TOKYO (Reuters) -Japan’s factory output declined in November, weighed by falls in autos production and clouding the outlook for the export-reliant economy.

Industrial production fell 0.9% in November from the previous month, data from the Ministry of Economy, Trade and Industry (METI) showed on Thursday. The reading was better than the median market forecast for a 1.6% drop.

Motor vehicle production, which has underpinned industrial output, fell 2.5% in November from the prior month due to slowdowns in the manufacturing of small cars and engines, a METI official said.

Output of electrical machinery and information and communication electronics equipment also fell 3.5%, due to sluggish demand in semiconductor and integrated-circuit testing equipment, the official said.

Manufacturers surveyed by the industry ministry expect seasonally adjusted output to increase 6.0% in December and decline 7.2% in January. METI maintained its assessment of industrial output as “seesawing”.

“We’ll continue to monitor the impact of the global economic downturn and rising prices,” the official said.

Furthermore, a production halt at Toyota Motor’s small car-unit Daihatsu due to safety scandal is expected to add downward pressure on output from January onward, the METI official said.

The small car specialist has suspended output in Japan until the end of next month, the company said this week.

Regarding the outlook on semiconductor production, the METI official expected a gradual recovery.

Separate data showed Japanese retail sales expanded 5.3% in November from a year earlier. That was roughly in line with the median market forecast for a 5.0% gain and marked the 21st consecutive month of expansion since March 2022.

Compared with the previous month, retail sales grew 1.0% in November, following a 1.7% decline in October, the data showed.

(Reporting by Satoshi SugiyamaEditing by Lincoln Feast and Sam Holmes.)

By Ankur Banerjee

SINGAPORE (Reuters) – The dollar nursed steep losses on Thursday and was headed for a yearly decline after two years of strong gains as expectations of interest rate cuts from the Federal Reserve next year grip markets.

With the year coming to a close, thin liquidity and limited moves are expected until the New Year.

The dollar index, which measures the U.S. currency against six rivals, fell to a fresh five month low of 100.81. The index fell 0.5% on Wednesday and is on course for a 2.6% decline this year, snapping two straight years of strong gains.

Investor focus remains on the timing of the interest rate cuts from the Fed, with markets pricing in a 89% chance of a cut in March 2024, according to CME FedWatch tool. Futures imply as much as 158 basis points of Fed easing next year.

Some analysts though remain unconvinced the U.S. central bank would be so aggressive.

“We still believe that a March policy change toward easing is much too early and there is quite a bit of potential for a dollar rally if and when such action does not materialize,” Monex USA analysts said in a note.

While the Fed took an unexpectedly dovish stance in its December meeting, opening the door to rate cuts next year, other major central banks, including European Central Bank retained their stance of needing to keep rates higher for longer.

Markets though are still pricing in as much as 165 basis points of rate cuts from the ECB next year.

“The European and UK economies are in a much more precarious state and we believe this will force their respective central banks to cut interest rates both before they are fully ready and before the Fed does so,” said the Monex USA analysts, noting the divergence in the outlooks for the U.S. and European economies.

The euro was up 0.09% at $1.1113, couched just below the five-month peak of $1.1122 hit on Wednesday. The single currency headed for a yearly gain of 3.7%, its strongest performance since 2020.

Sterling was last at $1.2813, its highest since Aug. 10. The pound is headed for a 6% gain in the year, its strongest performance since 2017.

Investors expect that the Bank of England will not be able to cut rates as much as the Fed and ECB, given inflation is running higher in the UK. [GBP/]

That has widened the gap between British bond yields and those in the U.S. and Europe, making them look more attractive and boosting the pound.

Meanwhile, the Japanese yen strengthened 0.23% to 141.50 per dollar, inching closer to a five-month peak of 140.95 it touched earlier this month.

The Asian currency is up 4% against the dollar in December, heading for its second straight month of gains on increased expectations that the Bank of Japan may soon move away from its ultra-loose monetary policy.

The central bank, however, stuck to its policy earlier this month and Governor Kazuo Ueda on Wednesday said he was in no rush to unwind ultra-loose monetary policy as the risk of inflation running well above 2% and accelerating was small.

