The World Global shares fall on mixed manufacturing indicators

By Yuri Kageyama AP Business Writer

Shares fell in early trading in France, Germany and Britain and US futures declined. Oil prices were mixed.

Russian President Vladimir Putin railed against the West Tuesday in a long-delayed state-of-the-nation address that shed light on how the Kremlin sees its bogged-down war in Ukraine. Such geopolitical factors add to uncertainties over slowing growth and

Russian oil exports to China reach highest levels since Ukraine invasion

RUSSIAN exports of discounted crude and fuel oil to China have jumped to record levels as the re-opening of the world’s biggest energy importer gathers pace after the dismantling of Covid Zero.

Overall flows last month were at the highest at any point since the invasion of Ukraine a year ago and surpassed a record set in April 2020, according to data intelligence firm Kpler. Exports of fuel oil surged to an all-time high.

The buying spree was likely underpinned by private refiners, but state-owned processors are now showing more interest in Russian crude after concerns around potential blowback from the US and allies kept them on the sidelines.

China is toe-to-toe with India as the biggest buyer of Russian crude after the war in Ukraine re-shaped global energy flows. Moscow has had to offer discounts to entice a shrinking pool of customers, a move welcomed by Asian buyers trying to control inflation. The West wants to deprive the Kremlin of funds for its war but would also like to keep a lid of on global oil prices.

Russia’s overall crude and fuel oil exports to China reached 1.66 million barrels a day last month, according to Kpler data as of February 20. That’s more than the previous record set in April 2020 when the Asian nation was emerging from its initial virus restrictions. Crude and condensate flows rose to 1.52 million barrels a day, just short of a record set almost three years ago.

T he uptick in Chinese buying is evidence the country’s economic recovery is picking up, which should help to buoy global oil prices. The International Energy Agency last week cited China for a boost in its demand forecasts, while Opec producer Iran is tipping Brent to rise above $100 a barrel this year.

It can take more than six weeks for cargoes shipped from Russia’s western ports to arrive in China, while barrels sent from the Far East typically arrive the same month.

Offers for Russian Urals and ESPO crude were pegged at a discount of $13 and $8 a barrel, respectively, to Brent on a delivered basis, according to traders. That’s much cheaper than similar West African grades, which were priced at near parity or a premium to Brent.

Asia’s largest economy has dominated buying of ESPO, a grade that can be shipped quickly from Russia’s Far East, since late-2022. Private refiners have been key consumers, but traders are watching for demand from state-owned refiners such as China Petroleum & Chemical Corp., or Sinopec, as well as CNOOC Ltd.

China not only bought the entire monthly loading schedule of ESPO for January, it also purchased Arctic grades and Urals, said Viktor Katona, lead crude analyst at Kpler. Its buying spree on fuel oil mainly comes from the Black Sea and Baltic Sea regions, he said.

Ship -tracking data indicates that more oil could flow to China from Russia’s western ports of Primorsk and Novorossiysk, where grades including Urals are loaded. The uptick can be partly attributed to state-run refiners speeding up purchases, according to people with knowledge of the matter.

Russian exports of straight-run fuel oil and highsulfur fuel oil to China hit a record of about 142,000 barrels a day in January, according to Kpler.

Fuel oil can be processed in place of crude in large distillation units, or used in secondary plants such as cokers to make diesel or gasoline. HSFO can also be blended into marine fuel or bitumen.

It was at a $16 to $17 a barrel discount to Brent before taxes, the traders said.

China’s private refiners have been buying more straight-run fuel oil since late-2022 due to attractive prices, said Mia Geng, an analyst at industry consultant FGE. Private refiners sometimes opt to refine fuel oil over crude in an effort to skirt government-issued quotas meant to limit crude imports, but the recent surge in purchases was more likely due to processors being able to reap sizable profits from processing, she said. With assistance from Kevin Dharmawan/ Bloomberg

Traffic surges at Dubai airport but lags behind 2019 peak

By Joseph Krauss & Malak Harb

The Associated Press

DUBAI, United Arab Emirates—Traffic more than doubled last year at Dubai’s airport, the world’s busiest for international flights, but has yet to fully recover after the coronavirus pandemic, according to figures released Tuesday.

