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OPEC+'s crude production hike comes amid tepid Asian demand for oil: Russell
The crude oil markets pay attention to what OPEC+ has to say, but less so to what they actually do when it comes down to supplying the world's biggest commodity. Eight members of a wider group who had implemented voluntary production reductions met over the weekend to decide on a rise in output of 411,000 barrels per daily (bpd) for July, which would be the third consecutive month of this increase. Saudi Arabia, Russia, and the United Arab Emirates will each receive more than half the increase in production. There are still two questions to be answered. Will the eight parties to the agreement increase their output by the agreed-upon volumes? And if so, will they be able to find buyers for this additional oil? It's important to note that OPEC+ and most of the market talk about production. However, the key metric for setting the price is the export volume of crude oil. Saudi Arabia's exports were actually lower in April, at 5.75 million barrels per day, compared to March's 5,80 million barrels per day, according data collected by commodity analysts Kpler. Kpler data shows that Saudi Arabian exports jumped to 6.0 millions bpd by May and are expected even higher in June. This suggests that there's a delay between the output agreements and exports. The Russian crude oil exports by sea were 5,07 million barrels per day in March. They remained relatively flat at 5,12 million barrels per day in April before dropping to 4,82 million in late April. This shows that the increase in production agreed upon did not translate into increased shipments. INVENTORIES and DEMAND It is still unclear whether additional oil will be needed in Asia, the region that imports most oil. In a statement released after the May 31, OPEC+ reiterated that it believes the global oil markets have "healthy" foundations, "as reflected by low inventories." They have maintained this position since April, when they began to ease the voluntary production cuts of 2.2 million bpd. The Organization of Petroleum Exporting Countries' monthly report for the month of May shows that crude inventories rose by 21.4 millions barrels in March to 1.323 trillion barrels. This is 139,000,000 barrels less than the annual average between 2015 and 2019. The Organization for Economic Cooperation and Development inventories are below pre-COVID levels, and were rising even before OPEC+ began increasing output. Inventories are not as visible outside of the OECD, especially in China. China is the largest crude oil consumer worldwide. Although China does not disclose its commercial and strategic stocks, it is possible to estimate the surplus crude by subtracting the volume of refined oil from the total domestic production and inventory. China's oil surplus has risen in recent months. It reached 1.98 million barrels per day in April, its highest level since June 2023. This is up from 1.74million barrels per day in March. China has increased its oil imports since March and April, as it procured discounted cargoes of Iranian and Russian crude. But it seems that China's appetite has waned for crude in May, despite lower global prices. Kpler estimates that China's seaborne exports were 9.43 million barrels per day in May, down from 10.46 in April and 10.45 in March. ASIA IMPORTS China's lower appetite in May led to a decline in arrivals in Asia. Kpler estimates 24.2 million bpd. This is down from 24,85 million bpd. in April. Asia's crude oil imports by sea are estimated to be 24.45 millions bpd for the first five month of this year. This is down 320,000 bpd compared to the same period in the previous year. The demand for oil in Asia has not increased despite the drop of Brent crude futures by nearly 30% between mid-January to the lowest price this year, $58.50 per barrel on May 5. The impact of lower oil prices is still being felt. While demand could rise in the coming months due to lower prices, it's possible that economic uncertainty caused by President Donald Trump's tariff war has crimped fuel consumption. Brent futures rose by over $1 on Monday to $63.84 per barrel. The increase in prices indicates that the market was expecting a higher output from the OPEC+ eight-member group for July. The Trump trade war has created distortions that have a significant impact on the outlook for demand. There is uncertainty about the future of supply and whether OPEC+ top producers will seek to increase export volumes or compete for market share. These are the views of the columnist, an author for.