For the year, yen is down 7% against the dollar.

Rate cut bets have also boosted riskier currencies, with the Australian dollar and the New Zealand dollar perched at fresh five-month peaks. The Aussie was last up 0.26% at $0.6865, while the kiwi was at $0.6360, up 0.3%.

========================================================

Currency bid prices at 0122 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar $1.1115 $1.1105 +0.10% +3.75% +1.1118 +1.1101

Dollar/Yen 141.5200 141.7450 -0.16% +7.84% +141.6550 +141.3000

Euro/Yen 157.32 157.49 -0.11% +12.13% +157.4500 +156.8700

Dollar/Swiss 0.8415 0.8432 -0.15% -8.95% +0.8429 +0.8414

Sterling/Dollar 1.2810 1.2799 +0.10% +5.94% +1.2812 +1.2797

Dollar/Canadian 1.3198 1.3210 -0.08% -2.58% +1.3210 +1.3197

Aussie/Dollar 0.6862 0.6848 +0.23% +0.68% +0.6865 +0.6842

NZ 0.6360 0.6341 +0.31% +0.17% +0.6362 +0.6337

Dollar/Dollar

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ

(Reporting by Ankur Banerjee in Singapore. Editing by Sam Holmes)

By John Kruzel

WASHINGTON (Reuters) -The Colorado Republican Party on Wednesday asked the U.S. Supreme Court to intervene after Colorado’s top court disqualified former President Donald Trump from appearing on the state’s Republican primary ballot, an attorney for the Republican group said.

The appeal comes after the Colorado Supreme Court on Dec. 19 disqualified Trump because of his role in the Jan. 6, 2021 attack on the U.S. Capitol by his supporters. The court barred Trump under a U.S. constitutional provision prohibiting anyone who “engaged in insurrection or rebellion” from holding public office.

The Colorado Republican Party is being represented by Jay Sekulow of the conservative litigation firm the American Center for Law & Justice.

Trump, the frontrunner for the Republican 2024 presidential nomination, is expected to file his own appeal. The state high court had put its decision on hold until Jan. 4, stating that Trump would remain on the ballot if he appealed.

The Colorado court’s ruling marked the first time in history that Section 3 of the U.S. Constitution’s Fourteenth Amendment – the so-called disqualification clause – had been used to deem a presidential candidate ineligible for the White House.

The 4-3 Colorado Supreme Court ruling reversed a lower court judge’s conclusion that Trump engaged in insurrection by inciting his supporters to violence, but as president, he was not an “officer of the United States” who could be disqualified under the Fourteenth Amendment.

The Colorado court concluded that Trump’s role instigating violence at the Capitol as lawmakers met to certify the results of the 2020 election constituted engaging in insurrection, and that the presidency is covered by the insurrection provision.

The attack was an attempt by Trump’s supporters to overturn his 2020 election loss to Democratic President Joe Biden, which Trump falsely claims was the result of fraud.

Courts have rejected several lawsuits seeking to keep Trump off the primary ballot in other states. Minnesota’s top court rebuffed an effort to disqualify Trump from the Republican primary in that state but did not rule on his overall eligibility to serve as president.

(Reporting by John Kruzel; Editing by Sonali Paul and Lincoln Feast.)

By Jonathan Stempel

NEW YORK (Reuters) -The New York Times sued OpenAI and Microsoft on Wednesday, accusing them of using millions of the newspaper’s articles without permission to help train chatbots to provide information to readers.

The Times said it is the first major U.S. media organization to sue OpenAI, creator of the popular artificial-intelligence platform ChatGPT, and Microsoft, an OpenAI investor and creator of the AI platform now known as Copilot, over copyright issues associated with its works.

Writers and others have also sued to limit the scraping — or automatic collection of data — by AI services of their online content without compensation.

The newspaper’s complaint, filed in Manhattan federal court, accused OpenAI and Microsoft of trying to “free-ride on The Times’s massive investment in its journalism” by using it to provide alternative means to deliver information to readers.

“There is nothing ‘transformative’ about using The Times’s content without payment to create products that substitute for The Times and steal audiences away from it,” the Times said.

