Lack Of Investments, Cost Of Capital For Gas Development Weaken Energy Security

Economic

Summary:

The lack of investments and raising the cost of capital for gas development will endanger energy security and weaken the industry’s capability to provide affordable, reliable and sustainable energy to people at large, said International Gas Union (IGU) president Li Yalan.

She said this has prompted the union to urge and encourage its members and the global key stakeholders to ensure investment and financing access for gas.

"For Asia’s current coal-dependent energy mix, natural gas is one of the fundamental energies to support countries’ energy transition and carbon neutrality efforts.

"Until large-scale, commercial, long-term electricity storage technology matures, natural gas will still play an important role in the energy system," she said at the fourth edition of the Malaysian Gas Symposium (MyGAS 2025).

She noted that estimates indicated that natural gas met around 40% of the increase in global energy demand in 2024, more than any other fuel.

Global natural gas consumption reached a record high of 4,212 billion cubic metres (bcm), a 2.8% increase year-on-year.

The strong growth was mainly due to the Asia-Pacific region, which accounted for almost 45% of incremental gas demand in 2024, on the back of continued economic development, which showed that there is still huge potential for natural gas development in Asia Pacific.

"In 2025, world natural gas consumption is expected to reach 4,292 bcm. Asia Pacific will continue (to account) for the majority of that increment.

"Meanwhile, Europe is expected to import more liquified natural gas (LNG) to replace pipeline gas. All these factors will impact the supply and price of the global gas market, whose balance remains fragile," said Li.

On the local front, Li said Malaysia, as the third largest natural gas producer in the Asia-Pacific region after Australia and China, would play a crucial role with its rich gas reserve, and its increasing LNG production capacity.

"At the same time, due to its geographical proximity to China, India and other natural gas markets, the Malaysian gas industry will have greater potential development," she said.

Malaysia is also the world’s fifth largest LNG exporter, with exports reaching over 28 metric tonnes, accounting for 7% of the global LNG trade.

In 2024, Malaysia exported 7.85 million tonnes of LNG to China.

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Source: Theedgemarkets

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Warren Takunda

Economic

The Pound-to-Euro exchange rate gapped higher to 1.1995 in the minutes after the ONS said GDP rose 0.1% in the final quarter of the year, up from 0% in the previous quarter and surpassing an expectation of -0.1%.

The Pound-to-Dollar exchange rate jumped through the 1.25 barrier after the release showed 0.4% growth for the month of December, marking a strong recovery from November's 0.1% and exceeding the expectation of 0.1%.

"There is no denying that domestic demand performed strongly going into Christmas. The question remains though as to how (real) labour market pressures and weak confidence will feed through to growth after that," says Sam Hill, Head of Market Insights at Lloyds Bank.

These data will come as a relief to Chancellor Rachel Reeves, who is desperately trying to drum up confidence in the UK economy following a near-ubiquitous run of poor economic data releases that suggests the economy has effectively flatlined under her tenure.

These data will also ease the Bank of England's concerns that the economy will need another interest rate cut next month.

UK bond yields fell as markets priced out the odds of a March cut, and the Pound is rising in response.

Pound Sterling Jumps against Euro & Dollar on GDP Relief_1

Above: GBP/EUR at five-minute intervals.

The ONS data shows government spending was the primary driver of the growth at 0.8%, and analysis from the National Institute of Economic and Social Research (NISER) says higher government spending will stimulate economic growth to 1.5% in 2025.

This figure would surprise most economists and would exceed the Bank of England's forecast for growth to reach just 0.75%.

A government spending-fuelled acceleration in the economy would also wrong-foot markets that expect a much poorer outturn in the year ahead, meaning February's print could be the first of a run of better-than-expected outturns that would inevitably reduce the odds of further Bank of England rate cuts.

The effect on financial markets would include rising bond yields and pound exchange rates in the coming months. "We think that this is a solid platform for the pound to stage a deeper recovery, even if GBP/USD is sticky around $1.25 in the short term," says Kathleen Brooks, research director at XTB. Pound Sterling Jumps against Euro & Dollar on GDP Relief_2

Pound Sterling Jumps against Euro & Dollar on GDP Relief_2

But We're Still Getting Poorer

Although the headline figures will relieve the government, Prime Minister Keir Starmer and the Chancellor won't receive a political dividend as your everyday Brit won't feel any benefit.

In fact, the average Brit was worse off over this period as real GDP per head is estimated to have fallen by 0.1% in Quarter 4 2024.

