Brent crude pushed toward US$50 a barrel in Asia yesterday, boosted by supply disruptions from the escalating Canadian wildfires and armed attacks against oil facilities in Nigeria.
Wildfires burning around the oil sands hub of Fort McMurray in Alberta, Canada, have been rapidly moving north, forcing firefighters to shift their efforts to protecting existing oil facilities.
In Nigeria, Africa’s biggest crude producer, troops have made several arrests following the attacks on an offshore oil facility as the government on Monday moved to avert a labor strike over gas prices.
“People are looking for any signs possible to confirm that supply is decreasing so any news of unplanned outages gets the market particularly excited,” BMI Research oil and gas analyst Peter Lee said.
“A break above US$50 in the next few days is very possible. In the second half of the year, oil is likely to hold between US$45 to US$50 a barrel,” he said.
A report by US banking giant Goldman Sachs Group Inc has predicted a short-term supply deficit due to production outages, pointing to disruptions in Nigeria and Venezuela, which is deep in political crisis.
At about 7am GMT, US benchmark West Texas Intermediate (WTI) for June delivery rose US$0.62, or 1.3 percent, to US$48.34 a barrel.
Brent North Sea oil for July delivery climbed US$0.41, or 0.84 percent to US$49.38.
Prices have rebounded strongly since plunging to near 13-year lows below US$30 in February, but are still well below peaks of more than US$100 a barrel reached in June 2014.
The last time Brent touched US$50 was in early November last year.
However, some analysts said the disruptions are temporary and said that the market remains oversupplied.
“Admittedly, these disruptions are large enough that the rebalancing in the market expected in the second half of the year may already be happening,” research firm Capital Economics said. “However, prices could quickly drop back again once at least some of this supply comes back on stream. In the meantime, global stocks remain ample.”
In related news, Algeria will supply oil and other energy products to Jordan for the first time under a memorandum of understanding signed on Monday, as the OPEC member seeks to diversify sales after years of stagnating crude production.
Algeria’s state-run Sonatrach Group will start shipping liquefied natural gas and liquefied petroleum gas to Jordan in September, followed by crude oil, Algerian Minister of Energy Salah Khebri said in an interview in Amman on Monday.
Sonatrach and National Electric Power Co of Jordan should reach a final agreement in the next few weeks, he said, without specifying shipment volumes.
Sonatrach will also explore for oil and gas in Jordan.
Algeria, the ninth-biggest member of OPEC, plans to raise crude output by 5 percent this year and offer energy-exploration rights to foreign companies, Salah Mekmouche, Sonatrach vice president of exploration and production, said in December last year.
Additional reporting by Bloomberg
ELECTRIC FARMLAND: TSMC’s proposal to clear 230 hectares of reforested land for what would become Taiwan’s largest photovoltaic solar farm has generated concerns New rules curbing solar farms built on agricultural land sparked fierce debate at a packed public hearing at the Legislative Yuan yesterday, with industry representatives saying that the new restrictions would endanger President Tsai Ing-wen’s (蔡英文) green energy goals, while agricultural officials emphasized the importance of protecting farmers and the environment. The Tsai administration has set a target to generate 20 percent of the nation’s power from renewable sources by 2025, by which time it also aims to install 20 gigawatts (GW) of solar power, including 6GW from rooftop solar systems and 14GW from ground-mounted solar farms. Although rooftop solar systems are
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted monthly revenue that suggested second-quarter sales surpassed analysts’ estimates, underscoring how its technological lead is helping the chipmaker weather the COVID-19 pandemic and US sanctions on its second-biggest customer Huawei Technologies Co (華為). Apple Inc’s main iPhone chipmaker posted sales of NT$120.88 billion (US$4.08 billion) for last month, up 40.8 percent year-on-year and bringing its revenue for the second quarter to NT$310.7 billion, beating the NT$308.8 billion analysts expected on average. TSMC, a barometer for the industry thanks to its heft in the global supply chain, had previously lowered its revenue outlook for this
Record heat is bringing record electricity use this month, after peak electricity consumption yesterday broke all historical records, Taiwan Power Co (Taipower, 台電) said. As the mercury spiked close to 39°C, Taiwan’s electricity consumption reached as high as 37.79 gigawatts (GW) at 1:59pm yesterday, higher than the previous record of 37.53GW, seen just a day prior, the state-run utility said. The top 10 peak consumption records have all occurred in the past three years, Taipower said. As the high temperatures are likely to continue this summer, more records might be set, it said. However, Taipower assured people that there is so far no
BIODEGRADABLE POLYMER: The bank said that its iPass credit card, the first such card issued by a foreign bank, gives it access to stores that do not accept its credit cards DBS Bank Taiwan (星展台灣) yesterday launched its first co-branded credit card with iPass Corp (一卡通票證), and said it expects its credit card business to fully recover in the second half of this year. The new “DBS eco card” is made of polylactic acid — a bio-based biodegradable polymer that can be produced from renewable resources — and is the bank’s first credit card to have the iPass electronic payment function, it said. The partnership would give the bank new business momentum, DBS Bank Taiwan general manager Lim Him-chuan (林鑫川) told a news conference in Taipei. That is because some stores and supermarkets in