OpenAI and Microsoft have said that using copyrighted works to train AI products amounts to “fair use,” a legal doctrine governing the unlicensed use of copyrighted material.

On its website, the U.S. Copyright Office says “transformative” uses add “something new, with a further purpose or character” and are “more likely to be considered fair.”

The Times is not seeking a specific amount of damages, but estimated damages in the “billions of dollars.” It also wants OpenAI and Microsoft to destroy chatbot models and training sets that incorporate its material.

Talks to avert a lawsuit and allow “a mutually beneficial value exchange” with the defendants were unsuccessful, the 172-year-old newspaper said.

“We respect the rights of content creators and owners,” OpenAI said in an emailed statement. “Our ongoing conversations with the New York Times have been productive and moving forward constructively, so we are surprised and disappointed with this development.”

Microsoft did not respond to requests for comment.

$80 BILLION VALUATION FOR OPENAI

AI companies scrape information online to train generative AI chatbots, and have attracted billions of dollars in investments.

Investors have valued OpenAI at more than $80 billion.

While OpenAI’s parent is a nonprofit, Microsoft has invested $13 billion in a for-profit subsidiary, for what would be a 49% stake.

Novelists including David Baldacci, Jonathan Franzen, John Grisham and Scott Turow have also sued OpenAI and Microsoft in the Manhattan federal court, claiming that AI systems might have co-opted tens of thousands of their books.

In July, the comedian Sarah Silverman and other authors sued OpenAI and Meta Platforms in San Francisco for having “ingested” their works, including Silverman’s 2010 book “The Bedwetter.” A judge dismissed most of that case in November.

The Times filed its lawsuit seven years after the U.S. Supreme Court refused to revive a challenge to Google’s digital library of millions of books.

A federal appeals court had found that the library, which gave readers access to snippets of text, amounted to fair use of authors’ works.

“OpenAI is giving the copyright industry a second bite at control,” said Deven Desai, a professor of business law and ethics at the Georgia Institute of Technology.

“It’s outputs that matter,” Desai said. “Part of the problem in assessing OpenAI’s liability is that the company has altered its products as copyright issues arose. A court could say its outputs at this moment in time are enough to find liability.”

Chatbots have compounded the struggle among major media organizations to attract and retain readers, though the Times has fared better than most.

The Times ended September with 9.41 million digital-only subscribers, up from 8.59 million a year earlier, while print subscribers fell to 670,000 from 740,000.

Subscriptions generate more than two-thirds of the Times’ revenue, while ads generate about 20% of its revenue.

‘MISINFORMATION’

The Times’ lawsuit cited several instances in which OpenAI and Microsoft chatbots gave users near-verbatim excerpts of its articles.

These included a Pulitzer Prize-winning 2019 series on predatory lending in New York City’s taxi industry, and restaurant critic Pete Wells’ 2012 review of Guy Fieri’s since-closed Guy’s American Kitchen & Bar that became a viral sensation.

The Times said such infringements threaten high-quality journalism by reducing readers’ perceived need to visit its website, reducing traffic and potentially cutting in to advertising and subscription revenue.

It also said the defendants’ chatbots make it harder for readers to distinguish fact from fiction, including when their technology falsely attributes information to the newspaper.

The Times said ChatGPT once falsely attributed two recommendations for office chairs to its Wirecutter product review website.

“In AI parlance, this is called a ‘hallucination,’” the Times said. “In plain English, it’s misinformation.”

Times general counsel Diane Brayton told staff in an internal memo that the newspaper recognized the potential of generative AI for journalism, but “the use of our work to create GenAI tools must come with permission and an agreement that reflects the fair value of that work, as the law provides.”

The case is New York Times Co v Microsoft Corp et al, U.S. District Court, Southern District of New York, No. 23-11195.

(Reporting by Jonathan Stempel in New York; Editing by Chizu Nomiyama, Matthew Lewis and Leslie Adler)

By Jonathan Stempel

NEW YORK (Reuters) – A U.S. judge on Wednesday rejected Alibaba’s bid to dismiss a lawsuit over the alleged sale by various merchants of counterfeit versions of the popular children’s toy Squishmallows on its online platforms.

