Oil steadies as investors assess US-EU deal
Brent crude futures were up 30 cents, or 0.4%, to $68.74 a barrel by 0813 GMT, while U.S. West Texas Intermediate crude stood at $65.43 a barrel, up 27 cents, or 0.4%.
The U.S.-European Union trade deal and a possible extension in the U.S.-China tariff pause are supporting global financial markets and oil prices, IG markets analyst Tony Sycamore said.
Sunday's U.S.-EU framework trade pact sets an import tariff of 15% on most EU goods, while U.S. President Trump said the deal calls for $750 billion of EU purchases of U.S. energy in coming years.
Senior U.S. and Chinese officials will meet in Stockholm on Monday, aiming to extend a tariff truce before an August 12 deadline.
Oil pared most of its gains on Monday after Brent futures rose above $69 a barrel earlier in the day.
Oil retreated from those levels as focus shifted to a stronger US dollar and lower oil imports by India, following the removal of another uncertainty with the US-EU deal, PVM analyst Tamas Varga said.
On the supply side, an OPEC+ panel is unlikely to alter existing plans to raise oil output when it meets on Monday, four OPEC+ delegates told Reuters on July 25.
ING expects OPEC+ will at least complete the full return of 2.2 million barrels per day of the additional voluntary supply cuts by the end of September.
Also on the supply side, Venezuela's state-run oil company PDVSA is readying to resume work, once Trump reinstates authorisations for its partners to operate and export oil under swaps, company sources said.
In the Middle East, Yemen's Houthis said on Sunday they would target ships of companies that do business with Israeli ports, regardless of nationality, in what they called a fourth phase of military operations against Israel over the Gaza conflict.
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The Guardian
35 minutes ago
- The Guardian
Despite Trump, the US economy remains surprisingly resilient. But for how long?
Chaotic and unpredictable, keeping up with Donald Trump's volatile trade war – never mind his presidency – can be tough. Back in April after his 'Liberation Day' tariff announcement, the talk was of the president crashing the global economy. Then, after a Wall Street backlash, the world learned the acronym 'Taco', which stands for 'Trump Always Chickens Out'. Now, things are heating up again. The president's decision to hit US trading partners with new tariffs – including Canada, Brazil, India and Taiwan – after his self-imposed 1 August deadline certainly reignites a threat to the world economy. Dozens of countries have been left reeling, and US consumers are expected to pay a heavy price. However, there is a sense that things could have been worse. Nowhere more clearly is this reflected than on Wall Street: despite the chaos of the president's trade war, the stock market remains close to record levels. After the latest escalation on Friday, and some worrying US jobs numbers, share prices took a hit, sliding by about 1%. But this is a setback, rather than a rout. A further slide could be ignited by this capricious president. Trump's decision to fire the official in charge of labour market data and his war on the independence of the US Federal Reserve will make matters worse. But despite the warnings of untold economic damage from the US tariff war earlier this year, the American economy has proven surprisingly resilient in recent months. Last week, the president seized on US growth figures showing the economy had expanded at an annualised rate of 3% in the second quarter – far in excess of the 2.4% rate predicted on Wall Street. Could the 'fake news' media have it wrong? Are tariff wars 'good, and easy to win,' as Trump claims? While inflation has ticked up, from 2.4% in May to 2.7% in June, it is well below the peak which followed the height of the pandemic disruption and Russia's invasion of Ukraine, and is far from hitting the levels feared. Back in April, in a country wrought with division, Democrat voters reckoned inflation was on track to hit 7.9% within a year, while Republicans said it would collapse to 0.9%. Butthere is good reason why the US economy has so far defied the prophecies of Armageddon. For starters, the hot-cold nature of Trump's tariff war means investors still anticipate further deals will be done to avoid the worst threats from ever materialising. The toughest tariffs introduced on Friday are only just arriving, too, meaning any impact has yet to emerge. Most countries have not hit back with retaliatory measures, which would have dramatically worsened things by putting international trade into a deeper tailspin. Meanwhile, knowing full well the dangers of this erratic president, businesses have been planning for months to avoid the worst-case scenarios. US companies rushed to stockpile goods before the trade war, helping them to keep prices down for now. Some firms have taken a hit to profits, according to analysts at Deutsche Bank, reckoning this is better than testing struggling American consumers – worn out by years of high inflation – with further price increases. The tariff costs are also being spread by multinationals, by increasing prices across the markets they operate in. In one high-profile example, Sony has put up the price of its PlayStation 5 by as much as 25% in some markets; including the UK, Europe, Australia and New Zealand. But not in the US. Still, there are signs that consequences are coming. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion When US businesses exhaust their pre-tariff stockpiles, it is likely that prices will creep higher. Meanwhile, the uncertainty of an erratic president is hitting jobs and investment. Last week's US jobs market data has reignited fears over the resilience of the American economy. Tariffs are weighing on business confidence and steadily creeping into consumer prices. GDP growth of 3% might appear robust on the face of things, but this figure was heavily influenced by the 0.5% fall in output in the first quarter, when the surge in US firms rushing to beat Trump's tariffs distorted activity. Growth in the first half averaged 1.25%, markedly slower than the 2.8% rate for 2024 as a whole. Part of the reason Wall Street remains sanguine about this is the continued belief that things could have turned out worse. Deals are still expected, with the pause in tariffs for key US trade partners Mexico and China, suggesting this most clearly. The investor view is that, rather than tariffs, the president would prefer a string of box office moments in front of the TV cameras with trade partners paying tribute to the court of Trump. However, it would be wrong to underestimate the self-described 'tariff man's' love of border taxes. And even though his most extreme threats will be negotiated down, the final destination will still be much worse than before. An economic hurricane might be avoided, but a storm is still the last thing businesses and consumers need. Britain's US trade deal is a case in point. A 10% US tariff on British goods has been welcomed as a big victory for Keir Starmer given the alternative, but it is still far worse than before. British cars will face a tariff rate four times higher than previously; costing jobs and growth in Britain while hitting American consumers in the pocket. For the US consumer, the average tariff had been close to 2% before Trump's return to the White House. After his 1 August escalation, that figure leaps to about 15% – the highest level since the 1930s. Almost a century ago a similar wrong-headed protectionist approach in Washington made the Great Depression far worse: the Smoot-Hawley tariffs hit the US and triggered a domino effect among the main industrialised nations; ultimately leading to the second world war. In the unpredictability of Trump's trade war, hope remains that similar mistakes can be avoided. But significant damage is still being done.
The Guardian
an hour ago
- The Guardian
‘We got a lot of honks in solidarity': anti-Musk protests ripple at LA's Tesla Diner
Elon Musk's 'retro-futuristic' Tesla Diner in Hollywood has become a new flashpoint for the 'Tesla Takedown' movement, with dozens of protesters picketing the diner last weekend alongside inflatable tube figures of Musk performing a Nazi salute. The viral popularity of the new diner, which is surrounded by 80 Tesla charging stations and two giant movie screens, has sparked out-the-door lines, massive traffic jams, and two angry protests, all within its first week of operation. Organizers say they are protesting against what they see as the Tesla CEO's corrosive effect on US democracy, as well as the human cost of the sweeping government cuts he spearheaded while working within the Trump administration earlier this year. For months, protesters who oppose the billionaire's political power have demonstrated outside of Tesla showrooms across the US and the world, hoping that by applying pressure to Tesla, a publicly-traded company, the Tesla Takedown movement can have an impact on Musk's behavior. 'Musk thought [the diner] would be good for him, but it's actually great for anti-Tesla protesters as well, to give us increased visibility,' said Joel Lava, who has been organizing weekly Tesla Takedown protests outside a Tesla service station in Burbank, California. Tesla did not immediately respond to a request for comment. Though Musk has officially left his role within the Trump administration, and has since publicly feuded with the president, the devastating effects of his so-called 'department of government efficiency' (Doge) live on, Lava said. Lava cited recent reports that the US had thrown away nearly 500 metric tons of emergency food aid this spring, in the wake of Doge's dismantling of the US Agency for International Development (USAID). Global health officials have also said Musk's budget-cutting efforts have thrown global HIV prevention efforts, including the rollout of a new 'miracle' drug, into chaos. There are hometown considerations, as well, Lava added: Musk has a history of anti-trans comments, and the diner is right on the border of West Hollywood, one of LA's historic LGBTQ+ neighborhoods. Protesters outside the Hollywood diner last weekend carried signs reading 'Fuck Nazi Billionaires' and 'Boycott Tesla'. 