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Demand for oil is skewed by Trump's tariffs
The oil prices fell on Thursday, as market participants viewed the latest tariff announcements from U.S. president Donald Trump as a threat against global economic growth. However, signs of strong U.S. gas demand helped to limit losses. Brent crude futures fell 3 cents to $70.16 per barrel at 0401 GMT. U.S. West Texas Intermediate Crude lost 6 cents, to $68.32 per barrel. In a recent note, Kpler, an analytics firm, noted that the geopolitical risks premiums had diminished with the Israel-Iran ceasefire. After a public spat, Trump threatened to impose a 50% penalty on Brazil's exports to the U.S. Trump had announced tariffs for copper, semiconductors, and pharmaceuticals. His administration also sent tariff letters to Iraq, the Philippines, and other countries. These letters were added to more than a dozen that his administration issued earlier this week, including to U.S. powerhouse suppliers South Korea, and Japan. Minutes released by the Federal Reserve on Wednesday show that policymakers are still concerned about inflationary pressures caused by Trump's tariffs. Only "a few" officials said they thought interest rates could drop as early as this month. The cost of borrowing increases with higher interest rates, and the demand for oil decreases. The Energy Information Administration reported on Wednesday that the rise in crude oil stocks and declines in gasoline and distillate stockpiles last week helped support prices. The EIA reported that gasoline demand increased 6% last week to 9.2 millions barrels per day. J.P. Morgan stated in a note to clients that global daily flights averaged 107,600 during the first eight days in July. This is an all-time record. Flights in China reached a peak of five months, and port and cargo activities indicated a'sustained growth' in trade activity from last year. The note stated that "year to date, the global oil demand has grown by an average of 0.97 million barrels a day, which is in line with our prediction of 1 million barrels a day." Tony Sycamore is an analyst with IG. He said that there are doubts about the increase in production quotas recently announced by OPEC+, since some members have already exceeded their quotas. He said that "others, such as Russia, are unable meet their targets because of damaged oil infrastructure." OPEC+ producers will approve a big increase in output for September as they finish both the unwinding and the United Arab Emirates moving to a higher quota.
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MORNING BID EUROPE - Markets not shaken by Trump's tariffs
Rae Wee gives us a look at what the European and global markets will be like tomorrow. The price movement of stocks in recent days has shown that investors have become less interested in Donald Trump's tariffs. Asia shares rose on Thursday, riding the wave of Nvidia's quick rise to $4 trillion in valuation. Futures indicated similar gains for Europe in the afternoon. On Wednesday, the U.S. president launched his tariff attack into overdrive. He announced a new tariff of 50% on U.S. imports of copper and a duty 50% on Brazilian goods. Both duties will begin on August 1. The Brazilian real and copper prices fell in Brazil and London, but there was little impact on other markets. Bitcoin was still near its record high, and the dollar dropped as investors took on more risks. They chose to ignore the Trump headlines. Money managers and analysts used the words "desensitized" and "numb", but it is unclear how long they will continue to use them. Investors are waiting to see the progress on a deal between U.S.A. and European Union. Trump said that he "probably" would tell the EU what rate they could expect to receive for their exports to the U.S. soon, and added that the 27-nation group had become more cooperative. EU Trade Chief Maros Sefcovic stated that good progress was made on a trade framework agreement, and a deal could be reached within a few days. Trump's latest delay in implementing tariffs has given hope to Japan, South Korea, and the European Union, that deals could be made to reduce duties. However, some exporters, such as South Africa, are confused and have no idea what to do next. Investors are taking the news with a smile and have little reason to panic. They put their trust in "TACO", an acronym for Trump always chickens out. The following are key developments that may influence the markets on Thursday. Weekly U.S. jobless claims Alberto Musalem and Mary Daly, Federal Reserve speakers Are you trying to stay up-to-date with the latest news on tariffs? Our daily news digest provides a quick overview of the most important headlines that impact global trade. Tariff Watch is available here.
