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Oil Extends Losses as Trump Calls Off Planned Strikes on Iran

FILE PHOTO: A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas, US February 18, 2025. REUTERS/Eli Hartman/File Photo
FILE PHOTO: A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas, US February 18, 2025. REUTERS/Eli Hartman/File Photo
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Oil Extends Losses as Trump Calls Off Planned Strikes on Iran

FILE PHOTO: A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas, US February 18, 2025. REUTERS/Eli Hartman/File Photo
FILE PHOTO: A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas, US February 18, 2025. REUTERS/Eli Hartman/File Photo

Oil prices fell over $1 on Friday, extending losses from the previous session after US President Donald Trump cancelled plans to strike Iran, reducing fears of an escalation of hostilities following tit-for-tat attacks earlier in the week.

Brent futures fell $1.83 or 2% to $88.55 a barrel at 0410 GMT, while US West Texas Intermediate (WTI) crude dropped $1.60, or 1.8%, to $86.11.

Trump, who had threatened to hit Iran "very hard", called off planned strikes on Thursday, saying discussions with ‌Iran had progressed and ‌a peace deal that would reopen the Strait ‌of Hormuz ⁠to shipping could ⁠be signed as soon as this weekend. Iran's semi-official Fars news agency reported that Tehran had not approved the text of any agreement.

"While this could, of course, be yet another false dawn, the market's reaction has been both swift and decisive," said IG market analyst Tony Sycamore.

He added that even as oil prices correct downwards, "as long as the price can hold above support in the low $80s, the ⁠risks remain firmly skewed to the upside."

On Thursday, Iran announced "the ‌closure" of the Strait of Hormuz, through which ‌vessel traffic was already severely limited, saying it would fire on any ship trying ‌to pass through the waterway. The strait normally carries a fifth of global ‌oil and liquefied natural gas shipments and Tehran's months-long blockade has kept energy prices elevated.

State media reported on Friday that Iranian forces prevented a tanker from transiting the Strait of Hormuz without coordination.

The US military said on social media that commercial ships continued to transit ‌the waterway.

"We would be cautious about assuming that the extension of the ceasefire is a done deal. Even ⁠if it is, ⁠it could be fragile. And clearly, if nuclear talks do not progress, it could very easily fall apart," said ING analysts in a Friday note.

"We believe the market reaches an inflection point in late July if we do not see oil flows resuming before then. This is when inventory levels and seasonally stronger demand push prices significantly higher towards $120-130 per barrel."

The Organization of the Petroleum Exporting Countries (OPEC) on Thursday lowered its forecast for 2026 world oil demand growth to 970,000 barrels per day (bpd) from a previous 1.17 million bpd, marking its second straight downward revision.

The producer group also said consumption would rebound later, raising its demand growth forecast for 2027. It expects 2027 oil demand to rise by 1.73 million bpd, up 190,000 bpd from its previous forecast.

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Mawani Updates MSC’s 'JADE' Service Route via Bab Al-Mandab, Suez Canal

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Mawani Updates MSC’s 'JADE' Service Route via Bab Al-Mandab, Suez Canal

The Saudi Ports Authority (Mawani) announced an update to the route of MSC’s JADE shipping service, which will now transit the Bab Al-Mandab Strait and the Suez Canal, passing through King Abdullah Port in Rabigh, the Saudi Press Agency reported on Sunday.

The update will help reduce cargo transit times and enhance trade efficiency and the reliability of supply chains to and from the Kingdom of Saudi Arabia.

The JADE shipping service connects King Abdullah Port with several regional and international ports. These include Fos-sur-Mer in France; Barcelona and Valencia in Spain; Gioia Tauro in Italy; Singapore; Nansha, Yantian, Xiamen, Ningbo, Shanghai, and Qingdao in China; and Busan in South Korea. The service has a capacity of up to 15,000 TEUs.

Updating the service route via the Bab Al-Mandab Strait and the Suez Canal shortens the shipping route, speeds up the delivery of goods and commodities to markets, and improves the efficiency of export and import flows. This supports the smooth operation of supply chains and strengthens the Kingdom’s position as a major hub in the global trade and maritime network.

The route update reflects the readiness and operational capabilities of Saudi ports, as well as their strategic location along major maritime trade routes. It strengthens Saudi Arabia’s connectivity with global markets and supports the objectives of the National Transport and Logistics Strategy to establish the Kingdom as a global logistics hub connecting three continents.

Business

Chinese Factory Slump Eases, but Weak Services Signal Uneven Recovery

Workers install a tunnel‑boring machine at a factory in Jinhu county in eastern China's Jiangsu province on Aug. 25, 2026. (Chinatopix via AP)
Workers install a tunnel‑boring machine at a factory in Jinhu county in eastern China's Jiangsu province on Aug. 25, 2026. (Chinatopix via AP)
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Chinese Factory Slump Eases, but Weak Services Signal Uneven Recovery

Workers install a tunnel‑boring machine at a factory in Jinhu county in eastern China's Jiangsu province on Aug. 25, 2026. (Chinatopix via AP)
Workers install a tunnel‑boring machine at a factory in Jinhu county in eastern China's Jiangsu province on Aug. 25, 2026. (Chinatopix via AP)

China's factory activity improved in August on stronger demand but remained in contraction, while services activity stayed weak, underscoring deepening imbalances in the economy and fueling calls for policy measures to boost the economy.

