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CNBC
39 minutes ago
- CNBC
Energy giants Baker Hughes, Woodside shy away from making oil forecasts as Iran-Israel conflict escalates
The CEOs of two major energy companies are monitoring the developments between Iran and Israel — but they aren't about to make firm predictions on oil prices. Both countries traded strikes over the weekend, after Israel targeted nuclear and military facilities in Iran on Friday, killing some of its top nuclear scientists and military commanders. Speaking at the Energy Asia conference in Kuala Lumpur on Monday, Lorenzo Simonelli, president and CEO of energy technology company Baker Hughes, told CNBC's "Squawk Box Asia" that "my experience has been, never try and predict what the price of oil is going to be, because there's one sure thing: You're going to be wrong." Simonelli said the last 96 hours "have been very fluid," and expressed hope that there would be a de-escalation in tensions in the region. "As we go forward, we'll obviously monitor the situation like everybody else is. It is moving very quickly, and we're going to anticipate the aspect of what's next," he added, saying that the company will take a wait-and-see approach for its projects. At the same conference, Meg O'Neill, CEO of Australian oil and gas giant Woodside Energy, likewise told CNBC that the company is monitoring the impact of the conflict on markets around the world. She highlighted that forward prices were already experiencing "very significant" effects in light of the events of the past four days. If supplies through the Strait of Hormuz are affected, "that would have even more significant effects on prices, as customers around the world would be scrambling to meet their own energy needs," she added. As of Sunday, the Strait remained open, according to an advisory from the Joint Maritime Information Center. It said, "There remains a media narrative on a potential blockade of the [Strait of Hormuz]. JMIC has no confirmed information pointing towards a blockade or closure, but will follow the situation closely." Iran was reportedly considering closing the Strait of Hormuz in response to the attacks. O'Neill said that oil and gas prices are closely linked to geopolitics, citing as examples events that date back to World War II and the oil crisis in the 1970s. Nevertheless, she would not make a firm prediction on the price of oil, saying, "there's many things we can forecast. The price of oil in five years is not something I would I would try to put a bet on." The Strait of Hormuz is a vital waterway between Iran and the United Arab Emirates. About 20% of the world's oil passes through it. It is the only sea route from the Persian Gulf to the open ocean, and the U.S. Energy Information Administration has described it as the "world's most important oil transit chokepoint."
CNBC
3 hours ago
- CNBC
China May retail sales sharply beat estimates; industrial output misses expectations
China's retail sales growth accelerated in May, data from National Bureau of Statistics showed Monday, in part helped by the two public holidays that fell in last month. Retail sales last month jumped 6.4% from a year earlier, sharply beating analysts' estimates for a 5% growth in a Reuters poll and rising from the 5.1% growth in the previous month. Growth in industrial output slowed to 5.8% year on year in May, slightly weaker than analysts' expectations for a 5.9% rise. A tariff deal reached by Beijing and Washington in mid-May gave temporary relief to the country's exports, prompting some businesses to frontload shipment while doubling down on alternative markets. Both sides struck a 90-day truce to roll back most of the triple-digit levies added on each other's goods in early April. Commerce Secretary Howard Lutnick told CNBC last week that U.S. tariffs on Chinese imports will stay at their current level of 55%. China's exports grew less than expected in May, though surging shipments to Southeast Asian nations, European Union countries and Africa helped offset the sharp decline in U.S.-bound goods. China's exports to the U.S. plunged over 34% from a year ago, their sharpest drop since February 2020. The past two months' trade data indicated resilience in China's exports, according to Goldman Sachs, as they highlighted "the difficulty for bilateral tariffs to meaningfully reduce total Chinese exports." Sluggish domestic demand stuck out as a more pressing issue for Chinese policymakers. Consumer prices have seen an year-on-year decline for four consecutive months, slumping 0.1% in May. Deflation in the factory-gate or producer prices has also deepened, falling 3.3% from a year ago. However, Beijing may feel less urgency in rolling out additional easing steps as exports appear more resilient than expected and the GDP growth is on track to exceed 5% in the first half-year, Goldman said.