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Top negotiator: Indonesia and US are looking to expand their partnership on critical minerals after a 'positive meeting'
The meeting between Indonesia and the United States in Washington over the impending tariffs was "positive", Indonesia's chief negotiator told reporters on Thursday. Both countries are exploring a broader partnership in the vital minerals sector. The U.S. has imposed a 32% duty on Indonesia, the largest economy in Southeast Asia. This is due to its strategic importance for global trade. Airlangga Hartarto, the chief negotiator of Indonesia and its economic minister, said that he had met Commerce Secretary Howard Lutnick as well as U.S. trade representative Jamieson Greer on Wednesday in Washington. Airlangga’s ministry stated on Thursday that they discussed tariffs, nontariff barriers, and commercial partnerships. They added that both countries would intensify their talks in the coming three weeks. "We have an agreement with the U.S. on the same lines regarding the discussions. Airlangga stated in a statement that we would make every effort to conclude these negotiations according to the principle of mutual benefits. Indonesia and the United States have set their sights on a larger partnership in the crucial minerals sector of the former, citing Airlangga’s Ministry's large nickel, cobalt and copper reserves. Indonesia is the G20's largest economy. It is the world's leading exporter of palm and tin oil, as well as a major metal producer. Indonesia has been a key player in the trade talks. Proposed slashing It offered to reduce the duties on American goods to almost zero, and to increase U.S. investments and purchases in the country. This would amount to about $34 billion Recently, several Indonesian companies signed agreements with their counterparts in the United States to increase their purchases of energy, wheat, corn, and cotton. (Reporting and writing by Bernadette Cristina and Ananda Terresia, with editing by David Stanway.)
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Empire Energy, Ellevo Set Up Joint Offshore Wind Lifting and Transport Unit
Empire Energy and Ellevo Group have launched a strategic joint venture for offshore wind lifting and transport consultancy services to meet the evolving demands of the offshore wind industry across the globe.The collaboration combines Empire’s hands-on operational experience with Ellevo’s technical expertise to enhance project delivery in the lifting and transport consultancy sector.Operating under the name Empire Energy – Ellevo (e³), the joint venture provides coordinated solutions for lifting and heavy transport operations across the offshore wind project lifecycle.From Pre-FEED and FEED studies through to marshalling, pre-assembly, commissioning, and operations and maintenance, it integrates engineering assurance with on-the-ground delivery experience.The joint venture is focused on supporting clients with early-stage constructability reviews, engineered lift planning, lifting operations management, inspection and verification, third-party assurance, and specialist consultancy services.“This joint venture marks a pivotal moment for both organizations. With Empire Energy’s operational footprint and Ellevo Group’s specialized engineering expertise, we are uniquely positioned to deliver next-generation lifting and transport consultancy services across the energy and infrastructure sectors,” said Jordan Kelly, Managing Director of Ellevo Group."At Empire, our strength has always been in delivering offshore wind managed services with precision, reliability, and scale. This joint venture with Ellevo brings in world-class engineering, lift planning, and assurance capabilities that perfectly complement our operational expertise. It’s a powerful combination that reinforces our position as a trusted delivery partner in the sector,” added Mike Milledge, President of Empire Energy.
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Iron ore reaches multi-month high in hopes of a steel supply cut and Chinese stimulus
Thursday, iron ore futures prices rose for the third consecutive session, reaching multi-month highs. This was due to a resurgence of optimism about a new reform wave to curb steel production and additional stimulus measures by China, its largest consumer. As of 0318 GMT on China's Dalian Commodity Exchange, the most traded September iron ore contract was trading 1.97% higher, at 751 Yuan ($104.64), a metric tonne, which is the highest price since April 3. As of 0308 GMT the benchmark August iron ore traded on the Singapore Exchange rose 1.96%, to $97.95 per ton. This is the highest price since May 26. The main reason for the rise in prices is the anticipation of supply-side steel reforms, according to a Shanghai analyst who spoke on condition of anonymity because he was not authorized to speak to media. On Wednesday, the head of China's state planner announced that the country's economy would exceed 140 trillion yuan in this year. Meanwhile, the second largest economy in the world has been battling a long-running trade war with the United States as well as persistent deflationary forces. Analysts at Yongan Futures said that this fueled some hopes about "whether there will be more stimulus in the high level meeting later this month." Pei Hao is an analyst with Freight Investor Services, a brokerage in international. She says that iron ore has benefited from the recent rally on the coal markets, which was fueled by the expectation of reforms at the supply side. Pei said that there was no fundamental shift in iron ore supply and demand. Although shipments fell, a decrease in arrivals is likely to be visible until late July. Coking coal and coke, which are both steelmaking ingredients, also saw gains. The benchmarks for steel on the Shanghai Futures Exchange have strengthened. Hot-rolled coil, rebar, wire rod, and stainless steel all gained.
