By Nia Williams

(Reuters) -Oil prices fell on Monday as questions over China’s economy outweighed OPEC+ output cuts and the seventh straight drop in the number of oil and gas rigs operating in the United States.

Brent crude settled down 48 cents, or 0.6%, to $76.13 a barrel while U.S. West Texas Intermediate (WTI) crude was down 49 cents, or 0.7%, to $71.29 at 1935 GMT. Trading volumes were thin due to a U.S. holiday.

Both contracts ended last week with gains of more than 2%.

A number of large banks have cut their forecasts for China’s 2023 growth in gross domestic product after May data last week showed the post-COVID recovery in the world’s second-largest economy was faltering.

China is widely expected to cut its benchmark loan rates on Tuesday after a similar reduction in medium-term policy loans last week to shore up a shaky economic recovery.

The oil market is watching for further signs of whether the global economy will pick up, said Jorge Leon, Rystad Energy’s senior vice president.

“Much will depend on China’s economic performance in the second half of this year and the effectiveness of the country’s recently announced stimulus measures, and on the ability of the U.S. and Europe to avoid an economic slowdown amid interest rates hikes,” Leon wrote in a research note.

However, China’s refinery throughput rose in May to its second-highest total on record, helping to boost last week’s gains, and U.S. energy firms cut the number of working oil and natural gas rigs for a seventh week in a row for the first time since July 2020.

Rising Iranian oil exports also weighed on prices. Iran’s crude exports and oil output have hit record highs in 2023 despite U.S. sanctions, according to consultants, shipping data and a source close to the matter, adding to global supply when other producers are limiting output.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia this month agreed on a new oil output deal and the group’s biggest producer, Saudi Arabia, also pledged to make a deep cut to its output in July.

“Sentiment-wise in the crude oil market, traders are fairly bearish,” said Daniel Ghali, a commodity strategist at TD Bank. “But from a broader perspective, the analyst community is still looking for pretty significant deficits in coming months.”

(Reporting by Nia Williams in British Columbia;Additional reporting by Ahmad Ghaddar in London, Katya Golubkova in Tokyo and Emily Chow in Singapore;Editing by David Goodman, Kirsten Donovan, Lisa Shumaker and Alison Williams)

By Friederike Heine, Supantha Mukherjee and Andreas Rinke

BERLIN/STOCKHOLM (Reuters) -Intel will spend more than 30 billion euros ($33 billion) to develop two chip-making plants in Magdeburg as part of its expansion push in Europe, a deal Chancellor Olaf Scholz hailed on Monday as Germany’s biggest ever foreign investment.

Berlin has agreed subsidies worth nearly 10 billion euros with the U.S. chipmaker, a person familiar with the matter said, more than the 6.8 billion euros it had initially offered Intel to build two leading-edge facilities in the eastern city.

Intel CEO Pat Gelsinger said he was grateful to the government and the state of Saxony-Anhalt, where Magdeburg is located, for “fulfilling the vision of a vibrant, sustainable, leading-edge semiconductor industry in Germany and the EU”.

Under Gelsinger, Intel has been investing billions in building factories across three continents to restore its dominance in chipmaking and better compete with rivals AMD, Nvidia and Samsung.

“Today’s agreement is an important step for Germany as a high-tech production location – and for our resilience,” Scholz said after Monday’s signing.

“With this investment, we are catching up technologically with the world’s best and expanding our own capacities for the ecosystem development and production of microchips.”

The German deal marks Intel’s third big investment in four days. It unveiled plans on Friday for a $4.6 billion chip plant in Poland, another European Union member, while Israel said on Sunday that Intel would spend $25 billion on a factory there.

Globally, semiconductor manufacturing is expected to become a trillion-dollar industry by 2030, expanding from $600 billion in 2021, according to McKinsey.

Both the United States and Europe are trying to lure big industrial players via a mix of state subsidies and favourable legislation, with Germany concerned about losing appeal as a place to invest.

The government in Berlin is investing billions of euros in subsidies to lure tech companies, amid growing alarm over supply chain fragility and dependence on South Korea and Taiwan for chips.

ATTRACTIVE LOCATION

“The size of Intel’s reaffirmed and increased commitment to its expansion in Magdeburg speaks louder than words about Germany’s appeal as a high-tech business location,” said Robert Hermann, CEO of government agency Germany Trade & Invest.

Berlin is also talking with Taiwan’s TSMC and Sweden’s electric vehicle battery maker Northvolt about setting up production in Germany, having already convinced Tesla to build its first European gigafactory there.

Frankfurt-listed Intel shares were 0.3% higher at 1534 GMT.

Monday’s agreement includes what Intel said was increased government support, including incentives, reflecting the expanded scope of the project since it was first announced in March 2022.

Initially, Intel wanted to invest 17 billion euros in the Magdeburg plant, an amount that has nearly doubled to more than 30 billion.

“This shows: Germany is a highly attractive location. We play at the forefront of global competition and secure sustainable and qualified jobs and value creation,” Economy Minister Robert Habeck said.

The first facility in Magdeburg is expected to enter operation 4-5 years after the European Commission’s approval of the subsidy package, Intel said.

