Brent crude LCOc1 futures were up 37 cents at $41.08 a barrel at 0846 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 25 cents to $38.21 a barrel.

Both benchmarks were down about 2% earlier in the session.

Worries about fuel demand rose after a surge in coronavirus cases led Beijing to cancel flights and shut schools and several U.S. states, including Texas, Florida and California, reported sharp increases in new cases.

A rise in U.S. crude stockpiles to a record high for a second week in a row weighed on sentiment, but U.S. government data showed lower inventories of gasoline and distillates, which includes diesel and heating oil, indicating higher demand.

“Gasoline and distillates both fell unexpectedly… Add to that that oil producers are still feeling the impact of the rout from March and April as (U.S.) crude oil output is now down at 10.5 (million barrels per day) and you might conclude that bulls have a case in point,” PVM oil analysts said in a note.

The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, are expected to hold an online meeting later on Thursday to discuss the future of a record 9.7 million barrels per day (bpd) output cut.

OPEC+ compliance with crude production cut commitments in May was 87%, two OPEC+ sources said on Wednesday.

Iraq and Kazakhstan are expected to present their plans for production cuts and compensation for overproduction to a meeting of the OPEC+ ministerial committee, known as the JMMC, on Thursday, one OPEC+ source said.

OPEC warned in a monthly report the market would remain in surplus in the second half of 2020 even as demand improves, as it now expects supply from outside the group to be about 300,000 bpd higher than previously thought.

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(Reuters) – The U.S. Transportation Department said on Wednesday it had fined Panama’s Copa Airlines (CPA.N) $450,000 for unlawfully transporting passengers between the United States and Venezuela via a stopover point and ordered the airline to avoid future similar violations.

The department said Copa sold more than 5,000 tickets for air travel between the United States and Venezuela and transported more than 15,000 passengers on these itineraries after the order took effect.

The department said Copa told officials it understands the seriousness of the matter and took considerable steps to avoid future violations.

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U.S. Federal Reserve Chairman Jerome Powell doused some of the market’s optimism on Tuesday with a rather bleak picture of the U.S. economy, while also reinforcing hopes for continued policy support.

Discouraging news over the past 24 hours — record-high coronavirus infections in six U.S. states, clashes between Indian and Chinese troops in the western Himalayas and new coronavirus cases in Beijing — also undermined sentiment.

Against a basket of other currencies, the dollar edged 0.1% lower to 96.89. The index has bottomed out after reaching a three-month low last week, but the broad outlook remains pessimistic.

“Market players are looking to, with caution, how critical the impact from any second wave of infections on the economy will be,” said Kazushige Kaida, head of FX sales at State Street. “It’s not that markets are pessimistic… But the length of time people hold their positions is getting shorter.”

The Fed’s Powell said that a full U.S. economic recovery will not occur until the American people are sure the novel coronavirus epidemic has been brought under control.

That remains far from certain, with new coronavirus infections rising to record highs in six U.S. states, including populous Texas and Florida, on Tuesday.

China also sharply ramped up restrictions on people leaving Beijing on Tuesday in an effort to stop the worst coronavirus flare-up since February from spreading.

The Fed’s cautious message also checked the momentum in the euro, which held below a three-month high of $1.1422 reached last week. It was trading at $1.1286 on Wednesday after rallying nearly 5% since a Franco-German proposal for a recovery fund in late May.

Brexit developments continued to hobble the British pound. Sterling was steady around $1.2576, below a three-month high above $1.28 hit earlier this month.

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(Reuters) – The U.S. Department of Commerce on Tuesday posted a new rule that allows U.S. companies to work with China’s Huawei to develop standards for 5G and other cutting-edge technologies, despite restrictions on doing business with the telecommunications equipment maker.

Reuters reported on Monday that the rule had been approved and sent to the Federal Register. It is scheduled to be formally published in the register, the official U.S. government journal, on Thursday.

The rule amends the Huawei “entity listing,” which restricts sales of U.S. goods and technology to the company. The U.S. placed Huawei on the list a year ago, citing national security concerns.

Industry and government officials have said the restrictions backfired in standards settings. With U.S. companies uncertain what technology or information they could share, they said, Huawei gained a stronger voice.

Huawei and 114 of its foreign affiliates on the Entity List “continue to participate in many important international standards organizations in which U.S. companies also participate,” the new rule says.

“As international standards serve as the building blocks for product development and help ensure functionality, interoperability and safety of the products,” the rule explains, “it is important to U.S. technological leadership that U.S. companies be able to work in these bodies in order to ensure that U.S. standards proposals are fully considered.”

Huawei said in a statement it wants to continue standards discussions with counterparts, including those in the United States.