CNBC
4 hours ago
- CNBC
CNBC Daily Open: Israel's conflict with Iran sends tremors through markets
Israel's airstrikes on Iran Friday sent reverberations through financial markets. Oil prices jumped on fears that supply from Iran, the world's ninth-largest oil producer in 2023, would be disrupted. Prices of gold, the stalwart shelter in times of crises, rose. Investors flock to the precious metal amid uncertainty because it serves as a stable store of value that is mostly resistant against exogenous shocks, such as inflation or geopolitical conflicts. And the dollar strengthened, as it is wont to do when the world looks ugly. Recall the dollar smile: The greenback will appreciate when things are really good because investors want in on U.S. risk assets, or when they are really bad because investors want in on the perceived safety of U.S. government bonds. The fact that the dollar increased in value against other currencies traditionally perceived as safe havens, such as the Swiss franc and Japanese yen, emphasizes the primacy of king dollar, despite rumblings of de-dollarization and concerns over U.S. government debt. Stocks, the financial risk asset epitomized, fell across markets globally. Despite the markets giving multiple indications we are entering a period of ugliness — or, at least, volatility — U.S. stocks still appear resilient, and the surge in oil prices only brings us back to where they were about three months ago as prices have been low since, CNBC's Michael Santoli wrote. The markets have, indeed, mostly shrugged off Russia's invasion of Ukraine and the Israel-Hamas war, both of which are still brewing. But with the conflict between Israel and Iran still in its early days, it might pay to be extra cautious in the coming weeks. Israel strikes IranOn Sunday, Israel launched a series of airstrikes across Iran. That marks the third day of violence between the two nations. Armed conflict broke out when Israel struck Iran's nuclear facilities early Friday local time. In retaliation, Iran launched more than 100 drones toward Israeli territory. Those events are likely just the beginning in a rapid cycle of escalation, according to regional analysts. Stocks retreat globallyU.S. futures rose Sunday night local time. On Friday, fears of a wider conflict in the Middle East sent stocks lower. The S&P 500 lost 1.13%, the Dow Jones Industrial Average fell 1.79% and the Nasdaq Composite retreated 1.3%. Europe's Stoxx 600 index dropped 0.89%. Travel and airline stocks on both sides of the Atlantic fell as the outlook for international travel grew cloudy and airlines suspended their Tel Aviv flights. Safe haven assets in demandInvestors piled into safe-haven assets after Israel's attack on Iran. After weeks of declining, the dollar index, a measurement of the strength of the U.S. dollar against other major currencies, rallied 0.3% on Friday and was up 0.1% as of 7:30 a.m. Singapore time Monday. Spot gold rose 0.38% and gold futures for August delivery were up 0.41% Monday, adding to Friday's gains of 1.4% and 1.5% respectively. Prices of oil jumpOil prices surged as investors feared a disruption to oil supply from Iran, which produced 3.305 million barrels per day in April, according to OPEC's Monthly Oil Market Report of May. As of Monday morning Singapore time, U.S. crude oil rose 2.22% to $74.62 a barrel, adding to its 7.26% jump on Friday. The global benchmark Brent climbed 2.22% to $75.88 a barrel, following Friday's 7.02% surge. [PRO] U.S. stocks still look resilientEven though stocks fell on the eruption of conflict between Israel and Iran, the market appeared resilient, wrote CNBC's Michael Santoli. This week, while hostilities between the two Middle East countries will continue weighing on investors' minds, they should not lose sight of the Federal Reserve's rate-setting meeting, which concludes Wednesday. Boeing Dreamliner crash, military escalations darken mood at Paris Air Show Kelly Ortberg's first Paris Air Show as Boeing CEO was set to be relatively upbeat. Under his leadership that began in August, the company has made strides in ramping up production of its bestselling 737 Max jets, increasing cash-generating deliveries of new planes, and indicating that it's turning a corner from a series of manufacturing and safety crises and years of lost ground to rival Airbus. Shares are up more than 13% this year, outpacing the S&P 500. But after an Air India flight crashed on Thursday, marking the first fatal air disaster of a Boeing Dreamliner, Ortberg canceled plans to go to the massive air show that begins Sunday.
