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UAE ready to boost oil production if market demand arises
United Arab Emirates' energy minister stated on Thursday that the country could increase its oil production after 2027, if the market demands it. This move could push the country into the top five oil producing countries in the world. OPEC granted the UAE a larger production quota for this year. The country argued that it was restricting too much its output after investing heavily to increase capacity from 3 million barrels to 4,85 million. Suhail Mohamed al-Mazrouei, Energy Minister of the country, told reporters that capacity could increase further after 2027. He said that if the market demanded it, they could go up to 6 million. However, this was not an officially set target. The UAE could cover just under 6 percent of the global demand if they were to reach this level. It will also be the fourth largest oil and liquids producer on the planet, only behind the United States of America, Saudi Arabia, and Russia. These countries can produce around 21 million barrels, 12 millions, and 10-12million respectively. The UAE will surpass the oil production of Canada, China and Iraq in 2024 with a 6 million barrel per day output. (Reporting and writing by OPEC Newsroom, Dmitry Zhdannikov, editing by Mark Heinrich & Tomaszjanowski)
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EU lawmakers criticize China for rare earth restrictions before summit
The European Parliament condemned China Thursday for its export restrictions of rare earths, and demanded that the European Union reject any attempt by Beijing to force concessions out of the bloc. Two weeks ahead of an EU-China Summit at which rare Earths will be a major topic, EU legislators backed a resolution saying that China's actions were unjustified and had a coercive intention and that its "quasimonopolistic position" provided it with enormous leverage. The European Parliament passed the motion with 523 votes in favor, 75 against and 14 abstentions. The motion, although not binding, is influential because the European Parliament is the only directly elected institution in the EU. China, which produces 90% of the rare earth magnets that are used in automobiles, home appliances and other products, has imposed export restrictions since early April. Exporters must obtain licenses in Beijing. The motion in parliament urged China, amid a trade conflict with the United States to lift restrictions. Beijing, however, had set up "green lanes" for European firms to make the process easier. Last week in Berlin, China's foreign minister Wang Yi played down European concerns, saying that it is standard practice to restrict exports of goods with a potential military use. However, Europe's requirements could be met by submitting applications. The EU legislators also called for the European Union's 2030 targets to be backed up with a budget and to determine minimum levels of strategic stock of rare earths. (Reporting and editing by Philip Blenkinsop, Aidan Lewis, and Milan Strahm)
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Italy: Conference pledges more than 10 billion euros for Ukraine reconstruction
Giorgia Mello, the Italian prime minister, said that participants in a Rome-based conference on economic recovery for Ukraine had pledged more than 10 billion euros ($11.7billion) to aid the war-torn nation. The conference is being attended by Ukrainian President Volodymyr Zelenskiy and other political leaders. It takes place in the backdrop of more intense drone attacks and missile strikes on Kyiv. Zelenskiy, speaking at the conference's opening, described the attacks in terms of "pure terror". Meloni, as well as German Chancellor Friedrich Merz, cited the recovery from World War Two of their respective countries as an example of the progress Ukraine can achieve. Meloni, in her opening address at the conference, said: "I believe we should be proud today of what we have accomplished together - nations and international organizations, financial institutes, local authorities, business sectors, and civil societies." She added, "Together at the conference today, we made commitments amounting to over 10 billion Euros." It is the fourth conference of this kind since Russia invaded Ukraine in February 2022. The main goal is to mobilize international support for Ukraine. The European Commission announced a support package of 2.3 billion Euros for Ukraine's reconstruction. Von der Leyen stated that "with 2.3 billion euro in agreements signed, our aim is to unlock up 10 billion euros of investments for rebuilding homes, reopening hospitals, revitalizing businesses, and securing energy." She added, "We literally stake our future on the future of Ukraine."