The divergence between manufacturing and service sectors suggests that China will continue to rely on manufacturing and exports to drive growth as momentum remains under pressure from lackluster domestic consumption and investment.

The official manufacturing purchasing managers' index (PMI) picked up to 49.8 from 49.2 in July, remaining below the 50-mark separating growth from contraction, a survey by the National Bureau of Statistics showed on Monday. It beat the median forecast of 49.6 in a Reuters poll.

NBS data showed both demand and output improved in August, with sub-indexes ‌for new orders ‌and production returning to expansion territory above 50.

TOO EARLY TO PREDICT ECONOMIC ‌RECOVERY

"Domestic ⁠demand seems to ⁠be coming back, although it's more likely to have been driven by AI and exports than by policy expansion," said Xu Tianchen, senior economist at the Economist Intelligence Unit.

Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said it was too early to conclude the economy had rebounded.

The non-manufacturing purchasing managers' index (PMI), which covers services and construction, remained unchanged at 49.0, matching July's reading, the weakest since December 2022.

"Because China's services sector is primarily domestically focused, this suggests domestic demand remained relatively sluggish in August," Lynn Song, ING's Greater China chief economist, said in a note. "For ⁠now, the PMI data suggests that we are due for another month of ‌relatively sluggish domestic activity data in August, with any potential rebound ‌likely to be limited."

The August PMIs for equipment manufacturing and high-tech manufacturing both came in above 51, while consumer goods ‌and high-energy-consuming industries stayed in contraction, according to data released by the NBS.

Zhang Liqun, an analyst with the ‌China Federation of Logistics & Purchasing, said that with the manufacturing PMI reading still in contraction, business confidence remained unstable.

"Continued government investment in public goods should be strengthened to effectively drive increased orders for businesses, continuously consolidate and enhance business confidence, and further strengthen factors contributing to economic stabilization and recovery."

SIGNS OF PREVAILING WEAKNESS

Economic data released earlier this month showed that growth remained under ‌pressure at the start of the second half, with goods consumption and industrial output both slowing.

Fixed-asset investment extended declines and the property market is still ⁠struggling to find a ⁠bottom more than five years into a slump.

Exports remained a growth driver, helped by robust demand for AI-related shipments that lifted prices for Chinese-made high-tech goods, but the profit squeeze felt by manufacturers relying on domestic demand weighed on overall industrial profits.

China's top leaders pledged in late July to introduce additional policies to support the economy as growth slowed to a more-than-three-year low of 4.3% in the second quarter, and vowed to accelerate fiscal spending on already-budgeted infrastructure projects for the remainder of the year.

The finance ministry recently expanded loan interest subsidies for small private firms and consumers to spur demand, while the central bank said this month it would roll out measures without signaling explicit cuts to policy rates or banks' reserve-requirement ratio.

ING's Song said the positive impact from interest subsidies "may be relatively marginal," and expects more measures in the weeks ahead.

In a sign the government will not unveil large-scale stimulus, an article published this month in the People's Daily, the Communist Party's official newspaper, said China is not excessively reliant on strong policy stimulus and that it is capable of achieving its annual economic growth target.

Business

Gold Hits Near Two-Week Low on Fed Chief’s Hawkish Stance

Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh May 8, 2012. (Reuters)
Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh May 8, 2012. (Reuters)
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Gold Hits Near Two-Week Low on Fed Chief’s Hawkish Stance

Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh May 8, 2012. (Reuters)
Gold bars are displayed at a gold jewellery shop in the northern Indian city of Chandigarh May 8, 2012. (Reuters)

Gold fell on Monday to its lowest in nearly two weeks after US Federal Reserve Chair Kevin Warsh signaled that interest rate hikes may be needed to ease price pressures, while escalating Middle East tensions fueled inflation fears.

Spot gold fell 0.8% to $4,417.04 per ounce by 0406 GMT, hitting its weakest level since August 19. Prices dropped more than 3% on Friday.

US gold futures declined ‌1.4% to $4,466.80.

"Gold is ‌still licking its wounds after the hawkish ‌tone struck ⁠by Warsh at ⁠Jackson Hole. US military action in Iran has put upward pressure on oil prices, and this has added to gold’s woes from an inflation standpoint," said Tim Waterer, chief market analyst at KCM Trade.

Though viewed as a hedge against inflation, gold typically loses appeal in a rising interest rate environment as it does not yield ⁠interest.

The Fed will "have work to do" if policymakers ‌don't get the confidence they need ‌that inflation is heading down to 2%, Warsh said on Friday at ‌the Jackson Hole economic symposium, coming closer than he has to ‌acknowledging rate hikes may be needed.

Markets currently see a 60% chance of a Fed rate hike in September, according to the CME FedWatch tool.

Iran's energy hub of Kharg Island is being blown to smithereens, US ‌President Donald Trump said on social media, after forces hit two rocket launchers on another island ⁠in the first ⁠known American strikes on Iran since late July. Oil prices were up more than 2%.

A series of US labor market reports is due this week, including job openings, the ADP employment report, weekly jobless claims and nonfarm payrolls data.

"NFP has the potential to either extend gold’s post-Jackson Hole softness or provide the catalyst for a short-covering bounce," Waterer said.

Spot silver fell 0.4% to $66.10, platinum declined 1.3% to $1,797.03 and palladium slipped 2.5% to $1,386.96.

BMI said silver prices were likely to stay near current levels, supported by steady investment demand and constrained mine supply, while easing physical tightness and softer demand would limit further gains.