EIA Crude Oil Inventories Show Unexpected Increase, Indicating Weaker Demand

Economic

Commodity

Summary:

The EIA strategic petroleum reserve inventory in the United States for the week ending May 9th was the highest since the week ending October 28th, 2022. The increase in domestic crude oil production in the United States for the week ending May 9th was the largest since the week ending March 7th, 2025.

The Energy Information Administration (EIA) has reported a significant increase in its Crude Oil Inventories, pointing towards weaker demand for crude oil. The weekly change in the number of barrels of commercial crude oil held by US firms was recorded at 3.454 million barrels, an unexpected swing from the forecasted decrease of 2 million barrels.

This recent data release reveals a stark contrast to the projected estimates. Analysts had predicted a decrease of 2 million barrels, based on various market factors and trends. However, the actual inventory numbers have defied these forecasts, indicating a potential shift in the market dynamics.

When compared to the previous week’s data, the numbers also show a notable increase. The previous week saw a decrease of 2.032 million barrels, reflecting a stronger demand for crude oil. The sudden rise in the inventory this week, therefore, suggests a weakening demand, which could potentially impact crude prices in the bearish direction.

The level of inventories significantly influences the price of petroleum products, which, in turn, can have an impact on inflation. An increase in crude inventories is generally considered bearish for crude prices as it implies weaker demand.

Given the importance of the EIA Crude Oil Inventories data, this unexpected increase will likely be closely monitored by investors and market analysts. The implications of this shift could be wide-ranging, influencing not only crude prices but also impacting broader market trends and the inflation outlook.

As the market continues to digest this unexpected data, the focus will now be on how this might influence the Federal Reserve’s approach to monetary policy, especially in the context of inflation concerns. The EIA’s next report will be eagerly awaited for further insights into the demand and supply dynamics of the crude oil market.

Source: Investing

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Thomas

Economic

U.S. President Donald Trump secured a $600 billion commitment from Saudi Arabia to invest in the United States on the first day of a four-day tour of the Gulf, opening the way for a series of business deals.

Here is an overview of major deals and announcements made on the sidelines of Trump's Gulf visit:

* Saudi Aramco (2222.SE), opens new tab has signed 34 agreements with major U.S. companies, potentially worth as much as $90 billion, the oil giant said.

* Qatar Airways signed a deal to purchase jets from U.S. manufacturer Boeing (BA.N), opens new tab.

* Nvidia (NVDA.O), opens new tab said it will sell hundreds of thousands of AI chips in Saudi Arabia, with a first tranche of 18,000 of its newest "Blackwell" chips going to Humain, an AI startup the kingdom's sovereign wealth fund launched this week.

* Qualcomm Inc (QCOM.O), opens new tab said it signed a memo of understanding to develop and build a data centre central processor.

* Franklin Templeton (BEN.N), opens new tab said it has signed a non-binding memorandum of understanding with Saudi Arabia's Public Investment Fund to partner in investing up to $5 billion in the kingdom's financial markets.

* Neuberger Berman signed an agreement with PIF to invest up to $6 billion in the kingdom, and to launch a Riyadh-based multi-asset investment management platform.

* BlackRock Saudi Arabia (BLK.N), opens new tab and PIF signed a non-binding letter of intent at the Saudi-U.S. Investment Forum to formalise their strategic collaboration through potential new allocations to the BlackRock Riyadh Investment Management platform.

* Cisco (CSCO.O), opens new tab said it will collaborate with the AI Infrastructure Partnership, which is led by BlackRock (BLK.N), opens new tab, Global Infrastructure Partners, MGX, Microsoft (MSFT.O), opens new tab, Nvidia and xAI.

The company also said it will join Saudi Arabia's Humain and extend its strategic partnership with Abu Dhabi's G42 to advance AI innovation and infrastructure development.

* Infrastructure investment manager I Squared Capital said it has signed a memorandum of understanding with PIF to establish a dedicated infrastructure investment strategy focused on the Middle East.

* Amazon Web Services (AMZN.O), opens new tab and Saudi Arabia's AI startup Humain said they planned to invest $5 billion-plus in a strategic partnership to build an "AI Zone" in the kingdom.

* U.S. chip firm AMD (AMD.O), opens new tab and Humain said they would build AI infrastructure that will lead them to invest up to $10 billion to deploy 500 megawatts of AI computing capacity over the next five years.

* Saudi Arabian DataVolt plans to invest $20 billion in AI data centres and energy infrastructure in the United States.