'We WILL NOT REST until the world has internalized the truth that TESLA FUNDS FASCISM,' organizers wrote in a post advertising the demonstrations, which one Los Angeles organizer estimated attracted about 100 people on Saturday, and about 85 on Sunday. A Los Angeles police spokesperson described the two demonstrations in Hollywood as 'peaceful protests'. Social media video of the diner demonstrations showed a few apparent Musk supporters yelling at protesters, including one young man caught on video describing himself as 'a proud fascist'. Dave, a Los Angeles-based Tesla Takedown organizer, said a few drivers of newer Teslas and Cybertrucks around the diner had screamed at the protesters, and 'there were some people who were doing the Sieg Heil [salute]'. At least one Cybertruck driver had gotten out of his vehicle to confront protesters, Dave said. The organizer asked not to be identified by his full name because he feared that protesting against Musk might affect his employment opportunities. Other Tesla fans waiting in line outside the diner simply seemed confused by the political rhetoric, Dave said, and other people driving by the diner were audibly supportive. 'We got a lot of honks and fist-pumps in solidarity, and many of those were even from Tesla drivers themselves – especially the people driving the older models of Teslas,' he said. Since it opened at 4.20pm last Monday, the diner has attracted Musk fans from across southern California, as well as curious tourists. At about midday on Wednesday last week, many fans in line had brought children with them, and some said that their kids were especially excited to see Musk's diner, which they had heard about on TikTok or YouTube. One Tesla Diner customer told the LA Public Press on Saturday that the protesters' comparisons of Musk to a Nazi did not make sense to him. 'If he's a fascist, who has he killed?' the man asked. 'Nazis kill people, from what I understand.' Dave, the Tesla Takedown organizer, said the demonstrators were considering more protests outside the diner, but that the group has already received at least one social media threat that they will be assaulted if they protest again next weekend. Asked about those threatening social media posts, which came from an anonymous pro-Musk Bluesky account, an LAPD spokesperson said the department was not currently aware of 'any specific threat'. For Angelenos who live in the neighborhood surrounding Musk's new diner, its sudden popularity has sparked a litany of complaints. Local news outlets have reported that neighborhood residents have complained of the chaos and traffic it has brought to the neighborhood, including 'insane gridlock from 1pm to 1 am', and concerns about the giant movie screens blocking the view from nearby apartments. 'If you can send people to Mars, you should be able to figure out how to make this doable for residents,' one resident told ABC7 News.
Reuters
3 hours ago
- Reuters
OPEC+ agrees in principle another large oil output hike, sources say
LONDON, Aug 3 (Reuters) - OPEC+ agreed in principle to boost oil output by 548,000 barrels per day in September, two OPEC+ sources said on Sunday as the group finishes unwinding its biggest tranche of production cuts amid fears of further supply disruptions from Russia. A decision is expected at a meeting scheduled to begin at 1100 GMT, amid fresh U.S. demands for India to stop buying Russian oil as Washington seeks ways to push Moscow for a peace deal with Ukraine. Fresh EU sanctions have also pushed Indian state refiners to suspend Russian oil purchases. OPEC+, which pumps about half of the world's oil, had been curtailing production for several years to support the market. But it reversed course this year to regain market share, and as U.S. President Donald Trump demanded OPEC pump more oil. OPEC+ began output increases in April with a modest hike of 138,000 bpd, followed by larger hikes of 411,000 bpd in May, June and July and 548,000 bpd in August. If the group agrees to the 548,000-bpd September increase, it will have fully unwound its previous production cut of 2.2 million bpd, while allowing the United Arab Emirates to raise output by 300,000 bpd. OPEC+ still has in place a separate, voluntary cut of about 1.65 million bpd from eight members and a 2-million-bpd cut across all members, which expire at the end of 2026. Sources have said previously the group had no plans to discuss other tranches of cuts on Sunday.
