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Economy ME
10 hours ago
- Business
- Economy ME
Crude oil prices rise above $70.5 as investors watch U.S. sanctions, OPEC+ output
Oil prices edged higher on Monday, adding to gains of more than 2 percent from Friday, as investors focused on further U.S. sanctions on Russia that may impact global supplies. However, a ramp-up in Saudi output and ongoing tariff uncertainty limited these gains. Brent crude futures rose 15 cents to $70.51 a barrel by 04:00 GMT (currently trading above $70.50), extending a 2.51 percent gain on Friday. U.S. West Texas Intermediate crude futures climbed to $68.59, up 14 cents, after settling 2.82 percent higher in the previous session (currently trading above $68.60) U.S. President Donald Trump stated on Sunday that he will send Patriot air defense missiles to Ukraine. He is expected to make a major statement on Russia on Monday. Trump has expressed frustration with Russian President Vladimir Putin due to the lack of progress in ending the war in Ukraine and Russia's intensifying bombardment of Ukrainian cities. To pressure Moscow into genuine peace negotiations with Ukraine, a bipartisan U.S. bill that would impose sanctions on Russia gained momentum last week in Congress, but it still awaits support from Trump. European Union envoys are close to agreeing on an 18th package of sanctions against Russia, which would include a lower price cap on Russian oil, according to four EU sources after a Sunday meeting. IEA highlights tighter global oil market Last week, Brent rose 3 percent, while WTI had a weekly gain of around 2.2 percent, following the International Energy Agency's assertion that the global oil market may be tighter than it appears. This demand is supported by peak summer refinery runs to meet travel and power generation needs. The International Energy Agency (IEA) reported that Saudi Arabia exceeded its oil output target for June by 430,000 barrels per day, reaching 9.8 million bpd, compared to the kingdom's implied OPEC+ target of 9.37 million bpd. Saudi Arabia's energy ministry stated on Friday that it had fully complied with its voluntary OPEC+ output target, noting that Saudi-marketed crude supply in June was 9.352 million bpd, in line with the agreed quota. In other news, China's June oil imports increased 7.4 percent to 49.89 million tons from a year earlier, equivalent to 12.14 million barrels per day, reaching the highest daily rate since August 2023, according to customs data released on Monday. Read more: Crude oil prices rise to $68.74 amid OPEC+ output increases, escalating tariff concerns Investors watch U.S. tariff talks Investors are also monitoring the outcome of U.S. tariff talks with key trading partners, which could impact global economic growth and fuel demand. Oil prices saw an uptick on Friday following U.S. President Donald Trump's announcement of an impending statement regarding Russia, which stirred the possibility of additional sanctions against the significant oil producer. However, concerns surrounding tariffs and increasing OPEC+ output limited the extent of these gains. As of 04:08 GMT, Brent crude futures rose by 19 cents, or 0.28 percent, reaching $68.83 a barrel (currently trading at $68.74). Meanwhile, U.S. West Texas Intermediate crude increased by 24 cents, or 0.36 percent, to settle at $66.81 a barrel (currently trading at $66.72). Throughout last week, Brent observed a 0.8 percent increase, while WTI experienced a slight decline of 0.2 percent. Both contracts faced a loss exceeding 2 percent on Thursday, driven by investor concerns over the repercussions of Trump's shifting tariff policies on global economic growth and oil demand. Trump has voiced his frustrations with Russian President Vladimir Putin due to the lack of progress towards peace in Ukraine and the escalating bombardment of Ukrainian cities by Russia. Additionally, tight market fundamentals coupled with improving seasonal demand have provided some support to oil prices, as have the recent Houthi attacks on vessels traversing the Red Sea, as noted by BMI analysts in their weekly report. A notable indicator of demand improvement is the expectation that Saudi Arabia will ship approximately 51 million barrels of crude oil to China in August, marking the largest shipment in over two years. OPEC+ increases production in August Oil prices faced pressure last week from an agreement made on Saturday by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, to increase production by 548,000 barrels per day in August. OPEC has revised its forecasts for global oil demand from 2026 to 2029, attributing the changes to a slowdown in Chinese demand, as outlined in its 2025 World Oil Outlook published last Thursday. The organization anticipates that global demand will average 106.3 million barrels per day in 2026, a decrease from the 108 million bpd estimated in last year's forecast. Oil prices declined on Thursday following U.S. President Donald Trump's latest tariff announcements, which raised investor concerns about a potential deceleration in global economic growth and weaker oil demand. By 4:01 GMT, Brent crude futures had decreased by 0.03 percent to $70.17 a barrel, while U.S. West Texas Intermediate crude fell by 0.07 percent to $68.33 a barrel. On Wednesday, Trump threatened Brazil, the largest economy in Latin America, with a steep 50 percent tariff on its exports to the U.S. following a public clash with Brazilian President Luiz Inacio Lula da Silva. This threat followed earlier proposals for tariffs on essential goods such as copper, semiconductors, and pharmaceuticals. His administration has also issued tariff notifications to countries like the Philippines and Iraq, adding to over a dozen others communicated earlier in the week, including to major U.S. trading partners such as South Korea and Japan.


