Oil News Archives -

Release of Negative Final Readings for Economic Growth Rate in the UK

Release of Negative Final Readings for Economic Growth Rate in the UK

The UK’s Office for National Statistics released the final data for the country’s GDP growth rate
for the second quarter of the year this Monday morning.
The readings were highly negative and fell short of expectations.

Content:

United Kingdom
Oil
China

United Kingdom

Official data revealed that the UK economy recorded a real GDP growth of 0.5% during the second quarter,
while markets were expecting economic growth of around 0.6%.
It is worth noting that the economic growth rate in the UK for the first quarter stood at 0.6%.
On an annual basis, the growth rate for the second quarter was approximately 0.7%,
whereas markets had anticipated a growth rate of 0.9%.
The previous reading for the indicator had shown a rise of 0.9%.

This indicator measures the inflation-adjusted change in the value of all goods and services produced by the UK economy.
It holds great importance as it is considered the broadest measure of economic activity
and a key indicator of the overall health of the economy.

Oil

Oil prices rose as traders assessed the risks in the Middle East and China’s economic stimulus efforts.
Oil prices climbed as the market watched for how Iran would respond to the killing of Hezbollah leader Hassan Nasrallah by Israel.
Investors are also evaluating China’s steps to support its economy, the world’s largest oil importer.

Brent crude for December delivery, the most active contract, surpassed $73 per barrel,
with West Texas Intermediate trading above $69 per barrel.
Nasrallah was killed in an airstrike on the Lebanese capital Beirut, delivering a major blow to the group and its sponsor, Tehran.
Meanwhile, Israeli occupation aircraft bombed targets in Yemen after attacks by Iranian-backed Houthi rebels earlier this month.
Despite this, oil remains low this year, as rising tensions in the Middle East have not yet escalated into a full-blown confrontation that could threaten oil supplies from the region. At the same time, global production remains abundant,
with “OPEC+” planning to ease production cuts, and China’s slowdown has weakened demand,
although recent stimulus measures by Beijing may offset some of this impact.

China

Chinese stocks saw their biggest rise since 2015 and are heading toward a bull market.
Chinese stocks rose for the ninth consecutive day as government incentives attracted investors back to one of the most battered markets globally.
The “CSI 300” index jumped 6.5% on Monday, its highest level since 2015, as traders rushed to buy stocks in the last session before a week-long holiday. After losing more than 45% of its value from its peak in 2021 until mid-September, the index has now risen by more than 20%, signaling a move toward a bull market. Last week’s rally was the biggest since 2008.
The continuous rise followed the relaxation of homebuyer rules in three of China’s largest cities, while the central bank also moved to lower mortgage rates. These recent measures were part of a broader stimulus package announced on Tuesday, which also included interest rate cuts, freeing up cash for banks, and supporting liquidity in the stock market.

Release of Negative Final Readings for Economic Growth Rate in the UK

Oil Witnesses Strong Declines in Recent Sessions

Oil Witnesses Strong Declines in Recent Sessions

Oil prices have experienced sharp declines over the past two days.

Content:

Oil
China
Libya

Oil:

Oil has dropped below the $70 mark, reaching $67.9 per barrel due to several recent events. Foremost among these is Saudi Arabia potentially abandoning its unofficial target of $100 per barrel.
Additionally, Saudi Arabia is committed to resuming production at the start of December, which will significantly increase the supply in the markets.
The Kingdom is unwilling to continue losing its market share to other producers.

China:

The ongoing crisis in the Chinese economy is one of the main factors affecting oil prices, due to reduced demand from China.
This situation is expected to persist into next year, with pessimism surrounding the timeline for resolving China’s economic crisis, despite recent economic stimulus efforts. Last week, China introduced its largest economic stimulus package yet, but markets seem to believe this will not be enough to resolve the economic and real estate challenges facing China, which will likely contribute to a further decline in oil prices in the coming months.

Libya:

On the other hand, Libyan factions have agreed on a leadership strategy for the Central Bank of Libya in the coming period.
This agreement is expected to help restore Libyan oil production to normal levels,
contributing to an increase in oil supply in the markets.
Additionally, the global economic slowdown,
which may affect major economies in the near future,
especially with the International Monetary Fund (IMF) lowering global growth forecasts,
is another factor likely to influence oil prices.

Oil Witnesses Strong Declines in Recent Sessions

Oil Prices Steady Ahead of Fed Decision Amid Demand Concerns

Oil Prices Steady Ahead of Fed Decision Amid Demand Concerns

Oil prices stabilized as concerns over deteriorating demand forecasts overshadowed the anticipated interest rate cut by the Federal Reserve.