“Inclusiveness and productive dialogue will better promote the formulation of technical standards and encourage the healthy development of the industry and the global economy,” the company statement said.

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SINGAPORE (Reuters) – Southeast Asian ride-hailing and payments firm Grab said on Tuesday it will lay off more than 300 employees due to the impact of novel coronavirus, in the latest setback to major backer SoftBank Group Corp (9984.T).

Southeast Asia’s most valuable startup with a valuation of $14 billion informed staff of the cuts at a townhall meeting, according to people with knowledge of the matter.

CEO Anthony Tan told staff in a note which was shared with Reuters the company would cut about 5% of its headcount or about 360 employees.

Singapore-based Grab, which is active in eight countries, did not face capitalisation issues and would be “sunsetting non-core projects, consolidating teams and pivoting to focus on deliveries”, a spokeswoman said.

Grab currently has $3 billion in reserves, according to a source with knowledge of the matter.

The layoffs are the latest restructuring at a SoftBank Group Corp (9984.T) portfolio company.

“Venture-backed companies are responsible for maximising growth while being financially sustainable in light of volatile financial markets, so re-balancing of resources in the long journey sometimes becomes critical to their success,” said Varun Mittal, who heads the emerging markets fintech business at consultancy EY.

The ride-hailing industry has been battered by the pandemic, with SoftBank-backed Uber (UBER.N) and Ola cutting jobs and costs.

The impact in Southeast Asia has been severe, with 11 drivers for Grab and rival Gojek telling Reuters last week they had their income slashed by more than half during the outbreak.

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U.S. West Texas Intermediate crude rose 86 cents, or 2.4%, to settle at $37.12 a barrel. Brent crude gained 99 cents, or 2.6%, to settle at $39.72 a barrel.

Prices rebounded from early losses after the energy minister of the United Arab Emirates voiced confidence that OPEC+ countries with poor compliance to agreed cuts would meet their commitments and reported signs oil demand was picking up.

“That seemed to take away some of the market’s negativity,” said Phil Flynn, senior analyst at Price Futures Group. “It’s fear about the coronavirus versus the reality of what’s happening on the ground.”

An OPEC-led monitoring panel will meet Thursday to discuss whether countries have delivered their share of output reductions.

Iraq agreed with its major oil companies to cut crude production further in June, Iraqi officials working at the country’s giant southern oilfields told Reuters on Sunday.

Saudi Arabia has also reduced the volume of July-loading crude it will supply to at least five buyers in Asia, sources said.

Also positive for prices, China’s crude oil throughput in May rose 8.2% from a year earlier as independent refiners increased processing to meet the recovery in fuel demand following the easing of lockdowns.

U.S. oil output from seven major shale formations is expected to decline in July to the lowest since July 2018, the U.S. Energy Information Administration said on Monday.

Still, fuel demand concerns have weighed on market sentiment. More than 25,000 new coronavirus cases were reported on Saturday in the United States, where more than 2 million people have been infected, about a quarter of the cases worldwide.

After nearly two months with no new infections, Beijing officials reported 79 coronavirus cases over the past four days, sparking fears of an outbreak in one of the world’s most populous cities.

Economic data from China suggested the world’s second-biggest economy was struggling to get back on track. Industrial output in May expanded 4.4% from a year earlier, less than expected.

Germany’s economic output will also fall further in the second quarter, its economy ministry said on Monday.

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FRANKFURT (Reuters) – Commerzbank (CBKG.DE) will announce “considerably” more branch closures and job cuts when it lays out its strategy review in August, a member of the bank’s supervisory board said on Monday.

Stefan Wittmann, who represents labour on the supervisory board and is a trade union secretary at the Verdi union, also criticized a public campaign for change by top investor Cerberus launched last week.

Cerberus is demanding two seats on the supervisory board at Germany’s second-biggest bank, as well as cost cuts and a strategy shift. Commerzbank rejected the demands for the board seats.

“Cerberus’ approach is rude and inappropriate,” Commerzbank supervisory board member Stefan Wittmann told Reuters.

Commerzbank is currently in the process of identifying more cost cuts and will announce plans when it releases second quarter earnings in August.

Wittmann gave a sense of what is to be expected.

“There will be considerably more branch closures and more job losses than previously announced,” he said.

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WASHINGTON (Reuters) – Systemic racism and high unemployment levels among black and Hispanic Americans create a drag on the U.S. economy, Dallas Federal Reserve President Robert Kaplan said on Sunday.

“A more inclusive economy where everyone has an opportunity will mean faster workforce growth, faster productivity growth and will grow faster,” Kaplan said on CBS’ “Face the Nation.”

