Oil Rises on US Demand Strength, Though Macroeconomic Uncertainty Looms
Brent crude futures was up 41 cents, or 0.6%, at $67.3 a barrel, as of 0607 GMT.
US West Texas Intermediate crude climbed 0.6% to $64.76, gaining 41 cents.
Both benchmarks slid about 1% on Wednesday to their lowest levels in eight weeks following US President Donald Trump's remarks on progress in talks with Moscow.
Trump could meet Russian President Vladimir Putin as soon as next week, a White House official said, though the US continued preparations to impose secondary sanctions, including potentially on China, to pressure Moscow to end the war in Ukraine.
Russia is the world's second-biggest producer of crude after the United States.
Still, oil markets found support from a bigger-than-expected draw in US crude inventories last week.
The Energy Information Administration said on Wednesday that US crude oil stockpiles fell by 3 million barrels to 423.7 million barrels in the week ended August 1, exceeding analysts' expectations in a Reuters poll for a 591,000-barrel draw.
Inventories fell as US crude exports climbed and refinery runs climbed, with utilization on the Gulf Coast, the country's biggest refining region, and the West Coast climbing to their highest since 2023.
Analysts at JP Morgan said in a note that global oil demand through August 5 has averaged 104.7 million barrels per day, tracking annual growth of 300,000 bpd, but 90,000 bpd below their forecast for the month.
"Despite a slightly soft start to the month, relative to our expectations, high frequency indicators of oil demand suggest global oil consumption is likely to improve sequentially over the coming weeks," the analysts said, with jet fuel and petrochemical feedstocks anticipated to drive the consumption growth.
Meanwhile, China's crude oil imports in July dipped 5.4% from June but were still up 11.5% year-on-year, with analysts expecting refining activity to remain firm in the near term.
Still, global macroeconomic uncertainty after the US ordered a fresh set of tariffs on Indian goods capped price gains.
Trump on Wednesday imposed an additional 25% tariff on Indian goods, citing their continued imports of Russian oil. The new import tax will go into effect 21 days after August 7.
"While these new duties (on India by the US) are set to take effect in three weeks, markets are already pricing in the downstream ripple effects on trade flows, emerging market demand, and broader energy diplomacy," said Phillip Nova's senior market analyst Priyanka Sachdeva.
Trump also said he could announce further tariffs on China similar to the 25% duties announced earlier on India over its purchases of Russian oil.
"Tariffs are likely to harm the global economy, which will ultimately affect fuel demand," said Phillip Nova's Sachdeva, adding that markets are overlooking the fact that its impact will still be much greater on the US economy and inflation.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arab News
3 hours ago
- Arab News
After busy first 100 days, Germany's Merz faces discord at home
BERLIN: German Chancellor Friedrich Merz has driven sweeping changes in security, economic and migration policy during his first 100 days in office, but faces widening cracks in his uneasy coalition. On election night in February, a jubilant Merz promised to bring a bit of 'rambo zambo' to the post – using a colloquialism that can evoke a wild and joyous ride, or chaos and mayhem. Having achieved his life's ambition at age 69 to run Europe's top economy, Merz lost no time to push change, mostly in response to transatlantic turbulence sparked by US President Donald Trump. 'Germany is back,' Merz said, vowing to revive the economy, the military and Berlin's international standing after what he labelled three lackluster years under his center-left predecessor Olaf Scholz. Even before taking office, Merz's Christian Democrats (CDU/CSU) and their governing partners from Scholz's Social Democratic party (SPD) loosened debt rules and unlocked hundreds of billions of euros for Germany's armed forces and its crumbling infrastructure. Merz vowed to build 'Europe's largest conventional army' in the face of a hostile Russia and keep up strong support for Ukraine in lockstep with Paris and London. A promise to ramp up NATO spending endeared Merz to Trump, who greeted him warmly at a White House meeting in June, only weeks after a jarring Oval Office showdown with Ukrainian President Volodymyr Zelensky. When Israel bombed Iranian targets, Merz, with a penchant for strong and often controversial