Content

Oil

Gold

The Fed

Oil

Brent crude traded near $73 per barrel after rising 1.6% on Monday, while West Texas Intermediate (WTI) surpassed $70. Opinions remain divided on the monetary easing path the Federal Reserve will take, with some betting on a half-percentage-point cut expected on Wednesday. Lower interest rates are likely to boost energy demand. Oil has lost about 14% this quarter due to concerns over an economic slowdown in China, the largest crude importer, and signs of ample supply. According to EA Quant Analytics, short positions are nearing their maximum limit, which may ease recent selling pressures.

Gold

Goldman Sachs: Gold could dip if rates are cut by a quarter percentage point.
Goldman Sachs believes gold may see a slight dip in the short term if the Federal Reserve opts for a 25-basis-point interest rate cut this week. However, the yellow metal could later rise to record levels, supported by increased flows into gold-backed exchange-traded funds (ETFs), according to their forecast. Analysts Lina Thomas and Dan Struiven noted in a memo that “the Fed’s rate cut is expected to trigger a resurgence of Western investment flows into gold ETFs, a factor that was largely absent during gold’s major rally over the past two years.” The memo added that the bank still holds its projection of gold reaching $2,700 per ounce by the beginning of next year.

The Fed

Fed decision bets push Wall Street traders toward small-cap stocks.
Wall Street traders, preparing for the Federal Reserve’s decision this week, continued to move away from investing in large tech companies that have driven the bull market since the beginning of the year.
With growing bets that the Fed will cut rates by half a percentage point on Wednesday, funds continued to flow toward economically sensitive sectors, away from major tech stocks, which are seen as safe havens. Apple shares dropped 3% after a leading analyst warned that demand for the iPhone 16 Pro was lower than expected. While the S&P 500 index showed little change on Monday, most listed stocks rose. This disparity was largely due to the weakness of major tech companies that dominate the primary U.S. stock index.

Oil Prices Steady Ahead of Fed Decision Amid Demand Concerns

New Assassination Attempt on Trump Suspect Arrested

محاولة اغتيال جديدة لترامب والقبض على المشتبه به

New Assassination Attempt on Trump Suspect Arrested: The FBI announced that U.S. Republican presidential candidate Donald Trump
is safe following what was described as an “apparent assassination attempt” on Sunday,
September 15, near Trump’s golf course in West Palm Beach, Florida.

Topic
Trump
Oil
Dollar

Trump

Law enforcement officials stated during a press conference that a suspect
was arrested after being spotted by U.S. Secret Service agents in the woods near Trump National Golf Club,
armed with an AK-47 assault rifle. Secret Service agents fired at the suspect, who fled in a black vehicle.

Oil

U.S. Agency: One-Fifth of Oil Production and 28% of Gas Output Halted in the Gulf of Mexico.
The U.S. agency responsible for regulating energy production on offshore platforms announced on Sunday,
September 15, approximately one-fifth of crude oil production
and 28% of natural gas production in U.S. federa
l waters in the Gulf of Mexico remains shut down following Hurricane Francine.
According to Reuters estimates,
the total cumulative offshore production losses due to Hurricane Francine
have reached 2.16 million barrels of crude oil and 4.635 billion cubic feet of natural gas.

Dollar

Dollar Nears Lowest Level Since January Amid Expectations of a Significant Interest Rate Cut.
The U.S. dollar fell to its lowest level since January
as traders increasingly expect the Federal Reserve to cut interest rates
by half a percentage point this week.
The Bloomberg U.S. Dollar Index dropped by 0.3% on Monday, approaching its lowest level in August,
and if breached, it would reach the weakest price since January.
After weeks of debate over whether the Federal Reserve would begin easing its monetary policy by reducing
interest rates by 25 or 50 basis points, traders now prefer the latter option.
Futures contracts linked to the Fed’s decision this week indicate a 58% probability of a half-point rate cut,
compared to a 50% chance last Friday.

New Assassination Attempt on Trump Suspect Arrested

Oil Prices Record First Weekly Gains Since Early August

Oil Prices Record First Weekly Gains Since Early August

Oil prices declined as production began to recover after Hurricane Francine, despite futures posting their first weekly gains in a month. Disruptions and risk appetite in broader markets helped ease the overselling that had gripped the crude market in previous days.

