfield giants brace for tough times as price slide rattles producers"
By Arunima Kumar
May 9, 2025
Summary
* Top oilfield service firms warn of slower 2025 activity
* Tariffs raising costs, adding pressure on service margins
* SLB, Halliburton, Baker Hughes cite weaker North America outlook
* Oil producers cutting back drilling activity
May 9 (Reuters) - Top U.S. oilfield service firms have signaled a challenging period ahead as a recent slide in oil prices pushes producers to temper their drilling activity and rethink their budgets.
SLB, Halliburton, and Baker Hughes all flagged cautious customer spending in their first-quarter reports, citing a lack of visibility, especially in North America.
Higher output from the OPEC+ grouping and a global tariff war that has raised demand concerns drove crude prices to near $55 a barrel this month, from around $78 just before U.S. President Donald Trump assumed office in January.
"With oil prices falling out of the well-defined range that had persisted for much of the past 2+ years, producer budgets are encountering meaningful strain for the first time in several years," said Raymond James analysts.
Many producers have warned that drilling becomes unprofitable below $65 per barrel.
Brent crude was trading around $63 on Friday.
Diamondback Energy trimmed its 2025 capital budget by $400 million and said it would drill and complete fewer wells, while Coterra Energy said it would cut its Permian rig count by 30% in the second half of the year.
The cuts by the independent producers could potentially affect the service firms that supply them with rigs, crews, and equipment.
Halliburton CEO Jeff Miller said customers were reviewing 2025 plans, which could lead to more idle time for fleets and, in some cases, sending equipment overseas or into retirement.
Analysts at Jefferies said while delays in North American activity have now stretched into the second quarter, international projects are facing slowdowns.
SLB flagged slow starts in Mexico and Saudi Arabia, and now expects global upstream investment to decline in 2025.
Baker Hughes forecast a low double-digit drop in North American spending and mid-to-high single-digit cuts internationally.
Tariffs are also adding fresh uncertainty, including driving up equipment costs.
Halliburton forecast a 2-cents-to-3-cents per share impact in the second quarter from the trade tensions, while Baker Hughes warned of a $100 million to $200 million hit to 2025 EBITDA if tariffs stay in place.
Meanwhile, all three companies are concentrating on pockets of resilience such as LNG infrastructure, power grid upgrades, and data center-driven power demand to weather a slower, more uneven recovery.
Baker Hughes expects to book at least $1.5 billion of orders in data-center equipment over the next three years.
"We're really not seeing customers pull back from LNG, gas infrastructure or the data-center projects," said CEO Lorenzo Simonelli.
Reporting by Arunima Kumar in Bengaluru; Editing by Arpan Varghese and Sriraj Kalluvila
https://www.reuters.com/business/energy ... 025-05-09/
"US oilfield giants brace for tough times as price slide rattles producers"
By Arunima Kumar
May 9, 2025
Summary
* Top oilfield service firms warn of slower 2025 activity
* Tariffs raising costs, adding pressure on service margins
* SLB, Halliburton, Baker Hughes cite weaker North America outlook
* Oil producers cutting back drilling activity
May 9 (Reuters) - Top U.S. oilfield service firms have signaled a challenging period ahead as a recent slide in oil prices pushes producers to temper their drilling activity and rethink their budgets.
SLB, Halliburton, and Baker Hughes all flagged cautious customer spending in their first-quarter reports, citing a lack of visibility, especially in North America.
Higher output from the OPEC+ grouping and a global tariff war that has raised demand concerns drove crude prices to near $55 a barrel this month, from around $78 just before U.S. President Donald Trump assumed office in January.
"With oil prices falling out of the well-defined range that had persisted for much of the past 2+ years, producer budgets are encountering meaningful strain for the first time in several years," said Raymond James analysts.
Many producers have warned that drilling becomes unprofitable below $65 per barrel.
Brent crude was trading around $63 on Friday.
Diamondback Energy trimmed its 2025 capital budget by $400 million and said it would drill and complete fewer wells, while Coterra Energy said it would cut its Permian rig count by 30% in the second half of the year.
The cuts by the independent producers could potentially affect the service firms that supply them with rigs, crews, and equipment.
