U.S. Opposes European Plan to Censure Iran Over Nuclear Work -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is up 0.6% at $82.58 a barrel.

--European benchmark gas is up 2.1% to EUR34.84 a megawatt-hour.

--Gold futures are up 0.5% at $2,345.80 a troy ounce.

TOP STORY:

U.S. Opposes European Plan to Censure Iran Over Nuclear Work

The Biden administration is pressing European allies to back off plans to rebuke Iran for advances in its nuclear program as it seeks to keep tensions with Tehran from escalating before the autumn's U.S. presidential election, according to diplomats involved in discussions.

The U.S. is arguing against an effort by Britain and France to censure Iran at the International Atomic Energy Agency's member state board in early June, the diplomats said. The U.S. has pressed a number of other countries to abstain in a censure vote, saying that is what Washington will do, they said.

U.S. officials deny lobbying against a resolution.

OTHER STORIES:

An Oil-Patch Brawl Over a $53 Billion Megadeal Entwines the Legacies of Three CEOs

Days after striking a $53 billion purchase of Hess, Chevron Chief Executive Mike Wirth called his counterpart at Exxon Mobil to discuss their future partnership in a mega-oil project Chevron would inherit through the deal.

Darren Woods told Wirth he looked forward to collaboration in Guyana, where Exxon and Hess own portions of a buried treasure of 11 billion barrels of oil and gas. Chevron and Exxon have a long-established partnership in projects around the world, one they could expand off the coast of the rainforest-covered South American country, Woods indicated in the October phone call.

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Chevron-Hess Deal Vote Is Looking Like a 'Coin Toss'

The agreement Chevron signed last year to buy Hess for $53 billion was expected to transform the oil giant, giving it new assets in fast-growing regions of the world. But the status of the deal now looks shakier than ever, with Hess shareholders split on whether to approve it. Everything comes down to a Hess shareholder vote on Tuesday.

Action in the stock indicates that investors think the success of the deal is very uncertain, according to one investor who is considering voting to delay the acquisition.

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RWE to Build Two Wind Farms in North Sea off German Coast

RWE will build two new wind farms in the North Sea off of the German coast, expanding its portfolio of offshore energy production.

The German energy firm said Monday that construction on the first project will start in 2025 and finish in 2026 with a capacity of 660 megawatts. The firm will start building the second wind farm, which will generate up to 900 megawatts, in 2027, with operations beginning in 2029.

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Another Roadblock to the EV Transition: Personal Politics

On paper, Robert Olson is a prime candidate to buy an electric vehicle.

The retired Arizona engineer loves cars, has owned hybrid vehicles and has the means to pay the premium for an EV. And he owns two gas-powered cars, including a Porsche, that he could use for longer road trips.

But Olson is turned off by electric cars. He thinks their potential to help the climate is overstated, and he resents the Biden administration's pro-EV policies.

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China Evergrande's EV Unit Shares Soar on Potential Investor Support

Shares of China Evergrande Group's electric-vehicle unit surged, fueled by optimism that some businesses may survive despite the property giant's liquidation.

China Evergrande New Energy Vehicle shares jumped 92% to 73 Hong Kong cents (9 U.S. cents) on Monday after the EV startup said liquidators were in talks to sell a 29% stake in the unit to an unnamed buyer. The buyer would also have the option to purchase an additional 29.5% stake.

MARKET TALKS:

Palm Oil Ends Lower on Expectations of Higher Output -- Market Talk

1016 GMT - Palm oil prices closed lower, erasing earlier gains. Expectation of seasonally higher output in the coming weeks is putting pressure on prices, says David Ng, a trader at Kuala Lumpur-based proprietary trading company Iceberg X. Ng pegs support for crude palm oil futures above MYR3,800 and resistance at MYR3,950. The Bursa Malaysia Derivatives contract for August delivery fell MYR13 to MYR3,872 a ton. ([e-mail])

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Iron Ore Traders More Upbeat Than Chinese Mills, Steel Traders -- Market Talk

0859 GMT - Chinese mills and steel traders' sentiment in May seems divergent from that of iron ore traders, Macquarie global strategists write in a note. In Macquarie's May survey, more mills and steel traders felt bearish, as compared with improving sentiment for iron ore traders amid rising iron ore prices, they write. Construction remains the main drag for steel demand, Macquarie says. However, there is an improvement in production outlook ahead, with almost 75% of Chinese steel mills not planning to make any changes to their purchasing patterns for June, Macquarie adds.([e-mail])

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Gold Prices Drift Higher Ahead of U.S. Inflation Data -- Market Talk

0815 GMT - Gold futures rise 0.2% to $2,339.9 a troy ounce ahead of key U.S. inflation data later this week. The precious metal made small gains, recouping some of the losses sustained in Friday's session, when it closed at its lowest level in two weeks. The market has shifted focus to the next U.S. Personal Consumption Expenditures price index, the Federal Reserve's preferred measure of inflation, set for release on Friday. The data will be scrutinized for hints as to the Fed's pathway toward monetary easing, as high interest rates typically depress demand for the non-interest-bearing bullion. Gold fell over the course of last week, after Federal Reserve minutes released Wednesday included downbeat commentary on the prospect of rate cuts. ([e-mail])

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Oil Edges Higher as Market Awaits OPEC+ Policy Decision -- Market Talk

0736 GMT - Oil prices are edging higher, with all eyes set on OPEC+'s upcoming decision on production cuts at its Sunday meeting. Brent crude and WTI are both up 0.2% at $82.26 and $77.90 a barrel, respectively. The cartel and its allies are expected to fully roll over supply curbs at least into the third quarter of the year, in an effort to prop up prices as the market remains under pressure. Meanwhile, Memorial Day weekend in the U.S. inaugurated the start of the summer driving season, which will be closely watched for a glimpse into demand trends. "While U.S. holiday trips are expected to hit a post-COVID high, improved fuel efficiency and EVs could see oil demand remain soft," ANZ Research analysts say in a note. Yet, "this may be offset by rising air travel." ([e-mail])

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Lithium Supplies Seen Rising, Weighing on Prices -- Market Talk

0631 GMT - Lithium supplies are expected to rise and potentially push down prices of the battery metal, Morgan Stanley analysts say. Australia's spodumene shipments should start to improve in the coming months and African shipments should also recover following the end of the wet season, say the MS analysts. China is likely to record another year of strong production growth after easing environmental restrictions, and Chile's exports are touching all-time highs, they add. "While the lithium price has held up well year-to-date, a loosening [supply-demand] balance from here brings downside risks," say the analysts. "The China lithium carbonate price is currently trading close to our base case of $13,500/ton but we see room for it to fall below this, with the price already starting to roll over recently." ([e-mail]; @RhiannonHoyle)

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(END) Dow Jones Newswires

05-27-24 0720ET