Content:

Oil
China
Gas

Oil

West Texas Intermediate (WTI) crude fell 0.5%, settling below $69 per barrel, giving up earlier gains after Shell began restoring production in the Gulf of Mexico. The earlier recovery was largely driven by short-covering after the settlement price dropped below $66 on Tuesday, marking the lowest close since December 2021.

China

China’s economy faces additional risks as industrial production growth slows for the fourth consecutive month.
In August, China’s economic momentum weakened, with activity slowing across various sectors, signaling rising risks to achieving the government’s annual growth target.
The National Bureau of Statistics reported on Saturday that industrial production increased by 4.5% compared to the previous year, falling short of the 4.7% forecast. This marks the fourth consecutive month of slowing growth, the longest such period since September 2021.
Retail sales grew by 2.1%, slower than the previous month and below economists’ expectations of 2.5%. Both fixed asset and property investments also disappointed. The continued slowdown in industrial production shows that the most resilient part of China’s economy is losing steam, further darkening growth prospects as domestic demand struggles to recover and government investments have yet to bounce back.

Gas

European natural gas prices surged amid fierce competition from Egypt.
Natural gas prices in Europe jumped after results from an Egyptian tender revealed that global competition for the fuel remains strong, which could complicate the region’s ability to secure supplies. Benchmark futures rose 2.8% before paring some gains, offsetting the previous day’s losses. Prices climbed after Egypt’s state-owned General Petroleum Corporation purchased 20 shipments for fourth-quarter delivery at a premium over European prices. This move indicates that Europe will face stiff competition for supplies from countries like Egypt and others in Asia, just weeks ahead of the official start of the heating season. Prices have been volatile in recent weeks, and any signs of rising demand could disrupt the delicate balance of supplies in the region.

Oil Prices Record First Weekly Gains Since Early August

OPEC+’s Options for Managing the Expected Oil Surplus in 2025

OPEC+’s Options for Managing the Expected Oil Surplus in 2025?: The OPEC+ alliance prevented an oil surplus this year by delaying plans to restore production.
This helped stabilize prices that had declined due to slowing economic growth in China and increased U.S. supplies.
However, forecasts indicate oil markets could face a surplus in 2025 despite OPEC+ cutting production.
This anticipated surplus is attributed to increased output from non-member countries like the United States, Guyana, Brazil, and Canada,
along with weak global demand growth due to the shift towards electric vehicles and China’s slowing economy.

Content

Details

The International Energy Agency expects global oil consumption to grow by less than 1% next year
amid weak post-pandemic economic recovery momentum and accelerated shifts towards alternative energy sources.
Meanwhile, global production outside of OPEC+ is expected to outpace this modest consumption growth,
with the United States contributing a significant share of this additional output.
As a result, the agency forecasts an increase in global oil inventories, particularly in the first quarter of 2025.

Despite these expectations, OPEC+ faces challenges adapting its strategy to the new variables.
Delaying plans to restore production could postpone the expected surplus, but pressures from member countries,
such as the UAE, which seeks to increase its output, may hinder these plans.
Saudi Arabia, which relies on high oil prices to finance its economic projects,
faces financial challenges if prices continue to fall.

According to forecasts by Citi Group and JPMorgan,
central banks and consumers might find some relief in the expected price drop to $60 per barrel.
However, this scenario puts pressure on producing countries.
Some analysts believe that OPEC+ may ultimately decide to take more drastic measures,
such as increasing production to counter competitors like U.S. shale oil producers.
However, this is not currently the most likely scenario.

The alliance may continue to delay restoring production to avoid the expected surplus in 2025.
Still, maintaining this policy depends on member states’ internal challenges and external pressures from global markets.

Source: Bloomberg

OPEC+’s Options for Managing the Expected Oil Surplus in 2025

Continued M&A Activity in the Sector

Continued M&A Activity in the Sector Amid Strong Demand and Oil Prices Near $80 per Barrel

Some shale oil producers are looking to strike new merger and acquisition (M&A) deals,
even as major oil and gas companies like ExxonMobil and
Chevron take a breather to absorb the intense activity that has led to significant deals.

Content:

Oil
Apple
China

Oil

The merger and acquisition (M&A) activity in this sector will remain strong, possibly even involving more large-scale deals, driven by strong demand and oil prices hovering around $80 per barrel.
The largest oil producers in the United States have rushed into a wave of acquisitions over the past 12 months in response to investor demands to scale back exploration activities and reduce costs, while attempting to maintain their relevance in an industry that is no longer as favored as it once was but remains highly profitable.
They found an opportunity to enhance their production and asset reserves by acquiring smaller competitors.

