Oil prices are rising weakly on Wednesday morning ahead of the publication of the US Department of Energy report on energy stocks in the country.
Traders’ attention is also directed to the data on the dynamics of consumer prices in the States for June, which is expected to influence the decisions of the Federal Reserve at the nearest meetings.
Inflation data will be published at 15:30 Q2, the report of the Ministry of Energy on energy stocks – at 17:30 Q2.
The cost of September Brent crude futures on the London-based ICE Futures exchange at 8:15 Q2 on Wednesday is $79.49 per barrel, up $0.09 (0.11%) from the previous session’s closing price. On Tuesday, these contracts rose $1.71 (2.2%) to $79.4 per barrel.
The price of WTI oil futures for August at the electronic trading of the New York Mercantile Exchange (NYMEX) increased by $0.1 (0.13%) to $74.93 per barrel. The day before, the cost of contracts rose by $1.84 (2.52%), to $74.83 per barrel.
Data from the American Petroleum Institute (API), released on Tuesday night to Wednesday, showed an unexpected increase in U.S. inventories in the week ended July 7. The indicator increased by 3.026 million barrels, while experts surveyed by Trading Economics, on average, expected its decline by 200 thousand barrels.
A week earlier, oil reserves fell by 4.382 million barrels.
A total of over 50 issues of corporate bonds of about 30 issuers had to be redeemed from the beginning of 2022 to mid-2023, some of them were restructured, but not a single default on bonds has been recorded, said Maxim Libanov, a member of the National Commission on Securities and Stock Market (NCSSM) of Ukraine.
“If we compare the situation in 2022 with the situation in 2008-09, in general we can say that the market has matured, and – all participants. As of now, there are no defaults,” he said at the USAID conference “Debt Instruments to Support Recovery” held recently in Kyiv.
Mr. Libanov specified that the matter concerns both traditional interest-bearing and discount corporate bonds and construction target bonds.
According to him, the issue was partially resolved by the Commission’s decision to extend the fulfillment of obligations until the end of wartime, as the commissioning of construction projects during this period is objectively complicated.
As stated by the member of the NCSSM, it gave a good result: several issuers, whose construction should have been completed in 2022 or early 2023, “calmly” complete it, including even in Kharkiv.
As Libanov stated, the regulator’s position is not to interfere in the relations between the issuer and investors while they are trying to reach an agreement, and if they have reached it, to fix it as quickly and easily as possible. According to him, in one of the last cases it took a week to formalize the restructuring in the Commission.
He noted that the SEC facilitated the restructuring process by launching a system, which allows holding meetings of bondholders, jointly with the National Depository.
As the member of the Commission specified, if we set aside the target bonds, then out of a little more than 10 issuers of corporate debt, eight have restructured: half of them used the meeting of bondholders through the National Depository, and the other half, due to a small number of investors, received written personal consent from all of them.
Speaking about the plans, Libanov said that the SECP is working to finalize the legislative framework for sustainable development bonds or ESG-bonds, which include green bonds.
He added that the Commission is also studying quasi-corporate and quasi-debt instruments, in particular finalizing a pilot project on loan notes.
According to the Commission member, the regulator is also working with the EBRD on securitization and secured bonds. “We have approved the concept, now we are working on the draft law. I hope that somewhere in the fall we will be able to show the first version,” Libanov specified.
Naftogaz Ukrainy, the parent company of Naftogaz Group, made a net profit of UAH 7.7 billion in the first quarter of 2023 against a net loss of UAH 24.6 billion in the same period last year, the company said in a press release on Tuesday.
“This result was possible due to a significant improvement in the financial performance of the group’s key enterprises compared to the first quarter of 2022,” said Naftogaz Group head Oleksiy Chernyshev, whose words are quoted in the report.
At the same time, the consolidated loss at the end of January-March 2023 amounted to UAH 1.395 billion against UAH 57.579 billion for the same period last year. Consolidated income from sales decreased by 23.1% (by UAH 20.626 billion) to UAH 68.54 billion. Gross consolidated loss amounted to UAH 12.097 billion against UAH 34.156 billion in the first quarter of 2022.
According to data reflected in the consolidated financial statements of Naftogaz Group for January-March 2023, the group’s consolidated operating profit in the period amounted to UAH 3.42 billion, while in the first quarter of last year the group had a consolidated operating loss of UAH 57.032 billion.
“The generation of operating profit is an important indicator of business consistency. This is a significant achievement, given the war and the starting positions from which we started work,” Chernyshev emphasized.
As explained in Naftogaz, the statements also show that the main reportable segments of the group showed net operating profit for the first quarter of 2023.
“The group’s enterprises that ensure fulfillment of special obligations (SOO, provision on special obligations – IF), supplying natural gas to socially sensitive categories of consumers, also significantly improved the level of cash collection for gas supplied,” the press release said.
This allowed the enterprises to significantly improve the operating financial result: losses in the mentioned reporting period amounted to only UAH 6.3 billion compared to UAH 33 billion of losses in the first quarter of 2022, the report said.
“It should also be added that during January-March 2023 to the consolidated budget of Ukraine enterprises of Naftogaz group paid taxes in the amount of UAH 26 billion, which is more than 7% of all tax revenues of the state for the corresponding period”, – added in the company.
At the same time, in April 2023, the group successfully completed the 2022/2023 heating season under the PCP without receiving any additional funding from the state.
“Moreover, even without additional support, the group not only retains, but increases the production of Ukrainian gas under war conditions,” Naftogaz noted.
