Oil prices climb to 2-month high on US-China trade deal, worries about Iran supply
Agencies
New York
Oil prices rose 2 percent on Wednesday, to their highest in more than two months, as President Donald Trump said the US had a trade deal with China, feeding hopes for the outlook for energy demand in the world's two largesteconomies.
Brent crude futures rose $1.32, or 1.97 percent, to $68.19 a barrel. US West Texas Intermediate crude was up $1.51, or 2.32 percent, to $66.49. Both Brent and WTI reached their highest in more than two months.
Trump said Beijing would supply magnets and rare earth minerals and the US will allow Chinese students in its colleges and universities. Trump added the deal is subject to final approval by him and President Xi Jinping.
The trade-related downside risk in oil has been temporarily removed, although the market reaction has been tepid as it is not clear how economic growth and global oil demand will be affected, PVM analyst Tamas Varga said.
Trump said he was less confident that Iran would agree to stop uranium enrichment in a nuclear deal with Washington, according to an interview released on Wednesday.
Iran threatened to strike US bases in the Middle East if nuclear negotiations fail and conflict arises with Washington.
Ongoing tension with Iran means its oil supplies are likely to remain curtailed by sanctions.
Supplies will still increase, as OPEC+ plans to boost oil production by 411,000 barrels per day in July as it looks to unwind production cuts for a fourth straight month.
'Greater oil demand within OPEC+ economies – most notably Saudi Arabia – could offset additional supply from the group over the coming months and support oil prices,' said Capital Economics' analyst Hamad Hussain in a note.
In the US, crude inventories fell by 3.6 million barrels to 432.4 million barrels last week, the Energy Information Administration said on Wednesday. Analysts polled by Reuters had expected a draw of 2 million barrels.
'It's a bullish report,' said Bob Yawger, director of energy futures at Mizuho, adding that the demand for motor gasoline began to strengthen.
Product supplied for motor gasoline, a proxy for demand, rose by about 907,000 barrels per day last week, to 9.17 million bpd. US consumer prices increased less than expected in May, deepening the conviction in financial markets that the Federal Reserve will start cutting interest rates by September. Lower interest rates can spur economic growth and demand for oil.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Qatar Tribune
42 minutes ago
- Qatar Tribune
US tariffs could be launchpad for Europe's single market needs
Agencies Materials group Umicore can spend at least a month on tackling a complex array of national shipment rules only to bring electronic scrap and other waste from across the European Union to its Belgian recycling plant. The problem is not just Umicore's, as businesses across Europe grapple with internal obstacles that can be as damaging as tariffs. Analysts, however, say U.S. President Donald Trump's tariffs have provided the necessary push to make the bloc the single market it aspires to be. Umicore's difficulties are particularly significant in that the company recycles 17 of the 34 minerals identified by the EU as critical for its green and digital transition. Chief Executive Bart Sap says a shipment may need to go by rail in one country, then transfer to a boat in another, with a wealth of diverse documentation along the route. 'With that ununified waste market, the internal hurdles are so high that actually 73% of waste is being exported,' he told Reuters in an interview. Diverging waste shipment regulations are one of the many internal barriers that add cost and complexity to doing business within the EU. The International Monetary Fund (IMF) has estimated EU internal barriers are the equivalent of tariffs of 44% for goods and 110% for services, well above the U.S. tariffs of 25% on steel and cars and 10% on many other goods. A similar study in 2021 concluded that barriers for goods flow within the U.S. amounted to a 13% tariff. For goods, EU barriers include restrictions on retailers' ability to source products or sell them in other EU countries and a jumble of rules on labelling. AkzoNobel, Europe's largest paint maker, complains it cannot just sell the same tub across the 27-nation bloc, placing the blame not on different languages but varying rules. These include separate recycling logos in France and Spain and some EU countries requiring air quality information. The Dutch company says it cannot fit all the necessary information on smaller tubs, and that frequent rule changes force it to keep investing in packaging updates. QR codes could be a solution, it says, something the EU will start requiring from 2027. For services, the single market is even less developed. Laws on setting up foreign subsidiaries diverge, declarations for posting workers abroad vary and 5,700 professions are regulated across the bloc, meaning doctors, nurses, engineers or accountants in one EU country cannot easily work in another. The barriers do not just add cost and complexity. They stifle Italian Prime Minister Enrico Letta, who produced an influential report on the EU single market last year, said EU companies suffered a 'stunning size deficit' relative to rivals and that market divisions prevented them from building scale. A core problem is vested interest in sectors protecting regulated professions from competition and as national supervisors prove resistant to an EU-wide capital market that could rival U.S. investments in newer companies and infrastructure. 'These are low-hanging fruit economically, because basically they're free. It's essentially changing the regulation. But that doesn't mean they're necessarily politically easy,' said Niclas Poitiers, research fellow at think tank Bruegel. The debate on a unified capital market has dragged on for over a decade as EU members have squabbled over issues such as supervision and insolvency rules. However, a deeper single market has gone from a nice-to-have to a must-have as the impact of Trump's tariffs on exports has highlighted the need to remove obstacles to compete with global rivals. The Commission says it is prioritizing removing what it calls the 'terrible ten' most harmful single market barriers, including recognition of professional qualifications and fragmented rules on labelling and waste. Letta, dean of IE University in Spain and president of the Jacques Delors Institute think tank, said he was encouraged by Commission initiatives to tackle the most critical unfulfilled parts of the single market – services and capital. They include the promotion of a savings and investment union and removing barriers to business in legislative proposals are due in 2025 and 2026. Aslak Berg, research fellow at the Centre for European Reform think tank, said the Commission seemed to be serious about reforms that made a difference, but needed to get EU members on said there were two grounds for optimism. Firstly, EU capitals were aware of the need for change.
