Oil prices jumped more than US$2 and closed above US$65 a barrel on Friday, pushed by Middle East terror fears and a production outage in Andean producer Ecuador.
The gains capped a volatile week for the oil market, as supply worries sparked by a missile attack on a US Navy ship off the coast of Jordan and the Ecuador production outage overshadowed earlier concerns that the record high prices were slowing demand.
"In the earlier part of the week, people were worried about demand and then these things happened and now people are worried about the supply side," said Jim Rollyson, vice president for energy research with Raymond James & Associates.
PHOTO: AP
September crude futures on the New York Mercantile Exchange rose US$2.08 to close at US$65.35 a barrel, recouping the bulk of losses incurred earlier this week.
On London's International Petroleum Exchange, October Brent crude futures jumped US$1.96 to close at US$64.36.
Petroleum products futures were pushed higher partly by the renewed strength in crude and partly by lingering worries about refinery glitches, including outages at two key Venezuelan refineries.
September gasoline futures edged US$0.0410 higher to close at US$1.9039 a gallon, while September heating oil futures rose US$0.0323 to close at US$1.8228 a gallon.
Terrorism worries were kindled after militants affiliated with an al-Qaeda-linked group in Jordan fired at least three missiles from Jordan, with one narrowly missing a US ship docked in a Jordanian port.
The attacks, which the al-Qaeda-linked Abdullah Azzam Brigades militant group claimed responsibility for, come at a time of heightened tension in the oil-rich Middle East, marked by continued instability in Iraq, a brewing crisis over Iran's suspected nuclear weapons program and a number of terrorist attacks in Egypt in the past year.
In Ecuador, several days of violent protests have halted production, forcing state-owned Petroecuador and EnCana Corp to declare force majeure on exports, the bulk of it going to the US
Ecuador produces about 535,000 barrels a day, exporting 390,000 barrels a day, including 290,000 barrels a day to the US, according to the federal Energy Information Administration. It's not clear exactly how much production has been shut down and how much exports are affected. Several oil companies have reported halting output in the past day, and Venezuela said it has yet to receive a request from Ecuador to provide it with oil to keep its export commitments to customers.
An executive with Petroecuador said on Friday the force majeure, affecting more than 100,000 barrels a day of exports to the US, may last up to 60 days. Petroecuador has stopped all of its 200,000 barrels a day in production.
An EnCana spokeswoman in Canada said the company has declared force majeure on all its production of 78,000 barrels a day.
"EnCana is continuing to work with the relevant authorities towards a peaceful solution," Almas Kassam said.
But analysts at Eurasia Group, a New York based consultancy, said an end to Ecuador's costly oil stoppage remained in doubt despite the Ecuadorean military's takeover of key strategic production points in the country's northern oil producing provinces.
"The government hopes to negotiate a solution to the crisis once tensions ease but oil production will only pick up once protesters agree to talk with the government," Eurasia analyst Patrick Esteruelas said in a note, Dow Jones Newswires reported.
The US imported about 288,000 barrels a day of crude oil from Ecuador in June, making it the No. 9 source of crude imports, according to the EIA.
"The shut-in could affect the US West Coast more than the size of Ecuadorean imports might suggest," the Eurasia note said.
Worries about petroleum product supplies lingered amid trouble at Venezuela's giant Amuay refinery where a fire this week forced the facility to reduce run rates.
Jesus Luongo, manager for the Amuay and Cardon refineries, said that a distillation unit at the Amuay refinery was due back up Monday or Tuesday.
A key gasoline-producing unit at PdVsa's Punta Cardon refinery is expected to return to service by next Friday, he said.
The 77,000 barrel a day fluid catalytic cracker at Punta Cardon was shut for repairs about a month ago, he added.
Venezuela exports relatively small amounts of petroleum products such as gasoline to the US, but is the No. 4 source of crude oil for the US, where state-owned Petroleos de Venezuela SA runs a number of refineries through its Citgo unit.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Standard Chartered Taiwan on March 26 announced that it has partnered with international fintech firm FinIQ to build an “Automated Structured Products Pricing Platform.” The bank is also introducing products from global issuers including Goldman Sachs Group Inc, Barclays PLC and BNP Paribas SA. The new platform enables an end-to-end process whereby it finds the most competitive pricing across multiple issuers in a matter of minutes, followed by automated documentation and transaction execution, which significantly shortens time-to-market and delivers a superior wealth management experience. Standard Chartered Bank Taiwan CEO Anthony Yu (游天立) said: “Standard Chartered is increasingly leveraging its wealth management
RSS