Oil traded higher in Asia yesterday but was below record peaks of more than US$96 as investors took profits and global stock markets weakened on concerns over the US economy, dealers said.
New York's main futures contract, light sweet crude for delivery in December, was trading at US$93.58 a barrel, up US$0.09 from its close of US$93.49 in US trade on Thursday.
Brent North Sea crude for December traded at US$90.04, up US$0.32.
The Commonwealth Bank of Australia said in a market note that the fallback in oil prices was influenced by profit-taking and precautionary selling as international equity markets weakened.
Asian stocks suffered heavy losses yesterday after initial euphoria on Wall Street over the US interest rate cut faded quickly as fresh credit jitters rattled global markets.
SPOOKED
Indices around the region fell after declines in New York and Europe on renewed worries about the fallout from the mortgage and credit woes that wreaked havoc on world markets in August.
Global stock markets were also spooked after oil prices rocketed beyond US$96 a barrel on Thursday.
"It's before the weekend and people are waiting for fresh news," said Tetsu Emori, a fund manager at Astmax in Tokyo, after oil prices pulled back.
VOLATILE
However, the market is still watching whether prices would shoot up to US$100 per barrel.
"People are looking at a higher level, prices are getting more volatile," Emori said.
While he said there could be some resistance against US$100 oil, there were just too many factors that could push prices higher.
"The question is how long oil will stay at current levels?" he said. "There are many, many factors -- investment money, psychological factors, supplies, geopolitics."
A sharp fall in US crude inventories last week by 3.9 million barrels against forecasts for a gain of 400,000 barrels highlighted supply concerns and helped oil prices to spiral.
"At this time of year, we should certainly be substantially building stocks, so to get draws on crude is never good for the refining industry and it shows that the market is decidedly nervous," said Robert Laughlin, a broker at Man Financial.
Oil prices were also boosted by the Federal Reserve's move on Wednesday to reduce US interest rates by a quarter-point to 4.50 percent. The cut weakened the US dollar against other currencies.
A weak US unit encourages oil demand because it makes dollar-priced commodities cheaper for buyers using stronger currencies.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by