The ASX Is Retaining Losses And BHP Shares Are Down

The ASX is retaining losses at lunchtime, with banks still under pressure and helping to pull the index back to levels last seen in October.

The S&P/ASX 200 index is down 29 points, or 0.5 per cent, at 5791 while the All Ordinaries is down 30 points, or 0.5 per cent, at 5898. The Australian dollar is trading up 0.3 per cent at US77.24¢.

Banks trading with losses included CBA, down 0.7 per cent, ANZ, down 0.9 per cent, NAB, down 0.8 per cent and Westpac, down 0.5 per cent.

BHP shares were down 0.6 per cent, CSL shares fell 0.7 per cenr and A2 Milk lost 2.7 per cent.

AMP fell 1.6 per cent after it said its CEO will resign by the end of the year.

Gold miners remained higher at lunchtime, with Newcrest up 1.8 per cent, and oil and gas producer Santos climbed 1.6 per cent.

Gold futures posted the biggest weekly advance in almost two years last week as mounting economic and geopolitical tensions fuelled demand for the metal as a haven.

The metal advanced 3.3 per cent over the week, the most since April 2016.

Gold dipped $1.41 to $1345.84 an once on Monday.

Oil falls as dollar firms, U.S. oil output expected to rise

Oil Stock Markets

Oil prices fell on Wednesday, weighed down by a rebound in the U.S. dollar from three-year lows hit last week and an expected rise in U.S. oil production. 

U.S. West Texas Intermediate (WTI) crude futures were at $61.07 a barrel at 0446 GMT, down 72 cents, or 1.2 percent, from their last settlement. 

Brent crude futures fell 60 cents, or 0.9 percent, from their last close to $64.65 per barrel.

Wang Tao, Reuters technical commodity analyst, said Brent could fall into a range of $63.92 to $64.41 per barrel, as suggested by its wave pattern and a projection analysis. 

Traders said the declines were driven by a recovery in the dollar, which potentially hits fuel demand as it makes greenback-denominated oil imports more expensive for countries using other currencies.

The dollar index, which measures the greenback against a basket of six major currencies, rose for a second day on Wednesday, moving further away from the three-year lows reached last week. 

Also pressuring prices is surging U.S. production, now the world’s second-largest oil stream at more than 10 million barrels per day (bpd), only slightly behind Russia and ahead of top exporter Saudi Arabia. 

The next set of weekly U.S. oil production data is due to be published by the Energy Information Administration (EIA) on Thursday after a one-day delay because of the President’s Day holiday on Monday. 

That data will also include U.S. inventory figures that are expected to show crude oil stockpiles rose 1.3 million barrels in the week to Feb. 16. Oil product stockpiles, including gasoline and distillate fuels, are all expected to decline. 

Despite the rising U.S. output, overall oil markets remain well supported due to healthy demand growth and supply restraint by the Organization of the Petroleum Exporting Countries (OPEC) that started last year to draw down excess global inventories. 

“A roughly balanced market is anticipated in calendar year 2018, with the risks around that view tilted toward surplus,” mining and energy giant BHP said in its economic and commodity outlook for the year, published this week.

BHP set to leave World Coal Association, threatens Minerals Council withdrawal

Australian Stock Markets

Australian mining giant BHP is set to pull out of the World Coal Association and is threatening to leave the Minerals Council of Australia over differences on climate change policy.

BHP plans to leave World Coal Association at the end of March 2018.

Company will review membership of Minerals Council within a year if MCA keeps lobbying for coal-fired power. 

Shareholder activists cautiously welcome the move after pushing for BHP to quit the MCA

The company has published a 22-page report outlining key climate and energy policy differences between it and several of the lobby groups it is a member of.

The review has found material differences between BHP's position and the position of the Minerals Council of Australia (MCA), the US Chamber of Commerce and the World Coal Association (WCA).
BHP said it has reached a preliminary view to exit the WCA, with a final decision due by the end of March.

The company said it is also considering its future as part of the US Chamber of Commerce, again with a decision due by the end of March.


BHP has indicated its desire to remain part of the MCA "given the high level of benefit BHP derives from membership", but the company has said it will request the MCA refrain from policy activity and advocacy in these areas of difference on climate and energy policy.

The company said it will review its membership of the MCA if the organisation has not stopped such activity within the next 12 months.

Investors eye Elliott's Plan B as BHP shake-up push falters

Two weeks after Elliott Management's surprise assault on BHP Billiton, the fund manager's three-point demand for change is gaining little traction with investors, prompting expectations a second strike is imminent.

While Elliott is struggling to push through a $46 billion overhaul of the Anglo-Australian miner, investors said it could point to BHP's plans for further sales of marginal assets and increasing shareholder returns as, potentially, some incremental victories.

"I think the case for agitating for management to do what a shareholder wants is always there," said Neil Boyd-Clark, portfolio manager at Arnhem Investment Management, a long-time holder of BHP's Australian shares.

Over the past year, Elliott has built up a minority stake in BHP and earlier this month told the company it had failed to deliver "optimal" value.

It demanded BHP spin off U.S. oil assets, ditch a corporate structure built on dual listings in London and Sydney and hand back more money to shareholders.

In a swift rebuff, BHP said the costs of the changes would outweigh the benefits.