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China solar stocks soar as Beijing tries to end price wars
Several China solar stocks rose sharply on Friday, continuing an upward trend that began on Wednesday, on the news that Beijing is looking to slow down aggressive price cuts that have driven prices of certain components by almost 30% over the past year, according to one estimate. Price wars have been sparked by overcapacity and price reductions made to clear stocks among Chinese manufacturers. Analysts are concerned that further price cuts could lead to deflation, and hinder efforts to stabilize the $19 trillion economy. The shares of JA Solar, the leading solar manufacturer, rose by nearly 10%. They had gained 20 percent since July 1, when leaders of the second largest economy in the world pledged to take measures to stop the price wars. On July 3, the industry ministry announced that it would stop price wars in the solar sector and phase out old capacity. The Oil Price Information Service's (OPIS') assessment of high-efficiency TOPCon (tunnel oxide passivated contacts) modules indicates that prices in the solar industry will fall by nearly 30% between 2024 and 2025. The stock prices of Longi Green, JinkoSolar, and Trina Solar all rose more than 10% in the last month. Companies did not respond when asked for comments. Longi announced to state media last week that it would begin commercialising high-efficiency products earlier in order to solve the low-price problem. Stocks of Xinjiang Daqo New Energy, Tongwei and Xinjiang Daqo New Energy have both risen by 29% since the start of July. Daqo shares, listed in Shanghai, closed Thursday at 26,48 yuan (3.69 dollars), their highest price in almost seven months. Daqo didn't respond to an email request for comment, and Tongwei refused to comment. In a note published on Thursday, Pierre Lau, Citi's managing director, stated that "whether solar share prices will rise this time around is dependent on the release of an effective policy." He said that prior initiatives to reduce excess capacity in the industry had driven prices up as much as 40 percent in just two weeks in October of 2024. Rumours unconfirmed that the National Development and Reform Commission, a powerful state planner, had met with polysilicon producers and asked them to maintain prices above the cost level also supported the price rise. NDRC has not responded to a faxed comment request. Berneuter Research, a consultancy, reports that the market price for a kilogram of meat in China is below $4.50, which is lower than most manufacturers' actual costs. Caixin reported that Tongwei, along with its polysilicon-producing peer GCL, were also preparing a plan for a new company, which would be set up to purchase excess factory capacity. This was according to people familiar with the situation. Citi's Lau stated that although the price of polysilicon has risen by 18% to 21% in the past two weeks, downstream solar manufacturers have continued to resist the increases. (Reporting and editing by Clarence Fernandez; Colleen howe)
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OPEC cuts oil demand for the next four years and says there is no peak in sight
OPEC cut their global oil demand projections for the next 4 years as Chinese growth slows. However, they raised their longer-term outlook based on the rising consumption of oil in developing countries. They also said that there were no signs to suggest oil usage had peaked. The OPEC+ group, which includes the Organization of Petroleum Exporting Countries and its allies, including Russia, pumps more barrels in order to regain market shares after years of cutting back to support the markets. A lower medium-term demand may make it more difficult for the group's other cuts to be unwound, as they remain in place through the end of 2026. OPEC's 2025 World Oil Outlook, published on Thursday, predicts that world demand will average 105 millions barrels of oil per day in 2019. The OPEC expects the demand to increase to an average of 106.3 million barrels per day in 2026, and then to 111.6 millions bpd by 2029. All forecasts of demand for 2026-2029 are lower than the previous year. OPEC has said that demand will average 106.3 millions bpd by 2026. This is down from 108.3 million bpd last year. The forecast for 2029 is 700,000 bpd lower than last year. Compared to other forecasters, OPEC anticipates that demand will grow for a much longer period. BP and International Energy Agency predict that oil consumption will peak in this decade. In the preface to the report, OPEC Secretary-General Haitham Al Ghais stated that "Oil is the foundation of the global economy and central to our everyday lives." There is no imminent peak in oil demand. The report will be launched at the biennial OPEC Seminar in Vienna which brings together oil executives and ministers. OPEC denied journalists from and other news organizations access to its seminar. OPEC refused to comment about why they were doing this. OPEC stated in its report that the demand has recovered from the COVID-19 epidemic, resulting a more stable outlook. OPEC also said that China's growth is slowing, the country which has been driving oil consumption higher over the past few decades. The OPEC referred to China by saying, "This is due to the slower economic growth and the increased penetration of EVs with charging infrastructure as well as the continued use of oil in many sectors." OPEC+ started to reverse its output cuts of 2,17 million bpd with a 138,000 bpd production boost in April. In May, June and July, there were monthly increases of 411,000 bpd. Separate cuts of 3,65 million bpd are still in place by the group until 2026. On Thursday, two OPEC+ delegates stated that there had not been any discussion on the release of this extra oil. GAP WITH IEA AND BP OPEC's forecast for 2030 demand remained unchanged from the previous year. The International Energy Agency, on the other hand, expects the global demand to peak in 2029 at 105.6 millions bpd and then to fall slightly by 2030, said the advisor to industrialised nations last month. OPEC believes that India, the Middle East, and Africa will drive the growth in the long term. OPEC says that developments such as the U.S. leaving the United Nations Climate Pact and a lower EV penetration rate will influence behavior and slow down the energy transition for developing countries. OPEC predicts that the world's oil demand will reach 122.9 millions barrels per day in 2050. This is up from the 120.1 million bpd predicted in last year’s report. This is far higher than other industry forecasts for 2050, such as those of BP. OPEC is calling for increased investment in the oil industry. The sector will need to spend $18,2 trillion by 2050 compared to $17,4 trillion estimated last year.
