Oil edges higher as investors weigh market outlook
Brent crude futures were up 40 cents, or 0.58%, at $69.04 a barrel as of 1027 GMT. U.S. West Texas Intermediate crude ticked up 45 cents, or 0.68%, to $67.02 a barrel.
At those levels, Brent was headed for a 1.1% gain on the week, while WTI was little changed against last week's close.
The IEA on Friday said the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power-generation.
Front-month September Brent contracts were trading at a $1.10 premium to October futures at 1027 GMT.
"Civilians, be they in the air or on the road, are showing a healthy willingness to travel," PVM analyst John Evans said in a note on Friday.
Prompt tightness notwithstanding, the IEA also boosted its forecast for supply growth this year, while trimming its outlook for growth in demand, implying a market in surplus.
"OPEC+ will quickly and significantly turn up the oil tap. There is a threat of significant oversupply. In the short term, however, oil prices remain supported," Commerzbank analysts said in a note.
One other sign of robust prompt oil demand was the prospect of Saudi Arabia shipping about 51 million barrels of crude oil in August to China, the biggest such shipment in over two years.
Longer term, however, rival forecasting agency OPEC cut its forecasts for global oil demand in 2026 to 2029 because of slowing Chinese demand, the group said in its 2025 World Oil Outlook published on Thursday.
Both benchmark futures contracts lost more than 2% on Thursday as investors worried about the impact of Trump's evolving tariff policy on global economic growth and oil demand.
"Prices have recouped some of this decline after President Trump said he plans to make a 'major' statement on Russia on Monday. This could leave the market nervous over the potential for further sanctions on Russia," ING analysts wrote in a client note.
Trump has expressed frustration with Russian President Vladimir Putin due to the lack of progress on peace with Ukraine and Russia's intensifying bombardment of Ukrainian cities.
The European Commission is set to propose a floating Russian oil price cap this week as part of a new draft sanctions package.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
an hour ago
- Zawya
Amazon expands same-day grocery delivery to perishable foods to compete with Instacart, Walmart
Subscribers to Prime service can now receive strawberries, milk, meats and frozen dinners on the same day they order them as the company expands its fast-delivery option to perishable food items, Amazon announced on Wednesday. It is the latest move by Amazon to compete with grocery delivery services offered by Walmart+ and Instacart. Shoppers in more than 1,000 U.S. cities - including Phoenix; Raleigh, North Carolina; and Tampa, Florida - can get ice cream delivered to their doors within hours, while Amazon plans to expand the service to 2,300 cities by the end of the year. The company announced in June that it is investing $4 billion to bring same-day and next-day delivery services to more than 4,000 rural U.S. communities by the end of the year. Previously, Prime subscribers' grocery orders were fulfilled through Amazon Fresh or Whole Foods. Now the additional service will complete orders through its same-day delivery logistics locations. Same-day delivery is free for Prime members, who pay $14.99 monthly or $149 annually, for orders over $25. Walmart's membership service, Walmart+, costs $98 a year and offers same-day delivery in under three hours—with some orders arriving in as little as 30 minutes. As the largest grocery retailer in the United States, most of Walmart's deliveries tend to be dry groceries and perishables. In May, Walmart said it will soon be able to offer delivery within three hours to 95% of the U.S. population, and that faster delivery speeds are helping drive its business. Between February and April, Walmart reported a 91% increase in deliveries under three hours compared with the same period last year. Amazon shoppers "can order milk alongside electronics; oranges, apples, and potatoes with a mystery novel; and frozen pizza at the same time as tools for their next home improvement project - and check out with one cart and have everything delivered to their doorstep within hours," Doug Herrington, chief executive of Worldwide Amazon Stores, said in a press release. E-commerce giant Amazon has struggled in previous years to get shoppers into its physical stores. While the company is focusing on its U.S. grocery experience, it is facing hurdles in the UK with its suppliers, a study by British grocery regulator the Groceries Code Adjudicator found. (Reporting by Arriana McLymore in New York City; Additional reporting by Siddharth Cavale in New York City; Editing by Matthew Lewis)
Zawya
2 hours ago
- Zawya
Just in time? Manufacturers turn to AI to weather tariff storm
Manufacturers like U.S. lawnmower maker The Toro Company are not panicking at the prospect of U.S. President Donald Trump's global trade tariffs. Despite five years of dramatic supply disruptions, from the COVID pandemic to today's trade wars, Toro is resisting any temptation to stack its warehouses to the rafters. "We are at probably pre-pandemic inventory levels," says its chief supply-chain manager, Kevin Carpenter, looking relaxed in front of a whiteboard at his office in Minneapolis. "I mean 2019. I think everybody will be at a 2019 level." Among U.S. manufacturers, inventories have roller-coasted this year as they rushed to beat Trump's deadlines for tariff hikes, only to see them repeatedly delayed. But since their post-pandemic expansion, inventories have mostly contracted, according to U.S. Institute for Supply Management data. Instead, "just in time" inventory management - which aims to increase efficiency and reduce waste by ordering goods only as they are needed - is back. But how can firms run lean inventories even as tariffs fluctuate, export bans come out of the blue, and conflict rages? One of the answers, they say, is artificial intelligence. Carpenter says he uses AI to digest the daily stream of news that could impact Toro's business, from Trump's latest social media posts to steel prices, into a custom-made podcast that he listens to each morning. His team also uses generative AI