The global oil market faced another choppy week as dealers tracked supply glut concerns, a flagging dollar and poor demand outlook in China.
Prices started with three-week highs on Monday after Russia said last week that it could meet the OPEC producers’ group for talks on possible output cuts.
Oil then swiftly reversed direction on profit-taking, disappointing Chinese economic data and doubts of an imminent reduction in the amount of oil being pumped out by leading producers.
WTI closed below US$30 per barrel on Tuesday for the first time since Jan. 21.
China’s official purchasing managers’ index (PMI), which tracks activity in factories and workshops, fell to 49.4 last month, its lowest level since August 2012 and well below the 50 mark that separates growth from contraction.
That was the sixth consecutive month the Chinese manufacturing PMI contracted, adding to concerns about slowing growth in the world’s largest energy consumer.
Crude futures then rallied on Wednesday as the weak dollar eclipsed news of another strong increase in US crude inventories.
In late afternoon deals on Friday, US benchmark West Texas Intermediate for March delivery slid US$0.31 to US$31.41 a barrel, as traders mulled a mixed US jobs report that revived jitters about global growth.
Brent North Sea for April dipped US$0.10 to US$34.36 per barrel compared with Thursday’s close.
PRECIOUS METALS: Gold extended its longest rally in five months as the dollar fell on lower US rates expectations. Investors bought holdings in metal-backed funds for the 13th day in a row and miners rallied as precious metals soared.
Bullion climbed as much as 0.4 percent to US$1,147.55 an ounce, the highest since October, while the Bloomberg Dollar Spot Index sank more than 2 percent since Tuesday on bets the US Federal Reserve would not raise interest rates this year.
Bullion for immediate delivery traded at US$1,145.24 an ounce at 11:41am in London, up 0.2 percent, according to Bloomberg generic pricing.
Spot silver added 0.6 percent, platinum rose 0.9 percent and palladium fell 0.4 percent.
BASE METALS: Lead fell for the first time in nine days, slipping from its highest close in almost four months, as industrial metals retreated amid anxiety over the health of the global economy.
Lead, used in batteries, lost as much as 1.6 percent to US$1,775 a tonne on the London Metal Exchange and traded at US$1,778 at 3:11pm in Shanghai. It closed at US$1,803 on Thursday, the highest since Oct. 16. All other metals contracts dropped in London, with zinc sliding 0.9 percent.
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
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)
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