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A strike hitting ports across British Columbia is raising concerns that an extended walkout could have an inflationary impact in Canada as the labour action disrupts supply chains and global shipping.

About 7,400 members of the International Longshore & Warehouse Union Canada (ILWU) walked off the job on Saturday, 72 hours after the waterfront union served its strike notice. The strike has led to the suspension of imports of consumer goods and most exports of raw materials.

A crucial issue at the bargaining table is the workers’ future job security amid a plan to build a $3.5-billion, semi-automated container terminal near the Vancouver suburb of Delta.

“For the future of our work force, we had to take this step,” ILWU president Rob Ashton said in a statement.

Besides worries about automation, the union’s other main concerns are familiar at the bargaining table: disputes with employers over contracting out and disagreements over what constitutes a fair cost-of-living wage increase.

About 6,000 of the ILWU’s members are in the Vancouver region, 1,000 in the Prince Rupert area and the rest in Nanaimo and Port Alberni.

“Any disruption to port operations has a significant impact globally and on Canadians who rely on the businesses that import and export goods,” the Vancouver Fraser Port Authority said. Canada’s largest port estimates that one-third of the value of Canadian trade in goods outside of North America gets handled by the various terminals in the Vancouver region.

With consumers already facing high prices, if the labour dispute is prolonged, the extra cost of congested ports threatens to place further inflationary pressure on imported goods that arrive by ship and get transferred to trains and trucks, according to business advocacy groups.

The Canadian Federation of Independent Business is among the groups warning about shipping delays potentially creating chaos as imported goods such as perishables, appliances and electronics move from the West Coast, across the Prairies and into Central Canada.

“Some businesses may lose inventory if perishable goods are not unloaded and brought to market quickly,” the federation’s vice-president of national affairs, Jasmin Guénette, said in a news release.

On the export side, Canadian shipments of a wide range of raw materials such as fertilizer and lumber have been suspended. An array of different materials are transported in a variety of ways, including bulk shipments loaded onto vessels or inside reusable steel containers.

Federal Labour Minister Seamus O’Regan arrived in Vancouver on Friday and met separately with both sides in the dispute. He plans to stay in Vancouver while the ILWU and the BC Maritime Employers Association try to hammer out a deal.

So far, attempts to reach a pact with the assistance of federal mediators have not succeeded. The previous five-year collective agreement expired on March 31.

The Canadian Chamber of Commerce is calling on the Liberal government to recall Parliament. But in an e-mailed statement on Sunday, Mr. O’Regan’s office responded: “We are not looking past the bargaining table, because the best deals are made at the table. Federal mediators continue to support the parties in their negotiations.”

Automation has emerged as a crucial issue, growing in importance after the federal government approved the Vancouver Fraser Port Authority’s proposal to build a $3.5-billion container terminal, which would be semi-automated.

In April, the government cleared the way for construction of the Roberts Bank Terminal 2 project, or RBT2, that would be located on an artificial island to be built near the Vancouver suburb of Delta.

Mr. Ashton has sounded the alarm over the anticipated magnitude of automation to load and unload cargo, arguing recently that RBT2 would result in many “jobs being done by robots.”

The port authority has yet to select RBT2′s terminal operator, which would have the final say over the number of jobs to be created. The port authority has said it will make it a condition of the selection process that the new terminal operator commit to employing at least 800 ILWU members.

But the union is worried that RBT2′s semi-automation will place pressure on existing terminal operators to install more machines and equipment to replace many duties currently done by unionized workers.

Container capacity would rise by nearly 50 per cent at Canada’s largest port when RBT2′s three berths are completed in the mid-2030s.

The union, environmental groups and one of the Vancouver Fraser Port Authority’s tenants, GCT Global Container Terminals Inc., oppose RBT2. GCT, which already operates the existing three-berth Deltaport container terminal near Delta, wants to expand by constructing a fourth berth.

The BC Maritime Employers Association represents 49 private-sector employers at more than 35 terminals spread across four port authorities in the province. Besides the Vancouver Fraser Port Authority, three other authorities oversee their respective locations in Prince Rupert, Nanaimo and Port Alberni.

Picket lines went up at terminals across B.C. over the weekend.

“Our bargaining committee has made repeated efforts to be flexible and find compromise on key priorities, but regrettably, the parties have yet to be successful in reaching a settlement,” the association representing employers said in a statement.

