08.23.18

Google and Apple face backlash over app store tax

BY Bloomberg 2 MINUTE READ

The app stores of Apple Inc. and Google are facing a growing number of complaints from companies saying the tech giants are collecting too high a tax for connecting consumers to developers’ wares.percent by the same measure, according to the brokerage firm. The technology giants are expected to earn more than $50 billion each, before interest and tax, in 2020, according to analyst forecast data compiled by Bloomberg.


Netflix Inc. and video game makers Epic Games Inc. and Valve Corp. are among companies that have recently tried to usurp the app stores or complained about the cost of the tolls Apple and Google charge. 
Ben Schachter, an analyst at Macquarie said, “The dollars are just getting so big. They just don’t want to be paying Apple and Google billions.”
Apple and Google launched their app stores in 2008, and they soon grew into powerful marketplaces that matched the creations of millions of independent developers with billions of smartphone users. In exchange, the companies take up to 30 percent of the money consumers pay developers.
The companies have won praise for helping to build an app economy that’s projected to grow to $157 billion in 2022, from $82 billion last year. 
Apple and Google take 30 percent of subscription dollars and in-app purchases made on iPhones and Android phones using Google’s app store (effectively all those outside China). About two years ago, the companies lowered that cut to 15 percent in some cases.
If app store commissions fell to a blended rate of 5 percent to 15 percent, that would knock up to 21 percent off Apple’s earnings, before interest and tax, by fiscal 2020, Macquarie estimated. Google could lose up to 20 percent by the same measure, according to the brokerage firm.
This is particularly worrying for Apple investors, who are expecting the App Store to support the growth of the company’s services business. 
Valve’s Steam planned to release a free iPhone app that let gamers keep playing while away from their computers. Apple blocked the app. Afterwards, the tech giant updated its app review guidelines to ban anything that looks like an app store within an app or gives users the ability to “browse, select, or purchase software not already owned or licensed by the user,” according to Reuters.
Fortnite has grossed $200 million (R2,8 billion) on the Apple App Store since its release there in March, according to Sensor Tower. Apple could make as much as $135 million (R1,93 billion) in fees from the title, Sensor Tower estimates, while Google misses out on at least $50 million (R717 million).
Only the most popular online services can risk not being in Apple and Google’s app stores. 
According to Branch co-founder Austin, this just shows how broken the system is. Most developers want to use the app stores, but some are reluctant to pay Apple and Google, so they have to take their chances on the web, he said. 
– BLOOMBERG

WATCH: Nikon reveals first mirrorless cameras

BY Bloomberg 3 MINUTE READ

Nikon Corp. unveiled its first full-frame mirrorless cameras, seeking to make up lost ground against Sony Corp. in the professional photography market.


The new Nikon Z7 and Z6 devices will feature new lenses and lens mount, and will be lighter than the current pro-grade cameras, the company said.

The 440,000 yen ($4,000) Z7, which will have a 45.7 megapixel sensor, will go on sale in late September, followed by the Z6, which will have 24.5 megapixels, cost 270,000 yen and hit stores in November. “We will deliver new value to the mirrorless market,” Nikon President Kazuo Ushida said at a media conference in Tokyo on Thursday.

With Nikon’s entry, Sony will no longer have the only high-grade mirrorless cameras that excel at capturing sharp images of fast-moving objects. Canon Inc. has also said that it’s considering its own model, setting the stage for a battle for professionals and enthusiasts. Although smartphones have decimated digital-camera sales, the three Japanese companies benefit from the branding and sales boost that comes with being the main suppliers of high-end cameras and lenses for news and sports events.
“Mirrorless is no longer a niche product,” said Stephen Baker, a consumer-technology analyst at researcher NPD. “It offers advantages in size and weight and battery that make mirrorless a very competitive premium technology.”
While Nikon and Canon dominated the pro market for decades, first with film and then with digital single-lens reflex (DSLR) cameras, it’s becoming clearer that devices without the mirror-and-prism system offer significant benefits. Thanks to advanced image sensors and sophisticated software, mirrorless systems can grab light faster and stay in focus, making it easier to capture crisp images of fast-moving objects.
“We will aim for the No. 1 spot in the mirrorless market,” said Nobuyoshi Gokyu, the chief of Nikon’s camera business. Asked about how the Z-series will stack up against Sony’s Alpha line of full-frame mirrorless cameras, he touted its optical performance, including the lens mount, which allows for the use of older Nikon lenses, with an adapter in some cases. “We believe we can lead the future in mirrorless.”
Mirrorless cameras have been around for more than a decade, but Sony’s efforts in recent years to embed them with the larger full-frame image sensors — the chips that convert light particles into digital bits — have put them on par with SLRs in terms of picture quality. The design also makes cameras lighter, smaller and quieter — important attributes for pro shooters. Nikon will continue making SLR cameras alongside the new devices, Gokyu said.
The new mirrorless designs have been a rare bright spot for the $11 billion industry, where digital camera shipments have plummeted 80 percent in the past decade, as more people use smartphones to take pictures. Mirrorless cameras now account for about a third of the sector’s revenue, up from 9 percent in 2012, according to industry body CIPA.
Source: Bloomberg

