By David Shepardson and Aatreyee Dasgupta

WASHINGTON (Reuters) -JetBlue Airways and Spirit Airlines scrapped their $3.8-billion merger agreement on Monday, with the low-cost carriers saying there was no path forward after a U.S. judge blocked the deal in January on anti-competition concerns.

A successful deal would have created the fifth-largest carrier in the United States and potentially ensured Spirit’s survival, as it burns through cash and struggles with its debt pile. But the combination had been on the ropes ever since a Boston judge said it would harm consumers by reducing competition.

The decision is a victory for the Biden Administration, which has taken a hard line against tie-ups in the aviation sector and argued the deal would boost ticket prices for consumers.

President Joe Biden said the “merger would have forced higher fares and fewer choices on tens of millions of Americans” and called the decision to block the merger “a win for American consumers and competition.

The administration has used antitrust action and other enforcement efforts to try to bring down prices across several industries.

“With the ruling from the federal court and the Department of Justice’s continued opposition, the probability of getting the green light to move forward with the merger anytime soon is extremely low,” JetBlue CEO Joanna Geraghty told employees in an internal note seen by Reuters.

“Even if the ruling was overturned on appeal, we simply don’t see a path to regulatory approval by the required July 24 deadline.”

Privately, JetBlue executives expressed relief the deal was blocked, because of Spirit’s deteriorating finances, according to a person familiar with the matter. Had the companies prevailed in their antitrust fight, JetBlue was considering using a “material adverse change” clause in its contract with Spirit to walk away from the deal, citing the latter’s decline in fortunes, the source said.

Spirit CEO Ted Christie said in a statement, “we concluded that current regulatory obstacles will not permit us to close this transaction in a timely fashion under the merger agreement.”

Under the agreement, JetBlue will pay Spirit $69 million. While the merger agreement was in effect, Spirit stockholders received approximately $425 million in total pre-payments.

Without the JetBlue deal, Spirit, the seventh-largest U.S. carrier, faces a rough road ahead. The ultra-low-cost carrier has grappled with weak demand in its key markets as it seeks to return to sustainable profitability. Some analysts have even suggested the company could face bankruptcy if it cannot shore up finances.

Spirit shares closed down 11% in late morning trading, while JetBlue, the sixth-largest U.S carrier, shares rose 4.3%.

The ruling by U.S. District Judge William Young found the proposed deal was likely to hurt competition in the U.S. aviation market and could hike ticket prices.

That prompted JetBlue to raise doubts over the future of its deal, saying it might be unable to meet certain conditions required as part of the agreement.

JetBlue opted not to appeal a separate ruling that had declared its Northeast partnership with American Airlines anticompetitive.

JetBlue, which last month hiked baggage fees, said is working on numerous near-term efforts to boost revenue by more than $300 million and said it is on track to deliver $175-200 million in cost savings from its structural cost program and $75 million in maintenance savings from its fleet modernization.

A judge in May sided with the Justice Department and six states in a lawsuit challenging the joint venture that American and JetBlue entered into in 2020, called the “Northeast Alliance,” joining forces for flights in and out of New York City and Boston, coordinating schedules and pooling revenue.

Spirit said it was taking steps to ensure the strength of its balance sheet and ongoing operations and retained Perella Weinberg & Partners and Davis Polk & Wardwell as advisors.

(Reporting by Aatreyee Dasgupta in Bengaluru and David Shepardson in Washington; Editing by David Gaffen, Devika Syamnath, Arun Koyyur and Nick Zieminski)

By Yuka Obayashi and Ritsuko Shimizu

TOKYO (Reuters) – A senior Nippon Steel executive told Reuters he is set to meet the United Steelworkers (USW) union chief this month to seek support for acquiring U.S. Steel, expressing confidence the deal can be finalised by the end of September.

