TOKYO/SINGAPORE: Oil edged lower on Thursday after a build in US gasoline and diesel inventories and cuts to Saudi Arabia’s July prices for Asian crude buyers, with global economic uncertainty weighing on prices as well.

Brent crude futures fell 1 cent to $64.85 a barrel at 9:30 a.m. Saudi time. US West Texas Intermediate crude lost 11 cents, or 0.2 percent, dropping to $62.74 a barrel.

Oil prices closed around 1 percent lower on Wednesday after official data showed that US gasoline and distillate stockpiles grew more than expected, reflecting weaker demand in the world’s top economy.

Saudi Arabia, the world’s biggest oil exporter, cut its July prices for Asian crude buyers to nearly the lowest in four years.

“While the (Saudi) decrease was smaller than anticipated, it suggests demand is soft despite entering the peak demand period,” said ANZ analysts in a note.

The price cut by Saudi Arabia follows the OPEC+ move over the weekend to increase output by 411,000 barrels per day for July. OPEC+ is made up of members of the Organization of the Petroleum Exporting Countries and allies such as Russia.

Weak US economic data and ongoing developments in US-China trade relations also weighed on oil prices, said independent market analyst Tina Teng.

“Simply put, a gloomy global economic trajectory dimmed the demand outlook,” she said.

“Markets are cautiously watching for any progress in trade talks between the world’s two top economies.”

Data on Wednesday showed that the US services sector contracted for the first time in nearly a year in May while businesses paid higher prices for inputs, indicating the American economy remains in danger of slow growth and high inflation.

On the trade front, US President Donald Trump said on Wednesday that China’s Xi Jinping was tough and “extremely hard to make a deal with,” exposing friction between Beijing and Washington after the White House had raised expectations for a long-awaited Xi-Trump phone call this week.

Meanwhile, Canada prepared possible reprisals and the EU reported progress in trade talks as new US metals tariffs triggered more disruption in the global economy and added urgency to negotiations with Washington.

“Uncertainty fueled by President Trump’s shifting stance on tariffs has intensified fears of a global economic slowdown,” analyst Ole Hansen at Saxo Bank said in a note. 

RIYADH: Lucid Group, the electric vehicle manufacturer backed by Saudi Arabia’s Public Investment Fund, has signed a multiyear supply agreement with Graphite One to source natural graphite from the US.

The move is aimed at reinforcing the company’s domestic supply chain for battery production. The agreement aligns with Lucid’s broader strategy to secure critical raw materials domestically.

It follows similar deals with Graphite One and Syrah Resources as the company ramps up efforts to localize its EV production ecosystem.

According to the terms, the graphite will be supplied through Lucid’s battery cell partners for use in upcoming vehicle models.

Lucid is majority-owned by PIF, which holds a 60 percent stake, amounting to 1.77 billion shares. The partnership underscores the sovereign fund’s long-term commitment to advancing electric mobility as part of Saudi Arabia’s Vision 2030.

In September 2023, Lucid opened its first international manufacturing facility in King Abdullah Economic City. The plant currently produces 5,000 vehicles per year, with plans to scale up to 155,000 units annually. The expansion is expected to support Saudi Arabia’s ambitions to diversify its economy and become a regional hub for electric vehicle manufacturing.

“A supply chain of critical materials within the United States drives our nation’s economy, increases our independence against outside factors or market dynamics, and supports our efforts to reduce the carbon footprint of our vehicles,” said Marc Winterhoff, interim CEO at Lucid.

Under the latest deal, Lucid and its battery suppliers will begin receiving natural graphite from Graphite Creek, a deposit located near Nome, Alaska, starting in 2028. This builds on a prior agreement signed in 2024, in which Graphite One will provide synthetic graphite from its proposed anode materials facility in Warren, Ohio — also set to begin production in 2028.

“This agreement complements the deal we struck with Lucid in 2024 — which marked the first synthetic graphite agreement between a US graphite developer and a US EV company,” said Anthony Huston, CEO of Graphite One.

He added: “We made history then — and we’re continuing to make history now as we build momentum for our efforts to develop a fully domestic graphite supply chain, to meet market demands and strengthen US industry and national defense.”

Lucid is also expected to receive natural graphite active anode material from Syrah Resources starting in 2026, as part of its ongoing diversification of supply sources.

In a further boost to its financial position, Lucid closed a $1.1 billion offering of convertible senior notes in April, due in 2030. The announcement came shortly after the company reported first-quarter deliveries of 3,109 vehicles — a 58 percent increase year on year.