U.S. District Judge Jesse Furman in Manhattan said Kelly Toys, whose parent Jazwares is owned by billionaire Warren Buffett’s Berkshire Hathaway, plausibly alleged that Alibaba knew about and contributed to the merchants’ infringement of its copyrights and trademarks.

Kelly Toys said the sale of counterfeits on Alibaba has persisted despite six earlier lawsuits to stop it, with Alibaba ignoring its own “three-strike” policies and awarding some infringing merchants “Gold Supplier” and “Verified” status.

Alibaba and lawyers for the Chinese e-commerce company did not immediately respond to requests for comment. Furman did not rule on the lawsuit’s merits.

Kelly Toys had in November 2022 sued about 90 merchants it accused of selling counterfeit Squishmallows, and obtained an injunction two months later. It added Alibaba as a defendant in March.

In seeking a dismissal, Alibaba said Kelly Toys failed to allege it had any involvement in infringements, and was trying to improperly shift the burden of policing its intellectual property by requiring “draconian” measures against sellers.

Jazwares bought a majority stake in Kelly Toys in April 2020. Berkshire bought Jazwares’ parent, the insurance holding company Alleghany, in October 2022. Revenue at Jazwares totaled $847 million in the first nine months of 2023.

The case is Kelly Toys Holdings LLC v 19885566 Store et al, U.S. District Court, Southern District of New York, No. 22-09384.

(Reporting by Jonathan Stempel in New York)

By Koh Gui Qing and Dhara Ranasinghe

NEW YORK/LONDON (Reuters) -World stocks rallied to their highest level in more than a year on Wednesday, while the U.S. dollar hit a five-month low, as expectations mounted that key central banks such as the Federal Reserve will start to cut interest rates early next year.

In line with expectations of lower interest rates, the benchmark 10-year Treasury yield fell to a five-month low, while the two-year Treasury yield tumbled to a low not seen in seven months.

Investor hopes that monetary conditions might be loosening boosted the MSCI’s gauge of stocks across the globe by 0.46% to a level not seen since October 2022.

On Wall Street, the Dow Jones Industrial Average added 0.21%, while the S&P 500 and the Nasdaq Composite were flat.

European shares edged up 0.21%, with trade subdued given public holidays across the region on Monday and Tuesday.

Analysts said the main risk for markets was that rates might not fall as fast as expected.

“If global equity markets have one Achilles’ heel going into January 2024, it is the expectation that the Fed will be methodically and consistently cutting interest rates throughout the year,” said Nicholas Colas, Co-founder of DataTrek Research.

The benchmark 10-year Treasury yield fell to 3.793%, and the 2-year yield retreated to 4.2375%. [US/]

Expectations of rate cuts also dragged on the U.S. dollar, which fell 0.51% against a basket of six major currencies to a level last seen on Jul. 27. [USD/]

The jovial mood in world equity markets and a sluggish dollar lifted the euro by 0.54% to $1.1102, more than a four-month peak.

“If the Fed cuts rates because inflation has come so far down that they don’t want policy to unintentionally tighten … then that’s probably a good scenario,” said Lou Brien, market strategist at DRW Trading in Chicago.

If they cut because of a weakening economy, however, “then the history is kind of harsh” for the economy and the stock market. “The motivation behind the rate cuts is still unknown and is going to be the most important factor,” Brien said.

Market pricing shows a more than 80% chance the Fed is likely to begin cutting rates next March, according to the CME FedWatch tool, with over 150 basis points of easing priced in for all of 2024.

Oil prices slipped as some major shippers returned to the Red Sea – an area disrupted after Yemen’s Houthi militant group began targeting vessels earlier this month.

U.S. crude fell 2.02% to $74.04 per barrel and Brent was at $79.6, down 1.81% on the day.

Maersk shares fell more than 4.5%, and other shipping stocks also declined, giving back part of this month’s gains that were driven by expectations a Red Sea traffic halt could boost rates.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose more than 1% to an over four-month high.

China’s November industrial profits posted double-digit gains as overall manufacturing improved, data showed, although soft demand continued to constrain business growth expectations, emboldening calls for more macro policy support.

Japan’s Nikkei rallied more than 1%, and Hong Kong’s Hang Seng Index rose 1.7% in its first trading day after the Christmas and Boxing Day holidays. Chinese blue chips eked out a marginal gain of 0.35%.

Spot gold added 0.5% to $2,077.39 an ounce [GOL/], while Bitcoin jumped rose 2.08% to $43,393.00.

(Reporting by Dhara Ranasinghe in London and Rae Wee in Singapore; Additional reporting by Sam Indyk; Editing by Alexandra Hudson, Barbara Lewis and Alistair Bell)

(Reuters) -Former President Donald Trump leads a pack of six candidates jostling to be the Republican presidential nominee in the 2024 election, while President Joe Biden faces little opposition in the Democratic Party in his campaign for a second term.

Here is a timeline of events related to the Nov. 5, 2024, election between now and Inauguration Day in January 2025.

2024

– Jan. 10: CNN says it will host a Republican presidential debate in Des Moines, Iowa. Qualification will depend on reaching at least 10% in polling, along with other criteria.

– Jan. 15: Republicans in Iowa hold their nominating contest, known as caucuses, the first of the 2024 election cycle. Caucuses are private meetings organized at the county, precinct or district level where participants divide into groups according to the candidate they support, determining how many delegates each candidate receives. Iowa Democrats, separately, are choosing their candidate entirely by mail-in ballot and will release their results on March 5, Super Tuesday.

– Jan 18: ABC News and WMUR-TV host a Republican presidential primary debate in Manchester, New Hampshire. The top three candidates from the Iowa caucuses will be invited to participate alongside any other hopeful who meets a 10% polling threshold.

– Jan. 21: CNN hosts a Republican presidential debate in Goffstown, New Hampshire. Qualification will depend on reaching at least 10% in polling, along with other criteria.

– Jan. 23: The date set by New Hampshire for its first-in-the-nation primary, a contest run by state and local governments where participants vote for their preferred candidate in a secret ballot.

The Democratic National Committee had wanted the state to hold the primary on Feb. 6 after South Carolina, which had been due to go first in the 2024 Democratic primary calendar.

But New Hampshire Democrats said they wanted to retain their tradition of being first, prompting Biden’s campaign to announce in October that his name will not be on the ballot in the state.

– Jan. 31: Federal Election Commission 2023 year-end filing deadline for candidates to declare the money they have raised and spent.

– Feb. 3: Democratic presidential primary in South Carolina.

– Feb. 6: Democratic primary in Nevada.

– Feb. 6: Nikki Haley has filed to take part in the Nevada state-run primary, two days ahead of the Republican Party’s caucuses in the state.

– Feb. 8: Nevada caucuses for Republicans.

– Feb. 24: South Carolina Republican primary.

– Feb. 27: Democrats and Republicans vote in the Michigan state-run primary, which was brought forward by the Democratic-controlled state in a move opposed by Republicans. Republicans will instead choose the majority of their delegates during caucuses in March.  

– 2: Republicans in Michigan pick most of their delegates during party-run caucuses.

– March 5: Known as Super Tuesday, this is the biggest single day of primaries and often helps whittle down the field of candidates. Both parties hold them in Alabama, Arkansas, California, Colorado, Maine, Massachusetts, Minnesota, North Carolina, Oklahoma, Tennessee, Texas, Vermont and Virginia. Democrats in Utah will also vote in their primary while Republicans hold their caucuses in the state. Republicans in Alaska vote in their primary.

– March 12: Primaries held in the states of Georgia, Mississippi and Washington. Republicans in Hawaii hold caucuses.

– March 19: Primaries held in Arizona, Florida, Illinois, Kansas and Ohio.

– June 4: The final states to hold their presidential primaries are scheduled to do so on this date. Some states have yet to set their primary or caucus dates.

– July 15-18: Republican National Convention in Milwaukee, Wisconsin, where the party formally chooses its candidate.

– Aug. 19-22: Democratic National Convention in Chicago, where the party formally chooses its candidate.