The National
14 hours ago
- Business
- The National
Writing oil's death certificate is premature, but what will its kingdom become?
Opec held its biennial seminar last week at Vienna's Hofburg Palace. It is an icon of the late Austro-Hungarian empire, a scientific and cultural ferment that was often unfairly caricatured as a dinosaur, living in the past and doomed to collapse. Giants such as Freud, Einstein, Klimt and Mahler rubbed shoulders. In a grim portent, the pre-fame Hitler, Stalin, Trotsky and Tito were all present in the city simultaneously in 1913. The oil exporters' latest long-term energy outlook was released on Thursday. Is it, too, the last gasp of a dying imperium? Or an optimistic step towards a new future? Speaking to The National at the Hofburg, Opec secretary general Haitham Al Ghais said the organisation's critics were 'writing Opec's death certificate – again". Indeed, its demise has been repeatedly, and wrongly, predicted. Opec's World Oil Outlook 2050 is a useful counterpoint to the International Energy Agency's World Energy Outlook, which came out in October. The industrialised countries' organisation has for some time been much more aggressive in its forecasts for climate action and energy transition, and more sceptical on oil demand, than the oil exporters' group. Like Kaiser Franz glowering from the Hofburg at his rival Napoleon, Opec has grown increasingly irritated at what it sees as the politicisation of its Paris-based counterpart. The IEA's publication came out, of course, before the second election of Donald Trump as US President, and the zeitgeist has changed since then. Low-carbon energy is under attack, and promoting oil, gas and coal is at the top of the White House's agenda. European politicians worry about high energy bills, industrial uncompetitiveness and the rise of the far right, opposed to 'net zero' carbon policies. Tariff turmoil and hostility to international co-operation threaten collective action on climate change. A previously unthinkable war involving Israel, the US and Iran has passed off without serious energy consequences, so far. Opec's schadenfreude at its critics' discomfiture is understandable. Its latest outlook revises up long-term oil demand by 2.8 million barrels per day by 2050, to 122.9 million bpd. It sees a gradual slowing of demand growth after 2030, but no peak, in sharp contrast to both the IEA, and its own long-term projections from 2020, 2021 and 2022. Those earlier views were perhaps clouded by the pandemic and then the impact of Russia's invasion of Ukraine. Perhaps counter-intuitively, Opec has cut its forecasts for the next few years, chipping off up to 1.7 million bpd, mostly on worries over the Chinese economy. It projects 111.6 million bpd of demand in 2029, up from 2024's 103.7 million bpd. Still, an average annual gain of nearly 1.6 million bpd over five years would be very robust by historic standards. Since 1980, it has happened only twice: in 2012-2017 and 2002-2007. But the IEA's medium-term outlook foresees a peak in oil demand by 2029, at 105.6 million bpd, with annual growth averaging just 0.5 million bpd over this five-year period. That is consistent with the last five years, but otherwise also a historical rarity, occurring around the global financial crisis, and in the early 1980s recession and oil shock hangover. Opec quite reasonably observes that, 'many initial net-zero policies promoted unrealistic timelines or had little regard for energy security, affordability or feasibility'. In its view, out to 2050, oil retains its market share; renewables grow, but essentially replace coal. Whether oil demand expands robustly to 2050 or peaks soon is a contest waged across geographies and sectors. In Opec's view, oil wins in developing Asia, Africa, Latin America and the Middle East, gaining 25.3 million bpd by mid-century; China is basically a draw, with 1.7 million bpd of expansion to 2030 but stasis thereafter. This basically assumes that emerging economies follow a similar development path to their East Asian counterparts of the 1960s to the 2000s, and that rapid population and economic growth outstrip adoption of non-oil energy sources. But petroleum does not do too badly in the developed countries either in Opec's view – consumption drops only 8.5 million bpd, less than 20 per cent, despite maturing and ageing economies, tightening climate policies, and rising electric vehicle use. In sectors, too, oil wins almost across the board, losing only a little ground in power generation, while it continues rising in road, sea and air travel, petrochemicals, industry and home and commercial use. This is, frankly, a little hard to believe. Yes, there are few good alternatives today to oil in ships, planes and petrochemicals: it's a fair argument that, in the absence of strong climate policy, demand here will keep climbing. But to satisfy these forecasts, petroleum would have to keep growing in nearly all of its traditional uses, without much prospect of discovering any new ones. Meanwhile, renewable and nuclear electricity have not just oil's existing domains, but new kingdoms to conquer, such as data centres and air taxis. Given that Saudi Arabia itself plans to phase out its 1 million bpd of daily oil burn in power plants by 2030, it seems implausible that global use in power generation would fall only 0.5 million bpd by 2050. In industry and homes, natural gas and electrification are cleaner, more flexible and increasingly cheaper options. Road transport is the key question. Opec thinks that electric vehicles will constitute only 28 per cent of the global fleet even by 2050. Almost none of today's cars will still be on the road by then. Battery and plug-in hybrids make up about 19 per cent of world sales currently, 26 per cent of European sales, and almost 53 per cent of those in China. New petrol and diesel car sales will be phased out in the UK and EU between 2030 and 2035, and China too will probably effectively ban them by then. The death certificate for oil written by the IEA seems indeed premature. But the oil exporters' organisation may find itself ruling over a patchwork of fading territories, where oil is a tired legacy or a last resort. Or, it may extend its reach over areas of growth, in India, in Africa, on the seas and in the skies. A lot has to go in Opec's favour if the zenith of its empire of oil is to outlast mid-century.
Business Times
15 hours ago
- Business
- Business Times
Oil edges up, investors eye Trump statement on Russia
[SINGAPORE] Oil prices nudged higher on Monday (Jul 14), adding to gains of more than 2 per cent from Friday, as investors eyed further US sanctions on Russia that may affect global supplies, but a ramp-up in Saudi output and ongoing tariff uncertainty limited gains. Brent crude futures rose 8 US cents to US$70.44 a barrel by 0011 GMT, extending a 2.51 per cent gain on Friday. US West Texas Intermediate (WTI) crude futures climbed to US$68.50, up 5 US cents, after settling 2.82 per cent higher in the previous session. US President Donald Trump said on Sunday that he will send Patriot air defence missiles to Ukraine. He is due to make a 'major statement' on Russia on Monday. Trump has expressed frustration with Russian President Vladimir Putin due to the lack of progress in ending the war in Ukraine and Russia's intensifying bombardment of Ukrainian cities. In a bid to pressure Moscow into good-faith peace negotiations with Ukraine, a bipartisan US bill that would hit Russia with sanctions gained momentum last week in Congress, but it still awaits support from Trump. European Union envoys are on the verge of agreeing an 18th package of sanctions against Russia that would include a lower price cap on Russian oil, four EU sources said after a Sunday meeting. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Last week, Brent rose 3 per cent, while WTI had a weekly gain of around 2.2 per cent, after the International Energy Agency (IEA) said the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power generation. However, ANZ analysts said price gains were limited by data showing Saudi Arabia lifted oil output above its quota under the Organization of the Petroleum Exporting Countries and allies' (Opec+) supply agreement. The IEA said that Saudi Arabia exceeded its oil output target for June by 430,000 barrels per day (bpd) to reach 9.8 million bpd, compared with the kingdom's implied Opec+ target of 9.37 million bpd. Saudi Arabia's energy ministry said on Friday the kingdom had been fully compliant with its voluntary Opec+ output target, adding that Saudi marketed crude supply in June was 9.352 million bpd, in line with the agreed quota. Elsewhere, the release of China's preliminary commodity trade data later on Monday should highlight any ongoing signs of weaker demand, ANZ said in a note. Investors are also eyeing the outcome of US tariff talks with key trading partners that could impact global economic growth and fuel demand. REUTERS


Business Recorder
17 hours ago
- Business
- Business Recorder
Oil in flux: Rising supply meets fragile demand
The global oil market in 2025 has become a delicate balancing act, influenced significantly by the decisions of OPEC and the International Energy Agency (IEA). Earlier this year, the market struggled with slow demand due to ongoing trade tensions and economic uncertainty in key economies. Initially, OPEC+ tried to keep oil prices stable by maintaining deep production cuts of around five million barrels per day. However, starting in April, OPEC+ shifted gears, gradually increasing production again. Their goal was straightforward: regain market share and counter growing supply from non-OPEC producers, particularly the United States. Over May and June 2025, they steadily increased output, adding roughly 400,000 barrels per day each month. By July, they ramped up the pace further, deciding to boost production by another 548,000 barrels per day in August, followed by around 550,000 more barrels per day planned for September. By that point, OPEC+ will have fully reversed their earlier production cuts. Notably, the UAE emerged as a standout within the group, announcing it would significantly raise its production by an additional 300,000 barrels per day, showcasing its ambitions to play a bigger role in global oil markets. Meanwhile, the IEA in July 2025 revised its outlook for the year, predicting a bigger supply increase of about 2.1 million barrels per day, slightly higher than previously expected. Interestingly, the IEA also noted that demand growth for oil in 2025 would remain unusually low, growing at just 700,000 barrels per day—the slowest growth rate seen outside of a global crisis year since 2009. Yet despite forecasting this supply surplus, the IEA warned the market might still feel tight in the short-term, especially during summer months, as refineries are operating at full capacity and global oil inventories remain relatively low. This unusual situation created uncertainty and volatility, making price movements unpredictable. Throughout early July, oil prices have experienced noticeable swings. Initially, they dipped sharply due to fears over trade tariffs and slower economic growth in major markets like the United States and China. But by now, prices recovered somewhat, edging back up toward $70 per barrel. This rebound came as traders focused on short-term factors, including strong summer demand and tighter physical supplies in the market. Looking ahead, OPEC remains optimistic about the long-term future of oil, expecting global oil consumption to rise steadily to approximately 123 million barrels per day by 2050. To meet this growing demand, especially from emerging markets, OPEC stressed the need for substantial investment in refining infrastructure, suggesting that the world would require an additional 195 million barrels per day of refining capacity over the next few decades. In summary, the global oil market midway through 2025 finds itself navigating conflicting signals. While overall supply growth is outpacing weak demand, short-term factors like seasonal refinery use and lower inventories are keeping markets tighter than expected. Both OPEC and the IEA, despite their differing perspectives, highlight the need for flexibility, ongoing investment, and cautious optimism as they steer through this uncertain period. Copyright Business Recorder, 2025


Telegraph
20 hours ago
- Business
- Telegraph
Rayner's employment law forcing ‘stealth tax' on workers
's employment law reforms will act as a £5 billion 'stealth tax' on workers, a report has warned. The Deputy Prime Minister is planning a raft of reforms that will make it easier for workers to strike and introduce new 'day-one' rights against unfair dismissal and zero-hours contracts. But they will also work to suppress wages, effectively taxing employees by increasing costs for their bosses, according to analysis by the Institute of Economic Affairs (IEA). The think tank said smaller pay rises will equate to a £5 billion 'stealth payroll tax', based on the Government's own impact assessment of the cost on workers. Business groups have already raised the alarm over the reforms, which they say will make firms more reluctant to hire workers. The Employment Rights Bill, which returns to the Commons on Monday, contains measures to make it easier for workers to form unions and launch strike action. Andrew Griffith, the shadow business secretary, said they would result in 1970s-style union militancy and hammer struggling businesses. 'Labour's love-in with the unions is dragging Britain back to the worst economic mistakes of the 1970s,' he said. 'The so-called Employment Rights Bill is nothing more than a Trojan horse for union power and state interference. 'Far from protecting workers, it will price people out of jobs, deterring investment and sending small businesses to the wall.' In June, the Conservatives pledged to scrap the Bill if they return to office, warning the plans would 'grind our economy to a halt'. The IEA's report, by Prof J.R. Shackleton, argues that the plans will 'put the public through the wringer' and 'extort more pay from the government – which means, of course, the taxpayer'. The Telegraph understands the workers' rights plan has already been the subject of dispute between Ms Rayner and the Treasury, which is concerned about the impact on business confidence and economic growth. The Office for Budget Responsibility, Britain's independent fiscal watchdog, has said they will have a 'probably net negative' impact on a range of economic indicators, including employment, prices, and productivity. The Government's impact assessment found that the reforms will result in £5 billion higher costs for businesses, which the IEA said would be passed to workers in the form of lower wages. Ms Rayner has argued that the new rules will boost living standards, giving the public an 'upgrade to our growth prospects and the reforms our economy so desperately needs'. 'Billions in hidden costs' The professor of economics at the University of Buckingham said: 'Politicians love to announce new employment 'rights' because they think employers pay the bill – but that's an illusion. 'Every mandate, from parental leave to holiday entitlements, acts like a stealth tax that gets passed back to workers through smaller pay rises than they would otherwise receive. The only difference is that no money is raised for the Exchequer,' said Prof Shackleton. 'The Employment Rights Bill will make this much worse, imposing billions in hidden costs that workers will ultimately bear themselves. 'The Government is not protecting workers – it is harming them and undermining its own alleged number one priority to boost economic growth.' A government spokesman said: 'Too many workers are trapped in insecure, low-paid work, with weak protections that are poorly enforced. 'Through our transformative Plan for Change, this government will deliver the biggest upgrade to workers' rights in a generation, contributing to economic growth, and our measures have strong support from businesses and the public.'