Crude oil rose to a 4 1/2-month high after a report that US manufacturing grew last month, signaling demand for petroleum products will strengthen.
US manufacturing expanded in February for the first time in 19 months, an industry group said. Factories use about one-fourth of the products made from crude oil in the US. The report came after OPEC Secretary-General Ali Rodriguez said the group will probably keep production limits in place for the rest of the year.
"The US led the world into recession and should lead it out," said Lynn Reaser, chief economist at Banc of America Capital Management Inc in St. Louis. "You should see more demand from trucking, airlines and industrial operations."
Crude oil for April delivery rose US$0.66, or 3 percent, to US$22.40 a barrel on the New York Mercantile Exchange, the highest closing price for a contract closest to expiration since Oct. 12.
Prices gained 6.3 percent this week and have rallied 13 percent this year.
In London, Brent crude oil for April settlement rose 56 cents, or 2.6 percent, to 21.89 a barrel on the International Petroleum Exchange. Prices gained 7.5 percent this week.
The Institute for Supply Management's factory index rose to 54.7 last month from 49.9 in January. A reading above 50 signals expansion. The last time the index exceeded that level was July 2000.
"The economy is entering a period of expansion, which will result in increased demand for oil," said David Becker, energy derivatives trading manager at Citibank NA in New York.
Oil company shares were among the biggest gainers on the Standard & Poor's 500 Index on expectations that higher fuel demand will bolster profits. Exxon Mobil Corp, the largest oil company, rose US$0.49 to US$41.79 in late afternoon trading.
ChevronTexaco Corp was US$0.37 higher at US$84.81.
While crude oil demand may strengthen, OPEC, which cut oil output four times in the past 14 months, probably will leave its quotas unchanged for the rest of the year, Rodriguez said.
"Growth in demand will be very modest this year," Rodriguez said in a telephone interview from OPEC's Vienna headquarters. "I believe we will maintain the decision" to restrict supplies in 2002.
Rodriguez also said he was confident that Russia, the second-biggest oil exporter after OPEC-member Saudi Arabia, will extend its export ceiling through June. Oil rallied this year after Russia, Norway, Mexico, Angola and Oman joined with members of OPEC in pledging to reduce world supply by about 2 million barrels a day, or 2.5 percent. Russia's share was 150,000 barrels a day.
The secretary-general will meet with oil officials in Moscow next week to try to convince them to extend the export limits.
Even so, Russian oil companies will probably restore exports to pre-January levels in the second quarter, said Alexei Turbin, a spokesman for the Russian energy ministry.
"OPEC officials will be trying to convince us to extend the export cuts," Turbin said. "This is unlikely, as there was no consolidated decision made by oil companies to do so."
The 10 OPEC members with quotas, all except Iraq, pumped 22.5 million barrels a day in February, down 1.3 percent from a revised January estimate of 22.8 million barrels, said Conrad Gerber of Geneva-based PetroLogistics Ltd, which tracks oil shipments.
Output still was 800,000 barrels a day above the group's quota of 21.7 million barrels a day.
"There should be some slippage in OPEC quota compliance, and Russia appears to be ramping up production," Banc of America's Reaser said. "The wild card is OPEC adherence. Revenue stress in Venezuela and some countries in the Middle East will work against strict adherence" to the group's production quotas.
Gasoline for April delivery rose US$0.282, or 4.2 percent, to US$0.706 a gallon on the New York exchange.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts