Oil prices rose on Friday on the possibility that the International Atomic Energy Agency (IAEA) will refer Iran to the UN Security Council over its nuclear program.
Price gains were limited, though, as the US has said it is not now seeking sanctions against Iran, OPEC's second-largest oil producer. The IAEA board adjourned until yesterday morning without reaching a consensus.
Light, sweet crude for March delivery rose US$0.69 to US$65.37 a barrel on the New York Mercantile Exchange, after sinking to as low as US$63.95 earlier in the day. The contract had dropped US$1.88 a barrel on Thursday.
March Brent futures rose US$0.51 to settle at US$63.39 a barrel on London's ICE Futures exchange.
"The market is uncertain as to what it wants to do at this point. Supply is not the issue," Alaron Trading Corp analyst Phil Flynn said, referring to ample US crude and product inventories.
"The uncertainty about Iran is the issue," Flynn said.
Participants on both sides in the IAEA meeting have said referring Iran to the UN body seemed unavoidable. The UN Security Council could impose sanctions if the agency reports Iran. Even though Iran's oil minister Kazem Vaziri Hamaneh has said Iran won't link the country's oil exports to its nuclear dispute, analysts say the issue is nevertheless a factor in the energy markets.
"Iran needs the money, and the world needs the oil," Flynn said, but any sanction against the country "would increase the anxiety and definitely increase the risk in holding futures."
Heating oil rose more than a US$0.01 to settle at US$1.7816 a gallon (US$0.47 per liter) on the NYMEX, while gasoline gained more than US$0.01 to settle at US$1.6817 a gallon. Natural gas rose US$0.266 to settle at US$8.613 per million British thermal units.
Iran claims its program is peaceful and aimed only at generating electricity, while the US and some European nations fear it could be used to develop 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
RSS