Oil falls on signs of weak U.S. demand ahead of key jobs report
Brent crude futures fell 24 cents, or 0.35%, to $68.87 a barrel by 0044 GMT after gaining 3% on Wednesday. U.S. West Texas Intermediate crude fell 24 cents, or 0.36%, to $67.21 a barrel after climbing 3.1% previously.
The U.S. Energy Information Administration said on Wednesday domestic crude inventories rose by 3.8 million barrels to 419 million barrels last week. Analysts in a Reuters poll had expected a drawdown of 1.8 million barrels.
Gasoline demand dropped to 8.6 million barrels per day, prompting concerns about consumption in the peak U.S. summer driving season.
Both benchmarks gained on Wednesday after Iran enacted a law suspending cooperation with the U.N. nuclear watchdog, raising concerns the lingering dispute over the Middle East producer's nuclear program may once again devolve into armed conflict.
Additionally, the U.S. and Vietnam reached a trade deal that sets 20% tariffs on many of the Southeast Asian country's exports, giving investors a sense of greater economic stability on international trade which could flow into higher demand for oil.
The market will be watching the release of the key U.S. monthly employment report on Thursday to shape expectations around the depth and timing of interest rate cuts by the Federal Reserve in the second half of this year, analysts said.
Lower interest rates could spur economic activity, which would in turn boost oil demand.
A private payrolls report on Wednesday showed a contraction for the first time in two year though analysts cautioned there is no correlation between it and the government data.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Politico
2 hours ago
- Politico
Why smuggle chips when you can remote in?
With help from Mohar Chatterjee In the global race to control the most powerful new technologies, America has used aggressive export controls to cut off China's access to high-end microchips. And smugglers have grown ever more creative in evading them: paying students to pack them alongside clothes in luggage, mislabeling shipments as toys or tea, stowing them in container trucks filled with an assortment of other electronics. But there's an easier way for China to tap into the computing power of those microchips: just access them remotely with cloud computing. Last year, Reuters found that at least 11 companies or state-backed entities from China had sought out U.S. cloud services as a back-door way to access the computing power of restricted chips. 'This was always a gaping blind spot that policymakers are waking up to,' said Barath Harithas, a senior fellow at the Center for Strategic and International Studies. 'What's the point of spending all these efforts on smuggling of chips if you can just access the computing capacity remotely?' Lawmakers are trying to close this loophole by extending export controls to cloud computing services. But that effort is about to get a lot trickier — thanks to none other than President Donald Trump. The giant data center deals Trump recently announced in Saudi Arabia and the United Arab Emirates could make it even harder to restrict China's access to computing power by basing providers outside the U.S. 'These countries in the Gulf maintain close relationships with Chinese counterparts and maintain a political position between the U.S. and China,' said Janet Egan, a senior fellow at the Center for a New American Security (CNAS). 'That concerns me when I think about Chinese actors accessing vast amounts of compute.' Controlling computing overseas goes back to the Cold War, and it's been evolving in the AI age. The Biden administration blocked the export of AI chips to China in 2022. It's since tightened the throttle with controls on more chips and on chipmaking equipment. Compared to that push to control hardware, the U.S. has taken a much less focused approach to remote cloud access for AI. The Biden administration packed 'know your customer' rules into its AI diffusion framework issued in January; Trump scrapped that rule in May. Trump's Commerce Department is currently working on a replacement rule, though it's unclear whether it will include cloud provisions. 'It sounds like the administration is still figuring out [the cloud] as it tries to determine what it wants a diffusion rule to look like,' said Michael Horowitz, who served as a deputy assistant secretary of defense under former President Joe Biden and is a scholar on emerging technologies. The Commerce Department did not respond to DFD's questions about the replacement rule. Congress has yet to pass a bill on remote cloud access. In 2024 security report on DeepSeek, the House Select Committee on China recommended 'remote access controls' on all data centers. A bill from Rep. Mike Lawler (R-N.Y.) to extend export controls to the cloud, and block 'CCP-aligned companies' from accessing U.S. technology remotely, advanced out of the House Foreign Affairs Committee in April. 'Closing this loophole is essential to preventing our adversaries like China from accessing restricted technology,' Lawler's communications director Ciro Riccardi told DFD. There's a tension embedded into the cloud computing question. Some Chinese customers use U.S. cloud services for innocuous purposes, like storage or video games, rather than military or AI development – and that can be a good thing, said Sam Winter-Levy, a fellow at the Carnegie Endowment for International Peace. 'So long as the world's AI computing activities stay tethered to the U.S. cloud, policymakers can bake some degree of transparency into the system,' he said. At the same time, Chinese users have been documented trying to set up accounts on Amazon Web Services and Microsoft Azure to access the advanced computing power needed for training AI models – not illegal but also not desirable in light of U.S. policy. In the absence of a government rulebook, cloud companies have implemented some safeguards like 'know your customer' standards on their own – for example, Amazon may require appointing a legal representative and submitting certain identity documents and financial information, depending on the type of use. Where remote access gets dicier is overseas, according to Egan of CNAS. 