Halliburton CEO Jeff Miller said customers were reviewing 2025 plans, which could lead to more idle time for fleets and, in some cases, sending equipment overseas or into retirement.
Analysts at Jefferies said while delays in North American activity have now stretched into the second quarter, international projects are facing slowdowns.
SLB flagged slow starts in Mexico and Saudi Arabia, and now expects global upstream investment to decline in 2025.
Baker Hughes forecast a low double-digit drop in North American spending and mid-to-high single-digit cuts internationally.
Tariffs are also adding fresh uncertainty, including driving up equipment costs.
Halliburton forecast a 2-cents-to-3-cents per share impact in the second quarter from the trade tensions, while Baker Hughes warned of a $100 million to $200 million hit to 2025 EBITDA if tariffs stay in place.
Meanwhile, all three companies are concentrating on pockets of resilience such as LNG infrastructure, power grid upgrades, and data center-driven power demand to weather a slower, more uneven recovery.
Baker Hughes expects to book at least $1.5 billion of orders in data-center equipment over the next three years.
"We're really not seeing customers pull back from LNG, gas infrastructure or the data-center projects," said CEO Lorenzo Simonelli.
Reporting by Arunima Kumar in Bengaluru; Editing by Arpan Varghese and Sriraj Kalluvila
https://www.reuters.com/business/energy ... 025-05-09/
Re: THE DAILY NEWS
REUTERS
"Fed's independent structure has proved its worth, Waller says"
By Howard Schneider
May 9, 2025
PALO ALTO, California, May 9 (Reuters) - The structure of the Federal Reserve's Board of Governors, with members who cannot be fired over policy disputes and serve for periods staggered across presidential terms, has "stood the test of time" and should be preserved, Fed Governor Christopher Waller said on Friday.
Waller, citing earlier research of his own and others, said the U.S. central bank's system provides electoral accountability by letting every U.S. president who serves a four-year term appoint some members of the seven-person Board of Governors, while the lengthy terms of up to 14 years allow objective, non-partisan policymaking.
That setup is more likely to produce better policy outcomes, with lower inflation and less economic volatility.
Economic stability is "enhanced by having a group of individuals set policy who could not be removed from office," said Waller, a former research director at the St. Louis Fed who was appointed as a Fed governor during President Donald Trump's first term in the White House.
"This structure is the one that we have in place today at the Federal Reserve," Waller told a monetary policy conference at Stanford University's Hoover Institution.
"I would argue that it has stood the test of time, and I hope that it continues to be in place for years to come."
His comments follow what seemed to be threats by Trump earlier this year to try to fire Fed Chair Jerome Powell, though the president has since backed down.
The Fed is closely monitoring a case before the U.S. Supreme Court to see if Trump is allowed to fire officials at other independent agencies.
Waller did not comment on monetary policy or the economic outlook in his prepared remarks.
Reporting by Howard Schneider; Editing by Paul Simao
https://www.reuters.com/world/us/feds-i ... 025-05-09/
"Fed's independent structure has proved its worth, Waller says"
By Howard Schneider
May 9, 2025
PALO ALTO, California, May 9 (Reuters) - The structure of the Federal Reserve's Board of Governors, with members who cannot be fired over policy disputes and serve for periods staggered across presidential terms, has "stood the test of time" and should be preserved, Fed Governor Christopher Waller said on Friday.
Waller, citing earlier research of his own and others, said the U.S. central bank's system provides electoral accountability by letting every U.S. president who serves a four-year term appoint some members of the seven-person Board of Governors, while the lengthy terms of up to 14 years allow objective, non-partisan policymaking.
That setup is more likely to produce better policy outcomes, with lower inflation and less economic volatility.
Economic stability is "enhanced by having a group of individuals set policy who could not be removed from office," said Waller, a former research director at the St. Louis Fed who was appointed as a Fed governor during President Donald Trump's first term in the White House.
"This structure is the one that we have in place today at the Federal Reserve," Waller told a monetary policy conference at Stanford University's Hoover Institution.
"I would argue that it has stood the test of time, and I hope that it continues to be in place for years to come."
