Embracing the upcoming autumn harvest season, Alphabet (GOOGL.O) is gearing up for exciting changes. Ruth Porat, the dynamic Chief Financial Officer of the tech giant and a former tech investment banker at Morgan Stanley (MS.N), is embarking on a new journey next month. Her role will expand to include the oversight of "other bets," an intriguing array of experimental projects. It's an opportune moment to reevaluate and revamp the innovative portfolio.

Signs of transformation are already evident at Verily Life Sciences, the health-data whiz that raked in a remarkable $560 million in revenue last year, as highlighted in a recent report by the Wall Street Journal. This impressive sum constituted over half of the non-search division's $1 billion contributions. For context, in 2022, Alphabet's total revenue exceeded $280 billion, yielding a net profit of $60 billion, while the "other bets" incurred a loss of $6 billion.

Amidst its nearly doubled top-line growth this year, Verily is experiencing a rise in operating costs, according to tech experts at The Information. In response, Stephen Gillett, Verily's leader, shared plans to disentangle from certain Alphabet services in the coming year. This strategic decision sparks speculation of a potential spinoff. Notably, Verily has already attracted external investments, including from Singapore's wealth fund Temasek.

From Alphabet's perspective, letting Verily take flight independently seems logical. Initially nurtured to develop a cancer-detection pill, Verily now predominantly generates revenue by offering insurance products to employers. This shift into financial services falls outside Alphabet's traditional realm. Moreover, as the tech world refocuses on artificial intelligence, wise capital allocation becomes crucial. In fact, Chris Hohn's activist TCI Fund Investments conveyed this sentiment to the $1.6 trillion conglomerate last year.

The lineup of "other bets" is brimming with prospects for potential separation. Waymo, the self-driving technology venture, recently secured approval to launch driverless rideshares in San Francisco, marking a significant achievement. Furthermore, the turmoil in this sector has swept away rivals like Ford Motor's (F.N) similar business. After a period of dormancy, Google Fiber, the internet provider, intends to expand again, spelling renewed promise for Alphabet's experimental endeavors.

Nonetheless, some speculative endeavors could emerge as pivotal sources of enduring growth. A case in point is the strategic relocation of DeepMind, an AI venture previously housed under "other bets," into Google's fold earlier this year. This move underscores Alphabet's commitment to nurturing unproven, nascent concepts and fostering their growth. This approach gains significance as regulatory bodies scrutinize tech giants' expansion through acquisitions. Some moonshots are simply destined for liftoff.

Verily Life Sciences is charting a course towards independence, aiming to sever ties with parent company Alphabet's services, as revealed by Chief Executive Stephen Gillett. The technology publication, The Information, reported this on August 18.

This health-focused unit encountered an operating loss for the first half of 2023, surpassing its projections by $17 million, according to an internal presentation detailed by the Wall Street Journal on August 16. In 2022, Verily recorded a loss of $568 million despite generating $559 million in revenue, the newspaper disclosed.

Source : Reuters (Reporting by Anita Ramaswamy)

TOKYO, Aug 30 - The sun is shining on oil prices once again as they continue their upward journey, fueled by some exciting news. Recent industry data has revealed a significant reduction in crude inventories in the United States, the globe's top fuel enthusiast. Additionally, a touch of suspense enters the scene with concerns about a hurricane dancing in the Gulf of Mexico, keeping investors delightfully intrigued.

Gearing up for a remarkable show, Brent crude futures for October put on a cheery display, climbing 17 cents, or 0.2%, reaching a delightful $85.66 a barrel by 0133 GMT. All eyes are on the October contract, set to bid farewell on Thursday, while the lively November contract dances at $85.08 a barrel, showcasing a similar 17-cent increase.

U.S. West Texas Intermediate crude futures decided to join the party as well, gaining a sprightly 24 cents, or 0.3%, gracefully reaching $81.40, marking the fifth consecutive session of gains.

The energy excitement doesn't end there. A spirited rally occurred on Tuesday, fueled by a friendly slide in the U.S. dollar. The prospects of additional interest rate hikes softened after the release of mild U.S. job data, creating an atmosphere of optimism. A weaker dollar takes the stage, making dollar-denominated oil accessible and inviting to those holding other currencies, in turn, kindling demand.

