Business

HAVANA (AP) — Cuban President Miguel Díaz-Canel on Friday announced a package of economic reforms aimed at attracting investment, expanding participation by Cubans living abroad in the economy and decentralizing parts of the country’s administration.

The president did not provide details about the measures or a timetable for their implementation but said during remarks to state media that it is now “time to change” and that the country “simply cannot continue on its current course.”

“Every opportunity in the midst of a crisis must be seized as a moment for takeoff, as a moment for growth,” Díaz-Canel said, according to a statement from the presidency that was republished by state-run media. “We have established a group of priorities to confront this situation,” he added without offering specifics.

The announcement comes as Cubans have struggled with fuel shortages as a result of the U.S. oil blockade and food insecurity. In January, the United States tightened restrictions on Cuba’s oil supplies in an effort to pressure the island’s government to change its political and economic model, exacerbating challenges that have persisted for about five years.

The U.S. State Department did not immediately respond to a request for comment.

Díaz-Canel said officials are evaluating measures related to foreign trade, exports, supply chains and logistics. Without elaborating, he suggested the government could eliminate mandatory state intermediaries in import and export operations and grant tariff benefits to those who bring raw materials into the country for production.

“The numbers don’t add up, and the government wants to make this look like a matter of will rather than a math problem,” Cuban economist Pedro Monreal wrote on X, in response to Díaz-Canel’s proposals.

The Spain-based former UNESCO official went on to criticize the collapse of a centralized planning model, for which he said “there are two respectable alternatives: assume the political price of failure, or self-critically rectify and drastically transform the model.”

For decades, Cuba maintained a centralized, vertical system under strict state control. This structure began to shift gradually over the last decade when the government introduced permits for independent workers. More recently, the state authorized the operation of the country’s first small- and medium-sized private enterprises.

Earlier Friday, a ship carrying nearly 100 tons of food and essential goods arrived from Colombia as part of the humanitarian aid that several countries have sent to Cuba in recent months as a U.S. energy embargo persists.

The ship, which departed Cartagena in early June, crossed the Havana Bay channel early in the morning flying the Colombian flag and escorted by a small Cuban auxiliary vessel, The Associated Press confirmed.

The Colombian Presidential Agency for International Cooperation said that, on orders of President Gustavo Petro, the shipment included nonperishable food, medicine, hospital supplies, electrical materials, solar panels and other items.

The ship also carried seven tons of goods collected by solidarity groups.

Last weekend, another ship carrying 1,700 tons of essential goods from Mexico and Belize arrived in Havana.

In late January, U.S. President Donald Trump threatened tariffs on any country that sells or provides oil to Cuba. The move has deepened a preexisting crisis caused by U.S. sanctions. Washington is pressing the Cuban government to release political prisoners and move toward political and economic liberalization in return for a lifting of sanctions.

Cuba produces only 40% of its oil, leaving the island semiparalyzed and subjected to severe power outages.

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Follow AP’s coverage of Latin America and the Caribbean at https://apnews.com/hub/latin-america

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By Arathy Somasekhar

HOUSTON, June 12 (Reuters) – Exxon Mobil was poised to name Alex Volkov as head of global trading, two sources with knowledge of the matter said. 

On Thursday, Reuters reported that sources said Tracey Gunnlaugsson, who led the trading division since 2023, was set to retire. Exxon declined to comment.

Reuters could not immediately reach Volkov for comment.

Volkov, based in Texas, has spent nearly three decades at Exxon, holding roles across the U.S., Russia and London, according to his LinkedIn profile. He has served as a vice president in several parts of the business, including global LNG marketing, upstream commercial, strategy and business development, and, currently, commercial and integration.

David Brown, who was an international crude trader, is also retiring from Exxon, three sources said.

Exxon in May reported a $3.9 billion paper loss stemming from derivatives in the first quarter which pushed net income down to its lowest level in five years. The losses contrasted with the first-quarter trading profits of European oil majors, which have spent decades building trading desks and reaped billions of dollars from this year’s energy supply crunch triggered by the U.S.-Israeli war on Iran.

(Reporting by Arathy Somasekhar in Houston; Editing by Nathan Crooks and David Gregorio)

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By Elizabeth Howcroft

PARIS, June 11 (Reuters) – Before SpaceX goes public, crypto exchanges are giving traders a way to make risky bets on the company’s future share price.

Billions of dollars have flowed into instruments dubbed “pre-IPO perpetual futures”, which have no direct link to the underlying shares but are priced with reference to SpaceX’s latest disclosed pre-IPO valuation.

These types of derivatives, known as “perps”, are already used to bet on cryptocurrency price moves. They roll over indefinitely and allow investors to borrow in order to make bigger bets.

The popularity of new pre-IPO perps – which trade on exchanges including Binance, Coinbase and Hyperliquid – has intensified the clash between crypto and Wall Street ahead of a wave of blockbuster IPOs set to also include AI giants Anthropic and OpenAI.

News that U.S. regulators would approve perps betting on cryptocurrencies was enough to knock the shares of New York Stock Exchange parent Intercontinental Exchange earlier this week, as investors weighed up what they saw as a long-term competitive threat for incumbent bourses.

The selloff continued into the next session, in part due to fear among investors that the contracts would be extended to equities.

‘MIND-BOGGLING’ VOLUMES

Global markets are bracing for the IPO of Elon Musk’s SpaceX, which aims to raise a record $75 billion to fund expansion as the world’s richest man pursues long-term ambitions, including colonising Mars and building data centres in space.

There was around $3.2 billion in trading volume and $390 million in open interest on SpaceX pre-IPO perps from May 17 to Wednesday, according to data provider Talos, which included eight exchanges in its figures.

Binance said its SpaceX pre-IPO perps saw $2.1 billion in trading volume in 18 days, but declined to break this down by region.

“This is obviously aimed at a crypto-native, crypto-friendly audience that are looking to obtain high-leverage bets on specific market movements,” said Philippe Noeltner, a lawyer at A&O Shearman, calling the volumes “mind-boggling”.

Crypto perps often offer high degrees of leverage — as much as 100-to-1 — ​although for the recently launched pre-IPO perps, the leverage is usually capped at 3x to 5x, analysts said.

Crypto exchanges typically make money from the products by market-making and charging fees to buyers.

‘THE HYPER-GAMBLER-ISATION OF EVERYTHING’

Proponents say pre-IPO perpetuals – which are generally not available to U.S. investors – are a tool for price discovery and help more people get access to the U.S. stock market’s gains.

But critics say they are risky as they have low liquidity, high volatility and – unlike tokenised stocks – are not pegged to any underlying asset. Once the stock floats, the price of the instrument is adjusted to reflect the share price, though details vary from exchange to exchange.

The price of SpaceX pre-IPO perps has fallen from above $200 to around $160 in less than a month, according to Kaiko price data. SpaceX shares are due to price at $135 apiece.

“This pre-IPO perpetual isn’t really anchored towards anything other than speculation,” said Kaiko analyst Laurens Fraussen.

“The pre-IPO thing is, alongside prediction markets, a good example of where the world is heading… it’s like the hyper-gambler-isation of everything.”

The World Federation of Exchanges, an industry body which represents stock exchanges, said that buyers might think they are getting an asset that comes with the guardrails of listed products, and that it was hard to be sure how robust the price formation would be.

“These are fundamental principles and we will work this issue into our dialogue with regulators,” a WFE spokesperson told Reuters via email.

SPACEX FRENZY MEETS CRYPTO

The SpaceX IPO and crypto are both “exciting stories”, said Alex Edman, a London Business School professor who researches investor psychology, cautioning that people should ensure they understand what they are buying.

“With SpaceX, investors may have done a little bit of research and conclude that space exploration is the future. With crypto, they may learn about potential use cases. But neither tells you what the asset is actually worth.”

Little is known about who or what is driving the volumes of pre-IPO perps. Coinbase and Binance declined to comment on how many users had bought SpaceX pre-IPO perps, and data provider Talos said it was not possible to determine from public data.