This describes an economy where immigration-fuelled population growth is outstripping economic output.

The NIESR says even if the economy strikes their out-of-consensus output of 1.5% in 2025, "growth won't immediately translate into higher living standards for every household."

In fact, "the living standards of the bottom 40% of households will not return to pre-2022 levels before the end of 2027."

Pound Sterling Jumps against Euro & Dollar on GDP Relief_3

Above: GDP per person.

Economists Forecast Disappointment

Breaking down the growth figures reveals the challenges for the UK in the coming months.

Construction grew by 0.5% in Q4, the services sector increased by 0.2% and production fell by 0.8%. International trade also subtracted from Growth.

"Higher taxes for businesses, a lingering drag from the previous interest rate hikes and softer overseas demand explain why we have revised down our UK GDP growth forecasts, from 1.3% to 0.5% for 2025 and from 1.6% to 1.5% for 2026," says Paul Dales, Chief UK Economist at Capital Economics.

Pound Sterling Jumps against Euro & Dollar on GDP Relief_4

Above: UK employment is falling. Image courtesy of Lloyds Bank.

This means Capital Economics have shifted forecasts from being a bit stronger than those of the consensus and the Bank of England to a bit weaker.

Neil Birrell, Chief Investment Officer at Premier Miton Investors, says it would be incorrect to be talking about an economy that is in good health.

"After all, it only grew at 0.1%. Worryingly, business investment fell sharply, displaying the level of confidence in the corporate sector at present. The data is better than expected, but nothing to get excited about," he says.

If the more pessimistic forecasts do come to pass, then the Pound will struggle in the coming year.

Source: Poundsterlinglive

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Cohen

Stocks

Economic

The Russian rouble and stocks surged on Thursday after a telephone conversation between US President Donald Trump and Russian President Vladimir Putin in which the two leaders discussed ways to end the Ukraine war.

At 0745 GMT, the rouble was up 3% at 90.90 against the dollar, the highest level for the Russian currency since September 2024, according to data from the over-the-counter market.

The rouble briefly touched the level of 89.9, the highest since September 11, during the trading session.

The rouble strengthened 2.6% against the dollar in the previous session and is up 20% since the start of the year. The Moscow Exchange (MOEX) index surged 5.8% on Wednesday and another 4.2% on Thursday.

"The moment investors have been waiting for has arrived. The next step towards easing geopolitical tensions," Sinara brokerage analysts said.

Russia's sanctioned corporations such as gas giant Gazprom, whose shares were hit by losing the European gas market, dominant lender Sberbank and liquefied natural gas producer Novatek led the market rally.

Foreign investors cannot buy assets at MOEX due to Western sanctions, imposed in 2024. Due to sanctions, all trade in dollars and euros have moved to the over-the-counter market, making China's yuan the most traded foreign currency.

Source: Theedgemarkets

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Warren Takunda

Economic

Britain’s economy unexpectedly picked up in the final three months of 2024, official figures have shown, easing pressure on the chancellor, Rachel Reeves, after flatlining during the summer.

Figures from the Office for National Statistics show gross domestic product rose by 0.1% in the fourth quarter of 2024 – after zero growth in the previous three months – to beat the forecasts of City economists and the Bank of England for a decline of 0.1%.

The latest snapshot will provide a shot in the arm for Labour after Reeves faced intense criticism for denting business and consumer confidence with her £40bn tax-raising October budget.

Monthly figures show the economy grew by a better-than-expected 0.4% in December, fuelled by growth in the UK’s dominant services sector after a strong month for business-facing services. Economists had expected growth of 0.1% in December.

Liz McKeown, the ONS director of economic statistics, said: “The economy picked up in December after several weak months, meaning, overall, the economy grew a little in the fourth quarter of last year.

“Across the quarter, growth in services and construction were partially offset by a fall in production. GDP per head, in contrast, fell back slightly in the quarter.

“In December, wholesale, film distribution and pubs and bars all had a strong month, as did manufacturing of machinery and the often-erratic pharmaceutical industry. However, these were partially offset by weak months for computer programming, publishing and car sales.”

Business surveys after the October budget had indicated a fall in hiring and weakness in private sector activity. Retailers also warned of a disappointing Christmas on the high street.

The latest snapshot showed output in business-facing services increased by 0.2% over the fourth quarter, while consumer-facing services increased by 0.1%.

