Oil Prices Dip Amid Surprise Surge in US Inventories
Oil prices saw a slight decline on Wednesday, as a surprise increase in U.S. fuel inventories overshadowed signs of rising demand. The news also coincided with growing concerns over broader economic impacts from U.S. tariffs, which continued to weigh on the markets.
Brent crude closed down by 19 cents, or 0.3%, at $68.52 per barrel. Meanwhile, West Texas Intermediate (WTI) crude dropped 14 cents, or 0.2%, ending the day at $66.38 per barrel.
Latest Oil Prices:
WTI Crude $66.62 +0.10 +0.15%
Brent Crude $68.69 -0.02 -0.03%
Murban Crude $69.93 -0.17 -0.24%
Louisiana Light $70.89 -1.54 -2.13%
Bonny Light $78.62 -2.30 -2.84%
Mars US $71.88 -1.03 -1.41%
Gasoline $2.153 -0.017 -0.78%
Natural Gas $3.565 +0.042 +1.19%
Despite the ongoing expectations for increased demand, the unexpected inventory rise sent a ripple through the oil markets. According to the Energy Information Administration (EIA), U.S. gasoline stocks surged by 3.4 million barrels last week, while market analysts had forecast a decrease of 1 million barrels.
The data further showed that distillate inventories, which include diesel and heating oil, jumped by 4.2 million barrels—vastly surpassing expectations of a mere 200,000 barrel increase. These figures are notable, as they could signal an oversupply in the short-term, affecting global oil prices.
Conversely, commercial crude oil stocks fell by 3.9 million barrels to 422.2 million barrels, a larger drawdown than the forecasted 552,000 barrel reduction. This drop in crude reserves could signal stronger demand or more effective supply chain management, balancing out some of the negative signals from the fuel inventories.
Geopolitical Tensions and Trade Concerns Loom
Amid these market shifts, the broader geopolitical climate remains a significant influence on oil prices. The threat of escalating trade wars, particularly from U.S. President Donald Trump's policies, continues to cloud market forecasts. Trump recently warned of imposing heavy tariffs on Russia in the coming 50 days unless a resolution to the ongoing Ukraine conflict is reached, adding to investor uncertainty.
Additionally, the European Commission is preparing for potential countermeasures should talks with Washington fail. These tensions have raised concerns about possible disruptions in global trade, which could further strain energy markets.
In the U.S., reports that President Trump might seek to remove Federal Reserve Chairman Jerome Powell led to a sharp rise in short-term U.S. interest rate futures, prompting investors to bet on potential rate cuts beginning as soon as September.
Looking forward, the Organization of the Petroleum Exporting Countries (OPEC) in its latest monthly report projected that the global economy would improve in the second half of the year, driven by stronger growth in China, India, and Brazil, alongside recovery in the U.S. and the European Union.
In China, state-run refineries ramped up production after completing maintenance, responding to surging demand in the third quarter. Barclays estimates that China's demand for oil grew by 400,000 barrels per day in the first half of the year, reaching 17.2 million barrels per day.
However, the oil market faces ongoing disruptions from geopolitical tensions in the Middle East. Drone attacks on oil fields in Iraq's Kurdistan region, now continuing for the third consecutive day, have caused a loss in production of approximately 140,000 to 150,000 barrels per day. This supply shortfall, along with other regional instability, continues to impact the overall balance of supply and demand.
read more
CBE: Deposits in Local Currency Hit EGP 5.25 Trillion
Morocco Plans to Spend $1 Billion to Mitigate Drought Effect
Gov't Approves Final Version of State Ownership Policy Document
Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister
Qatar Agrees to Supply Germany with LNG for 15 Years
Business
Oil Prices Descend amid Anticipation of Additional US Strategic Petroleum Reserves
Business
Suez Canal Records $704 Million, Historically Highest Monthly Revenue
Business
Egypt's Stock Exchange Earns EGP 4.9 Billion on Tuesday
Business
Wheat delivery season commences on April 15
News
Israeli-Linked Hadassah Clinic in Moscow Treats Wounded Iranian IRGC Fighters
News
China Launches Largest Ever Aircraft Carrier
Sports
Former Al Zamalek Player Ibrahim Shika Passes away after Long Battle with Cancer
Videos & Features
Tragedy Overshadows MC Alger Championship Celebration: One Fan Dead, 11 Injured After Stadium Fall
Lifestyle
Get to Know 2025 Eid Al Adha Prayer Times in Egypt
Arts & Culture
South Korean Actress Kang Seo-ha Dies at 31 after Cancer Battle
News
"Tensions Escalate: Iran Probes Allegations of Indian Tech Collaboration with Israeli Intelligence"
News
Flights suspended at Port Sudan Airport after Drone Attacks
Arts & Culture
Hawass Foundation Launches 1st Course to Teach Ancient Egyptian Language
Videos & Features
Video: Trending Lifestyle TikToker Valeria Márquez Shot Dead during Live Stream
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
See - Sada Elbalad
5 hours ago
- See - Sada Elbalad
Germany: Working Closely With France and UK for Diplomatic Solution on Iran Nuclear Issue
