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Concerns over plans to reopen the Strait of Hormuz cause oil prices to rise
Oil prices rose on Friday as concerns grew over the opening of the Strait of Hormuz. Iran and Oman proposed banning hostile vessels from the Strait of Hormuz, while imposing heavy fines for those who violated these rules. Brent crude futures rose by?80 cents, or 0.97 percent, to $83.29 per barrel at 0303 GMT. U.S. West Texas Intermediate Futures rose 64 cents or 0.83% to $77.93. Oil futures settled at $3.03 a barrel as Iran considered a bill that would ban U.S. vessels and Israeli vessels from entering the Strait of Hormuz, where a fifth of world oil and LNG was transported before the conflict began?at the end of Febuary. Prices dropped earlier in the week, as it appeared that a solution to the conflict was more likely. But benchmark Brent broke through $80 on Friday after having fallen below this level for the first since July 13. Both benchmarks are headed for a loss of 8% or more per week. Analysts say that events this week indicate that hostilities between Iran & the U.S. have not yet ended. The proximate cause is the reaction of oil prices to Iran's draft plan on transit conditions for Hormuz, which would prohibit U.S. and Israeli vessels and require that other 'hostile countries' pay compensation before passing, said Lin Ye. Vice president of commodities markets - Oil at Rystad Energy. Ye said that the price of oil is not indicative of a bad deal. It's a confirmation by the market that what emerges will be a managed/conditional route, and not a return to normal flow. According to Fars News Agency, an Iranian lawmaker stated that a parliamentary panel is currently reviewing a preliminary draft bill which would ban U.S. vessels, Israeli ships and other hostile vessels from the Strait of Hormuz and fine violators of proposed restrictions up 20% of their cargo value. According to a senior Iranian official, Iran wants fees between 5% and 7 % of the price of the cargoes of ships that use the Strait. Oman has proposed fees of around 3% while Washington is against any fees. Four industry sources said that the proposed deal was not feasible due to U.S. restrictions and restrictive insurance clauses. The market has been on a roller-coaster this week as a result of the signals about a possible Iran-Oman Transit Deal. However, as yet, it is not clear what the market needs to do to clinch the deal. Yemen's Houthis claimed to have carried out drone and missile attacks against "Saudi installations" in Marib, Hadramout and Yemen on Thursday. Donald Trump, the U.S. president, told reporters on Thursday that he believes the war will be over soon.
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The recovery of the Indian rupee is a delicate balance, as it depends on the return of oil risk before US job data
The Indian rupee will likely open lower on Friday, as a rise in crude oil prices is expected to weigh on the currency and fuel expectations that the Federal Reserve of the United States could raise interest rates. The U.S. July jobs report, which is due later in the day, should provide some clues about the state of the labor markets and the Fed's policy. Traders expect the rupee to open between 95.35 and 95.40, after closing at 95.22 against the dollar on Thursday. Brent crude rose about 4% Thursday, and another 1% during?Asian trades. It now stands at near $84 a barrel amid renewed concerns regarding access to the Strait of Hormuz. Iran and Oman proposed to ban vessels that were deemed hostile in the Strait of Hormuz. They also proposed imposing heavy fines on those who violated the rules. Oil prices have influenced the direction and sentiment of the rupee for many months. The Reserve Bank of India’s direct market interventions and policy actions have also played a major role in determining currency's trajectory. The rupee has managed to surpass the 95-per dollar mark. This was helped by Brent crude falling below $80 per barrel and RBI?dollar sales. Oil-related risks are back in the spotlight, and traders say the direction of the rupee will depend again on the amount of RBI support. You?will witness a rise in the dollar/rupee today throughout the day. Not just oil. A currency trader from a bank stated that there is an underlying demand for dollars at these levels. US JOBS - FED, DATA According to a survey by economists, the nonfarm payrolls in the United States are expected to have increased?by 80,000 during July after a rise of 57,000 last month. According to a survey of?economists, the unemployment rate will remain at 4.2%. The data comes amid a climate of increased uncertainty about whether the Federal Reserve is going to raise interest rates in response to inflation risks fueled by higher oil costs.
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Petrobras reports third-highest profit after Middle East conflict boosts oil prices
Petrobras, Brazil's state oil company, reported a 96% increase in net profit for the second quarter, to 52.4 billion Reais. This is the third highest result in its history. Petrobras earnings exceeded the 44.7 billion reais predicted in an LSEG survey. In a separate filing, the company said it would pay out 17.4 billion reais or 1.35 reais for each share in dividends and equity interest to its shareholders. In a press release, Fernando Melgarejo, Chief Financial Officer of Petrobras said: "The operational records that we achieved in this second quarter resulted in one of the best quarterly financial results ever recorded by Petrobras." Earnings before interest, tax, depreciation, and amortization (EBITDA), which are adjusted earnings, grew by 79.6% over the past year, to 93.8 billion reals, exceeding analysts' expectations of 90.1 billion reals. Even though the results exceeded market expectations, Petrobras' earnings have been negatively affected by the decisions taken by the Brazilian government to keep fuel prices low following the?closure of Strait of Hormuz which sent fuel prices in the country up. The firm paid the government 4.9 billion reais between April and June due to a 12% tax on diesel and crude oil exports, which was introduced following the U.S. Iran conflict. The company's cash flow was affected by a delay in receiving 9,7 billion reais in government subsidies as a result of participating in fuel price control. Petrobras has invested $5.3 billion over the last quarter, an increase of almost 20% compared to the same period in 2017. Petrobras said that 82% of this sum was allocated to "exploration and production" to maintain the upward curve in production. Last week, the company released its quarterly report on production and sales. It reported higher oil and natural gas production as well as lower fuel imports, as the Middle East conflict pushed the refineries to the limit. Analysts had predicted 160.4 billion reais for the quarter, but net revenue actually grew by 42.3%.
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Concerns over plans to reopen the Strait of Hormuz cause oil prices to rise
The price of oil continued to rise on Friday, amid concerns about the opening of the Strait of Hormuz.?Iran and Oman suggested that vessels considered hostile be banned from the strait, with heavy fines for those who broke the proposed rules. Brent crude futures rose by 99 cents or 1.2% to $83.48 per barrel at 0010 GMT. U.S. West Texas Intermediate Futures rose by 85 cents or 1.1% to $78.84. Oil futures settled at $3.50 a barrel as Iran considered a bill that would ban U.S. vessels and Israeli ships from the Strait of Hormuz, where a fifth of world oil and liquefied gas was transported before the conflict began in February. Prices dropped earlier this week as it became more likely that a solution to the conflict would be found. However, benchmark Brent broke through $80 on Friday after falling below the mark for the first since July 13th. "Markets already saw at least one'short-lived agreement earlier this year. So confidence that a new deal would fully restore normal movements of tankers remains low," said Tim Waterer. Chief market analyst at KCM Trade noted that skepticism has put a ceiling under prices. According to Fars News Agency, an Iranian lawmaker stated that a parliamentary panel is currently reviewing a preliminary draft bill which would ban U.S. vessels, Israeli ships and other hostile vessels from entering the Strait of Hormuz and fine violators up to 20% of their cargo value. According to a senior Iranian official, Iran wants fees between 5% and 7% of the cargo price from ships that use the Strait. Washington wants to charge no fees, whereas Oman wants fees of around 3%. Four industry sources said that the proposed deal was not feasible due to U.S. restrictions and insurance clauses. Yemen's Houthis claimed to have carried out drone and missile attacks on Saudi "deployments" in Marib, Hadramout and Yemen on Thursday. Donald Trump told reporters on Thursday that he believes the war will be over soon.