* Google (GOOGL.O), opens new tab , DataVolt, Oracle (ORCL.N), opens new tab, Salesforce (CRM.N), opens new tab, AMD (AMD.O), opens new tab, and Uber (UBER.N), opens new tab say they will invest $80 billion in technologies in both countries.

* Construction consulting firms Hill International, Jacobs, Parsons, and AECOM are building infrastructure projects such as King Salman International Airport, King Salman Park, The Vault, Qiddiya City, and more, totalling $2 billion in U.S. services exports.

* Additional major exports include GE Vernova's (GEV.N), opens new tab gas turbines and energy solutions totalling $14.2 billion and Boeing 737-8 passenger aircraft for AviLease totalling $4.8 billion.

* Healthcare firm Shamekh IV Solutions will be investing $5.8 billion, including a plant in Michigan to launch a high-capacity IV fluid facility.

* Hassana Investment Company and Franklin Templeton signed a memorandum of understanding valued at $150 million to explore a strategic partnership related to investments in Saudi private credit opportunities.

* Saudi Aramco (2222.SE), opens new tab said it would sign memorandums of understanding with U.S. liquefied natural gas producer NextDecade (NEXT.O), opens new tab and utility Sempra (SRE.N), opens new tab.

* U.S.-based investment platform Burkhan World Investments said it signed memorandums of understanding with Saudi partners, totalling $15 billion in investment commitments.

Source: Reuters

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Gerik

Economic

China–U.S. Trade War

Fed's Cautious Stance Amid Trade Uncertainty

Federal Reserve (Fed) President for the Chicago branch, Austan D. Goolsbee, expressed cautious optimism regarding the recent reduction in trade tensions between the US and China. While the 90-day tariff reduction deal between the two nations offers temporary relief, Goolsbee warned that the risk of stagflation—where inflation rises alongside slow economic growth—remains a concern. Despite the easing of tensions, the overall tariff levels remain high, continuing to exert pressure on the economy.

Goolsbee highlighted that the trade deal, which includes a reduction of US tariffs on Chinese imports from 145% to 30% and Chinese tariffs on US goods from 125% to 10%, only addresses part of the issue. While the temporary tariff reductions offer some respite, the high tariffs that remain could still lead to increased costs for consumers and slow growth.

Tariffs and Uncertainty Impeding Economic Growth

The ongoing tariff situation, coupled with the uncertainty surrounding President Trump’s broader trade policies, continues to hinder economic forecasts. With tariffs on goods from almost all of the US's trading partners still in place, economists estimate that American consumers are facing an effective tariff rate of around 15%. This uncertainty has already started to affect consumer sentiment, with surveys showing growing pessimism about the economic outlook and businesses pausing investments and hiring until there is greater clarity.

Despite these challenges, Goolsbee emphasized that the labor market remains relatively stable, and the Fed is taking a cautious approach in its policy decisions. The central bank paused its interest rate cuts after January, following a series of reductions in 2024, and remains in wait-and-see mode to assess the impact of these policies.

Fed's Focus on Inflation Risks

The biggest concern for the Fed remains inflation. Goolsbee warned that if inflation expectations increase significantly or if the labor market worsens, the Fed may be forced to take action. He stressed that stagflation is a particularly difficult scenario for central banks to manage, as rising prices without corresponding growth can dampen both consumer spending and investment.

With ongoing economic uncertainty, the Fed’s next steps will depend on the evolving impact of tariffs and trade policies. While there is room for optimism regarding the temporary relief from trade tensions, the lingering effects of high tariffs and market volatility mean the central bank must remain vigilant.

Source: The Business Times

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Adam

Economic

The mood on Wall Street brightened this morning, if only slightly, as futures inched upward on a gentle tailwind of geopolitical détente and tamer-than-expected inflation figures. The S&P 500 futures edged up by 0.2 percent, the Dow Jones Industrial Average futures crept ahead by 0.1 percent, and Nasdaq futures matched the S&P’s modest advance.

The latest reading from the Bureau of Labor Statistics offered a small but significant surprise: the Consumer Price Index rose by just 0.2 percent in April, following a rare 0.1 percent dip the previous month. Economists polled by Bloomberg had penciled in a slightly brisker 0.3 percent rise. In a market hypersensitive to the scent of inflation, even the subtlest cooling is perceived as good news.

For markets, Mr Trump’s second presidency is beginning to look less like a disruption and more like a restoration. The financial tumult that followed his early executive orders has, for now, been absorbed. Wall Street is once again responding to a familiar Trumpian mix: bluster, chaos, and ultimately, pragmatism.