“It’s also very difficult to know who’s active in these markets, whether it’s your retail trader punting £10 or a proprietary trading desk of a hedge fund taking a position,” said A&O Shearman’s Noeltner.

“It’s better not to assume that these are only retail traders.”

(Reporting by Elizabeth Howcroft; Editing by Jan Harvey)

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A look at the day ahead in European and global markets from Stella Qiu

Hope, as the saying goes, springs external. President Donald Trump has trumpeted an imminent peace deal with Iran so many times that it’s easy to lose track. But this time he’s offered something tantalisingly specific – a weekend signing ceremony in Europe with his vice president – and that was enough for stock investors to jump right back into an already frothy market.

Since then, Iran has attacked ships in the Strait of Hormuz, denied it had reached a final decision on any deal and vowed not to compromise on its red-line demands.

Still, the response was a full-throated risk-on roar across Asia. South Korea led the charge with a monstrous 8% jump, while Japan’s Nikkei leapt 3.5%. European bourses are slated to open almost 2% higher, with Wall Street futures adding to a strong overnight rally.

Bonds also rallied as oil prices hit two-month lows and lessened inflation fear. The European Central Bank had to raise interest rates for the first time in nearly three years to nip war-driven inflation in the bud, but if the Strait of Hormuz reopens soon, the chance for a follow-up hike next month will dwindle.

For Kevin Warsh, who is about to chair his first U.S. Federal Reserve meeting next week, a peace deal would be a godsend, perhaps even putting rate cuts back on the table.

Elsewhere, it seems to be the season for central bank sick notes. Bank of Japan Governor Kazuo Ueda will miss next week’s meeting, where a hike to 1% is widely expected, as he recovers from a liver cyst.

Russia’s central bank meets next Friday and its chief, Elvira Nabiullina, has not been seen since May 28 due to illness. President Vladimir Putin has already signalled he expects a rate cut, much like a certain president would want in the U.S.

Before all the central bank excitement, Elon Musk’s SpaceX debuts on the stock market today after raising a record $75 billion, valuing the company at $1.77 trillion and making its founder the world’s first trillionaire (a word not even recognised by our spellchecker). A strong opening would provide one more reason to be bullish.

Key developments that could influence markets on Friday:

• Prospects of an imminent peace deal in the Gulf

• SpaceX begins trading on the NASDAQ

• University of Michigan June consumer sentiment survey

• Monthly UK GDP data, French and German final CPI for May

(By Stella Qiu; Editing by Christopher Cushing)

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By Gregor Stuart Hunter

HONG KONG, June 12 (Reuters) – The dollar found its footing in Asian trade on Friday, retracing some of the previous day’s decline as traders questioned reports that a ceasefire deal in the Middle East could be imminent.

Against Japan’s currency, the U.S. dollar was up 0.2% at 160.235 yen. The Australian dollar was down 0.1% at $0.7045, while its kiwi counterpart was 0.2% weaker at $0.5824.

The euro last bought $1.1574, holding near its strongest in a week after the European Central Bank’s first interest rate hike in three years on Thursday. The British pound was flat at $1.3415.

“There’s a question around the hopes of a deal, and questions around whether it will be met and agreed upon by Iran and the U.S.,” said Michael Wan, senior currency analyst at Mitsubishi UFJ Financial Group in Singapore. “It sounds like it’s quite close, but they’re not exactly at the finish line.”

Brent crude slid 1.8% to $88.76 a barrel in Asian trade, after President Donald Trump said the United States and Iran could sign a peace deal as soon as this weekend that would reopen the Strait of Hormuz to shipping. Iran countered that it had not reached a final decision on an agreement.

The U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, was steady at 99.743, stabilising after slumping to its weakest level in a week on Thursday.

Data that day showed U.S. producer prices increased more than expected in May, leading to the largest annual gain in 3-1/2 years as the Middle East conflict drove up the cost of energy products. 

But traders found encouragement in the details of the report.

“The more important core PPI reading, which typically feeds directly into core PCE inflation, came in at 4.9% year-on-year, well below the 5.4% expected,” said Tony Sycamore, market analyst at IG in Sydney, referring to the Federal Reserve’s preferred gauge of cost-of-living increases. “This, combined with the fall in energy prices, helped calm inflationary concerns.”