'As we start to export more chips around the world, particularly in regions like the Gulf, we need more guidelines,' she said. In May, Trump announced a series of AI deals while on a tour of the Middle East, which would result in the sale of tens of thousands of the U.S.'s most advanced AI chips to build data centers in Saudi Arabia and the UAE. The Trump administration has cheered on these ventures, including their implications for cloud computing. 'American companies will operate the data centers and offer American-managed cloud services throughout the region,' Commerce Secretary Howard Lutnick said in a statement. 'These are America First deals that drive investment into the U.S., improve our trade balance, and lock in American technology as the global standard,' White House AI and crypto czar David Sacks wrote in a May post on X. Critics including House China Chair John Moolenaar (R-Mich.) called for scrutiny of the deals, especially in light of Gulf countries' alliances with China. But it's unclear what guardrails exist on the deals, for the chips themselves or the data centers they will power. When asked about the security of the Gulf data centers, the White House pointed DFD to a fact sheet stating that agreements in the UAE include 'strong protections to prevent the diversion of U.S.-origin technology.' Amazon and Microsoft have also inked deals to help those Middle Eastern companies develop their cloud services. Asked about their cloud security measures for those Gulf projects, Amazon said 'AWS complies with all applicable U.S. laws, including trade laws.' Microsoft pointed DFD to a press release stating that its UAE partnership includes a commitment 'to world-leading standards in AI safety and security.' Chris Miller, a Tufts University semiconductor historian and author of 'Chip War,' said the current approach leaves Big Tech companies largely responsible for policing who uses their cloud services, especially when it comes to the data centers planned for the Middle East. 'Different countries and governments have different interests,' Miller said. 'This seems to me to be just as important, if not more important, as where physically the chips and servers are.' EU firms want an AI moratorium too European companies are pushing for a pause on AI regulations, and what they're asking sounds an awful lot like the failed effort backed by Silicon Valley to pause state AI law enforcement in the megabill. As POLITICO's Eliza Gkritsi reports, 46 leaders of the European Union's biggest firms – including Airbus, Mistral, and Mercedes-Benz – sent an open letter Thursday asking Brussels for a two-year delay on implementing its AI Act, which is set to go into effect on Aug. 2. They complain of 'unclear, overlapping and increasingly complex EU regulations' as being a major obstacle to scaling AI systems and competing on a global level. The pause would allow for 'further simplification of the new rules,' they said. The AI Act, which the EU passed last year, includes an overarching set of rules regulating AI systems like chatbots and facial recognition. Those rules include transparency requirements, restrictions on AI-powered surveillance, and a ban on biometric systems that classify peoples' protected characteristics like race. Companies like Meta and Google have criticized the AI Act as unworkable. Henna Virkkunen, the EU's technology chief, told POLITICO that she would decide by the end of August whether to delay enactment of the legislation. THE KOSA POWER PLAY THAT SANK THE AI MORATORIUM At the center of Sen. Marsha Blackburn's decision this week to withdraw support for an artificial intelligence measure she worked on with Sen. Ted Cruz (R-Texas) was her Kids Online Safety Act, according to four people familiar with the situation, POLITICO's Ruth Reader and Mohar Chatterjee report. Those four people, granted anonymity to discuss private negotiations, said Blackburn (R-Tenn.) hoped a compromise to limit the scope and span of the 10-year AI moratorium would allow her to advance her KOSA legislation to markup in the Senate Commerce Committee, which Cruz chairs. The amendment she worked out with Cruz would have allowed states to enforce laws passed in recent years to keep kids safe from online sexual predators, bullying, drug sales and other negative health impacts, but it prevented states from putting 'undue or disproportionate burden' on AI systems. After a coalition of 130 organizations said they opposed that amendment, Blackburn went to Cruz on Monday and tried to get the 'undue or disproportionate burden' language removed from the bill. But Cruz wouldn't budge, one of the people said. By Monday night, Blackburn changed her amendment with Cruz to include KOSA as a symbolic move, three of the people said. She then partnered with Senate Commerce ranking member Maria Cantwell (D-Wash.) to strike the original AI moratorium from the megabill, which lawmakers approved with a 99-1 vote. Cruz's office didn't return a request for comment, and Blackburn's office declined to comment. post of the day THE FUTURE IN 5 LINKS
Politico
2 hours ago
- Politico
Trump's energy vow hits ‘big, beautiful' roadblock
