Oil pares loss as tight market offsets OPEC+'s bigger hike
The Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, agreed on Saturday to raise production by 548,000 barrels per day in August, more than the 411,000 bpd hikes they made for the earlier three months.
Brent crude futures fell as low as $67.22 a barrel and by 0815 GMT were down 22 cents, or 0.3 per cent, to $68.08. U.S. West Texas Intermediate crude was at $66.63, down 37 cents or 0.6 per cent, up from an earlier low of $65.40.
"For now, the oil market remains tight, suggesting it can absorb additional barrels," said UBS analyst Giovanni Staunovo.
The OPEC+ decision will bring nearly 80 per cent of the 2.2 million bpd voluntary cuts from eight OPEC producers back into the market, RBC Capital analysts led by Helima Croft said in a note.
However, the actual output increase has been smaller than planned so far and most of the supply has been from Saudi Arabia, they added.
In a show of confidence in oil demand, Saudi Arabia on Sunday raised the August price for its flagship Arab Light crude to a four-month high for Asia.
Goldman analysts expect OPEC+ to announce a final 550,000 bpd increase for September at the next meeting on August 3.
Oil also came under pressure as U.S. officials flagged a delay on when tariffs would begin but failed to provide details on changes to the rates that will be imposed. Investors are worried higher tariffs could slow economic activity and oil demand.
"Concerns over Trump's tariffs continue to be the broad theme in the second half of 2025, with dollar weakness the only support for oil for now," said Priyanka Sachdeva, a senior market analyst at Phillip Nova.
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CNA
an hour ago
- CNA
Oil shrugs off OPEC+'s bigger hike as tight market provides support
LONDON :Oil on Monday shrugged off the impact of OPEC+ hiking output more than expected for August as well as concern about the potential impact of U.S. tariffs, with prices reversing early losses as a tight physical market lent support. The Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, agreed on Saturday to raise production by 548,000 barrels per day in August, more than the 411,000 bpd hikes they made for the earlier three months. Brent crude futures fell as low as $67.22 a barrel but by 1018 GMT were up 40 cents, or 0.6 per cent, to $68.70. U.S. West Texas Intermediate crude was at $67.04, up 4 cents, and up from an earlier low of $65.40. "For now, the oil market remains tight, suggesting it can absorb additional barrels," said UBS analyst Giovanni Staunovo. The OPEC+ decision will bring nearly 80 per cent of the 2.2 million bpd voluntary cuts from eight OPEC producers back into the market, RBC Capital analysts, led by Helima Croft, said in a note. However, the actual output increase has been smaller than planned so far and most of the supply has been from Saudi Arabia, they added. In a show of confidence about oil demand, Saudi Arabia on Sunday raised the August price for its flagship Arab Light crude to a four-month high for Asia. Goldman analysts expect OPEC+ to announce a final 550,000 bpd increase for September at the next meeting on August 3. Oil had also come under pressure as U.S. officials flagged a delay on when tariffs would begin but failed to provide details on changes to the rates that will be imposed. Investors are worried higher tariffs could slow economic activity and oil demand. "Concerns over Trump's tariffs continue to be the broad theme in the second half of 2025, with dollar weakness the only support for oil for now," said Priyanka Sachdeva, a senior market analyst at Phillip Nova.
CNA
4 hours ago
- CNA
Oil pares loss as tight market offsets OPEC+'s bigger hike
LONDON :Oil pared losses on Monday as a tight physical oil market offset the impact of OPEC+ hiking oil output more than expected in August as well as concern about the potential impact of U.S. tariffs on economic growth and oil demand. The Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, agreed on Saturday to raise production by 548,000 barrels per day in August, more than the 411,000 bpd hikes they made for the earlier three months. Brent crude futures fell as low as $67.22 a barrel and by 0815 GMT were down 22 cents, or 0.3 per cent, to $68.08. U.S. West Texas Intermediate crude was at $66.63, down 37 cents or 0.6 per cent, up from an earlier low of $65.40. "For now, the oil market remains tight, suggesting it can absorb additional barrels," said UBS analyst Giovanni Staunovo. The OPEC+ decision will bring nearly 80 per cent of the 2.2 million bpd voluntary cuts from eight OPEC producers back into the market, RBC Capital analysts led by Helima Croft said in a note. However, the actual output increase has been smaller than planned so far and most of the supply has been from Saudi Arabia, they added. In a show of confidence in oil demand, Saudi Arabia on Sunday raised the August price for its flagship Arab Light crude to a four-month high for Asia. Goldman analysts expect OPEC+ to announce a final 550,000 bpd increase for September at the next meeting on August 3. Oil also came under pressure as U.S. officials flagged a delay on when tariffs would begin but failed to provide details on changes to the rates that will be imposed. Investors are worried higher tariffs could slow economic activity and oil demand. "Concerns over Trump's tariffs continue to be the broad theme in the second half of 2025, with dollar weakness the only support for oil for now," said Priyanka Sachdeva, a senior market analyst at Phillip Nova.