The production sector – which includes manufacturing and energy – was estimated to have declined for a fifth consecutive quarter, shrinking by 0.8%. Construction output was estimated to have grown by 0.5%.

Responding to the GDP figures, Reeves said: “The growth numbers have come in higher than many expected, but I’m still not satisfied with the level of growth that our economy is achieving.

“And that’s why I am determined to go further and faster in delivering the economic growth and the improvements in living standards that our country deserves.”

The housing minister Matthew Pennycook told Times Radio: “Construction numbers are up, but we’re not satisfied by these numbers. But on the other hand, we always knew that there was no silver bullet, no simple remedy to turning around 14 years of economic stagnation.”

The shadow chancellor, Mel Stride, said: “The chancellor promised the fastest growing economy in the G7, but her budget is killing growth.

“Working people and businesses are already paying for her choices with ever rocketing taxes, hundreds of thousands of job cuts and business confidence plummeting. It does not need to be this way.”

Ben Jones, the lead economist at the Confederation of British Industry, said the rebound in activity in December was encouraging, although growth remained lacklustre. “The data supports our view that the loss of momentum in the second half of last year will prove to be a soft patch for the economy rather than a slide back into stagnation,” he said.

Last week, the Bank of England halved its growth forecasts for the UK economy and warned households would come under renewed pressure from rising inflation. It cut interest rates from 4.75% to 4.5%.

Expectations for further cuts were unchanged in financial markets after the GDP data was released on Thursday, with two more reductions expected before the end of the year.

The pound hit a one-week high after the data beat expectations, rising more than half a cent against the dollar at just over $1.25. The UK currency had already been strengthening on Thursday morning, as the markets welcomed the prospect of a peace deal between Ukraine and Russia.

Source: TheGuardian

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Economic

U.S. and European stock futures rallied on Thursday on optimism over prospects of a peace deal between Ukraine and Russia, offsetting a jump in Treasury yields as higher inflation threatens to close the door to any policy easing this year.

Trade war jitters persisted as U.S. President Donald Trump said he would impose reciprocal tariffs on Wednesday or Thursday on every country that charges duties on U.S. imports. Gold prices climbed back towards the record reached on Tuesday.

The euro extended an overnight bounce, last up 0.5% in Asia to $1.0433, helped by Trump's phone calls with Russian President Vladimir Putin and Ukraine's Volodymyr Zelenskiy, which raised hopes that the years-long war could be nearing an end.

Oil prices fell for a second day, testing some key support levels, while EUROSTOXX 50 futures climbed 1%, pointing to a higher open for European markets.

Nasdaq futures rose 0.4% and S&P 500 futures gained 0.2%.

Japan's Nikkei gained 1.4% thanks to a much weaker yen. MSCI's broadest index of Asia-Pacific shares outside Japan (rose 1.2% to the highest since early December.

"There were pretty significant moves like in the euro and European assets. The spectre of war has definitely hung pretty heavy over the region," said Kyle Rodda, a senior analyst at Capital.com.

"The optimism is probably somewhat premature."

Chinese blue chips were 0.2% higher and Hong Kong's Hang Seng index extended its bullish run, up 2.5% to another four-month high.

Overnight, data showed U.S. consumer prices rose by the most in nearly 1-1/2 years in January. The closely watched core inflation index, which excludes food and energy prices, rose 0.4% in the month, above forecasts for 0.3%.

With the Federal Reserve already signalling no rush to cut rates further, investors scaled back expectations of more policy easing from the Federal Reserve this year to just 28 basis points, equivalent to just one cut.

Treasury yields jumped on the inflation data, with 10-year yields up 10 basis points overnight to a three-week top of 4.66%. They were down 3 bps on Thursday at 4.6092%.

Analysts at Barclays still expect one rate cut from the Fed this year.

"Risks are now skewing toward the Fed delivering no cuts this year, and we are putting somewhat more weight on off-baseline scenarios where rate hikes enter the conversation," they said in a note to client.

In the foreign exchange market, the dollar lost 0.2% to 154.15 yen, having jumped 1.3% overnight. The yen was the biggest loser from higher U.S. yields.

In commodities markets, oil prices extended their overnight decline as hopes grew for a peace deal between Russia and Ukraine that would mean the end of sanctions that have disrupted supply flows.

U.S. crude fell 1% to $70.64 a barrel, after dropping 2.7% overnight and Brent was also 1% lower at $74.43, having dropped 2.4% overnight.

