Brent oil gains $1 to claw back some losses

Libya’s announcement that four export terminals including Ras Lanuf, above, were being reopened was one of the catalysts for a correction, analysts say. (Reuters)
Updated 12 July 2018
0

Brent oil gains $1 to claw back some losses

TOKYO: Brent crude rose more than $1 on Thursday, recouping some ground after its biggest one-day drop in two years in the previous session on news that Libya would resume oil exports and US-China trade tensions.
Brent crude rose $1.31, or 1.8 percent, to $74.71 by 0242 GMT after slumping 6.9 percent on Wednesday.
US West Texas Intermediate (WTI) added 42 cents, or 0.6 percent, to $70.80, after falling 5 percent the previous session.
“Markets in Asia are a lot more settled today,” said Greg McKenna, chief market strategist at AxiTrader in Sydney.
“Moves, the like of which we saw in Brent and to a lesser extent WTI, last night are often followed by some sort of bounce the following day or session,” he said.
The announcement by Libya’s National Oil Corp. that four export terminals were being reopened, ending a standoff that had shut down most of Libya’s oil output, was one of the catalysts for a correction, analysts said.
The reopening allows the return of as much as 850,000 barrels per day of crude into international markets, while an escalating US-China trade row has raised concerns about demand.
Oil had some supportive news late on Wednesday that US crude oil stocks fell by nearly 13 million barrels last week, the most in nearly two years, dropping overall crude stocks to their lowest point since February 2015.
The decline in overall inventories was partially due to a fall-off in stocks at the Cushing, Oklahoma, delivery hub for US crude futures, which were down by 2.1 million barrels.
“For WTI there is tightness at Cushing, which will be supportive over July and August,” said Virendra Chauhan, oil analyst at Energy Aspects in Singapore.
Supply to the US market has also been squeezed by the loss of some Canadian oil production.


EU debates how and when to start trade talks with Trump

Updated 12 min 9 sec ago
0

EU debates how and when to start trade talks with Trump

  • The US and Europe ended a stand-off of several months last July
  • The EU is looking now to start negotiations on tariff reductions, possibly including cars

BUCHAREST: European ministers will begin debating on Friday how and when to start trade negotiations with the United States, aware that US President Donald Trump may impose punitive tariffs on EU car imports if the bloc waits too long.
The European Commission has asked the EU’s 28 countries to approve two negotiating mandates so that formal talks can begin. Germany is keen to start as soon as possible, while France is reluctant to engage with Trump.
The United States and Europe ended a stand-off of several months last July, when Trump agreed to hold off on car tariffs while the two sides looked to improve trade ties.
They committed to work toward removing tariffs on “non-auto industrial goods,” discuss ways to agree on product standards to boost trade and increase EU imports of US soybeans and liquefied natural gas.
The EU is looking now to start negotiations on tariff reductions, possibly including cars, as well as a separate set of talks on making it easier for companies to clear their products for sale on both sides of the Atlantic.
The ministers in Romania will face three questions.
The first concerns timing. Germany, whose exports of cars and car parts to the United States are worth more than half of the EU total, is keen to press ahead, but France is hesitant of moving before European Parliament elections in May.
The second question is whether to include fisheries, which is technically an industrial good. Some countries, such as France again, are concerned about increased competition in the sector, which is already strained by Brexit.
The third question is what to do about the previous broader “TTIP” negotiations, which drew thousands to streets in Europe in protest. The Commission has insisted the slimmed-down trade deal it is proposing is not a TTIP relaunch. One option to make that clear could be to formally end TTIP.
Industrial good tariffs are already low, at around 4 percent.
However, the Commission has said that removing them would boost EU exports to the United States by 8 percent and US exports to the European Union by 9 percent by 2033, corresponding to extra exports of respectively €27 billion and €26 billion ($29.5 billion).