Oil prices fell on Wednesday on disappointing economic data from China and Europe and a rise in U.S. crude inventories, partly erasing the previous session's sharp gains after the United States said it would delay tariffs on some Chinese products.
Brent crude was down 49 cents, or 0.8%, at $60.81 a barrel at 0954 GMT, after rising 4.7% on Tuesday, the biggest percentage gain since December.
U.S. West Texas Intermediate (WTI) crude future was down 73 cents, or 1.3%, at $56.37 a barrel, having risen 4% the previous session, the most in just over a month.
China reported a raft of unexpectedly weak data for July, including a surprise drop in industrial output growth to a more than 17-year low, underlining widening economic cracks as the trade war with the United States intensifies.
"This morning's Chinese industrial production came in below expectations confirming our expectation that the late-cycle dent likely becomes deeper before year end," Norbert Ruecker of Swiss bank Julius Baer said, referring to late-cycle phase in economies that is characterized by slowing growth.
"Oil demand should continue to soften," he added.
The global slowdown amplified by tariff conflicts and uncertainty over Brexit also shrank European economies. A slump in exports sent Germany's economy into reverse in the second quarter, data showed.
The euro zone's GDP also barely grew in the second quarter of 2019.
Profit taking after Tuesday's sharp gains also weighed on crude prices on Wednesday, analysts said.
Benchmark crude prices surged on Tuesday after U.S. President Donald Trump backed off his Sept. 1 deadline for 10% tariffs on some products affecting about half of the $300 billion target list of Chinese goods.
"While Brent crude has recovered back above $60 a barrel, the technical outlook for WTI looks somewhat better after once again managing to find support above $50 a barrel," said Ole Hansen, Head of Commodity Strategy at Saxo Bank.
"The range-bound behavior, however, looks set to continue with focus on U.S.-China trade talks and continued production restraint from OPEC, led by Saudi Arabia."
Data from industry group the American Petroleum Institute (API) showed U.S. crude stocks unexpectedly rose last week. [API/S]
Crude inventories increased by 3.7 million barrels to 443 million, compared with analyst expectations for a decrease of 2.8 million barrels, the API said.
When Cyril Ramaphosa succeeded Jacob Zuma as South Africa’s president, he promised a “new dawn” after nine years of misrule that hobbled the economy.
Eighteen months later, hopes have dissipated that the former labor union leader can orchestrate a turnaround. The economy shrank the most in a decade in the first quarter of this year; 38% of the workforce can’t find jobs or have given up looking; and massive bailouts for the debt-stricken state power utility are draining the country’s coffers, putting South Africa at risk of losing its sole investment-grade credit rating.
Ramaphosa himself, a respected 66-year-old lawyer who led the negotiations that brought an end to white-minority rule in 1994, is stuck in a political quagmire. While he won control of the ruling African National Congress by a razor-thin margin in late 2017, members of an ANC faction loosely allied to Zuma remain entrenched in senior positions in the party and the state, undermining Ramaphosa’s authority and limiting his scope to tackle rampant graft and nepotism.
The president has axed several cabinet ministers with tainted reputations, replaced the chief prosecutor and head of the national tax agency, and revamped the boards and management of troubled state companies. His efforts to sweep the government clean helped steer the ANC to its sixth consecutive win in May elections. But his detractors in the party have continued to push back against his anticorruption crusade, which has eroded investor confidence. They’ve demanded changes to the central bank’s inflation-targeting mandate and advocated land seizures to address racially skewed ownership patterns dating to apartheid and colonial rule, when members of the black majority were largely deprived of the right to own property.
“A more forceful leader could have adopted a blitzkrieg strategy straight after the election victory and probably been victorious. But Cyril Ramaphosa is not such a leader,” says Robert Schrire, a politics professor at the University of Cape Town. By moving cautiously, the president may have ensured the stability of his government, but at the expense of his ability to effect change, Schrire says. “The opportunity has passed.”
The president’s political challenges extend beyond the ANC. Powerful labor unions that played a key role in bringing Ramaphosa to power appear intent on derailing efforts to turn around state-owned power utility Eskom Holdings SOC Ltd. They’ve rejected cuts to its bloated workforce and plans to break it into three operating units that would be easier to manage. The president has also been locked in legal battles with the nation’s antigraft ombudsman, who accuses him of failing to disclose a campaign donation.
