By Mohi Narayan

NEW DELHI (Reuters) -Oil prices reversed course on Wednesday after rising over 1% in the previous session, as investors shrugged off jitters arising from supply cuts from Saudi Arabia and Russia and a firm dollar capped the upside.

Brent crude futures were down by 9 cents to $89.95 a barrel at 0657 GMT. U.S. West Texas Intermediate crude (WTI) futures traded at $86.60 a barrel, also down 9 cents.

Against a basket of currencies, the dollar was at 104.69, not far off the six-month high of 104.90 touched overnight. A stronger dollar can weigh on oil demand by making the fuel more expensive for holders of other currencies.

Analysts at Rystad Energy and ING Economics said the output cuts from OPEC+ will leave the market with a deeper than expected deficit over the fourth quarter of 2023, which should continue to support prices.

However, ING Economics was reluctant to revise price forecasts higher, as it expected demand concerns to continue to linger amid a rise in Iranian supply.

“Iran is producing close to 3.1 million barrels per day (bpd) and plans to pump around 3.4 million bpd. Meanwhile, our oil balance shows a small surplus in the first quarter of 2024, which should limit prices moving significantly higher,” ING Economics analysts said in a note.

Reflecting supply concerns in the near term, the front-month Brent futures traded near 9-month highs at $4.13 a barrel above prices in six months.

For U.S. WTI futures, the spread between front-month and the six-month contract widened to as much as $4.5 a barrel on Wednesday, also hovering near 9-month highs.

Saudi Arabia will extend its voluntary oil output cut of 1 million barrels per day (bpd) for another three months until the end of December 2023, state news agency SPA said on Tuesday, citing an energy ministry official.

Russia extended its decision to reduce its oil exports by 300,000 bpd to the end of this year, Deputy Prime Minister Alexander Novak said in a statement on Tuesday.

The Saudi and Russian cuts are on top of the April cut agreed by several OPEC+ producers, which extends to the end of 2024.

Both countries will review their decisions monthly to consider deepening cuts or raising output depending on market conditions, SPA and Novak said.

“The decision to prolong output cuts underscores their dedication to price stability in a challenging market environment,” Sugandha Sachdeva, executive director and chief strategist at Acme Investment Advisors, said.

Sachdeva, however, added that the annual refinery maintenance period in the U.S. from September to October could limit demand for crude and potentially act as a restraining factor on rising oil prices.

(Reporting by Mohi Narayan in New Delhi, additional reporting by Arathy Somasekhar in Houston; Editing by Christopher Cushing, Stephen Coates and John Stonestreet)

By Kane Wu

HONG KONG (Reuters) – Asia stocks fell on Wednesday after faltering growth in China and Europe heightened concerns about global economic momentum, while the dollar firmed as investors weighed the outlook for Federal Reserve interest rates.

London and U.S. markets are poised to open lower with FTSE futures and E-mini futures for the S&P 500 index down 0.42% and 0.13% respectively at 0520GMT.

MSCI’s gauge of Asia Pacific stocks outside Japan dipped 0.45%.

The Hang Seng Index lost 0.56% and China’s benchmark CSI300 Index fell 0.59%, ahead of China’s August trade data set to be released on Thursday, with analysts expecting exports and imports to continue their declines, but at a slower pace.

Investor sentiment was dampened by a private-sector survey on Tuesday that showed China’s services activity expanded at the slowest pace in eight months in August, reflecting weak demand.

“The China decline was bigger than expected,” said Redmond Wong, Greater China market strategist at Saxo Markets.

“The Chinese government has become more active and is relaxing more regulation but whether it is good enough remains to be seen,” he added.

China is also set to release lending and inflation data in the coming days.

Manufacturing data from Germany, Britain and the euro zone also showed declines, while their service sectors fell into contraction.

“The Europe data were rather weak. We think there is still a high chance to have a mild recession in the U.S. and Europe toward the end of the year or beginning of next year,” Wong said.

