WED, JUN 29 2022- Oil prices declined on Wednesday with tight supply worries not enough to outweigh concerns about a weaker global economy.

Brent crude futures for August settled 1.46% lower at $116.26. U.S. West Texas Intermediate (WTI) crude futures settled 1.77% lower at $109.78.

Both contracts rose more than 2% on Tuesday as concerns over tight supplies due to Western sanctions on Russia outweighed fears of that demand may slow in a potential future recession.

“The market is stuck in the push-pull between the current deteriorating macro backdrop and the looming threat of a recession, pitted against the strongest fundamental oil market set-up in decades, maybe ever,” RBC Capital’s Mike Tran said in a note.

Dan Yergin explains why crude prices are falling Saudi Arabia and the United Arab Emirates have been seen as the only two members of the Organization of the Petroleum Exporting Countries (OPEC) with spare capacity to make up for lost Russian supply.

French President Emmanuel Macron said this week he was told these producers will struggle to increase output further.

“Investors made position adjustments, but remained bullish on expectations that Saudi Arabia and the United Arab Emirates would not be able to raise output significantly to meet recovering demand, driven by a pick-up in jet fuels,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

OPEC and OPEC+, which includes allies such as Russia, begin a series of two-day meetings on Wednesday with sources saying chances of a big policy change look unlikely this month.

“Oil prices will likely stay above $110 a barrel, also on worries of potential supply disruptions due to hurricanes as the United States enters the summer,” he said.

Analysts also warned that political unrest in Ecuador and Libya could tighten supply further.

NEW YORK, June 28 (Reuters) – Wall Street closed sharply lower in a broad sell-off on Tuesday as dire consumer confidence data dampened investor optimism and fueled worries over recession and the looming earnings season.

The S&P and the Nasdaq fell about 2% and 3% respectively, with Apple Inc (AAPL.O), Microsoft Corp (MSFT.O) and Amazon.com (AMZN.O) weighing the heaviest. The blue-chip Dow shed about 1.6%.

“Markets were fine today until the consumer confidence number came out,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “It was weak and markets immediately began selling off.”

With the end of the month and the second quarter two days away, the benchmark S&P 500 is on track for its biggest first-half percentage drop since 1970. All three indexes are on course to notch two straight quarterly declines for the first time since 2015.

“At some point this aggressive selling is going to dissipate but it doesn’t seem like it’s going to be anytime soon,” said Tim Ghriskey, senior portfolio strategist Ingalls & Snyder in New York.

Data released on Tuesday morning showed the Conference Board’s consumer confidence index dropping to the lowest it has been since February 2021, with near-term expectations reaching its most pessimistic level in nearly a decade. read more

The growing gap between the Conference Board’s “current situation” and “expectations” components have widened to levels that often precede recession:

The Dow Jones Industrial Average (.DJI) fell 491.27 points, or 1.56%, to 30,946.99, the S&P 500 (.SPX) lost 78.56 points, or 2.01%, to 3,821.55 and the Nasdaq Composite (.IXIC) dropped 343.01 points, or 2.98%, to 11,181.54.

Ten of the 11 major sectors in the S&P 500 ended the session in negative territory, with consumer discretionary (.SPLRCD) suffering the largest percentage loss. Energy (.SPNY) was the sole gainer, benefiting from rising crude prices .

With few market catalysts and market participants gearing up for the July Fourth holiday weekend, the day’s sell-off cannot be blamed entirely on the Consumer Confidence report, said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis, Minnesota.

“It’s hard to attribute (market volatility) to one economic data point with so much noise around portfolio rebalancing at quarter-end,” Hainlin said.

“There’s not a lot of new information out there and yet you see this volatile stock environment,” he said, adding that there will not be much new information until companies start earnings.

With several weeks to go until second-quarter reporting commences, 130 S&P 500 companies have pre-announced. Of those, 45 have been positive and 77 have been negative, resulting in a negative/positive ratio of 1.7 stronger than the first quarter but weaker than a year ago, according to Refinitiv data.

Nike Inc (NKE.N) slid 7.0% following its lower than expected revenue forecast. Shares of Occidental Petroleum Corp (OXY.N) advanced 4.8% after Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) raised its stake in the company.

Declining issues outnumbered advancing ones on the NYSE by a 2.28-to-1 ratio; on Nasdaq, a 2.70-to-1 ratio favored decliners. The S&P 500 posted one new 52-week high and 29 new lows; the Nasdaq Composite recorded 29 new highs and 131 new lows. Volume on U.S. exchanges was 11.54 billion shares, compared with the 12.99 billion average over the last 20 trading days.

Reporting by Stephen Culp; Additional reporting by Sinead Carew and Caroline Valetkevitch in New York, Shreyashi Sanyal and Amruta Khandekar in Bengaluru; editing by Grant McCool

SCHLOSS ELMAU, Germany, (Reuters) – Group of Seven leaders on Sunday pledged to raise $600 billion in private and public funds over five years to finance needed infrastructure in developing countries and counter China’s older, multitrillion-dollar Belt and Road project.

U.S. President Joe Biden and other G7 leaders relaunched the newly renamed “Partnership for Global Infrastructure and Investment,” at their annual gathering being held this year at Schloss Elmau in southern Germany.

Biden said the United States would mobilize $200 billion in grants, federal funds and private investment over five years to support projects in low- and middle-income countries that help tackle climate change as well as improve global health, gender equity and digital infrastructure.

“I want to be clear. This isn’t aid or charity. It’s an investment that will deliver returns for everyone,” Biden said, adding that it would allow countries to “see the concrete benefits of partnering with democracies.”

Biden said hundreds of billions of additional dollars could come from multilateral development banks, development finance institutions, sovereign wealth funds and others.

Europe will mobilize 300 billion euros for the initiative over the same period to build up a sustainable alternative to China’s Belt and Road Initiative scheme, which Chinese President Xi Jinping launched in 2013, European Commission President Ursula von der Leyen told the gathering.

The leaders of Italy, Canada and Japan also spoke about their plans, some of which have already been announced separately. French President Emmanuel Macron and British Prime Minister Boris Johnson were not present, but their countries are also participating.

China’s investment scheme involves development and programs in over 100 countries aimed at creating a modern version of the ancient Silk Road trade route from Asia to Europe.

White House officials said the plan has provided little tangible benefit for many developing countries.

Biden highlighted several flagship projects, including a $2 billion solar development project in Angola with support from the Commerce Department, the U.S. Export-Import Bank, U.S. firm AfricaGlobal Schaffer, and U.S. project developer Sun Africa.

Together with G7 members and the EU, Washington will also provide $3.3 million in technical assistance to Institut Pasteur de Dakar in Senegal as it develops an industrial-scale flexible multi-vaccine manufacturing facility in that country that can eventually produce COVID-19 and other vaccines, a project that also involves the EU.

The U.S. Agency for International Development (USAID) will also commit up to $50 million over five years to the World Bank’s global Childcare Incentive Fund.

Friederike Roder, vice president of the non-profit group Global Citizen, said the pledges of investment could be “a good start” toward greater engagement by G7 countries in developing nations and could underpin stronger global growth for all.

G7 countries on average provide only 0.32% of their gross national income, less than half of the 0.7% promised, in development assistance, she said.

“But without developing countries, there will be no sustainable recovery of the world economy,” she said.

Reporting by Andrea Shalal; Editing by Mark Porter and Lisa Shumaker

SHANGHAI (Reuters) – China stood pat on its benchmark lending rates for corporate and household loans, as expected, on Monday, with global central banks’ rate increases making it tough for Beijing to stimulate a weak domestic economy by lowering rates.

