Turkish Manufacturing Activity Barely Grows in February

An employee works at an assembly line in the Toyota manufacturing plant in Sakarya October 10, 2013. REUTERS/Osman Orsal
An employee works at an assembly line in the Toyota manufacturing plant in Sakarya October 10, 2013. REUTERS/Osman Orsal
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Turkish Manufacturing Activity Barely Grows in February

An employee works at an assembly line in the Toyota manufacturing plant in Sakarya October 10, 2013. REUTERS/Osman Orsal
An employee works at an assembly line in the Toyota manufacturing plant in Sakarya October 10, 2013. REUTERS/Osman Orsal

Turkish factory activity barely grew for a second straight month in February amid sharp price rises and a slowdown in production due to outages of natural gas and electricity, a survey showed on Tuesday.

The Purchasing Managers' Index (PMI) for Turkish manufacturing stood at 50.4 in February, slipping from 50.5 in January, data from the Istanbul Chamber of Industry and IHS Markit showed.

According to Reuters, it has held above the 50.0 mark that denotes growth for nine consecutive months.

New orders continued to ease for a fifth month in February due to market uncertainty and sharp price rises, the panel said. Inflation in Turkey neared 50% in January, mainly due to a currency crisis at the end of last year.

Input costs rose sharply in February due to higher prices for raw materials, energy and transport and rising wages, some of which was exacerbated by currency weakness, it said, adding that this led to higher selling prices.

Last month, Iran cut gas flows to Turkey due to a technical failure. Planned gas and electricity cuts at industrial facilities caused some firms to halt production.

The outages hit production volumes, and output softened for a third consecutive month, the panel said. Backlogs also increased due to energy shortages, as well as delivery delays.

Manufacturers expanded their staffing levels to improve operating capacity, it said, leading to a rise in employment for a 21st consecutive month.

"Disruption to electricity and natural gas supply added to the challenges being faced by Turkish manufacturers and contributed to a slowdown in output during February," said Andrew Harker, economics director at IHS Markit.

"Meanwhile, the latest PMI data suggested that inflationary pressures may have peaked around the turn of the year, though cost increases remained sharp midway through the first quarter."



Oil Rises as Investors Weigh Market Outlook, Tariffs, Sanctions

A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
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Oil Rises as Investors Weigh Market Outlook, Tariffs, Sanctions

A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk

Oil prices rose by around 1% on Friday as investors weighed a tight prompt market against a potential large surplus this year forecast by the IEA, while US tariffs and possible further sanctions on Russia were also in focus.

Brent crude futures were up 76 cents, or 1.11%, at $69.40 a barrel as of 1153 GMT US West Texas Intermediate crude ticked up 82 cents, or 1.23%, to $67.39 a barrel.

At those levels, Brent was headed for a 1.6% gain on the week, while WTI was up around 0.6% from last week's close.

The IEA said on Friday the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power-generation, Reuters reported.

Front-month September Brent contracts were trading at a $1.11 premium to October futures at 1153 GMT.

"Civilians, be they in the air or on the road, are showing a healthy willingness to travel," PVM analyst John Evans said in a note on Friday.

Prompt tightness notwithstanding, the IEA boosted its forecast for supply growth this year, while trimming its outlook for growth in demand, implying a market in surplus.

"OPEC+ will quickly and significantly turn up the oil tap. There is a threat of significant oversupply. In the short term, however, oil prices remain supported," Commerzbank analysts said in a note.

Further adding support to the short-term outlook, Russian deputy prime minister Alexander Novak said on Friday that Russia will compensate for overproduction against its OPEC+ quota this year in August-September.

"Prices have recouped some of this decline after President Trump said he plans to make a 'major' statement on Russia on Monday. This could leave the market nervous over the potential for further sanctions on Russia," ING analysts wrote in a client note.

Trump has expressed frustration with Russian President Vladimir Putin due to the lack of progress on peace with Ukraine and Russia's intensifying bombardment of Ukrainian cities.

The European Commission is set to propose a floating Russian oil price cap this week as part of a new draft sanctions package, but Russia said it has "good experience" of tackling and minimising such challenges.