Nikon and Canon actually already offer mirrorless cameras, but they are aimed at consumers and amateur photographers. Nikon had delayed a push into the full-frame mirrorless cameras on concerns that it would cannibalize its existing SLR lineup, according to NPD. As a result, Nikon’s share of the combined SLR and mirrorless camera has fallen to about a quarter, which is about half its position a decade ago, according to company estimates.
Cameras and lenses now account for 41 percent of Nikon’s operating profit, down from 62 percent a decade ago. The Tokyo-based company has turned to precision-measurement tools and medical cameras, although shares are still trading at less than half of their peak in late 2007. Nikon shares rose less than 1 percent on Thursday, and are down about 8 percent this year.
Industry insiders are expecting Nikon’s main rival Canon to unveil its own full-frame mirrorless camera soon, setting the stage for a three-way battle in the professional photography market. Other camera makers are also stepping up investment, with Fujifilm Holdings Corp. announcing last month it will boost lens production by 70 percent in 2020 due to growing demand for mirrorless cameras.
– BLOOMBERG
08.21.18

Apple may launch a low-cost MacBook

BY Bloomberg 3 MINUTE READ

Apple Inc will release a new low-cost laptop and a professional-focused upgrade to the Mac mini desktop later this year, ending a drought of Mac computers that has limited sales of the company’s longest-running line of devices, according to people familiar with the plans.

The new laptop will look similar to the current MacBook Air but will include thinner bezels around the screen.

 The display, which will remain about 13-inches, will be a higher-resolution “Retina” version that Apple uses on other products, the people said. They asked not to be identified discussing products still in development.

Apple spokesman Bill Evans declined to comment.

The current MacBook Air, which costs $1,000, remains Apple’s only laptop without a high-resolution screen. The MacBook Air was last updated with a faster processor option last year, but hasn’t seen a major overhaul in several years.

The 12-inch MacBook launched in 2015 was seen as a replacement to the MacBook Air, but its $1,300 starting price put it out of reach for some consumers. 

The new MacBook Air will be geared toward consumers looking for a cheaper Apple computer, but also schools that often buy laptops in bulk.

When Apple releases new Macs in the fall, it often does so in October, following the launch of new iPhones. 

The company is planning to debut three new iPhones, Apple Watches with larger screens, and new iPad Pros later this year, other people familiar with the plans said.

The Mac has been a steady seller, representing more than 11 percent of Apple sales in the last fiscal year, ahead of the iPad. However, some loyal users have complained that recent updates haven’t met their professional needs.

Apple has sought to address this by releasing a high-end iMac Pro and a new MacBook Pro with an updated keyboard and faster processor options.

Still, in the fiscal third quarter this year, the company said it sold 3.7 million Macs, the fewest in a quarter since 2010. And Apple lags other companies in the education market.

Chromebooks, cheaper laptops running Google’s Chrome operating system, accounted for 60% of devices shipped to K-12 US education institutions in the final quarter of 2017, according to Futuresource Consulting Ltd.

“HP and Lenovo have released products priced similarly to the MacBook Air, gaining share, and in order to remain competitive in that price point, we think a form-factor change is necessary,” Shannon Cross, an analyst at Cross Research, said.

“It should help them rebound some of their Mac sales as things have been getting a bit long on the tooth in terms of their Mac line as they’ve clearly been very focused on the iPhone and services businesses.”