Congressional Republicans may have helped President Donald Trump follow through on major campaign promises with passage Thursday of the budget reconciliation bill. But the 'One Big Beautiful Bill' may also violate one of Trump's major campaign pledges: to slash Americans' electricity bills. An analysis from Princeton University's Rapid Energy Policy Evaluation and Analysis Toolkit predicts that the bill will result in Americans paying $28 billion more a year in energy prices by 2030 and $50 billion by 2035. That translates to $280 more a year for the average household by 2035. Trump promised he would halve energy bills during his first year. So far, that hasn't happened. The U.S. Energy Information Administration said this spring that retail electricity prices were set to rise faster than inflation through 2026. The president has little power to reduce your utility bill. The price you pay depends on factors including the generation mix, fuel costs and how much infrastructure is being built. But Trump's actions aren't doing much to help. The megabill will require wind and solar projects to either start construction within a year of passage or enter service by 2027 to get tax credits. That means less wind and solar being built, wiping away a cheap new source of power for an already strained grid. The Princeton analysis says that the megabill could result in some planned wind and solar additions being replaced by geothermal energy and gas plants with carbon capture, which would be more expensive and take longer to build. Those estimates — which have not been peer reviewed — are relative to what Trump could do on his own with executive action. They align with other projections for Republican policies, like a spring study from NERA Economic Consulting that found that repealing clean energy tax credits would raise the average retail electricity price by nearly 7 percent by 2026. In an hourslong speech on the House floor, Democratic Leader Hakeem Jeffries called the bill an 'extraordinary and unprecedented assault on clean energy and cheaper energy.' In a statement to Power Switch, the White House said the 'Panicans should trust President Trump,' pointing to the nation's lowest gasoline prices since 2021. 'The same 'industry experts' who suddenly care about energy prices supported Joe Biden's Green New Scam — a $15 billion tax hike on Americans to fund radical climate initiatives,' said It's Thursday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Jason Plautz. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to jplautz@ Programming note: We'll be off Friday, but we will be back in your inboxes on Monday, July 7. Today in POLITICO Energy's podcast: Zack Colman breaks down how the megabill could cause U.S. emissions to increase. Power Centers EV charging funds freed, for now Fourteen states are eligible to receive federal funds for electric vehicle charging stations after the U.S. attorney general declined to appeal a court order this week, David Ferris writes. The states were part of a coalition that sued over the Trump administration's freezing of the National Electric Vehicle Infrastructure program, which aimed to build EV chargers every 50 miles on major highways. The Federal Highway Administration said in a statement that it 'still can appeal the preliminary injunction and is currently coordinating its legal strategy with the Department of Justice.' Science, reconsidered The Trump administration's push for a new 'gold standard' for federal science protocol runs the risk of elevating fringe climate theories, Scott Waldman writes. At issue is an Office of Science and Technology Policy memo with directives that have been used to attack research, experts say. OSTP Director Michael Kratsios, who authored the memo, wrote that its goal is to 'ensure the United States continues as the global leader in rigorous, evidence-based science.' It's not easy being green Teresa Ribera has spent the past seven months quietly defending the European Union's ambitious climate targets amid a changed political reality in the bloc, Karl Mathiesen and Zia Weise write. Ribera runs the EU's green and competition policy, and her influence showed this week when the bloc pitched cutting its emissions 90 percent by 2040. It included a contentious proposal for countries to use international carbon credits toward their goal. But in the end it was a victory for Ribera in her quest to defend Europe's Green New Deal. In Other News Side by side: How do coal and solar stack up aesthetically? Take a look. What sales slump? Tesla had another dismal quarter of sales, but CEO Elon Musk has already moved on. Subscriber Zone A showcase of some of our best subscriber content. Last week's heat dome contributed to the deaths of at least three workers as the Occupational Health and Safety Administration considered protections for them. The Department of Energy halted its first-ever efficiency rule for manufactured homes that was set to take effect July 1. The Missouri attorney general is looking to block a transmission line that would move renewable energy across the Midwest. That's it for today, folks. Thanks for reading, and have a great long weekend!
Yahoo
4 hours ago
- Yahoo
India sends geologists to Zambia to explore copper and cobalt deposits
India has initiated a significant exploration project in Zambia by sending a team of geologists to investigate potential copper and cobalt deposits, as reported by Reuters. These minerals are crucial for the country's energy transition, with cobalt a vital component in electric vehicle batteries and copper essential in various industries. The Zambian government has allocated 9,000km² to India for mineral exploration. The exploration project, set to last three years, will see analysis primarily conducted in Indian laboratories. The exploration team plans to make multiple visits throughout the project's duration. Upon determining the mining potential in Zambia, the Indian government intends to request a mining lease and may extend an invitation to private-sector companies to join the venture. The Ministry of Mines in India has not commented on the development. India's strategic pursuit of critical minerals extends beyond Zambia, with discussions underway with several African countries, as well as prospects in Australia and Latin America. India is also engaging with the Democratic Republic of Congo to secure cobalt and copper supplies. Following the 2018 shutdown of Vedanta's Sterlite copper smelter, India's copper imports have risen, reaching 1.2 million tonnes (mt) in the fiscal year ending March 2025. India's reliance on cobalt imports is evident, with a 20% increase in cobalt oxide imports recorded in 2024/25. In a strategic move to bolster domestic resources and lessen dependence on China, India has instructed state-owned miner IREL to halt rare earth exports to Japan, potentially impacting a longstanding supply agreement. "India sends geologists to Zambia to explore copper and cobalt deposits" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
