Oil settles 1pct lower after US data shows large builds in fuel stocks
US gasoline stocks swelled by 5.2 million barrels, the Energy Information Administration said. Analysts polled by Reuters had expected a rise of 600,000 barrels.
Distillate stockpiles rose by 4.2 million barrels compared with expectations for a rise of 1 million barrels.
Crude inventories dropped by 4.3 million barrels. Analysts polled by Reuters had expected a draw of 1 million barrels.
"The report is in my view bearish, due to large builds in refined products," Giovanni Staunovo, an analyst with UBS.
"There was a strong increase in refinery demand for crude, resulting in a large crude draw. But post-Memorial Day, the strong supply increase with weaker implied demand resulted in large refined product inventory increases," he added.
Plans by OPEC+ producers to increase output by 411,000 barrels per day (bpd) in July were also weighing on investors.
On Tuesday, both benchmarks climbed about 2 per cent to a two-week high, driven by worries about supply disruptions and expectations that OPEC member Iran would reject a US nuclear deal proposal key to easing sanctions.
Russia posted a 35 per cent decline in May oil and gas revenue, which could make Moscow more resistant to further OPEC+ output hikes, as such moves weigh on crude prices.
On Tuesday, the Organisation for Economic Co-operation and Development (OECD) cut its global growth forecast as the fallout from Trump's trade policies takes a bigger toll on the US economy, which would in turn impact oil demand.
Meanwhile, US President Donald Trump and Chinese leader Xi Jinping are likely to speak this week, days after Trump accused China of violating a deal to roll back tariffs and trade curbs.
US economic activity has declined and higher tariff rates have put upward pressure on costs and prices in the weeks since Federal Reserve policymakers last met to set interest rates, the central bank said in its latest snapshot of the economy.
Geopolitical tensions continued to escalate. Russian President Vladimir Putin told Trump that he must respond to high-profile Ukrainian drone attacks on Russia's nuclear-capable bomber fleet and a deadly bridge bombing that Moscow blamed on Kyiv.
"Overall, we see limited upside potential amid ongoing concerns about a supply glut and softening demand growth," analyst Ole Hansen at Saxo Bank said in a note.
Meanwhile, production operations in Canada, some of which was shut-in due to wildfires, were restarting on Wednesday.
Canadian Natural Resources said it has restarted its Jackfish 1 oil sands site in northern Alberta after determining wildfires in the region were a safe distance away.
Wildfires in Canada had reduced the country's output by some 344,000 bpd, according to Reuters calculations on Tuesday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
an hour ago
- The Star
Interview: Zimbabwean scholar says China's rural revitalization experience inspires his country
HARARE, Aug. 19 (Xinhua) -- China's success in rural revitalization can serve as an inspiration for Zimbabwe's development path, a Zimbabwean scholar said on Tuesday. Achieford Mhondera, a lecturer at the University of Zimbabwe, made the remarks in an interview with Xinhua on the sidelines of the second edition of the Harare Forum for Africa (HFA) held in Harare, the southern African country's capital. Rural development is crucial to Zimbabwe's economic transformation, as the majority of its population resides in rural areas, Mhondera said, noting that China went through a similar stage of development many years ago. Given that both countries are developing economies in the Global South, Zimbabwe can learn from the practical measures China has adopted in advancing rural development, Mhondera added. He said China's "two mountains" concept, which holds that "lucid waters and lush mountains are invaluable assets," can provide inspiration for sustainable and ecological rural development in Zimbabwe. "You need a conducive and safe environment for development, and these are some of the things we need to learn from China's experience. If you go to the Chinese countryside, you will find lucid waters and lush mountains -- often described as mountains of gold and silver -- which can be adopted and adapted in Zimbabwe's case," Mhondera said. Drawing on China's rural revitalization efforts, particularly in modernizing agriculture and improving rural living standards, Mhondera noted that a conducive ecological environment is vital for promoting rural development. "In terms of rural development and modernization, I think the first step in the modernization process is to build a good countryside -- a beautiful, ecologically sustainable countryside," he said. He observed that rural development in China is driven by a combination of government intervention and active participation of local communities. Mhondera stressed that cooperation with China has played a crucial role in advancing rural development in Zimbabwe. "Cooperation is already underway, and there are more activities in progress," he said. He further noted that Zimbabwe and China can deepen collaboration in developing irrigation facilities, as Zimbabwe still largely relies on rain-fed agriculture, which is highly vulnerable to climate change. "China is helping Zimbabwe by developing the countryside, installing solar-powered irrigation systems, and sharing expert knowledge in horticulture and other agricultural practices. I think there is a need to further strengthen this cooperation and expand the model to other areas," he added. Co-organized by the School of Journalism and Communication at Tsinghua University, the Academy of Contemporary China and World Studies, and the China Zimbabwe Exchange Center, this year's HFA ran under the theme of Rural Development and Modernization, bringing together academics, business leaders, and government representatives to share their views on Africa's rural development.
