Oil rises more than 1% as US recession fears recede

US retail sales rose 0.7 percent in July as consumers bought a range of goods even as they cut back on motor vehicle purchases. (Reuters)
Updated 16 August 2019

Oil rises more than 1% as US recession fears recede

  • US retail sales rose 0.7 percent in July as consumers bought a range of goods even as they cut back on motor vehicle purchases
  • The price of Brent is still up nearly 10 percent this year

TOKYO: Crude oil prices rose more than 1 percent on Friday following two days of declines, buoyed after data showing an increase in retail sales in the United States helped dampen concerns about a recession in the world’s biggest economy.
Brent crude was up 68 cents, or 1.2 percent, at $58.91 a barrel at 0650 GMT, after falling 2.1 percent on Thursday and 3 percent the previous day.
US crude was up 63 cents, or 1.2 percent, at $55.10 a barrel, having dropped 1.4 percent the previous session and 3.3 percent on Wednesday.
US retail sales rose 0.7 percent in July as consumers bought a range of goods even as they cut back on motor vehicle purchases, according to data that came a day after a key part of the US Treasury yield curve inverted for the first time since June 2007, prompting a sell-off in stocks and crude oil.
An inverted Treasury yield curve is historically a reliable predictor of looming recessions.
“The rebound has a corrective look about it on thin volumes, rather than a beachhead for an impending rebound,” said Jeffrey Halley, senior market analyst at OANDA. “Overall, US data continues to be a bright spot in a dark economic universe.”
Gains are likely to be capped after a week of data releases including a surprise drop in industrial output growth in China to a more than 17-year low, along with a fall in exports that sent Germany’s economy into reverse in the second quarter.
“The broader story around global economic growth has been a weak one, or a weakening one and expectations (are for) further weakening,” Phin Ziebell, senior economist at National Australia Bank, said by phone.
The price of Brent is still up nearly 10 percent this year thanks to supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, a group known as OPEC+. In July, OPEC+ agreed to extend oil output cuts until March 2020 to prop up prices.
“At what point will further output cuts be needed at the back end of this year from OPEC and Russia to keep things going the way they are?” Zeibell said, pointing to the broader economic outlook.
A Saudi official on Aug. 8 indicated more steps may be coming, saying: “Saudi Arabia is committed to do whatever it takes to keep the market balanced next year.”
But the efforts of OPEC+ have been outweighed by worries about the global economy amid the US-China trade dispute and uncertainty over Brexit, as well as rising US stockpiles of crude and higher output of US shale oil.


Japan’s Uniqlo pulls ad after South Korean fury

Updated 21 October 2019

Japan’s Uniqlo pulls ad after South Korean fury

  • South Korean and Japanese relationship is deeply strained by the legacy of Tokyo’s 20th-century expansionism
  • Seoul and Tokyo are currently locked in a bitter trade and diplomatic row stemming from historical disputes
SEOUL: Japanese retail giant Uniqlo has pulled a commercial featuring a 98-year-old US fashion figure from South Korean screens, it said Monday after it was accused of whitewashing colonial history.
South Korea and Japan are both US allies, democracies and market economies faced with an overbearing China and nuclear-armed North Korea, but their relationship is deeply strained by the legacy of Tokyo’s 20th-century expansionism.
The latest example is an advert for Uniqlo fleeces showing elderly fashion celebrity Iris Apfel chatting with designer Kheris Rogers, 85 years her junior.
The last line has the white-haired Apfel, asked how she used to dress as a teenager, innocuously responding: “Oh my God. I can’t remember that far back.”
But Uniqlo’s Korean arm subtitled its version of the ad slightly differently, reading: “I can’t remember things that happened more than 80 years ago.”
That would put the moment as 1939, toward the end of Japan’s brutal colonial rule over the Korean peninsula, where the period is still bitterly resented, and some South Koreans reacted furiously.
“A nation that forgets history has no future. We can’t forget what happened 80 years ago that Uniqlo made fun of,” commented one Internet user on Naver, the country’s largest portal.
The phrase “Uniqlo, comfort women,” in reference to women forced to become sex slaves to Japanese troops during the Second World War, was among the most searched terms on Naver at the weekend, and demonstrators protested outside Uniqlo shops on Monday.
Seoul and Tokyo are currently locked in a bitter trade and diplomatic row stemming from historical disputes, and South Korean consumers have mounted boycotts of Japanese products.
Uniqlo — which has 186 stores in South Korea — has itself been one of the highest-profile targets, while Japanese carmakers’ sales dropped nearly 60 percent year-on-year in September.
The company denied the allegations in a statement, saying the text was altered to highlight the age gap between the individuals and show that its fleeces were for people “across generations.”
“The ad had no intention whatsoever to imply anything” about colonial rule, a Uniqlo representative said on Monday, adding the firm had withdrawn the ad in an effort at damage control.
Analysts said the controversy demonstrated the politicization of the neighbors’ complex history.
The reaction was excessive, said Kim Sung-han, a former foreign affairs vice minister who teaches at Korea University, involving a “jump in logic” that “assumes everything Uniqlo does is political as a Japanese company.”
“I don’t see how her remark could be linked to the comfort women issue,” he added. “This is overly sensitive.”