Even as the number of passengers has surged, the state-of-the-art airport in the oil-rich United Arab Emirates has avoided the travel chaos that rippled across North America and Europe last year, as it maintained capacity through the darkest days of the pandemic.

Over 66 million passengers moved through the airport, known as DXB, in 2022, up from 29.1 million in 2021, when global travel was still snarled by pandemic restrictions. But it remains well below the pre-pandemic milestone of 86.4 million logged in 2019.

Paul Griffiths, the airport’s CEO, told The Associated Press that he expects traffic to return to pre-pandemic levels by the end of this year or early 2024, with a boost from China’s easing of its “zero Covid” policies. The airport currently forecasts 78 million passengers in 2023.

“We’re optimistic that the traffic levels every month will be regularly over the seven million mark, which means that we’re very, very precisely weakening consumer demand in many economies.

France’s CAC 40 fell 0.1 percent in early trading to 7,327.24. Germany’s DAX lost 0.2 percent to 15,441.85. Britain’s FTSE 100 edged down 0.1 percent to 8,005.92.

After US markets were closed Monday for President’s Day, the future for the Dow Jones Industrial Average was 0.6 percent lower while that for the S&P 500 lost 0.7 percent.

In Europe, surveys of factory managers showed improvement in the manufacturing outlook in Britain but contractions in France and Germany.

In Japan, a preliminary manufacturing indicator, the flash purchasing manager’s index, or PMI, fell to 47.4 in February from 48.9 the month before. That was the weakest reading in more than two years.

In Australia, the Judo Bank PMI showed private sector activity remained in contraction for the fifth straight month. Although exports rebounded with help from China’s re-opening after it dropped Covid-related restrictions, the sector showed little to no positive momentum. Unemployment has also risen in Australia.

“The distortions in the Australian economy remain extreme and point only to recession,” Clifford Bennett, chief economist at ACY Securities, said in a commentary.

Tokyo’s Nikkei 225 shed 0.2 percent to 27,473.10. Australia’s S&P/ASX 200 slipped 0.2 percent to 7,336.30. South Korea’s Kospi gained nearly 0.2 percent to 2,458.96. Hong Kong’s Hang Seng dipped 1.8 percent to 20,517.91, while the Shanghai Composite gained 0.5 percent to 3,306.52.

It was unclear if newly issued rules on overseas initial public offerings by Chinese companies had any significant impact on trading.

China cleared the way for more companies to join foreign stock exchanges but issued rules that might make the stock offering process more time-consuming by requiring stricter regulatory scrutiny in advance. This week will bring updates on US manufacturing and housing and minutes from the last meeting of the Federal Reserve that might provide insights into the outlook for inflation and interest rates. on a trajectory to recover to the pre-pandemic levels, if not this year, certainly by the first half of 2024,” he said.

In energy trading, benchmark US crude picked up 28 cents to $76.83 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international pricing standard, lost $1.12 cents to $82.95 a barrel.

In currency trading, the US dollar inched up to 134.53 Japanese yen from 134.26 yen. The euro cost $1.0672, down from $1.0689.

“We’ve now got seven cities in China with 25 flights a week with five airlines,” he said. “That think is going to be the new engine of growth.”

Located at the crossroads of Europe, the Middle East and Asia, Dubai’s airport has long been the busiest worldwide for international flights.

Atlanta’s Hartsfield-Jackson International Airport is the busiest overall, including domestic routes, according to flight data provider OAG.

DXB is linked to 229 destinations across 99 countries, with routes operated by scores of international carriers.

Tourism is a major industry in the UAE, which has plowed its oil wealth into lavish infrastructure over the past few decades, giving rise to the futuristic cities of Dubai and Abu Dhabi.

Dubai was one of the first major destinations to lift its tourism lockdown. Major sporting and entertainment events have brought even more people to the region in recent years, and the UAE is set to host this year’s COP28 UN climate talks.

As the pandemic ushered in worldwide lockdowns and travel bans in early 2020, the UAE made it a “strategic priority” to ensure that it would be ready for the eventual recovery, Griffiths said.