His comments follow what seemed to be threats by Trump earlier this year to try to fire Fed Chair Jerome Powell, though the president has since backed down.
The Fed is closely monitoring a case before the U.S. Supreme Court to see if Trump is allowed to fire officials at other independent agencies.
Waller did not comment on monetary policy or the economic outlook in his prepared remarks.
Reporting by Howard Schneider; Editing by Paul Simao
https://www.reuters.com/world/us/feds-i ... 025-05-09/
Re: THE DAILY NEWS
REUTERS
"Exclusive: Nvidia modifies H20 chip for China to overcome US export controls, sources say"
By Liam Mo and Brenda Goh
May 9, 2025
BEIJING, May 9 (Reuters) - Nvidia plans to release a downgraded version of its H20 artificial intelligence chip for China in the next two months, following U.S. export restrictions on the original model, three sources familiar with the matter told Reuters.
The U.S. chipmaker has notified major Chinese customers, including leading cloud computing providers, that it aims to release the modified H20 chip in July, two of the sources said.
The downgraded H20 represents Nvidia's latest attempt to maintain its presence in one of its most crucial markets in the face of Washington's expanding efforts to restrict China's access to advanced semiconductor technology.
The H20, which had been Nvidia's most powerful AI chip cleared for Chinese sales, was effectively blocked from the market after U.S. officials informed the company last month that the product would require an export license.
Nvidia has formulated new technical thresholds, which will guide the development of the modified chip designs.
These specifications will result in significant downgrades from the original H20, including substantially reduced memory capacity, one of the sources said.
Another of the sources said downstream customers could potentially modify the module configuration to adjust the chip's performance levels.
Nvidia declined to comment.
The U.S. Commerce Department did not immediately respond to a request for comment.
China accounted for $17 billion in revenue, or 13% of Nvidia's total sales, in the fiscal year ended January 26.
Highlighting the country's strategic importance, Nvidia CEO Jensen Huang visited Beijing last month, just days after U.S. officials announced the new export license requirements for the H20 chip.
During meetings with Chinese officials, Huang emphasised China's significance as a key market for the company.
The U.S. has restricted exports of Nvidia's most sophisticated chips to China since 2022, citing concerns about their potential military applications.
The H20 was introduced after Washington tightened export controls in October 2023.
Chinese technology giants including Tencent, Alibaba and ByteDance, TikTok's parent company, stepped up H20 chip orders amid growing demand for cost-effective AI models from companies such as startup DeepSeek, Reuters reported early this year.
Nvidia had accumulated $18 billion worth of H20 orders since January, according to a Reuters report last month.
Reporting by Liam Mo and Brenda Goh; Editing by Sonali Paul
https://www.reuters.com/world/china/nvi ... 025-05-09/
"Exclusive: Nvidia modifies H20 chip for China to overcome US export controls, sources say"
By Liam Mo and Brenda Goh
May 9, 2025
BEIJING, May 9 (Reuters) - Nvidia plans to release a downgraded version of its H20 artificial intelligence chip for China in the next two months, following U.S. export restrictions on the original model, three sources familiar with the matter told Reuters.
The U.S. chipmaker has notified major Chinese customers, including leading cloud computing providers, that it aims to release the modified H20 chip in July, two of the sources said.
The downgraded H20 represents Nvidia's latest attempt to maintain its presence in one of its most crucial markets in the face of Washington's expanding efforts to restrict China's access to advanced semiconductor technology.
The H20, which had been Nvidia's most powerful AI chip cleared for Chinese sales, was effectively blocked from the market after U.S. officials informed the company last month that the product would require an export license.
Nvidia has formulated new technical thresholds, which will guide the development of the modified chip designs.
These specifications will result in significant downgrades from the original H20, including substantially reduced memory capacity, one of the sources said.
Another of the sources said downstream customers could potentially modify the module configuration to adjust the chip's performance levels.
Nvidia declined to comment.
The U.S. Commerce Department did not immediately respond to a request for comment.
China accounted for $17 billion in revenue, or 13% of Nvidia's total sales, in the fiscal year ended January 26.
Highlighting the country's strategic importance, Nvidia CEO Jensen Huang visited Beijing last month, just days after U.S. officials announced the new export license requirements for the H20 chip.