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US copper prices rise after Trump announces a date for tariffs, but remain below their peak
The price of U.S. Copper rose on Thursday, after U.S. president Donald Trump announced a 50% tariff that would begin on August 1. However, the prices remained below their previous record high due to an oversupply of metal in the country as well as uncertainty about details. Trump announced on Tuesday that new tariffs would be imposed on copper. He announced Wednesday the date and confirmed it. The COMEX copper contract that was most active at 0945 GMT rose 2.1% to $5.60 per lb, down from the record high of $5.90 reached on Tuesday. Ole Hansen is the head of commodity strategy for Saxo Bank, Copenhagen. He said: "I believe that the spike high may be left to its own devices for a while." "The market is now left with plenty of supplies for the near future, and that's why premiums in New York shouldn't reflect the 50% tariff," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. There are many things that can happen over the next three months. On Thursday, the premium for COMEX over LME was $2,690 per metric ton or 28 %, a slight drop from Tuesday's peak. The traders who anticipated copper tariffs following the announcement of a probe in February shipped enough imports to cover a full year's worth this year. Analysts predict that the COMEX premium is likely to ease in the coming months, as the stockpile slowly diminishes and the tariffs are a drag on demand. A Shanghai-based metals expert at a futures firm said that the copper prices on the Shanghai Futures Exchange were under pressure due to expectations that the copper shipments into China would increase as some supplies will be redirected outside of the U.S. The SHFE's most traded copper contract fell for the fifth consecutive day, falling 0.4% to 78.600 yuan per ton ($10,952.87 per ton) after reaching its lowest level since June 23. The benchmark three-month copper price on the LME rose 0.5% on Thursday, after five consecutive days of declines. It now stands at $9,681.50 per ton. Other metals include LME aluminium, which rose 0.6% to $2.613 per ton. Nickel gained 1.2% at $15,165. Zinc climbed 1.2% at $2.774. Lead was up by 0.1%, $2.057, and tin increased 1.2% at $33,675. Click here to see the latest news in metals.
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As 'dollar-negative' sentiments spread, gold gains gain momentum
Gold prices rose Thursday as a result of a weaker dollar and the possibility that U.S. rates will be cut later this year. Investors were also waiting for more information on President Donald Trump's proposed trade policy. By 0916 GMT, spot gold had risen 0.5% to $3328.23 an ounce. U.S. Gold Futures rose 0.5% to $3336.90. Nitesh Shah, WisdomTree commodities analyst, said that the passing of One Big Beautiful Bill and unsettling trade policies should all be considered 'dollar-negative' events. Gold should therefore be favored in such an environment. Gold is now cheaper for holders of other currencies due to the U.S. Dollar Index easing by 0.2%. Trump intensified his tariff campaign Wednesday, imposing a 50% tax on Brazilian goods and a 50% tax on imports of copper. Both taxes will take effect on August 1. Trump has also sent tariff notices to 7 minor trading partners. These are in addition to the 14 that were issued earlier this week. They will also take effect August 1, unless an agreement is reached. Global stocks rose on Thursday, despite the latest tariffs from U.S. president Donald Trump. 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. Minutes from the Fed's meeting on June 17-18 showed that "only a few" officials thought that rates could be cut this month. Most were worried about inflation linked to Trump's trade policies. Gold that does not yield, which is often used as a hedge to inflation and political unrest, can benefit from low interest rates. At its meeting in June, the Federal Open Market Committee unanimously decided to keep rates unchanged. The next policy meeting will be held on July 29-30. Silver spot rose 0.7%, to $36.59 an ounce. Platinum gained 0.9%, to $1359.65. Palladium rose 1.2%, to $1117.93. (Reporting and editing by Harikrishnan Nair in Bengaluru, Brijesh Patel and Anmol Chaubey)
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LSEG data show that the price gap between east and west for diesel in July is at its widest level in two-and-a half years.
LSEG data on Thursday showed that the immediate July price differential between diesel prices in Asia & Europe widened to a discount near $120 per metric tonne, its largest in slightly over 2-1/2 years. According to data, the last time the exchange of futures swaps (EFS), the price difference between ICE Gasoil Futures and Singapore Swaps, reached this level was at the end October 2022. The ICE Gasoil Futures Contract for July expires later this Thursday. As of 0830 GMT, the August EFS had a discount per metric tonne of $35. A larger EFS spread is likely to encourage swing suppliers from India and the Middle East, to send their cargoes over to Europe in order to take advantage of higher prices. LSEG's shiptracking data shows that most of the cargoes from the Middle East, India and other countries bound for West of Suez markets are loaded in the first half of July. James Noel Beswick, analyst at Sparta Commodities, said that the unprecedented rise in European diesel prices created arbitrage opportunities for sending supplies from Asia and the U.S. Gulf Coast to Europe. A Singapore-based trader stated that the large backwardation of ICE gasoil contracts could pose a risk, as it could reduce the prices of their cargoes when they reach Europe during the second half of July or August. Backwardation is a market structure in which prices for immediate months are higher than future months. The July/August ICE Gasoil Spread The price of Russian oil is $110 per tonne, which is the highest since October 2022, when the European Union placed an embargo against Russian oil following the Ukraine War. August/September Backwardation is $16-17 per ton. Reporting by Trixie YAP, Editing by Louise Heavens & Florence Tan
Oil prices fall as Trump's tariffs expand and cloud the demand outlook
Oil prices fell on Thursday, as market participants perceived that the latest tariff announcements made by U.S. president Donald Trump would threaten global economic growth.
Brent crude futures fell 22 cents or 0.31% to $69.97 per barrel at 0052 GMT. U.S. West Texas Intermediate Crude lost 27 cents or 0.39% to $68.11 per barrel.
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 a dozen that his administration issued earlier this week, including to two of the most important U.S. 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.
High interest rates increase borrowing costs and decrease demand for oil.
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. Flights in China reached a five-month high. Port and freight activities indicated'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." (Reporting and editing by Muralikumar Aantharaman in Tokyo)
(source: Reuters)