Gaining their backing could help the world’s fourth-largest steelmaker carry the $14.9 billion purchase of its U.S. rival over the line. The merger has drawn criticism from some Democratic and Republican lawmakers who worry about the national security implications of the takeover, even though the U.S. and Japan are close allies, and the powerful USW, who worry how their workers could fare under Nippon Steel’s management.

“I think we’ve cleared the contractual issues,” Executive Vice President Takahiro Mori said in an interview on Feb. 28, emphasizing Nippon Steel’s plan to uphold all of the current agreements between the union and U.S. Steel.

Mori will meet the USW chief in early March after a non-disclosure agreement it signed with the union on Feb. 26, which he sees as a positive indicator since it signalled their willingness to talk.

“We will have heart-to-heart talks” to address concerns including jobs and mills, he said.

Nippon Steel thinks it can strengthen U.S. Steel’s business without job cuts or plant closures through providing its advanced technologies, including those for high-grade electromagnetic steel sheets that are used in electric vehicles.

“The products could be a game changer in the U.S.,” Mori said, adding other skills in blast furnace operation and decarbonisation will also help grow the U.S. company.

Nippon Steel aims to find common ground with the USW by early April when U.S. Steel is expected to hold a shareholder meeting to vote on approving the deal, which would be delayed from March because of additional paperwork needed with the Securities and Exchange Commission (SEC), Mori said.

Mori is optimistic about winning shareholder approval from the shareholders thanks to the hefty 40% premium it is paying.

POLITICAL ISSUE

Asked about the opposition of former U.S. President Donald Trump and some politicians, Mori said the Japanese company’s priority now is to secure support from the union as then it will be “no longer a political issue.”

“This deal will make U.S. Steel, the steel industry and its customers, such as automakers, get stronger. The entire supply chain will get stronger… and so will national security,” Mori said, adding that there have been few objections from people in the U.S. business and economic worlds.

Nippon Steel is sticking to its goal to close the deal sometime between June and September, Mori said.

For Japan, the biggest foreign investor in the U.S., a collapse of the deal could give companies pause about acquisitions in other strategic sectors and force them to be more risk averse when sizing up deals, say former officials, lawyers, analysts and executives.

Mori also said if the U.S. dismisses the deal with “extrajudicial measures,” it would cause major damage to the appetite for Japanese companies to invest in the U.S.

“It would affect investment behaviour from Japan and make other countries close to the U.S. wary,” he said. “It’s going to be a huge minus for both of us.”

(Reporting by Yuka Obayashi and Ritsuko Shimizu; Editing by Christian Schmollinger)

(Reuters) -Frontier Lithium has formed a joint venture with Japanese trading house Mitsubishi to help advance lithium mining and processing in Ontario, sending the Canadian miner’s shares up 15% on Monday.

The deal will help finance the PAK Lithium Project mine and a planned lithium chemicals conversion facility, Frontier said, as the company aims to become a major supplier of the key mineral used in EV batteries to the North American supply chain.

Frontier shares were trading at C$1.06 after briefly hitting a five-month high earlier in the session.

Mitsubishi will buy a 7.5% stake in the project for C$25 million ($18 million) with an option to increase it to 25%, as per the terms of the agreement signed last week.

“Mitsubishi has significant previous experience in resource JVs and this partnership should improve market confidence to FID (for PAK Project),” said Stifel Canada analyst Cole McGill.

The PAK Lithium project encompasses about 27,000 hectares of land in Ontario, with two spodumene-bearing lithium deposits delineated since 2013. Spodumene concentrate is a type of lithium mineral ore.

($1 = 1.3560 Canadian dollars)

(Reporting by Kabir Dweit in Bengaluru; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila)

By David Shepardson and Aatreyee Dasgupta

WASHINGTON (Reuters) -Low-cost air carriers JetBlue Airways and Spirit Airlines canceled their $3.8-billion merger agreement on Monday, seeing no path forward after a U.S. judge blocked the deal in January on anti-competition concerns.