Quanta Computer Inc. and Hon Hai Precision Industry Co. make the current generation of MacBooks and will make the new generation as well, the people familiar with Apple’s plans said.

Apple accounts for about one-third of Quanta’s revenue, according to analysts.

Apple is also planning the first upgrade to the Mac mini in about four years. It’s a Mac desktop that doesn’t include a screen, keyboard, or mouse in the box and costs $500. The computer has been favored because of its lower price, and it’s popular with app developers, those running home media centers, and server farm managers.

For this year’s model, Apple is focusing primarily on these pro users, and new storage and processor options are likely to make it more expensive than previous versions, the people said.

In addition to the new Mac models, Apple is preparing to launch macOS Mojave, a new version of its Mac operating system that adds new features for sorting files and the ability to run iPad apps like Apple News.

The company is also planning a new version of the Mac Pro, the company’s most high-end Mac, for next year, Apple has said.

– BLOOMBERG 

08.20.18

Amazon may soon introduce a live TV recorder

BY Bloomberg 2 MINUTE READ

Amazon.com Inc. is developing a new device that records live TV, working around cable providers and encroaching on TiVo Corp.’s market, according to a person familiar with the plans.

The device, dubbed “Frank” inside Amazon, is a new type of digital video recorder for the streaming era. It would include physical storage and connect to Amazon’s existing Fire TV boxes, the living room hub for the company’s online video efforts, according to the person. 

They asked not to be identified discussing unannounced product details. An Amazon spokeswoman declined to comment.

The Frank DVR has the same wireless technology that Amazon’s Echo speakers use to connect to Fire TV boxes. Users will be able to record live TV and stream the video to a smartphone so it can be watched later. 

That functionality is similar to offerings from TiVo and Dish Network Corp.’s Slingbox. Amazon hasn’t made a final decision on rolling out the streaming feature, the person said, noting that the plans could either be canceled or delayed.

TiVo shares fell as much as 10 percent in afternoon trading in New York.

Currently, Fire TVs stream live content via the Amazon Channels service, which includes programming from providers like HBO, but the box can’t store video locally. Amazon is also working to better highlight live content to Fire TV users.

The e-commerce giant’s Lab 126 research and development center is working on the DVR, the latest in a series of connected gadgets aimed at the home. The group created the Echo speaker and is building a home robot known as Project Vesta.

Amazon wants to occupy living rooms through its devices and services. The company has been investing in original movies, TV shows and live sports to make its Prime membership an alternative to streaming services like Netflix Inc.

 Prime members pay annual or monthly fees for shipping discounts, video and other perks. Customers who watch Amazon video content spend more on other company offerings and are more likely to renew memberships.

Amazon also plans to update its Fire TV stick — a smaller version of the Fire TV box — with newer software, the person added. It’s also looking to get Fire TV software and video content onto more TVs made by other companies. 

Right now, Amazon sells Fire TV sets built by Toshiba Corp. and Westinghouse, and is seeking more manufacturing partners to better compete with Roku Inc., which features its software in many TV models.

Fire TV streaming devices are among Amazon’s best-selling products. Earlier this year, Amazon teamed up with Best Buy Co. to sell Fire TV-branded televisions made by Toshiba and Insignia.

– BLOOMBERG

08.16.18

Airbnb to open 14 apartment complexes by 2020

BY Bloomberg 2 MINUTE READ

Airbnb Inc. is set to debut another almost-hotel—and, according to its development partner, it has many more to come. 

The latest project for the Silicon Valley home-rental behemoth is a branded apartment complex in Nashville, Tennessee.
 The property will be the company’s second announced Airbnb-branded building, and will lease apartments to a hybrid of long-term renters and short-term visitors.


The new project is a takeover of an existing 328-unit building, called the Olmsted, in the SoBro neighborhood of downtown Nashville, a popular tourist destination for music lovers and bachelor parties. 

Airbnb’s partner Niido purchased the building last week. Under Niido’s new ownership, current residents of The Olmsted will be encouraged to sublet their units to Airbnb travelers for a maximum of 180 days per year.

 Airbnb and Niido will take 25 percent of the income the residents generate from home-sharing. The two companies will jointly rent a portion of the remaining vacant units through Airbnb’s platform for short-term stays. 

The concept, called “Niido Powered by Airbnb,” is part of a larger push by Airbnb to team up with real estate developers and facility managers, a group that has frequently argued that the home-sharing company enables renters to illegally sublet their apartments.

 In December, Brookfield Property Partners LP agreed to invest as much as $200 million into Niido’s efforts to turn residential apartment buildings into Airbnb-branded complexes.

By the end of 2019, Airbnb and Niido will open as many as 14 Airbnb-branded complexes across the country, said Cindy Diffenderfer, co-founder and chief marketing officer for Niido Powered by Airbnb. “We have a pretty aggressive growth strategy,” Diffenderfer said. 

A representative for Niido said the plans could change. Airbnb declined to comment.

As part of a push to broaden its appeal to more upscale clientele, Airbnb has added more hotels and hotel-like listings under the label Airbnb Plus. Those sites get regular visits from an inspector to confirm towels are fresh, sheets are matching and that appliances commonly found in hotels, including hair dryers and irons, are stocked. 

Working in partnership with real estate developers like Niido will help Airbnb offer a more hotel-like experience while operating out of homes and apartments. 

Not all residents are thrilled about their new neighbors, however. Earlier this year, Niido and Airbnb revealed a conversion of a 324-unit complex in Kissimmee, Florida. 

That prompted some residents to claim that they “didn’t agree to live in a hotel.” In Nashville, there was a similar surprise after Niido Powered by Airbnb informed Olmsted residents that their building would become a home-sharing complex late last week. 

“We’re excited to announce the recent acquisition of your beautiful community,” said a letter sent to residents on behalf of Diffenderfer and her partners at Niido. Residents already living in the building say they had no idea that Niido was taking over their leases or that their building would be turned into a permanent Airbnb complex.

 A representative for Niido said the real estate company is aware of the pushback and that they’re focused on, “building robust and satisfied communities in Nashville and Kissimmee.”

– BLOOMBERG
08.14.18

YouTube may offer cash to stars that promote its new features

BY Bloomberg 2 MINUTE READ

YouTube wants to prove to its biggest stars that the popular video service is more than just an advertising business.

The Google-owned company is paying talent upfront sums to use and promote new features, including paid memberships and an enhanced chat, according to people familiar with the deals.

The amounts range from tens of thousands to hundreds of thousands of dollars, said the people, who asked not to be identified as they are discussing terms that aren’t public.

YouTube introduced paid memberships, paid chats and a new merchandising programme earlier this year to placate top talent and keep up with major competitors.

Many people with large followings on the video site have complained that it doesn’t offer ways to make money beyond advertising and that YouTube’s efforts to shield advertisers from controversial content has hurt their sales.

Competitors have seized on that dissatisfaction. 

Facebook Inc. and its Instagram service have approached YouTube stars touting their new video features, while Amazon.com Inc’s Twitch and Patreon offer the chance to reduce reliance on advertising by selling subscriptions to fans who want early access to programming or the ability to use certain symbols in chats.

“If YouTube’s not scared of Twitch yet they should be now,” Casey Neistat, a popular filmmaker, and video blogger said in an interview with the Verge in May.

Merchandise Sales

YouTube has responded by making it easier for creators to sell merchandise and by expanding the number of users who can sell a monthly subscription. 

The new Super Chat lets fans of a given YouTube star pay to highlight their messages in live streams. Such features offer higher profit margins to YouTube and its parent company Alphabet Inc, which been looking to make money from sources beyond advertising.

“It’s something creators have been asking for, and we’ve built the products hand-in-hand with them,” Neal Mohan, YouTube’s chief product officer, said in an interview at the time.

“We have no new initiative in place,” the company said separately. “We have always invested in our creators’ success and will continue to do so to ensure they have a great experience and can find continued growth and opportunity on YouTube.”

YouTube has in the past offered talent direct payments whenever it felt pressured by new competition, such as Vessel, a short-lived video service that tried to strike exclusive deals with top YouTube talent. In 2014, YouTube paid bonuses to creators who agreed to provide their videos exclusively.

These new YouTube contracts don’t require people to post only on YouTube, but they do prohibit them from posting first on competitors’ sites.

– BLOOMBERG

06.25.18

Price of Bitcoin drops even further

BY Bloomberg 2 MINUTE READ

Bitcoin dropped to the lowest level this year as pressure mounts on the embryonic digital-currency sector, with global central bankers raising questions of viability and government regulators increasing scrutiny.

