Blackstone, Carlyle Take Different Sides on Oil-And-Gas Investment -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil moved 2.5% lower to $93.26 a barrel

--European benchmark gas dropped 1.2% to EUR241.50 a megawatt hour

--Gold futures fell 0.9% at $1,71.10 a troy ounce

--Three-month copper slipped 1.7% to $7,655 a metric ton

--Wheat futures fell 1.2% to $8.22 a bushel

TOP STORY:

Blackstone, Carlyle Take Different Sides on Oil-and-Gas Investment

Profits from oil-and-gas production have surged as crude prices hover at elevated levels, but volatile returns and a fraught political climate have created a divide among the biggest private-equity firms about whether investing in the sector is worth the headache.

Many public pension funds and endowments that invest in private-equity funds have put pressure on their managers to stop backing producers of fossil fuels and invest more in cleaner sources of energy. The energy market's boom-and-bust cycles have also translated into poor investment returns over the long term.

That has caused some of the biggest buyout firms to dial back their investment in the sector. Blackstone Inc. has said that neither of its energy businesses will make new investments in oil-and-gas exploration and production. Apollo Global Management Inc. forswore new fossil-fuel investments in the $25 billion buyout fund it is in the process of raising.

OTHER STORIES:

ESG Focus Lowers Environmental Impact From Gold Miners

A stronger focus on greener and social principles is helping the gold mining industry to lower its impact upon the environment, according to a new report by precious-metals consultancy Metals Focus.

According to the report, which covers roughly 30% of global gold production, scope one and two greenhouse gas emissions fell 1% on year in 2021 to 27,617 ktCO2e, with the industry's largest names such as Newmont Corp. and Barrick Gold Corp. aiming to cut emissions by 30% by 2030.

Despite the reduction, gold mining was estimated to have accounted for 0.3% of global GHG emissions in 2021, according to the consultancy.

--

France Appeals to EDF to Keep to Its Nuclear Maintenance Program

France's prime minister has appealed to Electricite de France SA to keep to its nuclear reactor maintenance program to avoid having to restart a coal-fired power plant this winter amid Europe's energy crisis

"I'm really counting on EDF to ensure its restart program in the coming weeks, in the coming months, so that we don't have to restart a coal-fired power plant," Elisabeth Borne said Thursday on broadcaster France Inter.

The appeal comes as 32 of the French electricity company's park of 56 nuclear reactors are offline for routine maintenance.

MARKET TALKS:

Gold Moves to Six-Week Low on Central Bank Hawkishness

1039 GMT - Gold prices are at a six-week low as investors move to other haven assets over increasing fears about the global economy. Prices in New York are at $1,714.50 a troy ounce, the lowest since July 21 and approaching the year-to-date low of $1,700.20 an ounce. "The precious metal is vulnerable amid aggressive ECB and the Federal Reserve bets," Fiona Cincotta, senior financial markets analyst at City Index, says in a note. Cincotta noted that August eurozone inflation hit a record 9.1% year-on-year and higher U.S. treasury yields have supported the dollar. She added that attention was on the U.S. labor market and non-farm payroll data as a strong labor market could spur a more aggressive approach from the Fed. ([e-mail])

--

Energy Crisis Has Reduced EU Zinc Capacity by a Quarter

1011 GMT - The current energy crisis in Europe has cut zinc output run rates across the continent by a quarter, according to analysis from Morgan Stanley. Zinc and aluminum smelting has been hard hit by the curtailments in gas supply from Russia, being two of the most energy-intensive industrial processes. Morgan Stanley says zinc output has dropped by 25% from normal levels while aluminum is down 22%. Carbon steel has also seen a 16% reduction already. Analysts at Morgan Stanley says there is "potential for more cuts into the winter months as hedges roll off." ([e-mail])

--

Oil Continues Slide on Demand Jitters

0741 GMT - Oil prices continue to tumble as fears about central-bank tightening and weak oil demand drag. Brent crude oil falls 1% to $94.65 a barrel, putting it on course for a third day of losses. WTI also drops 0.9% to $88.69 a barrel. Risk assets from stocks to oil have been hit by expectations that global central banks will keep raising rates and keep them at elevated levels for the foreseeable future. That is adding to fears that demand for oil is being undermined by weak global growth and lockdowns in China. "The market continues to battle with demand worries, including local Covid related lockdowns in China," DNB Markets says in a note. ([e-mail])

--

Metals Trade Lower as Macro Mood Sours

0726 GMT - Metals prices are moving lower as sentiment about the global economy continues to dim. Three-month copper prices are down 1% to $7,710 a metric ton while aluminum is 2.1% lower at $2,314 a ton. Gold is also down 0.5% to $1,717.50 a troy ounce. "The macro environment has gone from bad to worse this week," Dave Whitcomb, head of research at Peak Trading Research, says in a note. Equities are down while the dollar is testing 20-year highs because of the lack of confidence in the economy, he said. "Investors are nervous about the hawkish Federal Reserve, higher interest rates, weak Chinese market sentiment, and the possibility of a big 75 basis-point European Central Bank hike next Thursday," Whitcomb says. ([e-mail])

Write to Yusuf Khan at [e-mail]

(END) Dow Jones Newswires

09-01-22 0742ET