Oil Futures Settle Lower On Demand Worries
Crude oil prices fell sharply on Tuesday amid concerns about interest rate hikes and worries about the outlook for energy demand.
A firm dollar amid expectations of a sharp interest rate hike by the Federal Reserve on Wednesday, weighed on oil prices.
Outlook for energy demand is somewhat weak as it is feared that aggressive interest rate hikes by central banks might hurt growth which in turn will result in a drop in demand for oil.
West Texas Intermediate Crude futures for October ended lower by $1.28 or about 1.5% at $84.45 a barrel on expiration day.
WTI Crude futures for November, ended down $1.42 or 1.7% at $83.94 a barrel.
Brent crude futures were down $1.49 or 1.6% at $90.51 a barrel a little while ago.
Traders also looked ahead to weekly crude inventories data from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API’s report is due later today, while EIA is scheduled to release its inventory data Wednesday morning.
A Reuters poll showed crude oil stocks in the U.S. likely rose by 2 million barrels last week.
Traders also noted a report from OPEC+ that showed the group fell short of its output target by 3.58 million barrels per day in August, which was about 3.5% of global oil demand.
Twitter Stockholders Approve Deal To Be Acquired By Elon Musk
Twitter’s (TWTR) shareholders have voted to approve a deal with Elon Musk to buy the company for $44 billion.
Based on a preliminary tabulation of the stockholder vote, approximately 98.6% of the votes cast at the Special Meeting approved the proposal to adopt the deal.
Now, Twitter will legally try to force Elon Musk to buy the company after he terminated the deal earlier.
Twitter has sued the SpaceX and Tesla CEO in an attempt to force him to complete his agreement to acquire the social media company in the $44 billion deal.
In April, Twitter agreed to sell the company to the world’s richest person. However, Musk later terminated his deal to acquire Twitter, claiming that the social media giant failed to comply with its obligations in the merger agreement. Musk’s legal team claimed that Twitter did not provide Musk with relevant business information. Musk previously wanted to assess Twitter’s claims that about 5% of its monetizable daily active users are spam accounts.
“Twitter continues to believe that Mr. Musk’s purported termination of the merger agreement is invalid and without merit, and that the Musk parties continue to be bound by the merger agreement and obligated to complete the merger on the agreed terms and conditions,” Twitter said in a statement.
Twitter is currently valued at $32 billion, far below the $44 billion offer from Musk.
Apple To Raise Prices Of Apps In Europe, Asia
Tech giant Apple Inc (AAPL) is set to raise prices of apps and in-app purchases on its App Store from next month in some countries in Europe, Asia and South America.
“As early as October 5, 2022, prices of apps and in-app purchases (excluding auto-renewable subscriptions) on the App Store will increase in Chile, Egypt, Japan, Malaysia, Pakistan, Poland, South Korea, Sweden, Vietnam, and all territories that use the euro currency,” Apple announced in a blog.
“In Vietnam, these increases also reflect new regulations for Apple to collect and remit applicable taxes, being value added tax (VAT) and corporate income tax (CIT) at 5% rates respectively,” the statement added.
Although the company didn’t reveal any specific reason behind this decision, it is likely to offset weak local currencies against the dollar. The percentage hike varies across regions. For example, prices in South Korea have been hiked by 20-25%, in Japan, they have been raised by 30-35% and in regions that use Euro, the hike is around 8-10%.
European Economics Preview: UK Inflation Data Due
Consumer prices and factory gate inflation figures are due from the UK on Wednesday, headlining a light day for the European economic news.
At 2.00 am ET, the Office for National Statistics releases UK consumer and producer price figures for August. Consumer price inflation is seen rising to 10.2 percent from 10.1 percent in July.
The UK output price inflation is expected to advance to 17.4 percent from 17.1 percent a month ago. Meanwhile, input price inflation is forecast to ease to 22.4 percent from 22.6 percent.
In the meantime, consumer price data is due from Sweden. Economists expect inflation to rise to 9.6 percent in August from 8.5 percent in July.
At 5.00 am ET, Eurostat is scheduled to issue euro area industrial production data for July. Output is expected to fall 1.0 percent on month, reversing a 0.7 percent rise in June.
European Economics Preview: Eurozone Current Account Data Due
Current account data from the euro area is due on Tuesday, headlining a light day for the European economic news.
At 2.00 am ET, Destatis is scheduled to issue Germany’s producer price data. Producer price inflation is seen at 37.1 percent in August versus 37.2 percent in July.
At 3.00 am ET, the State Secretariat for Economic Affairs releases Swiss August economic forecast.
At 3.30 am ET, Sweden’s central bank announces its monetary policy decision. The bank is forecast to raise its key rate to 1.50 percent from 0.75 percent.
At 4.00 am ET, the European Central Bank publishes euro area current account data. The current account surplus is seen at EUR 5.3 billion in July versus EUR 4.2 billion in June.
In the meantime, industrial output, producer prices and corporate sector wages figures are due from Poland. Industrial output growth is expected to rise to 9.9 percent in August from 7.6 percent in July. Producer price inflation is seen at 24.5 percent versus 24.9 percent in July.