Category: Economy and Policy

(Reuters) – Suncor Energy Inc, Canada’s second-largest energy producer, reported a quarterly loss on Tuesday compared with a profit a year ago, as lower prices for the country’s crude offset gains from higher refinery margins.

The Calgary, Alberta-based company reported a net loss of C$280 million, or 18 Canadian cents per share, in the fourth quarter ended Dec. 31, from a profit of C$1.38 billion, or 84 Canadian cents per share, a year earlier.

Total upstream production rose to 831,000 barrels of oil equivalent per day, compared with 736,400 in the year-ago quarter.

Feb 6 (Reuters) – Gold prices held steady on Wednesday after rising 0.3 percent in the previous session, with investors looking to U.S. President Donald Trump’s upcoming State of the Union address for hints on the outlook for Sino-U.S. trade.

FUNDAMENTALS

* Spot gold was steady at $1,315 per ounce at 0049 GMT. Prices rose about 0.3 percent in the previous session, after falling to their lowest level since Jan. 29 at $1,308.20 on Monday.

* U.S. gold futures were also steady at $1,319.10 an ounce.

* Trump will ask Congress in his address on Tuesday to pass legislation to boost the nation’s aging infrastructure, but will not explain how to pay for it, administration officials said. The speech starts at 0200 GMT.

* Senior U.S. and Chinese officials are poised to start another round of trade talks in Beijing next week to push for a deal to protect U.S. intellectual property and avert a March 2 increase in U.S. tariffs on Chinese goods, two people familiar with the plans said on Tuesday.

* Trump has vowed to increase tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent currently if the two sides cannot reach a deal by 12:01 a.m. (0501 GMT) on March 2.

* The Federal Reserve should leave interest rates where they are until the U.S. economic outlook is clearer, Dallas Fed President Robert Kaplan said on Tuesday, a process that in his view could take several more months.

* The U.S. central bank last week kept interest rates steady and promised to be “patient” before making any future adjustments.

* China’s financial markets are closed all week for the Lunar New Year holiday.

* Trump and Fed Chairman Jerome Powell dined at the White House on Monday in their first meeting after months in which Trump lambasted the central bank for raising interest rates and, in the president’s view, endangering the economy’s growth.

* Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.18 percent to 811.82 tonnes on Tuesday from Monday. Holdings have dropped for three straight sessions.

* Equatorial Guinea, known mainly for its oil and gas sector, will officially launch the country’s first mining licence bid round on April 1, the mines and oil minister said on Tuesday. (Reporting by Nallur Sethuraman in Bengaluru; Editing by Joseph Radford)

PHUKET, Thailand (Thomson Reuters Foundation) – Staying at a hotel on the Thai island of Koh Samui in 2015, Meghan Kerrigan noticed the four bottles of water she was given every day were clogging her bin with plastic.

Outside her door, Chaweng beach was smothered in rubbish. It was then that she and Kohler brothers, Ryan and Matthew, had a “light-bulb moment”.

“Instead of trying to solve the problem by cleaning the beaches every day, let’s go to what the source of the problem is, and take the plastic bottle away,” said Kerrigan, now 31.

In 2016, the trio founded startup company Generation Water, based on the Thai resort island of Phuket.

They partnered with Marriott, the world’s largest hotel brand, in January 2017 to come up with a sustainable alternative to plastic bottles that would be commercially competitive and meet the needs of resorts and authorities.  

Two years on, the South African-born entrepreneurs explained the workings of a pilot water plant at the JW Marriott Phuket Resort & Spa on Mai Khao beach, next to slogans saying “Save Water Drink Air” and “Made 100% from the air”.

Here, in the sweltering heat, two water generators suck in vapor from the air, which then condenses into water when it hits cold coils.

The water drips into tanks, making 4,000 litres a day. It is filtered, minerals are added, and it is put into reusable glass bottles. These are placed into 445 guestrooms at the JW Marriott Phuket and neighboring Renaissance Phuket Resort & Spa.

The bottled water is also being trailed at two Marriott vacation clubs nearby.

The move is part of a wider effort on the holiday island to cut down on plastic bottles, rife in the hospitality industry, and a major problem in Asia and its travel hotspots.

SUSTAINABLE SHIFT

In many parts of Asia, tap water is unsafe to drink, so hotel guests get complimentary water, mostly in plastic bottles.

As much as 60 percent of the plastic found in the ocean comes from five Asian nations, including Thailand, according to U.S.-based non-profit group Ocean Conservancy.