The biggest virtual currency fell as much as 5.1% to $5,832.68 on Sunday, piercing the previous low of the year of $5,920.72 that was set on Feb. 6, according Bitstamp prices.

That bought its decline from the record high of almost $20,000 reached in December to 70%.

On Friday, Japan’s Financial Services Agency ordered six of the country’s biggest crypto-trading venues to improve measures to prevent money laundering.

The companies must submit their plans by July 23.

New pressure in Japan, one of the most crypto-friendly jurisdictions, demonstrated the market’s fragility to regulatory moves in the absence of much positive news.

Peer-to-peer money also came under fresh pressure in recent weeks after two South Korean exchanges said they were hacked. That raised fresh concerns about the security of investor holdings.

India’s central bank gave commercial lenders until early July to stop providing services with any company dealing with digital coins, in an order that’s reportedly being challenged in courts.

Bitcoin pared its slide on Sunday and was down 3.7% to $5,918 as of 8:57 a.m. in New York. Bitstamp is one of the major price sources for cryptocurrencies, which have no unified quotation system and can vary substantially among countries.

Bloomberg’s composite pricing, which includes Bitstamp and other sources, showed Bitcoin closed on Friday at $6,070.19.

In Africa, Paxful, a global peer-to-peer cryptocurrency marketplace, said that virtual currency is popular in Africa. 

According to the company, African consumers account for over R500 million transactions per month on the platform. 

Notably, half of these consumers are under 30 years old. 

Of these consumers, 70% have a tertiary qualification or are studying toward a post-school qualification. 65% are male while 35% are female.

– BLOOMBERG, BUSINESS REPORT ONLINE 

05.22.18

Google’s AI Robot will tell you when calls are recorded

BY Bloomberg 3 MINUTE READ

Since Google revealed a robo-caller that sounds eerily human earlier this month, the company has faced plenty of questions about how it works. Employees got some answers this week.

On Thursday, the Alphabet Inc. unit shared more details on how the Duplex robot-calling feature will operate when it’s released publicly, according to people familiar with the discussion. Duplex is an extension of the company’s voice-based digital assistant that automatically phones local businesses and speaks with workers there to book appointments.

At Google’s weekly TGIF staff meeting on Thursday, executives gave employees their first full Duplex demo and told them the bot would identify itself as the Google assistant. It will also inform people on the phone that the line is being recorded in certain jurisdictions, the people said. They asked not to be identified discussing private matters. A Google spokesman declined to comment.

Google introduced Duplex earlier this month at its I/O developer conference, playing several clips of its assistant booking a hair cut and a restaurant table with impressively casual speech. The demo impressed developers, but mortified others who criticized Google for presenting an artificially intelligent bot that posed as human.

Two days after the demo, Google said the service will be “appropriately identified” on calls. And on Thursday, executives reassured staff that the Duplex team had been thinking about disclosure and ethical implications long before the reveal earlier this month.

Still, Google has yet to say whether the businesses used in its demos knew they were speaking with a Google bot or being recorded. Several U.S. states, including California, Washington, Florida and Massachusetts, have two-party consent laws that prohibit people or companies from recording phone conversations without consent, according to the Digital Media Law Project.

In a May 8 blog post about Duplex, Google said the service will benefit businesses that can’t book appointments online, giving them that option without additional expense or staff training. In the example where Duplex booked a hair appointment, the system said it was calling for “a client.” One of the people familiar with the situation said Google edited some of the recordings to protect the identity of the businesses involved. Although one of the locations was tracked down by tech news site Mashable.

A “60 Minutes” segment devoted to assertions that Alphabet Inc.’s Google wields a destructive monopoly in online search hammered home the notion of the company’s dominance during a time of heightened public concern with technology giants, while not surfacing new allegations.

The segment on the CBS television program highlighted how critics and rivals, such as Yelp Inc., are trying to bring Europe’s antitrust approach to Google to the U.S. Margrathe Vestager, the European Union competition commissioner, told CBS that she is intent on stopping Google’s “illegal behavior” in search, suggesting that the regulator isn’t appeased with the company’s proposed solution for the hefty charges the EU filed last year.

Alphabet shares fell 1.7% on Friday morning when the subject of CBS show was announced. The stock closed the day down 1.3% to R13 710 in New York.