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Oil gains on Iran worries; stocks fall before Friday's US employment data
The?major indexes slid on Thursday ahead of the Friday U.S. jobs data, and oil prices rose on worries about U.S. access to the Strait of Hormuz. Iran's semi-official Fars news agency, citing an Iranian lawmaker, reported that a parliamentary committee in Iran is reviewing a draft bill that would prohibit U.S. vessels, Israeli ships, and other "hostiles" from transiting through the Strait of Hormuz. The draft bill could impose fines up to 20 percent of the value of a ship’s cargo for violating proposed restrictions. Brent crude futures increased $3.04 or 3.83% to $82.49 per barrel. U.S. West Texas Intermediate futures rose $2.07 or 2.75% to $77.29. Oil prices rising are bad for the economy and consumers. Jake Dollarhide is the chief executive officer at Longbow Asset Management, located in Tulsa in Oklahoma. "You'll see higher oil prices and?higher rates of interest." Three of the four major U.S. indexes closed lower while another global index was also down. Data from the United States showed that the number?of Americans filing for unemployment benefits increased a little last week. Layoffs, however, dropped to a 2-year low in July. This is consistent with a stable labour market. Investors are preparing for Friday's release of the Labor Department’s July employment report. Many economists, traders and investors still expect the U.S. Central Bank to increase interest rates next year unless inflation improves. The Dow Jones Industrial Average dropped 464.02 points or 0.85% to 53,885.10. The S&P 500 declined 13.59 points or 0.18% to 7,709.96, and the Nasdaq Composite lost 15.09 points or 0.06% to 26,348.35. MSCI's global stock index fell 3.81 points or 0.33% to 1,145.73. The pan-European STOXX 600 rose by 0.16%, and reached another record high. Media and telecoms stocks were the main drivers. DOLLAR RISE, YIELDS U.S. Treasury Yields increased as oil prices rose due to concerns over U.S.-Israeli access to the Strait of Hormuz, and ahead of Friday's jobs report. Treasury yields dropped earlier this week, on the belief that a deal to open the Strait would keep oil in check. This was a major focus for the markets, given the risk that higher prices of oil could reignite an already high consumer price inflation. The yield on the benchmark U.S. 10 year notes increased by 5.67 basis points, to 4.674%. As a result of safe-haven positions, the U.S. Dollar rose against Japanese yen. Dollar last gained 0.44% against the yen, at 158.45. This was its third straight session of gains, after dropping to 155.20 on Monday, the lowest since early May. The yen rose after U.S., and Japanese governments intervened on the market last Friday.
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James Hardie posts a 54% increase in quarterly profits and raises its annual earnings forecast
James Hardie increased its annual earnings forecast on Friday. It cited synergies from its acquisition of AZEK and manufacturing efficiencies, as well as strong execution across its businesses. The company also reported a 54% increase in its first-quarter profits. As affordability restrictions in the?U.S. grew, pressure was put on the company's Siding & Trim division. New construction activity slowed and distributor inventories were high. The company's previous forecast was $5.25 to $5.41 Billion. It now expects a net sales of $5.56 to $5.72 Billion in 2027. It also raised its forecasted adjusted earnings before taxes, depreciation, and?amortization for the year from $1.45 billion up to $1.50billion. CFO Ryan Lada stated that the increase in guidance was supported by synergy realisation, manufacturing cost improvement and the company’s enhanced go to market strategy. The James?Hardie adjusted net income for the three-month period ending June 30 rose to $209.3 millions, up from $136.1million a year earlier. The Siding & Trim segment's first-quarter?net sale rose by 34%, to $859.8 millions. This was driven by the exteriors business of?AZEK and a 20% increase in organic?growth as North American fibre cement volume returned to growth. James Hardie acquired the decking and exteriors company AZEK, based in the United States, for $8.75 billion in 2025. Contributions from this business were not included in the first quarter of the previous year.
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MP Materials beats expectations with sales growth and US price support
MP Materials, a rare?earths manufacturer, reported on Thursday?second quarter results that 'beat analysts' expectations because of rising sales and the price support agreement it has with the U.S. Government. In after-hours trading, the company's stock rose 2.2% to reach $48.52. Rare earths is a grouping of 17 metals which are used to produce magnets, which turn energy into motion. Washington's deal with MP in July 2025 was designed to loosen China’s grip on these materials which are used for weapons, electric cars and many electronics. MP Materials owns the only rare earths mining operation in North America, and it processes these 'critical minerals' in California. The company also built a magnetic facility in Texas. The company's net loss for the quarter ending June 30 was $20.3 million or 11 cents per share. This compares to a loss of $30.9million or 19cents per share in the previous quarter. Aside from startup costs and one-time items MP was even for the third quarter. According to IBES data provided by LSEG, analysts had expected a loss per share of a penny. The U.S. Government paid $17,6 million in price protection to boost the results. Since last year, the company has received $100.9 million. Last year, MP stopped delivering rare?earths for processing to China. This halted a major source?of?revenue. It has been?boosting processing in California, and its quarterly revenue from this processing nearly quadrupled up to $94.4 millions. MP Materials is bringing its Texas magnet plant online. The?company reported $16.5 million of magnetics revenue during the quarter and $7.5 millions in adjusted magnetics profits. The company reported that it had signed an agreement during the quarter for the supply of gadolinium - 'one of the rare earths' - to an unnamed U.S. customer. In June, President Donald Trump reported capital gains ranging from $100,001 up to $1,000,000 on investments made in MP Materials shares last year. (Reporting and editing by Stephen Coates; Ernest Scheyder)
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Trump announces trade measures to protect solar and semiconductor materials
The White House on Thursday set a series a price 'floors' and a?tariff of 15% on products made from polysilicon. This raw material is used to make semiconductors and solar panel. The U.S. president Donald?Trump issued a proclamation pursuant to Section 232 of Trade Expansion Act of 1961 in order to protect domestic polysilicon manufacturers from Chinese 'competition. Polysilicon is an ultra-pure silicon that sits at?the start of the semiconductor and solar manufacturing supply chain. Solar panels are made by assembling solar cells, which are manufactured from silicon wafers. The White House announced that the trade protections would take effect on 4 December. In a White House report, the President set import prices at $21 per kilogram of?polysilicon and $100 per kilogram of polysilicon wafers and ingots. He also set a $0.22 per watt price for solar cells, and $0.38 for solar panels or modules. The Commerce Department is authorized to create a program of incentives for companies who invest in factories that produce polysilicon and derivative products. First reported by was the administration's intention to implement a hybrid system that combines a minimum import price and tariffs.