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ASX-listed James Hardie secures $3.5 billion credit to fund AZEK deal
James Hardie, listed on the ASX, announced Monday that it had obtained new senior credit facilities totaling $3.5 billion from a wide range of banks. This will support its operations as well as AZEK's acquisition in the United States. The multi-billion loan facility is divided into a revolving loan of $1 billion and a senior secured term loan (A) of $2.5 billion, which are split into two tranches. In March, the fibre-cement manufacturer offered to purchase the U.S. artificial flooring maker for $8.75billion. At the time, markets were worried about a slowdown of the U.S. residential sector. The new credit facilities have reduced the commitments to bridge facilities with certain lenders for the pending acquisition from $4.3 billion down to $1.7 billion. The U.S. housing stock is at a record high. A crackdown on immigration under President Donald Trump and tariffs are expected to further slow down construction. The building materials firm reported a decline in profit for the year, despite forecasting tepid growth of earnings. North America is the biggest market and profit generator. Investors raised concerns about the AZEK transaction in Australia. James Hardie announced that it had terminated the American Depositary Shares (ADS) Program, believing the program would be rendered unnecessary once the company listed its shares on the New York Stock Exchange. James Hardie ASX listed shares rose as much as 3.2%, to A$36.57. This was their highest level for over a week. They were trading at a 2.9% gain last time. Since the announcement of the March buyout, shares have lost over 8%.
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Soul Patts, a company from Australia, will take over Brickworks for $9 billion in a merger
The companies announced on Monday that the Australian investment company Washington H Soul Pattinson would buy out Brickworks, its building products subsidiary. This will create a new business worth A$14 Billion ($9.03 Billion), they said. Corporate governance experts in Australia have long criticised the complex ownership structure of both companies, which has existed for more than 60 years. Brickworks shareholders receive 0.82 shares of the new company with a value implied at A$30.28. This is a 10.1% increase over the closing price of the stock on Friday. The building products manufacturer will be valued at A$4.62billion ($3billion). Soul Patts' stock rose 9.2% in the early trading on Monday, but Its shares gained 17.7%. Brickworks, the largest gainer in the ASX200 index (down 0.1%), was on track to have its best single-day performance since September 2009. Soul Patts will own 72% of this new company. Brickworks shareholders would own 19% of the new company, with the rest being offered to new investors. Soul Patts shareholders will receive a share of the new company in exchange for each existing share. Soul Patts owns 43% of Brickworks and Brickworks 26%. Todd Barlow, the Chief Executive of Soul Patts, told investors at a Monday investor briefing that Soul Patts will see its free float increase from A$8.4 to A$12.6 Billion. Aitken Mount Capital has fully guaranteed the A$550,000,000 in shares that were pledged by Aitken Mount Capital. The deal will be approved by shareholders later this year. (1 Australian dollar = 1.5499 dollars) (Reporting and editing by Scott Murdoch and Rishav chatterjee, both in Sydney; and Cynthia Osterman and Stephen Coates in Bengaluru)
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Oil prices rebound after OPEC+ maintains same production increase in July versus the previous month
Monday, oil prices rose by more than $1 a barrel after OPEC+ announced that it would increase production in July in the same proportion as in the two previous months. This was in line with expectations on the market. Brent crude futures rose $1.19 or 1.9% to $63.97 per barrel at 0044 GMT, after closing 0.9% lower Friday. U.S. West Texas Intermediate Crude was $62.09 per barrel, up $1.30 or 2.14% after a 0.3% drop in the previous session. Both contracts were lower than 1% over the past week. The Organization of the Petroleum Exporting Countries (OPEC) and its allies have decided to increase output by 411,000 barges per day for July. This is the third time the group, known as OPEC+, has increased production by the same amount. The group was expected to discuss an increase in production. Harry Tchilinguirian, an analyst at Onyx Capital Group, wrote on LinkedIn that if they had gone with a larger surprise amount then Monday's opening price would have been very ugly. Brent and WTI oil futures already reflect the increase of 411,000 bpd in production. Analysts said that low fuel stock levels in the United States have caused supply concerns ahead of an expected hurricane season above average. In a recent note, ANZ analysts noted that the surge in implied demand for gasoline was "more encouraging" as it coincided with the beginning of what is considered the U.S. summer driving season. They added that the increase of almost 1 million bpd marked the third highest weekly gain in the past three years. The impact of the lower crude oil prices in the United States, which have hit production levels, is also being closely monitored by traders. all-time high 13 49 Mbpd was produced in March. Baker Hughes' weekly report said that the number of oil rigs operating in the U.S. dropped for the fifth consecutive week. It fell four to 461 - the lowest level since November 2021.
