Oil dips as US dollar firms, oil production is expected to rise

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Updated 21 February 2018
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Oil dips as US dollar firms, oil production is expected to rise

SINGAPORE: Oil prices fell on Wednesday, weighed down by the rebound of the US dollar further away from three-year lows hit last week.
An expected rise in US oil production also weighed on prices, traders said.
US West Texas Intermediate (WTI) crude futures were at $61.32 a barrel at 0307 GMT, down 47 cents, or 0.8 percent, from their last settlement.
Brent crude futures fell 39 cents, or 0.6 percent, from their last close to $64.86 per barrel.
Wang Tao, Reuters technical commodity analyst, said Brent could fall into a range of $63.92 to $64.41 per barrel, as suggested by its wave pattern and a projection analysis.
Traders said the declines were driven by a recovery in the dollar, which potentially hits fuel demand as it makes greenback-denominated oil imports more expensive for countries using other currencies.
The dollar index, which measures the greenback against a basket of six major currencies, rose for a second day on Wednesday, moving further away from the three-year lows reached last week as traders shaved off some bearish bets against the US currency.
“The US dollar continues to find firmer footing,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.
Also pressuring prices is surging US production , now the world’s second-largest oil stream at more than 10 million barrels per day, only slightly behind Russia and ahead of top exporter Saudi Arabia.
“Bulging US production will weigh on prices,” said Singapore-based Phillip Futures in a note on Wednesday.
The next set of weekly US oil production data is due to be published by the Energy Information Administration (EIA) on Thursday after a one-day delay because of the President’s Day holiday on Monday.
That data will also include US inventory figures that are expected to show crude oil stockpiles rose 1.3 million barrels in the week to Feb. 16, according to a Reuters poll. Oil product stockpiles, including gasoline and distillate fuels, are all expected to decline.
Despite the rising US output, overall oil markets remain well supported due to healthy demand growth and supply restraint by the Organization of the Petroleum Exporting Countries (OPEC) that started last year to draw down excess global inventories.


EU to respond to any US auto tariff move: report

Updated 23 June 2018
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EU to respond to any US auto tariff move: report

  • Trump threatened to impose 20 percent tariff
  • Shares in carmakers slip on trade war fears

PARIS: The European Union will respond to any US move to raise tariffs on cars made in the bloc, a senior European Commission official said, the latest comments in an escalating trade row.
US President Donald Trump on Friday threatened to impose a 20 percent tariff on all imports of EU-assembled cars, a month after his administration launched an investigation into whether auto imports posed a national security threat.
“If they decide to raise their import tariffs, we’ll have no choice, again, but to react,” EU Commission Vice President Jyrki Katainen told French newspaper Le Monde.
“We don’t want to fight (over trade) in public via Twitter. We should end the escalation,” he said in the comments published on Saturday.
The European Autos Stocks Index fell on Friday after Trump’s tariff threat. Shares US carmakers Ford Motor Co. and General Motors Co. also dropped.
“If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the US Build them here!” Trump tweeted.
The US Commerce Department has a deadline of February 2019 to investigate whether imports of automobiles and auto parts pose a risk to US national security.
US Commerce Secretary Wilbur Ross said on Thursday the department aimed to wrap up the probe by late July or August. The Commerce Department plans to hold two days of public comments in July on its investigation of auto imports.
Trump has repeatedly singled out German auto imports to the United States for criticism.
Trump told carmakers at a meeting in the White House on May 11 that he was planning to impose tariffs of 20 or 25 percent on some imported vehicles and sharply criticized Germany’s automotive trade surplus with the United States.
The United States currently imposes a 2.5 percent tariff on imported passenger cars from the EU and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported US cars.
The tariff proposal has drawn sharp condemnation from Republican lawmakers and business groups. A group representing major US and foreign automakers has said it is “confident that vehicle imports do not pose a national security risk.”
The US Chamber of Commerce said US auto production had doubled over the past decade, and said tariffs “would deal a staggering blow to the very industry it purports to protect and would threaten to ignite a global trade war.”
German automakers Volkswagen AG, Daimler AG and BMW AG build vehicles at plants in the United States. BMW is one of South Carolina’s largest employers, with more than 9,000 workers in the state.
The United States in 2017 accounted for about 15 percent of worldwide Mercedes-Benz and BMW brand sales. It accounts for 5 percent of Volkswagen’s VW brand sales and 12 percent of its Audi brand sales.