Oil Bulls Flee US Market as Glut Looms and Sanctions Risk Wanes
Net-long positions on West Texas Intermediate fell by 29,562 to 49,264 in the week ended Tuesday, the lowest since 2009, data from the Commodity Futures Trading Commission show. The retreat, which helped drive oil futures near two-month lows this week, comes as forecasts for a supply glut outweigh concerns that sanctions on Russia will curtail global supplies.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
4 hours ago
- Yahoo
Trump could trigger a financial crisis in Russia — if he wants to — but has backed off from his threat of ‘very severe consequences'
President Donald Trump and Russian President Vladimir Putin ended their meeting in Alaska on Friday without a ceasefire deal. Despite Trump's earlier threat that Moscow would face 'very severe consequences' if the summit didn't produce an agreement, he said he would hold off on imposing new sanctions. But a tougher U.S. crackdown on tankers delivering Russian oil would cripple Putin's war machine, an expert said. The U.S. holds immense leverage over Russia's economy and ability to continue waging war on Ukraine, but President Donald Trump has backed off from earlier warnings that lack of progress on a ceasefire would result in harsh penalties for Moscow. Trump and Russian President Vladimir Putin ended their highly anticipated meeting in Alaska on Friday without a deal. On Saturday, Trump shifted his stance toward reaching a more comprehensive peace agreement between Russia and Ukraine, mirroring Putin's position, rather than a ceasefire. He also reportedly backed Putin's idea for Ukraine to give up territory it holds in exchange for a Russian promise that it won't attack again. That marked a big swing from his rhetoric leading up to the Alaska meeting, as he threatened 'very severe consequences' for Russia if Putin didn't agree to a ceasefire. When asked why he didn't follow through, Trump said he would hold off on any new penalties and suggested the threat remains on the table as diplomacy plays out. 'Because of what happened today, I think I don't have to think about that now,' he told Fox News. 'I may have to think about it in two weeks or three weeks or something, but we don't have to think about that right now.' Trump had previously warned Russia's oil sector could face secondary sanctions. Oil and gas generate the bulk of the Kremlin's revenue, and the U.S. could exploit this critical vulnerability. In particular, cutting off the 'shadow fleet' of tankers that deliver Russia's oil under the radar would send the war economy into a 'deep financial crisis,' according to Robin Brooks, a senior fellow at the Brookings Institution and former chief economist at the Institute of International Finance. After the Biden administration sanctioned nearly 200 ships in January, just before Trump returned to office, their activity collapsed, he pointed out in a Substack post on Saturday. But there are 359 more ships that have already been sanctioned by the European Union or United Kingdom, but haven't been targeted yet by the U.S. 'Sanctioning these ships would be a hammer blow to the Russian war machine,' Brooks wrote. 'There would undoubtedly be a sharp fall in the Urals oil price, reducing the flow of hard currency to the Russian state, and the Ruble would most likely depreciate significantly.' Meanwhile, foreign policy expects have called the Alaska meeting a success for Putin as he was able to avoid severe consequences from Trump while also buying time for his military to make more battlefield gains in Ukraine. But Melinda Haring, a nonresident senior fellow at the Atlantic Council's Eurasia Center, also noted that Trump has significant leverage over Russia. 'Let's hope that Trump sees through Putin's endless appetite to talk and tires of the Russian dictator's pseudo-historical lectures,' she wrote in a blog post. 'Trump can squeeze the Russians; he seems to forget that the United States holds the cards, not Moscow.' Oil and gas revenue tumbled 27% in July from a year ago, and Russia is running out of financial resources as war-related spending deepens its budget deficit. The National Wealth Fund, a key source of reserves, has dwindled from $135 billion in January 2022 to just $35 billion this past May and is expected to run out later this year. 'Russia's economy is fast approaching a fiscal crunch that will encumber its war effort,' economist and Russia expert Anders Åslund wrote in a Project Syndicate op-ed last week. 'Though that may not be enough to compel Putin to seek peace, it does suggest that the walls are closing in on him.' This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 hours ago
- Yahoo
US will dodge recession, but Trump's policies will slow economic growth: Report
President Donald Trump's aggressive economic policies will likely significantly slow U.S. growth and push up inflation but stop short of causing a recession or 'stagflation' – the dire scenarios that forecasters envisioned before he took office, a report says. 