– Sept. 16: The date set by the Commission on Presidential Debates for the first presidential debate to take place. It will be held at Texas State University in San Marcos, Texas.

– Sept. 25: The date set for the only vice presidential debate, to be held at Lafayette College in Easton, Pennsylvania.

– Oct. 1: The date set for the second presidential debate, to be held at Virginia State University in Petersburg, Virginia.

– Oct. 9: The date set for the third and final presidential debate, to be held at the University of Utah in Salt Lake City, Utah.

– Nov. 5: Election Day

– Later in November: It could take days for the election result to be known, especially if it is close and mail-in ballots are a factor.

2025 

– Jan. 6: The vice president presides over the Electoral College vote count at a joint session of Congress, announces the results and declares who has been elected.

Ahead of the count on Jan. 6, 2021, former President Trump lambasted his vice president, Mike Pence, for refusing to try to prevent Congress from certifying Biden’s win. On that day, the U.S. Capitol was attacked by rioters and some people chanted, “hang Mike Pence” as they tried to stop the count. Both chambers of Congress later resumed their work and certified Biden’s win.

Congress has since passed the Electoral Count Reform Act of 2022, which requires approval of one-fifth of the House and Senate to consider a challenge to a state’s results – a much higher bar than existed before, when any single lawmaker from each chamber could trigger a challenge.

– Jan. 20: The inauguration of the election winner and their vice president takes place. At this ceremony, the victor is officially sworn in and takes office.

(Reporting by Costas Pitas; Editing by Jonathan Oatis and Lisa Shumaker)

By Stephanie Kelly

NEW YORK (Reuters) -Oil prices dropped nearly 2% on Wednesday, eating into the previous day’s gains as investors monitored developments in the Red Sea, where shippers are returning despite further attacks on Tuesday.

Brent crude futures settled down $1.42, or 1.8%, at $79.65 a barrel. U.S. West Texas Intermediate crude fell $1.46, or 1.9%, to $74.11.

Danish shipping company Maersk said it has scheduled several dozen container vessels to travel via the Suez Canal and Red Sea in the coming weeks after calling a temporary halt to those routes this month after attacks by Yemen’s Iran-backed Houthi militia.

France’s CMA CGM also said it was resuming passage through the Red Sea after deployment of a multinational task force to the region.

“I think we have to wait and see whether the increased naval patrols and rerouting of ships lead to a decline in attacks,” said Callum Macpherson, head of commodities at Investec.

Both the Brent and WTI benchmarks settled more than 2% higher in the previous session as the latest attacks on ships in the Red Sea prompted fears of shipping disruption.

The prospect of a prolonged Israeli military campaign in Gaza remained a major driver of market sentiment.

Israeli forces pummelled central Gaza by land, sea and air on Wednesday, a day after Israel’s Chief of Staff Herzi Halevi told reporters the war would go on “for many months”.

Elsewhere, oil loadings at the Russian Black Sea port of Novorossiisk were suspended because of a storm. However, the Caspian Pipeline Consortium (CPC) terminal near the port was open, Kazakhstan’s energy ministry said.

U.S. crude stocks were expected to have fallen by 2.6 million barrels last week, while distillate and gasoline inventories were expected to have risen, a preliminary Reuters poll showed on Tuesday.

Inventory reports from the American Petroleum Institute and the Energy Information Administration are expected on Wednesday and Thursday respectively, a day later than normal because of the Christmas holiday.

Oil output in Russia, the third largest producer in the world after the United States and Saudi Arabia, is expected to be steady or even to increase next year as Moscow has largely overcome Western sanctions, analysts said.

(Reporting by Stephanie Kelly in New York, Robert Harvey and Noah Browning in London and Jeslyn Lerh in Singapore;Additional reporting by Andrew Hayley in Beijing;Editing by David Goodman, Jane Merriman, David Gregorio and Emelia Sithole-Matarise)

By Stephanie Kelly

NEW YORK (Reuters) -Oil prices dropped over 1% on Wednesday, eating into the previous day’s gains as investors monitored developments in the Red Sea, where shippers are returning despite further attacks on Tuesday.

