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Oil prices ease as traders evaluate US tariffs and OPEC+ production hike
Investors retreated from oil prices on Tuesday, after a nearly 2% rise in the previous session. They were assessing new developments regarding U.S. Tariffs and a larger-than-expected OPEC+ production increase for August. Brent crude futures fell 22 cents or 0.3% to $69.36 per barrel at 0330 GMT. U.S. West Texas Intermediate Crude fell 27 cents or 0.4% to $67.66 per barrel. U.S. president Donald Trump began Monday telling U.S. trade partners, including major suppliers South Korea, Japan, as well as smaller U.S. Exporters such as Serbia, Thailand, and Tunisia that the U.S. will begin imposing sharply higher tariffs on August 1. He later clarified that this deadline is not 100% certain. Trump's tariffs have caused uncertainty on the market, and there are concerns that they could negatively impact the global economy, and therefore, oil demand. There are signs that demand is still strong, especially in the U.S. Last week, AAA data showed that a record number of Americans (72,2 million) were expected to travel over 50 miles (80 kilometers) during their Fourth of July holidays. The U.S. Commodity Futures Trading Commission published data on Monday that showed money managers increased their net-long positions in futures and options contracts for crude oil in the week leading up to July 1. Seasonal factors continue to support a healthy prompt demand. It remains to be seen if the forward demand can continue to absorb OPEC+'s larger than expected supply. India, the third largest oil consumer in the world, also showed signs of increased demand. government data Reporting fuel consumption was 1.9% more than it was a year earlier in June. On Saturday, the Organization of the Petroleum Exporting Countries (OPEC+) and its allies agreed to increase production by 548,000 barrels a day in August. This is a higher rate than the 411,000 bpd they increased for the previous three months. This decision eliminates almost all the voluntary reductions of 2.2 million bpd that the group made. Five sources with knowledge of the situation say that they are likely to approve a 550,000-bpd increase for September at their meeting on August 3. This would undo all the cuts. Analysts said that the actual increase in production has been less than what was announced and the majority of the supply comes from Saudi Arabia. (Reporting from Stephanie Kelly in New York, and Jeslyne Lerh in Singapore. Editing by Christian Schmollinger).
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Exxon, Hess Dispute Over Chevron Deal Nears Resolution
The arbitrators in a legal dispute between Exxon Mobil and Hess have reached a decision related to a major oilfield project in Guyana, according to two sources familiar with the matter.The ruling will determine whether Chevron can move forward with its $53 billion planned acquisition of Hess.The Paris-based International Chamber of Commerce, which is overseeing the arbitration case, is now reviewing the decision before it is released to the parties.It is unclear what the arbitrators decided or when the decision will be released."We remain confident in our position and appreciate the arbitration panel giving this issue the due consideration it deserves," an Exxon spokesperson said in a statement.Hess, Chevron and the ICC did not immediately respond to requests for comment.Chevron struck its deal to acquire smaller U.S. oil producer Hess in October 2023, with the prize being the latter's 30% stake in the prolific Stabroek block in Guyana that is operated by Exxon with a 45% interest.The closing of the acquisition has been delayed due to arbitration claims from Exxon and CNOOC, the other minority partner in the joint venture, who argue that they have a contractual right of first refusal to purchase Hess' stake in the Stabroek block. CNOOC did not immediately respond to request for comment.Chevron and Hess argue the clause does not apply to the sale of the whole company. If they lose the arbitration or are unable to agree on an acceptable resolution with Exxon and CNOOC, the acquisition would fail, according to the terms of the deal.The stakes are high for Chevron. Acquiring Hess is key to Chevron CEO Mike Wirth's strategy to improve the company's performance. Gaining access to the Stabroek block would provide a valuable addition to Chevron's declining oil and gas reserves.(Reuters - Reporting by Sheila Dang in Houston; Editing by Sandra Maler and Sonali Paul)
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Rotra Futura RoRo Vessel Enters Offshore Wind Operations