Ahmed Emam The German Foreign Ministry has confirmed that it is engaging in intensive coordination with France and the United Kingdom to secure a lasting diplomatic resolution to the Iranian nuclear issue, according to Alqahera News. In a statement, the ministry stressed that the three European powers — known collectively as the E3 — are maintaining close consultations aimed at reviving negotiations and preventing further escalation surrounding Iran's nuclear program. The announcement comes amid growing regional tensions and international concern over Tehran's recent acceleration of uranium enrichment activities and its reduced cooperation with the International Atomic Energy Agency (IAEA). The E3 have historically played a central role in the Joint Comprehensive Plan of Action (JCPOA), the 2015 nuclear deal with Iran, which has been under strain since the U.S. withdrawal in 2018 and Iran's subsequent breaches of the accord. While no further details were given, Berlin's affirmation of its commitment to diplomacy signals renewed European efforts to prevent a nuclear crisis and to restore channels of dialogue between Tehran and the West. It's worth mentioning that Germany, UK, and France are part of an agreement reached with Iran in 2015 to rein in its nuclear program, from which President Donald Trump withdrew the US during his first term, insisting it wasn't tough enough. read more Gold prices rise, 21 Karat at EGP 3685 NATO's Role in Israeli-Palestinian Conflict US Expresses 'Strong Opposition' to New Turkish Military Operation in Syria Shoukry Meets Director-General of FAO Lavrov: confrontation bet. nuclear powers must be avoided News Iran Summons French Ambassador over Foreign Minister Remarks News Aboul Gheit Condemns Israeli Escalation in West Bank News Greek PM: Athens Plays Key Role in Improving Energy Security in Region News One Person Injured in Explosion at Ukrainian Embassy in Madrid News Israeli-Linked Hadassah Clinic in Moscow Treats Wounded Iranian IRGC Fighters Arts & Culture "Jurassic World Rebirth" Gets Streaming Date News China Launches Largest Ever Aircraft Carrier Videos & Features Tragedy Overshadows MC Alger Championship Celebration: One Fan Dead, 11 Injured After Stadium Fall Lifestyle Get to Know 2025 Eid Al Adha Prayer Times in Egypt Arts & Culture South Korean Actress Kang Seo-ha Dies at 31 after Cancer Battle News "Tensions Escalate: Iran Probes Allegations of Indian Tech Collaboration with Israeli Intelligence" Business Egyptian Pound Undervalued by 30%, Says Goldman Sachs Sports Get to Know 2025 WWE Evolution Results News Flights suspended at Port Sudan Airport after Drone Attacks
Egypt Independent
5 hours ago
- Egypt Independent
NATO has promised a spending blitz. Can its European members afford it?
London CNN — The North Atlantic Treaty Organization, the defense alliance of 32 countries, is on a spending spree, with plans to funnel billions into their militaries and security systems over the coming decade. But it's a splurge that some European members of NATO, grappling with huge and ballooning debt burdens, can ill-afford. 'It's something unprecedented in peacetime to have such a massive increase in spending on any item – in particular, on defense,' Marcel Fratzscher, president of the German Institute for Economic Research or DIW, told CNN. Last month, NATO members agreed to boost their respective defense spending targets to five percent of gross domestic product by 2035 – more than double the current two percent target and the sort of major increase that US President Donald Trump has been demanding for many years. The pledge came as Europe's NATO members have to contend with an aggressive Russia and an America that has backed away from its long-standing role as the guarantor of the region's security. Governments have three options to meet the new spending target – cut other expenses, raise taxes or borrow more – but analysts told CNN that each is either politically unpalatable or unviable in the long term for heavily indebted European NATO countries. 'Many (European Union) countries face hard fiscal constraints,' analysts at Bruegel, a Brussels-based think tank, wrote earlier this month. 'It is unrealistic to expect countries that have struggled for decades to reach a 2 percent defense spending target to embrace credibly an ill-justified, much higher target.' Hard choices Many NATO countries have failed to meet the previous, two percent target, set in 2014. Most have increased spending in recent years in response to Russia's full-scale invasion of Ukraine in 2022 – so much so that the European Union's executive arm expects its 23 member states belonging to NATO to meet that target this year, based on their combined GDP. But they now need to go further. The new, five percent target includes a commitment by NATO member states to spend the equivalent of 3.5 percent of their annual GDP on so-called 'core' defense requirements, such as weapons, with the remaining 1.5 percent allocated to areas supporting defense like port infrastructure. For some nations, that will mean finding tens of billions of extra dollars a year. Frank Gill, a senior sovereign credit ratings analyst for Europe, the Middle East and Africa at S&P Global Ratings, thinks that meeting the 3.5 percent target alone will require European countries, including the United Kingdom, to borrow huge sums of money. Some nations may also cut or reallocate government spending to reduce the amount they need to borrow, he said, but that could prove difficult. Two older people walk in the garden of a retirement home in Potsdam, Germany, in July 2025. Fabian Sommer/dpa/picture-alliance/AP 'A lot of (European governments) are facing other fiscal pressures… not least aging populations, which are essentially leading to even higher pension spending,' Gill told CNN. 'Politically, (that) is very challenging to cut.' Fratzscher at DIW in Germany agrees. For most NATO countries, he argued, cutting spending is 'utterly impossible.' 'Europe is aging quickly,' he said. 