A successful deal would have created the fifth-largest carrier in the United States and helped Spirit ensure its survival, but the deal had been on the ropes ever since a Boston judge said it would harm consumers by reducing competition.

The decision is a victory for the Biden Administration, which has taken a hard line against tie-ups in the aviation sector and argued the deal would boost ticket prices for consumers.

U.S. Attorney General Merrick Garland said the decision by JetBlue “is yet another victory for the Justice Department’s work on behalf of American consumers” saying the merger “would have caused tens of millions of travelers to face higher fares and fewer choices.”

The administration has used antitrust action and other enforcement efforts to try to bring down prices for U.S. residents across several industries.

“With the ruling from the federal court and the Department of Justice’s continued opposition, the probability of getting the green light to move forward with the merger anytime soon is extremely low,” JetBlue CEO Joanna Geraghty told employees in an internal note seen by Reuters.

“Even if the ruling was overturned on appeal, we simply don’t see a path to regulatory approval by the required July 24 deadline.”

Spirit CEO Ted Christie said in a statement, “we concluded that current regulatory obstacles will not permit us to close this transaction in a timely fashion under the merger agreement.”

Under the agreement, JetBlue will pay Spirit $69 million. While the merger agreement was in effect, Spirit stockholders received approximately $425 million in total pre-payments.

Without the JetBlue deal, Spirit, the seventh-largest U.S. carrier, faces a rough road ahead. The ultra-low-cost carrier has grappled with weak demand in its key markets as it seeks to return to sustainable profitability. Some analysts have even suggested the company could face bankruptcy if it cannot shore up finances.

Spirit shares fell 14% in late morning trading, while JetBlue, the sixth-largest U.S carrier, shares rose 4%.

The ruling by U.S. District Judge William Young found the proposed deal was likely to hurt competition in the U.S. aviation market and could hike ticket prices.

That prompted JetBlue to raise doubts over the future of its deal, saying it might be unable to meet certain conditions required as part of the agreement.

JetBlue opted not to appeal a separate ruling that had declared its Northeast partnership with American Airlines anticompetitive.

JetBlue, which last month hiked baggage fees, said is working on numerous near-term efforts to boost revenue by more than $300 million and said it is on track to deliver $175-200 million in cost savings from its structural cost program and $75 million in maintenance savings from its fleet modernization.

A judge in May sided with the Justice Department and six states in a lawsuit challenging the joint venture that American and JetBlue entered into in 2020, called the “Northeast Alliance,” joining forces for flights in and out of New York City and Boston, coordinating schedules and pooling revenue.

Spirit said it was taking steps to ensure the strength of its balance sheet and ongoing operations and retained Perella Weinberg & Partners and Davis Polk & Wardwell as advisors.

(Reporting by Aatreyee Dasgupta in Bengaluru and David Shepardson in Washington; Editing by David Gaffen, Devika Syamnath, Arun Koyyur and Nick Zieminski)

LONDON (Reuters) – Late Irish singer and activist Sinéad O’Connor’s label demanded Donald Trump to stop using her music in political rallies, adding her to a list of artists from Taylor Swift to Rihanna who have denounced the former U.S. president.

The Dublin native, who was known for her outspoken views on religion, sex, feminism and war, would have been “disgusted, hurt, and insulted” to have her work misrepresented in this way by someone who she herself referred to as a “biblical devil,” the statement said.

Her longtime label Chrysalis Records and estate expressed “outrage” in a joint statement that Trump – the U.S. Republican frontrunner – had been playing her 1990 chart-topping hit “Nothing Compares 2 U” at his rallies.

“Throughout her life, it is well known that Sinéad O’Connor lived by a fierce moral code defined by honesty, kindness, fairness, and decency towards her fellow human beings,” they said on behalf of the singer, who died last July at the age of 56.

“As the guardians of her legacy, we demand that Donald Trump, and his associates desist from using her music immediately.”

The statement comes as Trump scored wins in Michigan, Missouri and Idaho Republican caucuses on Saturday, moving him closer to becoming his party’s White House standard-bearer and a likely general election rematch with U.S. President Joe Biden.

Many artists, or their representatives, have voiced similar objection to their compositions being played at Trump events over the years, including late American singer-guitarist Tom Petty, British singer-songwriter Adele, and rock band R.E.M.

(Reporting by Muvija M, Editing by Paul Sandle)

By Laura Sanicola

(Reuters) – The United States may sell its 1 million barrel Northeast gasoline reserve in fiscal year 2024, according to the draft text of a funding bill released on Sunday.

The reserve, first established in 2014 after Superstorm Sandy left motorists in the northeastern United States without fuel, is located in New York Harbor, New York, Boston, Massachusetts and Portland, Maine.

The proceeds from the sale of the refined products in the reserve would be deposited into the Treasury’s general fund, according to the text of the bill, which is likely to pass this week.

Once the Northeast Gasoline Supply Reserve is closed, the secretary of energy cannot establish any new regional petroleum product reserve unless funding is explicitly requested in advance of an annual budget submitted by the president and approved by Congress, the bill stipulates.

One barrel of gasoline contains approximately 42 gallons. Gasoline in New York Harbor is currently selling for about $2.29 per gallon.

The provision was included in a bill that also aims to prohibit Chinese entities from buying crude oil from the U.S. Strategic Petroleum Reserve.

The U.S. House of Representatives will have to vote on the bill first before the Senate can take up the package before Friday, Senate Majority Leader Chuck Schumer said.

(Reporting by Laura Sanicola; editing by Jonathan Oatis)

By Leah Millis, Nathan Frandino and Rich McKay

CANADIAN, Texas (Reuters) -Fire crews in the Texas Panhandle on Friday were battling to get a tighter grip on the state’s largest wildfire on record, hoping to capitalize on a lull in incessant wind gusts that have fanned an inferno that has devastated the cattle-ranching region.

The deadly wildfire, dubbed the Smokehouse Creek Fire, has scorched more than 1 million acres (404,685 hectares), according to the latest figures from the Texas A&M Forest Service, provided on Thursday.

“Terrible is not strong enough of a word,” said Terrill Bartlett, owner of a family-run lumber company who serves as mayor of Canadian, Texas, the epicenter of the sprawling blaze. “The ground is just black in all directions.”

Since Monday, the fire has spread eastward across the Panhandle, pushing across the state’s border with Oklahoma. In its wake it has left at least two people dead, dozens of torched homes and hundreds of square miles of scorched grazing land.

While firefighters have gained a measure of control over the blaze, the danger has not passed, with the wind expected to pick up over the weekend, said Sean Dugan, a spokesperson for the Texas A&M Forest Service.

“We’re looking at the next few hot, dry days that will be windy,” he said. “Those heavy fuels will come back alive with dry and windy weather, kicking up embers and … carry them over into unburned fuel.”

Between 400 and 500 structures have been destroyed so far, based on a “premature assessment” that would likely change, Texas Governor Gregg Abbott said at a news briefing on Friday.

“We face enormous potential fire dangers as we head into this weekend,” Abbott said. “No one can let down their guard.”

Earlier, Canadian’s fire chief, Scott Brewster, said 109 homes were destroyed in the town and surrounding Hemphill County, as well as an unspecified number of other structures.

W. Nim Kidd, chief of the Texas Division of Emergency Management, said at the briefing that it was difficult to assess full damages with the fire still smoldering.

Kidd did not update the number of acres burned and the level of containment achieved by fire crews, saying he did not want to give people false confidence.

Earlier on Friday, Texas A&M’s Dugan said containment was conservatively estimated at 5%, up from 3% on Thursday.