In 2017, the United Nations Economic and Social Commission for Asia and the Pacific organized a forum to encourage sustainable water management on resort islands.  

On Phuket, which is half the size of Hong Kong, more hotels are being built, and water is already in short supply.

Trucks navigate crowded roads as resorts without their own catchment area bring in water from reservoirs.

Phuket was the world’s 11th top city destination in 2017, with 11.6 million international arrivals, according to global research company Euromonitor International.  

To cope with the environmental impacts of this influx, nearly 70 hotels from the Phuket Hotels Association have pledged to cut plastic bottles and straws by the end of 2019.

Since Marriott started producing its own water four months ago, it has stopped more than 100,000 plastic bottles from entering landfill or oceans, the chain says.

It plans to expand the scheme to all Marriott resorts in southern Thailand, handing out 4 million glass bottles.

Carsten Siebert, Marriott International’s director of operations for Thailand, Vietnam, Cambodia and Myanmar, said the company understood it had “a greater obligation to operate responsibly given our expanding global footprint”.

The chain has a goal to reduce water consumption per occupied room by 20 percent between 2007 and 2020.

‘CLIMATE-POSITIVE’

The “water from air” technology uses 78 percent less energy than producing standard bottled water, has a lower carbon footprint, and is about a third cheaper, Generation Water says.

“The good thing is that it starts to become financially affordable,” said Matthias Y. Sutter, general manager at JW Marriott Phuket.

Nor does the system rely on pulling water from the ground, rivers or lakes.

“We don’t have to invest in land to secure our own water,” said Kanokwan Homcha-aim, corporate social responsibility manager for the same Marriott hotel.

Guests here have reacted positively since the bottled water was introduced in September, happy that “finally a big brand made a move”, she said.

They also like the taste. Michael Lawson, a lawyer from Sydney sitting at the Sala Sawasdee lobby bar, said his children were “quite picky” about water. “But it’s very refreshing and they are fighting over it in the room,” he said.

Downstairs in the Siam Deli, teenage student Jeremy Frydman from Melbourne said it was better than tap water at home.

One challenge for Generation Water is explaining the science behind the technology.

Many guests ask about air pollution, for example. But the water collected is clean to start with, and the technology still works if the air is polluted as only water condenses, not the air or its contaminants, said Ryan Kohler.  

And with human activities emitting more greenhouse gases, the atmosphere is warming up, causing more water to evaporate, which further heats the air in “a vicious circle”, he added.

The water-from-air system helps reduce this vapor, said Kerrigan, adding that it has no impact on rainfall levels.

Thailand’s food and drug administration approved Generation Water last August, and the company is now expanding.

It is building a plant in Phuket, which will use solar energy to make “climate-positive” water, producing more than 20,000 liters of water per day by the end of the year.   

Nine Marriott resorts on Phuket are in the process of signing up, along with 30 other hotels.

Generation Water is now eyeing the rest of Thailand, and is talking to hotels in Singapore, Indonesia, Vietnam and the Maldives, Kohler said.

It also sells smaller water production units that can be used in homes, offices, classrooms and yachts. 

The company’s goal is to stop 1 billion 500 ml plastic bottles from entering landfill and the oceans every year by the end of 2021 – equal to supplying 3,000 hotels of 250 rooms.  

As for Marriott staff on Phuket, they have “no excuse now”, said Homcha-aim.

Their birthday gift from the company will be a reusable tumbler, which they can fill up with “water from the air”.

Feb 6 (Reuters) – The following are the top stories in the Financial Times. Reuters has not verified these stories and does not vouch for their accuracy.

Headlines

German minister calls for fund to counter foreign takeovers on.ft.com/2Dme151

Apple to pay hundreds of millions of euros in French back-taxes on.ft.com/2DgrtY6

FCA fines ex-Newton fund manager over IPO pricing on.ft.com/2Dbu1qc

Overview

German Economy Minister Peter Altmaier is calling to create a state investment fund to counter foreign takeovers of big German firms.

Authorities in France have ordered iPhone maker Apple Inc to pay additional taxes after an examination of the company’s French operations in the past decade.

A former fund manager at Newton Investment Management has been fined for attempting to influence competitors during share sales, demonstrating a lack of due skill and care, the Financial Conduct Authority said on Tuesday. (Compiled by Bengaluru newsroom; Editing by Sandra Maler)

SYDNEY (Reuters) – Asian shares started cautiously on Wednesday as investors waited to see if U.S. President Donald Trump drops any hints of progress on tariffs in his State of the Union speech.

