Oil settled back above US$69 a barrel and gasoline futures also rose on Friday on concerns about Iran's nuclear capabilities and on news that talks to end a general strike in Nigeria had failed.
The market has been fixated on US domestic supply concerns, but a lack of news from the US shifted traders' focus to international developments. The news about Iran and Nigeria sent light, sweet crude for August delivery up US$0.49 to settle at US$69.14 a barrel (159 liters) on the New York Mercantile Exchange, and gasoline for July was up US$0.0401 to settle at US$2.2868 a gallon (3.8 liters). August Brent crude rose US$0.96 to settle at US$71.18 a barrel on the ICE Futures exchange in London.
In other NYMEX trading, heating oil futures for July rose US$0.0133 to settle at US$2.038 a gallon while natural gas prices fell US$0.218 to US$7.13 per 1,000 cubic feet (28 cubic meters). A government report on Thursday showed natural gas supplies rose by 2.5 billion cubic meters in the week ended June 15, in line with expectations.
Traders began buying after Iran's interior minister, Mostafa Pourmohammadi, said his country had 100kg of enriched uranium. Investors' concern is that the West will at some point take action, military or economic, against Iran, which could disrupt oil supplies from the Persian Gulf.
"The market really started taking off from there," said Jack Hunter, an energy trader at FC Stone Group in Kansas City, Missouri.
In Nigeria, talks on Friday night between union leaders and the government failed to produce an agreement, sending Africa's largest oil-producing nation into a third day of a general strike. Strikers want the government to drop a 15 percent increase in gasoline prices, which the government subsidizes.
Later on Friday, labor leaders said the two sides continued to talk and could resolve the strike by tomorrow.
So far, the unions have failed in their threat to shut down Nigeria's oil industry.
"We don't see production being affected yet," said Michael Cohen, an industry economist at the US Energy Department's Energy Information Administration (EIA).
Nigerian oil supplies won't be affected unless the strike lasts at least a week, Cohen said, and even that is uncertain.
Still, geopolitical events that could affect supplies tend to make traders jittery, sending prices higher, analysts said.
Nigeria, which has proven oil reserves of 36.2 million barrels, according to the EIA, has been beset by political violence since December 2005 often targeting its oil infrastructure. The EIA estimates the violence has halted the production of about 587,000 barrels per day of the 2.28 million barrels of crude oil Nigeria produced each day last year. Nigeria is the third-biggest overseas supplier of oil to the US.
Analysts think traders long ago built a Nigerian violence premium into oil prices, and are taking a wait-and-see approach to the strike.
"There's historical precedent that these strikes don't last very long," said Jim Ritterbusch, president of Ritterbusch and Associates, an oil trading advisory firm in Galena, Illinois.
The EIA's report on Wednesday that showed crude inventories jumped by 6.9 million barrels in the week ended June 15 lent some support to prices. Analysts had expected crude stocks to drop by 150,000 barrels. Gasoline inventories rose by 1.8 million barrels, more than the 1 million-barrel increase expected.
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
READY TO HELP: Should TSMC require assistance, the government would fully cooperate in helping to speed up the establishment of the Chiayi plant, an official said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said its investment plans in Taiwan are “unchanged” amid speculation that the chipmaker might have suspended construction work on its second chip packaging plant in Chiayi County and plans to move equipment arranged for the plant to the US. The Chinese-language Economic Daily News reported earlier yesterday that TSMC had halted the construction of the chip packaging plant, which was scheduled to be completed next year and begin mass production in 2028. TSMC did not directly address whether construction of the plant had halted, but said its investment plans in Taiwan remain “unchanged.” The chipmaker started
MORTGAGE WORRIES: About 34% of respondents to a survey said they would approach multiple lenders to pay for a home, while 29.2% said they would ask family for help New housing projects in Taiwan’s six special municipalities, as well as Hsinchu city and county, are projected to total NT$710.65 billion (US$23.61 billion) in the upcoming fall sales season, a record 30 percent decrease from a year earlier, as tighter mortgage rules prompt developers to pull back, property listing platform 591.com (591新建案) said yesterday. The number of projects has also fallen to 312, a more than 20 percent decrease year-on-year, underscoring weakening sentiment and momentum amid lingering policy and financing headwinds. New Taipei City and Taoyuan bucked the downturn in project value, while Taipei, Hsinchu city and county, Taichung, Tainan and Kaohsiung
RSS