During meetings with Chinese officials, Huang emphasised China's significance as a key market for the company.
The U.S. has restricted exports of Nvidia's most sophisticated chips to China since 2022, citing concerns about their potential military applications.
The H20 was introduced after Washington tightened export controls in October 2023.
Chinese technology giants including Tencent, Alibaba and ByteDance, TikTok's parent company, stepped up H20 chip orders amid growing demand for cost-effective AI models from companies such as startup DeepSeek, Reuters reported early this year.
Nvidia had accumulated $18 billion worth of H20 orders since January, according to a Reuters report last month.
Reporting by Liam Mo and Brenda Goh; Editing by Sonali Paul
https://www.reuters.com/world/china/nvi ... 025-05-09/
Re: THE DAILY NEWS
REUTERS
"Investors pull money out of US equity funds for a fourth straight week"
By Reuters
May 9, 2025
May 9 (Reuters) - U.S. equity funds saw outflows for a fourth straight week through May 7, driven by uncertainties around trade tariffs and as investors awaited U.S.-China trade talks for more clues.
Investors withdrew a net $16.22 billion from U.S. equity funds during the week, the largest weekly net sales since March 19, data from LSEG Lipper showed.
A U.S. trade deal with Britain on Thursday, however, has fueled guarded optimism for progress in tariff talks with other countries.
U.S. President Donald Trump also signaled that productive talks with China could lead to lower tariffs.
"We continue to view U.S. equities as attractive, with a year-end S&P 500 target of 5,800," said Mark Haefele, chief investment officer at UBS Global Wealth Management.
U.S. large-cap and mid-cap equity funds suffered net outflows of $13.6 billion and $1.12 billion, respectively, during the week.
U.S. small-cap equity fund outflows, meanwhile, eased to a six-week low of $917 million.
U.S. sectoral funds saw a net $2.89 billion worth of sales.
Investors divested financials, tech, and metals and mining funds worth $1.18 billion, $507 million and $420 million, respectively.
Sentiment towards U.S. fixed-income markets improved during the week as fund investors poured a net $3.53 billion - the most in eight weeks - into U.S. bond funds.
Short-to-intermediate government and treasury funds saw a net $1.15 billion worth of purchases, reversing a net $765 million of sales the prior week.
Municipal debt funds also saw a net $1.06 billion worth of additions.
At the same time, investors snapped up a net $28.4 billion worth of money market funds in their largest weekly net purchase since March 5.
Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru. Editing by Mark Potter
https://www.reuters.com/business/invest ... 025-05-09/
"Investors pull money out of US equity funds for a fourth straight week"
By Reuters
May 9, 2025
May 9 (Reuters) - U.S. equity funds saw outflows for a fourth straight week through May 7, driven by uncertainties around trade tariffs and as investors awaited U.S.-China trade talks for more clues.
Investors withdrew a net $16.22 billion from U.S. equity funds during the week, the largest weekly net sales since March 19, data from LSEG Lipper showed.
A U.S. trade deal with Britain on Thursday, however, has fueled guarded optimism for progress in tariff talks with other countries.
U.S. President Donald Trump also signaled that productive talks with China could lead to lower tariffs.
"We continue to view U.S. equities as attractive, with a year-end S&P 500 target of 5,800," said Mark Haefele, chief investment officer at UBS Global Wealth Management.
U.S. large-cap and mid-cap equity funds suffered net outflows of $13.6 billion and $1.12 billion, respectively, during the week.
U.S. small-cap equity fund outflows, meanwhile, eased to a six-week low of $917 million.
U.S. sectoral funds saw a net $2.89 billion worth of sales.
Investors divested financials, tech, and metals and mining funds worth $1.18 billion, $507 million and $420 million, respectively.
Sentiment towards U.S. fixed-income markets improved during the week as fund investors poured a net $3.53 billion - the most in eight weeks - into U.S. bond funds.
Short-to-intermediate government and treasury funds saw a net $1.15 billion worth of purchases, reversing a net $765 million of sales the prior week.
Municipal debt funds also saw a net $1.06 billion worth of additions.