Oil prices continue to rise despite US job losses, Asian stocks pause over US jobs
The Asian stock market waited with bated breath for the U.S. employment data, which could be pivotal in determining if Federal Reserve will raise interest rates next month. Meanwhile, rising oil prices reminded investors that Middle East tensions are far from being resolved.
The broadest MSCI index of Asia-Pacific stocks outside Japan was flat for the week and down by 0.4%. Japan's Nikkei fell 0.9%, despite being set to rise by 1.2% on a weekly basis.
South Korea's KOSPI fell 0.5%, and was down by 5.0% for the entire week. This is the seventh consecutive week that KOSPI has declined. The index doubled during the first half of this year due to the fervent demand for AI-related?chip stocks. China's CSI 300 rose by 0.2%.
Investors are now focused on the U.S. payrolls data due later that day. This could be crucial for interest rate outlook. Forecasts predict a gain of 80,000 jobs in July, following a 57,000 increase in June. The unemployment rate is expected to remain at 4.2%.
Markets cannot decide how the Federal Reserve will move next month. A rate increase is seen as a coin flip.
Michael Feroli is the chief U.S. economics at JPMorgan. He said that yields and inflation are still key risks for stocks. We expect Friday's NFP to trade as "good news, bad news" print. A strong jobs number will reinforce higher prices and increase pressure on rates.
In contrast, stocks may react positively to a weak payrolls report, as yields are easing and expectations of policy shift towards a more dovish direction, said Feroli.
Nasdaq Futures were unchanged, while S&P500 futures fell 0.1%. Stock futures for the entire region are down by 0.2%, indicating a lower opening on European bourses.
OIL CLIMBS AGAIN
The tensions in the Middle East have risen again since Yemen's Houthis, who are a major oil exporter, attacked Saudi Arabia. Riyadh warned that coordinated attacks from the Houthis, and Iran-backed Iraqi militas would be imminent.
Brent crude futures rose 1% overnight to $83.38 per barrel after a?3.8% jump. The price of Brent crude futures was still expected to fall 7.5% on a weekly basis and remain well below the recent peak of $102 per barrel two weeks ago.
Iran is examining a draft bill which would prohibit U.S. vessels, Israeli ships and other "hostiles" from transiting through the Strait of Hormuz. The draft bill could impose fines up to 20% of the value of a ship’s cargo for violating proposed restrictions.
Treasury yields rose as oil prices increased. The 2-year note yield remained at 4.2496% after gaining 7 basis points overnight. Meanwhile, the 10-year yield remained at 4.6757% despite a 5 bps increase overnight.
After a bouncing start to the day, the dollar remained steady in Asia on Friday.
The dollar was trading at 158.51 Japanese yen after rising by 0.4% overnight to surpass the 200-day avg. of 158. The U.S. employment report may determine the next moves for the yen, after the historic currency market intervention by Japan and the U.S. last week sparked a sharp rise.
Spot gold increased 0.1%, to $4,243 per ounce. Spot silver rose 0.5%, to $61,78 per ounce. (Reporting and editing by Shri Navaratnam.)
(source: Reuters)