Markets widely believe that Chinese policymakers are wary of risks that the yuan will depreciate and capital outflows will be triggered if they embark on further monetary easing to underpin a COVID-19-hit economy at a time when other major economies are tightening their rates policies. The one-year loan prime rate (LPR) was kept at 3.70%, and the five-year LPR was unchanged at 4.45%.

“Perhaps there is some reluctance in loosening monetary policy to support economic activity, which could reflect some caution in moving in the opposite direction to other central banks, particularly the Federal Reserve,” said Stephen Innes, managing partner at SPI Asset Management. “It seems a matter of time, however, before there are larger liquidity injections and measures to boost credit.”

Central banks across Europe raised interest rates last week, some by a level that shocked markets, in the wake of the Fed’s 75 basis point hike to combat high inflation.

“While the PBOC has little to fear from a weaker currency – the renminbi remains extremely strong – the last thing it wants is to have to defend against a sharp, potentially destabilising sell-off,” economists at Capital Economics said in a note earlier. “That could plausibly happen if it lowered rates now when almost every other major central bank has turned much more hawkish.”

Divergent Sino-U.S. policies have wiped out China’s yield advantage in April, triggering a record monthly tumble in the yuan . And a deeper inversion of U.S. and Chinese government-bond yields , could revive such depreciation pressure on the Chinese currency.

About 90% of traders and analysts in a Reuters survey last week expected China to keep both rates unchanged. China lowered the five-year LPR, the benchmark reference rate for mortgages, by an unexpectedly wide margin last month, in a bid to revive the ailing housing sector to prop up the economy.

Most new and outstanding loans in China are based on the one-year LPR. The five-year rate influences the pricing of mortgages.

Reporting by Winni Zhou and Brenda Goh; Editing by Kim Coghill and Muralikumar Anantharaman

WASHINGTON – A bipartisan group of lawmakers said on Monday they have agreed on a proposal that would give the U.S. government sweeping new powers to block billions in U.S. investment into China, although the measure is part of a broader bill with an uncertain future.

The provision is part of broadbased legislation to boost U.S. competitiveness with China and also grant $52 billion to chipmakers to expand U.S. operations.

“The refined proposal released today has bipartisan, bicameral support and addresses industry concerns, including the scope of prospective activities, industries covered, and the prevention of duplicative authorities,” said U.S. Senators Bob Casey and John Cornyn, and Representatives Rosa DeLauro, Bill Pascrell, Jr., Michael McCaul, Brian Fitzpatrick and Victoria Spartz, in a statement.

The initial “outbound investment” proposal had run into opposition on the fear it could reduce companies’ investments abroad, leading some chipmakers to oppose its inclusion in the chips bill being hammered out by Senate and House lawmakers.

Democratic Senator Mark Warner told Reuters on Monday the “the clock is ticking” on the broader chips bill and said there were “a lot of conversations” about pivoting to a bill that would only focus on subsidies for plants to make chips, potentially dropping trade provisions and other measures aimed helping the U.S. compete with China in science, business and technology.

The outbound investment measure was originally proposed as a standalone bill by Cornyn and Casey, but was later added to the House version of a massive bill that includes the grants for chipmakers and is aimed at countering China’s rise.

The draft legislation, which would capture fewer investments than the original version, stirred opposition from critics who said it would harm American competitiveness. The US-China Business Council said about the new draft, “If such government controls were implemented on a unilateral basis, it would only hurt the flexibility and resilience of American companies.”

The draft says a new investment committee would engage with allies to coordinate and share information. The legislation is intended to give the U.S. government greater visibility into U.S. investments. It will be mandatory to notify the government of investments that may fall under the new regulations, and the U.S. can use existing authorities to stop investments, or mitigate risk. If no action is taken, the investment can move forward.

The concept behind the measure has support within the Biden administration. U.S. President Joe Biden’s national security adviser Jake Sullivan said in July the government was working on new investment screening and considering outbound investment as it seeks to better position the United States for competition in technology.