SCENES OF DEVASTATION

The once-fertile grasslands around Canadian looked more like a war zone on Friday, with thousands of cattle corpses littering the charred fields, according to Wes Avent, who owns a local ranch supply store.

Avent turned his store into a makeshift station for distributing donated feed, fencing and other supplies to ranchers.

“Right now our biggest chore is to get feed to the cattle that survived,” he said. “We’ve got to get feed and hay out to these guys as fast as we can.”

A miles-long line of tractor trailers snaked along the highway into Canadian on Friday, waiting to deliver bales of cattle feed and other supplies to desperate ranchers.

The two people killed in the wildfire included a woman who succumbed to her injuries on Thursday, her family said on GoFundMe.com. She was rushed to a burn center in Oklahoma City after she was overcome with smoke and flames while driving her truck in Pampa, Texas, on Tuesday, local news reported.

An 83-year-old woman in Hutchinson County, northeast of Amarillo, was also killed in the fire, according to local media.

“As far as cattle, I don’t think anyone knows yet,” said Brewster, the fire chief. “I talked to one rancher and he said he lost 700 cattle. And that’s just one guy. There’s no telling what the tally will be, but it’ll be up there.”

Over the weekend, the weather forecast for the Texas Panhandle calls for no rain and winds of up to 45 miles (72 km) per hour, said Bob Oravec, a meteorologist with the National Weather Service’s Weather Prediction Center in College Park, Maryland.

“These are ingredients for more fire,” Oravec said. “The winds have no moisture content coming from the southwest. It dries out the stuff that burns.”

According to the latest Texas A&M Forest Service numbers, the Smokehouse Creek Fire has now burned through 1.08 million acres (437,060 hectares), or nearly 1,700 square miles, an area larger than New York’s Long Island. That replaced a 2006 fire that charred about 900,000 acres (364,220 hectares) as the most expansive in state history.

Several smaller wildfires were burning in other parts of the Panhandle. The next largest, the Windy Deuce fire, has burned 142,000 acres (57,470 hectares) and was 50% contained on Friday, according to Texas A&M.

(Reporting by Leah Millis in Canadian, Texas; Nathan Frandino in Borger, Texas; Brendan O’Brien in Chicago and Rich McKay in Atlanta; Editing by Frank McGurty and Jonathan Oatis)

By Leah Millis, Nathan Frandino and Rich McKay

CANADIAN, Texas (Reuters) -Fire crews in the Texas Panhandle on Friday were battling to get a tighter grip on the state’s largest wildfire on record, hoping to capitalize on a lull in incessant wind gusts that have fanned an inferno that has devastated the cattle-ranching region.

The deadly wildfire, dubbed the Smokehouse Creek Fire, has scorched more than 1 million acres (404,685 hectares), according to the latest figures from the Texas A&M Forest Service, provided on Thursday.

“Terrible is not strong enough of a word,” said Terrill Bartlett, owner of a family-run lumber company who serves as mayor of Canadian, Texas, the epicenter of the sprawling blaze. “The ground is just black in all directions.”

Since Monday, the fire has spread eastward across the Panhandle, pushing across the state’s border with Oklahoma. In its wake it has left at least two people dead, dozens of torched homes and hundreds of square miles of scorched grazing land.

While firefighters have gained a measure of control over the blaze, the danger has not passed, with the wind expected to pick up over the weekend, said Sean Dugan, a spokesperson for the Texas A&M Forest Service.

“We’re looking at the next few hot, dry days that will be windy,” he said. “Those heavy fuels will come back alive with dry and windy weather, kicking up embers and … carry them over into unburned fuel.”

Between 400 and 500 structures have been destroyed so far, based on a “premature assessment” that would likely change, Texas Governor Gregg Abbott said at a news briefing on Friday.

“We face enormous potential fire dangers as we head into this weekend,” Abbott said. “No one can let down their guard.”