Apple

Apple allows third parties to use its electronic payment chip for the first time.
It will begin allowing third parties to use the payment chip in its iPhone to conduct financial transactions, a move that will allow banks and other service providers to compete with the Apple Pay platform.
This step, announced last Wednesday, comes after years of pressure from regulatory bodies, including those affiliated with the European Union. Apple said it will allow developers to use this chip starting with the upcoming “iOS 18.1” update for the iPhone operating system.
This chip relies on Near Field Communication (NFC) technology to exchange information when the phone is close to another device.
This change will allow external service providers to use the chip for payments in stores, public transportation costs, work badges, home and hotel keys, and reward cards. Apple will also later add support for government ID cards.
Users will be able to set a third-party payment app as the default payment option instead of Apple Pay.

China

China steps up efforts to boost private investment in infrastructure.
It Central Television, citing a statement from the Economic Planning Agency,
reported that the National Development and Reform Commission (NDRC) will work to present projects to private sector investors,
with a particular focus on major infrastructure in areas such as transportation and energy.

The government will also provide support from the central budget for qualified key private investment projects.
China Central Television reported that the NDRC will collaborate with the Ministry of Natural Resources and the Ministry of Environment to provide support in land and sea use and environmental impact assessment guarantees.
It added that the NDRC will draft financing support policies to boost private investment in cooperation with the National Financial Regulatory Administration.

Chinese Premier Li Qiang emphasized on Friday the importance of effectively utilizing government investments and ensuring the implementation of policies to support private investment.

Continued M&A Activity in the Sector

Oil Rises Amid Political Uncertainty in the U.S. and the Middle East

Oil Rises Amid Political Uncertainty in the U.S. and the Middle East

Oil prices climbed on Monday amid political uncertainty in the United States and the Middle East,
offsetting some of the pressures from a stronger dollar and weak demand in China.

Topic

Details

Last Week

Details

Brent crude futures rose 15 cents, or 0.2%, to $85.18 a barrel by 0425 GMT, after closing 37 cents lower on Friday.
U.S. West Texas Intermediate (WTI) crude was at $82.41 a barrel, up 20 cents, or 0.2%.

Oil prices shrugged off the impact of a stronger dollar, which rose following a failed assassination attempt on U.S. presidential candidate Donald Trump.
“I don’t think you can ignore the uncertainty stemming from the assassination attempt that
occurred at the beginning of the week, which will cast a shadow over a deeply divided country ahead of the elections,”
said Tony Sycamore, a market analyst at IG.

In the Middle East, talks aimed at ending the war in Gaza between Israel and the Palestinian Hamas movement stalled on Saturday after three days, although a Hamas official said on Sunday that the group had not withdrawn from the discussions. Meanwhile, an attack that Israel said targeted the commander of Hamas’ military wing killed 90 people on Saturday.

The ongoing geopolitical risks have driven oil prices higher amid uncertainty about the volatile situation in the Middle East. Additionally, oil markets remain broadly supported by supply cuts from OPEC+, with Iraq’s oil ministry stating it will compensate for any surplus production starting in early 2024.

Last Week

Brent crude fell more than 1.7% after four weeks of gains, while U.S. WTI crude futures dropped 1.1%,
as weak oil demand in China, the world’s largest crude importer,
clashed with strong summer consumption in the United States.
China’s crude oil imports fell 2.3% in the first half of this year to 11.05 million barrels per day amid disappointing fuel demand and independent refineries cutting production due to weak profit margins.

Data showed that China’s economy slowed in the second quarter as prolonged real estate downturns and job insecurity affected domestic demand, maintaining expectations that Beijing would need to implement more stimulus measures.

Energy services firm Baker Hughes reported on Friday that the number of active oil rigs in the United States, an early indicator of future production, fell by one to 478 last week, the lowest level since December 2021.

Oil Rises Amid Political Uncertainty in the U.S. and the Middle East

U.S. Energy Information

U.S. Energy Information Administration Reveals Its Global Oil Demand Forecasts

The U.S. Energy Information Administration (EIA) released its monthly short-term energy outlook report yesterday, Tuesday. Below are the key points from the report:

Content

Global Demand
U.S. Oil Production
U.S. Oil Demand
Global Oil Production
Crude Oil Price Forecasts

Global Oil Demand

The global oil demand for 2024 is expected to increase by about 1.10 million barrels per day year-on-year. The EIA has raised its global oil demand forecast for 2025 by 300,000 barrels per day, with the annual increase now expected to reach 1.80 million barrels per day.

