Oil pares losses after dive toward 12-year low

Updated 07 January 2016

Oil pares losses after dive toward 12-year low

NEW YORK/LONDON: Oil lurched to new 12-year lows before paring some losses on Thursday, with some traders betting a rout triggered by fears over China demand and swelling US stockpiles had run its course, for now.
Global benchmark Brent crude fell as much as 6 percent to nearly $32 a barrel, its lowest level since at least April 2004, as another free fall in the Chinese stock market rattled investors already concerned by the world glut in crude.
But by midmorning trade in New York, Brent pared those losses as some traders took profits after prices slid nearly 14 percent in four days.
“I’ll say it’s oversold on a short-term basis, though I am an oil bear,” said Tariq Zahir, who trades mostly longer-dated spreads in US West Texas Intermediate crude futures (WTI) for the Long Island, New York-based Tyche Capital Advisers fund.
“There’s covering and also some panic buying in an attempt to support WTI at above $32.”
Brent was 25 cents lower at $33.98 a barrel by 1718 GMT after sliding during European trading to a low of $32.16, a level last seen in April 2004.
WTI were down 50 cents at $33.47, after hitting a low of $32.10, their lowest since late 2003.
China allowed its yuan currency to slip on Thursday, sending regional currencies and stock markets tumbling globally. Stock market trading was suspended less than half an hour after opening after sharp falls triggered a new circuit-breaking mechanism for a second time since its introduction this week.
The crash raises the risk of slowing demand from the world’s No. 2 oil consumer, threatening to prolong an over year-long supply overhang.
“For sure, a minus 7 percent for oil over two days on just China, and a blowup of the whole macro trade, was not something I was expecting to see in the first two days of the year,” said Doug King, fund manager in London for the $220 million Singapore-based Merchant Commodity Fund.
US government data on Wednesday showed a 10.6 million-barrel surge in gasoline supplies, the biggest weekly build since 1993, rattling investors already concerned by near-record production and massive stockpiles around the world.
Prices also trimmed early losses after violence in the Middle East and North Africa offered a measure of support.
A military training center in the Libyan town of Zliten was hit by a truck bomb, causing dozens of casualties, witnesses said, while dozens of air strikes hit the Yemeni capital Sanaa.
Oil’s rapid fall has made a prediction that Goldman Sachs made last year that crude could fall as low as $20 a barrel seem less outlandish than it then seemed.

France ready to take Trump’s tariff threat to WTO

Updated 08 December 2019

France ready to take Trump’s tariff threat to WTO

  • Macron government will discuss a global digital tax with Washington at the OECD, says finance minister

PARIS: France is ready to go to the World Trade Organization to challenge US President Donald Trump’s threat to put tariffs on French goods in a row over a French tax on internet companies, its finance minister said on Sunday.

“We are ready to take this to an international court, notably the WTO, because the national tax on digital companies touches US companies in the same way as EU or French companies or Chinese. It is not discriminatory,” Finance Minister Bruno Le Maire told France 3 television. Paris has long complained about US digital companies not paying enough tax on revenues earned in France.

In July, the French government decided to apply a 3 percent levy on revenue from digital services earned in France by firms with more than €25 million in French revenue and €750 million ($845 million) worldwide. It is due to kick in retroactively from the start of 2019.

Washington is threatening to retaliate with heavy duties on imports of French cheeses and luxury handbags, but France and the EU say they are ready to retaliate in turn if Trump carries out the threat. Le Maire said France was willing to discuss a global digital tax with the US at the Organization for Economic Cooperation and Development (OECD), but that such a tax could not be optional for internet companies.

“If there is agreement at the OECD, all the better, then we will finally have a global digital tax. If there is no agreement at OECD level, we will restart talks at EU level,” Le Maire said.

He added that new EU Commissioner for Economy Paolo Gentiloni had already proposed to restart such talks.

France pushed ahead with its digital tax after EU member states, under the previous executive European Commission, failed to agree on a levy valid across the bloc after opposition from Ireland, Denmark, Sweden and Finland.

The new European Commission assumed office on Dec. 1.