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Calgary Herald
9 hours ago
- Business
- Calgary Herald
Oil extends slump as Trump announces ceasefire in Middle East
Article content (Bloomberg) — Oil extended a slump as US President Donald Trump announced a tentative ceasefire between Iran and Israel. Article content Global benchmark Brent tumbled almost 5% toward $68 a barrel in early Asian trading, before paring some of that drop. The plunge — which followed a roller-coaster session on Monday that ended in steep losses — took prices to below their level on June 12, the day before Israel attacked Iran. Gold also fell. Article content Article content Article content In a move that will lower crude's risk premium, Trump said that Israel and Iran had agreed to a 'complete and total ceasefire,' which would begin at about midnight New York time, according to a post on Truth Social. Article content Article content The global oil market has been rocked by the crisis in the Middle East on concerns that the conflict could disrupt supplies from the region that pumps about a third of the world's crude. Prices initially spiked, then retraced gains as the standoff unfolded, with Israel, Iran and the US all avoiding hits on oil-related infrastructure and vessel traffic continuing through the Strait of Hormuz with only minor disturbances. Article content 'Traders are now firmly of the belief that the risk of a supply shock is now firmly in the rear-view mirror.' said Chris Weston, head of research at Pepperstone Group Ltd. 'The prospect of a prolonged conflict with US involvement has been repriced, giving the green light to add risk, and pare back well-owned tail-risk hedges.' Article content Article content In a sign of reduced tensions, Brent's prompt spread — the difference between its two nearest contracts — narrowed to 93 cents a barrel in backwardation. While that's still a bullish pattern, with nearer-term prices above those further out, it's down from last week's closing peak of $1.77 a barrel. Article content The crisis erupted earlier this month as Israel attacked Iran in a bid to eradicate its nuclear program, decimate its leadership, and degrade its military, with Tehran firing missiles in reply. In a major escalation, Trump then ordered a weekend strike against the Islamic Republic's nuclear sites. Iran's retaliation to that move was a limited missile salvo against a US air base in Qatar. Article content The tentative ceasefire in the Middle East — if it takes effect and lasts — may pull traders' main focus back to the crude market's underlying fundamentals. There are widespread expectations that oil supplies will run ahead of demand in the second half of this year, spurring a build-up in global stockpiles.
Mint
6 days ago
- Business
- Mint
Oil Steadies as Trump Spurs Concerns Over Middle East Escalation
Oil steadied after rallying around 10% since Israel started its attacks on Iran last week, as speculation the US may join the conflict stoked concerns about supply disruptions in the Middle East. Brent traded near $76 a barrel, while West Texas Intermediate was above $74 after closing at the highest level in almost five months on Tuesday. President Donald Trump demanded Iran's 'UNCONDITIONAL SURRENDER' and warned of a possible strike against the country's leader — Ayatollah Ali Khamenei — in a social media post, before meeting with his national security team. Iran's crude-exporting infrastructure has been spared so far, and most of the fallout has been confined to shipping. The Middle East produces around a third of the world's oil and a wider conflict could drive prices even higher. The hostilities have rattled global markets, with investors seeking havens in assets such as gold, and oil volatility surging to a three-year high. Brent's prompt spread has spiked, signaling concerns around tightening supply, and options are more bullish than after Russia's invasion of Ukraine in 2022. The biggest concern for the oil market centers on the Strait of Hormuz, although there are no signs that Tehran is seeking to disrupt shipping through the narrow waterway at the entrance to the Persian Gulf. About a fifth of the world's crude output passes through the strait, including from Saudi Arabia. 'Trump's demand for Iran's 'unconditional surrender' and threats against its supreme leader signal diplomacy is off the table,' said Charu Chanana, chief investment strategist at Saxo Markets Ltd. in Singapore. A 'worst-case scenario blockade of Hormuz, could send prices sharply higher,' she added. Israel launched surprise attacks on Iran's nuclear sites late last week, but American weapons are seen as crucial to achieving a more complete destruction of Tehran's atomic program than anything it can do alone. Prime Minister Benjamin Netanyahu has sought to draw the US — which has provided defensive support against Iranian missile fire — deeper into the conflict. He told ABC News on Monday that the countries share a common enemy in Iran, and that it's in America's interest to support Israel. Oil could break above $80 a barrel on headlines of US involvement, said Chris Weston, the head of research at Pepperstone Group Ltd. The shape of the futures curve suggests that people are pricing in a much tighter market, he added. The gap between Brent's two nearest December contracts — a key indicator on long-term balances — has significantly widened since the attacks and was almost $3 a barrel in a bullish backwardation structure. Prior to the conflict, it was in a bearish contango pattern, signaling expectations of ample supply. Meanwhile, US industry figures showed the nation's crude inventories fell by more than 10 million barrels last week. That would be the biggest decline since last summer if confirmed by official data later on Wednesday. To get Bloomberg's Energy Daily newsletter in your inbox, click here. This article was generated from an automated news agency feed without modifications to text.
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Business Standard
12-05-2025
- Business
- Business Standard
Markets to decide if 'substantial progress' enough after US-China talks
By Naomi Tajitsu, Anya Andrianova and Elena Popina Financial markets will reopen needing to decide if warm words are as good as action after trade talks between the US and China ended with President Donald Trump 's advisers declaring 'substantial progress' had been made, yet without providing many details. Speaking after two days of negotiations in Geneva, US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer said that they will share more information on Monday. Greer told reporters 'differences were not as large as maybe thought.' Chinese officials echoed the message during a separate briefing on Sunday, saying that talks between the two sides achieved a 'sound sustainable development' for the Chinese-US relationship. 'I'd imagine we'll see at least some kind of knee-jerk risk-on move, as participants had trimmed risk ahead of the talks, and are likely now a bit more comfortable to re-enter those positions given that we've seemed to avoid a worst case scenario of the talks collapsing, and do appear to have achieved some progress,' said Michael Brown a senior research strategist at Pepperstone Group Ltd. in London, 'That said, I'd imagine conviction is going to be lacking until we hear specifics. It's very much a case of having more questions than answers at this stage.' Early indicative prices in foreign exchange markets in Australia and Asia, showed both euro and yen edging lower against the US dollar. The offshore yuan was also indicated slightly stronger. Investors entered the weekend seeking signs of a detente in the trade war that's been the biggest driver of markets this year. The fear is that unless reversed, tit-for-tat tariffs risks dealing a stagflationary blow to the US and world economies by driving them into recession and at the same time boosting inflation. Markets have erased much of the damage from Trump's so-called Liberation Day tariff announcements as the president pulled back on some of his protectionist pledges, but investors are nevertheless likely to stay wary of staking large bets on encouraging comments before any concrete plans are announced to reduce levies, especially those between the world's two largest economies. Wall Street ended Friday on a cautious note, with stocks and bonds fluctuating, after some optimism in the preceding days that the talks in Switzlerland would at least narrow differences between Washington and Beijing. 'The de-escalation of trade, economic and geopolitical tensions could give market risk sentiment a boost,' said Valentin Marinov, head of G-10 FX research and strategy at Credit Agricole. 'The latest developments could become a boon for risk-correlated assets and currencies and a blow to safe-haven currencies like the yen, Swiss franc and even the euro.' Risk assets may also benefit from the ceasefire between India and Pakistan, as well as signs the leaders of Russia and Ukraine may meet this week. Sentiment toward the Australian dollar, often seen as a proxy for the Chinese economy, has improved recently and will also be a key asset to monitor when market renew trading. Rounds of retaliation have raised US tariffs on imports from China to 145 per cent, while the Chinese have put in place a 125 per cent duty on US goods. Two-way annual trade between both countries is around $700 billion, and China has an estimated $1.4 trillion of portfolio investments in the US. The US side had set a target of reducing tariffs below 60 per cent as a first step that they feel China may be prepared to match, people familiar with the conversations said before the weekend. Trump said on social media on Friday that an 80 per cent levy 'seems right!' The S&P 500 Index has risen back to around where it was prior to Trump's announcement of reciprocal tariffs in early April, a declaration which triggered the worst day for equities since 2020. A week later, Trump paused the steepest of the tariffs on most countries other than China, sparking a rally in the S&P 500 that was the best since the 2008 financial crisis. A trade deal struck with the UK last week also helped lift confidence that pacts were possible although the details disappointed. Trade pressures are already starting to hit US businesses, with companies from United Parcel Service Inc. to Ford Motor Co. to Mattel Inc. withdrawing guidance, citing tariff uncertainty that's getting too hard to navigate. The average member of the S&P 500 made 6.1 per cent of its revenue from selling goods in China or to Chinese companies in 2024, according to an analysis from Bloomberg Intelligence. The dollar last week enjoyed its biggest weekly gain since late March, but is still suffering its worst start to the year in at least two decades with the Bloomberg Dollar Spot Index down 6 per cent so far. Since April 2, speculative traders — including hedge funds and asset managers — have build an increasingly bearish position on the dollar, according to data from the Commodity Futures Trading Commission. They hold some $17 billion worth of wagers tied to bets that the greenback will weaken, the latest data show. Chinese shares edged lower on Friday amid investor caution. The region's CSI 300 Index has come close to recouping all its losses since Chinese goods were targeted with US tariffs above 100 per cent early last month. Strategists at Goldman Sachs Inc. last week raised their 12-month index targets for MSCI China and CSI 300 to 78 and 4,400, implying about 7 per cent and 14 per cent returns from the current levels. Despite their traditional safe-haven status, Treasuries have also slipped since early April, sending the yield on 30-year bonds up to 4.83 per cent on Friday, from a recent low of 4.41 per cent in early April.
Yahoo
29-04-2025
- Business
- Yahoo
Gold Falls On Stronger Dollar as US Offers Auto Tariff Reprieve
(Bloomberg) -- Gold declined on expectations President Donald Trump will ease the impact of his auto tariffs, weighing on haven demand amid hopes of a further dialing down of trade tensions. New York City Transit System Chips Away at Subway Fare Evasion NYC's Congestion Toll Raised $159 Million in the First Quarter Newsom Says California Is Now the World's Fourth-Biggest Economy The Last Thing US Transit Agencies Should Do Now At Bryn Mawr, a Monumental Plaza Traces the Steps of Black History Bullion fell as much as 1.2% to $3,305.23 an ounce, following a 0.7% gain in the previous session, after a White House official said some levies on foreign parts for cars and trucks would be lifted and imported automobiles would be given a reprieve from separate tariffs on aluminum and steel. A gauge of the dollar strengthened, making bullion more expensive for most buyers as it's priced in the greenback. Traders continue to weigh the outlook for the global economy amid heightened uncertainty over the impact of the fast-developing US-led trade war, which has stoked haven demand for gold and led to its record-breaking run in recent months. The consequences of Trump's tariff agenda should become even clearer this week, with a raft of data due on American jobs, inflation and economic growth. 'Although negotiations may progress slowly, the White House's renewed willingness to engage has shifted market sentiment from panic selling to cautious optimism, putting some downward pressure on gold,' Pepperstone Group Ltd. research strategist Dilin Wu said in a note. Still, if there are signs of labor market deterioration in US reports due later this week, 'expectations for a June Fed rate cut would likely firm, potentially reigniting another leg higher in gold,' Wu said. There's also little prospect of a reprieve in US-Sino relations, after China's top diplomat warned countries against caving in to Trump's tariff threats. Meanwhile, Treasury Secretary Scott Bessent told CNBC that the US has put China to the side for now and indicated it's up to Beijing to take the first step in de-escalating the fight. The Chinese Foreign Ministry again denied it was in talks with Washington to find ways to whittle down the wall of tariffs separating the two largest economies. Gold has climbed more than 25% this year as the trade war, expectations for a global slowdown, and tensions between the Trump administration and the Federal Reserve drove haven demand. The gains have also been supported by inflows into bullion-backed exchange-traded funds, central-bank buying and signs of strong speculative demand in China, even as physical consumption in the world's biggest buyer falls. Gold for immediate delivery fell 0.9% to $3,313.06 an ounce as at 1:53 p.m. in Singapore. The Bloomberg Dollar Spot Index was up 0.2%. Silver and palladium declined, while platinum was little changed. As More Women Lift Weights, Gyms Might Never Be the Same Why US Men Think College Isn't Worth It Anymore Healthy Sodas Like Poppi, Olipop Are Drawing PepsiCo's and Coca-Cola's Attention Eight Charts Show Men Are Falling Behind, From Classrooms to Careers The Mastermind of the Yellowstone Universe Isn't Done Yet ©2025 Bloomberg L.P. Sign in to access your portfolio