U.S. Oil Production

The administration expects U.S. oil production to rise by 10,000 barrels per day in 2024 and predicts that production will now grow by 320,000 barrels per day year-on-year to 13.25 million barrels per day. The EIA has increased its U.S. oil production forecast for 2025 by 60,000 barrels per day and now expects production to grow by 520,000 barrels per day year-on-year to 13.77 million barrels per day.

U.S. Oil Demand

The EIA has raised its U.S. oil demand forecast for 2024 by 100,000 barrels per day and now expects demand to grow by 200,000 barrels per day year-on-year to 20.4 million barrels per day. The U.S. oil demand forecast for 2025 remains unchanged at 20.6 million barrels per day, with a growth of 200,000 barrels per day compared to 2024.

Global Oil Production

The EIA has lowered its global oil production forecast for 2024 by 200,000 barrels per day,
expecting production to grow by 600,000 barrels per day year-on-year to 102.4 million barrels per day.
The administration has reduced its global oil production forecast for 2025 by 100,000 barrels per day,
with production now expected to grow by 2.2 million barrels per day year-on-year to 104.6 million barrels per day.

Crude Oil Price Forecasts

The EIA has raised its forecast for the price of West Texas Intermediate (WTI) crude oil in 2024 to $82.03 per barrel (previously $79.70 per barrel). For 2025, the WTI price is expected to rise to $83.88 per barrel (previously $80.88 per barrel). The administration has also raised its forecast for Brent crude oil prices in 2024 to $86.37 per barrel (previously $84.15 per barrel) and expects Brent prices to rise to $88.38 per barrel in 2025 (previously $85.38 per barrel).

U.S. Energy Information Administration Reveals Its Global Oil Demand Forecasts

Top Commodities to Watch This Week in Financial Markets

Top Commodities to Watch This Week in Financial Markets

Global financial markets are closely monitoring a range of commodities
that are significantly affected by climate changes and economic events.
As we begin this week, we highlight five key commodities
that are worth watching due to their substantial impact on the global economy and market trends.
Here’s an overview of these commodities:

Topic

Oil

Oil remains at the forefront among the most crucial commodities in global markets.
With ongoing price fluctuations and increasing demand expectations,
investors are keenly observing oil price movements. Last week,
a report from the Federal Reserve Bank of Dallas revealed
that executives in American shale oil companies expect West Texas
Intermediate crude prices to end the year averaging below $80 per barrel.
Predictions range between $75 and $85 per barrel,
reflecting a sense of pessimism despite slowed U.S. production growth
and global optimism about rising demand.

Cocoa

New York cocoa futures recorded their first quarterly loss in two years,
dropping by 21% in the second quarter of this year.
This decline has calmed the price surge that pushed cocoa to historical highs last April.
These changes come amid production difficulties in Ivory Coast and Ghana,
the world’s largest cocoa producers, which are facing a significant shortfall of up to 439,000 tons this season.
However, expectations are improving for the next season,
with Ivory Coast’s production anticipated to recover to two million tons
for the harvest season starting in October.

Wheat

Wheat is a staple commodity heavily influenced by climate fluctuations and geopolitical crises.
With rising tensions in key production regions and changing weather patterns,
wheat production faces substantial challenges.
This results in price volatility, making wheat a commodity to closely monitor during the current week.

Silver

Silver has played a significant role in supporting the commodities market during the first half of 2024.
The Bloomberg Spot Commodity Index, which tracks a basket of 24 futures contracts,
rose by 5.7% during this period thanks to consecutive increases over two quarterly periods.
Although this rise is much lower than the gains achieved by the index at the beginning of the COVID-19 pandemic,
silver’s performance shows improvement compared to most quarterly periods over the past two years.

Coffee

Coffee markets have seen notable support during the first half of the year,
contributing to the overall strengthening of the commodities market.
With increasing global demand for coffee, particularly in emerging markets,
price movements and production forecasts in key coffee-producing regions like Brazil
and Colombia are under close scrutiny.

Conclusion

Financial markets are in a state of anticipation, focusing on essential commodities significantly
impacted by climatic and economic factors.
From oil to coffee, investors and analysts are closely tracking price movements
and future projections for these commodities,
given their profound impact on the global economy and market trends.
As climate changes and geopolitical events continue,
these commodities remain at the center of attention in the financial markets this week.

Top Commodities to Watch This Week in Financial Markets