Australia’s S&P/ASX 200 extended losses to 0.76%, even as second-quarter gross domestic product beat forecasts with a 0.4% rise.

Japan’s Nikkei 225 share average stood out to gain 0.52% with the weakest yen rate since November boosting exporters such as automakers, while energy shares outperformed amid a surge in crude oil prices.

The yield on the benchmark U.S. 10-year Treasury note rose 9 basis points to 4.26% after reaching 4.268%, its highest since Aug. 25, while the U.S. dollar rose to a near six-month high against a basket of currencies.

Investors are digesting recent signals on potential U.S. interest rate hikes. Fed Governor Christopher Waller said on Tuesday that the latest round of economic data was giving the U.S. central bank space to see if it needs to raise rates again.

“[The] Fed is a focus for us, we think they have more work to do with potential for U.S. rates to continue heading higher,” said John Milroy, investment adviser at Ord Minnett.

“We see central banks being forced to keep policy tight to lean against inflationary pressures,” the BlackRock Investment Institute said in a note Wednesday.

The Institute for Supply Management (ISM) is set to release U.S. services PMI on Wednesday.

U.S. crude was up 0.06% at $86.74 a barrel. Brent gained 0.07% to trade at $90.10 a barrel.

Oil prices surged more than 1% in the previous session, as markets worried about a supply shortage after Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year.

Spot gold rebounded up 0.09% at $1,927.79 per ounce by 0534 GMT, after posting its biggest one-day loss since Aug. 1 on Tuesday.

(Reporting by Kane Wu; Editing by Edmund Klamann and Sam Holmes)

(Reuters) – Elon Musk withdrew a loan of $1 billion from SpaceX – the two-decade-old rocket company run by the billionaire – around the same time he was acquiring Twitter, now known as X, for $44 billion, the Wall Street Journal reported on Tuesday.

SpaceX approved the $1 billion loan, which was backed by some of Musk’s SpaceX stock, in October and Musk drew all of it down the same month, according to the report, citing documents. Musk took ownership of Twitter in October.

Musk has had arrangements with banks to borrow against his shares in his companies, including electric vehicles (EV) maker Tesla, while privately held SpaceX has served as his lender, the report said, adding that paying for Twitter further complicated Musk’s financial situation.

Musk is SpaceX’s largest shareholder with a 42% stake and almost 79% of its voting power as of March, the report said, citing a filing with the Federal Communications Commission. SpaceX had $4.7 billion in cash and securities on hand at the end of last year, the paper said, citing documents.

Both SpaceX and X did not immediately respond to a Reuters request for comment.

Elon Musk sold a massive chunk of his Tesla shares in 2022, both before and after the Twitter deal, bringing his total sales to about $40 billion which frustrated investors in the EV maker.

In April 2023, Tesla disclosed that it had further tightened rules around Musk using his stake in the company to borrow money, according to the WSJ report.

In addition to Tesla and X, Musk is a co-founder of brain-chip startup Neuralink.

(This story has been refiled to fix a typographical error in paragraph 6 and remove an extraneous word in paragraph 7)

(Reporting by Nilutpal Timsina and Mrinmay Dey in Bengaluru; Editing by Sherry Jacob-Phillips, Eileen Soreng and Rashmi Aich)

TOKYO (Reuters) – A malfunction that shut down all of Toyota Motor’s assembly plants in Japan for about a day last week occurred because some servers used to process parts orders became unavailable after maintenance procedures, the company said.

The system halt followed an error due to insufficient disk space on some of the servers and was not caused by a cyberattack, the world’s largest automaker by sales said in a statement on Wednesday.

“The system was restored after the data was transferred to a server with a larger capacity,” Toyota said.

The issue occurred following regular maintenance work on the servers, the company said, adding that it would review its maintenance procedures.

Two people with knowledge of the matter had told Reuters the malfunction occurred during an update of the automaker’s parts ordering system.

Toyota restarted operations at its assembly plants in its home market on Wednesday last week, a day after the malfunction occurred.

