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Oil prices drop as traders evaluate US tariffs and OPEC+ production increase
The oil prices fell on Tuesday, after a rise of almost 2% the previous day. Investors analyzed new developments regarding U.S. Tariffs and a larger-than-expected OPEC+ production increase for August. Brent crude futures fell 21 cents to $69.37 per barrel at 0041 GMT. U.S. West Texas Intermediate Crude fell 24 cents to $67.69 per barrel. U.S. president Donald Trump began informing trade partners on Monday, including major suppliers South Korea, Japan, as well as smaller U.S. importers such as Serbia, Thailand, and Tunisia that the U.S. will begin imposing sharply higher tariffs starting August 1. This marks a new phase of his trade war, which he started earlier this year. Trump's tariffs caused uncertainty on the market, and there were concerns that they could negatively impact the global economy, and therefore, oil demand. Prices have been supported by the fact that there are signs of a strong demand, especially in the U.S. Last week, AAA data showed that a record number of Americans are expected to travel over 50 miles (80km) during their Fourth of July holidays. The U.S. Commodity Futures Trading Commission published data on Monday that showed money managers had increased their net-long positions in futures and options contracts for crude oil in the week leading up to July 1st. Concerning supplies, the Organization of the Petroleum Exporting Countries (OPEC+) and its allies agreed on Saturday to increase production by 548,000 barrels a day in August. This is more than the 411,000 bpd they increased for the previous three months. Goldman Sachs analysts expect OPEC+ will announce a final increase of 550,000 bpd for September during the next meeting, on August 3. Analysts said that the actual increase in production has been lower than what was announced so far, and the majority of the supply comes from Saudi Arabia. (Reporting and editing by Christian Schmollinger; Stephanie Kelly)
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Aura Minerals, a Canadian company, prepares to list on Nasdaq and targets a $2.1 billion valuation
Aura Minerals, a Canadian gold and copper mining company, is planning to list its shares at the Nasdaq. This could give the company an estimated value of $2,14 billion. If the company priced its public offering at a price near to that of July 4th's closing price on Toronto Stock Exchange, it could raise approximately $210 million. Foreign companies often list in the U.S. for higher valuations and to tap into deeper capital markets. Investors were rattled by uncertainty over President Donald Trump's policies on tariffs, and new listings were frozen. But sentiment has changed as new listings are gaining momentum. The proceeds from Aura’s U.S. Offering will be used to strengthen the business, including additional liquidity and financial flexibility in support of its strategic growth initiatives. Aura Minerals expects to list under the Nasdaq symbol "AUGO" after selling 8.1 million shares. The gold and copper miner was founded in 1946 and focuses on the development of projects and operations throughout the Americas. The joint bookrunners of the offering are BTG Pactual, Itau BBA and BofA Securities. Reporting from Prakhar Srivastava, Bengaluru. Editing by Shashesh Kuber
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Dollar gains on stocks as Trump prepares 25% tariffs against Japan and South Korea
The dollar gained strength on Monday after U.S. president Donald Trump announced sharply increased tariffs against goods imported from Japan, South Korea, and other countries. This is the latest development in U.S.'s trade war. The yields on longer-dated U.S. Treasury bonds rose. Trump began Monday telling his trade partners, including Japan and South Korea, that higher U.S. Tariffs will begin August 1. Trump in April set a 10% cap on all so-called reciprocal Tariffs with trading partners until July 9, to allow time for negotiations. Only two agreements have been reached, with Britain, and Vietnam. Adam Sarhan is the chief executive officer of 50 Park Investments, a New York-based investment firm. He said: "Markets like certainty and the news of today increases the level uncertainty. Hence the selloff." Tariffs will likely increase prices and slow growth. However, uncertainty about the final policies could be more of a drag on business as they postpone making decisions. Next week, S&P 500 companies are expected to start reporting their results for the second quarter. The Dow Jones Industrial Average dropped 422.17 points or 0.94% to 44,406.36, while the S&P 500 declined 49.37 points or 0.79% to 6,229.98, and the Nasdaq Composite lost 188.59 or 0.91% to 20,412.52. U.S. listed shares of Japanese automakers fell. Toyota Motor was down 4%, and Honda Motor by 3.9%. Tesla shares also fell 6.8% when CEO Elon Musk revealed the formation of the "American Party," a new political party in the United States. MSCI's global stock index fell by 5.80 points or 0.63% to 919.93. The pan-European STOXX 600 closed at 0.44%. The yield on benchmark U.S. 10 year notes rose 5.7 basis points in the last day to 4.397%. The yield on the interest rate-sensitive two-year note rose 1.9 basis to 3.901%. It was the dollar's increase against the yen that was most noticeable. The dollar was up by 1.09% to 146.130. The euro fell 0.57%, to $1.172 after a rally of over 13% this year. The dollar index (which measures the currency in relation to six major counterparts) rose by 0.517%, reaching an all-time high of 97.467. The minutes of the Federal Reserve's last meeting are due this week. Investors are trying to determine how many times they expect the Fed to reduce interest rates in this year, after Thursday's jobs data showed that employers had added more jobs than forecast. The oil price rose on signs of strong demand, which offset the impact from a higher than expected OPEC+ production increase for August as well as concerns over possible tariff effects. Brent crude futures gained $1.28 or 1.9% to settle at $69,58. U.S. West Texas Intermediate Crude gained 93 cents, or 1.4% to settle at $67.33. (Reporting from Caroline Valetkevitch, New York; Additional Reporting by Lawrence White, London; and Wayne Cole, Sydney; Editing and rewriting by Cynthia Osterman and Stephen Coates.)
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Study: Abandoning EU 2035 zero emission car target could risk 1,000,000 jobs
A study released by the campaign group Transport & Environment on Tuesday showed that the European Union could achieve its 2035 target of clean cars and implement policies to help the transition. T&E stated that if no industrial strategy is implemented and the target of 2035 of all new cars and vans in the EU not emitting carbon dioxide is not met, it could lead to the loss of one million jobs in the auto industry and two thirds of the planned battery investment. Why it's important European automakers are already facing high costs on their home markets, and they have to compete with their Chinese and U.S. competitors in the electric vehicle market. Now, President Donald Trump has imposed 25% tariffs on imports of automobiles. This has forced many manufacturers to withdraw their forecasts for the year 2025. In May, after heavy lobbying by the industry, the European Parliament backed a softer approach to the EU CO2 emission targets for cars, vans, and trucks. However, it has not yet changed the regulation that bans the sale of fossil fuel cars before 2035. KEY QUOTES In a statement, Julia Poliscanova Senior Director of Vehicles & Emobility Supply Chains, T&E said: "It is a moment that will make or break Europe's Automotive Industry as global competition for the lead in production of electric vehicles, batteries, and chargers, is immense." By the Numbers The advocacy group stated that if the 2035 target is maintained and policies to increase domestic EV production were implemented, the contribution of the automotive value chain to the European economic system would grow by 11% by the year 2035. The report added that the loss of jobs in the vehicle industry could be offset by creating more than 100,000 new jobs in battery manufacturing by 2030, and 120,000 jobs in charging by 2035. The report stated that a weakening of the goal, coupled with a lack of comprehensive industrial policy could reduce the value chain's contributions by 90 billion euro ($105.5 billion), by 2035. $1 = 0.8529 Euros (Reporting and editing by Milla Nissi-Prussak in Gdansk)
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BP and Shell will study the hydrocarbon potential of three Libyan oilfields
Oil Majors BP & Shell have agreed to work with Libya's National Oil Corp. (NOC) on hydrocarbon exploration and production at three Libyan fields, NOC announced in a Monday statement. Libya, Africa's largest oil producer and a Member of the Organization of the Petroleum Exporting Countries(OPEC), has experienced disruptions to its oil production due to disagreements between armed factions about oil revenues. These disputes have led to the shutdown of oilfields. Foreign investors are wary about investing in Libya. The country has been in chaos since Muammar Gadaffi was overthrown in 2011. Oil giants such as Eni, OMV and BP resumed their exploration activities in Libya after a decade-long hiatus. NOC reported that BP would reopen its Tripoli office during the fourth quarter of 2025. The company also announced that it had signed a Memorandum of Understanding with BP for the purpose of conducting studies to evaluate the potential hydrocarbon production and exploration in the Messla oilfields and Sarir as well as some nearby exploration areas. Separately the state oil company said that it had agreed with Shell to conduct a technical and economic feasibility report to develop Atshan and other fields owned entirely by the NOC. According to the NOC's website, the national oil production in the last 24 hours reached 1.385 millions barrels per day.
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TSX drops as trade jitters continue
Canada's main index of stocks closed lower on Sunday, following U.S. stock markets, after U.S. president Donald Trump announced new tariffs against Japan, South Korea and other countries, causing trade worries among Canadian investors. The benchmark S&P/TSX Composite Index closed at 27,020.28, down 15.88 points or 0.06%. The TSX index fell earlier in the morning as investors waited for updates on developments in trade. The index reached new all-time records every day of the week, and it also hit another record on Monday. Wall Street's main indexes ended lower following Trump's announcements on tariffs. Greg Taylor, Chief Investment Officer at PenderFund Capital Management, said: "It is more of a warning, that these friendly countries are getting close to tariffs. And that's probably just a reminder that Canada hasn't yet gotten out of the woods." "We are starting to realize that the (worries about tariffs) have not completely disappeared, and that there will still be some uncertainty regarding earnings. Investors say, "Well, we have had such huge gains." Why don't you take a break and enjoy your profits?" Energy stocks also fell by 0.6% and healthcare stocks dropped 0.3%. Gold pared its losses following Trump's tariff announcement, causing some investors to seek out safe-haven investments. ATS Corporation, the largest individual stock on the TSX index, fell 8% as Andrew Hider, the CEO, is leaving the company. Sandstorm Gold rose 6.2% when Royal Gold announced that it would acquire the company for approximately $3.5 billion. Horizon Copper has gained 67.7% since Royal Gold announced that it had acquired the company for $196 million in cash. Reporting by Nivedita Bali in Toronto, Twesha Dhikshit and Sukrit Gupta from Bengaluru. Editing by Sahal Muhammad and Richard Chang.
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US rules could increase oil and gas production in US West
The U.S. The U.S. Interior Department proposed rule changes on Monday to allow energy companies more easily to combine oil and natural gas output from several leases using the exact same well pad. This could save the industry up to $1.8 billion annually, according to the department. The proposed rule, which would primarily affect onshore oil-and-gas drilling in the U.S. West would ease limitations on so called commingling. According to the Department, this would improve operations. The Interior Secretary was directed to approve the commingling of applications by President Donald Trump’s tax-cut law. The current U.S. Bureau of Land Management regulation restricts commingling of leases with identical mineral ownership, royalties rates and revenue distribution. Interior has said that the requirements are a barrier in areas of the West with complex mineral ownership. According to the Department, this change will allow oil and gas companies to track production more accurately and calculate royalties that drillers must pay to the federal and tribal governments for fossil fuels produced in public and tribe lands. Interior Secretary Doug Burgum stated in a press release that the current rules were designed for a different time. These updates will allow us to manage public resources more effectively, promote responsible energy production and ensure that taxpayers and tribal members receive every dollar owed. Western Energy Alliance is pushing for more access to commingling. They say it's one of the fastest ways to increase production in the United States. Many projects have been stalled for years because the Interior Bureau of Land Management has not approved federal and private oil in consolidated projects. Trump's "energy dominance policy" pushes the administration to reduce regulations on fossil fuels. Many of these regulations are meant to slow down climate change and pollution. (Reporting and editing by Deepababington, Timothy Gardner)
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Demand outweighs OPEC+ production increase
On Monday, oil rose by more than 1% due to signs of strong demand. This was despite a higher-than expected OPEC+ production increase for August and concerns over the possible impact of U.S. Tariffs. Brent crude futures were up 79 cents or 1.2% to $69.08 at 02:05 pm. ET (18:05 GMT). U.S. West Texas Intermediate Crude was trading at $67.29 up 29 cents or 0.4%. Earlier in the session, benchmarks fell to $67.22 ad $65.40 respectively. Dennis Kissler is senior vice president for trading at BOK. Travel industry statistics revealed that a record number of Americans were set to travel by road and air for the Fourth of Independence holiday. The Organization of the Petroleum Exporting Countries (OPEC+) and its allies agreed to increase production in August by 548,000 barrels a day, a higher rate than the 411,000 bpd they increased for the previous three months. RBC Capital analysts led by Helima Crockt said in a report that the OPEC+ agreement will return nearly 80% (2.2 million bpd) of the voluntary cuts made by eight OPEC producers to the market. Analysts said that the actual increase in production has been less than expected and the majority of the supply comes from Saudi Arabia. Saudi Arabia raised its August price of its flagship Arab Light crude on Sunday to a record high for Asia. Goldman analysts anticipate OPEC+ will announce a final increase of 550,000 bpd for September during the next meeting, on August 3. The oil industry was also under pressure when U.S. officials announced a delay in the start of tariffs, but did not provide any details about changes to rates. Investors worry that higher tariffs will slow down economic activity and reduce oil demand. Treasury Secretary Scott Bessent announced on Monday that the United States would make several announcements about trade in the next 48-hours. He added that his email inbox was flooded with last-ditch proposals from countries looking to reach a tariff agreement before July 9. Jeffrey McGee is the managing director of Makai Marine Advisors. Geopolitical uncertainty continued. Yemen's Iran aligned Houthis claimed on Monday that they had destroyed a cargo vessel in the Red Sea with remote-controlled boats and rockets, their first attack on high seas of the year. Israeli Prime Minister Benjamin Netanyahu will meet Trump at the White House Monday. Israeli officials are also holding indirect talks with Hamas to reach a ceasefire in Gaza and a deal for hostage release mediated by the United States. According to an interview published on Monday, Iranian President Masoud Pezeshkian believes that Iran can solve its differences with the United States by dialogue. However, trust will be a problem after U.S. attacks and Israeli attacks against his country. (Additional reporting by Florence Tan, Ahmad Ghaddar and Marguerita Choy; Editing by Nick Zieminski, Cynthia Osterman and Margueritachoy)
Stocks rise after ADP is weak, and gilt yields soar on Finance Minister's worries
Global stock markets were essentially unchanged following U.S. labor market data that showed a surprising weak reading. Meanwhile, British government bond yields soared amid speculation over the future of Britain's finance ministry.
ADP's National Employment Report shows that private payrolls fell by 33,000 last month, after a downwardly-revised 29,000 job increase in May. This is well below the 95,000 jobs expected by economists surveyed by.
The data is released ahead of the government's payrolls report on Thursday, but there is very little correlation between them.
The FedWatch Tool of CME says that after the release of the data, the market expectations for a rate cut in July by the U.S. Federal Reserve increased to just over 27 percent, up from 20,7 percent the previous session.
"I see it as a mixed bag. One hand, wages are still high, which is important for the U.S. economic system. If this is not seasonality, it is the beginning of an overall trend for white collar jobs, said Ross Mayfield. Investment strategist at Baird, Louisville, Kentucky.
Wall Street saw a modest increase in the S&P 500, Nasdaq, and Dow, thanks in part to a rebound in Tesla, after its stock fell 5.3% on the previous day. Tesla shares rose 4.5% last after the electric carmaker reported its quarterly deliveries.
The Dow Jones Industrial Average rose 138.79 or 0.69% to 20,341.01. The S&P 500 gained 13.84 points or 0.22% to 6,211.70, and the Nasdaq Composite increased 138.79 or 0.69% to 6,211.70.
Investors were looking for signs of a trade deal ahead of U.S. president Donald Trump's tariff deadline of July 9. The pan-European STOXX 600 rose by 0.09%.
The yield on the benchmark U.S. 10 year note rose 4.8 basis points, to 4.297%. However, the yields of the shorter-term notes fell after the ADP report.
The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve fell by 0.9 basis points, to 3.768%.
After Finance Minister Rachel Reeves, who appeared visibly upset in Parliament, had scaled back the government's plans to reduce benefits, yields on British government bonds surged. At one point, they jumped nearly 23 basis points. This was the highest since October 2022.
The yield of the 10-year Government Bond, or gilt was up by 11.5 basis points to 4.572%.
The sterling fell 1.17%, to $1.3584. This was the biggest percentage decline since April 7.
The dollar index (which measures the greenback versus a basket currencies) rose by 0.44% at 97.06, and was on course to end a nine-day streak of declines.
Trump announced on social media that the U.S. had struck a deal with Vietnam on Wednesday. He said previously that he would not consider extending the deadline to negotiate trade agreements, despite negotiations with Japan, his top trading partner, failing to progress. However, he still expected to reach a deal with India.
Investors are also looking for progress on Trump's tax and spending bill, which will add $3.3 trillion to national debt and cut social safety net programs. The bill is now heading to the House of Representatives. Republican leaders have scheduled a procedural vote at 1300 GMT on the bill.
Brent crude rose 0.18% to $67.23 a barrel as Iran halted its cooperation with the U.N. Nuclear Watchdog. A surprise increase in U.S. oil supplies capped gains.
(source: Reuters)