During a news conference on Sunday at a break from negotiations, Mr. Ashton countered that union officials have shown greater flexibility than representatives for the employers. “We do not plan to leave the bargaining table,” he said, adding that Ottawa should not impose any settlement.

Parliament is currently on a summer recess until September. While the Liberal government could recall the House of Commons to introduce back-to-work legislation, it recently showed a clear reluctance to use that option when more than 100,000 federal public servants went on strike in April.

The minority government regularly relies on support from the NDP on key votes and the New Democrats said they would strongly oppose the use of back-to-work legislation during the public-service strike.

Parliament did approve back-to-work legislation in 2021 to end a strike at the Port of Montreal. In that case, the Liberals received the support of Conservative MPs and the bill passed over the objections of the NDP and the Bloc Québécois.

Leaders at the ILWU and the group of employers said the labour dispute will not affect the servicing of cruise lines docked at Vancouver, Prince Rupert and Vancouver Island.

Bulk grain shipments are expected to continue being exported overseas, in accordance with the Canada Labour Code.

Two coal-export terminals, Westshore Terminals Investment Corp. near Delta and Trigon Pacific Terminals Ltd. near Prince Rupert, would keep operating because those employers have their own collective agreements.

With a report from Bill Curry in Ottawa

Gold climbed on Monday as geopolitical concerns surrounding Russia drew some investors into the safe haven metal, outweighing pressure from a hawkish interest rate outlook.

Spot gold rose 0.6% to $1,932.19 per ounce, while gold futures were up 0.7% to $1,942.30.

Bullion slumped nearly 2% in the previous week as hawkish comments from Federal Reserve officials signalled more rate hikes to tame sticky inflation.

“The markets are trying to adjust to the heightened geopolitical worries that unfolded in Russia this weekend,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Heavily armed Russian mercenaries withdrew from the southern Russian city of Rostov on Sunday under a deal that halted their rapid advance on Moscow.

Meanwhile, markets saw 72% chance of a rate hike in July, with cuts seen from 2024 onwards, according to CME Fedwatch tool.

“The market is somewhat lukewarm about fully pricing in two hikes and … we have found some additional support down towards that $1,900 psychological level,” Hansen said.

Higher interest rates make non-yielding gold less appealing.

The dollar index edged 0.2% lower, making gold cheaper for holders of other currencies, while competing safe-haven asset Treasury yields hit their lowest since June 7.

But the dollar hit a 15-month high against the rouble after dramatic weekend events in Russia.

Speculators raised their net long position in COMEX gold by 1,322 to 94,626 in the week ended June 20, CFTC data showed on Friday.

Spot silver gained 1.8% to $22.80 per ounce while platinum was up 1.5% to $931.08.

Palladium rose 2% to $1,310.05, bouncing off four-year lows.

However, stagnant growth in China and acceleration of battery electric vehicles could curb palladium autocatalyst demand and push the price lower, Heraeus analysts wrote in a note.

Gold futures settled higher on Friday, rebounding from recent losses, despite the latest round of interest rate hikes by some central banks and hawkish comments from several Fed officials.

Gold prices edged higher on the previous metal’s safe-haven appeal, as riskier assets such as stocks drifted lower amid worries about inflation and an economic slowdown.

The dollar surged higher after U.S. Fed Chair Jerome Powell reiterated plans to continue raising interest rates during his second day of testimony on Capitol Hill.

The dollar index, which surged to 103.17 in the Asian session, eased to 102.90 later on, but still remained up in positive territory with a gain of over 0.5%.

Gold futures for August ended higher by $5.90 at $1,929.60 an ounce

Silver futures for July ended down $0.113 at $22.354 an ounce, while Copper futures for July settled at $3.8035 per pound, down $0.0865 from the previous close.

After tumbling to the $1,920 an ounce level, gold is starting to attract safe-haven flows as the stock market selloff intensifies.

“Gold got an added boost after the Fed’s Bostic said he favors no more rate hikes for the rest of the year. The rebound however lost some steam after the latest PMI data isn’t showing enough weakness in the service sector to warrant a pause,” says Edward Moya, Senior Market Analyst at OANDA.