(Reporting by Daniel Leussink; Editing by Edmund Klamann)

Crypto Staking Hits Record Highs despite Digital Assets Sell Off

It’s not all doom and gloom in the cryptocurrency sector. While digital assets led by Bitcoin and Ethereum have been under immense pressure amid a prolonged market selloff, another segment of the broader sector has flourished. Liquid staking is the segment that is flying high, having turned out to be a hotbed of investments in recent months.

Liquid Staking Demand

Staking is one of the options offered by various platforms that allow token holders to lock their tokens to help secure the blockchain network and enhance liquidity. It turned out to be an attractive investment play, given the rewards up for grabs on locking tokens in liquidity pools for a specified amount of time.

The value of assets locked in liquid staking services has jumped by more than 290% to over $20 billion over the past 12 months. Lido platform has benefited with the value of assets locked in the platform soaring to $14 billion, helping support the 60% rally of the network’s native token. The increase signals investors are increasingly locking their digital assets in staking services instead of trying to buy and sell to benefit from price differences.

Consequently, liquid staking has emerged as one of the flourishing segments in decentralized finance. The segment allows people to trade, lend, and borrow without intermediaries but through blockchain-powered pools. Its popularity has grown on being embraced by Ethereum, one of the most important blockchains, following an upgrading of the network last year.

Likewise, the Ethereum network offers Ether token holders an opportunity to earn an equivalent of 4% annually on locking their tokens to help secure and enhance liquidity. The number of Ether token holders that pledge tokens to help approve Ethereum transactions has risen by more than 40%, affirming strong interest in staking.   Rival blockchains like Solana and Cardano also offer staking opportunities.

Crypto Market Sell Off

Liquid staking pools like Lido and Rocket Pool have since bounced back after last year’s sell-off following the TerraUSD stablecoin implosion. The collapse of the stablecoin, followed by the FTX scandal, triggered a massive sell-off in the broader industry, triggering a $2 trillion crypto market rout.

A rebound in liquid staking comes against global regulators’ pressure on cryptos and staking products from various centralized exchanges. Kraken and Bitstamp are some of the popular staking platforms that have been targeted and pushed to discontinue their products. Hong Kong is one of the jurisdictions that have taken a stringent stance against staking, with Singapore banning all forms of staking.

The broader cryptocurrency sector has struggled to bounce back from last year’s slow down amid reduced demand for risk in the markets. Bitcoin, the flagship cryptocurrency, has so far struggled to power and find support above the $30,000 handle signaling waning demand for digital assets. Ethereum has also struggled to rise past the $2,000 level.

Likewise, the prices of major digital assets remain far below the record highs of 2021 and 2022 as investors turn their attention to other assets. Equities have emerged as a preferred investment vehicle in addition to staking for digital assets. Investors have been ramping up positions in equities depicted by the Nasdaq 100, rallying by more than 30% year to date, with the S&P 500 also up by more than 15%.

By Kane Wu

HONG KONG (Reuters) – Asia stocks fell on Wednesday after weak economic data in China and Europe heightened concerns over global growth, while the dollar firmed as investors weighed the outlook for U.S. interest rates.

MSCI’s gauge of Asia Pacific stocks outside Japan was down 0.5% at 0143GMT.

Australia’s S&P/ASX 200 fell 0.55% even as second-quarter gross domestic product beat forecasts with a 0.4% rise.

The Hang Seng Index and China’s benchmark CSI300 Index both opened down about 0.3%.

A private-sector survey on Tuesday showed China’s services activity expanded at the slowest pace in eight months in August, reflecting weak demand.

Manufacturing data from Germany, Britain and the euro area also showed declines, while their service sectors fell into contraction.

“The China decline was bigger than expected,” said Redmond Wong, Greater China market strategist at Saxo Markets.

“The Chinese government has become more active and is relaxing more regulation but whether it is good enough remains to be seen,” he added.