Highlighting this jubilant journey, U.S. crude stocks made an impressive decline of about 11.5 million barrels during the week that concluded on Aug. 25, as whispered among market sources citing American Petroleum Institute figures on Tuesday. The experts surveyed by Reuters earlier had expected, on average, a reduction of 3.3 million barrels. Such a delightful drop in U.S. crude oil stockpiles is a testament to robust demand, as declared by Toshitaka Tazawa, the merry analyst from Fujitomi Securities Co Ltd.

In the midst of this energy extravaganza, the spotlight also falls on Hurricane Idalia, swirling gracefully over the Gulf of Mexico to the east of major U.S. oil and natural gas production hubs. A swirl of concern and curiosity envelops the situation, prompting joyful waves of buying among investors.

Tazawa adds to the festive mood by stating, "The whispers of Hurricane Idalia have certainly sparked some fresh buying activity."

Let's not forget that the Gulf of Mexico, that magical offshore region, contributes approximately 15% of U.S. oil output and about 5% of natural gas production, according to the charming Energy Information Administration (EIA). Even amidst the excitement, oil major Chevron Corp CVX.N, being the life of the party, gracefully evacuated a portion of their staff from the region. However, the production continues to dance merrily at the sites they operate in the Gulf of Mexico.

While the plot thickens with the reduction of crude oil stockpiles, the API data adds a twist with the revelation of a rise in gasoline inventories, showcasing an increase of approximately 1.4 million barrels. Not to be outdone, distillate fuels, including diesel and jet fuel, also make their grand entrance with a rise of approximately 2.5 million barrels.

And there's more in store for this narrative, as the highly anticipated official crude stockpile data from the EIA is set to make its grand debut at 1430 GMT on Wednesday, promising more intrigue and excitement in this riveting energy saga.

Source : Reuters (Reporting by Yuka Obayashi)

Iron ore futures took a step back on Monday, as traders embraced a cautious approach following a week of robust gains. The rally, fueled by the upbeat outlook on China's economy and the short-term demand prospects for the vital steelmaking component, prompted a surge in optimism.

The primary iron ore contract for January, traded on China's Dalian Commodity Exchange, wrapped up the daytime trading session with a modest 1% dip, settling at 811 yuan ($111.27) per metric ton.

Meanwhile, the benchmark September contract for iron ore on the Singapore Exchange, known as SZZFU3, displayed a decline of 1.4%, resting at $112.15 per ton as of 0700 GMT. Notably, it had achieved a four-week pinnacle of $114.85 just last week.

Even with China's cabinet giving the green light to affordable housing planning and construction guidelines in a meeting led by Premier Li Qiang on Friday, a sense of caution remained prevalent in the market, as reported by the Xinhua news agency.

Commenting on the current situation, analysts from National Australia Bank noted, "China's updates on stimulus measures continue to seize the spotlight in terms of future prospects. We anticipate the need for further measures to enhance the overall outlook."

The market's attention is also riveted on the upcoming manufacturing activity data, alongside earnings reports, particularly from major property developers and steel producers in China. These are expected to provide additional insights and guidance, according to market analysts.

"Key players in the region are gearing up to release their manufacturing PMI reports. These figures are likely to reveal ongoing challenges, underscoring the anticipation for more substantial governmental backing to invigorate domestic demand amid persistently weak global demand," ING economists explained.

As the manufacturing data surfaces, including that of China's pivotal trade partners in the steel sector, it could mirror the country's ongoing economic struggles, experts added.

Data from Sunday indicated that profits at China's industrial firms had dipped by 6.7% in July compared to the same period the previous year, marking the seventh consecutive month of this year's downward trend.

The majority of steel benchmarks in Shanghai underwent declines. Rebar (SRBcv1) saw a contraction of 1.3%, hot-rolled coil (SHHCcv1) experienced a dip of 1.4%, wire rod (SWRcv1) slipped by 0.9%, while stainless steel (SHSScv1) managed a slight uptick of 0.1%.

Other essential ingredients in steel production also saw minor setbacks, with coking coal (DJMcv1) and coke (DCJcv1) retreating by 0.8% and 1.5%, respectively.