Despondency over the stalemate is evident in the financial markets. The rand, which jumped to a three-year high after the ANC forced Zuma to quit and replaced him with Ramaphosa, has reversed all of its gains. Meanwhile, government bond yields have spiked over the past month as the cost of a three-year bailout for Eskom ballooned by $4 billion, to $8.6 billion. “The additional support to ease the company’s financial pressures would be credit negative for South Africa because it would be an additional drain on fiscal resources,” Moody’s Investors Service, the only major rating company that doesn’t classify the nation’s debt as junk, wrote in a July 24 report. “The lack of a strategy to return Eskom to a more stable financial situation that would reduce the need for government support exacerbates the problem.”
Morgan Stanley analyst Andrea Masia sees the budget deficit widening, to about 6.4% of gross domestic product in the current fiscal year and 6.6% in 2020-21, from 4.2% in the year ended March 2019, mainly because of the extra money being poured into the utility. Eskom lost a record $1.4 billion in the 12 months through March. The February budget projected a gap of 4.5% and 4.3% for the two years, respectively, though the country’s growth prospects have deteriorated since then.
The government has made mistakes and failed to implement coherent policies, Ramaphosa concedes, while unchecked graft has impaired its ability to fix the country’s problems. Zuma is standing trial for allegedly taking bribes from arms dealers almost two decades ago, but no other high-profile individuals have been indicted—despite a judicial panel having unearthed evidence that staggering amounts of money were looted from the state during Zuma’s administration.
Ramaphosa’s plans to boost the annual economic growth rate to 5% and halve the unemployment rate include luring $100 billion in investment and getting private companies to partner with the government to build infrastructure. He’s targeting a top 50 position in the World Bank’s ease of doing business ranking within three years by reducing red tape and other hindrances to commerce. South Africa currently ranks 82nd out of 190 nations.
Adversaries in the ANC, including the party’s secretary-general, Ace Magashule, appear bent on scuppering Ramaphosa’s initiatives. They insist that priority should be given to securing the black majority a bigger share of the nation’s wealth by redistributing land and changing the central bank’s mandate so it plays a more proactive role in fostering growth and creating jobs. This they call “radical economic transformation”—a mantra popularized by Zuma. —With Nkululeko Ncana
BOTTOM LINE - Ramaphosa’s tenuous hold on the ruling party is making it difficult for him to eliminate graft and turn around the flagging South African economy.
Hackers and malware and ransomware have for years targeted personal computers and computerized networks, but analysts say cybercriminals may soon turn their attention to hijacking something else — your cameras.
Check Point Research said in a study this week hackers can tap into what’s known as the Picture Transfer Protocol — the capability of digital cameras to transfer images to computers and other peripheral devices. The protocol is a feature of Digital Single Lens Reflex, or DSLR, cameras — and experts say hackers can infect them with malware to lock away your photo files and hold them for ransom.
Although hacking cameras is a different concept, since they aren’t always connected to the Internet, Check Point Research said they are susceptible.
“Initially focused on image transfer, this protocol evolved to include dozens of different commands that support anything from taking a live picture to upgrading the camera’s firmware,” the firm said in its analysis, posted Sunday.
“This makes them vulnerable to threats as attackers can inject ransomware into both the camera and PC it is connected to,” Itkin said. “The photos could end up being held hostage until the user pays the ransom for them to be released.”
Check Point said it tested hacking with a Canon EOS 80D, but said all digital cameras likely have the same vulnerability.The analysis led Canon to issue an advisory warning users to avoid connecting cameras to unsecured networks, such as free and public WiFi environments or devices potentially exposed to viruses or other security threats.
Check Point said it tested hacking with a Canon EOS 80D, but said all digital cameras likely have the same vulnerability.
The analysis led Canon to issue an advisory warning users to avoid connecting cameras to unsecured networks, such as free and public WiFi environments or devices potentially exposed to viruses or other security threats.
Canon also recommended users disable Internet functions when the camera is not in use, and download the latest firmware updates.
While ransomware in the past mainly targeted consumers through exploits like the one now affecting digital cameras, antivirus firm Malwarebytes said in a study last week attacks against businesses have skyrocketed 363 percent since last year.
The warnings from Check Point Research and Canon came amid a recent spate of successful ransomware attacks on a smattering of U.S. cities. Two Florida cities paid hackers more than $1 million to release hijacked files, and several others, including Baltimore and Louisville, have seen their computer systems crippled by hackers. Similar activity has also been seen in Europe.