Earlier, Canadian’s fire chief, Scott Brewster, said 109 homes were destroyed in the town and surrounding Hemphill County, as well as an unspecified number of other structures.

W. Nim Kidd, chief of the Texas Division of Emergency Management, said at the briefing that it was difficult to assess full damages with the fire still smoldering.

Kidd did not update the number of acres burned and the level of containment achieved by fire crews, saying he did not want to give people false confidence.

Earlier on Friday, Texas A&M’s Dugan said containment was conservatively estimated at 5%, up from 3% on Thursday.

SCENES OF DEVASTATION

The once-fertile grasslands around Canadian looked more like a war zone on Friday, with thousands of cattle corpses littering the charred fields, according to Wes Avent, who owns a local ranch supply store.

Avent turned his store into a makeshift station for distributing donated feed, fencing and other supplies to ranchers.

“Right now our biggest chore is to get feed to the cattle that survived,” he said. “We’ve got to get feed and hay out to these guys as fast as we can.”

A miles-long line of tractor trailers snaked along the highway into Canadian on Friday, waiting to deliver bales of cattle feed and other supplies to desperate ranchers.

The two people killed in the wildfire included a woman who succumbed to her injuries on Thursday, her family said on GoFundMe.com. She was rushed to a burn center in Oklahoma City after she was overcome with smoke and flames while driving her truck in Pampa, Texas, on Tuesday, local news reported.

An 83-year-old woman in Hutchinson County, northeast of Amarillo, was also killed in the fire, according to local media.

“As far as cattle, I don’t think anyone knows yet,” said Brewster, the fire chief. “I talked to one rancher and he said he lost 700 cattle. And that’s just one guy. There’s no telling what the tally will be, but it’ll be up there.”

Over the weekend, the weather forecast for the Texas Panhandle calls for no rain and winds of up to 45 miles (72 km) per hour, said Bob Oravec, a meteorologist with the National Weather Service’s Weather Prediction Center in College Park, Maryland.

“These are ingredients for more fire,” Oravec said. “The winds have no moisture content coming from the southwest. It dries out the stuff that burns.”

According to the latest Texas A&M Forest Service numbers, the Smokehouse Creek Fire has now burned through 1.08 million acres (437,060 hectares), or nearly 1,700 square miles, an area larger than New York’s Long Island. That replaced a 2006 fire that charred about 900,000 acres (364,220 hectares) as the most expansive in state history.

Several smaller wildfires were burning in other parts of the Panhandle. The next largest, the Windy Deuce fire, has burned 142,000 acres (57,470 hectares) and was 50% contained on Friday, according to Texas A&M.

(Reporting by Leah Millis in Canadian, Texas; Nathan Frandino in Borger, Texas; Brendan O’Brien in Chicago and Rich McKay in Atlanta; Editing by Frank McGurty and Jonathan Oatis)

By Nicole Jao

NEW YORK (Reuters) -Oil prices rose 2% on Friday and posted weekly gains as traders awaited an OPEC+ decision on supply agreements for the second quarter while also weighing fresh U.S., European and Chinese economic data.

Brent futures for May settled $1.64 higher, or 2%, at $83.55 a barrel. The April Brent futures contract expired on Feb. 29 at $83.62 a barrel.

U.S. West Texas Intermediate (WTI) for April rose $1.71, or 2.19%, to $79.97 a barrel.

For the week, Brent added around 2.4% following the switch in contract months, while WTI gained more than 4.5%.

“The expectation that OPEC+ is going to continue with their voluntary production cuts well into the second quarter of 2024 is the main focus on the market,” said Andrew Lipow, president of Lipow Oil Associates.

A decision on extending OPEC+ cuts is expected in the first week of March, sources have said, with individual countries expected to announce their decisions.

“Sticking to the voluntary production cuts until the end of the year would be a strong signal and should therefore be seen as price-positive,” Commerzbank analyst Carsten Fritsch said.

