…As Oil prices mixed after coronavirus concerns, undercut support from lower U.S. crude stocks***
Toyota Motor forecasts its net profit for the current financial year will drop 64.1 per cent from the previous year to 730 billion yen ($6.9 billion) due to the fallout from the COVID-19 pandemic, it said on Thursday.
Japan’s largest carmaker maintained its operating profit outlook at 500 billion yen and sales are estimated at 24 trillion yen for the year ending March 31, 2021.
In May, Toyota withheld its net earnings forecast due to the effects of the coronavirus pandemic.
For the April to June period, the manufacturer of the Prius hybrid and Lexus luxury vehicles posted a net profit of 158.8 billion yen, down 74.3 per cent from the same period last year.
Toyota also saw operating profit for the quarter plunged 98.1 per cent to 13.9 billion yen, while sales were down 40.4 per cent at 4.6 trillion yen.
The number of vehicles sold worldwide during the quarter plummeted 50 per cent to 1.15 million units, Toyota said.
While Toyota predicts the global automobile market will gradually recover and return to the same level as the previous year during the end of 2020 and the first half of 2021, “the impact of COVID-19 is wide-ranging, significant and serious.
“It is expected that weakness will continue for the time being,’’ the company said in a statement.
In another development, oil prices were mostly flat, on Thursday, as a boost from lower-than-expected U.S. crude stocks that lifted the market to five-month highs in the previous session gave way to fuel demand concerns amid rising coronavirus infections.
U.S. West Texas Intermediate (WTI) crude futures eased three cents, or 0.1 per cent, to $42.16 a barrel by 0436 GMT, while Brent crude futures rose nine cents or nearly 0.2 per cent to $45.25.
The two benchmark contracts rose more than one per cent on Wednesday to their highest since March 6, completing a four-day rally, after the Energy Information Administration reported a much bigger than expected drop in U.S. crude stockpiles.
However, investors remained wary of rising U.S. refined product inventories at a time when U.S. central bankers said the resurgence in cases was slowing the economic recovery in the world’s biggest oil consumer.
EIA data showed distillate stockpiles, which include diesel and heating oil, climbed to a 38-year-high and gasoline inventories unexpectedly rose for a second week in a row.
“It is difficult to get overly constructive towards the oil market with demand having stalled and this product overhang,’’ ING Economics said in a note on Thursday.
The U.S. EIA calculated gasoline demand remains around 8.6 million barrels per day, around 10 per cent lower than a year earlier.
This is just as the U.S. driving season, which ANZ Research called the “world’s biggest seasonal demand period’’, was winding down.
Still, recent declines in the U.S. dollar have supported higher oil prices.
Since oil futures are priced in dollars, crude prices tend to rise to offset the weaker currency.
“Since oil is priced in dollars, that is good for oil,’’ AxiCorp market strategist, Stephen Innes, said in a note.
The dollar logged its biggest monthly percentage fall in a decade against a basket of six currencies in July and a Reuter’s poll found analysts expect it to continue falling into next year.
dpa with additional reports from Reuters