Gold rose 0.5% to $2,918 per ounce, not far from its record high of $2,942.70 hit on Tuesday.

Source: Reuters

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Economic

Stocks

Officials work at a dealing room of Hana Bank in Seoul, Feb. 13.

Korean stocks rose to the highest level in about three months Thursday, led by gains of tech and auto shares, on growing hopes for an exemption from U.S. tariffs. The local currency rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) added 34.78 points, or 1.36 percent, to close at 2,583.17, extending a winning streak to a third session.

It marked the highest level since Nov. 4, 2024, when the index finished at 2,588.97.

Trade volume was heavy at 669.19 million shares worth 16.82 trillion won ($11.61 billion), with winners outnumbering losers 571 to 309.

Institutions bought a net 656.27 billion won worth of local shares, while foreign and retail investors sold a net 102.86 billion won and 601.93 billion won worth of shares, respectively.

The index opened higher and had risen further, though the U.S. data showing strong inflation led to speculation that the Federal Reserve would delay interest rate cuts.

Investors welcomed the news that U.S. House of Representatives Speaker Mike Johnson said he believes President Donald Trump is considering exemptions to reciprocal tariffs on the auto and pharmaceutical industries.

Eyes are also on talks between Trump and Russian President Vladimir Putin on ways of ending the Russia-Ukraine war.

In Seoul, tech and auto shares led the upturn of the index.

Market bellwether Samsung Electronics added 0.18 percent to 55,900 won, and chip giant SK hynix surged 1.81 percent to 202,500 won.

Leading electric vehicle (EV) battery maker LG Energy Solution soared 3.1 percent to 349,000 won.

No. 1 carmaker Hyundai Motor went up 4.24 percent to 206,500 won, and its sister affiliate Kia jumped 3.27 percent to 94,700 won.

Top steelmaker POSCO Holdings rose 4.34 percent to 240,500 won following recent sharp losses.

Major bio shares traded mixed. Leading bio firm Samsung Biologics climbed 1.3 percent to 1,172,000 won, while Celltrion lost 0.11 percent to 178,500 won.

Among decliners, leading portal operator Naver lost 2 percent to 220,500 won, and Kakao, the operator of the country's top mobile messenger, tumbled 3.81 percent to 40,400 won.

The local currency was quoted at 1,447.5 won against the greenback at 3:30 p.m., up 5.9 won from the previous session.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys shed 2 basis points to 2.631 percent, and the return on the benchmark five-year government bonds fell 1.2 basis points to end at 2.732 percent.

Source: Koreatimes

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Commodity

The oil price selloff accelerated on Wednesday after U.S. President Donald Trump took the first big step towards ending Russia’s war in Ukraine three weeks after his inauguration.

In Asian trading on Thursday, Brent crude for April delivery sank nearly a percentage point to trade at $74.48 per barrel at 00.53 ET, while WTI crude for March delivery declined the same to $70.70 per barrel.

On social media, Trump said he and Putin "agreed to have our respective teams start negotiations immediately, and we will begin by calling President Zelenskiy, of Ukraine, to inform him of the conversation, something which I will be doing right now."

A ceasefire to the Russia-Ukraine war could be bearish for oil prices if Trump pushes for removal of sanctions on the Russian energy industry, Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Geopolitical stability may also "largely extinguish the still simmering 'fear bid' in the oil market." The latest sanctions by the Biden administration roughly tripled the number of directly sanctioned Russian crude oil tankers, enough to affect around 900,000 barrels per day (bpd). Whereas it’s highly likely that Russia will try to circumvent the sanctions by employing even more shadow fleet tankers and ship-to-ship transfers, StanChart sees 500,000 bpd of displacements over the next six months.

However, the oil price selloff kicked off before Trump’s latest mediation efforts in the Ukraine war thanks to rising U.S. crude stockpiles and hawkish remarks from Fed Chair Jerome Powell. Jerome Powell said on Tuesday that the Fed is not rushing to cut interest rates further because the economy is in a good place, but it is prepared to do so if inflation drops or the job market weakens. Higher interest rates increase the cost of borrowing, which can slow economic activity and weaken oil demand. The U.S. consumer price index (CPI) increased at a faster-than-expected clip in January, reinforcing the Federal Reserve's wait-and-see stance before cutting interest rates further amid growing uncertainty over the economy. The CPI jumped 0.5% last month, up from 0.4% in December, and advanced 3.0% in the 12 months through January after advancing 2.9% in December.