Oil prices neared US$49 a barrel on Friday, capping a rise of 7 percent for the week, as Gulf of Mexico crude production rebounded at a slower-than-expected rate in the wake of Hurricane Ivan.
Light crude for November delivery rose US$0.42 to settle at a new high of US$48.88 per barrel on the New York Mercantile Exchange. The price of oil is up 73 percent from a year ago.
London Brent crude ended US$0.20 a barrel higher at US$45.33. Brent set a new record at US$45.75 a barrel on Thursday on nagging fears over a US oil supply shortfall caused by Hurricane Ivan.
The federal Minerals Management Service reported on Friday that daily oil production in the Gulf remains 27 percent below normal at about 1.2 million barrels per day -- the same level as on Thursday. The agency said 10 million barrels of oil, the equivalent of 1.7 percent of annual production in the region, have been lost since last Monday, when offshore producers began evacuating crews.
"There continues to be hope for a quicker rebound in output," said John Kilduff, senior oil analyst at Fimat USA in New York. "Today's figures confirmed that little or no progress was made yesterday."
While the domestic supply problems caused by Hurricane Ivan are expected to be short-lived, analysts said underlying tightness in global oil markets is not.
The amount of excess oil production available worldwide is about 1 percent of total demand of about 82 million barrels a day, leaving the industry little breathing room in the event of a prolonged supply interruption, according to many analysts.
Potential output disruptions in Iraq, Russia and other key oil-producing nations have kept oil traders jittery. For example, one factor that may have contributed to Friday's rise in prices was violence in Nigeria that forced Royal Dutch/Shell Group, which accounts for roughly half the country's daily exports of 2.5 million barrels, to evacuate two oil facilities. Shell said there has been no disruption to its production and exports.
US oil supplies typically grow this time of year as gasoline demand tapers off and refiners briefly shut down to perform maintenance. Instead, over the past two weeks the nation's supply of crude has fallen by 16.1 million barrels due to Ivan-related disruptions to oil production and shipping, according to the Energy Department.
Refiners have had to use oil held in storage to produce gasoline, heating oil and other fuels. To help several refiners in a supply pinch, the Energy Department has agreed to lend them oil from the nation's emergency stockpile. The last time this was done was October 2002, after Hurricane Lili.
The Energy Department said on Friday that it would lend 1.4 million barrels to Shell Trading, a unit of Royal Dutch/Shell Group, and 300,000 barrels to Placid Refining Co, a supplier of jet fuel to the Department of Defense.
Analysts expect these fuel loans to have limited impact on prices.
SEMICONDUCTOR SERVICES: A company executive said that Taiwanese firms must think about how to participate in global supply chains and lift their competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to launch its first multifunctional service center in Pingtung County in the middle of 2027, in a bid to foster a resilient high-tech facility construction ecosystem. TSMC broached the idea of creating a center two or three years ago when it started building new manufacturing capacity in the US and Japan, the company said. The center, dubbed an “ecosystem park,” would assist local manufacturing facility construction partners to upgrade their capabilities and secure more deals from other global chipmakers such as Intel Corp, Micron Technology Inc and Infineon Technologies AG, TSMC said. It
People walk past advertising for a Syensqo chip at the Semicon Taiwan exhibition in Taipei yesterday.
NO BREAKTHROUGH? More substantial ‘deliverables,’ such as tariff reductions, would likely be saved for a meeting between Trump and Xi later this year, a trade expert said China launched two probes targeting the US semiconductor sector on Saturday ahead of talks between the two nations in Spain this week on trade, national security and the ownership of social media platform TikTok. China’s Ministry of Commerce announced an anti-dumping investigation into certain analog integrated circuits (ICs) imported from the US. The investigation is to target some commodity interface ICs and gate driver ICs, which are commonly made by US companies such as Texas Instruments Inc and ON Semiconductor Corp. The ministry also announced an anti-discrimination probe into US measures against China’s chip sector. US measures such as export curbs and tariffs
The US on Friday penalized two Chinese firms that acquired US chipmaking equipment for China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯國際), including them among 32 entities that were added to the US Department of Commerce’s restricted trade list, a US government posting showed. Twenty-three of the 32 are in China. GMC Semiconductor Technology (Wuxi) Co (吉姆西半導體科技) and Jicun Semiconductor Technology (Shanghai) Co (吉存半導體科技) were placed on the list, formally known as the Entity List, for acquiring equipment for SMIC Northern Integrated Circuit Manufacturing (Beijing) Corp (中芯北方積體電路) and Semiconductor Manufacturing International (Beijing) Corp (中芯北京), the US Federal Register posting said. The
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