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Oil Prices Gain on Middle East Supply Concerns

A general view of Ras Lanuf Oil and Gas Company in Ras Lanuf, Libya, August 28, 2024. REUTERS/Mohammed Al-Hadad
A general view of Ras Lanuf Oil and Gas Company in Ras Lanuf, Libya, August 28, 2024. REUTERS/Mohammed Al-Hadad
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Oil Prices Gain on Middle East Supply Concerns

A general view of Ras Lanuf Oil and Gas Company in Ras Lanuf, Libya, August 28, 2024. REUTERS/Mohammed Al-Hadad
A general view of Ras Lanuf Oil and Gas Company in Ras Lanuf, Libya, August 28, 2024. REUTERS/Mohammed Al-Hadad

Oil prices rose on Friday as investors weighed supply concerns in Libya and Iraq, although signs of weakened demand, particularly in China, limited gains.
Brent crude futures for October delivery, which expire on Friday, were up 39 cents, or 0.5%, at $80.33 a barrel by 0630 GMT. The more actively traded contract for November rose 34 cents, or 0.4%, to $79.16.
US West Texas Intermediate crude futures gained 30 cents, or 0.4%, to $76.21, Reuters reported.
Both benchmarks settled more than $1 higher on Thursday on oil supply concerns, up 1.6% and 1.8% respectively for the week so far.
"Ongoing concerns over dented Libyan supplies were magnified by Iraq's plans to tame production, which together can dent the global supplies of oil," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
"However, the somber economic outlook of mainland China, the world's largest importer of crude oil, continues to be a constant headwind on oil demand."
More than half of Libya's oil production, or about 700,000 barrels per day (bpd), was offline on Thursday and exports were halted at several ports following a standoff between rival political factions.
Libyan production losses could reach between 900,000 and 1 million bpd and last for several weeks, according to consulting firm, Rapidan Energy Group.
Meanwhile, Iraqi supplies are also expected to shrink after the country's output surpassed its OPEC+ quota, a source with direct knowledge of the matter told Reuters on Thursday.
Iraq plans to reduce its oil output to between 3.85 million and 3.9 million bpd next month.
Brent and WTI, however, are still headed for declines of 0.5% and 2.2% for August, their second straight monthly drops.
Worries over demand continue to weigh on the market, with US inventory data showing a crude stock draw for the week ended on Aug. 23 around a third smaller than expected.
In China, while August imports are expected to be up on month, July's official number for the intake of the world's largest crude oil imports was at 9.97 million bpd, the lowest on a daily basis since September 2022.
"The market is concerned about the medium-term outlook, with oil balances for 2025 looking weak," ANZ analysts said in a note.
"We believe OPEC will have no choice but to delay the phase out of voluntary production cuts if it wants higher prices," the ANZ analysts said.
The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, is set to gradually phase out voluntary production cuts of 2.2 million bpd over the course of a year from October 2024 to September 2025.

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Eurozone Manufacturing Growth Reaches 4-Year High

Production lines at German car manufacturer Mercedes-Benz at its factory in Rastatt (Reuters)
Production lines at German car manufacturer Mercedes-Benz at its factory in Rastatt (Reuters)
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Eurozone Manufacturing Growth Reaches 4-Year High

Production lines at German car manufacturer Mercedes-Benz at its factory in Rastatt (Reuters)
Production lines at German car manufacturer Mercedes-Benz at its factory in Rastatt (Reuters)

Euro zone manufacturers faced soaring input costs and supply chain disruptions in March due to the Iran war, even as underlying tepid demand threatened to undermine the sector's fragile recovery, a survey showed.

The conflict in the Middle East has disrupted global logistics networks, causing delivery delays and pushing input price inflation to its highest levels since October 2022, distorting headline growth measures.

A jump in the cost of manufacturing, driven by higher oil and energy prices, led manufacturers to respond by raising selling prices at the fastest pace ⁠in just over ⁠three years.

"It's exactly the same as during the pandemic - this is a supply shock - normally longer delivery times are associated with too much demand in a really healthy environment but in a supply shock it falsely elevates the PMI," said Chris Williamson, chief business economist at S&P Global.

"It ⁠does falsely elevate the PMI so conditions would be worse than the headline PMI indicates," he also said.

The S&P Global euro zone Manufacturing Purchasing Managers' Index rose to 51.6 in March from 50.8 in February, higher than a preliminary estimate of 51.4.

A reading above 50.0 indicates growth in activity.

The new orders sub-index - a key gauge of demand - matched February's 46-month high but growth remained modest.

Production rose for a third consecutive month, with the output sub-index edging up ⁠to 52.0 ⁠from 51.9 in February, marking a seven-month high.

New export orders stabilized after contracting for eight straight months, providing some relief to manufacturers.

Backlogs of work increased for the first time since mid-2022, signaling capacity pressures, yet companies cut jobs at a faster rate in March.

Business confidence slipped to a five-month low and remained below its long-term average as the conflict weighed on sentiment.

Germany and Italy recorded their strongest readings in 46 and 37 months respectively, while Spain was the only country in contraction territory. Greece posted the highest reading, followed by Ireland, while France's manufacturing sector stagnated.