one-liners, praised it for doing the 'dirty work' – but last Friday he took the bold step of freezing arms exports to Israel over its Gaza campaign. On the home front, Merz has pressed a crackdown on irregular migration, a sharp departure from the centrist course of his long-time party rival Angela Merkel. He has said he must address voter concerns about immigration to stem the rise of the far-right Alternative for Germany (AfD) party, which won a record 20 percent in February's election. Merz's heavy focus on global events has earned him the moniker of 'foreign chancellor' – but trouble looms at home, where his SPD allies have often felt overshadowed or sidelined. To many of them, Merz's right-wing positions have been hard to swallow in the marriage of convenience they entered following the SPD's dismal election outcome of 16 percent. German voters have not yet fallen in love with Merz either. His personal approval rating slipped 10 points to just 32 percent in the latest poll by public broadcaster ARD. In an early sign of trouble, Merz's inauguration on May 6 turned into a white-knuckle ride when rebel MPs opposed him in the first round of the secret ballot. He was confirmed in the second round, but the debacle pointed to simmering resentment in the left-right coalition. Many have chafed at his hard line on immigration, his vow to slash social welfare and his limited enthusiasm for climate protection. Merz also sparked controversy when he dismissed plans to hoist an LGBTQ rainbow flag on the parliament building by saying the Reichstag was 'not a circus tent.' The biggest coalition crisis came last month, sparked by what should have been routine parliamentary business – the nomination of three new judges to Germany's highest court. Right-wing online media had strongly campaigned against one of them, SPD nominee Frauke Brosius-Gersdorf, calling her a left-wing activist on abortion and other issues. The CDU/CSU withdrew support for her and postponed the vote, sparking SPD fury. The issue looked set to fester until Brosius-Gersdorf withdrew her candidature on Thursday. Other trouble came when the CDU's Bavarian sister party demanded sharp cuts to social benefits for Ukrainian refugees, a position the SPD opposes. Vice Chancellor Lars Klingbeil of the SPD warned the conservatives to refrain from further provocations, telling Welt TV that 'we already have far too many arguments in this government.' Both coalition partners know that open squabbling will turn off voters after discord brought down Scholz's three-party coalition, and play into the hands of the AfD, their common foe. For now Merz and most other politicians are on summer holidays, leaving unresolved issues lingering. Merz will need to pay attention, said Wolfgang Schroeder of Kassel University. 'The chancellor's attitude is: I think big-picture and long term, I'm not interested in the small print,' he said. But Schroeder added that all the coalition's big troubles so far – from the judge row to Ukrainians refugees – 'have been about the small print.'
Arab News
14 hours ago
- Arab News
G7 under growing scrutiny on its big birthday
The international relations landscape this summer has been unusually busy — from the Trump tariffs to geopolitical tensions in the Middle East. Yet, underneath the global radar screen, one of the world's longest-standing institutions, the G7, has celebrated the half-century of its founding. While the G7 has its critics, in many respects it has been a successful institution during the five decades since the club's first summit in 1975. Alongside other bodies, including NATO, it has helped underpin in the post-1945 era one of the longest periods of sustained peace in the West's modern history. However, in the period since at least Donald Trump's first US presidency from 2017 to 2021, tensions within the club have become more apparent, giving rise to the moniker of the 'G6 plus 1.' This was shown in 2018 when Canada hosted a hugely disruptive, tumultuous year of G7 diplomacy. In June that year at the club's leadership summit, Trump refused to endorse the end of summit G7 communique, and called for Russia's re-entry into the club of advanced industrial democracies when it was the G8. Yet, other G7 members are opposed to this. So, there is little sign that Moscow, which joined the G8 summits from 1997 to 2014, will be invited back into the club while Russian President Vladimir Putin remains in office. Burden sharing has long been a sore spot Andrew Hammond On a range of issues from trade to climate change, the US is dividing from key Western partners at a time of significant geopolitical and international economic turbulence. While these fissures within the G7 did not begin with Trump, they have been exacerbated by his presidencies. Since the collapse of the Soviet Union, there have been a series of intra-Western disagreements over issues ranging from the Middle East, including the Iraq War opposed in 2003 by France and Germany, through to the rise of China, with some European powers and the US disagreeing over the best way to engage the rising superpower. There have been disputes over burden sharing, which has long been a sore spot, not least as the US has paid for about two-thirds of total NATO defense spending. US presidents other than Trump have previously urged all NATO allies to boost military expenditure. Yet, despite occasional discord, key Western nations generally continued to agree around a broad range of issues until the Trump presidency. These include international trade under the WTO rules-based system; backing for a Middle Eastern peace process between Israel and the Palestinians along the so-called Oslo Accords from 1993; plus strong support for the international rules-based system and the supranational organizations that make this work. Today, however, more of these key principles are being disrupted during Trump's second term, which, if anything, is more disruptive than his first presidency. This includes trade tariffs, where the US is at odds with all of its G7 partners: Canada, the UK, Japan, France, Germany, and Italy. In the midst of this important change, the G7 has also evolved as an organization. Its original mandate in the 1970s was to monitor developments in the world economy and assess macroeconomic policies. Trump's presidencies have widened divisions Andrew Hammond However, it has become a key security lynchpin over time. At the recent G7 meeting, for instance, geopolitical topics included Ukraine's long-term prosperity and security; regional peace and stability in the Middle East; cooperation to increase security and resilience across the Asia-Pacific region; building stability and resilience in Haiti and Venezuela; supporting enduring peace in Sudan and the Democratic Republic of the Congo; and strengthening sanctions and countering hybrid warfare and sabotage. To be sure, economic issues were also on the agenda, but these often are shaped nowadays by security issues and are geoeconomic in nature. This included building energy security and accelerating the digital transition, including fortifying critical mineral supply chains. This agenda has come to higher prominence since Moscow's military invasion of Ukraine in 2022 which exposed the huge reliance of Europe, in particular, on Russian energy. Since then, there has been an intensified emphasis by advanced industrialized economies to diversify dependence for raw materials driving a recent series of major trade deals, including the EU-Mercosur agreement. Reflecting this global focus, a wider range of world leaders have been invited to summits in recent years. Other attendees at this year's G7 forum included Australian Prime Minister Anthony Albanese, Ukrainian President Volodymyr Zelensky, South African President Cyril Ramaphosa, Brazilian President Luiz Inacio Lula da Silva, Indonesian President Prabowo Subianto, and India Prime Minister Narendra Modi. The G7's involvement in this multitude of geopolitical dialogues is not without controversy given its original macroeconomic mandate. For instance, Beijing strongly objects to G7 discussion of security issues in Asia, let alone internal issues in China. It is sometimes asserted, especially by non-Western countries, that the G7 lacks the legitimacy of the UN to engage in these international security issues, and/or is a historical artefact given the rise of new powers, including China. However, it is not the case that the international security role of the G7 is new. An early example of the lynchpin function the body has played here was in the 1970s and 1980s when it helped coordinate Western strategy toward the Soviet Union. Moreover, following the September 2001 terrorist attacks, the then G8, including Russia, assumed a key role in the US-led 'campaign against terrorism.' Taken together, the G7 can claim some big successes on its 50th birthday, despite the splits within the club. While some of these pre-date Trump, his presidencies have widened these divisions into what have become the largest strains in the G7's long history. • Andrew Hammond is an associate at LSE IDEAS at the London School of Economics.