Source : Reuters (Reporting by Enrico Dela Cruz)

August 28 - Nestled along the vibrant U.S. Gulf Coast, a hub renowned for its oil and gas riches and pocket-friendly electricity, an unexpected twist is set to unfold in the realm of renewable energy. While renewable energy commitments aren't a norm here, the U.S. offshore wind pioneers are poised to break barriers as they venture into uncharted waters. The upcoming offshore wind auction, orchestrated by the Biden administration, is poised to transform the Gulf of Mexico into a cradle for innovation and progress, igniting a fresh era of green hydrogen production to power the sprawling industrial expanse of the region.

Hydrogen, the eco-friendly fuel derived from water through electrolysis, holds the key to reducing carbon footprints across energy-intensive sectors and transportation. When produced using renewable energy, it earns the coveted "green" label; otherwise, it carries a "gray" tag if derived from carbon-emitting natural gas.

Unlike the well-trodden path of previous federal offshore wind lease sales mainly seen in the Northeast, where billions were invested to secure acreage connected to lucrative power markets and state-level incentives, the Gulf Coast auction heralds a new chapter. Cheryl Stahl, the principal project manager at DNV, a trailblazing risk assessment firm, envisions a paradigm shift, stating, "As we set sail towards the Gulf, offshore wind's connection with the grid will loosen, fostering a hotbed of ingenious solutions."

Scheduled for August 29, the Interior Department's Bureau of Ocean Energy Management (BOEM) will present offshore wind developers with the opportunity to acquire three zones off the coasts of Louisiana and Texas. This unprecedented move is an integral part of the administration's pledge to slash power sector emissions and combat climate change.

John Filostrat, a spokesperson for BOEM, articulates that the Gulf's unique positioning offers a fertile ground for embracing a renewable energy future, envisioning the inception and execution of green hydrogen production.

Industry stalwarts like Shell, Invenergy, and TotalEnergies (TTEF.PA), who have already established themselves in the U.S. offshore wind arena, are among the companies qualified to partake in this milestone auction. In their earlier communications to BOEM, these industry leaders highlighted the region's potential to generate green hydrogen through offshore wind power.

In April, Shell expressed its excitement, stating, "The Gulf of Mexico boasts an exceptional setting for facilitating and capitalizing on green hydrogen production via offshore wind," underscoring the existing port and pipeline infrastructure, alongside fresh federal backing for green hydrogen initiatives. However, all three companies remained tight-lipped about their auction strategies.

The American Clean Power Association, a reputable trade organization advocating for offshore wind and other renewable energy developers, shared its insights with BOEM, accentuating that green hydrogen could amplify the market appeal of offshore wind.

Unlike the previous spectacle of the offshore wind lease sale that took New York and New Jersey by storm, drawing in billions of dollars in bids during February 2022, the Gulf auction is projected to evoke a different response. The Northeastern states boasted legal mandates compelling utilities to procure power from offshore wind projects, a vital lifeline for a technology whose electricity costs were estimated to be double those of natural gas plants. Furthermore, the elevated power prices in these states rendered the more expensive offshore wind a competitive choice.

On the contrary, Texas and Louisiana stand without legal mandates for clean energy, with relatively milder wind speeds, amplified hurricane risks, and considerably lower retail power prices. Even Texas, which could greatly benefit from offshore wind bolstering its grid, faces the challenge of finding buyers willing to pay premium prices for non-subsidized electricity.

Amid these challenges, Alon Carmel, a partner at PA Consulting, noted that the hydrogen tax credits from President Biden's Inflation Reduction Act have breathed new life into the idea of coupling offshore wind with hydrogen production. This financial incentive could pave the way for Gulf-based wind developers to pivot towards hydrogen production for revenue generation.

Lacy McManus, a prominent figure at the economic development agency Greater New Orleans Inc, which spearheads a federally-backed initiative to create a green hydrogen "cluster" in South Louisiana, envisions the Gulf region's flourishing petroleum industry as a receptive market. Driven by the impetus to reduce carbon intensity in response to investor demands, this industry could swap out gray hydrogen feedstocks and fuels with their green counterparts. As McManus aptly puts it, "Wind, at its abundant scale and capacity, becomes the perfect answer to our industrial sector's needs." The future, it seems, is blowing in the wind, carrying the promise of innovation, progress, and a greener tomorrow.

Source : Reuters (Reporting by Nichola Groom)