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Oil prices drop as US and China concerns weigh
The oil prices fell on Monday due to the downgrade by Moody's of the U.S. government's sovereign credit rating, and data from China that indicated a slowdown in industrial production and retail sales. Brent crude futures for the front-month fell 35 cents or 0.5% to $65.06 per barrel at 0440 GMT, while U.S. West Texas Intermediate Crude dropped 26 cents or 0.4% to $62.23 per barrel. The front-month WTI contract expires Tuesday, and the more active July contract dropped 31 cents or 0.5% to $61.66 per barrel. Both contracts increased by more than 1% in the last week, after the U.S., China and other major oil-consuming countries agreed to a 90 day pause of their trade war, with dramatically lower import tariffs. Priyanka Sackdeva, a Phillip Nova senior analyst, says that Moody's downgrade has raised questions about the future of the U.S. economic outlook. China's data also indicates a bumpy path for any economic recovery. She said that the Moody's downgrade does not directly impact oil demand, but creates a more sobering market sentiment. Moody's has downgraded U.S. sovereign debt rating due to the growing amount of $36 trillion in the U.S. This could make President Donald Trump's tax-cutting efforts more difficult. China, which is the world's biggest crude oil importer has seen its industrial production growth slow in April. However, it was still better than what economists expected. Beijing and Washington agreed last week to reduce most of the tariffs they imposed on each others' goods. However, Trump's unpredictable attitude and the short-term truce continue to cast a dark shadow on China's export driven economy. It still faces 30% additional tariffs to existing duties. The outcome of the Iran-U.S. nucleus talks is still uncertain, which limits oil price losses. Steve Witkoff, the U.S. Special Envoy to Iran, said that any agreement between the United States of America and Iran should include an agreement that neither party will enrich uranium. This comment was quickly criticized by Tehran. Tony Sycamore, IG's market analyst, said that there was a great deal of hope in those discussions. "Realistically Iran is unlikely to agree to peacefully abandon its nuclear ambitions. It has always insisted that they are non-negotiable." "Iran is less likely to agree to peacefully give up its nuclear ambitions after Hamas, Hezbollah, and the Houthis have collapsed," he said. In Europe, tensions have risen between Estonia and Russia after Moscow detained an oil tanker owned by Greece on Sunday as it left a Baltic Sea port in Estonia. Baker Hughes reported that in the U.S. producers reduced the number of oil rigs operating by one to 473, the lowest level since January. They continued to focus their efforts on cutting spending, which could slow the growth of U.S. crude oil production this year. (Reporting and editing by Florence Tan, Emily Chow and Muralikumar Aantharaman)
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China's crude oil surplus surged in April, as refinery output dipped. Russell
In April, the amount of crude oil that was available in China for storage grew for a second consecutive month. Imports were relatively high while refinery processing declined. According to calculations based upon official data, China's crude surplus amounted to 1,89 million barrels a day (bpd), the highest since June 2023, and an increase from 1,74 million bpd last March. China, which is the world's largest crude importer and has been a major buyer of oil, has bought large quantities of discounted oil, mainly from Iran and Russia, in countries that are under Western sanctions. China does not reveal the volume of crude oil flowing in or out of its strategic and commercial stockspiles. However, an estimate can still be made by subtracting the amount processed from the total crude available through imports and domestic production. According to data released by the government on Monday, refiners processed 14,12 million barrels per day in April. This is down from 14,85 million barrels per day in March, and 1.4% less than one year ago. Crude imports in April were down from a 19-month high (12.11 million bpd) in March. Last month, domestic production fell slightly from its 14-year high (4.48 million bpd) in March. After subtracting the refinery output of 14,12 million bpd, there is a surplus 1.89 million BPD. The surplus crude was 880,000 barrels per day (bpd) in the first four quarters of the year. This is up from the 580,000 barrels per day for the first three months. China's refiners used up their inventories for the first time since 18 months in the first two-month period of 2025. They processed 30,000 bpd per day more than they could get from crude imports or domestic production. The massive surpluses of March and April, however, have reversed this earlier trend. Not all this excess crude has likely been stored, as some is processed in plants that are not included in the official data. Even if you ignore the gaps in official data, there is no doubt that China imported crude oil at a rate far greater than what it needed to meet its domestic fuel needs in March and in April. Options What is the likely trajectory of China's crude oil imports and refinery production in the next few months? Refiners have more options with the large amount of crude oil surplus that has accumulated in recent months. China's refineries are known to buy surplus crude oil when prices are low and reduce imports when prices rise too fast or too high. The increase in imports between March and April is largely due to refiners purchasing Iranian and Russian crude. This was partly because these grades are cheaper than other grades but also partially due to fears that U.S. sanctions against vessels and buyers could be effective. According to commodity analysts Kpler, China's seaborne exports to Russia in April were 1,38 million bpd and in March they were 1,22 million bpd, the highest two months since October of last year when 1.51 million tonnes bpd was imported. Kpler estimated that imports from Iran fell to 743,000 barrels per day (bpd) in April. This was down from 1,39 million bpd, the highest monthly figure since October. If they can find a way to avoid the U.S. sanction, it's likely Chinese refiners would continue to purchase Russian and Iranian crude. It would appear that if the volume of crude they can import from these two suppliers is limited, they will have enough in stock to avoid the risk of driving prices up by importing other sources. These are the views of a columnist who writes for.
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Indonesia searches for 19 missing people following a landslide in a gold mine in Papua
Officials said that 19 Indonesians were missing after heavy rainfall caused a landslide in a gold mining area of Papua. Abdul Muhari said that torrential rains caused a landslide in a small mine operated by local residents on the Arfak Mountains in West Papua Province late Friday night. He added that the landslide killed one person, injured four others and still left 19 people missing. Officials said that at least 40 rescuers, including police and military personnel, had been dispatched to search for missing persons. In Indonesia, accidents caused by illegal and small-scale mining have often occurred in areas where minerals are found in remote locations with conditions that are difficult to regulate. Yefri Sabuddin, head of the local team, said on Monday that the rescuers began the search only on Sunday, because it takes at least 12 hour for teams to reach the site. Yefri stated that "the damaged roads, mountainous tracks and bad weather hindered the rescue efforts." He said that the number of casualties may rise. In September of last year, heavy rains caused a landslide that led to the collapsed illegal gold mine. In July of last year, another landslide at a gold-mining site on the island of Sulawesi killed 23 people. (Reporting and editing by Ananda Teresia)
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MORNING BID EUROPE - So, China should consume less and the US more?
Wayne Cole gives us a look at what the future holds for European and global markets. A miss in China's retail sales has been the biggest disappointment of the day for Asia. It shows how far China still needs to go to move away from export-driven economics to one that is driven by domestic demand. Beijing doesn't seem to want to change this. It's clear that consumers in China aren't buying. Donald Trump tells Americans that they will have to do without dolls and pencils while promoting trade policies which indirectly force Chinese consumers to purchase more. Treasury Secretary Bessent of the United States was on hand Sunday to warn potential trade partners that if they don't offer deals in "good faith", they will be sent a letter with a tariff rate. He implied that the U.S. has limited time to deal only with 18 of its top trading partners and that the rest may be swept away by the wind. The effective tariff on U.S. imported goods is still around 13%. This is the highest level since the 1930s, and equates to a tax increase of 1.2% GDP. Trump wants Walmart to absorb this tax in their margins, rather than pass it onto voting customers. This week, it will be interesting to hear what Target, Lowe's, and Home Depot say about this idea. It reminds me of the kind of price setting that would occur in a Soviet style command-control economic system. Trump is relying on the tariff revenue to help fund his tax-cut package. This package has been approved by a House of Representatives Committee and could be voted upon later this week. The bill could add up to $5 trillion in debt to the U.S. over the next decade. Moody's, which was among the other rating agencies to downgrade the U.S. last week, cited this as a reason. Since the financial crisis when the subprime scandal tarnished the reputation of certain agencies and funds abandoned mandates for triple-A, ratings have not been as important. The news has sparked a reaction among foreign investors who are already displeased with the unpredictable nature of U.S. policies. Wall Street futures have fallen by 1% to 2% today. The yields on ten-year bonds are up by around 5 basis points, and the dollar has fallen a little. Euro bulls are relieved that the unexpected victory of a pro-EU candidate at the Romanian election, as well as the victories by centrist parties from Poland and Portugal, will bring them relief. Market developments on Monday that may have a significant impact Final CPI data from the EU for April Bank of Dallas president Lorie Logan and Bank of Minneapolis president Neel Kahkari are among the Fed speakers.