The Rotra Futura Roll-on/Roll-off (RoRo) vessel has entered operations, with the transportation of wind turbine blades from Denmark to the United States.The project supply vessel, specifically designed to handle larger and heavier offshore wind turbine components, collected the 108-meter-long blades at the Port of Aalborg, Denmark, under the supervision of deugro Denmark’s wind experts.The vessel, delivered in late March 2025, was developed as part of the the partnership between Danish logistics specialist deugro, Siemens Gamesa Renewable Energy and Amasus Offshore.“We are delighted to officially welcome Rotra Futura to our fleet of RoRo vessels dedicated to servicing the offshore wind industry.“After years of preparation and hard work, it brings great joy to finally see her in action.“Witnessing the first loading operation executed so smoothly and precisely – just as we had planned for – is a proud moment for our entire team. Rotra Futura has performed to our full expectations, reaffirming her vital role in supporting the logistics needs of the offshore wind market,” said Dennis Bjørslev Jensen, Branch Manager, deugro Denmark.Rotra Futura's sister ship Rotra Horizon was launched in Apirl 2025, from Zhenjiang Shipyards in Jiangsu Province, China, and is salted for delivery this July.Pair of China-Built Offshore Wind Vessels Enter Fleet
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Gold prices hold steady as investors evaluate US tariff hike
Gold prices held steady after U.S. president Donald Trump announced higher tariffs for imports from Japan and South Korea. A firmer dollar and higher Treasury yields also limited gains. As of 0220 GMT, spot gold was unchanged at $3,334 an ounce. U.S. Gold Futures are unchanged at $3.344.20. Trump told trade partners on Monday that the U.S. would begin imposing tariffs of 25% on all goods imported from Japan and South Korea on August 1. This marks a new phase in his trade war, which he began earlier this year. Trump stated that the deadline of August 1, 2018 for the implementation of tariffs is firm, but he will consider extensions if other countries make proposals. The "reciprocal tariffs", which were set at 10%, remained in place until the 9th of July to allow time for negotiations. However, only agreements have been reached with Britain and Vietnam. Tim Waterer, KCM Trade's Chief Market Analyst, said that Trump's latest tariffs letters keep gold on the radar of investors looking for a hedge against uncertainty. However, a strong dollar and rising bond yields limit the metal's upside potential in the short term. The yield on the benchmark 10-year U.S. notes hovered around a two week high while the U.S. Dollar Index steadied, after hitting a one-week-high in the previous session. Gold's price increases when the dollar is stronger. Waterer stated that "traders appear relatively unfazed" by Trump's tariffs letters. With safe-haven demands largely contained, gold is just waiting to see if a breakout on the topside occurs. Trump's tariffs have increased inflation fears and complicated the Federal Reserve's efforts to reduce interest rates. The minutes of the Fed meeting from June, which are expected to be released on Wednesday, will provide more information about the central bank's outlook. The spot price of silver fell 0.1%, to $36.78 an ounce. Platinum rose 0.6%, to $1379.29, and palladium grew 1%, to $1170.46. (Reporting and editing by Sumana Nady and Subhranshu Sahu in Bengaluru.
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Iron ore prices rise despite Trump's tariff threats
Iron ore prices rose on Tuesday due to a resilient short-term demand from China, the world's largest consumer. However, caution caused by President Donald Trump’s threat of increased tariffs limited gains. As of 0244 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange added 0.14%. It now stands at 733 yuan per metric ton. As of 0234 GMT, the benchmark August iron ore traded on Singapore Exchange was up 0.55% at $95.75 per ton. The near-term demand for iron ore was stable, as shown by the relatively high output of hot metal, which is a measure of iron ore consumption, and underpins the prices of this key ingredient in steelmaking. The fall in portside iron ore inventories, which fell 0.4% compared to the previous week and reached 144.04 millions tons by July 7, according to data from Mysteel consultancy. The resumption of trade tensions around the world has limited price gains. Trump began Monday telling his trade partners, from major suppliers like Japan and South Korea down to minor ones, that the U.S. will be imposing sharply higher tariffs on August 1. This marks a new phase of the trade war Trump launched earlier this summer. Coking coal and coke were both up by 0.54%, but other steelmaking ingredients did not change much. The benchmarks for steel on the Shanghai Futures Exchange have been moving sideways. Rebar fell 0.13%, while hot-rolled coils were down 0.06%. Wire rod remained flat, and stainless steel was up 0.63%. The (steel market) focus has returned to the seasonally weak fundamentals, after the frenzy over promises of crackdowns on price wars receded," Zhuo Guqiu said. Analyst at Jinrui Futures. The downside is likely to be limited, as supply and demand are not in conflict at the moment. (Reporting and editing by Amy Lv, Lewis Jackson, and Rashmi aich).