Business Times
6 hours ago
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UK builders find support in Labour's plan to upgrade roads and railways
[LONDON] British infrastructure firms stand to benefit from the Labour government's spending plans for roads, railways and energy projects, with strong order books expected to feed into improving outlooks during the upcoming earnings season. Companies including Balfour Beatty, Costain Group, Morgan Sindall Group and Kier Group are lined up to win orders after Chancellor of the Exchequer Rachel Reeves announced £113 billion (S$196.4 billion) of funding for public infrastructure across the UK last month. That includes £39 billion to build affordable homes, £14 billion for the Sizewell C nuclear project in Suffolk and £15 billion for new transport infrastructure across the north and midlands. 'The general pitch will be quite healthy,' Investec Bank analyst Aynsley Lammin said. He highlighted that an array of energy, water and housing contracts is already in the works, while the commitments made in Reeves' spending review will brighten the outlook and provide visibility on a steady order pipeline. An improvement would be welcome. UK commercial building activity has been in contraction territory since January, according to S&P Global's overall construction PMI. The confidence level edged up to 48.8 in June, marking the slowest decline in construction output this year and reversing the downward trend. A reading below 50 indicates a reduction in activity. 'It might be too early for upgrades, but the risk is definitely on the upside,' Lammin said. 'At the very least it will be a strong underpinning, with expectations that margins and volumes will accelerate from next year.' Order books for listed UK infrastructure firms are at or near record levels already, according to Deutsche Numis analyst Jonathan Coubrough. While government spending pledges tend to take several years to convert into construction activity, secured projects like Sizewell C can have a faster impact, Coubrough said. He expects the nuclear project to contribute to solid order book growth in the upcoming earnings season, particularly for Balfour Beatty, which was awarded contracts worth as much as £400 million a year until 2030. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up High-speed rail project HS2 and BP and Equinor ASA's joint venture Net Zero Teeside Power – a gas-fired power station with carbon capture – will also support profit gains over this year and the next for Balfour Beatty, Bloomberg Intelligence analyst Sonia Baldeira wrote in a note. The London-based firm is the 'clear market leader in energy and power markets,' and should see the fastest growth among its peers this year as power firms increase their grid investments, Coubrough said. He expects Morgan Sindall, Kier and Costain to benefit from upgrades to the UK's water infrastructure. Costain in particular is set to be a major beneficiary of AMP8, a regulatory overhaul of the UK water industry that aims to modernise infrastructure and address environmental challenges, according to Investec's Lammin. The company is working to deliver 260 kilometres of new pipelines to enhance drought resilience in eastern England, and recently entered an agreement with United Utilities Group to upgrade water and wastewater treatment sites as part of a £3 billion project that will last until 2030. Morgan Sindall is 'exceptionally well positioned' to deliver on the government's affordable housing commitments, Lammin said. It already raised its outlook for 2025 last month, with its construction division set to outperform revenue and profit expectations. Kier, which specialises in road, prison and hospital infrastructure, lifted its medium-term operating profit margin goal, showing confidence in its pipeline. Kier's ongoing turnaround is 'delivering solid results,' with a record £11 billion of orders in the fiscal first half supporting its move toward growth after a period focused on paring debts, BI's Iwona Hovenko said. Still, delays in planning approval, difficulties in securing funding and inflationary pressures might complicate the delivery of such projects and the steady earnings growth that is expected to come with them. 'The administrative process of planning and getting these things funded takes time and usually longer than everybody hopes for,' Lammin said. The biggest obstacle is engineering capability and human resources, according to Coubrough, particularly for complex projects such as power grid upgrades and tunnel projects. The shortage of skilled workers can in turn increase construction costs, worsening funding challenges. Another headwind, more short-term and unpredictable, is the macro backdrop, Lammin said, referring to the bond market's nervous reaction to the recent speculation about a potential departure of Reeves as Chancellor. The sharp market moves brought to the fore the fragility of Britain's economic position, as the government attempts to balance ambitious spending – in infrastructure and beyond – with fiscal discipline. Bond and equity markets recovered some of their losses after Prime Minister Keir Starmer quashed the speculation, giving Reeves his full backing. BLOOMBERG