A Reuters survey showed the Organization of the Petroleum Exporting Countries pumped 26.42 million barrels per day (bpd) in February, up 90,000 bpd from January.

Strong expectations of Saudi Arabia keeping term prices of crude it sells to Asian customers little changed in April from March levels also underpinned the market on Friday.

Meanwhile, geopolitical tension in the Red Sea also lifted prices on Friday, said Tim Snyder, an economist at Matador Economics.

The leader of Yemen’s Houthis said on Thursday the group would introduce military “surprises” in the region.

U.S. energy firms added oil and natural gas rigs for a second straight week, energy services firm Baker Hughes said in its closely followed report on Friday.

The oil rig count, an early indication of future output, rose by three to 506 this week, the highest since September.

On the demand side, Chinese manufacturing activity shrank for the fifth straight month in February, an official survey showed.

Euro zone inflation fell in February according to Eurostat, but both the headline figure and core inflation, which strips out volatile food and fuel prices, just missed analysts’ expectations.

Supporting prices, the U.S. personal consumption expenditures (PCE) index showed January inflation in line with economists’ expectations on Thursday, reinforcing market bets for a June interest rate cut.

(Reporting by Nicole Jao in New York, Robert Harvey in London, Laura Sanicola in Washington and Trixie Yap in Singapore; Editing by Kirsten Donovan, Emelia Sithole-Matarise and David Gregorio)

By Nicole Jao

NEW YORK (Reuters) -Oil prices rose on Friday and were set for weekly gains as traders awaited an OPEC+ decision on supply agreements for the second quarter while also weighing fresh U.S., European and Chinese economic data.

Brent futures for May were up $1.68, or 2.05%, at $83.59 a barrel by 1:35 p.m. EST (1835 GMT). The April Brent futures contract expired on Feb. 29 at $83.62 a barrel.

U.S. West Texas Intermediate (WTI) for April rose $1.74, or 2.22%, to $80 a barrel.

For the week, Brent was set to rise around 2.4% following the switch in contract months, while WTI was on track to close 4.6% higher this week.

“The expectation that OPEC+ is going to continue with their voluntary production cuts well into the second quarter of 2024 is the main focus on the market,” said Andrew Lipow, president of Lipow Oil Associates.

A decision on extending OPEC+ cuts is expected in the first week of March, sources have said, with individual countries expected to announce their decisions.

“Sticking to the voluntary production cuts until the end of the year would be a strong signal and should therefore be seen as price-positive,” Commerzbank analyst Carsten Fritsch said.

A Reuters survey showed the Organization of the Petroleum Exporting Countries pumped 26.42 million barrels per day (bpd) in February, up 90,000 bpd from January.

Strong expectations of Saudi Arabia keeping term prices of crude it sells to Asian customers little changed in April from March levels also underpinned the market on Friday.

Meanwhile, geopolitical tension in the Red Sea also lifted prices on Friday, said Tim Snyder, an economist at Matador Economics.

The leader of Yemen’s Houthis said on Thursday the group would introduce military “surprises” in the region.

U.S. energy firms added oil and natural gas rigs for a second straight week, energy services firm Baker Hughes said in its closely followed report on Friday.

The oil rig count, an early indication of future output, rose by three to 506 this week, the highest since September.

On the demand side, Chinese manufacturing activity shrank for the fifth straight month in February, an official survey showed.

Euro zone inflation fell in February according to Eurostat, but both the headline figure and core inflation, which strips out volatile food and fuel prices, just missed analysts’ expectations.

Supporting prices, the U.S. personal consumption expenditures (PCE) index showed January inflation in line with economists’ expectations on Thursday, reinforcing market bets for a June interest rate cut.

(Reporting by Nicole Jao in New York, Robert Harvey in London, Laura Sanicola in Washington and Trixie Yap in Singapore; Editing by Jan Harvey, Kirsten Donovan, Emelia Sithole-Matarise and David Gregorio)