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Oil drops on dollar strength, OPEC+ expectations

Oil prices fell on Friday as the U.S. dollar rose while forecasts called for crude supply to rise in response to prices climbing above pre-pandemic levels. The dollar rose as U.S. government bond yields held near one-year highs, making greenback-priced oil more expensive for holders of other currencies. Also, the U.S. stockpile report this week showed a surprise build in oil inventories. Investors are betting that next week’s meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, a group known as OPEC+, will result in more supply returning to the market. U.S. crude production fell in December, the latest month for which data is available, according to a monthly report from the Energy Information Administration. Despite talk of tightening fundamentals, the demand side of the market is nowhere near warranting current oil price levels, some analysts said. U.S. crude prices also face pressure from slower refinery demand after several Gulf Coast facilities were shuttered during the winter storm last week. (Reuters)

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President Joe Biden’s administration has indicated that trade talks are not high on its agenda for now — but that may be what the U.S. needs to get closer to its partners in Asia-Pacific, said two former American trade officials. Trade is important for Asia-Pacific because many economies in the region are exports-dependent. Improving trade relations with those countries will be critical for the U.S. to raise its standing in the region, where China’s influence is growing, the officials said during a Wednesday panel discussion at The Economist’s Asia Trade Week event. (CNBC)

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China’s Huawei plans to make electric vehicles under its own brand and could launch some models this year, four sources said, as the world’s largest telecommunications equipment maker, battered by US sanctions, explores a strategic shift. Huawei Technologies is in talks with state-owned Changan Automobile and other automakers to use their car plants to make its electric vehicles (EVs), according to two of the people familiar with the matter. Huawei is also in discussions with Beijing-backed BAIC Group’s BluePark New Energy Technology to manufacture its EVs, said one of the two and a separate person with direct knowledge of the matter. The plan heralds a potentially major shift in direction for Huawei after nearly twoyears of US sanctions that have cut its access to key supply chains, forcing it to sell a part of its smartphone business to keep the brand alive. Huawei was placed on a trade blacklist by the Trump administration over national security concerns. Many industry executives see little chance that blocks on the sale of billions of dollars of US technology and chips to the Chinese company, which has denied wrongdoing, will be reversed by his successor. (CNA)

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Online booking platform Airbnb has said it is preparing for a “significant” travel rebound as the world emerges from coronavirus lockdowns. However, the company said it was still “too early” to predict how the business would fare this year. The company’s revenue dropped 30% last year to $3.4bn (£2.4bn), as Covid-19 restrictions kept many from travelling. That was better than many other travel companies, as people took to their cars for longer stays in private homes. The firm said it has already seen a smaller decline in travel this year than in the last three months of 2020, when revenue was down 22% year-on-year at $859m. That was better than many analysts had expected, given the resurgence of Covid cases and fresh lockdown restrictions in many areas. (BBC) mannyrabacal1144@ gmail.com