Expectations for the timing of the Fed’s next rate hike shifted back to December after the report. Fed funds futures now price in an implied 63.3% probability the U.S. central bank will keep rates on hold at its two-day meeting ending October 28, compared with an even chance a day earlier, according to the CME Group’s FedWatch tool.

The European Central Bank is now widely expected to lift interest rates again in September, according to LSEG data.

“The ECB delivered its first 25-basis-points hike since September 2023, with inflation and growth revisions hawkish at the margin,” analysts from Barclays wrote in a research note. “That said, it offered little guidance on if and when it will follow with more, though risks seemed skewed towards further action, barring a quick improvement in the inflation outlook.”

In cryptocurrencies, bitcoin was up 0.5% at $63,645.84, while ether edged 0.4% higher to $1,676.83.

(Reporting by Gregor Stuart Hunter; Editing by Jacqueline Wong and Kevin Buckland)

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By Stella Qiu

SYDNEY, June 12 (Reuters) – Asian stocks extended a global rally on Friday on hopes a Middle East peace deal may finally materialise, while the dollar and bond yields dropped and oil prices marked two-month lows, tempering inflation fears.

European bourses are set to open sharply higher, with pan-region futures up 1.8%. Wall Street futures rose about 0.2%, building on the strong rally from overnight.

All eyes are on the hotly awaited market debut of Elon Musk’s SpaceX, which has made history with the biggest-ever initial public offering. The IPO raised a record $75 billion, valuing the rocket and spacecraft manufacturer at $1.77 trillion and making Musk the world’s first trillionaire.

U.S. President Donald Trump said on Thursday that a peace deal could be signed as soon as this weekend, hours after threatening more strikes on Iran. He said negotiations with Tehran had advanced to the highest levels of Iran’s leadership and had been approved by a broad coalition of regional powers.

Trump’s remarks follow repeated bouts of optimism from the president that have failed to yield a deal, keeping markets on edge. In this case too, Iran countered that it had not reached a final decision on an agreement.

Nonetheless, “this does look perhaps a bit more tangible than we have had,” said Ray Attrill, head of FX strategy at National Australia Bank.

“If we hear something from Iran that sounds positive, the odds (of a peace deal) are clearly going to flip quite dramatically.”

The deal, if confirmed, would be the most significant diplomatic breakthrough yet to end the three-month-old war, which sent global energy prices sharply higher. The European Central Bank had to raise interest rates for the first time in nearly three years on Thursday to nip war-driven inflation in the bud.

Oil prices slumped to two-month lows on expectations of an impending agreement. Brent crude futures dropped 1.8% at $88.76 per barrel, having fallen nearly 3% overnight.

MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 3.7%, led by a 7.8% surge in South Korea’s KOSPI. Japan’s Nikkei rose 3.6%.

China’s blue-chip CSI300 rose 1.5%, while Hong Kong’s Hang Seng gained 2%.

Overnight, Wall Street rallied with the three major indexes registering their biggest daily gains since April 8, when the U.S. and Iran agreed to a temporary ceasefire. The Nasdaq jumped 2.5%, helped by expectations of a strong market debut for Musk’s SpaceX.

“With a fixed offer price and a larger than usual retail allocation, the early float is also likely to be held by a more diverse and potentially less patient investor base, which could amplify near-term volatility,” said Hugh Lam, an investment strategist at Betashares.

Treasuries held onto gains as hopes of a peace deal in the Gulf led markets to trim bets of a rate hike from the Federal Reserve this year. Pricing for a hike in October has come down to 36% from 51%.

Two-year Treasury yields were steady at 4.073% on Friday, having slumped 6 basis points (bps) overnight. Benchmark 10-year Treasury yields held at 4.4690%, after falling almost 8 bps overnight.

The dollar stabilised after overnight losses. It rose 0.2% to 160.20 yen, after retreating 0.4% in the prior session. Traders are still on high alert for intervention from Japanese authorities as the yen stays close to the 160 level that many see as a line in the sand.

Precious metals retreated on Friday. Spot gold slipped 0.7% to $4,183 an ounce, following a 3.5% jump overnight, while spot silver also fell 0.9% to $66.72 an ounce, after a 5.8% gain.

(Reporting by Stella Qiu; Editing by Shri Navaratnam and Kevin Buckland)

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NEW YORK (AP) — Taylor Swift became the youngest woman ever inducted into the Songwriters Hall of Fame Thursday night at age 36.

“It was instinctual. No one taught me how to do it,” she said of songwriting through a raspy voice she attributed to screaming along to the night’s performances and Wednesday night’s historic NBA game between the New York Knicks and the San Antonio Spurs.

She told the room about her family uprooting their lives to move her from Pennsylvania to Nashville, Tennessee, as a tween.

“I will never be able to express my gratitude,” the singer-songwriter said while holding back tears — crediting their sacrifice for her career.

She offered young songwriters advice: “You really have to prioritize what you love, down to your very core. Because you’ll need that.”

Steven Spielberg introduced Swift with a surprise speech about the power of songwriting. “There is something undeniable about how songs imprint on our souls,” he said, before changing his focus to Swift. “Somehow Taylor knows us all too well.”

Swift started her speech by acknowledging Spielberg. “Because of examples like Steven’s, I trusted my imagination,” she said.

The Gen Z singer Sombr launched Swift’s segment by performing “Cardigan” and “Dear John” in front of her.

Swift has brought new eyes to this year’s ceremony and undeniably shaped contemporary pop music trends with her songwriting. Swift is the youngest woman inducted, but Stevie Wonder, who started his recording career at 13, was the youngest ever inducted, it was announced on stage.

It was a notable moment in an evening full of them, where Swift, Kiss’ Gene Simmons and Paul Stanley, Christopher “Tricky” Stewart, Alanis Morissette, Kenny Loggins and more were honored.

Tamar Braxton opened the gala at the Marriott Marquis Hotel in New York City with a spirted tribute to a new inductee — the game-changing R&B songwriter, producer and rapper Christopher “Tricky” Stewart — with one of the biggest songs he’s known for: Beyoncé’s “Single Ladies.”

He’s also responsible for singer-songwriter Rihanna’s “Umbrella,” Mariah Carey’s “Touch My Body” and Justin Bieber’s “Baby.”

Dallas Austin, a songwriter and producer known for work with Boyz ll Men and Madonna, introduced Stewart. “Think about that catalog,” he said, listing off those zeitgeist-shifting records. “Those are cultural moments.”

Stewart thanked God, his family, artists he’s worked with and mentors — giving a special shout out to Grammy award-winning music producer Antonio “L.A.” Reid and the iconic singer-songwriter Babyface. “I wanted to be like L.A. and Baby,” he reflected.

Kiss founders Simmons and Stanley — two and a half years after the band’s farewell — were also recognized for their glam rock classics “Rock and Roll All Nite” and “I Love It Loud.” The Smashing Pumpkins’ Billy Corgan covered the former, a fittingly fiery introduction for the band. He was joined by Goo Goo Dolls’ frontman John Rzeznik for the latter.

Simmons wasn’t present; Stanley said that he had a family emergency.

“Songs are the messenger,” he said — the foundation of “every show.”

Soft rock legend Kenny Loggins (“Footloose,” “Danny’s Song”) and the alt-rock icon Morissette were also inducted.

For the latter, Brandi Carlile performed “Uninvited” alongside SistaStrings, before introducing Morissette.

“Writing to me is not a hobby,” Morissette said, it’s critical. “It’s write or die.” Then she performed “Mary Jane” and “You Oughta Know” from her 1995 album “Jagged Little Pill.”

For Loggins, Gavin DeGraw performed “Danny’s Song,” before Loggins told the story behind the tune in his acceptance speech.

Taylor Dayne and Madison Cunningham performed Tina Turner classics written by Terry Britten and Graham Lyle in honor of their induction; John Fogerty was honored with the Johnny Mercer Award.