Al Arabiya
19 hours ago
- Al Arabiya
Weigh in on Sydney Sweeney or run the world? Trump attempts it all
From firing people to promoting jeans, calling for peace deals or the renaming of a sports team, President Donald Trump keeps a lot on his proverbial to-do list. Much of it is unrelated to running the country. More than six months into his second term as US commander-in-chief, Trump, a former New York businessman and reality television host, has applied a hands-on management style and producer-like attitude toward governing, relying largely on his own instincts for decisions large and small. Using the tools of social media and a propensity for bullying, Trump personally wades into issues inside and outside the federal government to get his way. He harangues company executives to invest in America and uses trade deals as leverage over foreign leaders to end conflicts. Last week he fired the head of the Bureau of Labor Statistics over unproven allegations she falsified figures that he didn't like. This week he called for the head of Intel to step down over ties with China, and the company's stock fell. In recent months he has pressed the Washington Commanders football team to change its name back to the Redskins, forced universities to pay huge amounts to the federal government, boosted retailer American Eagle Outfitters' shares with a compliment about a controversial jeans commercial featuring actor Sydney Sweeney and attempted to shore up Republican power by pushing for political redistricting in Texas. Trump's style, which can confound both his friends and his foes, is dramatically different from his more traditional predecessors. It has earned him condemnation for being caustic and praise for being effective at getting what he wants. 'While he delves into topics that are certainly distractions relative to the big business of leading the world's greatest nation, it can also be said that past presidents have excessively deferred to the bureaucracy and failed to deliver the change their voters expected,' said Carlos Curbelo, a Republican former congressman from Florida. 'Trump views himself more as the CEO of the USA. than as president,' Curbelo added. 'It's good for decision making and challenging for the constitutional order which made our country the world's greatest economic and military force.' Trump has taken on academia, the legal world, media companies, athletics, the federal bureaucracy and more, all while retooling the world economy with tariffs, cracking down on immigration flows, upending relations with allies and putting his stamp on American culture. Though he has a team of advisers, the president frequently follows his own counsel, making policy decisions and then announcing them himself, ramifications aside. 'I think what a lot of people miss about Trump is he's the marketer-in-chief,' said Ford O'Connell, a Republican strategist with ties to the White House. 'Not only is he his own best press secretary, he's also his own best chief-of-staff.' A POTUS who 'can't focus' Critics question why Trump gets bogged down in issues that are secondary to his goals of strengthening the US economy, for example, or achieving a peace deal between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy. 'He's commenting one moment on ... Putin and tariffs and all that's happening in the world and the next moment he's talking about, oh, Sydney Sweeney, and all these other issues that are completely unrelated to being president of the United States,' said Charlie Dent, a Republican former congressman from Pennsylvania. 'He simply can't focus.' The White House said Trump is using his skills to deliver on policy priorities. 'President Trump's leadership style can be summed up plainly as decisive and commanding,' said White House spokesman Harrison Fields. Trump also employs a talent to distract when facing difficulty. Though that super power has largely eluded him with the controversy over sexual offender Jeffrey Epstein and the Department of Justice's refusal to release files related to the disgraced financier's case, Trump's broad ability to change the subject and dominate the news cycle has stupefied his opponents for years. 'His leadership style is much closer to that of an executive producer, and the executive producer who has a really big picture understanding of the audience,' said Republican strategist Kevin Madden, a senior adviser to former Massachusetts Governor Mitt Romney's 2008 and 2012 presidential campaigns. 'I think he trusts his instincts about the audience over anybody else, and that's why you see him oftentimes, you know, managing his own policy portfolio.' Trump, though not a stickler for detail on all things policy-related, does get into the weeds on things he cares about, both cultural and political, including redecorating the Oval Office with gold, paving over the Rose Garden and building a new ballroom on the White House grounds. On Tuesday, reporters bantered with the president while he walked on the roof of the White House press room, surveying the grounds for what he said were more ways to spend his money. The White House said Trump and other donors plan to pay for the $200 million ballroom project, which is slated to be finished before his second term concludes. 'I think narcissists do get bogged down in details because they think that everything is a reflection of them,' said Republican strategist Rina Shah. 'When he decides to focus on the minutia, he's forgetting about the bigger picture. And that's kind of a disservice to the office.' Where critics see such disservice, the White House sees results. On the eve of presiding over a US-brokered peace framework between Azerbaijan and Armenia this week, Trump took to social media to tout his involvement: 'Many Leaders have tried to end the War, with no success, until now, thanks to 'TRUMP.''