MSCI’s broadest index of Asia-Pacific shares outside Japan was flat with China and several other markets in the region still closed for the Lunar New Year holiday. Japan’s Nikkei edged up 0.3 percent, while E-Mini futures for the S&P 500 barely budged.

Dow Jones reported on Tuesday that U.S. Treasury Secretary Steve Mnuchin and Trade Representative Robert Lighthizer plan to hold talks in Beijing early next week, citing an unidentified senior administration official.

Trump was expected to challenge Democrats to approve funding for his long-sought border wall but stopped short of declaring a national emergency over it, at least for now. The speech starts at 2100 ET (0200 GMT).

Investors are also interested in any detail on a long-touted plan for infrastructure spending, which has yet to get a single road or bridge built.

“Trump is likely to tout progress on the trade front, though many key structural issues are likely still outstanding,” said Richard Franulovich, Westpac’s head of FX strategy.

“An infrastructure plan is likely to be resuscitated again. A Democrat led-Congress will likely be more sympathetic, which would be a positive for risk appetite.”

Wall Street had already racked up gains courtesy of strong corporate results from Europe and the U.S., including a blockbuster from Estée Lauder Cos Inc.

The Dow ended Tuesday up 0.68 percent, while the S&P 500 gained 0.47 percent and the Nasdaq 0.74 percent.

Treasury bonds also bounced, helped by data showing a surprisingly soft U.S. service sector index of 56.7, with new orders falling to a one-year low.

A LENGTHY PAUSE

The Federal Reserve should leave interest rates where they are until the U.S. economic outlook is clearer, Dallas Fed President Robert Kaplan said on Tuesday, a process that could take several more months.

The dollar held up well thanks in part to a retreat in sterling, which hit two-week lows at $1.2922 after poor survey data and uncertainty about Brexit talks pushed it below a key market level.

Against a basket of currencies, the dollar was firm at 96.064 and well above last week’s low of 95.162. It was steady on the yen at 109.94.

The euro slipped to $1.1407 after a survey showed on Tuesday that euro zone businesses expanded at their slowest pace since mid-2013 at the start of the year.

The Australian dollar was a rare gainer after the Reserve Bank of Australia (RBA) sounded less dovish than speculators had wagered on at its first policy meeting of the year on Tuesday.

Markets are now all ears for a speech by RBA Governor Philip Lowe at 0130 GMT.

“The Bank could keep to its mantra of “the next move in cash rates is more likely to be up”, though not any time soon and presumably even further away,” said Rodrigo Catril, a senior FX strategist at National Australia Bank.

“However, increased downside risks both globally and domestically will likely mean the Governor will be less confident of this statement than was the case a few months ago.”

In commodity markets, the Wall Street Journal reported Saudi Arabia and its Persian Gulf allies were proposing a formal partnership with a 10-nation group led by Russia to try to manage the global oil market, an alliance that could transform the cartel.

U.S. crude futures rose 15 cents to $53.81 in early trade. Brent had ended Tuesday down 40 cents at $62.11.

Spot gold held at $1,314.71 per ounce, short of its recent peak at $1,326.30.

NEW YORK (Reuters) – Plains All American Pipeline LP said on Tuesday it expects the reversed Capline crude pipeline, from the U.S. Midwest to the Gulf Coast, to begin service in the third quarter of 2020.

The target in-service date for the reversed line is third quarter 2020 for light oil service and early 2022 for heavy oil service, the company said on its quarterly earnings call with analysts.

“The capacity from Cushing (Oklahoma) down to St. James (Louisiana) should be available on a quicker time frame than heavy moving down from Patoka (Illinois),” Chief Executive Officer Willie Chiang said on the call.

Pending a successful open season, in which companies gauge shipper interest for the proposal, the Cushing to St. James movement would include a 200,000 barrel a day of expansion and a modest extension of the Diamond JV pipeline that will connect to Capline, Plains said.

Capline is the largest crude pipeline that currently runs from the Gulf Coast to refineries in the Midwest. Volumes on Capline, once a major artery for imports and Gulf of Mexico crude used by U.S. Midwest refiners, have declined sharply as the U.S. shale boom pushed inland crude to the East Coast and Gulf Coast.

The company said it is also making progress on its Cactus II pipeline with partial service expected in late third quarter of 2019 and full service plan by April 2020.

Plains said its Corpus Christi, Texas and St. James facilities could both could explored further for crude export capabilities.

“We think we’re the best solution to get barrels to the coast and what we strive to do is to have connectivity to the many, many docks that are being expanded to be able to get access to water … so far there’s been a lot of interest in us being able to get connections,” Chiang said.