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Prices of copper in London and China are near their 3-week-lows due to the looming US tariff of 50%
The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) saw copper prices drop on Thursday. They were near their lowest level in three weeks, due to President Donald Trump’s plan to impose a 50% tariff on imported copper starting August 1. Trump announced a 50% tariff for copper on Wednesday, stating on social media the tariff would take effect on August 1, and that it was a decision made following a national assessment. The LME's three-month copper rose 0.19%, to $9,649 a metric ton, by 0111 GMT. Meanwhile, the SHFE's most traded copper contract fell 0.75%, to 78.320 yuan. Both contracts were near their lowest levels since June. The COMEX copper contract that was the most active on Wednesday hovered around its record high and its premium over the LME copper increased to 26%. A futures analyst in Shanghai commented: "Traders are very sensitive and alert. Only limited cargoes can still make it to the U.S. by August 1. Therefore, most have stopped betting on higher LME and SHFE price premiums and have stopped using the premium. COMEX inventories The analyst stated that copper prices are at a seven-year high. In the next few days, supplies of copper may be shipped to other countries, which will ease regional supply shortages. LME aluminium rose 0.27%, to $2.603.5 per ton. Nickel was up 0.24%, to $15.015, while tin was up 0.2%, to $33,350. Zinc increased by 0.2%, to $2.748, and Lead advanced by 0.12%, to $2.058.5. SHFE aluminium rose 0.93% at 20,705 yuan per ton. Zinc was up 0.84% to 22,265 yuan. Tin was up 0.5% to 264,890 yuan. Lead gained 0.26% at 17,245 yuan. Nickel was up 0.12% at 119,600. Click or to see the latest news in metals, and other related stories. Data/Events (GMT) 0600 Germany HICP final YY June 200900 Germany, France and UK Q3 Comprehensive Risk 1230 Initial US Jobless Clm, 5 July (w/e) 1430 EIA Nat Gas Bcf, 4 July (w/e) 1430 Nat Gas-EIA implied flow, 4 July (w/e)
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Gold prices rise on weaker dollar as trade war intensifies
Gold prices rose on Thursday as a result of a slight decline in bond and dollar yields. Investors also kept an eye on the trade talks, with President Donald Trump expanding his tariff war. By 0157 GMT, spot gold had risen 0.3% to $3322.46 an ounce. U.S. Gold Futures rose 0.3% to $3,331. Trump ramped up his global tariff attack on Wednesday. He announced a new tariff of 50% on U.S. imports of copper and a duty 50% on Brazilian goods, both starting on August 1. Trump issued tariff notices on Thursday for seven minor trading partner countries, in addition to the 14 other notices issued earlier this week. These included South Korea and Japan. The 25% levies will take effect August 1, unless an agreement is reached. Trump also said that trade talks with China and Europe, the U.S.'s largest bilateral trading partners, were going well. The market impact of tariffs appears to be decreasing with every new headline. "Tariff fatigue is upon us, and traders require a new catalyst in order to wake up volatility from the lull," Matt Simpson, senior analyst at City Index, said. The U.S. Dollar Index fell 0.3% while the yield of benchmark 10-year U.S. Treasury Notes retreated from its three-week high. A lower yield reduces the opportunity cost for holding bullion that does not pay a return, and a weaker US dollar makes gold more affordable for holders of foreign currencies. Minutes from the Federal Reserve meeting of June 17-18 showed that "a few" Fed officials thought interest rates could be cut as soon as this month. The majority, however, preferred reductions to occur later in the year because of inflation concerns linked to Trump's trade policies. At its meeting in June, the Federal Open Market Committee unanimously decided to keep rates unchanged. The next policy meeting is scheduled for July 29-30. (Reporting by Anmol Choubey in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu) (Reporting and editing by Rashmi aich and Subhranshu Sahu in Bengaluru.