“PCE readings and comments from Fed Chair Powell will be key for Fed’s policy stance,” adds Moya. “If swap futures start to believe the Fed will likely deliver two more rate increases, gold could remain vulnerable. However, if risk aversion runs wild, gold could see some flight to safety flows. Gold has key support at the $1900 level and resistance at the $1960 region.”

Monday June 26

ECB Forum on Central Banking (through Wednesday)

(8:30 a.m. ET) Canadian manufacturing sales for May.

(8:30 a.m. ET) Canadian wholesale trade for May.

(10:30 a.m. ET) U.S. Dallas Fed Manufacturing Activity for June,

==

Tuesday June 27

(5:30 a.m. ET) Bank of Canada deputy governor Sharon Kozicki speaks at the ECB Forum on Central Banking in Sintra, Portugal.

(8:30 a.m. ET) Canada’s CPI for May. The Street is projecting a rise of 0.4 per cent from April and up 3.4 per cent year-over-year.

(8:30 a.m. ET) U.S. durable orders for May. Consensus is a decline of 0.9 per cent from April with core orders up 0.2 per cent.

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(9 a.m. ET) U.S. S&P CoreLogic Case-Shiller Home Price Index (20 city) for April. The Street is estimating a rise of 0.4 per cent from March but a year-over-year decline of 2.3 per cent.

(9 a.m. ET) U.S. FHFA House Price Index for April. Consensus is a rise of 0.5 per cent from March and up 2.5 per cent year-over-year.

(10 a.m. ET) U.S. new home sales for May. Consensus is an annualized rate decline of 1.9 per cent.

(10 a.m. ET) U.S. Conference Board Consumer Confidence Index for June.

Earnings include: Walgreens Boots Alliance Inc.

==

Wednesday June 28

Germany consumer confidence

(8:30 a.m. ET) Canada’s national population estimates for Q1.

(8:30 a.m. ET) U.S. goods trade deficit for May.

(8:30 a.m. ET) U.S. wholesale and retail inventories for May.

(9:30 a.m. ET) U.S. Fed chair Jerome Powell joins a policy panel at the ECB Forum.

Earnings include: BlackBerry Ltd.; General Mills Inc.; Micron Technology Inc.

==

Thursday June 29

Japan retail sales and consumer confidence

Euro zone economic and consumer confidence

Germany CPI

(2:30 a.m. ET) U.S. Fed chair Jerome Powell joins a dialogue at the Banco de Espana Fourth Conference on Financial Stability in Madrid.

(8:30 a.m. ET) Canada’s Survey of Employment, Payrolls and Hours for April.

(8:30 a.m. ET) U.S. initial jobless claims for week of June 24. Estimate is 266,000, up 2,000 from the previous week.

(8:30 a.m. ET) U.S. real GDP and GDP deflator for Q1. Consensus estimates are annualized rate increases of 1.4 per cent and 4.2 per cent, respectively.

(8:30 a.m. ET) U.S. pre-tax corporate profits for Q1. Estimate is a year-over-year decline of 2.8 per cent.

(8:30 a.m. ET) U.S. real GDP by industry for Q1.

(10 a.m. ET) U.S. pending home sales for May.

Earnings include: Corus Entertainment Inc.; Nike Inc.; Paychex Inc.

==

Friday June 30

China manufacturing and non-manufacturing PMI

Japan industrial production and jobless rate

Euro zone CPI and jobless rate

Germany unemployment and retail sales

(8:30 a.m. ET) Canada’s monthly real GDP for April. The Street is forecasting a rise of 0.2 per cent from March.

(8:30 a.m. ET) U.S. personal spending and income for May. Consensus estimates are month-over-month rises of 0.2 per cent and 0.4 per cent, respectively.

(8:30 a.m. ET) U.S. core PCE price index for May. The Street expects a rise of 0.4 per cent from April and up 4.7 per cent year-over-year.

(9:45 a.m. ET) U.S. Chicago PMI for June.

(10 a.m. ET) U.S. University of Michigan consumer sentiment for June.

(10:30 a.m. ET) Bank of Canada’s Business Outlook Survey and Survey of Consumer Expectations for Q2.

Earnings include: Constellation Brands Inc.

Crude oil futures settled lower on Friday on concerns about the outlook for energy demand following a slew of interest rate hikes by central banks and prospects of further tightening raising concerns about economic growth.

Data showing a slowdown in economic activity in the U.S. and Europe in June added to the gloom.

