Oil Edges Down on US Recession Risk

A oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann/File Photo
A oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann/File Photo
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Oil Edges Down on US Recession Risk

A oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann/File Photo
A oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann/File Photo

Oil prices slipped on Thursday as the prospect of a possible recession in the United States, the world's largest oil consumer, offset concerns of tight supply.

Brent crude fell 55 cents, or 0.63%, to $86.78 a barrel by 1352 GMT. US West Texas Intermediate (WTI) slipped 46 cents, or 0.55%, to $82.80.

Both Brent and WTI had risen 2% on Wednesday to their highest in more than a month as cooling US inflation spurred hopes that the US Federal Reserve will stop raising interest rates.

However, minutes from the Fed's last policy meeting indicated that banking sector stress could tip the economy into recession, which would weaken US oil demand.

The Organization of the Petroleum Exporting Countries (OPEC) flagged downside risks to summer oil demand in a monthly report on Thursday. But OPEC kept its forecast for global oil demand growth in 2023 unchanged.

The market is a keeping a close eye on indicators of economic growth, which Tamas Varga of oil broker PVM described as fragile. "Inflationary pressure could easily become elevated again," Varga said.

The market is still reeling from the shock decision by OPEC and its allies, together known as OPEC+, to cut output further.

The executive director of the International Energy Agency expects the move to tighten supply in the second half of the year and push oil prices higher, Reuters reported.

However, the International Monetary Fund on Tuesday highlighted the risk this poses to global economic expansion.

For every 10% rise in the price of oil, IMF models show a 0.1 percentage point reduction in growth and a 0.3 percentage point increase in inflation, IMF chief economist Pierre-Olivier Gourinchas said.

Markets on Wednesday shrugged off a small build in US crude oil stocks, attributing it in part to a release of oil from the US emergency reserve and lower exports at the start of the month.

The Biden administration plans to refill the US Strategic Petroleum Reserve soon and hopes to do it at lower oil prices, US Energy Secretary Jennifer Granholm said on Wednesday.



China’s First Four-Month Steel Exports at Record High Despite Tariff Turmoil 

Workers install steel rods at a construction site in Miami, Florida, US, March 11, 2025. (Reuters)
Workers install steel rods at a construction site in Miami, Florida, US, March 11, 2025. (Reuters)
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China’s First Four-Month Steel Exports at Record High Despite Tariff Turmoil 

Workers install steel rods at a construction site in Miami, Florida, US, March 11, 2025. (Reuters)
Workers install steel rods at a construction site in Miami, Florida, US, March 11, 2025. (Reuters)

China's steel exports in April topped 10 million metric tons for a second straight month bringing the total in the first four months to a record high, underpinned by front-loaded shipments ahead of US President Donald Trump's hefty tariffs.

The world's largest steel producer and exporter shipped 10.46 million tons of steel last month, customs data showed on Friday. While largely unchanged from March, exports were 13.5% higher than the same month in 2024.

Exports from January to April jumped by 8.2% from the year before to an all-time high for the period of 37.89 million tons.

"Steel exports in April are a bit higher than our expectation, albeit maintaining positive annual growth, supported by sustained front-loading orders observed," said Jiang Mengtian, a Shanghai-based analyst at consultancy Horizon Insights.

Jiang forecast May shipments to slow as tariff and widening trade protectionism started to bite.

Washington's tariffs threaten the transshipment trade, where third countries resell Chinese steel to the US, while China's top steel customers like South Korea and Vietnam have also imposed duties to avoid steel being rerouted and dumped in their markets.

Second-quarter exports are set to fall by as much as a fifth from the first quarter as a result, eight analysts and traders told Reuters earlier this week.

China's April iron ore imports climbed by 9.8% from March to the highest since December, as improved margins encouraged mills to book more seaborne cargoes.

The world's largest iron ore consumer brought in 103.14 million tons of the key steelmaking ingredient last month, up from a 20-month low of 93.97 million tons in March.

The volume last month, which was largely in line with analysts' expectations, was also 1.3% higher than 101.82 million tons in April 2024.

"Since March imports missed expectations, it's not surprising to see higher iron ore imports in April, which could also be reflected in higher hot metal output last month and a pile-up in inventory in the last two weeks of April," said Pei Hao, an analyst at international brokerage Freight Investor Services (FIS).

In the first four months of this year, China's iron ore imports slid 5.5% from the year earlier to 388.36 million tons, the data showed.