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Oil rises on Saudi supply signals, but demand fears cap gains.............................................................
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Oil prices rose on Tuesday following commitments to tightening supply from Saudi Arabia and the Organization of Petroleum Exporting Countries (OPEC), although concerns over slowing demand in China and a potential U.S. recession kept gains muted.

Crude markets reversed sharp losses in a volatile session on Monday after Saudi Arabia, the leader of the OPEC said reports suggesting that the cartel planned to hike supply in December were false.

Instead, the OPEC will commit to its 2 million barrel per day supply cut until the end of 2023, and also stands ready to support prices with more cuts, Saudi Energy Minister Abdulaziz bin Salman said.

While his comments helped crude prices recover sharply from a 10-month low, they still remained well below highs hit earlier this month, amid growing concerns that China’s COVID lockdowns and a potential U.S. recession will dent demand.

Brent oil futures rose 0.5% to $87.89 a barrel, while West Texas Intermediate crude futures rose 0.4% to $80.33 a barrel by 22:45 ET (03:45 GMT). Both contracts rose 0.2% on Monday after a volatile session that saw crude sink to January lows.

Crude prices fell sharply last week as rising COVID-19 infections in China raised concerns over slowing demand in the world’s largest oil importer. The country introduced lockdowns in several major cities, including Beijing and Shanghai, as it struggles with a record-high rate of daily new infections.

China’s oil imports slowed substantially this year, and despite a surprise jump in October, are broadly expected to remain muted in the coming months. The country has also ramped up its export quotas, likely indicating a surplus in local stockpiles.

Investment bank Goldman Sachs slashed its oil price forecast for the year, citing the slowdown in China.

Also chipping away at crude prices were concerns over a U.S. recession, particularly as several Federal Reserve members suggested that U.S. interest rates were set to keep rising in the near-term.

Markets fear that a mix of stubborn inflation and high interest rates could hobble growth in the world’s largest economy. The OPEC recently cut its 2022 and 2023 oil demand forecasts citing similar concerns.

Strength in the greenback, as the Fed raises rates, is also expected to weigh on crude rates, which are priced in dollars.

On the other hand, tightening supply in Europe, especially as the west clamps down on Russian oil exports, could benefit crude oil towards the end of the year.

The OPEC’s recently announced supply cut was also seen going into effect this month, as several members began curbing shipments.............................................................
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Chinese carmakers target more European sales with five-star EVs.............................................................
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SOLIHULL, England (Reuters) - Chinese electric vehicle (EV) makers have set their sights on winning over European drivers and large corporate customers with more affordable cars that come with top safety ratings and lots of high-tech features.

In the last few months, several Chinese EVs have received five-star European New Car Assessment Programme (NCAP) ratings - an achievement that requires loading vehicles with active and passive safety features that go well beyond legal requirements.

More are coming.

"All Chinese EV makers want to achieve Euro NCAP five-star ratings in order to be more competitive in the European market," said Brian Gu, president of Chinese EV maker Xpeng (NYSE:XPEV).

Gu said Xpeng has spent the last three years building stores and service centres in Denmark, the Netherlands, Norway and Sweden - with some initial sales in Norway - before an official launch next year of its electric P7 sedan and G9 sports-utility vehicle (SUV) in the four countries.

Chinese EV makers have recognised that safety plays an incredibly important part of the sales process, said Matthew Avery, director at Thatcham Research, a British car research centre funded by insurers and a Euro NCAP board member.

Five-star Euro NCAP ratings are seen as key to overcoming residual European concerns over the quality of Chinese-made cars, after awful crash test failures in 2006 and 2007 created an impression that cars from China were unsafe.

Perhaps more importantly for sales, high safety ratings also open up the potentially huge corporate car fleet market for Chinese EV makers.

Fleet sales make up about half of all car sales in major markets including Germany, France and the United Kingdom, and many corporate buyers put a premium on safety.

"Fleet sales are very important and a lot of fleets have a mandatory five-star rating for buying cars," Avery said.

CAR RENTAL COMPANIES

What's more, many fleets want to switch to EVs fast to meet sustainability goals. But corporate fleets have struggled to get enough EVs in Europe as supply chain issues have pushed waiting times for some models to more than 12 months.

High demand for electric cars amid supply chain shortages has allowed European carmakers to raise EV prices and focus more on retail clients, rather than customers such as car rental firms that have traditionally been less profitable for them.

That has created a window of opportunity for Chinese EV makers that have already stolen a march on most foreign rivals in China, by far the world's biggest market for EVs.

In October, for instance, German car rental company Sixt said it would buy about 100,000 EVs from BYD, starting with its Atto 3 SUV which received the coveted Euro NCAP five-star rating the same month.

China's Great Wall Motors (GWM) received five-star ratings in September for its WEY brand Coffee 01 hybrid SUV and its ORA brand Funky Cat electric sedan.

European carmakers are also pursuing five-star ratings for their EVs and hybrids, from BMW's iX to Volkswagen (ETR:VOWG_p)'s ID.4 and ID.5. In October, Mercedes got the top rating for its EQE sedan and its driver-assistance features received the highest marks to date from Euro NCAP.

Chinese EV maker Aiways has yet to put its U6 electric crossover through its NCAP paces but it too is shooting for the highest rating on offer, said Alexander Klose, who heads the carmaker's operations outside China.

He said Aiways has invested in extra safety features for the U6 to open up opportunities for sales to European fleets, including rental car firms, when it goes on sale next year.

"There will be a natural demand for vehicles like ours that are fully equipped and come at very competitive prices," he said, adding that Aiways hopes to sell 30,000 EVs in Europe in 2023, up from about 5,000 this year.

BASIC REQUIREMENT

French auto consultancy Inovev said about 155,000 Chinese-made cars were sold in Europe in the first nine months of 2022, or 1.4% of the market. Chinese firms are on track to hit 150,000 cars this year, nearly double the 80,000 sold in 2021.

But almost half the Chinese cars sold were EVs, according to Inovev, giving them a 5.8% share of Europe's fully-electric vehicle market.

Inovev vice-president Jamel Taganza said all Chinese cars sold in Europe would be EVs within a few years, with more lower-cost models on the way.

By 2030, Inovev estimates EVs will make up 40% of Europe's new car sales and that Chinese brands will represent between 12.5% to 20% of that fully-electric market, with sales of between 725,000 and 1.16 million vehicles.

"This is a conservative forecast," Taganza said. "But it could increase more rapidly, especially if European carmakers do not answer the needs in Europe of affordable EVs."

Getting a five-star rating is expensive for automakers because it means investing in additional safety features from extra airbags to collision avoidance, driver-assistance and driver-monitoring systems.

Thatcham's Avery said Chinese EV makers have actively engaged with Euro NCAP and were eagerly making the investments necessary to land top ratings.

"Forget what you might think that Chinese means lower quality or lower safety performance," he said. "Their quality is now better than others."

BYD is launching three cars in a handful of European markets and will add more models and markets next year, all of which should have top safety ratings, said Michael Shu, managing director of BYD Europe.

"We think a five-star rating should be a very basic requirement," he said.

'LEVERAGING THAT ADVANTAGE'

Great Wall Motor's ORA Funky Cat, meanwhile, will launch in Britain, Germany, Ireland and Sweden later this year.

Starting around 32,000 pounds ($36,330) in Britain, or about 5,000 pounds cheaper than VW's ID.3, the Funky Cat's features include facial recognition to store seating preferences, driver-assistance systems, reverse camera and wireless phone charging.

Toby Marshall, UK sales and marketing director for GWM's ORA brand, said if a car is well made, laden with features, has a high safety rating and is competitively priced, it no longer matters where it was built.

"Those are the key ingredients that matter to car buyers," Marshall said, while showing off the Funky Cat at his office in Solihull in England's midlands.

Bill Russo, head of consultancy Automobility Ltd in Shanghai, said the problem for many international carmakers with was that they ceded the advantage to Chinese rivals when it comes to building lower-cost EVs.

"The one place on the planet you'll find an affordable EV today is China," said Russo. "And they're leveraging that advantage."............................................................
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Asian stocks mixed, dollar finds footing as traders assess Fed outlook.............................................................
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TOKYO (Reuters) - Asian stocks were mixed on Thursday while the U.S. dollar stabilized and Treasury yields remained depressed as investors tried to assess the outlook for Federal Reserve policy following stronger-than-expected retail sales data.

Renewed expectations the Fed will keep hiking rates have increased concerns about the economic outlook. The U.S. Treasury yield curve remained deeply inverted in Tokyo trading, suggesting investors are bracing for recession.

Rhetoric from Fed officials has remained hawkish this week, as they sought to rein in recent market optimism that a pivot in the central bank's hawkish rate-hiking campaign might be close following cooler consumer and producer price data.

Fed Governor Christopher Waller said on Wednesday there is still a ways to go on rates, while San Francisco Fed President Mary Daly told CNBC pausing rate hikes is not yet part of the discussion.

The U.S. dollar was largely flat against a basket of major peers, finding its feet following a slide to a three-month trough earlier in the week. Safe-haven support it garnered early Wednesday from a deadly explosion in Poland faded, with NATO now saying the missile was a stray fired by Ukraine's air defences and not a Russian strike.

"Fed speakers were clear that a pause is not imminent," Ted Nugent, a markets economist at National Australia Bank (OTC:NABZY), wrote in a client note.

"Like the resilient spending numbers, (that) gave little succour for anyone looking for an imminent pivot," resulting in "a more cautious tone in markets," he said.

Japan's Nikkei was little changed, recovering from early, Wall Street-inspired losses, while the broader Topix index was up 0.4%.

However, Hong Kong's Hang Seng tumbled 1.35%, with its tech stocks plunging 2.91%.

Mainland Chinese shares also declined, with blue chips falling 0.57%.

Australia's benchmark added 0.19%. South Korea's Kospi dropped 0.58%.

MSCI's broadest index of Asia-Pacific shares outside Japan slid 0.77%.

U.S. e-mini stock futures, though, indicated a 0.3% rebound at the reopen following the S&P 500's 0.8% overnight retreat.

U.S. 10-year Treasury yields hovered near the six-week low at 3.671% hit overnight in Tokyo trading, while the two-year yield continued to consolidate near its lowest level since Oct. 28 at around 4.38%.

The dollar index - which measures the currency against six major counterparts - added 0.07% to 106.34, stabilizing following its slide to as low as 105.30 on Tuesday following the release of producer price inflation numbers.

Money markets currently give 93% odds that the Fed will slow to a half-point rate hike on Dec. 14, with just 7% probability of another 75 basis point increase. However, traders still see the terminal rate as close to 5% by next summer from the currency policy rate of 3.75-4%.

Gold was slightly lower at $1,772.62 an ounce after safe-haven demand ebbed.

Crude oil continued to decline in Asia after settling more than a dollar lower overnight after Russian oil shipments via the Druzhba pipeline to Hungary restarted and as rising COVID-19 cases in China weighed on sentiment. [O/R]

Brent crude futures dropped by 62 cents, or 0.7%, to $92.24 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 65 cents, or 0.8%, to $84.94 a barrel..............................................................
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