US crude sinks to lowest since July

Updated 28 December 2013

US crude sinks to lowest since July

LONDON: US crude fell toward $96 a barrel to its lowest since July on Wednesday, outpacing a smaller drop in Brent futures, pressured by ample supplies and a further inventory build-up in the United States, the world's top consumer.
Maintenance at US refineries and pipeline outages have led to an increase in domestic stocks, stretching Brent's premium to the US benchmark also known as WTI to more than $13 a barrel, its widest since April.
US crude fell $1.83 to $96.47 and earlier reached $96.16, its lowest since July 1. Brent crude fell $1.23 to $108.74 a barrel by 1445 GMT, after hitting a session high of $110.06.
"The weakness in the Brent/WTI spread reflects refinery maintenance and growing crude stocks in the US," said Christopher Bellew, an oil broker at Jefferies Bache."
"Other bearish factors are the warm autumn in the northern hemisphere and Libyan oil coming back onto the market."
Adding to a series of reports of rising crude stocks, the US government's Energy Information Administration - returning to its normal schedule after the government shutdown - said inventories rose by 5.2 million barrels, more than forecast.
On Monday, the US government said they rose by 4 million barrels in the week to Oct. 11 and increased at the Cushing storage hub for the first time since the end of June.
The EIA report released at 1430 GMT showed a larger rise in crude stocks than the 2.9-million-barrel increase expected by analysts and the 3-million-barrel increased reported by industry group the American Petroleum Institute on Tuesday.
Brent could break below $109, Bellew said earlier in the day, and other analysts saw a weakening chart pattern for US crude. Its 200-day moving average at $98.62 is now a resistance level after prices fell below that mark.
"The technical picture in WTI is turning more negative as WTI broke the support of the 200-day moving average and it has its five-day moving average trending below the nine-day," said Olivier Jakob, consultant at Petromatrix.
Stockpiles also built in China, the second-largest oil consumer, in September, official news agency Xinhua said on Wednesday, as crude imports jumped to a record high.
Rising output of shale oil added to the picture of an amply supplied US market. The Eagle Ford formation in Texas has beaten North Dakota's Bakken to the milestone of 1 million barrels per day, the EIA said.
Uncertainty over the future of Scotland's Grangemouth refinery also supported Brent. The refinery provides steam to a plant which processes Forties, the largest crude oil stream underpinning Brent futures.


Big week for Big Tech as earnings, hearings loom

Updated 25 October 2020

Big week for Big Tech as earnings, hearings loom

  • The four giants drawing the most scrutiny — Apple, Amazon, Facebook and Google — have been wildly successful in recent years

SAN FRANCISCO: Big Tech is bracing for a tumultuous week marked by quarterly results likely to show resilience despite the pandemic, and fresh attacks from lawmakers ahead of the Nov. 3 election.

With backlash against Silicon Valley intensifying, the companies will seek to reassure investors while at the same time fend off regulators and activists who claim these firms have become too dominant and powerful.

Earnings reports are due this week from Amazon, Apple, Facebook, Microsoft, Twitter and Google-parent Alphabet, whose combined value has grown to more than $7 trillion.

They have also woven themselves into the very fabric of modern life, from how people share views and get news to shopping, working, and playing.

Robust quarterly earnings results expected from Big Tech will “highlight the outsized strength these tech behemoths are seeing” but “ultimately add fuel to the fire in the Beltway around breakup momentum,” Wedbush analyst Dan Ives said in a note to investors.

The results come amid heightened scrutiny in Washington of tech platforms and follow a landmark antitrust suit filed against Google, which could potentially lead to the breakup of the internet giant, illustrative of the “techlash” in political circles.

Meanwhile, Senate Republicans have voted to subpoena Jack Dorsey and Mark Zuckerberg, the chief executives of Twitter and Facebook respectively, as part of a stepped-up assault on social media’s handling of online political content, notably the downranking of a New York Post article purported to show embarrassing information about Democrat Joe Biden.

CEOs of Twitter, Facebook and Google are already slated to testify at a separate Senate panel on Wednesday examining the so-called Section 230 law, which offers liability protection for content posted by others on their platforms.

The four giants drawing the most scrutiny — Apple, Amazon, Facebook and Google — have been wildly successful in recent years and have weathered the economic impact of the pandemic by offering needed goods and services.

Google and Facebook dominate the lucrative online ad market, while Amazon is an e-commerce king.

Apple has come under fire for its tight grip on the App Store, just as it has made a priority of making money from selling digital content and services to the multitude of iPhone users.

The firms have stepped up lobbying, spending tens of millions this year, and made efforts to show their social contributions as part of their campaign to fend off regulation.

“For the most part, tech companies know how to do this dance,” said analyst Rob Enderle of Enderle Group.

“They don’t spend a lot of time bragging about how well they have done any more.”

Ed Yardeni of Yardeni Research said the outlook for Big Tech may not be as rosy as it appears.

“For one, regulators at home and abroad are gunning to rein in some of the largest US technology names,” Yardeni said in a research note.

Of interest to the market short-term will likely be whether backlash about what kind of content is left up and what is taken down by online titans causes advertisers to cut spending on the platforms.

Economic and social disruption from the pandemic also looms over tech firms, which benefitted early in the pandemic as people turned to the internet to work, learn, shop and socialize from home.

“Performance will be best for those providing solutions for people working at home,” analyst Enderle said.

Amazon, Google and Microsoft each have cloud computing divisions that have been increasingly powering revenue as demand climbs for software, services and storage provided as services from massive datacenters.

Amazon has seen booming sales on its platform during the pandemic, and viewing surge at its Prime streaming television service.

Enderle expressed concern that with the coronavirus disease (COVID-19) cases and a lack of new stimulus money in the US, tech companies could reveal in forecasts that they are bracing for poorer performance in the current quarter.