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Goldman is cautious about oil prices, as the prospect of increased Iranian supply weighs.
Goldman Sachs stated on Sunday that it will maintain a cautious outlook for oil prices as the pressure of likely increased Iranian supply and higher OECD Commercial inventories will counteract support from stronger GDP growth globally. The bank stated that it would maintain its Brent/WTI oil forecasts at $60/56 ($4 less than the forwards), for the rest of 2025, and $56/52 dollars ($8 less than the forwards), in 2026. Goldman Sachs increased its Iran crude oil supply forecasts for the second half 2025-2026 from 3.6 million barrels to 3.6 millions barrels per day following media reports that progress was being made on a possible U.S. Iran nuclear deal. Donald Trump stated on Thursday that a nuclear agreement with Iran is very near. Goldman Sachs stated that if a U.S. Iran nuclear deal is achieved and implemented sustainably, Iran's crude oil supply may gradually increase by several hundreds of thousands barrels each day. The bank stated that "Incorporating lower taxes and higher GDP we are raising our Q4-Q4 global oil demand growth forecasts for 2025 and 2020 by 0.3mb/d (and 0.1mb/d) and respectively to 0.6mb/d (and 0.4mb/d)," the bank added. Goldman Sachs predicts that Brent will fall to $40 by the end of 2026 in a less extreme scenario, with both a global economic slowdown and a complete unwinding of OPEC's cuts. Brent crude futures traded at $65,24 per barrel at 0326 GMT while U.S. West Texas Intermediate crude (WTI crude) was trading at $62,38 per barrel. (Reporting by Anushree Mukherjee in Bengaluru)
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London Copper eases after weak data on China demand
After data showing a slowdown in industrial output in China, concerns about the demand outlook for copper in China led to a slight decline in London's copper prices on Monday. As of 0355 GMT, the benchmark copper price on London Metal Exchange (LME), was down 0.1% to $9,438 per metric tonne. China's industrial production and retail sales growth slowed down in April, according to official data released on Monday. A trade war was threatening to slow the momentum of the second largest economy in world. Official data revealed that the country's new house prices were flat for the second consecutive month in April compared to a month before. This extended the trend of no growth to almost two years, despite the efforts made by policymakers to stabilize the sector. Scott Bessent, the U.S. Treasury secretary, said in interviews broadcast on Sunday that Trump would impose tariffs on trading partners who do not negotiate "good faith" in deals at the same rate that he had threatened last month. BMI, an arm of Fitch Solutions, said that Trump's unpredictable policymaking poses a persistent risk to the metal price forecasts for the next few months. Other London metals include aluminium, which fell by 0.5% to $2468.5 per ton. Zinc slipped 0.3%, to $2684.5; lead rose 0.03%, to $2,000, and nickel, which dropped 0.3%, to $15,595. Tin rose 0.2% to $22,875. The Shanghai Futures Exchange's (SHFE) most traded copper contract fell by 0.9%, to 77 630 yuan per ton ($10 758,93). SHFE aluminium fell by 0.1%, to 20,130 yuan per ton. Zinc dropped by 0.2%, to 22,480 yuan. Lead was down 0.4%, to 16,870, while nickel slid 0.5%, to 124100, and tin was down 0.3%, to 264760. ($1 = 7.2144 yuan) (Reporting and editing by Sumana Niandy)
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China's economic data is muted as iron ore prices fall
Iron ore futures fell on Monday due to tepid data from China, the top steel-making consumer. Also, there was uncertainty about demand in the near term. As of 0258 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 1.03% lower. It was 721.5 yuan (US$100) per metric ton. The benchmark June Iron Ore at the Singapore Exchange fell 0.56% to $99.5 per ton. Official data released on Monday showed that the growth of China's retail sales and industrial output slowed down in April. A trade war was threatening to slow this momentum. Official data released on Monday showed that property investment in China dropped 10.3% from the same period a year ago, after a 9.9% drop in the first quarter. Everbright Futures said that the hot metal production, which is typically used as a gauge of iron ore demand to determine supply, dropped 8,700 tons from one month to another to 2,45 million tons. The broker attributed this to blast furnaces being maintained. Steelhome data revealed that the total iron ore stocks across Chinese ports also increased, increasing by 0.26% per week to 137 millions tons on May 16. According to Mysteel, despite the two-week decline in production, it increased again on 15 May, as mills hoped for higher profits and more steel demand. Mysteel added that "the number of profitable blast furnace steel mills in China has continued to grow this week primarily due to the recovery in finished metal prices." Coking coal and coke, which are both steelmaking ingredients, were down by 2.43% and 2.17 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange have lost ground. Rebar dropped 1.03%, while hot-rolled coils weakened by 1.11%. Wire rod also fell 1.5%, and stainless steel slipped 0.19%. ($1 = 7.2153 Chinese yuan). (Reporting and editing by Mrigank Dahniwala; Reporting by Michele Pek)
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China's April crude steel production misses expectations
China's crude output of steel in April fell 7% compared to March. This was contrary to analysts' expectations, who expected a rise due to healthy profits and robust sales. However, production remained high. National Bureau of Statistics data released on Monday showed that the world's biggest steel producer produced 86.02 millions metric tons of crude iron ore last month. This is flat with April of last year and down from March's 92.84million tons. Calculations based on data suggest that the April volume suggests an average daily production of 2.87 million tonnes, compared to 2.99 million tons in March, and 2.86 millions tons in April 2024. A survey by consultancy Mysteel revealed that 56% of steelmakers made a profit in the month of April, up from 53% in the previous month. Analysts say that a decent demand in China, coupled with robust exports, helped to support production last month. Analysts say that steel mills are eager to increase production after suffering severe losses during the last two years, when demand was hampered by a prolonged property slump. This will likely boost output in May. China produced 345.35 millions tons of crude iron and steel in the first four month of 2025. This is an increase of 0.4% on the previous year, even though Beijing announced plans to restructure its giant steel industry through output reductions. Beijing has not revealed essential details, including the timing and the scale of output. The state-backed China Iron and Steel Association said in a report on May 16, that steel output controls would be most visible in the second half, depending on local government enforcement.
Nasdaq to confirm bear-market as Trump tariffs cause recession fears
Investors fled riskier assets as they feared that tariffs implemented by President Donald Trump would spark a global trade war, and plunge the economy into recession.
Trump slapped on Wednesday a 10% tariff base on all imports into the United States, along with heavy levies against tech production hubs like China, Taiwan, and Vietnam. This deepened a selloff that was triggered by fears about AI spending, which had sent Nasdaq to correction territory at the beginning of last month.
After China announced 34% additional tariffs on U.S. products, the index fell 3.8% last Friday.
The Nasdaq composite index is down around 20% from the record high closing price of 20,173.89. According to a commonly used definition, a bear market is defined as an index that closes at least 20% below its previous record high.
Tariffs and the fear of retaliation from other trading partners has weighed heavily on the markets. The benchmark S&P 500 Index has fallen 14.9% since its record closing high of 6,144.15, and is just 5% from confirming that a bear market exists. The Dow Jones was set to confirm a corrective move on Friday after a drop of 10% from its closing record high.
Apple, the world's largest manufacturer of consumer electronics, has seen its share price fall by 12.5% since U.S. tariffs were announced. Meanwhile, China, which is Apple's main manufacturing base and production base faces an aggregate tariff rate of 54%.
Other big tech stocks are also down.
Microsoft is down 4.3%, including Thursday's losses. Alphabet, the parent company of Google, is down 5.3%. Meta Platforms is down 12.6%, and Amazon has lost 13.3% over the same time period.
Tesla shares have fallen 37% since the close of Wednesday as the electric vehicle pioneer deals with protests over billionaire Elon Musk's political involvement and slowing sales. Nvidia, the chipmaker that has been the most successful in the AI boom, shed 11.2% as it grappled with concerns over slowing data center spending.
A Magnificent 7 ETF, which tracks the tech-heavyweights that have fueled Wall Street's record rise in recent years, has fallen about 27% since its all-time December high. (Reporting and editing by Sriraj Kalluvila, Bengaluru)
(source: Reuters)