Oil climbed to the highest in nearly two months amid optimism that the US and China are close to locking down a partial trade deal.
Futures jumped 1.7 percent on Friday in New York, pushing a weekly advance to 0.8 percent after White House economic adviser Larry Kudlow late on Thursday said that negotiations between the two countries were coming down to the final stages.
That outweighed US government data earlier this week that showed an expansion in crude stockpiles and oil production at record-high levels.
“The most important factor is economic growth and demand growth, and the trade talks are going to be the indicator for expectations about how that’s going to play out,” said Gene McGillian, senior analyst and broker for Tradition Energy Group in Stamford, Connecticut. “We’ve seen optimism surrounding the trade deal bring some length into the market.”
Still, US crude is down about 13 percent since late April.
OPEC has indicated it would not cut output deeper to stave off the impending surplus and predicted worldwide supplies would exceed demand by about 645,000 barrels a day in the first half of next year.
Meanwhile, the International Energy Agency (IEA) said soaring production outside OPEC and high inventories would keep consumers comfortably supplied next year.
West Texas Intermediate (WTI) for December delivery gained US$0.95 to settle at US$57.72 a barrel on the New York Mercantile Exchange, up 0.8 percent for the week.
Brent for January settlement rose US$1.02 to end the session at US$63.30 a barrel on the ICE Futures Europe Exchange in London. The contract is up 1.3 percent for the week.
The global benchmark crude on Friday traded at a US$5.47 premium to WTI for the same month.
US crude output increased by 200,000 barrels a day to 12.8 million a day last week, according to US Energy Information Administration data on Thursday.
While nationwide crude inventories rose, stockpiles at the key storage hub at Cushing, Oklahoma, declined for the first time in six weeks.
Hedge-fund managers unwound bets that crude will fall at the fastest pace in 16 months as the prospects for a trade truce and a slowdown in shale drilling helped futures rebound.
Oil short-sellers slashed their bearish positions on WTI by 41 percent in the week that ended on Tuesday, data released on Friday showed.
As they come into the market as buyers to close positions, they are contributing to oil’s 10 percent rebound since early last month.
“We saw a pretty significant amount of short covering this last week,” TD Securities commodity strategist Daniel Ghali said. “That’s in line with recent optimism we have seen, much of which was driven by optimism on the trade file, and also a relatively more recent narrative that the shale patch is not going to be able to sustain its output profile.”
While US explorers are still pumping crude at a record clip, drilling has plunged to the lowest level in more than two years as companies come under increasing pressure to cut spending, with many strapped for cash.
That means an eventual slowdown in output.
It also helps that the US is signaling a truce with China.
Money managers’ WTI net-long position, or the difference between bullish and bearish bets, rose 32 percent to 153,174 futures and options, US Commodity Futures Trading Commission data showed.
The more bullish stance was entirely due to the short-selling slump, though, as long-only bets declined 3.3 percent.
This signals that the price rebound might be short-lived, especially because there are still concerns about the global economy and imminent supply influxes from places like Brazil and Guyana.
For now, it seems the world will still need more oil.
While legendary oil trader Andy Hall joined the IEA in predicting demand will probably plateau in about a decade, the organization has forecast the current growth rate of 1 million barrels a day — or about 1 percent — will hold for the next five years.
A key development is to be a meeting of OPEC and its allies next month.
If they decide to cut production further, that should give prices a boost. If not, worries about a world awash with oil probably will resurface.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last