The Star
2 hours ago
- The Star
India plans to ban online games played with money, citing addiction risks
FILE PHOTO: The words "India online gaming regulations" are displayed in front of an Indian flag in this Illustration taken September 14, 2022. REUTERS/Dado Ruvic/Illustration/File Photo NEW DELHI (Reuters) -India's government plans to ban online games played with money, a proposed bill showed on Tuesday, in what would be a heavy blow for an industry that has attracted billions of dollars of foreign investment. Citing psychological and financial harm it says can be caused by such games, the Promotion and Regulation of Online Gaming Bill 2025 says that no person "shall offer, aid, abet, induce or otherwise indulge or engage in" the offering of online money games and such services. The 13-page bill, which has not yet been made public but has been reviewed by Reuters, describes an online money game as one played by a user by depositing money in expectation of winning monetary and other enrichment. The Indian market for such gaming is set to be worth $3.6 billion by 2029, venture capital firm Lumikai says. Endorsements by top Indian cricketers and other marketing efforts have boosted appeal and investor interest of real money gaming apps such as the popular fantasy cricket games operated by startups Dream11 and Mobile Premier League. Dream11 commands a valuation of $8 billion while Mobile Premier League is valued at $2.5 billion, PitchBook data shows. The Indian government has long been concerned about how such games are addictive. India's IT ministry, which has drafted the bill, did not immediately respond to a request for comment. MPL and Dream11 declined to comment. In fantasy cricket games on Dream11, users create their teams by paying as little as 8 rupees (10 U.S. cents), with a total prize pool of 1.2 million Indian rupees ($14,000). The apps become more popular during the Indian Premier League season, one of the world's most popular cricket tournaments. The bill states that anyone who offers such money games could face a jail term of up to three years and a fine. "Such games often use manipulative design features, addictive algorithms ... while promoting compulsive behaviour leading to financial ruin," the bill said. (Reporting by Aftab Ahmed and Aditya KalraEditing by David Goodman)
The Star
2 hours ago
- The Star
Roundup: Cambodian scholars laud Cambodia-China economic, trade cooperation
PHNOM PENH, Aug. 19 (Xinhua) -- Cambodian officials and scholars on Tuesday lauded Cambodia-China economic and trade cooperation and a bilateral free trade agreement, saying that they have offered tremendous mutual benefit and win-win situation. They made the remarks during a seminar on Cambodia-China economic and trade cooperation 2025. Kao Muy Thong, deputy secretary general of the Council for Agriculture and Rural Development of Cambodia, said China is Cambodia's top investor, trading partner and major source of tourists, adding that Chinese investment and tourists have significantly contributed to the kingdom's socio-economic development and poverty alleviation. He said the Cambodia-China Free Trade Agreement (CCFTA), which entered into force in 2022, has provided greater access of made-in-Cambodia products to the Chinese market. "Under the CCFTA, Cambodia can export more than 340 categories of products to China, with 95 percent of them being agricultural goods with zero-percent tariffs," he said. "The remaining 5 percent, which are machinery and vehicles, will see tariffs reduced to zero percent within 10 years." He said 2025, which is the Cambodia-China Year of Tourism, has provided a good opportunity for both countries to further expand people-to-people exchanges and trade relations for mutual benefit. Heang Sotheara, an advisor to Cambodia's Ministry of Public Works and Transport, said China has played a critical role in Cambodia's economic growth. Sotheara said Chinese investors should focus on non-garment manufacturing sectors such as food and beverage, agro-industry, and agriculture, adding that these sectors have potential for medium- and long-term investment. Neak Chandarith, director of the Cambodia 21st Century Maritime Silk Road Research Center of the Royal University of Phnom Penh, said the CCFTA has contributed to rising Cambodian exports to China and improved tariff preferences. "For the CCFTA to deliver broad-based benefits, Cambodia must invest in technical capacity, accelerate protocol negotiations, and promote higher-value exports," he said. Chandarith said Belt and Road Initiative (BRI) mega-projects such as the Sihanoukville Special Economy Zone, Phnom Penh Sihanoukville Expressway, Siem Reap Angkor International Airport, and hydropower plants are vivid examples of economic and trade cooperation between the two countries. "These BRI flagship projects have laid a solid foundation for Cambodia's development of the economy, trade, manufacturing industry, connectivity infrastructure, logistics and tourism as well as for attracting more foreign direct investment to the kingdom," he said. "In sum, broader Cambodia-China economic and trade cooperation will provide greater mutual benefit and win-win situation, injecting more vigorous impetus into building an all-weather Cambodia-China community with a shared future in the new era," Chandarith added.