“I got my songs back!” Fogerty said, ending a nearly 30-minute speech, referencing the fact that he won the rights back to his catalog at age 80. Then he ran through a medley of his hits: “Proud Mary,” “Fortunate Son,” and “Have You Ever Seen the Rain” among them.

The songwriter Walter Afanasieff (Mariah Carey’s “All I Want for Christmas Is You”) was also recognized, a segment that began with an introduction by actor Jeremy Renner and included a monster medley of his biggest songs by R&B singer Sheléa, kicking off with his Christmas classic six months early.

“I wanted to be The Beatles,” he said of falling in love with songwriting in his speech. “Sixty years later, I got to produce Paul McCartney.”

British singer-songwriter RAYE received the prestigious Hal David Starlight Award. She ended her speech by stating that songwriters deserve a cut of master royalties.

Last year’s inductees included George Clinton, The Doobie Brothers, Ashley Gorley, Rodney “Darkchild” Jerkins, The Beach Boys’ Mike Love and Tony Macaulay.

The Songwriters Hall of Fame was established in 1969 to honor those creating popular music. A songwriter with a notable catalog of songs qualifies for induction 20 years after the first commercial release of a song.

Some already in the hall include Gloria Estefan, Carole King, Paul Simon, Billy Joel, Jon Bon Jovi and Richie Sambora, Elton John and Bernie Taupin, Brian Wilson, James Taylor, Bruce Springsteen, Tom Petty, Lionel Richie, Bill Withers, Neil Diamond and Phil Collins.

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June 12 (Reuters) – FanDuel owner Flutter Entertainment said on Friday it would delist from the London Stock Exchange in August while retaining its primary listing on the New York Stock Exchange, dealing a fresh blow to the British capital’s financial markets.

The betting giant said the decision was in the best interests of its shareholders, about a month after it began a review of the London listing and two years after it decided to swap its primary listing to the NYSE.

Flutter, the world’s largest online betting company, cited low trading volumes and regulatory costs in London for abandoning the secondary listing, with the last day of trading set for July 31 and delisting for August 3.

SHIFT AWAY FROM LONDON

It joins a growing list of companies that have either shelved plans to list in London, exited the market altogether, or aimed to better capitalise on stronger foreign markets by demoting or scrapping their London listing.

Amid a roiling of global markets due to the Iran war, Britain’s blue-chip FTSE 100 index is valued at about £2.4 trillion ($3.21 trillion), far below the S&P 500’s $63 trillion and only slightly higher than Microsoft.

Britain has embarked on broad regulatory reforms, including easing rules for companies to raise funds, to boost the appeal of London as a global financial hub after a prolonged downturn in new share issuance.

Flutter has been ramping up its U.S. focus. Last month, it overhauled the management at its FanDuel brand amid tough U.S. betting market conditions following a disappointing performance that saw 2026 profit growth forecasts slashed to just 1%.

FanDuel has a leading 39% share of the U.S. betting market, and the country is Flutter’s biggest revenue contributor, accounting for about 42% of sales.

($1 = 0.7467 pounds)

(Reporting by Prerna Bedi and Raechel Thankam Job in Bengaluru; Editing by Mrigank Dhaniwala and Jan Harvey)

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By Sudarshan Varadhan and Emily Chow

SINGAPORE, June 12 (Reuters) – Oil prices fell more than 2% on Friday, extending losses from the previous session after U.S. President Donald Trump cancelled plans to strike Iran, reducing fears of an escalation of hostilities following tit-for-tat attacks earlier in the week.

Brent futures were down $2.11 or 2.3% at $88.27 a barrel by 0640 GMT, while U.S. West Texas Intermediate (WTI) crude dropped $1.90, or 2.2%, to $85.81.

Trump called off planned strikes on Thursday, saying discussions with Iran had progressed and a peace deal that would reopen the Strait of Hormuz to shipping could be signed as soon as this weekend, even as Tehran said it had not made a final decision.

“While this could, of course, be yet another false dawn, the market’s reaction has been both swift and decisive,” said IG market analyst Tony Sycamore.

He added that even as oil prices correct downwards, “as long as the price can hold above support in the low $80s, the risks remain firmly skewed to the upside”.