Investors are learning to appreciate a version of Mr Trump who is still combative, but quicker to retreat when faced with economic realities. He may lack finesse, but his approach - direct, divisive, unapologetic - is effective. In an era where political consensus has withered, such a bulldozer style of governance is oddly reassuring. It gives the impression, however illusory, that someone is at the wheel - regardless of how many red lights are run or toes (and allies) are crushed in the process.

This embrace is not without reservation. Bond markets remain uneasy. Treasury yields edged higher yesterday, despite April inflation data coming in slightly lower than expected. High interest rates continue to weigh on the economy. And America's yawning fiscal deficit remains unaddressed.

Concerns about recession linger. In Bank of America’s latest survey of large fund managers, 26% still expect a US downturn - down from 42% in April, but hardly comforting. On Polymarket, a predictive platform that has at times outperformed traditional financial houses, the probability of a recession stands at 39%. That figure may not dominate headlines, but it reflects a persistent undercurrent of doubt.

Meanwhile, Europe's markets have outpaced their American counterparts. The Stoxx Europe 600 is up 7% in 2025, still comfortably ahead of the S&P 500. German and Spanish indices, in particular, have performed well, each gaining 18% this year. But markets heavy in pharmaceuticals - such as Denmark, Belgium and Switzerland - have underperformed amid escalating White House rhetoric against high drug prices.

Investors are also tilting back toward American tech giants and large-cap stocks, a shift that should benefit the big US indices in the months ahead.

On the geopolitical front, Mr Trump is touring the Middle East, touting hundreds of billions of dollars in promised financial commitments from Gulf nations to the United States. Eyes are also on Turkey, where talks are scheduled Thursday to broker a ceasefire between Russia and Ukraine. Washington’s trade diplomacy is hitting friction elsewhere: China has voiced displeasure with the terms of the UK-US trade agreement, a reminder that America’s commercial assertiveness extends well beyond tariffs.

Monetary policy remains in the spotlight. Several Federal Reserve officials are scheduled to speak today, including Christopher Waller, Philip Jefferson and Mary Daly later in the day. Their remarks will be parsed for clues on the path of interest rates.

In Asia-Pacific, markets were mixed. European markets are relatively flat.

source : marketscreener

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Gerik

Economic

Russia-Ukraine Conflict

Russia's Depleting Financial Reserves

Russia is grappling with a severe financial crisis, as its liquidity reserves in the National Wealth Fund (NWF) have plummeted from $117 billion in 2021 to just $31 billion by November 2024. According to Swedish economist Anders Åslund, Russia could run out of these reserves by the fall of 2025. This situation poses a serious risk to Russia's military ambitions, as the country has heavily relied on its national wealth fund for defense spending in recent years.

The Russian government’s defense budget for 2025 is set to reach a record high of $130.5 billion, an amount that could put immense pressure on the country’s financial resources. Åslund warns that when the reserves run out, it will be inevitable to cut the defense budget, potentially leading to economic controls reminiscent of the Soviet era.

The Impact of Western Sanctions

The rapid depletion of Russia’s reserves can be partially attributed to the sanctions imposed by the West, which have made it difficult for Russia to borrow from foreign nations. The country’s total foreign debt has significantly decreased over the last decade, dropping from $729 billion in 2023 to about $293 billion by September 2024.

This limited capacity to fund its military efforts not only threatens Russia’s ability to maintain its war in Ukraine but also undermines its overall economy, which is already facing serious challenges. These challenges include rising inflation, a depreciating currency, and a severe labor shortage, which many economists warn could stunt Russia's long-term growth prospects.

Economic Struggles Amid War Efforts

Despite President Vladimir Putin’s assertions that Russia’s economy is strong and even "tempered" by Western sanctions, Åslund argues that the reality is different. Russia is edging closer to a state of "stagflation," where inflation is high but economic growth remains nearly stagnant.

The economy’s deteriorating state is compounded by the difficulty in financing its military efforts. Many experts, including European economist Renaud Foucart, suggest that Russia may not have the financial means to win the war or even to sustain it in the long run.

A Crisis Point for Russia’s Military and Economy

With the war in Ukraine continuing into its fourth year, Russia's economy is at a breaking point. As its financial reserves dwindle, the country faces the risk of a severe economic crisis, compounded by a shrinking workforce and a weakening economy. The Kremlin's ability to continue its military campaign will largely depend on its financial resources, which are increasingly stretched thin. Some analysts predict that economic pressures may force Russia to end its conflict with Ukraine by 2025, as it struggles to maintain both its military and domestic economy.

