Oil prices rise as Fed rate cut, Trump-Putin talks loom
Central banks, like the U.S. Federal Reserve, use interest rates to control inflation. Lower interest rates reduce consumer borrowing costs and can boost economic growth and demand for oil. Brent crude futures were up 87 cents, or 1.3%, to $66.50 a barrel at 10:53 a.m. EDT (1453 GMT), while U.S. West Texas Intermediate (WTI) crude rose 88 cents, or 1.4%, to $63.53. Those price gains pushed both crude benchmarks out of technically oversold territory for the first time in three days. Brent closed on Tuesday at its lowest price since June 5 and WTI closed at its lowest price since June 2 due in part to bearish inventory and supply data from the U.S. Energy Information Administration and the International Energy Agency.
Putin on Thursday praised "sincere efforts" by the U.S. to end the war in Ukraine and floated the prospect of a nuclear arms deal ahead of a summit on Friday in Alaska with Trump. U.S. allies in Europe have urged Trump to stand firm.
Russia was the second-biggest producer of crude in 2024 behind the U.S., so any agreement that may ease sanctions on Moscow would likely boost the amount of Russian oil available for export to global markets. Trump on Wednesday threatened "severe consequences" if Putin does not agree to peace in Ukraine. The U.S. president did not specify what the consequences could be, but he has warned of economic sanctions if the meeting on Friday proves fruitless.
Trump has threatened to enact secondary tariffs on buyers of Russian crude, primarily China and India, if Russia continues its war in Ukraine.
"The uncertainty of U.S.-Russia peace talks continues to add a bullish risk premium given Russian oil buyers could face more economic pressure," Rystad Energy said in a client note. Some analysts, however, remained sceptical that Trump would take action that could significantly disrupt oil supplies.
FED RATE CUT
Expectations that the Fed will cut interest rates in September also propped up oil prices. Traders overwhelmingly believe a cut will happen next month after U.S. consumer prices increased at a moderate pace in July.
U.S. Treasury Secretary Scott Bessent said he thought an aggressive half-percentage-point cut was possible given recent weak employment numbers.
But a jump in U.S. wholesale prices last month looks to have all but erased the possibility that the Fed will deliver a jumbo-sized half-percentage-point interest rate cut in September, though expectations for a quarter-percentage-point move next month, followed by another in October, remain intact.
San Francisco Fed President Mary Daly has pushed back against the need for a 50-basis-point rate cut at the U.S. central bank's September 16-17 meeting, the Wall Street Journal reported on Thursday.
In Europe, meanwhile, Norwegian oil and gas investments are expected to peak this year, and start declining next year as major projects are completed, a statistics office survey of industry players showed on Thursday.
Norway produces about 2% of global oil. It became Europe's largest supplier of pipeline gas after Russia's invasion of Ukraine in February 2022.
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The National
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- The National
Trump says DC residents 'feel so safe' with National Guard posted
US President Donald Trump on Thursday said Washington residents "feel so safe already", after he ordered federal agents and members of the National Guard to patrol the streets in support of local law enforcement. The White House has said the move was needed amid a surge in violent crime, although city officials say crime has been decreasing in recent years. "I had calls from many, many friends, including Democrats, a lot of Democrat friends ... and they were thanking me so much for what I'm doing in DC," Mr Trump told reporters from the Oval Office. "So we will have crime under control very shortly in DC." Mr Trump said Washington officials and police had "fudged" the crime statistics to make it seem as if violent incidents were going down. "We're going to be getting the criminals the hell out of here. People are so happy to see our military going into DC and getting these thugs out of there," he said. The federal intervention is supposed to last 30 days but Mr Trump has said he will have Republicans in Congress push for extensions. A significant rise in the number of troops and federal agents could be seen on the streets on Thursday after the White House said the day before that more would be on patrol. It has said that more arrests are being made and homeless people are being forced to remove their tents from public spaces. The Pentagon says the 800 National Guard members who have been activated will have missions that include monument security and community safety patrols. They will not be armed, according to the Pentagon, and the White House said they will help with crowd control but will not be making arrests. National Guard Maj Micah Maxwell said troops will assist federal and local law enforcement in a variety of roles, including traffic and crowd control. The Guard members have been trained in de-escalation tactics as well as the proper use of crowd control equipment, Maj Maxwell said. Mr Trump has described the residents of Washington as "happy" to see troops and agents on the streets, but a viral video shows a man confronting a law enforcement officer and hitting him with a sandwich. The man was charged with a felony and fired from his job at the Justice Department.