At the same time, investors snapped up a net $28.4 billion worth of money market funds in their largest weekly net purchase since March 5.
Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru. Editing by Mark Potter
https://www.reuters.com/business/invest ... 025-05-09/
Re: THE DAILY NEWS
RIGZONE
"Oil Prices Rise on Eased Trade Tensions"
by Bloomberg | Newsroom
Monday, May 12, 2025
Oil and most other commodities powered higher, while gold fell, after China and the US ratcheted down trade tensions that had threatened to slash demand for raw materials.
West Texas Intermediate crude rose 1.5% to settle at $61.95 a barrel in New York, while copper advanced 0.8%.
European natural gas, soybeans and iron ore also rallied.
Shares of the top mining companies surged.
The truce between the world’s two largest economies brought some temporary relief to commodity markets roiled by tariffs that dented the outlook for global economic growth in recent weeks.
Oil watchers have slashed demand forecasts, and the trade war already was showing signs of reducing the volume of goods arriving in the US.
China will reduce tariffs on US goods to 10% from 125%, while America will cut its own curbs to 30% from 145% in an arrangement lasting for 90 days.
At a briefing after the talks, US Treasury Secretary Scott Bessent said neither nation wanted their economies to decouple.
Both countries said they would establish a mechanism to continue discussions on economic and trade relations.
“The oil market got caught up in the euphoria, but the damage has already been done to demand in the short term,” said John Kilduff, founding partner of Again Capital LLC.
Still, reduced trade war tensions have removed $3 to $5 of downside from the market, rendering the new price floor near $60 a barrel, he said.
Commodities have been volatile ever since President Donald Trump first announced so-called reciprocal tariffs in early April.
Oil prices are still down more than 10% since then as the market contends with rising supplies from the Organization of the Petroleum Exporting Countries and its allies.
While commodity trading advisers are still largely betting against crude, they’re moving off their extreme bearish stance.
The funds, which can accelerate price momentum, liquidated short positions to sit at 82% short in both WTI and Brent on Monday, compared with 91% short on May 9, according to data from Bridgeton Research Group.
The commodity eased off of intraday highs as Trump signaled positive progress in nuclear talks that took place on Sunday between the US and Iran, boosting expectations of relaxed restrictions on Tehran’s crude in the near future.
Traders are also focused on Trump’s first overseas trip to the Middle East.
Saudi Arabia, OPEC’s de facto leader, will be the first stop.
Companies Rally
Top miners including Glencore Plc and Rio Tinto Plc rose on Monday and were among the best performers in Europe’s equity markets.
Energy companies including Exxon Mobil Corp. and Chevron Corp. also climbed.
Copper prices, which fell sharply after tariffs were first announced, have rebounded on signs that demand in China is holding firm for now.
But the price increase lagged the pace of gains in crude as investors caution against more trade uncertainty.
“There are still questions as to what the end game will be, as the measure will be operational for 90 days, and what the eventual level of tariffs will be,” said Ewa Manthey, commodity strategist with ING Groep NV.
“Although these new levies are lower than expected, they still are significant and that could still hit demand for raw materials.”
In agricultural markets, soybean futures in Chicago extended gains to trade at the highest since February.
China is the world’s top soybean buyer, and the trade thaw could help get crop flows moving again.
Meanwhile, gold lost ground as haven demand eased.
The decline was compounded by a de-escalation of military hostilities between India and Pakistan after four days of clashes brought the two nuclear-armed nations close to a full-blown war.
The world’s top bullion producers slid following gold’s decline.
Newmont Corp., Barrick Mining Corp. and Agnico Eagle Mines Ltd. — the top three miners of the precious metal — all were down more than 6% in New York.
Shares of companies that sell battery systems that rely on cells from China rallied.
Fluence Energy Inc. jumped 23% while Sunrun Inc. climbed 16%.
Sunrun said last week that the series of tariffs that had been put in place could result in additional costs of $100 million to $200 million.