On Thursday, Iran announced “the closure” of the Strait of Hormuz, through which vessel traffic was already severely limited, saying it would fire on any ship trying to pass through the waterway.

The strait normally carries a fifth of global oil and liquefied natural gas shipments, and Tehran’s months-long blockade has kept energy prices elevated.

State media reported on Friday that Iranian forces had prevented a tanker from transiting the Strait of Hormuz without coordination.

The U.S. military said on social media that commercial ships continued to transit the waterway.

“We would be cautious about assuming that the extension of the ceasefire is a done deal. Even if it is, it could be fragile. And clearly, if nuclear talks do not progress, it could very easily fall apart,” said ING analysts in a Friday note.

“We believe the market reaches an inflection point in late July if we do not see oil flows resuming before then. This is when inventory levels and seasonally stronger demand push prices significantly higher towards $120-130 per barrel.”

The Organization of the Petroleum Exporting Countries on Thursday lowered its forecast for 2026 world oil demand growth to 970,000 barrels per day from a previous 1.17 million bpd, marking its second straight downward revision.

The producer group also said consumption would rebound later, raising its demand growth forecast for 2027. It expects 2027 oil demand to rise by 1.73 million bpd, up 190,000 bpd from its previous forecast.

(Reporting by Sudarshan Varadhan and Emily Chow; Editing by Tom Hogue and Jan Harvey)

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The average long-term U.S. mortgage rate ticked up this week to just below its high for the year, the latest sign that borrowing costs on home loans remain elevated relative to where they were before the war with Iran started.

The benchmark 30-year fixed rate mortgage rate rose to 6.52% from 6.48% last week, mortgage buyer Freddie Mac said Thursday. Despite the increase, the average rate remains below 6.84%, where it was a year ago.

Borrowing costs on 15-year fixed-rate mortgages, often sought by borrowers refinancing a home loan, also rose this week. That average rate climbed to 5.84% from 5.79% last week. A year ago, it was at 5.97%, Freddie Mac said.

When mortgage rates rise they can add hundreds of dollars a month in costs for borrowers, reducing their purchasing power.

Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

Rates have been mostly trending higher since the conflict between the U.S. and Iran began in late February, disrupting the flow of crude oil from the Persian Gulf to customers worldwide. That’s sent oil prices sharply higher, helping drive up inflation.

Expectations of higher oil prices as the war drags on have kept long-term bond yields elevated, causing mortgage rates to mostly trend higher.

The yield on the U.S. 10-year Treasury note was at 4.53% in midday trading Thursday on the bond market, up from 4.47% a week ago. It was just 3.97% in late February, before the war broke out.

As recently as late February, the average rate on a 30-year mortgage had slipped just under 6% for the first time since late 2022. It’s hasn’t fallen below that threshold since. Two weeks ago, it climbed to 6.53%, its highest level since August 28.

While average long-term mortgage rates remain lower than they were at this time last year, their mostly upward trajectory and uncertainty over how much higher they may go has kept many would-be homebuyers on the sideline.

Sales of previously occupied U.S. homes declined in the first three months of the year compared to a year earlier, extending a nationwide housing slump that dates back to 2022 when mortgage rates began to climb from pandemic-era lows. Sales were essentially flat in April, but accelerated in May to their fastest pace since December.

Still, sales of existing U.S. homes continue to hovering close to a 4-million annual pace, far short of the historic norm that is closer to 5.2-million.

The latest mortgage applications data suggest home shoppers who can afford to buy at current rates are not holding out for them to move lower.

After declining in recent weeks, mortgage applications, which include loans to buy a home or refinance an existing mortgage, jumped 10.8% last week from the previous week, according to the Mortgage Bankers Association. Applications for both home purchase and refinancing loans rebounded.

The increase in mortgage applications is an encouraging sign for the housing market heading into the second half of the year after a lackluster spring homebuying season.

“However, if inflation continues to outpace wage growth, eroding purchasing power alongside still-elevated mortgage rates, household budgets will come under increasing pressure, posing a meaningful drag on housing demand heading into the summer,” said Jiayi Xu, an economist at Realtor.com.

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