Qatar Tribune
42 minutes ago
- Qatar Tribune
US IPO market revival takes root as Chime soars in debut
Agencies New York New listings in the US have bounced back sharply in recent weeks, with some eye-popping debuts stoking hopes of a sustained revival after a dry spell since April. On Thursday, fintech firm Chime climbed 59 percent in its debut, extending a winning streak for the latest US stock market entrants. 'If Chime trades well in the first few weeks, boardrooms at a dozen other 'waiting room' candidates may move from paper-testing S-1s to pressing the 'file' button,' said Michael Ashley Schulman, partner and CIO at Running Point Capital Advisors. The packed IPO calendar for the rest of 2025 includes high-profile names such as Klarna, Gemini and Cerebras. IPO activity had remained shackled after President Donald Trump's 'Liberation Day' tariff threats in April rattled global markets and hit sentiment. Several of 2025's most closely watched IPOs, including Circle eToro and CoreWeave have soared since their debuts. 'The June IPO market window has clearly been a success with the hugely popular IPO of Circle Financial, and its incredible after-market rise,' said Samuel Kerr, head of equity capital markets at Mergermarket. The strong listings may boost confidence among investors and late-stage startups preparing to go public, experts have said. 'There's a clear backlog of well-capitalized, later-stage firms looking to go public and a successful June slate could set the tone for a stronger Q4,' said Kat Liu, vice president at IPOX. US IPOs had raised $25.36 billion in 2025 as of June 11, according to data from Dealogic. That compares with $18.22 billion and $9.53 billion raised over the same period in 2024 and 2023, respectively. Crypto exchange Gemini, buy-now-pay-later firm Klarna, AI chipmaker Cerebras and medical supplies company Medline are marquee names that investors are tracking in the latest wave of IPO hopefuls. Cancer diagnostic firm Caris Life Sciences and insurance tech firm Slide have kicked off roadshows ahead of their expected US market debuts next week. UK economic output shrank by 0.3 percent in April, with a record £2 billion fall in exports to the US as President Trump's tariffs kicked in. Finance, technology, oil and gas, and healthcare have dominated the listings this year, data shows. Top banking executives and exchange heads have said in recent weeks that the IPO market remains open, particularly for companies in sectors insulated from tariff risks. A boom in crypto listings may also be on the horizon, according to analysts and industry experts, with companies preparing to ride the momentum from strong recent debuts and improving sentiment. The Trump administration's push for lighter-touch oversight has been welcomed by digital asset firms, some of which are now accelerating their IPO plans. Last week, Gemini, run by billionaire twins Tyler and Cameron Winklevoss, confidentially filed for a US IPO. Rival Kraken is also reportedly exploring a potential listing. IPO stocks underperformed the broader market in early 2025 as trade and economic uncertainty curbed investor appetite. But the Renaissance IPO Index which tracks the performance of high-profile US listings, has since staged a comeback, nearly aligning with the S&P 500 by June.
Qatar Tribune
42 minutes ago
- Qatar Tribune
UK economy contracts 0.3% in April as tariffs, tax hike kick in
Agencies Britain's economy contracted more than expected in April – the first month of the Labour government's business tax hike and U.S. President Donald Trump's reciprocal tariffs onslaught, which also led to a record drop in exports to the U.S., official data showed Thursday. Gross domestic product (GDP) declined 0.3% in the month, compared to 0.2% growth in March, the Office for National Statistics (ONS) said in a statement. That falls below the 0.1% contraction expected by economists. Exports of British goods to the U.S. fell by a record 2 billion pounds ($2.7 billion) in the same month, the ONS revealed, following the introduction of Trump's tariffs. The data comes one day after Prime Minister Keir Starmer's Labour government laid out its priorities for the coming years, hoping that changes to day-to-day spending amounts and longer-term investment will spur Britain's sluggish economy. Finance chief Rachel Reeves injected the ailing National Health Service (NHS) with billions of pounds and pumped funds into defense and housing, while making cuts to other departments. Reeves said Thursday's figures were 'clearly disappointing' but insisted that her spending plans would deliver growth for Britain. Paul Dales, chief U.K. economist at research group Capital Economics, noted that the economy faced 'subdued overseas demand and domestic businesses cutting back on spending to compensate for the rise in costs driven by April's increase in taxes.' Following Labour's return to power last July, following years of Conservative rule, Reeves announced a tax rise for U.K. businesses, which entered force in April. Official data this week showed that the hike had contributed to a small rise in Britain's unemployment rate and a slowdown in growth in average economy had expanded by 0.7% in the first three months of the year. 'With the economy now weakening, we can expect to see concerns around further tax rises increase as we near the Autumn Budget – which is likely to weigh on growth even more,' said Lindsay James, investment strategist at Quilter. The latest data also follows the introduction of a baseline 10% tariff imposed on the U.K. and other countries by Trump at the start of April. The U.K. and U.S. have since struck a trade agreement that cuts tariffs on British cars and scraps them on steel and in return, has agreed to open up its markets to U.S. beef and other American farm the U.K. remains subject to a 10% tariff on most goods exported to the U.S. Decreases in exports to the U.S. in April were seen 'across most types of goods, following the recent introduction of tariffs,' said ONS director of economic statistics, Liz McKeown.