Ukraine’s progress in implementing the reforms required for EU membership is impressive, European Commission President Ursula von der Leyen has said.
“The speed at which Ukraine is pursuing EU membership (…) is excellent, impressive. It is an achievement-based process and we see with what enthusiasm and intensity Ukraine is reforming and moving rapidly towards EU membership,” the EC chief told reporters in Vilnius.
“I firmly believe that if they continue in the same spirit, they will soon succeed,” she added.
Von der Leyen will take part in a meeting with leaders and partners of the North Atlantic Alliance on the sidelines of the NATO summit in Vilnius.
Ukraine imported “borscht set” vegetables, in particular potatoes, carrots, beets, cabbage and onions, worth $100.253 million in January-June 2023.
According to statistics released by the State Customs Service (SCS) on Monday, Ukraine imported 12.476 thousand tons of potatoes worth $8.641 million in the first six months of 2023.
At the same time, 27.29% of the market share of imported potatoes in the first half of this year belonged to Greece, which was able to earn $2.23 million from its sales. Potato shipments from Romania accounted for 12.66% worth $1.034 million, and from Azerbaijan – 9.67% and $970 thousand, respectively.
Ukraine had to import the entire “borscht set” during the most deficient in terms of vegetables in the first half of 2023. In particular, purchases of onions on foreign markets reached 0.16% of the country’s total imports, cabbage – 0.09%, carrots and beets – 0.06%. In total, market operators spent $93.882 mln to purchase these basic vegetables in the diet of Ukrainians (excluding potatoes).
The top three leading suppliers of “borscht set” vegetables in the group were importers from Poland and the Netherlands. They accounted for 43.5% and 31.6% of Ukraine’s onion imports, which amounted to $12.393 mln and $8.949 mln, respectively. The leading onion supplier was China with 8.3% of supplies worth $2.346 mln.
The leader in cabbage supplies to Ukraine was Poland, whose share in supplies amounted to 32% and brought $9.147 million to the neighboring country. Macedonia ranked second with 31.6%, for which it earned $9.034 million, while the Netherlands ranked third with 10.8% and $3.093 million, respectively.
Poland also turned out to be one of the leading suppliers of root vegetables – carrots, beets and celery – in the first half of 2023. The share of imports of these vegetables in the domestic market reached 46.9%, which in monetary terms amounted to $11.072 million. The best in supplies of these vegetables were the Netherlands and Turkey, whose supplies occupied 37.7% and 2.9% of the import share, which in monetary terms amounted to $8.899 million and $683 thousand, respectively.
The most demanded vegetables in winter-spring time in Ukraine are tomatoes and cucumbers. Import of tomatoes in the first half of 2023 amounted to 0.29% of all imports into the country, cucumbers – 0.07%, which amounted to 73.05 thousand tons and 28.182 thousand tons respectively.
The leader in supplying these vegetables to Ukraine was Turkey, which accounted for 77.4% of all imports of tomatoes and 46.8% of cucumbers in January-June 2023, which amounted to $45.5 million and $12.87 million, respectively.
The top three suppliers of tomatoes to Ukraine were Poland, which accounted for 20.37% of supplies worth $12.989 mln, and the Netherlands with 2.99% of supplies worth $1.9 mln.
In addition to Turkey, Ukraine bought cucumbers in the first half of 2023 from Romania, which fulfilled 35.33% of supplies worth $9.714 million, and Poland with 11.3% for $3.106 million, respectively.
Despite the shortage of vegetables in the country, Ukrainian agricultural producers managed to send small batches of them for export.
Ukrainian potatoes are forbidden to be supplied to the European market due to legislation not adapted to European requirements. Ukraine did not lose its traditional markets and managed to earn $11.251 million on the export of 19.854 thousand tons of potatoes, of which 50.7% went to Bulgaria, 39.7% to Azerbaijan, 9.05% to Moldova.
Cabbage exports from Ukraine amounted to 871 tons, of which 98% went to Bulgaria. Deliveries of onions, carrots and beets to foreign markets were practically not performed in the first half of 2023.
The sale of 781 tons of cucumbers on foreign markets brought Ukraine $1.905 million. The traditional buyer of greenhouse cucumbers is Poland, where in the first half of 2023 was made 96% of all exports of this vegetable, and the Baltic States, in particular, in Lithuania went 3% of Ukraine’s exported cucumbers.
Ukrainian farmers earned $463 thousand on export of 120 tons of greenhouse tomatoes, 86.5% of which were bought by Poland and 12.4% by Estonia.
A study of the prospects for EU rail links with Ukraine and Moldova provides a basis for launching a project to use European gauge railway gauges on key lines, the European Commission (EC) has said.
The study was published on Tuesday by the European Commission and the European Investment Bank (EIB).
“The construction of the first European rail gauge in Ukraine and Moldova, which will connect their railroads with Poland and Romania, will bring these countries closer to the EU single market. With this study, we are laying the groundwork for long-term solutions, supporting Ukraine in its trade and recovery,” said Adina Velian, EC Member for Transport.
The conformity of the railroad lines of Ukraine and Moldova to the European standard of gauge, she said, will also improve conditions for citizens of these countries to travel to Europe.
The study suggests that the European gauge on the lines to Lviv and Chisinau should be implemented “as a first step to improve communication between Poland and Ukraine, as well as between Romania and Moldova”.
The study also assesses how the new European standard gauge lines will interact with the rest of the rail network in these countries, where broad gauge will continue to be used, the EC communiqué said.