The S&P Global US Composite PMI dropped to 53.0 in June 2023, down from 54.3 in the previous month, according to preliminary estimate. The latest reading signaled the slowest upturn in private sector output since March as factory production fell at the steepest rate since January.

The S&P Global US Manufacturing PMI fell to 46.3 in June 2023, pointing to the biggest contraction in the manufacturing sector since December, compared to 48.4 in May.

The S&P Global US Services PMI edged down to 54.1 in June 2023 from 54.9 in May and compared with market expectations of 54, preliminary estimates showed.

West Texas Intermediate Crude oil futures for August ended lower by $0.35 at $69.16 a barrel.

Brent crude futures were down $0.25 or 0.34% at $73.89 a barrel a little while ago.

“Oil prices are declining on fears that a European recession and delayed stimulus from China will spell trouble for the global growth outlook,” says Edward Moya, Senior Market Analyst at OANDA.

“Energy traders are worried that the Fed and friends might cripple economic growth in the second half of the year. The upcoming week contains Energy Institute global energy outlook that could become a lot more pessimistic,” he adds.

According to the data from Baker Hughes, the total rig count fell to 682 this week, 71 rigs below this time last year. The current count is 393 fewer rigs than the rig count at the beginning of 2019, prior to the pandemic, the data said.

The number of oil rigs declined by 6 this week to 546, while the number of gas rigs stayed the same, at 130.

By RTTNews Staff Writer   ✉  | Published: 6/23/2023 6:11 PM ET

Canadian stocks drifted lower on Friday, extending losses to a sixth straight session, amid rising concerns interest rate hikes will hurt growth and weigh on corporate earnings as well.

Healthcare, utilities, financials and energy stocks fell. Several stocks from industrials sector too posted sharp losses.

The benchmark S&P/TSX Composite Index ended with a loss of 162.67 points or 0.83% at 19,418.23, a three-month low.

In the healthcare sector, Canopy Growth Corp (WEED.TO) plunged 11.7% despite reporting a surge in quarterly revenue. The company reported fourth-quarter net revenue of $87.5 million, up 14% compared to the net revenue the company recorded in the year-ago quarter.

Tilray Inc (TLRY.TO) ended more than 6% down, while Bausch Health Companies (BHC.TO) lost about 2.1%.

Among utilities stocks, Algonquin Power and Utilities Corp (AQN.TO), Transalta Renewables (RNW.TO), Transalta Corp (TA.TO), Altagas (ALA.TO) and Capital Power Corp (CPX.TO) lost 2 to 3.45%.

Among financials shares IA Financial Corp (IAG.TO) ended more than 4% down. Goeasy (GSY.TO), EQB Inc (EQB.TO), National Bank of Canada (NA.TO), Power Corp of Canada (POW.TO), Bank of Montreal (BMO.TO) and Manulife Financial (MFC.TO) lost 1 to 2.6%.

Vermilion Energy (VET.TO), Baytex Energy (BTE.TO), Crescent Point Energy (CPG.TO), Parex Resources (PXT.TO), Imperial Oil (IMO.TO) and MEG Energy Corp (MEG.TO) were among the major losers in the energy sector.

Thomson Reuters (TRI.TO), FirstService Corporation (FSV.TO), Kinaxis Inc (KXS.TO), Docebo Inc (DCBO.TO) and Endeavour Mining Inc (EDV.TO) gained 1 to 2.5%.

One of the country’s largest grocers is seeing signs that food inflation has hit its peak in Canada, as requests for cost increases from product suppliers have begun to slow down.

Sobeys parent company Empire Co. Ltd. EMP-A-T +4.08%increase says that, while supplier requests are still trending above prepandemic levels, both the number of requests and the magnitude of cost increases being discussed have abated since the beginning of May.

“While food inflation remains high, we are pleased to see that it is beginning to moderate,” said Michael Medline, Empire chief executive officer on a conference call Thursday to discuss the company’s fourth-quarter results.

Mr. Medline predicted the moderation will continue in the coming months – supported by easing of commodity prices for ingredients such as wheat and various cooking oils.

“These are still tough times. It’s not over,” he said. “And hopefully we’ll be through it soon.”

Empire on Thursday boosted its quarterly dividend paid to shareholders by 10.6 per cent to 18.25 cents per share, as the grocer reported increased profits and the completion of a six-year turnaround plan that has reshaped the business and added hundreds of millions of dollars to its bottom line.