The episode featured guests who argued Google abuses its dominance in search and search advertising. It didn’t show any evidence that U.S. lawmakers or enforcement agencies will target the company, according to a transcript. Nor does the segment mention the potential cases Vestager is pursuing against Google for its Android mobile software and advertising business.

The EU is still weighing Google’s remedy for Vestager’s one formal case, the charge that Google promotes its own services in its shopping search results, which brought a R34.5 billion fine. Europe could eventually levy a fine if it finds Google didn’t comply with its order last year to give equal treatment to shopping search rivals.

Most analysts see long odds of U.S. regulators bringing antitrust charges against Google. Should that happen, the case will probably end in a settlement with little material impact on the tech giant, a Bloomberg Intelligence report said on Friday. Google declined to speak to “60 Minutes” but gave the news magazine a statement denying that it’s a monopoly.

– BLOOMBERG 

02.14.18

Zim assets to be re-listed in London

BY Bloomberg 2 MINUTE READ

Robert Mugabe’s fall as Zimbabwe’s president is setting the scene for the return of a London mining listing for Andrew Groves and his long-term business partner – and former England cricketer – Phil Edmonds.

Groves is preparing to relist the pair’s Zimbabwe coal, chrome and gold assets in London through the reverse takeover of a cash shell, or dormant company. He sees the ascent to the presidency of Emmerson Mnangagwa, a man who served more than half a century at the side of Mugabe, as beneficial.

“I’d like to build it into a mid-tier mining company,” Groves said, adding that he has a lot of local contacts. “I’ve known Emmerson – the new president Emmerson Mnangagwa – for 15 years. He’s made a huge change already.”

Mnangagwa, Zimbabwe’s former spy chief, became president in November with military backing and has offered to hold elections by July. His administration abolished rules that mining operations must be at least 51percent owned by black Zimbabweans for all minerals other than platinum and diamonds.

Geologically rich

Zimbabwe is geologically rich, with deposits of gold, chrome, lithium, coal, diamonds, platinum and iron ore. Mine development stalled under Mugabe, whose policies led to a collapse in the economy and hyperinflation. “Everything has changed in the country,” said Groves, who won’t hold an executive position in the new company. “There’s a huge amount of euphoria.”

Groves and Edmonds delisted their Sable Mining venture, which was trying to build an iron-ore mine in Guinea, less than two years ago. That followed a slump in prices of the commodity and bribery allegations that were denied by the company.

Now renamed Consolidated Growth Holdings, the private company that holds Zimbabwe and Guinea assets is in talks with London-listed Contango Holdings for a reverse takeover.

Past deals by Groves and Edmonds include the sale of Central African Mining & Exploration for about £584m in 2009 after securing copper and cobalt mines in the Congo with the help of Dan Gertler.

– BLOOMBERG 

02.08.18

Oil trades at lowest price in 2 weeks

BY Bloomberg 1 MINUTE READ

OIL TRADED near its lowest closing price in two weeks as concerns about volatility in global markets offset a drop in US inventories.

Futures in New York dropped 0.2percent after earlier gaining as much as 1.3percent. American Petroleum Institute data on Tuesday showed an unexpected decrease in US stockpiles, while equity markets are clawing back on calls to “buy the dip” after extreme volatility earlier this week. Investors are watching if government inventory data also surprises with a decline when released yesterday.

Crude is struggling to extend last month’s largely dollar-driven gains on speculation that US output will impede efforts by Opec to drain a glut. Goldman Sachs Group stuck to its bullish call on commodities, saying the recent global equity sell-off only bolsters its view that raw materials are set to perform well in the months ahead.

Mixed

“Investors are a bit mixed today, which makes sense after we saw the huge risk-off mode at the start of the week,” says Hans van Cleef, senior energy economist at ABN Amro Bank. “Yesterday’s inventory data showed a different picture, which triggered a small recovery and now we’re waiting for today’s number.”

West Texas Intermediate (WTI) for March delivery was 10cents lower at $63.29 (R762.45) as of 10.25am in London, after dropping 1.2percent on Tuesday to the lowest since January 19. Total volume traded was about 13percent above the 100-day average.

Brent for April settlement fell 2c to $66.84 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $3.84 to April WTI.

US crude stockpiles were reported to be down to 1.05million barrels last week, with storage also shrinking at tanks in the key hub of Cushing, Oklahoma.