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.


Germany mulls how to attract skilled labor from outside EU

Updated 16 December 2019

Germany mulls how to attract skilled labor from outside EU

  • The new legislation will take effect March 1
  • German official said shortage of skilled workers is currently biggest risk to business

BERLIN: Chancellor Angela Merkel is meeting top German business and union officials on Monday to discuss how to attract skilled workers from outside the European Union as the country tries to tackle a shortfall of qualified labor.
Legislation is due to take effect March 1 making it easier for non-EU nationals to get visas to work and seek jobs in Germany. Arrangements currently applied to university graduates are being expanded to immigrants with professional qualifications and German language knowledge.
“Many companies in Germany are urgently seeking skilled workers, even in times of a weaker economy,” Eric Schweitzer, the head of the Association of German Chambers of Commerce and Industry, told the Funke newspaper group. “For more than half of companies, the shortage of skilled workers is currently the biggest risk to business.”
He called for “unbureaucratic and effective implementation” of the new legislation.
Sectors including information technology and nursing have complained of a shortage of workers.
Monday’s meeting will discuss which countries German business wants to focus on “and we will cut out the bureaucratic hurdles,” Labor Minister Hubertus Heil told RBB Inforadio. He named as examples the process of recognizing professional qualifications, language ability and visa procedures.
Like many other European countries, Germany is trying to strike a balance between the needs of its labor market, an aging native population and concern about immigration.
Heil said that the aim isn’t to undercut German wages and “our problem at the moment is rather that we are not being overrun, that we are not getting qualified workers.”