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Nvidia helps Asia shares to a high, as investors are unfazed with Trump's tariff moves
Asian stocks rose on Thursday on the back of optimism following Nvidia's rise to a record $4 trillion valuation. Investors also shrugged off President Donald Trump's recent tariffs. U.S. Copper Futures increased their premium over the London benchmark overnight, after Trump announced his plans to impose 50% tariffs on copper. Later, on Wednesday, he said that the tariffs would be in effect from August 1. Trump's trade anger also erupted against Brazil on Wednesday, as he issued notices of tariffs and threatened to impose a 50% penalty on Brazilian exports. The recent moves have not caused much of a stir in the markets. MSCI's broadest Asia-Pacific share index outside Japan is up 0.2%. The Nikkei Index fell 0.56%. China's blue-chip CSI300 index increased 0.2%, and Hong Kong’s Hang Seng Index rose 0.1%. Futures on the EUROSTOXX50 index gained 0.18%, while those of the FTSE Index advanced 0.33%. Nvidia, a designer of artificial intelligence chips, became the first company in history to reach a market capitalization of $4 trillion on Wednesday. It also cemented its place as one Wall Street's favourite stocks. U.S. Stock Futures Weakened in Asia on Thursday. Nasdaq and S&P 500 Futures each fell about 0.2% after both indexes had closed higher overnight. Jeff Ng of SMBC, Asia macro strategy head, said that investors are "numb" about the constantly changing situation. "They know there is still room to negotiate." Many of these announcements start with impressive numbers but are not final and are subject to change. "Even if implemented, these changes could be reversed within the next few months or even a year," said he. Expectations of Federal Reserve rate reductions later in the year also kept stocks supported. The minutes of the Fed meeting held last month showed that "most participants" expected rate cuts to occur later this year. Any price shocks from tariffs are expected to be "temporary and modest". Ng stated that markets do not currently price in a large chance of a full blown recession, as the labour market is still quite resilient. However, they are aware that there is a lot pressure on policy rates to drop, which could reduce the opportunity costs of holding stocks. DOLLAR EASES The dollar fell 0.4% to 145.79 yen on Thursday after Trump's 25% tariffs on Japan earlier in the week. The euro rose 0.17%, to $1.1742. Sterling gained 0.11%, to $1.3605. The Brazilian real was an exception, as it sank to a low of 5.5826 dollars per Brazilian real in response to Trump's threat of tariffs on Latin America's biggest economy. Julia Wang, Global Market Strategist at J.P. Morgan Private Bank, said: "Despite the S&P 500’s impressive rally the U.S. Dollar continues to retreat. This highlights a changing global macro narrative." We believe that the dollar is still 5-15% undervalued. We expect further weakness as cyclical trends and capital reallocation play out. Bitcoin was near its record high at $111,234.63, and ether rose 1.3% to 2,775.54. "We are seeing our clients adopt a more measured strategy, choosing to allocate their funds strategically into cryptocurrencies that have real utility rather than chasing after short-term movements. Bitcoin is still the most popular choice on OKX Singapore's platform, according to Gracie Lin. Brent crude futures fell 0.16% on Thursday to $70.08 a barrel. U.S. crude dropped 0.22% to $68.02 a barrel. Spot gold increased 0.3% to $3322.69 per ounce.
Israel will resume natural gas exports once the military determines that it is safe, says energy minister
Israel's Energy Minister Eli Cohen announced on Wednesday that the country will resume natural gas exports once its military deems it safe. The air battle between Israel & Iran is now in its sixth day.
Since June 13, two of Israel's three natural gas fields, Leviathan operated by Chevron and Karish owned by Energean, off its Mediterranean coastline that provides the bulk of the exports to Egypt & Jordan have been closed.
The older leaves are still in use
Field used mostly for domestic supply.
Cohen stated that he had been in touch with Egpyt, Jordan and Jordan regarding the reduction in supplies.
"They can clearly see that we're in a conflict." Cohen said after a press briefing that he had to reduce exports because he didn't want our strategic storage to be used.
"I hope that I can use another rig to supply gas (exports) as soon as possible." "I think the most important thing for me is to (supply) Israel," he stated, referring to the need for fuel during the conflict against Iran.
Cohen noted that it was not clear when another field would be reopened. "We're working with them (the military), the Navy and at this time their recommendation is to continue one (field) and shut down two."
Data from the Joint Organisations Data Initiative shows that Israeli gas makes up about 15-20% of Egypt's total consumption. Egypt's fertilizer industry halted operations Friday due to the disruption in Israel's supply of gas.
Israel began its air war against Iran on Friday, after concluding that the country was close to developing a nuclear bomb. Iran insists that its nuclear program is solely for civilian purposes.
Other Energy Sources
Cohen stated that Israel's energy industry was running normally and no shortages were expected, since the country has reserves of coal, diesel, and renewable energy.
Israel's Oil Refineries, located in Haifa, were hit by an Iranian rocket this week. Three people died and the refineries were forced to stop operations.
Cohen expressed his hope that the facility will resume its operations in a month. A second refinery is still open to the south.
Cohen stated that since Friday, the amount of solar energy or renewable energy used to produce electricity has doubled, reaching about 40%.
The airstrikes by Iran also caused some damage to pipelines and wastewater treatment plants.
Cohen said that a victory over Iran may take several weeks, but Israel's needs for energy could be met.
The Iranians may have damaged some of our energy plants, but we still have a very strong energy infrastructure that can meet all of Israel's energy needs, including fuel, electricity, and water. (Reporting and editing by Bernadette baum)
(source: Reuters)