Source: Yahoo Finance

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Gerik

Economic

Rising Business Failures and Economic Slowdown in South Korea

South Korea is facing alarming economic signals, with a growing number of business failures and a sharp decline in domestic demand. According to the Korea Development Institute (KDI), the country's economy is showing clear signs of recession, a stark contrast to previous years of growth. For the first time since February 2023, the term "economic recession" was included in KDI’s economic report.

The construction industry, a key sector for foreign direct investment (FDI), has especially been hit hard, with many small and medium-sized construction companies unable to cope with the increasing economic challenges. Exports, particularly to the United States, have also seen significant reductions, reflecting the broader trade impacts and the downturn in global demand.

KDI predicts that the economic slowdown will intensify, driven by global risks and the decline in FDI, which fell by 24% in the first four months of 2025. The country’s GDP growth for Q1 2025 was -0.246%, the lowest among 19 countries that have reported their growth rates.

Record High Debt and Increasing Financial Strain

South Korea’s total debt—across the government, businesses, and households—has reached a record high of 6,222 trillion won (approximately $4.27 trillion). This massive debt, equivalent to 247.2% of GDP, continues to weigh heavily on the economy. Household debt, in particular, has been growing rapidly, with the debt-to-GDP ratio for households standing at 91%, significantly higher than the average of 68.9% in other developed economies.

The central bank has lowered interest rates twice to 3%, but the relief has not been felt by households, as banks have not yet reduced lending rates for consumers. This ongoing financial strain is reducing household purchasing power and driving up the cost of living, with many households turning to more extreme measures to manage their finances.

Consumer Behavior Shifts Amid Rising Costs

As inflation and debt continue to mount, South Korean consumers are adjusting their spending habits. Traditional celebrations such as Family Day have seen people opting for cheaper alternatives, such as buying second-hand flowers or discounted food items nearing expiration. Platforms like Danggeun Market and Lucky Meal are gaining popularity, as consumers seek to save on everyday expenses by purchasing second-hand goods or discounted meals.

These shifts are reflective of the broader trend of consumers tightening their belts amid economic uncertainty. Retailers are reporting increased demand for second-hand items, especially toys and gifts, as people look for ways to make ends meet without compromising on social traditions.

The Strain on Businesses and Rising Prices

As consumer spending falters, businesses, particularly small and medium enterprises (SMEs), are struggling to keep up with rising costs. The price of food and basic goods continues to rise, adding to the financial burden of the population. Convenience store chains like CU are raising the prices of everyday items such as lunch boxes, with prices now exceeding expectations for the average consumer.

The Consumer Protection Agency of South Korea has reported that food prices at retail stores and restaurants have been rising consistently. Suppliers are struggling to absorb the increasing costs of raw materials, forcing them to pass the burden onto consumers.

A Struggling Economy and the Need for Reform

South Korea's economic situation paints a grim picture, with rising debts, business closures, and an overall contraction in economic activity. While some sectors like housing, automobiles, and renewable energy are seeing growth, the broader economic landscape remains uncertain.

With household debt and inflation reaching unsustainable levels, South Korea faces the daunting challenge of stabilizing its economy. Experts suggest that the government must focus on structural reforms, particularly in the real estate and construction sectors, to address the deepening crisis. As businesses and households adjust to new economic realities, the nation’s ability to rebound will depend on effective policy interventions and international cooperation to navigate the global economic challenges ahead.

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Adam

Commodity

The New York session has seen precious metals get clobbered, and of course silver will have taken its lumps in this situation. However, we are still technically in a range, so the closing price will be crucial here.

Silver Technical Analysis

The silver market has seen a pretty nasty sell-off in the early part of the New York session as traders continue to look for some type of momentum one way or the other to get out of this consolidation area. At the time of this recording, we still haven’t broken out of it. So, I think that is something worth paying attention to. But ultimately, this is a scenario where silver just can’t get out of its own way. And if that is in fact going to be the case, then I do think that it’s very possible the $32 level gets broken through.

If we break down below the $32 level, then it’s likely that we will plunge even further, perhaps trying to get down to the 200 day EMA, which is closer to the $31.33 level. To the upside, we have the $34 level offering resistance. I think that resistance is something that’s going to be very difficult to break above. But if somehow, we did, then you would have to assume that the market goes back towards the highs at $35.50. As things stand right now, the metals markets are really taking a beating, and interest rates are rising in the United States. So, it’ll be interesting to see how this ends up playing out.

Ultimately, I do think this is a scenario where a lot of traders are just simply waiting to see which way silver breaks in order to follow it. So it could be a nice little momentum kind of follow through type of trade, even when we get the breakout. Short-term traders may try to pick up the bottom here and cause a little bit of a bounce. You can make an argument for that, I suppose, but obviously you would have to be very nimble.