The Stellarton, N.S.-based retailer, which also owns grocery banners such as Safeway, FreshCo, Longo’s and Farm Boy, reported net earnings growth that beat analysts’ estimates, amounting to $182.9-million or 72 cents per share in the fourth quarter ended May 6, up from $178.5-million or 68 cents per share in the comparable period the prior year. The company reported the higher profits in a comparatively shorter time frame of this year’s 13-week quarter compared with a 14-week period in 2022.

The second three-year phase of the now completed turnaround plan, called Project Horizon, involved store renovations, expansion of some store banners including the discount FreshCo chain, investments in data analytics and expansion of the company’s private-label products. Empire says it has now reached its goal of adding $500-million in annual earnings before interest, taxes, depreciation and amortization (EBITDA) through these initiatives.

Through the turnaround, the company also expanded its EBITDA margin by 60 basis points. (A basis point is one-hundredth of 1 per cent.) While Empire’s management had originally set a goal of expanding that profit margin by 100 basis points, some projects were delayed by the pandemic, inflation and a cybersecurity breach that hit the company in November.

In the fiscal year ended on May 6, Empire recorded a $34.1-million adjustment to net earnings related to that breach. The company has previously said it expects the cost of the breach to be $32-million after insurance recoveries – some of which will be recorded following the end of this fiscal year. That estimate remains unchanged.

Now that the turnaround is complete, the company plans to continue to invest in updating its stores, with plans to renovate 20 to 25 per cent of its locations over the next three years. The company also plans to continue its focus on e-commerce expansion through the Voilà brand, and to use analytics to better tailor store layouts and improve product promotions. Empire is aiming for further cost-control measures, including by focusing on product sourcing and supply chains.

Empire’s fourth-quarter sales declined by 5.5 per cent to $7.4-billion compared with the longer quarter in the prior year. Same-store sales – an important industry metric that tracks sales growth not tied to new store openings – grew by 1.6 per cent, or 2.6 per cent excluding fuel sales at the company’s gas stations.

E-commerce sales declined by 13.5 per cent in the quarter. In a news release, the company attributed the decline to a period in 2022 when the pandemic was still causing people to buy more groceries online than usual.

Canadian Imperial Bank of Commerce CM-T -1.33%decrease will pay a $3-million penalty after the financial institution watchdog for consumers said that the lender failed to transfer some credit card transactions to new cards in a timely manner, resulting in additional fees for customers.

In a May decision published Thursday, the Financial Consumer Agency of Canada (FCAC) said that over the course of 18 years, CIBC violated a rule that requires banks to provide customers with accurate information on credit card statements. The announcement comes days after the Globe and Mail reported that CIBC is under remediation orders from Canada’s banking regulator after an audit of its mortgage portfolio revealed breaches of rules that limit levels of debt for borrowers.

The FCAC alleges that from May 2003 to June 2021 CIBC failed to properly transfer transactions after a credit card was deactivated because it was lost, stolen or defrauded. Due to the delay, the new account statements did not reflect all outstanding transactions. As a result, the account balances, amount due, available credit limit and the payment date were incorrect – and some customers were charged interest, over-limit fees and other costs.

On Thursday, the FCAC also revealed that National Bank of Canada had paid a penalty of $600,000 in April related to violations that occurred between 2001 and 2018. The lender failed to properly process interest payments, which affected more than 920,000 personal loans, representing a financial impact of more than $772,000.

CIBC found that more than 125,000 accounts were affected by its errors, and that $1.5-million in improper fees, interest and premiums were charged to those accounts. The bank’s standard processing period is five days, but $51.7-million in credit transactions were not transferred within that time frame. Some customers experienced delays as long as three years.

“This violation deprived customers of accurate reporting on their credit card statements and persisted for many years, causing harm,” the FCAC said in its decision.

CIBC self-identified and reported the issue to the FCAC in September 2020, and brought on a third-party company to help identify affected customers. It attributed the issue with lost or stolen cards to employee error and an ineffective quality assurance program. For the defrauded cards, the bank said that the error was caused after a specialized fraud claims team was eliminated in April 2018 and replaced by an automated process that failed to transfer credit transactions.