'The totality of the policies does not push the economy to the brink of recession but it significantly diminishes growth' during Trump's four-year term, said economist Justin Begley of Moody's Analytics. He added, 'It's not yet stagflation but it's edging that way.' Stagflation is an economy characterized by high inflation, slow or stagnant growth and high unemployment – an unusual and toxic cocktail. Typically, a sluggish economy leads to low inflation, allowing the Federal Reserve to cut interest rates to stimulate more borrowing and activity. The Fed, however, faces a dilemma because lowering rates to bolster a softening labor market could further drive up inflation. Consumer price increases generally have eased substantially after a pandemic-related spike but recently edged higher, in part because of Trump's sweeping import levies. His policies are imposing countervailing forces on the economy. Tax cuts and increased spending on border security and defense are set to juice growth. But those positive catalysts are expected to be more than offset by the tariffs, a historic immigration crackdown, layoffs of hundreds of thousands of federal workers and big cuts to social services programs such as Medicaid and food stamps, Begley said. During Trump's presidential race against former Vice President Kamala Harris last year, Moody's, among other research firms, predicted Trump's economic blueprint would spark a recession by mid-2025. Moody's has updated its forecast in part because the contours of his plan recently have become more clearly defined, Begley said. 'We have a better view where things are going,' he said. For example, high double-digit tariffs are in place for steel and aluminum, foreign cars and Chinese imports. And the White House has reached deals with trading partners such as Japan, South Korea, Vietnam and the UK that set tariffs at 10% to 20%. Trump's deportations and constraints on Southern border crossings are well under way. And his huge budget bill, which he signed into law on July 4, expanded his 2017 tax cuts, beefed up military and border security outlays, and slashed some entitlement spending. All told, Moody's projects Trump's policies will reduce economic growth by an average 0.4 percentage points annually – nearly half a point – during his term. That would leave the economy expanding an average 1.7% annually over the four years, with growth bottoming at 1.4% next year and peaking at 2.2% in 2028. The economy grew at an annual rate of 1.2% the first half of 2025. It's projected to grow at slightly less than a 1% pace in the second half, according to economists surveyed by Wolters Kluwer Blue Chip Economic Indicators. By contrast, the economy averaged 2.3% growth the decade after the Great Recession of 2007-2009 and 3.5% during former president Joe Biden's term. The latter, however, included unusually strong gains as the nation emerged from the pandemic recession. In 2024, Biden's last year in office, the economy grew a healthy 2.8%. Growth had been expected to downshift no matter who won the 2024 election as a post-COVID-19 surge in consumer demand petered out, Americans depleted government pandemic aid and other government stimulus measures faded. But by the end of Trump's term in 2028, the economy will be 1.3% smaller than if his policies had not been enacted, Begley wrote in a report. Also, the unemployment rate is expected to peak at 4.7% in 2027 before falling to 4.4% by the time Trump leaves office. Without his policies, unemployment would broadly hold steady at about 4% and there would be about 885,000 additional jobs, Moody's said. Trump's policies similarly are poised to push up inflation by an average of nearly half a percentage point a year. That would leave annual inflation averaging 2.6% during Trump's term and peaking at 3.1% in 2026, based on the Commerce Department's personal consumption expenditures price index. Inflation then would decline and nearly reach the Fed's 2% goal in 2028, the last year of his term. Absent the president's policies, inflation would achieve the Fed's target next year, Begley's analysis shows. Tariffs, by far, represent both the biggest drag on growth and the largest contributor to inflation, Begley said. Companies are expected to pass most of the costs of the duties to consumers, driving up prices. And that's expected to sap their buying power and reduce consumption, which makes up 70% of economic activity. Without the tariffs, the net effects of Trump's policies on growth would be slightly positive, Begley said. The benefits of tax cuts and increased defense and border spending would outweigh the toll taken by the immigration crackdown, federal layoffs and cutbacks to Medicaid and food stamps, he said. Another big hit comes from the deportations. Like the tariffs, the immigration crackdown is projected to both curtail growth and boost inflation. A reduced supply of workers in industries such as construction, agriculture and hospitality is expected to drive up wages and prices. And a smaller population of immigrants means less consumer spending. Here's why Moody's forecast of the effects of Trump's policies is less dire than it was before he took office: Although Trump's tariffs are higher than anticipated, Moody's expected more significant retaliation from foreign countries that would batter U.S. manufacturers' exports. At least so far, those nations have taken a more restrained approach. Moody's figured the Trump administration would seek to deport about 1 million immigrants who lack permanent legal status each year. But Begley said that has proven logistically challenging. Goldman Sachs estimates monthly deportations have averaged an annualized pace of about 600,000. Although Trump vowed during his campaign to eliminate taxes on tips and overtime, Moody's didn't necessarily expect him to follow through. The budget bill, however, scraps taxes on tips up to $25,000 a year and over time up to $12,500. This article originally appeared on USA TODAY: Will the US dodge a recession? Economist weighs in on Trump policies Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 hours ago
- Yahoo
Apple's 10% Stock Pop: Time to Invest in the Technology Giant Embracing America?