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Copper prices are easing on the back of trade tariffs and Chilean supply outlook
The London Metal Exchange and Shanghai Futures Exchange saw copper prices drop on Tuesday as the uncertainty surrounding U.S. tariffs on trade and increased supply of copper from Chile, which is the world's biggest producer, weighed heavily on the market. As of 0109 GMT the LME's three-month copper was down by 0.2% to $9,810 a metric ton. The most traded copper contract on SHFE also fell 0.16%, to 79.380 yuan (11,064.34) per ton. Both contracts are still trading at high levels. On Monday, the United States sent notices to 14 nations announcing new tariffs of 25% to 40% that will take effect August 1. Donald Trump, the U.S. president, warned that a 10% additional tariff could be imposed if BRICS nations such as Brazil, Russia India and China pursued what he called "anti-American policies" during their Brazil summit. The market is still focused on U.S. tariffs as they haven't been finalized. A higher value of copper exported from Chile may indicate a larger supply, according to a metals analyst in Beijing from a futures firm. Chile exported $4.67 Billion worth of copper to the world in June, an increase of 17.5% compared with the previous period. ANZ reported that "Chilean Copper Mines enjoyed their best export month in three years in June", The U.S. continues to receive copper, as Washington continues its investigation into possible new copper import tariffs, which keeps the premium for COMEX futures over LME benchmarks high. COMEX stocks have also reached a seven-year-high, or a 120% increase since mid-February. LME nickel slipped 0.18% to $15,150 per ton. Zinc gained 0.24% at $2,691, while tin climbed 0.12% to $33,325, with aluminium gaining 0.1% to $2,576. SHFE zinc fell by 0.68%, to 22,035 Yuan per ton. Lead dropped by 0.55%, to 17,115 Yuan. Nickel was down 0.53%, to 120,540 Yuan. Tin dropped 0.5%, to 264 360 Yuan. Click or to see the latest news in metals, and other related stories.
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Dollar gains on US tariffs; shares steady and oil drops
The Asian stock markets took the latest twist of U.S. President Donald Trump’s tariff rollout in stride on Tuesday as the dollar held gains and oil declined. Wall Street shares fell after Trump sent letters, including to Japan and South Korea announcing sharply increased tariffs on imported goods into the United States. He also delayed their implementation until August 1. The Nikkei index of Japan opened lower, but turned positive when Trump said that the deadline was "firm but not 100% solid" and tariffs could be adjusted for certain countries. The Aussie Dollar rose in anticipation of the Reserve Bank of Australia's decision to be made later that day. Tapas Strickland, National Australia Bank's head of market economy, said that the market reaction to Trump's tariff announcements had been muted because of Trump’s quick retreat from his "Liberation Day", duties originally set out on April 2. Strickland, head of market economics at National Australia Bank, said that there would be volatility when the headlines started to appear, more letters were released, and the negotiations came to the forefront before the August 1 deadline. Trump set a 10% cap on all so-called reciprocal Tariffs for trading partners in April to allow time for negotiations. Two agreements have been made, with Britain, and Vietnam. Washington and Beijing reached an agreement in June on a framework for tariff rates. This restored a fragile truce to their trade war. The tariffs for Japan and South Korea will now increase to 25% by August 1. Shigeru Shiba, the Japanese prime minister, called the increase regrettable and stated that his country would continue to negotiate with the U.S. EU sources informed on Monday that the European Union would not receive a letter outlining higher tariffs. A spokesperson for the EU said that it still hopes to reach a deal with Trump by Wednesday, after Ursula von der Leyen, President of the European Commission and Trump had "a good exchange". MSCI's broadest Asia-Pacific share index outside Japan rose 0.2% at the start of trading. Japan's Nikkei index rose by 0.4%, while South Korea's KOSPI increased by 1.5%. The dollar increased 0.2% to 146.36 Japanese yen and reached a new two-week high. The euro remained flat at $1.1741. The Australian dollar rose 0.4% to $0.6516 ahead of a central bank meeting where policymakers will likely announce a 25 basis-point reduction. U.S. crude oil fell 0.5% to $67.59 per barrel, after surging almost 2% on Sunday. Gold spot edged down 0.2%. Early trade saw Euro Stoxx futures down by 0.1%. German DAX Futures at 24,133 were also down by 0.1%. FTSE futures fell 0.3%. (Reporting and editing by Jacqueline Wong; Reporting by Rocky Swift)
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Oil prices drop as traders evaluate US tariffs and OPEC+ production increase
The oil prices fell on Tuesday, after a rise of almost 2% the previous day. Investors analyzed new developments regarding U.S. Tariffs and a larger-than-expected OPEC+ production increase for August. Brent crude futures fell 21 cents to $69.37 per barrel at 0041 GMT. U.S. West Texas Intermediate Crude fell 24 cents to $67.69 per barrel. U.S. president Donald Trump began informing trade partners on Monday, including major suppliers South Korea, Japan, as well as smaller U.S. importers such as Serbia, Thailand, and Tunisia that the U.S. will begin imposing sharply higher tariffs starting August 1. This marks a new phase of his trade war, which he started earlier this year. Trump's tariffs caused uncertainty on the market, and there were concerns that they could negatively impact the global economy, and therefore, oil demand. Prices have been supported by the fact that there are signs of a strong demand, especially in the U.S. Last week, AAA data showed that a record number of Americans are expected to travel over 50 miles (80km) during their Fourth of July holidays. The U.S. Commodity Futures Trading Commission published data on Monday that showed money managers had increased their net-long positions in futures and options contracts for crude oil in the week leading up to July 1st. Concerning supplies, the Organization of the Petroleum Exporting Countries (OPEC+) and its allies agreed on Saturday to increase production by 548,000 barrels a day in August. This is more than the 411,000 bpd they increased for the previous three months. Goldman Sachs analysts expect OPEC+ will announce a final increase of 550,000 bpd for September during the next meeting, on August 3. Analysts said that the actual increase in production has been lower than what was announced so far, and the majority of the supply comes from Saudi Arabia. (Reporting and editing by Christian Schmollinger; Stephanie Kelly)
Oil market torpor sends investors to other products: Kemp
International petroleum markets have ended up being calm again after massive interruptions brought on by the coronavirus pandemic, Russia's invasion of Ukraine, and the sanctions imposed in response by the United States and its allies.
