Oil prices shot higher on global markets on Friday for the second day in a row, rebounding from losses over the past week amid positioning ahead of a long holiday weekend in the US.
Tensions in key oil producer Nigeria and fears about a possible cutback from the OPEC oil cartel also kept the market nervous.
New York's main contract, light sweet crude for delivery in March, climbed US$1.19 to US$59.65 per barrel in closing deals.
In London, the price of Brent North Sea crude for April delivery added US$1.10 to close at US$59.89 per barrel.
"It is a correction. Oil is rebounding because the market felt it was oversold," said Victor Shum, an energy analyst with Purvin and Gertz, explaining the resurgence after steep declines early is week.
Shum added that the coming long weekend in the US was also having a supportive effect as traders covered positions ahead of the extended break.
The New York market will be closed for the President's Day public holiday on Monday.
"The market seems to have found a base to spring from its grossly oversold condition," analyst Mike Fitzpatrick at Fimat USA said.
"Even though stockpiles are swelling, the market had descended too far, too fast. Our thinking is that a bottom has formed for the near term, particularly with the weather shifting to more seasonal readings for the next few days," he said.
Fitzpatrick said that Venezuela called for a March OPEC production cut this week, "which will cause shorts more than a modicum of uneasiness over a long weekend."
"Obviously, the market retains its potential for extreme volatility," he added.
Oil prices had tumbled on Wednesday after the weekly US Department of Energy inventories report showed better-than-expected US crude and heating oil supplies.
In the wake of the news, New York crude futures hit a two-month low on Wednesday, sinking to US$57.60 per barrel.
US crude stocks are now about 11 percent higher than at the same stage last year, while gasoline and distillates stockpiles are up 1.8 percent and 14 percent respectively.
Oil prices began to rebound on Thursday as tensions over Iran came back into focus.
"Geopolitical issues are still providing some support to the market," analysts at the Sucden brokerage firm said on Friday.
The unfolding crisis over Iran has led to concerns of possible disruptions to the country's oil exports of 2.6 million barrels of crude per day.
Iran insisted on Thursday that it was not seeking a nuclear weapon, rejecting accusations by France that its atomic drive was "clandestine" and "military" in nature.
In Nigeria, Africa's biggest crude exporter, supply worries persisted owing to simmering tensions there, dealers said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)