“The Europe data were rather weak. We think there is still a high chance to have a mild recession in the U.S. and Europe toward the end of the year or beginning of next year.”

Shares in Europe and the U.S. fell on Tuesday over concerns about weak global growth.

The yield on the benchmark U.S. 10-year Treasury note rose 9 basis points to 4.26% after reaching 4.268%, its highest since Aug. 25, while the U.S. dollar rose to a near six-month high against a basket of currencies.

Investors are digesting recent signals on potential U.S. interest rate hikes. Fed Governor Christopher Waller said on Tuesday that the latest round of economic data was giving the U.S. central bank space to see if it needs to raise rates again.

“[The] Fed is a focus for us, we think they have more work to do with potential for U.S. rates to continue heading higher,” said John Milroy, investment adviser at Ord Minnett.

U.S. crude was up 0.16% at $86.83 a barrel. Brent gained 0.19% to trade at $91.21 a barrel.

Spot gold fell 0.07% to $1,924.5 an ounce, after reaching its lowest since Aug. 1 on Tuesday.

(This story has been refiled to correct the Reuters Instrument Code of the Hang Seng Index in paragraph 4)

(Reporting by Kane Wu; Editing by Edmund Klamann)

By Mohi Narayan

NEW DELHI (Reuters) -Oil prices ticked up in early Asian trade on Wednesday after rising over 1% in the previous session, as markets worried about a supply shortage after Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year.

Brent crude futures rose by 14 cents to $90.18 a barrel at 0215 GMT. U.S. West Texas Intermediate crude (WTI) futures gained 12 cents at $86.81 a barrel.

Investors had expected Saudi Arabia and Russia to extend voluntary cuts into October, but the three-month extension was unexpected.

“These bullish moves significantly tighten the global oil market and can only result in one thing: higher oil prices worldwide,” Jorge Leon, senior vice president at consultancy Rystad Energy, said in a note.

The impact these cuts will have on inflation and economic policy in the West is hard to predict, but higher oil prices will only increase the likelihood of more fiscal tightening, especially in the U.S., to curtail inflation, Leon added.

Rystad estimated global liquids demand will surpass supply by around 2.7 million bpd in the next quarter.

Reflecting supply concerns in the near-term, the front-month Brent futures traded near 9-month highs at $4.10 a barrel above prices in six months.

For U.S. WTI futures, the spread between front-month and the six-month contract widened to as much as $4.47 a barrel on Wednesday, also hovering near 9-month highs.

Saudi Arabia will extend its voluntary oil output cut of 1 million barrels per day (bpd) for another three months until the end of December 2023, state news agency SPA said on Tuesday, citing an energy ministry official.

Russia extended its voluntary decision to reduce its oil exports by 300,000 bpd to the end of this year, Deputy Prime Minister Alexander Novak said in a statement on Tuesday.

The Saudi and Russian voluntary cuts are on top of the April cut agreed by several OPEC+ producers, which extends to the end of 2024.

Both countries will review the cut decisions monthly to consider deepening cuts or raising output depending on market conditions, SPA and Novak said.

“The decision to prolong output cuts underscores their dedication to price stability in a challenging market environment,” Sugandha Sachdeva, executive director and chief strategist at Acme Investment Advisors, said.

Sachdeva, however, added that the annual refinery maintenance period in the U.S. from September to October could limit demand for crude and potentially act as a restraining factor on rising oil prices.

(Reporting by Mohi Narayan in New Delhi, additional reporting by Arathy Somasekhar in Houston; Editing by Christopher Cushing and Stephen Coates)

(Reuters) -C&S Wholesale Grocers, with the backing of SoftBank Group, is nearing a deal to acquire stores that Kroger and Albertsons Companies Inc are looking to sell to obtain regulatory approvals for their $25 billion merger, a source familiar with the matter told Reuters on Tuesday.

The deal value and the number of stores included in the transaction could not be immediately learned.

C&S lost one of its largest customers, Ahold Delhaize, when the supermarket group decided to transition to self-distribution in 2019. C&S can help offset that loss through acquisitions.

Bloomberg News, which first reported the talks, said that C&S could announce the deal to acquire most or all of the stores that the supermarket operators are unloading for antitrust reasons as soon as this week.

Kroger, Albertsons, C&S and SoftBank did not respond to Reuters’ request for a comment.

Reuters had reported in February that Kroger and Albertsons were advancing their plans to sell between 250 and 300 stores that they hope will alleviate U.S. antitrust concerns over their combination.

The stores that the firms may sell could be worth more than $1 billion and are located across all the regions where the two companies operate such as the Pacific Northwest, Southern California, Phoenix and Chicago.

In March, the companies reiterated that they would divest some stores to win the regulatory clearance required to go ahead with the merger.

The Federal Trade Commission (FTC), which is reviewing Kroger’s proposed $24.6 billion acquisition of Albertsons, is under pressure from some U.S. lawmakers and consumer advocacy groups to block the deal on concerns it may lead to higher grocery prices.

(Reporting by Juby Babu in Bengaluru, Anirban Sen and Abigail Summerville in New York; Editing by Sherry Jacob-Phillips and Rashmi Aich)

By Jaiveer Shekhawat

(Reuters) – Crytocurrency exchange Coinbase Global is launching a digital asset lending platform aimed at large institutional investors, a company spokesperson told Reuters on Tuesday.

Coinbase has raised $57 million for its new crypto-lending platform, a regulatory filing showed.

The crypto industry, which was reeling from several high profile failures, got a boost last week after a three-judge panel ruled that the Securities and Exchange Commission (SEC) was wrong in rejecting Grayscale’s proposed bitcoin ETF without explaining its reasoning.

Coinbase last month had secured approval to offer cryptocurrency futures to U.S. retail customers, scoring a major regulatory win.

(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Shailesh Kuber)

By Elida Moreno

PANAMA CITY (Reuters) – The Panama Canal’s water levels have not recovered enough as the end of the rainy season approaches and limits on daily transit and vessel draft will stay in place for the rest of the year and throughout 2024, the waterway’s authority said on Tuesday.

The restrictions, implemented earlier this year to conserve water amid prolonged drought, triggered a backlog of ships waiting to pass the key global waterway, which handles an estimated 5% of world trade, contributing to more expensive freight costs ahead of the approaching Christmas season.

The bottleneck at the canal connecting the Pacific and Atlantic Oceans has eased about 20% since last week, but waiting times to transit the waterway doubled last month from July in some vessel categories, while many ship owners have opted for alternate routes to avoid costly delivery delays.

The authority that manages the canal added in a statement that this week’s ship traffic represents a “normal” level for this season.

It noted that a month before the end of its 2023 fiscal year, the canal’s total vessel crossings already total nearly 800 more that what the canal authority’s budget had forecast.

The additional vessel crossings, which contribute to a total of more than 13,000 transits so far during the fiscal year, show strong demand by vessel owners.

But insufficient rainfall continues to negatively impact the Gatun Lake, which feeds the canal, lowering its water level to 24.2 meters (79.7 feet), versus 26.6 meters (87.41 feet) for the month of September in recent years.

Each vessel passing through the 50-mile (80-km) trans-oceanic waterway uses some 51 million gallons (193 million litres) of water from the lake.

At the end of the rainy season in November, the lake’s water level typically reaches some 27 meters (89 feet) and then drops to slightly below 26 meters (85 feet) after the dry season ends in April, according to the canal authority.

Experts have warned about maritime trade disruptions ahead of what is shaping up to be an even drier period next year. They argue that a potential early start to Panama’s dry season and hotter-than-average temperatures could increase evaporation and result in near-record low water levels by April.

(Reporting by Eli Moreno; Additional reporting by Brendan O’Boyle; Writing by Marianna Parraga; Editing by David Alire Garcia and Michael Perry)