Brent crude futures were down $1.02, or 1.3%, at $80.05 a barrel by 1:04 p.m. EST (1804 GMT). U.S. West Texas Intermediate crude fell $1.03, or 1.4%, to $74.54.

Danish shipping company Maersk said it has scheduled several dozen container vessels to travel via the Suez Canal and Red Sea in the coming weeks after calling a temporary halt to those routes this month after attacks by Yemen’s Iran-backed Houthi militia.

France’s CMA CGM also said it was resuming passage through the Red Sea after deployment of a multinational task force to the region.

“I think we have to wait and see whether the increased naval patrols and rerouting of ships lead to a decline in attacks,” said Callum Macpherson, head of commodities at Investec.

Both the Brent and WTI benchmarks settled more than 2% higher in the previous session as the latest attacks on ships in the Red Sea prompted fears of shipping disruption.

The prospect of a prolonged Israeli military campaign in Gaza remained a major driver of market sentiment.

Israeli forces pummelled central Gaza by land, sea and air on Wednesday, a day after Israel’s Chief of Staff Herzi Halevi told reporters the war would go on “for many months”.

Elsewhere, oil loadings at the Russian Black Sea port of Novorossiisk were suspended because of a storm. However, the Caspian Pipeline Consortium (CPC) terminal near the port was open, Kazakhstan’s energy ministry said.

U.S. crude stocks were expected to have fallen by 2.6 million barrels last week, while distillate and gasoline inventories were expected to have risen, a preliminary Reuters poll showed on Tuesday.

Inventory reports from the American Petroleum Institute and the Energy Information Administration are expected on Wednesday and Thursday respectively, a day later than normal because of the Christmas holiday.

Oil output in Russia, the third largest producer in the world after the U.S. and Saudi Arabia, is expected to be steady or even to increase next year as Moscow has largely overcome Western sanctions, analysts said.

(Reporting by Stephanie Kelly in New York, Robert Harvey and Noah Browning in London and Jeslyn Lerh in SingaporeAdditional reporting by Andrew Hayley in BeijingEditing by David Goodman, Jane Merriman and David Gregorio)

By Robert Harvey and Noah Browning

LONDON (Reuters) -Oil prices slipped on Wednesday, eating into the previous day’s gains as investors monitored developments in the Red Sea, where shippers are returning despite further attacks on Tuesday.

Brent crude futures were down 54 cents, or 0.6%, at $80.53 a barrel by 1445 GMT. U.S. West Texas Intermediate crude fell 65 cents, or 0.8%, to $74.92.

Danish shipping company Maersk said it has scheduled several dozen container vessels to travel via the Suez Canal and Red Sea in the coming weeks after calling a temporary halt to those routes this month after attacks by Yemen’s Iran-backed Houthi militia.

France’s CMA CGM also said it was resuming passage through the Red Sea after deployment of a multinational task force to the region.

“I think we have to wait and see whether the increased naval patrols and rerouting of ships lead to a decline in attacks,” said Callum Macpherson, head of commodities at Investec.

Both the Brent and WTI benchmarks settled more than 2% higher in the previous session as the latest attacks on ships in the Red Sea prompted fears of shipping disruption.

The prospect of a prolonged Israeli military campaign in Gaza also remains a major driver of market sentiment.

Israeli forces pummelled central Gaza by land, sea and air on Wednesday after Israel’s Chief of Staff Herzi Halevi told reporters on Tuesday that the Gaza war would go on “for many months”.

Elsewhere, oil loadings at the Russian Black Sea port of Novorossiisk were suspended because of a storm. However, the Caspian Pipeline Consortium (CPC) terminal near the port was open, Kazakhstan’s energy ministry said.

U.S. crude stocks were expected to have fallen by 2.6 million barrels last week, while distillate and gasoline inventories were expected to have risen, a preliminary Reuters poll showed on Tuesday.

Inventory reports from the American Petroleum Institute and the Energy Information Administration are expected on Wednesday and Thursday respectively, a day later than normal because of the Christmas holiday.

(Reporting by Robert Harvey and Noah Browning in London and Jeslyn Lerh in SingaporeAdditional reporting by Andrew Hayley in BeijingEditing by David Goodman and Jane Merriman)