Oil prices plummeted to a one-year low below US$83 a barrel yesterday in Asia as investor fears of a severe global economic downturn sparked a panicked sell-off of equities and crude.
Light, sweet crude for November delivery was down US$4.00 to US$82.59 a barrel in electronic trading on the New York Mercantile Exchange by mid-afternoon in Singapore, the lowest since last October. The contract overnight fell US$1.81 to settle at US$86.62.
“The whole market has lost confidence in everything,” said Mark Pervan, senior commodity strategist with ANZ Bank in Melbourne. “Everyone is worried about global growth, and oil is the front line commodity for that. There’s just a lot of panic and fear in the market.”
Investors were unimpressed by interest rate cuts by the US and other central banks this week to unclog credit markets and promote lending. A credit crisis that began last year in US subprime mortgages has spread across the globe, forcing governments to spend hundreds of billions of dollars to bail out banks, brokerages and insurance firms.
Japan’s benchmark Nikkei 225 index plunged 9.6 percent yesterday, while the Dow Jones industrial average fell more than 7 percent on Thursday to its lowest in five years.
“The problem is no one really knows how far and deep this will go,” Pervan said. “But we can see from the size of the rescue packages, this is a really serious deal. This isn’t a normal bear market.”
Investors even ignored signs that OPEC may cut production. OPEC said on Thursday that it would hold an extraordinary meeting on Nov. 18 to discuss the widening global financial crisis and oil prices.
On Thursday, the head of Libya’s national oil company, Shukri Ghanem, called on oil producing nations to cut output.
“OPEC is trying to jaw-bone the price up, but they’ll have to come into the market because no one is going to be believe just jaw-boning with the market sliding so quickly,” Pervan said. “The market is so demand-focused, it doesn’t even care what happens to supply.”
OPEC’s decision last month to cut production by 520,000 barrels a day failed to halt the losses, which have accelerated in recent days.
Oil prices have fallen about 44 percent since soaring to a record US$147.27 on July 11.
“We haven’t seen the bottom of this yet,” Pervan said. “We thought US$75 would be a floor but if the market mood doesn’t change, US$50 to US$60 a barrel is not out of the question.”
In other Nymex trading, heating oil futures fell US$0.0891 to US$2.33 a gallon, while gasoline prices dropped US$0.0863 to US$1.94 a gallon. Natural gas for November delivery fell US$0.224 to US$6.60 per 1,000 cubic feet.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS