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US oil prices rise after US military strikes against Iran
U.S. Oil Prices jumped by?nearly 3 percent in early trade Wednesday, continuing the previous session’s gains. This was after a series of strikes launched by the U.S. Military against Iran. The U.S. military's actions raised concerns about a fragile ceasefire. U.S. Central Command said on Tuesday that the strikes against Iran were a response to Iranian attacks on commercial vessels that were?transiting the Strait of Hormuz?. As of 2215 GMT, U.S. West Texas Intermediate Crude was up $1.95 or 2.8% at $72.39 per barrel. WTI closed 2.8% higher on Tuesday, before continuing to rise?in the post-settlement trading after the U.S. revoked its general licence authorizing the sale of Iranian oil following the Iranian attack on commercial ships. Qatar accused Iran of attacking the vessels. This included the massive 'Qatari LNG tanker Al Rekayyat which reported that it was struck by a drone, causing a fire to start in its engine room. The crew was safe and being evacuated. Maritime security sources confirmed that a Saudi-flagged crude?tanker was also damaged near Oman. It is believed to be the supertanker Wedyan. The cause of the incident was not immediately clear. The recent developments have re-ignited concerns about disruptions in tanker traffic along the Strait of Hormuz. Reporting by Yuka Obaashi; editing by Jamie Freed
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Canada and Teck agree on potential investment of C$400M for strategic metals production
In a Tuesday statement, Canada's Natural Resources Ministry announced that the government could invest up to C$400m ($281.93m) in Teck Resources to expand the facility Trail Operations in British Columbia to produce strategic metals. Tim Hodgson of Canada's Natural Resource Minister said that because there is no equity that can be purchased, the investment would be made in a facility in Trail whose value will fluctuate with production. The agreement includes a framework agreement for an "offtake agreement" from the Canadian Government to secure Teck's rights for future production of rare-earth metals like germanium, gallium, and antimony. These?metals can be used in many industries, including infrared optical systems in semiconductors and defense. Hodgson stated that "this?investment" will enable them to'significantly increase production. This will allow us share our essential minerals with our alliance partner." Teck plans to invest C$850m to maintain and enhance Trail Operations' critical minerals processing capability. The government investment is part of that plan. Hodgson said in a statement that providing capital to a mining giant like Teck gives companies the confidence they need to invest in critical Canadian mineral mining and processing project, even in volatile global markets. Canada and its G7 partners have been stockpiling a variety of?strategic metals? that are currently controlled by China. Canada announced earlier this year an agreement to purchase graphite for a predetermined price from Montreal's Nouveau Monde Graphite and sell it on to its allies. Over the last two years, the G7 nations have proposed several steps to combat China's dominance in rare earths - difficult-to extract metals that are used in high-tech weapons, cell phones and EVs. China controls over 90% of this metal and implemented export controls last year as a retaliation to U.S. Tariffs. Teck Resources is the biggest producer of germanium on North American soil.
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United States revokes license which authorized Iranian oil exports
On Tuesday, the United States revoked a general license which authorized the sale of Iranian crude oil. A U.S. official had warned that Iran's actions in the Strait of Hormuz are "wholly unacceptable" and that they will be met with consequences after attacks on tankers along the strategic waterway. The announcement led to an increase of more than 5% in oil prices. The U.S. Treasury announced that it would allow Iran to wind down its oil transactions until July 17, which were allowed under the license now revoked. An official from the United States said that despite this latest escalation, negotiators were still working in good faith towards a final deal with Iran. In a recent report, the British Navy-affiliated?UKMTO reported that the U.S. action was taken after three tankers had reported being?hit by unknown projectiles near and in the Strait of Hormuz over the past few days. No immediate response from Tehran was received, nor any claim of blame. The attacks and U.S. reaction 'threaten to place a fragile diplomatic agreement between Washington and Tehran in a precarious position, raising the?risk that further retaliation could derail negotiations for a wider agreement. Unnamed U.S. officials said that initial indications indicated that Iran fired on three commercial vessels. Both sides were working towards a deal which included restrictions on Iran's oil exports and relief from certain sanctions. The Strait of Hormuz is a narrow waterway that connects Iran and Oman. It's one of the most important energy chokepoints in the world, as it accounts for a fifth of all global oil consumption, and a large volume of liquefied gas shipments pass through every day. A prolonged disruption would likely increase the cost of fuel and put pressure on both consumers and government. Oil exports are a major source of revenue for Iran. They provide billions of dollars in hard currency to fund government expenditures and support an economy that has been weakened by U.S. sanctions. Tehran has been able to increase oil sales in recent years - mainly to China - despite the restrictions. A renewed effort to curb these exports would put Iran's finances under additional strain, and could affect its ability to maintain domestic programs and regional initiatives. Reporting by Steve Holland and Jarrett Renshaw, with additional reporting from Ismail Shakil and Timothy Gardner; editing by Costas Pittas and Michelle Nichols.
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Canada has agreed to a possible C$400-million investment by Teck for strategic metals production.
In a statement released on Tuesday, Canada's Natural Resources Ministry announced that the government could invest up to C$400,000,000 ($281.93,000,000) in Teck Resources to expand the facility Trail Operations in British Columbia to produce strategic metals. The agreement includes a framework agreement for an offtake contract from the Canadian Government to "secure rights" for Teck's production of rare earths metals like germanium, gallium, and antimony. These metals are widely used in industries like infrared optical systems in defense, semiconductors and radar systems. Teck plans to invest C$850m to maintain and improve critical minerals processing capacity at Trail Operations. The Canadian Natural Resources Minister Tim Hodgson stated that the plan was designed to be practical, giving companies the confidence they need to invest in critical Canadian mineral mining and processing project even in volatile global markets. Canada and its 'Group of Seven' partners have been stockpiling a variety of strategic metals that are currently controlled solely by China. Canada announced earlier this 'year an offtake deal, in which it would buy graphite at a fixed price from Montreal-based 'Nouveau Monde Graphite' and sell it to allies. Over the past?two-years, the G7 countries have proposed a number of measures to combat the dominance of China in rare Earths - difficult-to extract metals that are used in high-tech weapons, cell phones and EVs. China controls a whopping 90% of this metal and implemented export controls in response to U.S. Tariffs last year. Teck Resources is the biggest producer of germanium on North American soil.
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Official: US revokes license which authorized Iranian oil exports
A U.S. official announced on Tuesday that the United States was revoking the 'general license' that allowed the sale of Iranian oil. The official warned that Iran’s actions in the Strait if Hormuz are "wholly unacceptable", and that they would be met with consequences following the attacks on tankers along the strategic waterway. In a recent report, UKMTO (an agency affiliated with the British Navy) said that three tankers had reported being hit by unknown projectiles near and in the Strait of Hormuz. Tehran has not yet made any comment or claimed responsibility. An official from the United States said that despite this latest escalation, negotiators continue to?work in good faith towards a final deal with Iran. The attacks and the U.S. reaction threaten to undermine a fragile diplomatic agreement between Washington, D.C. and Tehran. This raises?the possibility that further retaliation may derail negotiations for a larger agreement. The 'potential escalation' comes at a time when?both sides were working towards a deal which included limitations on Iran’s nuclear program, and relief from certain sanctions including restrictions on oil imports. The Strait of Hormuz is a narrow waterway that connects Iran to Oman. It's one of the most important energy chokepoints in the world, as it passes through a large volume of LNG shipments and a fifth of global oil consumption each day. A prolonged disruption can increase?energy costs and put pressure on governments and consumers already dealing with higher fuel prices. Oil exports are a major source of revenue in Iran. They provide billions of dollars of hard currency to fund government spending and bolster an economy that has been weakened for years by U.S. sanctions. Tehran has been able to increase oil sales in recent years - primarily to China - despite restrictions. If Iran continues to export these products, it could face additional financial pressure and be unable to maintain its domestic programs or regional activities. (Reporting by Steve Holland and Jarrett Renshaw, additional reporting by Daphne Psaledakis, editing by Costas Pitas).
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Gold prices fall as Middle East tensions drive oil prices up. Fed minutes are awaiting.
Investors watched the Middle East hostilities that pushed oil prices higher and waited for the minutes of the U.S. Federal Reserve meeting in June to get a sense of the outlook for monetary policy. By 2:00 pm ET (1800 GMT), spot gold had fallen 0.5% to $4,144.36 an ounce. U.S. gold futures for delivery in August settled at $4,157.40 per ounce, down 0.3%. Bullion?hit a 2-week high on monday as markets lowered expectations of interest rate hikes in the near future after a weaker-than-expected U.S. jobs report last week. Peter Grant, senior metals analyst at Zaner Metals and vice president, said that "higher for longer seems to be the most likely Fed path." According to the CME FedWatch tool, traders still expect a 60% chance of a rate increase in September. The minutes of the Fed meeting, which are scheduled to be released on Wednesday, have now caught our attention. Two tankers were damaged in the Strait of Hormuz, and Iran announced that there would be no peace talks until U.S. president Donald Trump stopped his threats to restart war. The news prompted a slight increase in oil prices, which fueled inflation fears as fuel prices continue to rise. When inflation worries keep interest rates high, gold is often under pressure. This reduces the appeal of non-yielding investments such as bullion. China's central banks has maintained its gold purchasing for the 20th consecutive month. Its?reserve reached 75.44 millions fine troy pounds by the end of June, an increase from 74.96 one month earlier. Hong Kong has launched a gold central clearing system on Tuesday and revived the gold futures market as it aims to become a regional bullion reserve hub. Silver spot fell 1.7%, to $61.00 an ounce. Palladium rose 0.9% and platinum gained 1.2%. (Reporting by Sukanya Mitra in Bengaluru; Editing by Diti Pujara and Jonathan Ananda)
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As NATO meets, oil prices are pushed up by tensions over the Hormuz region and AI concerns on Wall Street
Investors' worries about the?sustainability? of an AI rally coupled with renewed Middle East tensions drove oil prices up. The Nasdaq Composite, which is dominated by tech stocks, was down 0.61% at midday. Meanwhile the S&P 500 dropped 0.26% while the Dow Jones Industrial Average fell 0.33%. MSCI's global stock index was down by 0.49%. Samsung Electronics, the world's largest memory chipmaker, forecasted a 19-fold increase in its April-June operating profits to 89.4 trillion dollars. Rather than reassuring shareholders, the results triggered a sell-off in Samsung and rival SK Hynix. Investors are increasingly questioning whether artificial intelligence-related profit growth can be sustained in the event that supply bottlenecks for key components like memory chips ease. Kathleen Brooks said that these results are a record, but they have not placated the markets. Instead, the strong results have led to concerns about the AI chip boom's sustainability. A report stating that the Chinese startup DeepSeek is developing its own AI chip could further weigh on markets. This would reduce their reliance on major chipmakers for training and running its AI models. SK Hynix will?join the Nasdaq in a?$28 billion listing this week, one of the largest new share sales worldwide, as the chipmaker tries to capitalize on the AI boom. The Philadelphia SE Semiconductor Index was down 4% at midday and 13% in the past month. As reported, the tentative calm in the Middle East suffered a test on Tuesday when Qatar accused Iran of an attack against two tankers in Strait of Hormuz. One tanker was evacuated by its crew, and another tanker was at risk of explosion. Oil prices rose after returning to levels similar to those seen before the war. U.S. crude oil rose by 2.83%, to $70.49 per barrel. Brent was up 3.03% for the day to $74.17 a barrel. NATO MEETS in Turkey NATO leaders met Tuesday in Turkey, where European leaders announced arms deals worth billions of dollars. Donald Trump, the U.S. president, expressed his frustration over what he called the insufficient support of the U.S. and Israeli war against Iran. He also re-issued calls for the 'U.S. Greenland should be taken back from Denmark. Trump stated on Monday that the U.S. will either "finish the deal" with Iran, or reach an agreement. He renewed his threat of military actions as Tehran continues to show defiance following the funeral of the Supreme Leader Ayatollah Ayatollah Khamenei. The dollar index, which measures the U.S. dollar against six other currencies, rose 0.12% to reach 100.98. Meanwhile, the euro fell 0.16% versus the dollar. The yen remained above its 40-year lows and last traded at 161.92 to the dollar. The traders were on high alert for any possible intervention by the Japanese authorities. The yield on the benchmark 10-year U.S.?notes rose 4.41 basis points, to 4.523%, ahead of Wednesday's release of the minutes from the Federal Open Market Committee. Investors may get a better idea of how the new Federal Reserve Chair Kevin Warsh will approach monetary policy. (Additional reporting from Satoshi Sugiyama, in Tokyo, and Amanda Cooper, in London. Editing by Mark Potter and Kevin Liffey.
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New York Fed: US consumers' expectations of near-term inflation rise in June
?U.S. In June, consumers were less concerned about the near-term inflation rate even though their concerns about gas prices had decreased. They also felt more optimistic about current and future finances. This was revealed in a report by the New York?Federal Reserve on Tuesday. The regional Fed bank stated in its latest Survey of Consumer Expectations that inflation in a year's time was expected to reach 3.7% in the month of June. This would be the highest reading in the last nine years. In May, the figure was 3.5%. Three years hence, inflation was predicted to reach 3.3%. This would be the highest since June 2022. Comparatively, the May reading was 3.1%. The central bank officials who are most interested in inflation five years from now continue to watch it closely. It is expected to remain at 3%. The war in the Middle East has caused a spike in energy prices, which is putting pressure on the inflation rates. Personal Consumption Expenditures Prices Index increased 4.1% year-over-year in May, compared with a 3.8% increase in April. The war has slowed the flow of vital energy products, as well as other goods. This has led to sharp price increases for commodities like gasoline and diesel. The drop in energy costs following the preliminary U.S. Iran peace agreement is expected to reduce price pressures. Less Concern About Gasoline Prices In a TV interview on Tuesday, New York Fed president John Williams stated, "Inflation remains too high." He added, "I feel a bit more optimistic about the near-term outlook for inflation because of the declines in energy prices that we will see." Fed officials are closely monitoring inflation expectations, as they believe that public perceptions of where prices will be heading have a significant impact on where the price pressures are currently at. The public is largely in agreement that inflation will eventually return to the target set by the central bank due to the stability of long-term expectation readings. Fed Chairman Kevin 'Warsh stated in a press conference last month that "the members of (Federal Open Market Committee), are unambiguous, and unanimous: this Committee will deliver... price stability." The Fed left its benchmark interest ?rate unchanged in the 3.50%-3.75% range following the end of its June 16-17 meeting, although a number ?of policymakersindicated a need for higher rates later this year to control inflation. New York Fed's survey revealed that, while the expected inflation path near-term has?modified, the public remains less concerned about gasoline prices, which, in June, moderated to levels last seen in August 2022. In the report, it was also revealed that in June the public had improved its outlook for the labor market and were more optimistic about their current and future personal finances. The public's views on credit access are mixed.
Oil prices spike, Wall Street falls as tensions between the US and Iran increase
Late on Tuesday, oil prices spiked on renewed fears of a fragile peace between the U.S. Stocks fell on investor concerns about the?longevity of the AI rally. The Nasdaq Composite, which is heavily tech-heavy, suffered the biggest decline of 1.16%, to 25,818.69. The Dow Jones Industrial Average fell 0.25%, to 52,925.15. And the S&P 500 declined 0.45% to 7,503.85.
MSCI's global index of stocks fell by 0.64%, to 1,121.20. The selloff started after Samsung Electronics's blockbuster results, despite the fact that the company forecasted a 19-fold increase in operating profit from April to June at 89.4 trillion dollars ($58.4 billion), marking the third consecutive quarter of record-breaking?operating profits for the world’s largest memory chipmaker. The results did not reassure investors but rather triggered a sell-off in Samsung and rival SK Hynix. Investors are increasingly questioning whether artificial intelligence-related profit growth can be sustained in the event that supply bottlenecks for key components like memory chips ease. A report that Chinese startup DeepSeek is developing its own AI chip was also weighing heavily on the markets. This could help it reduce its dependence on other major chipmakers for training and running its AI models. The market pessimism grew after Qatar accused Iran of an attack on vessels in the Strait of Hormuz. One LNG tanker was forced to evacuate crew members due to the threat of explosion. As part of a move to reduce tensions after the three-month conflict that disrupted global energy supply, the White House revoked the license it had granted Iran to export oil. Both nations are in negotiations to reach a final settlement. The oil prices rose 3% on Tuesday and continued to rise after the settlement. U.S. crude oil was up 5.3% at $72.20 per barrel. Brent reached $76.09, an increase of 5.9%.
Josh Young, Chief Investment Officer at Bison interests said that the U.S. sanctions against Iran are a major escalation. "Iran could respond with force and further limit exports through Strait of Hormuz. This would put oil prices at $100+ again in the short term."
NATO MEETS TURKEY NATO Leaders met in Turkey on Tuesday. European leaders announced arms deals worth billions of dollars. U.S. president Donald Trump, however, expressed frustration over what he called 'insufficient support for U.S. and Israeli war against Iran. He also resurfaced his calls for the U.S. gaining control of Greenland away from Denmark.
NATO allies were expected to discuss plans for a multinational naval mission in the Strait of Hormuz on the sidelines of this summit, along with Gulf Arab Foreign Ministers. Trump stated on Monday that the U.S. will either reach a deal or "finish the task" with Iran. He renewed his threat of military actions as Tehran shows defiance after the funeral of Supreme leader Ayatollah Ayatollah?Khamenei.
The dollar index, which measures the U.S. dollar against six other currencies, rose 0.21% at 101.07 while the euro fell 0.24% when compared to the dollar. The yen was hovering above its 40-year low and was at 162.06 dollars per yen. The traders were on alert for any?intervention, given the signs of a possible change in strategy from Japanese?authorities.
Before the release on Wednesday of the minutes from the Federal Open Market Committee’s last meeting, the yield of benchmark U.S. 10 year notes had risen 7.01 basis points. Investors may get a better idea of how the new Federal Reserve Chair Kevin Warsh will approach monetary policy. (Editing by Mark Potter and Kevin Liffey; Additional reporting by Satoshi sugiyama in Tokyo, and Amanda Cooper in London)
(source: Reuters)