(Bloomberg) — Oil dropped toward $39 a barrel in Asian trading — even after a decline in American crude and fuel stockpiles — following warnings over global energy demand and the state of the U.S. economy.
Futures in New York fell 1.4% after rising for a second day on Wednesday. Federal Reserve officials stressed that more fiscal stimulus is critical to sustain the U.S. economic recovery, while the head of commodities trader Mercuria Energy Group said that global oil markets won’t be able to absorb OPEC+ production increases as demand remains weaker than expected.
That was after the market found support on Wednesday from Energy Information Administration data showing U.S. distillates inventories fell the most since March, while crude inventories dropped for a second week.
After trading above $43 a barrel in late August, oil has lurched lower this month amid signs a resurgence in the coronavirus could lead to more lockdown measures. The OPEC+ alliance, meanwhile, is slowly tapering its production cuts and Libya is unleashing fresh supply as its civil war abates.
See also: Return of Libya’s Oil Is a New Headache for Markets
“The warning from Fed officials certainly weighed on U.S. equities and took oil lower with it,” said Warren Patterson, head of commodities strategy at ING Bank NV. Economic uncertainty and the recent pickup in Covid-19 cases will keep oil from moving too much higher in the next two weeks and it’s likely to remain in a fairly narrow range, he said.
Brent’s three-month timespread was steady at $1.26 a barrel in contango — where prompt contracts are cheaper than later-dated ones — compared with $1.37 at the beginning of the week. The market structure indicates that while there’s still concern about over-supply, it’s eased a bit.
Oil stockpiles have been building in September and won’t draw down enough in the remainder of the year to be in balance if OPEC+ follows through with its plan to taper production cuts early next year, Mercuria Chief Executive Marco Dunand said in an interview. Democrats and Republicans, meanwhile, have been at loggerheads over another virus relief package, with no formal negotiations since early August, even as Fed officials call for more fiscal support.
U.S. crude stockpiles fell by 0.3% to 494.4 million barrels in the week through Sept. 18 and distillates inventories dropped 1.9% to 175.9 million barrels, the EIA data showed. U.S. oil producers say they’re still prioritizing keeping output flat over reducing debt, according to the latest energy survey published by the Federal Reserve Bank of Dallas.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
