Oil prices rebounded higher on Friday, with prices in New York closing above US$50 a barrel for the first time, as traders fretted about Nigerian oil production amid a threatened rebel uprising.
The light sweet crude November futures contract on the New York Mercantile Exchange closed up US$0.48 at US$50.12 a barrel, posting a record close, on the latest Nigerian worries.
In London, the price of reference Brent North Sea crude oil for delivery in November rose US$0.24 to close at US$46.62 a barrel.
Oil prices hit all-time peaks of US$50.47 in out-of-hours deals in New York on Tuesday and US$46.80 in London on Tuesday amid unrest in Nigeria.
"There are still concerns about Nigeria," said New York-based Refco oil analyst Marshall Steeves, referring to Friday's closing price spike.
Unrest in Iraq and disruption to Gulf of Mexico oil output, caused by recent hurricanes that have struck Florida, have also stoked oil prices in recent weeks, tightening US domestic stocks.
"Concern about Nigeria, because a lot of Nigerian oil goes to making gasoline," said Mike Fitzpatrick, an oil trader with Fimat in New York.
"I don't know if worries about gasoline inventories are justified, [there] appears to be plenty of gasoline in stockpiles," Fitzpatrick said, adding traders often worry about supplies on Fridays as they depart for the weekend.
Traders are holding their breath that the Nigerian government, in peace talks with rebels, will be able to stave off a threatened uprising by the rebels, who said they would mount an all-out war on the government if their demands were not met. The country is a key supplier to the US and Africa's biggest oil exporter.
Asari's Niger Delta People's Volunteer Force has threatened oil installations and asked foreign oil workers to quit the region. It is one of the militias fighting for supremacy over control of the west African country's illegal oil traffic.
The group claims to be fighting for the rights of the ethnic Ijaws living around the center of Nigeria's Niger delta oil industry, which turns out about 2.3 million barrels per day.
However, just after the New York market closed, two other militias in the delta, the People's Volunteer Force and the Niger Delta Vigilante, reportedly promised they would stop fighting government forces and hand in their weapons.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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