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Oil prices fall as investors remain on edge due to tariff uncertainty
Oil prices dropped on Monday, as investors' appetite for riskier assets was tempered by concerns about the impact of U.S. tariffs on global growth and fuel consumption, as well as the rising production from OPEC+ producers. Brent crude dropped 31 cents or 0.4% to $70.05 per barrel at 0445 GMT, after closing up 90 cents Friday. U.S. West Texas Intermediate Crude was $66.69 per barrel, down by 35 cents or 0.5% after closing the previous session 68 cents higher. WTI fell for the seventh consecutive week, which is the longest losing streak in 2023. Brent also dropped for a third week running after U.S. president Donald Trump delayed and then imposed tariffs on key oil suppliers Canada, Mexico, and raised taxes on Chinese products. China responded by imposing tariffs on agricultural goods against the U.S., Canada and other countries. In a recent note, ING analysts stated that "tariff uncertainty is a major driver of the weakness", adding that Saudi Arabia's oil price cuts and China's deflationary signal also hurt sentiment. IG analyst Tony Sycamore stated that other factors affecting oil prices are concerns over U.S. economic growth, a potential lifting of U.S. Sanctions on Russia and OPEC+'s decision to increase production. In a client letter, he stated that despite the fact that the WTI price has recovered to $72, the weekly support will remain at $65/$62. The oil prices recovered some of their losses on Friday, after Trump announced that the U.S. will increase sanctions against Russia if it fails to reach an agreement with Ukraine. Two people with knowledge of the situation said that the U.S. was also looking at ways to ease sanctions against Russia's energy industry if Russia agreed to end its conflict with Ukraine. OPEC+ (Organisation of Petroleum Exporting Countries, including Russia) has announced that it will increase oil production starting in April. Alexander Novak, the Russian Deputy Premier, said on Friday that OPEC+ might reverse its decision if the market is imbalanced. Saudi Arabia, which has been a major supplier of crude oil to Asia since March 2010, cut the price for the first three months. Trump stated last week that he was willing to negotiate a nuclear deal with OPEC-member Iran in order to stop the latter from acquiring such weapons, despite Iran's claim to not be interested. A spokesperson for the State Department said that Trump is conducting a campaign of "maximum press" against Iran, under which on Saturday the U.S. revoked a waiver allowing Iraq to pay Iran electricity. Ayatollah Khamenei, Iran's supreme leader, said on Saturday that his country would not be pushed into negotiations. Florence Tan, Christopher Cushing, Michael Perry and Florence Tan are reporting; Christopher Cushing is editing.
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BRICS' climate leadership aims hang on healing deep divides
The BRICS' ambitions to play a more prominent role in climate change, following the success of the United Nations' nature talks last month, will depend on how well the countries can overcome their fractious political differences and deep-seated disagreements about money. Brazil, Russia India China and South Africa – collectively known as BRICS – are well placed to influence the outcome of high-profile conferences this year. A dozen sources said that they established their credentials when they proposed a draft document which ensured agreement during the COP16 discussions in Rome in February. This could have unlocked billions of dollars for the protection of ecosystems. Narend Singh said that the BRICS will now influence discussions on other platforms. South Africa has a newfound profile this year as the G20 president, and another BRICS country, Brazil is preparing to host COP30 Climate talks in November. Maria Angelica Ikeda said that the BRICS countries can fill a gap in multilateral negotiations at this time. Susana Muhamad from Colombia, who is the president of the COP16 Nature Talks, stated that the BRICS countries are positioning themselves to be "bridge-builders". She said, "They're trying to create an balance to represent the Global South before the far-right governments emerging in the U.S.A., Italy and Argentina." "I know there are a lot countries that want to join BRICS because, if they have to face something like the U.S. then, at least, they're not alone." Unnamed British officials present at the meeting said that other countries should consider the impact of the BRICS's more aggressive approach on global institutions. DISPARATE GROUP If BRICS is to fill the vacuum created by President Donald Trump in the United States, then it must address its internal divisions on politics and finance. Timo Leiter, distinguished policy fellow at London School of Economics and a former UN official, warned that the group's refusal of taking on the financial obligations of donors could be a major obstacle. The BRICS countries with middle incomes have so far refused to share their financial liabilities, despite the demands of cash-strapped, developed nations. This has complicated the search for compromise in the U.N. climate negotiations and upcoming discussions on development financing in Seville, Spain. Data from the OECD revealed that nearly three quarters of the 25.8 billion dollars in funding for biodiversity in 2022 came from five different sources: European Union institutions (EU), France, Germany, Japan, and the United States. The BRICS may be divided by divergent national interests. For example, Russia wants to keep its fossil fuel sales, while Brazil is pushing countries to accelerate their decarbonisation at COP30. Li Shuo is the director of China Climate at Asia Society. He said that "they (the BRICS countries) are dramatically different in terms development stage and emission trajectory." The geopolitical ambitions of both countries are what binds them together, and this leads to the question: Can they agree on a positive agenda? Analysts said that a test of the group’s solidarity would be at a June meeting in Bonn, where countries will begin to present their COP30 negotiating position. The Financing for Development Conference in Seville, Spain in June will also be pivotal. Ministers are expected to discuss global sustainability and the ongoing reform of international financial systems. Leiter stated that "this will be a perfect entry point for BRICS in order to further their goal of changing the world order and having a greater say in the international financial system," he said. The new U.S. role is a kind of gift. In the short-term, it is likely that the BRICS will renew their demands for a greater say in the Global Environment Facility. The GEF distributes a large portion of biodiversity financing around the world. GEF reform has become a priority as richer nations cut their development budgets while demanding that nature-rich countries protect ecosystems like the Amazon. Ikeda, a Brazilian, said: "It is a serious problem that countries are updating their nuclear weapons or purchasing more armaments, instead of directing more money to nature and biodiversity." "At the Same Time, They Demand More and More Obligations from Us, The Mega-Diverse Countries."
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Australia offers financial assistance to workers affected by the ex-Tropical Cyclone Alfred
The Australian Government announced on Monday that it will provide financial assistance to workers who have lost income as a result of the ex-Tropical cyclone Alfred, which caused flooding, power failures and property damage along the east coast. The storm, which was downgraded from a tropical low to a tropical storm, pounded the states of Queensland, New South Wales and Australia's third most populous city late Saturday night. Authorities reported that a man died and twelve soldiers injured when their vehicles collided in wet weather conditions. From Tuesday, Prime Minister Anthony Albanese announced that workers who earn less than the average weekly wage in the country will be eligible for financial assistance of up to 13 weeks. "We have your back." "That's my message to you," Albanese said at a Monday press conference held in Lismore, a town that was flooded about 700 km north of Sydney. The income support is equivalent to JobSeeker in the country, which pays A$778 (US$490.76) per fortnight to a single adult without children. This payment comes on top of the A$1,000 one-off disaster payment that was announced at the weekend. Authorities reported that more than 230,000 homes and businesses still faced power outages, and thousands of properties are at risk of flood after rain totals up to 433mm in the last 24 hours. The Bureau of Meteorology in Australia said that although conditions will ease throughout the day the risk is not over. Bureau meteorologist Sue Oates stated that there is still significant flooding in south-east Queensland. There is a risk of flash flooding and dangerous rains. The Insurance Council of Australia announced on Sunday that insurers have received almost 3,000 claims. Andrew Hall, CEO of the company, said that it was still too early to estimate the insurance bill. However, he expects "thousands more claims" as the residents return home and realize the extent of damage. Insurers paid out A$409 Million from 10,500 claims in the aftermath of Cyclone Jasper, 2023's most rain-intensive cyclone. In today's dollars, the insurers paid out an estimated A$7.4 Billion for Cyclone Tracy of 1974.
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London copper prices ease on US tariff worries, but a weak dollar limits losses
London copper prices fell on Monday, as traders assessed the uncertainty surrounding U.S. trade policies. However, a weaker US dollar limited the decline. As of 0342 GMT, the price for three-month copper at the London Metal Exchange was $9,572 per metric ton. The Shanghai Futures Exchange's most active copper contract fell 0.6%, to 78210 yuan (10,777.03 dollars) per ton. In an interview with The Wall Street Journal on Sunday, U.S. president Donald Trump declined to say whether the U.S. might face a recession due to stock market worries about his tariffs on Mexico Canada and China for fentanyl. Trump's trade policy has fueled fears of a potential trade war that could slow economic growth and increase prices for Americans who are still suffering from high inflation. ANZ Research stated that "dramatic shifts in U.S. foreign and trade policy will likely cause further disruption to the metal markets." "President Trump imposed a 25% tariff against imports of U.S. steel and aluminium. Copper is also likely to be taxed. In the short term, premiums will rise as the U.S. tries to adjust to this dislocation of the physical markets." Dollar began the day weak, after significant losses due to a possible weakening of the U.S. labor market. Investors fled to safe havens over concerns about a global economic war, which boosted the yen, and Swiss franc. The greenback is less expensive to buyers of other currencies. LME aluminium dropped 0.5% to 2,693 per ton. Zinc fell 0.6% to 2,869, and nickel declined 0.4% to 16,445. Lead rose 0.4% to $2,000 and tin fell 0.4% at $32,400. SHFE aluminium fell 0.02%, to 20,880 Yuan per ton. Zinc dropped 1.1%, to 23,795 Yuan. Lead fell 0.09%, to 17,460 Yuan. Nickel rose 1.5% to 132210 yuan, and tin firmed up 0.1% to 262,220.
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Iron ore prices rise on the prospect of more Chinese stimulus
Iron ore futures prices rose on Monday as China's recent low inflation data fueled hopes for additional support measures to achieve its annual growth goal. However, lingering fears about demand prospects held gains back. As of 0206 GMT, the most traded May iron ore contract at China's Dalian Commodity Exchange was up 0.39% to 777.5 Yuan ($107.17). As of 0156 GMT, the benchmark April iron ore traded on Singapore Exchange rose 0.4% to reach $100.85 per ton. It dropped below the psychologically important level of $100 a ton to $99.5 earlier in the day. China's consumer prices index fell by the fastest pace in 13 years in February, despite expectations. Producer price deflation continued. Analysts said that this could lead Beijing to introduce more stimulus measures in order to boost its economic growth. This is especially true when the second largest economy of the world faces an escalating US-China trade war. China's economic growth goal for 2025 is 5%. This is unchanged from the previous year. The market is also encouraged by signs of improvement on the Chinese property market. This long-running crisis has dampened consumption and pushed down prices for steel and steelmaking ingredients over the last two years. Prices were lowered as investors remained cautious of any new measures that might be announced in the coming weeks, after Beijing pledged to cut its crude steel production this year by another 10% to combat overcapacity. Iron ore consumption will decrease if steel production is reduced. Coking coal and coke, which are both steelmaking ingredients, fell by 0.09% and 0.36 percent, respectively. The Shanghai Futures Exchange has seen a decline in most steel benchmarks. Hot-rolled coils lost 0.5%, rebar dropped 0.89% and wire rod was down 0.78%. Stainless steel gained 0.15%.
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London copper prices ease on US tariff worries, but dollar caps fall
London copper prices fell on Monday, despite some dollar weakness. This was due to uncertainty over U.S. trade policies. The price of three-month copper at the London Metal Exchange slipped 0.3%, to $9.588 per metric ton as of 0223 GMT. The Shanghai Futures Exchange's most active copper contract fell 0.5%, to 78290 yuan (10,797.73 dollars) per ton. In a Fox News Sunday interview, U.S. president Donald Trump declined to say whether the U.S. might face a recession due to stock market worries about his tariffs on Mexico Canada and China for fentanyl. Trump's trade policies have sparked fears of a trade war that could slow economic growth and increase prices for Americans who are still suffering from high inflation. ANZ Research stated that "dramatic shifts in U.S. foreign and trade policy will likely cause further disruptions to metal markets." "President Trump imposed a 25% tariff against imports of U.S. steel and aluminium. Copper is also likely to be taxed. In the short term, premiums will rise as the U.S. tries to adjust to dislocations in the physical markets." The dollar started the day low after significant losses due to a possible weakening of the U.S. labor market. Meanwhile, investors fled to safe havens because they were worried about a trade war, which led them to the yen, and Swiss franc. The greenback is less expensive to buyers of other currencies. Other metals include LME aluminium, which fell by 0.5%, to $2.692.5 per ton. Zinc also declined, falling 0.5%, to $2.873.5, and nickel, which fell 0.6%, to $16,405. Lead rose 0.2% to 2,023 while tin fell 0.5% to $32,455. SHFE aluminium fell 0.2%, to 20,845 Yuan per ton. Zinc dropped 0.9% to 23 845 Yuan. Lead slid by 0.3% to 17 430 Yuan. Nickel rose 1.3% to 131.970 yuan, and tin grew 0.08% to 262150 yuan. $1 = 7.2506 Chinese Yuan (Reporting and editing by Sumana Niandy).
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Seven & i talks to Couche-Tard about store sales as part of merger deal
Japan's Seven & i Holdings announced on Monday that it has begun talks with Canada's Alimentation Couche-Tard about a plan to sell stores that will set the stage for ACT's $47 Billion takeover bid. Stephen Dacus was named as the new CEO of 7-Eleven last week to help lead the company's recovery and to respond to Couche-Tard's takeover bid. Seven & i said that U.S. Antitrust Law would be a barrier for any deal. Both companies have about 20,000 convenience stores between them. Seven & i wrote to its shareholders Monday that it was proposing the two companies map out a viable divestiture and identify possible buyers. Seven & i reported that Couche-Tard had "recently accepted" the proposal to allow an evaluation of the Canadian firm's buyout bid. Separately Seven & i announced that Joseph Michael DePinto stepped aside as a board member of the holding company, while still remaining chief executive officer of 7-Eleven Inc. This week, top executives from Couche-Tard will visit Tokyo to talk to the media about their bid to take over. Artisan Partners is a U.S.-based investment firm that owns Seven & i Holdings. It said Sunday that it opposes the Japanese retailer's succession plan for the CEO and urged Couche-Tard to reconsider its takeover offer. (Reporting and editing by Tom Hogue, Stephen Coates and Rocky Swift)
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Oil prices continue to fall as investors fret about tariffs
Oil prices dropped on Monday, as investors' appetite for riskier assets was tempered by concerns about the impact of U.S. tariffs on global growth and fuel consumption, as well as a rise in production from OPEC+ producers. Brent crude dropped 25 cents or 0.4% to $70.11 per barrel at 0037 GMT, after closing Friday up 90 cents. U.S. West Texas Intermediate Crude was $66.76 per barrel, down by 28 cents or 0.4% after closing the previous session 68 cents higher. WTI fell for the seventh consecutive week, which is the longest losing streak in 2023. Brent also dropped for a third week running after U.S. president Donald Trump delayed and then imposed tariffs on key oil suppliers Canada, Mexico, and raised taxes on Chinese products. China responded by imposing tariffs on agricultural goods against the U.S., Canada and other countries. The IG analyst Tony Sycamore stated in a client's note that "Crude Oil was weighed last week down by U.S. Tariff uncertainty, U.S. Growth Concerns, the potential lifting U.S. Sanctions on Russia, as well as OPEC+ choosing to increase production." He said that despite the fact that the WTI price has recovered to $72, he still expects the weekly support to remain around $65. The oil prices recovered some of their losses on Friday, after Trump announced that the U.S. will increase sanctions against Russia if it fails to reach an agreement with Ukraine. Two people with knowledge of the situation said that the U.S. was also looking at ways to ease sanctions against Russia's energy industry if Russia agreed to end its conflict with Ukraine. OPEC+ (Organisation of Petroleum Exporting Countries, including Russia) has announced that it will increase oil production starting in April. Alexander Novak, the Russian Deputy Premier, said on Friday that OPEC+ might reverse its decision if the market is imbalanced. Trump stated last week that he was willing to negotiate a nuclear deal with OPEC-member Iran in order to stop the latter from acquiring such weapons, despite Iran's claim to not be interested. A spokesperson for the State Department said that Trump is conducting a campaign of "maximum press" against Iran, under which on Saturday the U.S. revoked a waiver allowing Iraq to pay Iran electricity. Ayatollah Khamenei, Iran's supreme leader, said on Saturday that his country would not be forced into negotiations. Reporting by Florence Tan, Editing by Christopher Cushing
US stock futures fall, but yen rises on China deflationary forces and trade war
Wall Street futures fell and the yen, a safe-haven currency, strengthened on Monday morning as deflationary forces in China exacerbated growth concerns from a slowing U.S. economic and a simmering trade war.
U.S. S&P500 e-mini futures were 0.7% lower, while Nasdaq Futures fell 0.9%.
The yen rose by 0.4%, to 147.395 U.S. dollars.
Bitcoin, the cryptocurrency, fell 7.2% on Friday to its lowest level this month of $80 085.42.
On Sunday, data showed that China's consumer prices index dropped at its fastest pace in 13 month in February. Meanwhile, producer prices deflation continued for a 30th consecutive month.
The first payrolls report for the month of January, which reflects President Donald Trump's policy, showed that the U.S. labour market had created fewer positions than expected. This continued a recent trend of weak readings for the largest economy in the world.
In a Fox News Sunday interview, Trump declined to say whether or not his tariffs against Canada, Mexico, and China would lead to a U.S. economic recession.
Kyle Rodda is a senior financial market analyst at Capital.com. He said that there are many possible reasons for the early weakness of markets.
Rodda stated that "most of all, I believe it is Trump's cavalier attitude to economic policy which has roiled sentiment."
"Unlike his first administration where signs of a slowdown in the economy or a market correction would lead to reversals on policy, he's genuinely focused on structural changes to the country's economy, even if that means sacrificing short-term economic growth." Reporting by Kevin Buckland, Editing by Jamie Freed
(source: Reuters)