Woodside Heads Off Australian Labor Dispute Roiling Gas Markets -- Commodities Roundup

MARKET MOVEMENTS:

-- Brent crude oil is up 0.3% at $83.45 a barrel.

-- European benchmark gas is 9.7% lower at EUR33.11 a megawatt hour.

-- Gold futures are down 0.1% at $1,947.10 a troy ounce.

-- LME three-month copper futures are down 0.7% at $8,396.50 a metric ton.

-- Wheat futures are flat at $6.40 a bushel.

TOP STORY:

Woodside Heads Off Australian Labor Dispute Roiling Gas Markets

Woodside Energy reached a preliminary deal with disaffected workers at some of its natural gas export facilities in Australia, a move that could head off a walkout that risked disrupting global gas supply and jolting worldwide energy prices.

Workers at three Woodside-operated offshore liquefied natural gas platforms had threatened to strike over issues including pay after the Australian company and union officials had failed to find common ground after months of talks.

Worries about strikes at one of the world's major LNG exporters had stoked volatility in natural-gas prices as European countries prepare for their second winter since Russia's invasion of Ukraine disrupted traditional energy markets.

Woodside and union representatives reached agreement on a collective deal in the early hours of Thursday following a 15-hour meeting at the company's headquarters in the Western Australian city of Perth. Members will now decide whether to endorse the deal and won't strike while the agreement is being ratified, said Offshore Alliance, a partnership between two local unions.

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OTHER STORIES:

In Quest for Battery Metals, U.S. Takes On Cobalt's 'Inconvenient Truth'

The U.S. is turning to a much-criticized source as it races to secure supplies of battery metals to meet the growing demand for electric vehicles.

To do so, it is homing in on cobalt from the Democratic Republic of Congo's informal mining sector, where miners, sometimes including children, often work with no safety equipment in dangerous, hand-dug mines. Congo supplies around 70% of the world's cobalt, a key metal in the lithium-ion batteries used in EVs, with about a third of that coming from these so-called artisanal miners.

The U.S. Agency for International Development said earlier this year that it would issue grants to companies that source critical minerals from Congo and were willing to support artisanal miners. Meanwhile, the Labor Department has been working with officials in the country to help improve working conditions and oversight.

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Building Green: New Technologies to Create Less Polluting Cement

Rising demand for housing in most major cities around the world is increasingly at odds with efforts to reduce greenhouse emissions, as the literal building blocks-concrete and cement-of the construction projects are extremely polluting.

Roughly 7% of all carbon emissions today come from cement production, making it one of the highest-emitting industrial sectors, according to the consulting firm McKinsey.

About 90% of the emissions in traditional portland cement come from producing clinker-the binding agent that holds the water, gravel and sand together-that makes up nearly three quarters of the final product.

That process has been replicated for millennia but companies now are looking to change it. Approaches to the problem include improving energy efficiency, using cleaner fuels, capturing the carbon emissions produced and switching to alternative raw materials.

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MARKET TALKS:

Palm Oil Ends Higher, Tracking Soybean Oil's Overnight Gains

1004 GMT - Palm oil prices closed higher, tracking soybean oil's overnight gains on the Chicago Board of Trade. The two vegetable oils trade in tandem, as they are used in similar products. OCBC analysts note that any price increase aboveMYR4,000 a ton may be short-lived, given the improving production outlook in both Malaysia and Indonesia in the coming months. RHB Research pegs support for CPO futures at MYR3,800 and resistance at MYR4,000. The Bursa Malaysia Derivatives contract for November delivery is MYR50 higher at MYR3,880 a ton. ([e-mail])

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Oil Weakens on Reports US Considering Easing Venezuela Sanctions

0806 GMT - Oil prices slip on reports that the U.S. could be considering easing sanctions on Venezuelan oil exports. Brent crude oil declines 0.6% to $82.75 a barrel while WTI falls 0.8% to $78.29 a barrel. The Biden administration has drafted proposals that would ease sanctions on the South American nation's oil exports if Caracas moves toward fair elections, according to Reuters, citing five people with knowledge of the proposal. Extra oil exports from Venezuela would come as Iran has been ramping up its own oil exports, alleviating tightness in the oil market and weighing on prices. ([e-mail])

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Sugar Prices Could Jump if India Implements Export Ban

0747 GMT - Prices for sugar could rise sharply if India implements an export ban, similar to the one it recently put in place for rice, according to ING. "Reports suggest that India is likely to ban the export of sugar for the first time in seven years in the upcoming season starting in October, following lower rainfall and weaker yields," analysts at the bank say. This should provide support to prices which currently are hovering around $0.24 a pound for raw sugar, they say. "Recent statements from government officials highlight concern that there is not enough sugar to allocate for export quotas, as patchy rain will likely weigh on output over 2023/24 and could also see reduced planting for 2024/25." ([e-mail])

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European Natural Gas Prices Slump as Woodside Deal Averts Strike in LNG Facility

0739 GMT - European natural gas prices slump after a last-minute deal at a key Australian LNG export facility appears to stave off a strike. Benchmark European gas futures slumped 14% to EUR31.70 a megawatt-hour after Woodside Energy reached a preliminary deal with unions, whose memberships still need to approve the deal. Thursday's declines come after the gas contracts had risen over 5% on Wednesday taking their gains to their highest level since April. Fears of a walkout by Woodside workers had raised worries about greater competition between European and Chinese consumers for limited global gas supplies. Still, the threat of industrial action still hangs over other LNG facilities operated by Chevron with a capacity of 24.5 million metric tons a year. ([e-mail])

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Metals Slip Amid Worries Over China Demand

0726 GMT - Metal prices are falling as worries around China's property sector continue to pressure industrial goods. Three-month copper is down 0.7% to $8,392.50 a metric ton while aluminum is 0.3% lower at $2,167.50 a ton. Gold meanwhile is up 0.1% to $1,950 a troy ounce. "China's beleaguered property sector shows no signs of improving," analysts at Australian bank ANZ say in a note. They point to a lack of sufficient support measures as well as consumer reluctance to buy as key reasons noting a 25% on-year drop in floor space sold in July. "New starts and buildings under construction have fallen nearly 50% year-on-year. That looks unlikely to reverse in the short term." ([e-mail])

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Australia's National Economy Could Get Boost From Natural Advantages, NAB CEO Says

0536 GMT - Australia could witness its national economy grow by A$435 billion by 2050 due to its natural advantages in solar, wind and critical minerals, according to a new report by NAB. But the lender's CEO, Ross McEwan, said how the country transitions will be the most important factor. "First and foremost, we need to build, build, build. We need investment and labor to drive the renewable projects, have shorter lead-times, as well as a consistent national framework that delivers major green infrastructure projects that have widespread community support," he told the Australia-Israel Chamber of Commerce event in Melbourne on Thursday. "The cost of inaction is also too great to ignore. All-too-frequent natural disasters are a stark reminder." ([e-mail])

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(END) Dow Jones Newswires

08-24-23 0730ET