About 7,000 construction jobs will be created in the first expansion, plus around 3,000 high-tech jobs at Intel and tens of thousands of jobs across industry, the U.S. chipmaker said.

Intel announced plans last year to build a big chip complex in Germany and facilities in Ireland and France as it seeks to benefit from easier European Commission funding rules and subsidies. The EU is trying to reduce its dependence on U.S. and Asian chips supply.

Gelsinger had told Reuters on Friday that the gap between what Germany had offered in subsidies and what Intel needed was too big but said he expected to reach an agreement, adding that his request was to be cost competitive.

“We lost this industry to Asia, we have to be competitive if we’re going to bring it back,” he said.

($1 = 0.9150 euros)

(Additional reporting by Maria Martinez and Riham Alkousaa; Writing by Christoph Steitz; Editing by Rachel More, Jason Neely, Sharon Singleton and Catherine Evans)

By David Shepardson

WASHINGTON (Reuters) -U.S. auto safety regulators are investigating nearly 40,000 Hyundai Ioniq 5 electric vehicles over reports of power loss while driving tied to a battery charging issue.

The National Highway Traffic Safety Administration’s preliminary investigation covers 2022 model-year vehicles after it received 30 consumer complaints alleging a loss of acceleration. The agency said many consumers reported a loud popping noise followed by a warning displayed on their dashboard, and immediately experienced a loss of power that ranged from a reduction in acceleration to a complete loss.

NHTSA said it learned from Hyundai the failure is related to the Integrated Charging Control Unit (ICCU) responsible for powering both the main electric vehicle and low-voltage 12-volt batteries.

A preliminary review indicates too much current within the unit can damage transistors, resulting in the inability to recharge the 12V battery, NHTSA said.

Hyundai said Monday it is launching a service campaign in July that will update impacted vehicles’ software and replace the ICCU if necessary. “We value our cooperative relationship with NHTSA and have engaged in frequent, open and transparent dialogue with the agency on this topic,” the Korean automaker said, adding it is fully cooperating.

NHTSA conducted several owner interviews confirming a range of loss of power and varying time intervals between the warning message and power loss but did not report any crashes or injuries tied to the issue.

One complaint reported a driver traveling 75 miles (120 km) per hour on a highway using advanced highway assist and “the car became completely unresponsive.” The driver added that there was a semi-trailer truck behind him “and one to my right in the slow lane. The car stopped accelerating, and I was unable to resume driving. I was forced to coast to a stop on the side of the highway.”

According to another complaint in February, a driver on a highway in Santa Maria, California, heard a loud pop coming from my car and “within a few seconds my car lost speed rapidly, from 55 mph to 25 then a second later 22 mph.”

(Reporting by David Shepardson; editing by Jonathan Oatis and Chizu Nomiyama)

By Shreyashi Sanyal and Bansari Mayur Kamdar

(Reuters) -European shares fell on Monday, as investors awaited further stimulus measures from China to revive demand and eyed testimony from Federal Reserve Chair Jerome Powell this week for more cues on the U.S. central bank’s rate outlook.

The pan-European STOXX 600 index shed 1.0%, while Germany’s DAX index also dropped 1.0% after closing at a record high in the previous session.

Trading was thin on Monday with U.S. markets shut for a public holiday.

Shares of lab supplies maker Sartorius plunged 15.7% after the company cut its 2023 revenue and margin forecasts on Friday.

Medical gear maker Getinge slumped 16.2% after saying it faced additional quality and supply chain problems that would hit the Swedish group’s second-quarter profit and also impact the business for the rest of 2023.

The focus remains on geopolitics after China and the United States agreed to stabilize their intense rivalry so it doesn’t veer into conflict but failed to produce any major breakthrough, while China’s cabinet met on Friday to discuss measures to spur growth in the economy, state media reported.

China is also widely expected to cut key lending benchmarks on Tuesday in the first such easing in 10 months, a Reuters survey showed, as authorities seek to shore up a slowing recovery in the world’s second-largest economy.

“There has been a lack of a more euphoric reaction in China-related markets to the latest easing measures,” strategists at Jefferies wrote in a client note.

“Given such market action and the relatively disappointing data, the question is whether more aggressive stimulus is coming.”

China-exposed luxury giant LVMH, which is Europe’s most valuable firm, fell 1.8%, while the basic resources index dropped 2.2% amid demand worries from the top metals consumer.

MTU Aero Engines climbed 4.2% after raising its earnings forecast for 2023, while the STOXX Europe aerospace & defence index added 0.4%.

Airbus shares edged up on announcing the biggest plane deal in history, with an order for 500 narrow-body jets from Indian budget carrier IndiGo.

The STOXX 600 is coming off its best performance in over two months, as investors await testimony from Fed Chair Powell on Wednesday and Thursday for further cues on the monetary policy outlook for the world’s largest economy.

Meanwhile, rate hikes are also expected in Britain, Norway and Switzerland this week.

(Reporting by Shreyashi Sanyal and Bansari Mayur Kamdar in Bengaluru; Editing by Savio D’Souza, Eileen Soreng and Susan Fenton)