Plains has previously said it was monitoring demand for building a crude export facility capable of handling supertankers.

Several midstream companies have announced multimillion-dollar crude terminals along the Gulf Coast looking to take advantage of a surge in U.S. crude exports.

Plains said it has a 20 percent ownership interest in the joint venture with ExxonMobil and Lotus Midstream for a pipeline system that is expected to provide more than 1 million barrels per day of crude and condensate capacity from the Permian Basin to the Texas Gulf Coast.

Plains expects a net 2019 capital investment of about $250 million toward the project.

HOUSTON (Reuters) – Roughly 20 percent of the hydraulic fracturing fleets that were active in mid-2018 have now been idled or are being idled, as lower oil prices prompt producers to tighten their budgets, Liberty Oilfield Services estimated on Tuesday.

The company in its fourth quarter earnings release said a number of customers made last-minute decisions to defer well completions due to budgeting and cash flow management decisions, in part due to the drop in oil prices at the end of last year.

PARIS (Reuters) – France and Germany will on Wednesday announce a 65 million euros ($74 million) contract financed equally by both countries over two years as the first act of the joint program to design a next-generation combat jet, a French army source said.

Dassault Aviation and Airbus, which will build the jet that is expected to replace Dassault’s Rafale and Germany’s Eurofighters by 2024, will start work on the concept and architectures of the program, the source said.

The companies are expected to launch demonstrators of aircraft and engine by mid-2019.

French President Emmanuel Macron and German Chancellor Angela Merkel first announced plans in July 2017 for the new Future Combat Air System (FCAS), which will include a fighter jet and a range of associated weapons, including drones.

After nearly two years of preparatory work by the companies involved, Wednesday’s agreements and contract signing will pave the way for the program to begin in earnest.

Airbus and Dassault have been waiting for initial contracts to be signed to start work on the new project.

France’s Safran and Germany’s MTU Aero Engines are expected to join forces to develop the engine for the new warplane, while French electronics firm Thales and European missile maker MBDA would also participate.

French Armed Forces Minister Florence Parly and German Defence Minister Ursula von der Leyen will preside over the signing ceremony at a Safran site in northeastern Paris on Wednesday.

Germany removed a key obstacle to progress on the project last week when it bowed to French demands and excluded Lockheed Martin’s F-35 stealth fighter from a multibillion-euro tender to replace ageing Tornado fighter jets that are fitted to carry U.S. nuclear weapons.

Paris, Germany’s closest European partner, had warned that buying the F-35 in particular would derail plans to develop the new Franco-German fighter by 2040 since it would constitute a potential competitor to that project.

France and Germany will add Spain as a full partner in the program this summer, sources told Reuters in December.

Britain, which is due to exit the European Union in March, unveiled its own rival aircraft development program, dubbed Tempest, at the Farnborough Air Show in July.

European military and industry executives say they believe the two programmes could and should eventually be merged given the need to compete internationally and the many billions of euros needed to develop a new combat aircraft.

The French army source said France and Germany were open to more European partners joining the program.

Feb 5 (Reuters) – * The Toronto Stock Exchange’s S&P/TSX rose 100.37 points, or 0.64 percent, to 15,702.69. * Leading the index were Eldorado Gold Corp, up 5.6 percent, Nexgen Energy Ltd, up 4.6 percent, and Alacer Gold Corp , higher by 4.2 percent. * Lagging shares were Cronos Group Inc, down 6.1 percent, Home Capital Group Inc, down 3.2 percent, and Ensign Energy Services Inc, lower by 2.9 percent. * On the TSX 178 issues rose and 55 fell as a 3.2-to-1 ratio favored advancers. There were 22 new highs and 1 new lows, with total volume of 217.7 million shares. * The most heavily traded shares by volume were Aurora Cannabis Inc, Aphria Inc and Enbridge Inc. * The TSX’s energy group rose 0.03 points, or 0.02 percent, while the financials sector climbed 1.97 points, or 0.68 percent. * West Texas Intermediate crude futures fell 1.56 percent, or $0.85, to $53.71 a barrel. Brent crude fell 0.74 percent, or $0.46, to $62.05 * The TSX is up 9.6 percent for the year.

Feb 5 (Reuters) – Apple Inc said on Tuesday that Angela Ahrendts, the chief of its retail operations, was leaving the company to pursue new opportunities.

The iPhone maker named Deirdre O’Brien as senior vice president of “Retail + People” to replace Ahrendts. (Reporting by Vibhuti Sharma in Bengaluru; Editing by Sai Sachin Ravikumar)