Prices
Brent oil advanced 1.6% to settle at $64.96 a barrel
WTI added 1.5% to settle at $61.95 a barrel
Copper rose 0.8% to settle at $9,520.50
Spot gold fell 2.7%
European natural gas added 2.2% to settle at $35.39
https://www.rigzone.com/news/wire/oil_p ... 7-article/
"Oil Prices Rise on Eased Trade Tensions"
by Bloomberg | Newsroom
Monday, May 12, 2025
Oil and most other commodities powered higher, while gold fell, after China and the US ratcheted down trade tensions that had threatened to slash demand for raw materials.
West Texas Intermediate crude rose 1.5% to settle at $61.95 a barrel in New York, while copper advanced 0.8%.
European natural gas, soybeans and iron ore also rallied.
Shares of the top mining companies surged.
The truce between the world’s two largest economies brought some temporary relief to commodity markets roiled by tariffs that dented the outlook for global economic growth in recent weeks.
Oil watchers have slashed demand forecasts, and the trade war already was showing signs of reducing the volume of goods arriving in the US.
China will reduce tariffs on US goods to 10% from 125%, while America will cut its own curbs to 30% from 145% in an arrangement lasting for 90 days.
At a briefing after the talks, US Treasury Secretary Scott Bessent said neither nation wanted their economies to decouple.
Both countries said they would establish a mechanism to continue discussions on economic and trade relations.
“The oil market got caught up in the euphoria, but the damage has already been done to demand in the short term,” said John Kilduff, founding partner of Again Capital LLC.
Still, reduced trade war tensions have removed $3 to $5 of downside from the market, rendering the new price floor near $60 a barrel, he said.
Commodities have been volatile ever since President Donald Trump first announced so-called reciprocal tariffs in early April.
Oil prices are still down more than 10% since then as the market contends with rising supplies from the Organization of the Petroleum Exporting Countries and its allies.
While commodity trading advisers are still largely betting against crude, they’re moving off their extreme bearish stance.
The funds, which can accelerate price momentum, liquidated short positions to sit at 82% short in both WTI and Brent on Monday, compared with 91% short on May 9, according to data from Bridgeton Research Group.
The commodity eased off of intraday highs as Trump signaled positive progress in nuclear talks that took place on Sunday between the US and Iran, boosting expectations of relaxed restrictions on Tehran’s crude in the near future.
Traders are also focused on Trump’s first overseas trip to the Middle East.
Saudi Arabia, OPEC’s de facto leader, will be the first stop.
Companies Rally
Top miners including Glencore Plc and Rio Tinto Plc rose on Monday and were among the best performers in Europe’s equity markets.
Energy companies including Exxon Mobil Corp. and Chevron Corp. also climbed.
Copper prices, which fell sharply after tariffs were first announced, have rebounded on signs that demand in China is holding firm for now.
But the price increase lagged the pace of gains in crude as investors caution against more trade uncertainty.
“There are still questions as to what the end game will be, as the measure will be operational for 90 days, and what the eventual level of tariffs will be,” said Ewa Manthey, commodity strategist with ING Groep NV.
“Although these new levies are lower than expected, they still are significant and that could still hit demand for raw materials.”
In agricultural markets, soybean futures in Chicago extended gains to trade at the highest since February.
China is the world’s top soybean buyer, and the trade thaw could help get crop flows moving again.
Meanwhile, gold lost ground as haven demand eased.
The decline was compounded by a de-escalation of military hostilities between India and Pakistan after four days of clashes brought the two nuclear-armed nations close to a full-blown war.
The world’s top bullion producers slid following gold’s decline.
Newmont Corp., Barrick Mining Corp. and Agnico Eagle Mines Ltd. — the top three miners of the precious metal — all were down more than 6% in New York.
Shares of companies that sell battery systems that rely on cells from China rallied.
Fluence Energy Inc. jumped 23% while Sunrun Inc. climbed 16%.
Sunrun said last week that the series of tariffs that had been put in place could result in additional costs of $100 million to $200 million.
Prices
Brent oil advanced 1.6% to settle at $64.96 a barrel
WTI added 1.5% to settle at $61.95 a barrel
Copper rose 0.8% to settle at $9,520.50
Spot gold fell 2.7%
European natural gas added 2.2% to settle at $35.39
https://www.rigzone.com/news/wire/oil_p ... 7-article/