A study by Rhodium said 43% of U.S. foreign direct investment transactions in China over the past two decades could have been subject to screening under the broad categories set out by the original proposal.

Reporting by Alexandra Alper and David Shepardson in Washington; Karen Freifeld in New York; Editing by Nick Zieminski, David Gregorio and Richard Pullin

SINGAPORE, June 9 (Reuters) – Oil prices extended gains on Thursday, underpinned by robust demand in the world’s top consumer United States while demand is expected to rebound in China as COVID-19 curbs across major cities are relaxed.

Brent crude futures for August rose 50 cents, or 0.4%, to $124.08 a barrel by 0153 GMT, while U.S. West Texas Intermediate crude for July was at $122.49 a barrel, up 38 cents, or 0.3%.

Both benchmarks closed Wednesday at their highest since March 8, matching levels seen in 2008. The United States posted a record fall in strategic crude reserves even as commercial stocks rose last week, data from the Energy Information Administration (EIA) showed on Wednesday.

U.S. gasoline stocks unexpectedly dropped, indicating resilience in demand for the motor fuel during peak summer despite sky-high pump prices.

“It’s hard to see significant downside in the coming months, with the gasoline market likely to only tighten further as we move deeper into driving season,” ING’s head of commodities research Warren Patterson said.

EIA’s data showed that apparent demand for all oil products in the United States rose to 19.5 million barrels per day (bpd) while gasoline demand rose to 8.98 million bpd, ANZ analysts said in a note.

“China’s reopening continued to boost the demand optimism,” CMC Markets analyst Tina Teng said in a note. “The oil price could be heading to the peak of March at above $130 on a very tight supply market.”

Efforts by OPEC+ oil producers to boost output are “not encouraging”, UAE energy minister Suhail al-Mazrouei said on Wednesday, noting the group was currently 2.6 million bpd short of its target.

Last week, the group agreed to accelerate production increase to tame runaway fuel prices and slow inflation. But the move will leave producers with very little spare capacity, and almost no room to compensate for a major supply outage.

Reporting by Florence Tan; Editing by Shri Navaratnam

NEW YORK, Reuters – Global equity markets rose on Monday on signs of an easing of COVID-19 pandemic-related and other restrictions by China and as investors took expected interest rate hikes in coming days in their stride despite crude oil hitting $120 a barrel.

The dollar gained against the euro ahead of a European Central Bank policy meeting on Thursday but risk appetite ebbed after being higher earlier on the day. Sterling rose ahead of a confidence vote in Parliament that Prime Minister Boris Johnson won, but a rebellion by 148 of his 359 Conservative Party lawmakers dealt a serious blow to his authority.

A Wall Street Journal report that Chinese regulators are concluding probes into ride-hailing giant Didi Global Inc , as well as the easing of domestic pandemic-related curbs, have bolstered sentiment, said Marc Chandler, chief market strategist at Bannockburn Global Forex.

“You’ve got the world’s second-largest economy continuing to open up,” Chandler said, referring to China. “It looks like Didi may be available again at the mobile app stores and Beijing opened up public transportation.”

Didi shares closed up 24.3% after earlier surging more than 50% on the Journal report. The news earlier helped Hong Kong’s Hang Seng tech index close 4.6% higher. Sentiment also was aided by comments by U.S. Commerce Secretary Gina Raimondo that President Joe Biden has asked his team to look at the option of lifting some tariffs on Chinese imports. read more

People no longer speculate that the Federal Reserve might hike interest rates by 75 basis points and have backtracked a bit from a 50 basis-point hike in September, which also has boosted sentiment, Chandler said.

The major U.S. stock indexes rose, as did the big bourses for Britain (.FTSE), Germany (.GDAXI), France (.FCHI), Italy (.FTMIB) and Spain (.IBEX), all closing up 1% or higher. The pan-European STOXX 600 index (.STOXX) rose 0.92% and MSCI’s gauge of stocks across the globe (.MIWD00000PUS) gained 0.35%.

