Oil prices drop on tariff worry and rising supplies
Brent crude futures were down 33 cents to $66.22 a barrel at 11:05 a.m. EDT (1505 GMT), taking losses to 2.5% over the week. US West Texas Intermediate crude was down 31 cents to $62.48 a barrel, headed for a weekly decline of 3.3%. 'Prices are down as concerns over oversupply from OPEC+ persist, while the demand outlook remains uncertain amid ongoing trade tensions,' LSEG senior analyst Anh Pham said. 'A stronger US dollar has also added pressure to crude prices.'
Oil erased early gains after a spokesperson from China's foreign ministry said Beijing and Washington were not having any consultations or negotiations on tariffs. That contradicted earlier comments by US President Donald Trump, who said on Thursday trade talks were underway.
China has exempted some US imports from its 125% tariffs and is asking firms to identify critical goods they need levy-free, according to businesses that have been notified, the clearest sign yet of Beijing's concerns about trade war fallout. 'Traders now view further (crude price) gains as unlikely in the short term due to the continued trade war among top global consumers and speculation that OPEC+ may accelerate production hikes from June,' Saxo Bank analyst Ole Hansen said.
Oil prices fell earlier this month to four-year lows after tariffs sparked investor concern about global demand and a selloff in financial markets. While the risk is a weaker economy will erode demand, supplies could swell.
Several OPEC+ members have suggested the group accelerate oil output increases for a second month in June, Reuters reported earlier this week.
An end to the war in Ukraine also has the potential to add to supplies if it allows more Russian oil to reach global markets. A three-hour meeting on Friday between Russian President Vladimir Putin and Trump envoy Steve Witkoff was constructive and narrowed differences when it came to ending the war in Ukraine, Kremlin aide Yuri Ushakov said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
an hour ago
- Business Recorder
PSX maintains bullish run, KSE-100 crosses 142,000 level
The Pakistan Stock Exchange (PSX) maintained its bullish run, with the benchmark KSE-100 Index crossing the 142,000 level during the intra-day trading on Monday. At 1:40pm, the benchmark index was hovering at 142,117.00 level, an increase of 1,082.02 points or 0.77%. Buying was observed in key sectors including commercial banks, oil and gas exploration companies, OMCs, power generation and refinery. Index-heavy stocks including ARL, MARI, OGDC, PPL, POL, PSO, WAFI, HBL, MEBL and NBP traded in the green. Analysts attributed the buying rally to investor optimism after the US and Pakistan struck a trade deal that will result in lower tariffs for the South Asian nation. During the previous week, the PSX capped off a historic week, with the benchmark KSE-100 Index closing at an all-time high of 141,035 points, up 1.3% on a weekly basis. The index also touched a new intraday record of 141,161 points, underscoring a remarkable reversal in market sentiment that was largely driven by an unexpected breakthrough in trade relations with the United States and renewed investor confidence in Pakistan's macroeconomic trajectory. Internationally, Asian share markets followed Wall Street lower on Monday as fears for the US economy returned with a vengeance, spurring investors to price in an almost certain rate cut for September and undermining the dollar. Some early resilience in US stock futures and a continued retreat in oil prices did help limit the losses, but the bleak message from the July payrolls report was hard to ignore. Not only had revisions meant payrolls were 290,000 below where investors had thought they would be, but the three-month average slowed to just 35,000 from 231,000 at the start of the year. Neither did the reaction of President Donald Trump instil confidence, as the firing of the head of Labor Statistics threatened to undermine confidence in US economic data. Likewise, news that Trump would get to fill a governorship position at the Federal Reserve early added to worries about the politicisation of interest rate policy. The prospect of lower borrowing costs offered some support for equities and S&P 500 futures inched up 0.1%, while Nasdaq futures rose 0.2%. Asian share markets, however, were still catching up with Friday's retreat, and the Nikkei fell 2.1%, while South Korea dipped 0.2%. MSCI's broadest index of Asia-Pacific shares outside Japan broke the mould and firmed 0.3%. This is an intra-day update
Business Recorder
an hour ago
- Business Recorder
European shares tick higher after Friday selloff; Swiss stocks slump
European shares edged higher on Monday, recovering some ground after a sharp selloff on Friday, while Swiss stocks slumped to their lowest in more than three months as investors digested a hefty 39% U.S. tariff rate. The pan-European STOXX 600 index rose 0.2% by 0720 GMT, after logging its biggest daily drop in more than three months on Friday. Switzerland's benchmark SMI index fell 1.5% as trading resumed after a long weekend. Switzerland could revise its offer to the United States after being hit by a staggering levy late last week that experts warned could trigger a recession, Business Minister Guy Parmelin said. Swiss pharma stocks Novartis and Roche slipped 1.3% and 2.3%, respectively, after U.S. President Donald Trump sent letters to the leaders of 17 major pharmaceutical companies directing them to slash U.S. prescription drug prices. Swiss luxury companies Richemont and Swatch, among the most exposed to tariffs, fell more than 1.5% each. UBS slipped 2.5% after the bank said it would pay $300 million to resolve U.S. mortgage securities cases related to misselling of mortage-linked investments. Lloyds was a bright spot, gaining 6.3% to the top of the Stoxx 600 index after the UK's Supreme Court overturned a ruling on motor finance commissions in positive news for banks.
Business Recorder
2 hours ago
- Business Recorder
Iron ore ticks higher on firm demand, healthy steel margins
BEIJING: Iron ore futures prices ticked up on Monday, helped by firm near-term demand, falling portside stocks and healthy steel margins in top consumer China, while the anticipation of growing supplies ahead curbed gains. The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) traded 0.25% higher at 786.5 yuan ($109.44) a metric ton, as of 0202 GMT. The benchmark September iron ore on the Singapore Exchange added 0.3% to $100.3 a ton, as of 0152 GMT. Despite a weekly decline, the average daily hot metal output among steelmakers remained above 240 million tons, a level typically considered a signal of resilient iron ore demand. Around two-thirds of steel mills were operating at a profit in the week, as of July 31, compared to 59% in early July, data from consultancy Mysteel showed. Also, portside inventory slid 0.6% from the week before to the lowest since February 2024 at 130.3 million tons, as of August 1, data from consultancy Steelhome showed. The outlook of supplies rising in the second half of the year, however, limited price gains of the key steelmaking ingredient. 'Since miners kept their annual production guidance unchanged, it's likely that shipments will ramp up in the remainder of the year, indicating growing supply,' analysts at broker First Futures said in a note. The cyclones in Australia earlier this year had resulted in a sharp fall in shipments in the first quarter, contributing to generally lower shipments in the first half. Other steelmaking ingredients on the DCE retreated, with coking coal and coke down 0.58% and 1.67%, respectively. Steel benchmarks on the Shanghai Futures Exchange slipped, with rebar falling 1%, hot-rolled coil shedding 0.7%, wire rod sliding 1.28% and stainless steel ticking down 0.12%.