Key Points Apple has increased its spending plans in the United States from $500 billion to $600 billion. There are positives and negatives to the announcement from an investor's perspective. Shares of Apple stock look expensive today relative to its growth rate. 10 stocks we like better than Apple › Investors are back on the Apple (NASDAQ: AAPL) train. The stock of the multinational technology giant is still down slightly in 2025 but popped over 10% in the last week after management announced new planned spending in the U.S. CEO Tim Cook even visited the White House in a joint press conference with President Donald Trump to announce this new planned spending on components for the iPhone as well as other Apple products in America. It has helped the company achieve some breathing room around potential tariffs on semiconductors, iPhone components, and iPhones themselves getting imported to America. Apple's stock got its mojo back on this upsized spending news, but should you actually buy shares today? Here's what the numbers say. A $600 billion investment Earlier this year, Apple announced that it would spend $500 billion over the next four years in the United States. Last week, it upped its estimate to $600 billion, or $150 billion annually. This is different than a company's announced capital expenditure plans, such as when Amazon promises $100 billion in investments related to data centers and its delivery network. Apple is spending money with its suppliers, including advanced glass screens and various semiconductor manufacturers. It is more of an announcement around committed orders for products, which will spur demand for factory work in the United States. Apple is a sprawling company, and the announced spending will occur in all 50 states, impact 450,000 jobs, and involve 79 different factories. It is astounding how complex Apple's supply chain for the iPhone and other computing hardware is today. However, Apple is still not at the point of a "Made in America iPhone" as assembly and other services are performed in China and India, with Apple negotiating with the U.S. government around what is feasible to bring to the United States. Investors applauded the spending plans as a way to shy away from tariff risks on iPhone and semiconductor imports, which could have added huge costs to Apple's supply chain, damaging its profits. Now, it seems to be in good standing with the U.S. government and regulation authorities again. Does the announcement matter? In regard to tariffs, this spending announcement won't necessarily hurt the company, it just prevents Apple from having future cost increases across its supply chain. However, since the U.S. has higher salaries and labor standards, this investment may lead to higher input costs for product components, which could lead to margin compression. Apple's operating margin has steadily risen since the COVID-19 pandemic, hitting a record high of 32% over the last 12 months. Sourcing components in the United States may reverse this expansion. What matters more at the end of the day is demand for Apple's products. Last quarter, the company released solid figures for the three months ending in June. Total revenue grew just under 10% year over year, driven by services revenue and iPhone revenue growth. Even though the iPhone is almost 20 years old, it remains the bread and butter of Apple's business today. This puts the company in a tough spot. Even though the iPhone remains wildly popular, unit volumes have stagnated for years, meaning Apple is only able to grow revenue by increasing prices. This is not an ideal position to be in. Price increases may be necessary just to maintain profit margins in the future if input costs grow due to the Made-in-America investments. All in all, this announcement does matter. It just might be a negative for Apple's business, contrary to the stock's initial reaction. The truth about Apple stock There are a lot of arguments to be made -- both bearish and bullish -- for Apple stock. Bulls might say this is a fantastic brand with major lock-in effects along with a growing services division with strong profit margins. Bears may say that Apple's unit volumes for the iPhone have fallen with no new successful products coming down the pipeline. For example, the Apple Vision Pro has turned into a total product bust, likely losing the company billions if not tens of billions of dollars. A deciding factor in this debate could be the stock's valuation. Apple's price-to-earnings ratio (P/E) is 35. This is quite expensive for a business with low revenue growth. Compare that to Alphabet, which has grown its revenue significantly faster than Apple over the last few years but trades at a more reasonable P/E ratio of 22. Apple may be a great business, but that doesn't mean you should ignore the price you pay when analyzing its stock. Avoid buying shares of Apple after this post-announcement pop. Should you invest $1,000 in Apple right now? Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $663,630!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,115,695!* Now, it's worth noting Stock Advisor's total average return is 1,071% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025 Brett Schafer has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Apple. The Motley Fool has a disclosure policy. Apple's 10% Stock Pop: Time to Invest in the Technology Giant Embracing America? was originally published by The Motley Fool Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