On Wall Street, the Dow Jones Industrial Average (.DJI) fell 0.08% after briefly dipping lower. The S&P 500 (.SPX) gained 0.20% and the Nasdaq Composite (.IXIC) added 0.25%. Growth shares (.IGX) rose 0.3%, or more than double the 0.1% advance in value stocks.

U.S. Treasury yields rose as the market prepared for the sale of $96 billion in debt this week and ahead of data on Friday expected to show U.S. inflation is still running hot.

The consumer price index (CPI) is expected to have gained 0.7% last month, compared with 0.3% in April, with annual inflation unchanged at 8.3%, according to the median estimate of economists polled by Reuters.

The three U.S. debt auctions this week are likely to push yields higher as banks and investors prepare to absorb the issuance. The yield on 10-year Treasury notes was up 8.5 basis points at 3.040%, the first time the benchmark’s yields have topped 3% in almost three weeks.

At the ECB meeting on Thursday, President Christine Lagarde is considered certain to confirm an end to bond-buying this month and a first rate increase in July, though the jury is out on whether that will be 25 or 50 bps, as some investment banks ramped up their expectations. Money markets are priced for 130 bps of rate increases by year-end, with a 50 bps move at a single meeting fully priced in by October.

A high number would only add to expectations of aggressive tightening by the Fed next week, with markets already priced for half-point increases in June and July and almost 200 basis points (bps) by the end of the year.

The dollar index rose 0.274%, with the euro down 0.23% at $1.0694. The yen weakened 0.73% at $131.85 and sterling rose 0.32% at $1.2528. Oil prices were largely unchanged in choppy trade, buoyed by Saudi Arabia raising its July crude prices but amid doubts that a higher output target for OPEC+ producers would ease tight supply.

U.S. crude futures settled down 37 cents at $118.50 a barrel and Brent fell 21 cents to settle at $119.51. Gold prices slid, pressured by an uptick in the dollar and Treasury yields. U.S. gold futures settled down 0.4% at $1,843.70 an ounce.

Reporting by Herbert Lash in New York Additional reporting by Huw Jones in London Editing by John Stonestreet, Will Dunham and Matthew Lewis

June 2 (Reuters) – California port leaders expect imports to rise as Shanghai, home to the world’s busiest seaport, emerges from a two-month COVID-19 lockdown. The question is whether that release of pent-up goods will again swamp West Coast ports that have recently emerged from the pandemic’s massive cargo wave, they and other experts said.

The Port of Shanghai was open during the city’s shutdown, but cargo flows still slowed. Area factories that make everything from Tesla (TSLA.O) electric vehicles to Apple (AAPL.O) laptops ran out of components and quarantines idled some truckers. As the city returns to normal, trade should follow.

“We will have some form of a surge, given the delay of cargo volume from Shanghai and China overall,” Mario Cordero, executive director of the Port of Long Beach, said on the sidelines of a Reuters Events logistics conference in Chicago. “To what extent that surge will be remains to be seen,” Cordero said.

The Los Angeles/Long Beach port complex is the busiest in the United States. The Port of Shanghai is its second-biggest source of container trade cargo, behind Port of Shenzen.

When Shanghai closed, some factories there re-routed goods to other ports that trade with Southern California. April imports soared 9.2% to a new monthly record at the Port of Long Beach.

“The question is – but for lockdowns and slowdowns, what would have been that percentile?” said Cordero. He expects the Shanghai surge to begin this month – landing alongside back-to-school goods, Fall fashions and early Christmas shipments.

April imports fell 6.8% at the Port of Los Angeles, giving it a chance to prepare for the Shanghai uptick. The port thinned its cargo backlog and cut the queue of ships waiting to unload to about two dozen – the lowest number in about a year, Executive Director Gene Seroka, said in a telephone interview.

Reporting by Lisa Baertlein and Tom Polansek; Editing by Lincoln Feast.