Business

Turkish Manufacturing Contracts at Fastest Pace in Five Months in March, PMI Shows

People walk past displayed items in a clothes shop at Eminonu commercial area, in Istanbul, Türkiye, Thursday, March 26, 2026. (AP)
People walk past displayed items in a clothes shop at Eminonu commercial area, in Istanbul, Türkiye, Thursday, March 26, 2026. (AP)
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Turkish Manufacturing Contracts at Fastest Pace in Five Months in March, PMI Shows

People walk past displayed items in a clothes shop at Eminonu commercial area, in Istanbul, Türkiye, Thursday, March 26, 2026. (AP)
People walk past displayed items in a clothes shop at Eminonu commercial area, in Istanbul, Türkiye, Thursday, March 26, 2026. (AP)

Turkish manufacturing activity contracted ‌at its fastest pace in five months in March as the war in the Middle East lifted costs, disrupted supply chains and weakened demand, a business survey showed on Wednesday.

The Istanbul Chamber of Industry Turkish Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, fell to 47.9 in March from 49.3 in February, the survey showed.

The 50-mark separates ‌growth from contraction.

"The ‌Turkish manufacturing sector suffered ‌something ⁠of a setback in ⁠March, after conditions had looked to be on the path to becoming more favorable in February," said Andrew Harker, economics director at S&P Global Market Intelligence.

New orders fell for a 33rd straight month and ⁠at the sharpest pace since last ‌November, while export ‌demand also weakened more quickly. Output was scaled back ‌to the greatest extent since last November, ‌S&P Global said.

Price pressures intensified as firms linked higher freight, fuel, oil and raw material costs to the Middle East conflict. Input costs rose ‌at the fastest rate since April 2024, while output price inflation ⁠hit ⁠a 25-month high.

Supply-chain strains also worsened. Suppliers' delivery times lengthened to the largest extent since August 2024, while manufacturers cut employment at the sharpest pace in six months and reduced purchasing activity and inventories.

The survey said manufacturing conditions have now weakened in every month over the past two years. Business confidence fell to a five-month low in March, although firms still expected output to rise over the coming year.

Business

Japan, France Agree Rare Earths Deal to Cut China Reliance

French President Emmanuel Macron shakes hands with Japanese Prime Minister Sanae Takaichi during a welcoming ceremony at the Akasaka palace in Tokyo, Japan on April 1, 2026. PHILIP FONG/Pool via REUTERS
French President Emmanuel Macron shakes hands with Japanese Prime Minister Sanae Takaichi during a welcoming ceremony at the Akasaka palace in Tokyo, Japan on April 1, 2026. PHILIP FONG/Pool via REUTERS
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Japan, France Agree Rare Earths Deal to Cut China Reliance

French President Emmanuel Macron shakes hands with Japanese Prime Minister Sanae Takaichi during a welcoming ceremony at the Akasaka palace in Tokyo, Japan on April 1, 2026. PHILIP FONG/Pool via REUTERS
French President Emmanuel Macron shakes hands with Japanese Prime Minister Sanae Takaichi during a welcoming ceremony at the Akasaka palace in Tokyo, Japan on April 1, 2026. PHILIP FONG/Pool via REUTERS

Japan and France agreed to strengthen support for rare earths supply chains on Wednesday, Japan's public broadcaster NHK reported, in the latest moves by both countries to lessen dependence on the world's dominant supplier, China.

During French President Emmanuel Macron's three-day visit to Japan for talks with Prime Minister Sanae Takaichi, officials signed a roadmap to cooperate on critical minerals supply chains, NHK said.

"We cannot rely solely on specific countries, especially China," French Finance Minister Roland Lescure was quoted as saying by NHK.

The two sides also agreed to secure raw material supplies for a rare earths refining project in southern France, called Caremag, the broadcaster said.

The state-owned Japan Organization for Metals and Energy Security and gas ⁠firm Iwatani, along ⁠with the French government, are investors in Caremag, which is due to start operations in late 2026.

Japan plans to get about 20% of its future demand for dysprosium and terbium from the refining plant, heavy rare earth oxides used in magnets for EV motors, offshore wind turbines and electronic components.

Takaichi and Macron are due to issue a joint statement calling for diversifying supplies of rare earths and other critical minerals during their summit on Wednesday, the Nikkei newspaper reported separately.

The deal ⁠comes at a critical moment, with Japan and Western governments and manufacturers scrambling to secure supplies of rare earths minerals to reduce their dependency on China, the world's dominant rare earths producer and supplier.

In February, China prohibited exports of so-called dual-use items to 20 Japanese entities, which it said supply Japan's military.

That was after Takaichi angered Beijing with comments about Taiwan in November.

The rules cover seven rare earths and associated materials currently on China's dual-use control list, including dysprosium and yttrium, along with a swathe of other controlled critical minerals.

"China is pursuing a strategy of using rare earths as a diplomatic card, and if US-China and Japan–China relations improve, exports could recover quickly," said Kotaro Shimizu, principal analyst at Mitsubishi UFJ Research and Consulting.

Japan has reduced its reliance on ⁠China to 60% ⁠from 90% following a 2010 diplomatic incident which saw Beijing restricting rare earths supply to Tokyo.

Japan has been boosting investments in overseas projects like trading house Sojitz's tie-up with Australia's Lynas Rare Earths, and promoting rare earths recycling and manufacturing processes.

In the latest set of steps, Japan's Mitsubishi Materials this week agreed to acquire a stake in US ReElement, a company involved in rare earth element recycling, as both countries have set up an action plan for China alternatives.

Japan and the US are also considering joint development of rare-earth-rich mud deposits, near the remote Minamitori Island, and Japan is in talks with India to jointly explore rare earths in the desert state of Rajasthan.

Japan and France will also seek cooperation in space, with companies from the two countries expected to sign memorandums of understanding on 12 joint projects, including space debris removal and rocket launches, the Nikkei said.