Oil extended its collapse to the lowest intraday price since March 2009 on speculation that record US supply might start to strain the country’s storage capacity.
Crude tanks in the US might fill up as drilling-rig cuts fail to slow production this year, the International Energy Agency predicted.
Speculators have cut bullish bets on oil to the lowest level in more than two years, while short wagers rise to a record, US Commodity Futures Trading Commission data show.
Futures lost as much as 2.8 percent to US$43.57 per barrel in New York yesterday, falling a fifth day.
Oil slumped for a fourth week on Friday after government data showed US output and stockpiles expanded to the highest levels in more than three decades, exacerbating a glut that drove prices almost 50 percent lower last year.
The market has not bottomed yet because of the surplus, former US Federal Reserve chairman Alan Greenspan said on Bloomberg Television.
“We’ve got this ongoing increase in inventory with no cut in production, despite the drop in the number of shale-oil rigs,” CMC Markets Sydney-based chief strategist Ric Spooner said by telephone. “We’re seeing downside momentum now develop in the market.”
West Texas Intermediate for delivery next month was down US$0.42, or 0.9 percent, at US$44.42 per barrel in electronic trading on the New York Mercantile Exchange at 3:56pm Singapore time. The contract fell US$2.21 to US$44.84 on Friday, capping a 9.6 percent loss for the week, the most since December last year. The volume of all futures traded was about 45 percent above the 100-day average. Prices have decreased 17 percent this year.
Brent for April settlement, which expired yesterday, slid by as much as US$1.34, or 2.5 percent, to US$53.33 per barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of US$10.05 to WTI. The more active Brent contract for May was US$0.54 lower at US$54.47.
Global spare oil-storage capacity is “not as tight as we thought previously” and there are about 377 million barrels of onshore storage space left, according to Societe Generale SA.
US crude tanks are 63 percent full, Michael Wittner, the head of oil market research in New York, said in an e-mailed report dated Friday.
US oil production is expected to expand this year by about 750,000 barrels per day to 12.56 million per day, the energy agency said in a report on Friday. That is up from an estimate of 12.41 million in last month’s report.
The Paris-based agency, an adviser to developed economies, boosted its projection for North American output including natural gas liquids and condensate in the fourth quarter of last year by 300,000 barrels per day.
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