“This matter affected a very small percentage of credit card clients whom we have already refunded with interest after self-identifying and self-correcting the issue,” CIBC spokesperson Tom Wallis said in an e-mail statement. “Our team is focused on doing what’s right for our clients and when we identify an issue, we work to advise our clients and take steps to correct it right away, as we did in this case.”

To fix the issue, CIBC implemented new procedures in July 2020 that corrected the process for defrauded cards. It also reintroduced a dedicated team to monitor the processing of credit transactions and established a quality assurance program for defrauded accounts.

In June 2021, the bank introduced new processes for lost or stolen cards with a quality assurance program to ensure that employees follow procedures.

By September 2021, CIBC had transferred all outstanding transactions and refunded the charges, along with 3 per cent interest. The average amount of the charges was $122.31 for defrauded cards and $96.85 for lost or stolen cards. It also made a charitable donation for customers who could not be located or whose refund was less than $5.

The FCAC said that it did not find any evidence to suggest that CIBC intentionally breached its regulatory obligations, but that its “controls were inadequate and ineffective,” demonstrating “significant negligence.”

According to the FCAC’s decision document, CIBC said that the organization overemphasized the 18-year duration of the issue, stating that the lengthy period indicates that there were infrequent errors, representing less than 1 per cent of all lost or stolen cards.

On the issue of the defrauded cards, CIBC said that the shorter duration of the breach – which spanned two years – should result in a lower assessment of negligence.

The FCAC initially proposed a penalty of $3.25-million. CIBC admitted to the violation, but disputed the watchdog’s assessment of the level of harm involved, prompting the FCAC to lower the penalty.

Gold hovered near a three month low on Friday and was set for its biggest weekly drop since February, as the dollar strengthened after U.S. Federal Reserve Chief Jerome Powell hinted about more interest rate hikes.

Spot gold ticked up 0.2% to $1,917.63 per ounce but stayed close to a three-month low hit earlier in the session. Prices are down 2% for the week. U.S. gold futures rose 0.2% to $1,927.90.

The dollar index drew support from risk aversion globally, making bullion less attractive for overseas investors.

“Gold has extended lower out of the range that it was occupying for a few weeks, suggesting there is more weakness ahead. The decline matches up with the rise in yields, reflecting hawkish comments from Powell and Fed officials more generally,” said Ilya Spivak, head of global macro at Tastylive.

Powell in his second day of testimony said the U.S. central bank would move interest rates at a “careful pace” from here as policymakers edge towards a stopping point for their historic round of monetary policy tightening.

While gold is struggling to find any impetus amid the higher interest rate outlook, it has shown an ability to stage a recovery after recent price dips, said Tim Waterer, chief market analyst at KCM Trade.

U.S. jobless claims, meanwhile, held steady at a 20-month high last week, potentially signaling a softening labor market in the face of the Fed’s aggressive rate hikes.

Oil dropped for a second day on Friday and was heading for a weekly decline, as a UK interest rate hike added to concern over economic growth that outweighed lower U.S. crude stocks and other signs of tighter supplies.

Both crude benchmarks had dropped about $3 on Thursday after the Bank of England raised interest rates by a bigger-than-expected half a percentage point. Central banks in Norway and Switzerland also hiked rates.

Brent crude slipped 59 cents, or 0.8%, to $73.55 a barrel at 0810 GMT, while U.S. West Texas Intermediate (WTI) crude was down 70 cents, or 1%, at $68.81.

“After yesterday’s central banks’ action, anxiety has palpably grown,” said Tamas Varga of oil broker PVM. “Due to strengthening economic headwinds caused by recession fears, only conspicuous stock depletion will herald a protracted change in the currently ominous outlook.”

Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and cloud the oil demand outlook for the rest of the year.

The prospect of more U.S. interest rate hikes added to those headwinds. U.S. Federal Reserve Chair Jerome Powell said this week two more rate hikes of 25 basis points each by the end of the year was “a pretty good guess.”

An increase in the dollar, drawing support from hawkish comments from global central banks, also weighed. A strong dollar makes oil more expensive for other currency holders and can hit demand and indicate higher risk aversion among investors.

The recession and demand concerns outweighed signs of supply-side tightness. This week’s U.S. inventory report showed crude stocks posted a surprise decline of 3.8 million barrels.

Also set to tighten the market is Saudi Arabia’s production cut of 1 million barrels per day in July announced as part of an OPEC+ deal to limit supplies into 2024.