Kaplan said he agreed with his counterpart at the Atlanta Federal Reserve Bank, Raphael Bostic – the Fed’s only African-American policymaker – who on Friday called for an end to racism and laid out ways the U.S. central bank can help.

The comments by the Fed policymakers follow weeks of nationwide protests against police brutality and racism after the May 25 death of George Floyd, a black man, in Minneapolis. The white police officer who knelt on Floyd’s neck has been fired and charged with murder.

“It’s in the interest of the U.S.,” Kaplan said. “The fastest-growing demographic groups in this country are blacks and Hispanics. If they don’t participate equally, then we’re going to grow more slowly.”

Kaplan said the Dallas Fed and the Federal Reserve System have been working for years to improve skills training and education for blacks and Hispanics, who have long endured a higher level of unemployment than whites.

Overall unemployment, which spiked dramatically during the shutdowns, is on the way down, Kaplan said, adding that he expects to see positive job growth starting this month.

He said fiscal policy, which is set by Congress, will be a critical element of the recovery, including unemployment benefits, possibly “restructured to create more incentives for people to go back to work,” and benefits to state and local governments.

White House economic adviser Larry Kudlow cited positive signs as the economy reopens, telling CNN, “We are in the recovery stage.”

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Value stocks, which typically sport lower price-to-earnings valuations, tended to underperform growth stocks during the bull market that ran for more than a decade and ended this year.

That pattern has recently reasserted itself: The S&P 500 Value index was up just 4.5% over the last month compared to a 5% gain in the S&P 500 Growth index.

Yet better-than-expected readings on U.S. employment and other indicators have money managers thinking about lightening up on the stocks driving the rally in favor of sectors such as financials and energy. A sustained bounce in these economically sensitive areas could be an encouraging signal for the nascent recovery, investors said.

The coronavirus pandemic “reset the economy back to a recession, and now you’re in a brand new economic cycle. That typically favors value names,” said Ernesto Ramos, head of equities at BMO Global Asset Management.

Ramos has been buying shares of companies he believes will get a boost when consumer spending rebounds, including Sprouts Farmers Market Inc. Shares of the company trade at a trailing price two earnings ratio of 15.5, well below the broad S&P 500’s trailing ratio of 22.2. He also owns shares of PepsiCo Inc and U.S. supermarket chain Kroger Co.

Phil Orlando, chief equity market strategist at Federated Hermes, has been shifting away from technology and healthcare stocks and into financial and energy companies. Technology stocks in the S&P 500 are up nearly 30% since the start of April, while finanical stocks are up 20%.

“We think they will provide leadership here as the market starts to shift from a risk-off position to more of a risk-on,” he said.

Investors will watch a raft of U.S. data next week including retail sales and business inventories for more evidence of an economy on the mend. On Thursday, the S&P 500 notched its biggest daily drop since mid-March after a cautionary economic forecast from the U.S. Federal Reserve and concerns over a possible resurgence of Covid-19.

“We’ve always said that what started with the virus will end with the virus,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management.

Increased uncertainty over growth or the pandemic’s trajectory could push investors back into the growth companies that have delivered performance in recent months, even as the U.S. economy reeled from countrywide shutdowns, she said.

Despite those concerns, some fund managers who have benefited from the jump in momentum stocks are becoming more cautious, expecting that value will soon regain favor.

“In the short-term, people have been hiding out in a handful of names,” said Mike Lippert, portfolio manager of the Baron Opportunity Fund. “Sooner or later we will get a real economic recovery and from that point the stocks that were thrown out will lead the market.”

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The inquiries focus at least in part on how Amazon treats sellers in its online marketplace, the Wall Street Journal and the New York Times reported on Friday.

Amazon declined to comment on the report of an investigation by California. It was not immediately available for comment outside regular market hours on the Washington review report.

The reports said California state is reviewing Amazon’s practices on selling its own products in competition with third-party vendors. Amazon said its in-house products only account for about 1% of its total annual retail sales.

Washington state is also investigating whether Amazon makes it harder for sellers to list their products on other websites, the NYT reported. The inquiries did not appear to be in advanced stages, the NYT report added, citing sources.

A spokeswoman for the Washington attorney general told the NYT that the office did not confirm or deny investigations. California attorney general’s office told the NYT that it does not comment on any pending or potential investigations.

The California and Washington attorney generals were not immediately available when approached by Reuters for comment.

The U.S. House of Representatives Judiciary Committee last month called on Chief Executive Jeff Bezos to testify about allegations that Amazon uses data from its own third-party sellers to create competing products.

Amazon is already being investigated by the European Commission for its dual role as a marketplace and as a rival, after complaints from traders.

It may also face EU antitrust charges in the coming weeks over its use of data on merchants with whom it competes on its platform, Reuters reported on Thursday, citing a source.

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