The National
3 hours ago
- The National
I've lived in Washington for 30 years – the last thing the city needs is troops
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He describes our gorgeous metropolis (I wouldn't live anywhere else on the East Coast) as 'a national disgrace' beset with 'violent gangs and bloodthirsty criminals' and overrun by 'roving mobs of violent youth'. He also mischaracterised it as, 'horribly run, graffiti stained' and 'too dangerous' to visit. There are violent crimes here, but rates are at a 30-year low. There was a deadly insurrection on January 6, 2021, but all the malefactors have been summarily pardoned. DC is strikingly beautiful, filled with gorgeous parks, magnificent monuments, endless (mostly free) world-class museums and similar institutions of art and learning. As for being horribly run, the city was graded first in financial health out of 73 cities examined in a 2023 report by the non-partisan think tank Truth in Accounting. It has a surplus of $2.5 billion, and $9,000 for every citizen, and meets virtually 100 per cent of its pension and healthcare obligations. 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The power to unilaterally declare, and act upon, 'states of exception' demonstrates that a real sovereign can sweep aside traditional legal, moral or other constraints in a previously functional democratic order like the Weimar Republic, which Schmitt detested. Mr Trump's misuse of emergency powers illustrates this precisely. Since the end of the Second World War, time and again Congress has pondered the legitimate need for a robust executive that can act decisively in genuine states of sudden emergency, like nuclear war. They never imagined that the power would be used in conjunction with executive orders, often providing the president virtually unchallengeable authority. Like his administration's attempt to seize control of universities, intimidate media and law firms, and remove other crucial constraints on executive power, the de facto seizure of Washington DC's police is likely to be replicated in other Democratic-run cities with a large African-American population. 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The National
4 hours ago
- The National
What Kodak's woes can teach us about Big Tech, capitalism and brand resilience
, once among the most recognisable companies in the world, is blaming "misleading media reports" for causing concern after its second-quarter financial results. Although Kodak reported a gross profit of $51 million this week, the Rochester, New York-based company included a "concern assessment" that unnerved investors, employees and customers. The assessment warned various conditions "raise substantial doubt about the company's ability to continue". Kodak, which declared bankruptcy in 2012 and emerged in 2013, has tried to climb back to relevance amid a vastly changed photography, imaging and chemical market. It said reporters misinterpreted the company's disclosure. "Media reports that Kodak is ceasing operations, going out of business or filing for bankruptcy are inaccurate and reflect a fundamental misunderstanding of a recent technical disclosure the company made to the Security and Exchange Commission," read a statement posted to Kodak's LinkedIn page. 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Despite emerging from bankruptcy protection in 2013 and turning to commercial print, advanced materials and chemicals, the company's earnings and overall financial reality leave a lot to be desired. "When your debts and liabilities are going to be larger than the other side of your balance sheet, that's when you sort of turn the lights out and close the doors," Mr Hogan said. Teachable moment for Big Tech? The story of Kodak's rise and fall are almost cliched at this point. The firm's domination of consumer photography through film and camera products, but inability to adjust to digital photography are well documented, although as Mr Hogan says, superficially researched to some extent. In 1975, a Kodak employee by the name of Steven Sasson invented what many to be the first digital camera. Although bulky and initially impractical, the technology showed promise, but Kodak failed to see a future in which digital cameras would destroy the profitable film industry it dominated. It shelved Mr Sasson's digital camera project, and sealed the company's fate when digital cameras started to outsell film cameras. Yet what many often fail to factor in is that even if Kodak supported Mr Sasson's invention, smartphones – not necessarily digital cameras – changed photography forever. As Mr Hogan says, sometimes the rules of economics and time make a company's demise inevitable. Nothing lasts forever. "Going from the top of the leaderboard to being shown the door is something that inevitably happens," he said, adding that if competition and market forces do not cause company dominance to erode, sometimes government regulators step in and break up that dominance. "It's the evolution of capitalism and it's just how things work." He said that even companies like Nvidia, which is experiencing unprecedented success, inevitably falter, and there is not one single moment it can be pegged to. Much like Nvidia, Kodak was once considered an invincible darling of S&P 500. Its stock price, as of the writing of this article, hovers at $5 a share. Mr Hogan also said that although there are optimists who try to compare Kodak's recent struggles to that of Apple, which was nearing irrelevance in the mid-1990s only to come roaring back, those comparisons are ill-conceived. Apple's struggles occurred while the computer industry was still finding its footing and the company was relatively young, whereas Kodak was already past its prime when its downfall began. "It's clearly a fallen angel that's not coming back," Mr Hogan said. Kodak's brand remains strong despite struggles Although Kodak has financially meandered for more than a decade, at this point, the company's logo and name still carry weight. Throughout many parts of the world, and particularly in the Middle East, Kodak signs remain prominent outside print and photo shops. Timothy Kneeland, a professor of history, politics and law at Nazareth University in western New York, said that the company's contributions to chemical and photography breakthroughs helped to give the US brand unprecedented recognition. "Overseas, Kodak is loved," he said. "You can still see retail stores with Kodak branding and merchandise." Prof Kneeland also said when Kodak was ascending to its peak of influence, the company made it a priority to send representatives overseas to promote its film, lenses and cameras, giving the brand a significant advantage over competitors. "Kodak became the standard for film," he said, adding that the company's prolific TV advertisements boasting of capturing "Kodak moments" with cameras, made it a household name for billions. Robert Thompson, a professor of pop culture, television, radio and film at Syracuse University 's Newhouse School of Public Communications, said that in the 1960s, '70s and '80s, Kodak's products and advertising worked so well that the brand almost took on a generic quality, similar to how people refer to tissues as Kleenex or adhesive bandages as Band-Aids. "Their advertising essentially taught people how to use what was once just an emerging technology of photography," he explained. Prof Thompson said Kodak's advertising messages were easily transferable to other parts of the world. He said the now beleaguered company but resilient brand and logo offer a lesson to others at the centre of the current artificial intelligence boom, such as OpenAI and Anthropic. "They turned photography into something that was part of the daily activities of a huge portion of the population," Prof Thompson said. "AI is obviously a big deal too, but Kodak is admirable because it took technology and turned it into an aspirational product enjoyed by billions."
