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Oil Sinks By 3% As Economic Slowdown Fears Weigh On Market – OilPrice.com

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Oil Sinks By 3% As Economic Slowdown Fears Weigh On Market | OilPrice.com


Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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  • Oil prices saw their largest daily gain in nearly six weeks on Monday, with supply concerns in both Libya and Iraq spurring bullish sentiment.
  • On Tuesday morning, however, that bullish sentiment had decidedly turned, with oil prices falling by 3% as inflation fears and concerns about demand returned.
  • Violence in Iraq overnight failed to spark further concerns about the country’s oil demand, with the director general of SOMO claiming it could export more oil if necessary.

Oil prices dipped by nearly 3% early on Tuesday, losing around $3 from Monday’s close, as fears of a global economic slowdown intensified while fears of a loss of supply from OPEC’s second-largest producer, Iraq, abated. 

As of 8:43 a.m. ET on Tuesday, Brent Crude was down by 2.82% at $102.19. The U.S. benchmark, WTI Crude, traded down 2.46% on the day at $94.62.  

Oil prices saw on Monday their biggest daily gain in nearly six weeks after Brent hit $104 per barrel yesterday due to concerns about supply from both Libya and Iraq, as well as the possibility of an OPEC+ production cut. 

On Tuesday, concerns about demand prevailed, with prices losing ground amid continuous fears that aggressive interest rate hikes from central banks, including the Fed, would slow down economies for a prolonged period of time. 

In a Friday speech, Federal Reserve’s Chair Jerome Powell said that large interest rate hikes could continue and could slow the economy “for some time,” and that rates could be higher for longer.    

In addition, the oil market swept aside, for now, concerns that the deadly clashes in Iraq would hurt the country’s oil industry and exports. 

At least 15 people have been killed and scores of others wounded in overnight fighting in the Iraqi capital, following protestors’ storming of the presidential palace on Monday. Fighting broke out in and around the Green Zone after hundreds of protesters loyal to powerful Shi’ite cleric Moqtada al-Sadar tore down cement barriers and charged through the Republican Palace following the cleric’s announcement on Monday that he would withdraw from politics. 

Iraq can ramp up its oil exports and will not decline any requests for more crude, Alaa Al-Yassiri, director general of state oil marketing company SOMO, told Bloomberg in an interview on Tuesday. SOMO could even redirect more Iraqi oil to Europe if necessary, a source at the marketing firm told Reuters today. 

By Tsvetana Paraskova for Oilprice.com

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Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

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Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

The Canadian Press. All rights reserved.

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