Production and consumption are growing at similar rates; inventories are near normal; prices are close to typical when adjusted for inflation; and volatility is low-- all signs the market has found a balance after a tempestuous couple of years.
With a comfy production-consumption balance, hedge funds and other speculators have actually scaled back oil positions to redeploy capital to more interesting markets in power, gas, metals and soft commodities.
It marks a sharp contrast to the start of the year, when most forecasters expected stocks of crude and fuels to deplete as OPEC+ extended production restraint and the significant economies emerged from a downturn in 2022/23.
Chartbook: Oil costs and inventories
However the anticipated drawdown has not materialised as more powerful usage development has been satisfied by faster-than-anticipated increases in unrefined output from the United States, Canada, Brazil, Guyana and some OPEC members.
The threat to global fuel products positioned by Ukraine's drone attacks on refineries in Russia, which peaked in the very first quarter of the year, has actually declined after pressure from the United States to alter the targeting program.
In the Middle East, fighting in between Israel, Hamas, Iran and the Houthis has actually not interrupted unrefined production and tanker circulations have actually been effectively re-routed to prevent attacks on shipping in the Red Sea.
CALM AFTER THE STORMS
So far in May, Brent rates have actually been around $83 per barrel, which is precisely in line with the inflation-adjusted average considering that 2000, so it is not sending a strong signal to either producers or customers to alter their behaviour.
Reflecting the marketplace calm, everyday rate moves have actually been uncommonly small, with annualised volatility decreasing to simply 13%, in the fourth percentile for all overlapping durations considering that 1990.
Signalling a well balanced market, U.S. industrial crude stocks are simply 5 million barrels (-1%) listed below the previous ten-year seasonal average and the position has not changed considerably since the start of the year.
Combined U.S. stocks of gasoline, distillate fuel oil and jet fuel are only 14 million barrels (-4%) listed below the ten-year average and the deficit has actually narrowed considering that the start of the year.
The exact same calm has actually therefore settled over markets for refined fuels such as gasoline, diesel and heating oil.
Pump rates for gasoline including taxes have actually averaged $3.73. per gallon in May, just around 20 cents higher than the. inflation-adjusted average because 2000.
List prices for diesel have actually averaged $3.82 this month,. exactly in line with the inflation-adjusted average over the. very same period.
SPECULATORS LEAVE
Unsurprisingly, speculative investors have actually reduced their. positions to deploy money more beneficially somewhere else as they. conclude costs are unlikely to move anywhere in the short-term.
Hedge funds held a combined position across the six the majority of. essential petroleum futures and choices agreements equivalent to. 380 million barrels on May 21, below 685 million barrels six. weeks previously.
The combined position had actually been lowered to only the 16th. percentile for all weeks since 2013 down from the 66th. percentile on April 9.
Similar scaling back appears across all the futures and. choices agreements for crude and fuels as fund managers slash. their direct exposure to focus on more promising markets.
With oil settled into a period of calm, traders' interest. has actually shifted to other energy markets led by gas and power, still. adjusting to the aftermath of Russia's intrusion of Ukraine.
The focus has also moved to industrial metals, where. products have actually been stretched by fast deployment of electric. cars and grid upgrades as part of the transition to a future. energy system.
Associated columns:
- OPEC? likely to extend production cuts in June (May 3,. 2024)
- Oil traders sanguine about threats from Israel-Iran. conflict( April 18, 2024)
- Why the oil market declines to catastrophise( January 17,. 2024)
John Kemp is a market expert. The views revealed. are his own. Follow his commentary on X https://twitter.com/JKempEnergy.
(source: Reuters)