'It's completely illusionary to believe that… governments in Europe could save on public pensions, on healthcare, on care more generally.' The only sustainable way to finance the 'kind of magnitude of extra (defense) spending' now pledged by NATO is to hike taxes, he argued. Yet there exists neither the political will nor the public support to spend 'in such a dramatic way in this direction… and actually accept the consequences.' Crushing debt Simply borrowing more is a similarly tricky option in Europe where a number of governments are already saddled with debts close to, or larger than, the size of their country's entire economy. All else remaining equal, meeting just the 3.5 percent 'core' defense spending target could add roughly $2 trillion to the collective government debt of NATO's European members, including the UK, by 2035, according to a recent analysis by S&P Global Ratings. That compares with combined GDP of $23.1 trillion for the EU – a proxy for European NATO members – and Britain, based on World Bank data for 2024. The extra debt would be particularly hard to swallow for countries such as Italy, France and Belgium. These NATO members had some of the highest public debt-to-GDP ratios at the end of 2024, at 135 percent, 113 percent and 105 percent respectively, according to the EU's statistics office. Countries such as France, where this photo was taken, are grappling with huge government debt burdens. Sameer Al-Doumy/AFP/Getty Images Those are already heavy burdens. On Tuesday, French Prime Minister François Bayrou said the EU's second-largest economy risks a 'crushing by debt.' He warned that, should nothing change, just the interest France pays on its debt will swell to €100 billion ($117 billion) in 2029, becoming the government's largest single expense. He still supports splashing the cash on defense, while reining in other government spending. The EU is trying to make it easier for member states to invest in their security. Brussels has exempted defense expenditure from its strict rules on government spending and pledged to create a €150 billion fund from which countries can borrow, at favorable interest rates, to invest in their defense. However, there is another option for EU NATO members, according to Guntram Wolff, a senior fellow at Bruegel. 'Just not doing it. Not spending more,' he told CNN. Already, Spain has said it will not meet the five percent target, arguing that doing so would compromise its spending on welfare. Last year, the southern European nation spent only 1.28 percent of its GDP on defense, based on NATO estimates. Wolff said the 'best predictor for the increase in defense spending is (a country's) distance to Moscow – much more than any pledges at the NATO summit.'
Al-Ahram Weekly
9 hours ago
- Al-Ahram Weekly
US tariffs help push Jeep owner Stellantis into big loss - Economy
Jeep owner Stellantis said on Monday it suffered a massive loss in the first half of the year, when it felt the first impact of new US tariffs and took a massive charge following a change in US laws. The 2.3-billion-euro ($2.7-billion) net loss in the first half of the year came as sales in North America continued to slump, down 25 percent by volume in the second quarter year-on-year. The carmaker, whose stable of brands also includes Peugeot, Citroen and Fiat, said first-half net revenues dropped 12.6 percent to 74.3 billion euros, according to the preliminary and unaudited results. Sales of vehicles fell by six percent in the second quarter year-on-year, after having dropped nine percent in the first three months of 2025. Stellantis said "the early effects of US tariffs" had a 300-million-euro negative impact and disrupted its plans to boost its struggling performance in North America. Automakers have struggled to respond to US President Donald Trump's new US tariff of 25 percent on imported cars that are not largely made within North America. The company, which also owns the Chrysler, Dodge and Ram Truck brands, paused production at some plants in Canada and Mexico in April as the tariffs went into force. Stellantis said the sharp drop in North American sales volume was "due to factors including the reduced manufacture and shipments of imported vehicles, most impacted by tariffs," as well as lower sales for corporate fleets. Restructuring charge Stellantis also took a 3.3-billion-euro charge, which it said was "primarily related to programme cancellation costs and platform impairments, net impact of the recent legislation eliminating the CAFE penalty rate and restructuring". Trump's massive tax and spending legislation, approved earlier this month, removed the penalties for not respecting the so-called CAFE fuel economy targets, meaning automakers can produce and sell more higher polluting cars in the United States. The company said it was in the early stage of taking action to improve performance and profitability, with new products expected to deliver a larger impact in the second half of 2025. Stellantis suspended its financial guidance in April due to the heightened uncertainty generated by US tariffs. Analysts at finance group ODDO BHF said a drop in sales was widely expected and noted that new chief executives often clean house by passing new provisions or restructuring charges. Company veteran Antonio Filosa took over as chief executive in June and immediately launched a management shake-up. Filosa headed up the North American region that accounts for most company profits and whose struggles last year precipitated the sacking of Carlos Tavares, and has retained responsibility for the region. While the overall six-percent drop in sales volumes was in line with analyst expectations, according to ODDO BHF, the 25-percent drop was double the 12 percent foreseen by analysts. Shares in Stellantis fell 2.1 percent in morning trading on the Paris stock exchange, which was 0.4 percent lower overall. Stellantis said it would release audited first half results on July 29 as scheduled. Follow us on: Facebook Instagram Whatsapp Short link:
