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Saudi oil price reduction unlikely to convince Asia buyers who are already satisfied, traders say
Saudi Arabian crude sold to Asia has seen its price drop the most in'more than 20 years, but the grade is still more expensive to lift compared to some Gulf rivals. This reduces the appetite for oil from the OPEC linchpin. On Monday, the world's largest exporter cut the??official selling price (OSP), for its flagship Arab Light oil to $1.50 per barrel below the average Oman and Dubai quotations for Asia. This is a $11 reduction from the previous months. The OSPs of its four other grades were also reduced by $11 per barrel. The sudden shift is due to the U.S./Iran interim agreement in June, which has led to more shipping through the Strait of Hormuz. This has also resulted in a resumption of loading of oil and lowered global oil prices. Oil traders stated that the sanctions waiver for Iran crude sales has increased competition among sellers. They also said that lifting crude from within 'the Gulf' still carried a certain risk due to the fragile truce between the U.S. The sharp monthly cuts in?Saudi OSPs were not surprising, as Middle Eastern spot grades traded at even greater discounts," said Vortexa Analyst Emma Li. Li stated that "weak Asian demand from China in conjunction with the waiver of sanctions on Iranian crude oil has intensified the competition between sellers and shifted market to buyers' favor." Saudi crude oil prices reached all-time-highs in May, after the U.S. - Iran?war stopped ships from sailing the Strait of Hormuz where a quarter of global oil supply used to flow. To boost demand, other Gulf producers such as Abu Dhabi National Oil Co., Iraq's SOMO and Kuwait Petroleum Corp. are offering crude oil at steep discounts. The National Iranian Oil Co. is attempting to revive the buying interest of former Asian customers, beyond independent refiners and China, during the 60-day U.S. sanctions waiver. SAUDI CRUDE IS 'WAY EXPENSIVELY MORE' Multiple sources from Asian refineries and trading companies said that August-loading Saudi Crude will cost a few extra dollars per barrel than other Gulf grades. Chartering a tanker for entry into the Gulf remains expensive. Why would I purchase more Saudi oil when I can get Upper zakum at a -$7 price? A source at an Indian refinery said this. A second trader stated: "Saudi crude oil inside the strait is way more expensive." He said that ADNOC's Upper Zakum Crude is being sold at $6-$8 per barrel less than Dubai's quotes for the transfer of oil from ship to ship at Oman's Sohar port. The cost of chartering a Very large Crude Carrier was $4-$5 per barrel. He said that the cost of loading a VLCC which can transport 2 million barrels at the Saudi port of Ras Tanura in the Gulf would be more than twice as much, resulting in a more expensive economics. One trade source estimated it would cost $15 per barrel more to transport oil from the Gulf than from outside. Some sources claim that the state oil company will continue to sell its crude on the spot market in order to compete with other Gulf producers. One trader stated that Saudi Arabia is trying to?prop up prices? by refusing a price war. The August OSP, he said, is higher than Dubai benchmark. Dubai swaps for Monday were about $3.70 per barrel lower. He said that Aramco could lose market share in Asia if they continue to hold on to their prices. Reporting by Florence Tan, Siyi Liu and Nidhi verma from New Delhi.
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New York Times Business News - July 7,
These are the most popular?stories from the New York Times business pages. The New York Times has not?verified?these?stories and cannot?guarantee?their accuracy. U.S. president Donald Trump will likely restore the rights of Turkey to buy F-35 stealth jets at the NATO summit, which would reverse a 7-year-old ban imposed by Trump himself. Canada announced on Monday that it has selected ThyssenKrupp to build a fleet of submarines in collaboration with the Norwegian, German and Canadian governments. This is a move towards reducing Canada's military and economic dependence on the United States. Walmart announced on Monday that it would be slashing the prices of beef, produce, drinks and other products, such as toys, summer clothing and grills. This was a move which U.S. president Donald Trump attempted to claim credit for on the 250th anniversary of his country. Samsung Electronics announced on Tuesday a second-quarter operating loss of 89.4 trillion South Korean won ($58.69billion) that was 20 times greater than last year's $3.09billion. This was due to a rise in demand for memory chip used in artificial intelligence data centers.
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MORNING BID EUROPE-Samsung boom, market gloom
Satoshi sugiyama gives us a look at what lies ahead for the European and global markets. Samsung Electronics, based in South Korea, shook the world with its 'outstanding' forecast of a 19-fold increase in operating profit for the upcoming'second quarter from a year ago and topping?its earnings over three years. Investors were still frightened: Samsung shares fell more than 8% while South Korea's benchmark stock index dropped 6.7%. Traders questioned whether AI demand, which is fueling these bumper earnings, can continue to deliver. MSCI's broadest Asia-Pacific share index outside Japan, which takes its cues from South Korea fell 1.7%. The moves are a warning of the volatility coursing through the equity markets, as the AI trade expands beyond semiconductors and equipment makers to include energy groups, copper miner and lithium suppliers. Michael McCarthy, Moomoo Australia's market strategist, said that investors still want to?exposed but are very nervous about valuations. Early European futures showed a decline of 0.34% in the Euro Stoxx 50, a 0.3% drop in German DAX and 0.15% increase for FTSE. S&P 500 E-minis rose 0.07%. Donald Trump, the U.S. president, will be in Turkey for a NATO summit. Before his arrival, European leaders plan to announce arms deals worth tens or hundreds of millions of dollars, showing their heightened commitment to regional defense. The yen rose 0.15% to 161.83 per dollar, a slight improvement from its previous low of?162. Traders are still alert for possible official intervention. Key developments on Tuesday that may influence the markets: - Bank of England releases its 'financial stability report' - German industrial output for May, British Halifax housing data in June, Canadian leading index and trade balance for May, U.S. Trade data for May. (Editing by Kate Mayberry).
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Stocks fall despite Samsung's upbeat forecast. The yen is weakening
Asian stocks fell on Tuesday, despite the fact that South Korea's Samsung Electronics had forecast a 19-fold increase in its second-quarter profits. Meanwhile, the Japanese yen was still pinned at a 40-year low amid speculation about intervention. Samsung Electronics,?the world's largest memory-chip maker, has estimated its operating profit for April-June at 89.4 trillion won ($58.44billion), marking the third consecutive quarter of record profits. South Korean shares fell by 4.1% while MSCI's broadest Asia-Pacific share index outside Japan dropped by 0.73%. Japan's Nikkei shed 1.08%. Investors are seeking refuge in this sector due to concerns about the economy, inflation and the future, including the worsening of tensions with Iran, according to Toru Suehiro. Chief economist at Daiwa Securities. Suehiro, in a recent note, said that while it would be better for share prices to move in line with economic conditions and real-world growth, these conditions don't change very quickly. He added that the markets are therefore likely to remain range bound. Wall Street's three major stock indexes closed higher overnight on hopes artificial intelligence would fuel a strong earnings season in the second quarter. The Dow Jones Industrial Average (.DJI) ended the day up by 0.29%. Meanwhile, the S&P500.SPX rose 0.72%. And the Nasdaq composite.IXIC increased 1.12%. SK Hynix, a South Korean chipmaker, launched a U.S. shares sale on Monday to?raise?43 trillion won ($28.07billion) and drew interest from up to $7billion of major investors. Broadcom announced that it has expanded its partnership with Apple for the development and supply of custom chips through 2031. INTERVENTION AT THE HORIZONT? The yen was near its lowest level in 40 years on the currency markets Tuesday, as traders became more confident to push it lower. There were no signs of Japanese intervention, but the possibility of a sudden yen buying move by Tokyo held losses at bay. Early Asia trade saw the yen struggling to stay below 162 dollars and fell to its lowest level against the British Pound since 2007, at 217.09 after slipping to a new overnight low. On Tuesday, Japan will hold an auction of 30-year Government Bonds. Akihiko Yokoo is a senior analyst at MUFG bank. He said that if the auction was weak, the government bond yields might rise further, and this could accelerate the selling of the yen. The dollar index (which measures the greenback versus a basket of currencies, including the yen, the euro and others) rose by 0.03% at 100.89. Meanwhile, the euro fell 0.01% to $1.1439. Oil prices climbed slightly, but gains were limited. Traders focused on supply and demand after the price of oil reached levels seen before the Iran war. U.S. crude climbed 0.54% to 68.92 per barrel. Brent climbed to $72.34 a barrel, up 0.49% for the day. Donald Trump announced on Monday that the United States will either "finish the deal" with Iran or reach an agreement. He also renewed his threat of military intervention as Tehran continues to show defiance after the funeral of the former Supreme Leader Ayatollah Ali Khamenei. Trump will be attending a NATO summit in Turkey this week. Fed watchers can get a glimpse of how Kevin Warsh, the new chair, will steer the central bank on Wednesday when the Federal Open Market Committee releases its first minutes. The yield on the benchmark U.S. 10 year notes increased 0.42 basis points to 4.483% from 4.479% at late Monday. Gold fell 0.49% on the commodity market to $4,143.59 per ounce. Silver dropped almost 1%, to $61.47 per ounce. Copper fell 0.21% to $13,375.00 per ton. (Reporting and editing by Jacqueline Wong; Satoshi Sugiyama)
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George E. Johnson died at age 99, the founder of a pioneering Black hair product company.
George E. Johnson died on Monday, aged 99. His eponymous Chicago-based company, which marketed brands such as Afro Sheen and Ultra Wave, radically changed the way Black women cared for their hair in the U.S. Johnson, who was reportedly born in a "sharecropper's" shack in Mississippi, and moved with his mother to Chicago at the age of 2, died in his condo in downtown Chicago from natural causes, according to his son John Edward Johnson. The New York Times reported, citing Johnson's second wife Madeline Murphy Rabb as the cause of death, that Johnson had died from a respiratory disease. In 1954, the Johnson Products Company was established to cater to African Americans’ evolving tastes in fashion, hairstyles and cosmetics at a time when?U.S. Companies and advertisers did not pay much attention to Black customers. Johnson founded the business with his first spouse, Joan Johnson. She died in 2019. The company grew to control nearly 80% in the Black haircare market by 1960. In 1971, it became the first Black owned company listed on the American Stock Exchange (now called NYSE American). The company's marketing campaign, which echoed the slogans and images of the Black Pride and Black Power movements of that era, helped the Chicago-based television music show "Soul Train" grow from a weekly broadcast to a nationally syndicated success. The roots of the company illustrate the challenges faced by minority entrepreneurs at the dawn of the civil right movement. Johnson, who began as a door to door cosmetics salesman, after dropping out high school, launched a business with a $250 bank loan he obtained by telling a loan officer that he needed the money for his family's vacation. According to the Chicago Sun-Times, and BlackPast.org an online encyclopedia dedicated to African American History, his first bank had turned down his request for a loan. I knew that this request for a vacation loan would not shake [the loan officer]'s belief that he is superior to me. Johnson's 2025 memoir "Afro Sheen" recounted that it would not challenge the stereotypes he held about Black men being subservient and unintelligent. From HAIR STRAIGHTENER to the AFRO The company introduced its first major brands as hair-relaxing products for the home, such as Ultra Wave for women and Ultra Sheen, to achieve the straight and wavy styles popular during 1950s and 1960s. Johnson's Company adapted to the Black Power movement by introducing its Afro Sheen Blow Out Kit in the late 1960s. Classy Curl is a product that allows consumers to achieve the "Jheri curl" perm, first popularized by Jheri Redding, a white hairdresser and chemist. Johnson's venture started to struggle as it was faced with competition from large cosmetics and hair care companies such as Revlon, who were looking to gain market share in the lucrative African American hairstyling industry. After the Johnsons' divorce, the ownership of the Johnsons' business changed several times before a major African American investment company acquired it in 2009 from Procter & Gamble.
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At least eight people are killed by storms in central China, as Typhoon Bavi threatens to strike offshore
State media reported that eight people died after a 'thunderstorm' hit central China’s Hubei Province. Forecasters warned of torrential rain in various parts of the country, which is home to 200 million people. Xinhua, citing Hubei emergency management, reported that winds up to 149 kph (92.5 mph) slammed the cities of Huangshi and Huanggang as well as?Ezhou, Xianning and Xianning over a four-hour period on Monday night. National?Meteorological Center said that the southeast region of Guangxi, eastern provinces of Jiangsu, and Shandong, should prepare for heavy rains of up to 250mm over the next 24hours, which could trigger landslides. Other?areas in China's north and south can expect tornadoes. Hubei and Shandong, two of China's most important agricultural provinces are affected by the heavy rains. Corn, peanuts, and vegetables are harvested later in the season, and are more susceptible to damage. Climate-driven weather extremes are causing tens billions in economic losses every year in China. Recent floods have flooded cities, disrupted industry and damaged crops. Meteorologists blame climate change for the extreme weather conditions. China is also 'on alert' for Super Typhoon Bavi which is'making its way across to the Pacific Ocean and towards Taiwan. The National?Weather?Service of the United States said that it was packing winds up to 180 mph on Monday as it moved across Guam and Tinian. Saipan, Rota, and Saipan were also affected. (Reporting and editing by Stephen Coates; Reporting by Joe Cash)
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Oil prices rise as the focus shifts from supply to demand
The oil prices rose on Tuesday but the gains were modest as traders focused their attention on supply and demand. Brent crude futures rose 28 cents or 0.39 percent to $72.29 and U.S. West Texas?Intermediate crude climbed to $68.84 per barrel at 0046 GMT. This is up 29 cents or 0.26 percent after having settled down on Monday to levels similar to those seen before the Iran war. Tim Waterer is the chief market analyst for KCM Trade. He said that although the steps taken towards recovering supply have reduced the immediate risk premium the market still remains cautious about putting too much faith in the stability and continuity of the current ceasefire given the ongoing nature of U.S. -Iran relations. Donald Trump announced on Monday that the United States would either "finalize" a deal with Iran, or "finish the task." He renewed his threat of military intervention as Tehran continues to show defiance after the funeral of the former Supreme Leader Ayatollah Ali Khamenei. Investors are closely monitoring the?talks' between the U.S.A. and Iran regarding the fate of shipping in the Strait of Hormuz, as well as the recovery of Gulf oil exports. Estimates say that the United Arab Emirates increased crude production above 3.8 millions bpd, their highest level since April 2020, and also above pre-Iran War levels. They did this after they left OPEC+ production quotas in May. We will be looking for early signs of demand, especially from China. Waterer said that the market has already priced in "a lot" of the good news about supply, and the next leg up in oil prices will depend on whether the physical reality matches optimistic headlines. On Sunday, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia agreed to increase the output target by 188,000 bpd for August. This is in addition to the similar increases made for June and July. Saudi Arabia has cut its official selling price (OSP) of its flagship Arab Light crude to Asia by $11, a drop of $11 from the previous months and the largest drop in over two decades.
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Australia's Lynas and South Korea's JS Link Sign Deal for Malaysia Magnet Factory
Lynas?Earths 'announced on Tuesday that it had signed a deal with South Korea JS Link for the development of a magnet plant in Malaysia. JS Link, a magnet manufacturer in?South Korea, and the Malaysian factory planned by JS Link will receive rare-earth material from the Australian producer until January 2038. This partnership comes after a magnet manufacturing agreement between the two companies in last year. Under the new?deal, JS Link is going to establish a permanent magnet factory in Kuantan (Malaysia) with 3,000 tonnes of neodymium, iron, and boron (NdFeB). Lynas stated that it will invest a total of?about A$50m ($34.78m) in JS Link's shares to help develop the facility. Lynas said that the magnets produced will be used to supply supply chains for automotive, wind power and electronics manufacturing in key markets such as Korea and Malaysia. The Kuantan magnet factory is expected to create 400 new jobs. Malaysia announced on Monday that it will review the $96 million contract signed between Lynas (the operator of one of the largest rare-earths processing plants in Southeast Asia) and the U.S. Department of Defense earlier this year. The four-year contract has been met with?protests. Some rights groups have accused Lynas that it supplied materials to U.S. made weapons used by Israel in its war on?Hamas? in Gaza. Malaysia, a Muslim majority country, has long supported the Palestinian cause. It does not maintain diplomatic relations with Israel.
Aluminium prices fluctuate as the market evaluates macros and supply
The price of aluminium fell on Tuesday, as the market continued to assess the supply situation and the broader macroeconomic outlook. Benchmark three-month aluminum on the London Metal Exchange was?down by 0.16% at $3,110.5 per metric ton as of 0300 GMT. It had?risen to a high of one week earlier in the day before falling in line with the rest of the base metal complex.
The Shanghai Futures Exchange's most traded aluminium contract increased 0.33% to 22,910 Yuan ($3,373.53) per tonne. This will be the fourth consecutive daily increase. Aluminium stabilized over the past week after being battered in the previous weeks by expectations of returning Middle East supply and the declining Gulf war risk premium. Some analysts warn that it will be some time before supply returns to normal. Physical stocks are also low. Total?stocks
Oil prices rose slightly but remained close to their pre-Middle East War levels. As market participants sought to find direction in a more tame macroeconomic environment, the broader base metal complex fluctuated as well.
Zinc, lead, nickel, and tin all fell on the LME.
The SHFE saw zinc gain 0.98% and lead lose 0.47%. Nickel was stable, while tin dropped 0.1%.
(source: Reuters)