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Oil prices rebound after OPEC+ maintains same production increase in July vs. June
The oil price rose by more than $1 a barrel in the early Asian trading on Monday, after OPEC+ announced that it would increase production in July in the same way as in the previous two months. This was in line with the market expectations. Brent crude futures rose $1.06 or 1.69% to $63.84 a bar by 2244 GMT, while U.S. West Texas Intermediate Crude was at $61.95 a bar, up $1.16 or 1.91%. The Organization of the Petroleum Exporting Countries (OPEC+) and its allies have decided to increase output by 411,000 barges per day for July. This is the third consecutive month of the same amount. The group was expected to discuss an increase in production. Harry Tchilinguirian, an analyst at Onyx Capital Group, wrote on LinkedIn that if they had gone with a larger surprise amount then Monday's opening price would have been very ugly. Brent and WTI Futures, which fell more than 1% in the past week, already reflect this decision.
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Lutnick minimizes the impact of the tariff court decision on US-EU talks
In an interview conducted on Sunday, U.S. commerce secretary Howard Lutnick said that talks with the European Union were still ongoing despite the legal uncertainty surrounding U.S. tariffs. Lutnick was asked on "Fox News Sunday" about a report that quoted an unnamed EU official involved in negotiations, who claimed the uncertainty surrounding tariffs within the U.S. provided the EU with "extra leverage." Lutnick stated, "You cannot listen to stupid people making stupid comments." "All the countries who are negotiating with US understand Donald Trump's power and his ability protect American workers." In a broad ruling issued last week, a U.S. Trade Court blocked the majority of President Trump's new tariffs. The court found that he had exceeded his authority in imposing duties across-the board on imports coming from U.S. Trading Partners. The U.S. Federal appeals court suspended that ruling the next day, allowing tariffs to be implemented while the Trump administration appealed. Lutnick stated that the ruling may have cost a "week, but everyone came back to the table." Trump and his advisors said that on Friday, many countries have been in contact since the court decision and that talks are moving forward. In late May, the Republican president threatened to impose 50% tariffs on all European products by June 1. However, a few days later he delayed this date to July 9, to give more time for negotiations. Trump said also on Friday that he will increase tariffs for imported steel and aluminium to 50%, from 25%. The European Commission responded on Saturday by saying it may consider countermeasures. Kevin Hassett, White House economist and economic adviser to the President, said on ABC News "This Week" that U.S. national security was at risk due to China's steel production. Hassett stated, "We must show strength." We need a steel industry ready to support American defense. (Reporting from Ted Hesson, Washington; Additional reporting done by Doina chiacu; Editing performed by Caitlin Berkrot and Bill Berkrot.
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Lutnick minimizes the impact of the tariff court decision on US-EU talks
In an interview with Fox News Sunday on Sunday, U.S. commerce secretary Howard Lutnick said that talks with the European Union were still ongoing despite the legal uncertainty surrounding U.S. tariffs. Lutnick was questioned about a report that quoted an unnamed EU official involved in negotiations, who claimed the uncertainty surrounding tariffs on the U.S. market gave the E.U. "extra leverage." Lutnick stated, "You cannot listen to stupid people making silly remarks." "All the countries who are negotiating with US understand Donald Trump's power and his ability protect American workers." In a broad ruling issued last week, a U.S. Trade Court blocked the majority of President Donald Trump’s tariffs. The court found that Trump had overstepped his powers by imposing duties across-the board on imports coming from U.S. Trading Partners. The U.S. Federal appeals court suspended that ruling the next day, allowing tariffs to be implemented while the Trump administration appealed. Lutnick stated that the ruling may have cost a "week, but everyone came back to the table right away." Trump threatened in late May to impose 50% tariffs on European goods by 1 June, but a few days later he delayed this date to 9 July to give time for negotiations. Trump said also on Friday that he will increase tariffs for imported steel and aluminium to 50%, from 25%. The European Commission responded on Saturday by saying it may consider countermeasures. Kevin Hassett, White House economist and advisor to ABC News' "This Week," said that the U.S. must protect its steel industry from national security concerns in view of China's steel manufacturing. Hassett stated, "We must show strength." We need a steel industry ready to support American defense. (Reporting from Ted Hesson, Washington; Additional reporting provided by Doina Ciacu; Editing done by CaitlinWebber in Washington).
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Treasury's Bessent: Trump and Xi are likely to discuss the minerals dispute soon
U.S. Treasury Sec. Bessent believes that President Donald Trump will be speaking with Chinese President Xi Jinping soon about trade issues, including a dispute regarding critical minerals. Donald Trump accused China on Friday of violating a bilateral agreement to reduce tariffs and trade barriers for vital minerals. "What China does is that they hold back products which are essential to the industrial supply chain of India and Europe." Bessent told CBS' "Face the Nation" on Sunday that this is not the behavior of a reliable partner. "I'm confident that President Trump and Party Chairperson Xi will have a conversation, which will resolve this issue. The fact that some products are being withheld that were agreed to be released during our agreement could be a glitch or intentional. We'll know more after the President talks to the party chairman." Trump said that he was certain he would talk to Xi on Friday. China stated in April that Xi and Trump had not spoken recently. Bessent responded, "I think we'll be seeing something very soon." (Reporting and editing by Doina chiacu)
Wildfire smoke exposure may shorten lung cancer survival
A large California study, presented on Saturday at a major medical conference, found that exposure to wildfire smoke can increase the risk of lung cancer patients dying, especially among non-smokers. However, certain cancer treatments may mitigate this effect.
Researchers followed up on more than 18000 people diagnosed with non-small-cell lung cancer, the most common type of lung cancer. This was between 2017 and 2020. Researchers found that those who lived in areas with high levels of air pollution caused by wildfires in the first year following their cancer diagnosis had a higher risk of dying from the disease.
Researchers reported that patients who inhaled high levels of small particulate matter, with a diameter of less than 2.5 microns and can penetrate deep into the lungs, had a 20% higher risk of lung cancer death.
Researchers found that people with advanced cancer stage 4 who have never smoked are particularly affected. Researchers found that their risk of death from cancer increased by 55% if they were exposed high levels of air pollution caused by wildfires.
This study relied on advanced modeling to estimate the daily air quality of patients' homes, using data from satellites. weather models, smoke predictions, and air quality monitors.
Researchers also found that wildfire exposure did not have a significant impact on the survival of Stage 4 lung cancer patients who had smoked in the past and were being treated with immunotherapy drugs.
Researchers said that this surprising trend indicates that changes caused by smoking in the body could interact with certain treatments. Further study is needed to understand this phenomenon.
Smoke from wildfires is more toxic than air pollution. It contains soil particles, biological materials and traces of metals, plastics, and other synthetic materials.
Surbhi Singhal, a researcher at the UC Davis Comprehensive Cancer Center, Sacramento, California, said: "As wildfires are becoming more intense and frequent in California and elsewhere in the U.S. we need to develop targeted health strategies that protect cancer patients as well as those with other serious health issues." Reporting by Nancy Lapid, Editing by Bill Berkrot
(source: Reuters)