to sieve an ocean of data and to suggest when and how many components to buy from whom. It is a boom industry. Spending on software that includes generative AI for supply chains, capable of learning and even performing tasks on its own, could hit $55 billion by 2029, up from $2.7 billion now, according to U.S. research firm Gartner, driven in part by global uncertainties. HYPE "The tool just puts up in front of you: 'I think you can take 100 tonnes of this product from this plant to transfer it to that plant. And you just hit accept if that makes sense (to you)," McKinsey supply chain consultant Matt Jochim said. The biggest providers of overall supply chain software by revenue are Germany's SAP, U.S. firms Oracle, Coupa and Microsoft and Blue Yonder, a unit of Panasonic, according to Gartner. Generative AI is in its infancy, with most firms still piloting it spending modest amounts, industry experts say. Those investments can climb to tens of millions of dollars when deployed at scale, including the use of tools known as AI agents, which make their own decisions and often need costly upgrades to data management and other IT systems, they said. In commenting for this article, SAP, Oracle, Coupa, Microsoft and Blue Yonder described strong growth for generative AI solutions for supply chains without giving numbers. At U.S. supply chain consultancy GEP, which sells AI tools like this, Trump's tariffs are helping to drive demand. "The tariff volatility has been big," says GEP consultant Mukund Acharya, an expert in retail industry supply chains. SAP said the uncertainty was driving technology take-up. "That's how it was during the financial crisis, Brexit and COVID. And it's what we're seeing now," Richard Howells, SAP vice president and supply chain specialist, said in a statement. An AI agent can sift real-time news feeds on changing tariff scenarios, assess contract renewal dates and a myriad of other data points and come up with a suggested plan of action. But supply chain experts warn of AI hype, saying a lot of money will be wasted on a vain hope that AI can work miracles. "AI is really a powerful enabler for supply chain resilience, but it's not a silver bullet," says Minna Aila, communications chief at Finnish crane-maker Konecranes and member of a business board that advises the OECD on issues including supply chain resilience. "I'm still looking forward to the day when AI can predict terrorist attacks that are at sea, for instance." Konecranes' logistics partners are deploying AI on more mundane data, like weather forecasts. The company makes port cranes that are up to 106 metres (348 ft) high when assembled. When shipping them, AI marries weather forecasts with data like bridge heights to optimise the route. "To ship those across oceans, you do have to take into consideration weather," Aila says. RISING COSTS By keeping inventories low, firms can bolster profit margins that are under pressure from rising costs. Every component or finished product sitting on a shelf is capital tied up, incurring finance and storage costs and at risk of obsolescence. McKinsey has been surveying supply-chain executives since the pandemic. Its most recent survey showed that respondents relying on bigger inventory to cushion disruptions fell to 34% last year from 60% in 2022. Early responses from its upcoming 2025 survey suggest a similar picture, Jochim said. Gartner supply chain analyst Noha Tohamy says that without AI, companies would be slower to react and be more likely to be drawn into building up inventories. "When supply chain organisations don't have that visibility and don't really understand the uncertainty, we go for inventory buffering," Tohamy says. But AI agents won't put supply chain managers out of work, not yet, consultants say. Humans still need to make strategic and big tactical decisions, leaving AI agents to do more routine tasks like ordering and scheduling production maintenance. Toro supply chain chief Carpenter says that without AI, supply chain managers might need to run bigger teams as well. Is he worried that AI is coming for his job one day? "I hope it doesn't take it until my kids get through college!" (Reporting by Mark Bendeich; Editing by Sharon Singleton)
Zawya
3 hours ago
- Zawya
Gold rises on increasing Fed rate-cut bets, weaker dollar
Gold rose on Wednesday as expectations of a U.S. Federal Reserve interest rate cut in September gained traction following mild inflation data, while a weaker dollar bolstered demand. Spot gold gained 0.6% to $3,363.61 per ounce by 1026 GMT. U.S. gold futures for December delivery rose 0.5% to $3,414.10. "Market participants are starting to debate if the Fed will do a 50 basis point cut at its September meeting following the comments from U.S. Treasury Secretary Bessent yesterday, with a focus on incoming weaker U.S. economic data supporting that," said UBS commodity analyst Giovanni Staunovo. Markets are pricing in a more than 96% chance of a Fed rate cut next month, after July's mild inflation bump signalled limited impact from U.S. import tariffs on consumer prices, with at least one additional reduction anticipated by year-end. Gold, a non-yielding asset often viewed as a safe haven during times of economic or geopolitical uncertainties, typically benefits from a low-interest-rate environment. The dollar index hit a two-week low, making greenback-priced bullion more affordable for overseas buyers. Europe and Ukrainian leaders will speak with U.S. President Donald Trump at a virtual meeting on Wednesday ahead of his summit with Russian President Vladimir Putin, as they try to drive home the perils of selling out Kyiv's interests in pursuit of a ceasefire. "Don't expect those talks to meaningfully influence the gold market, (they) might trigger some short-term volatility. Near-term prices are likely to move sideways, until incoming U.S. economic (data) starts to support a faster (Fed) rate cut cycle," Staunovo said. Meanwhile, the U.S. and China extended their tariff truce by another 90 days, averting triple-digit duties on each other's goods. Spot silver rose 1.7% to $38.53 per ounce, platinum was up 0.7% at $1,345.89 and palladium gained 0.5% to $1,135.45. (Reporting by Anmol Choubey in Bengaluru; Editing by Rashmi Aich, Kirsten Donovan)
