Oil prices hit new record highs yesterday after crossing US$70 a barrel in Asian trading hours as powerful Hurricane Katrina threatened the crude-producing Gulf of Mexico region in the US.
With the psychological barrier now breached, some analysts said prices could now aim for the once unthinkable US$80 a barrel -- a level which economists fear could severely dent consumer demand and curb business activities.
New York's main contract, light sweet crude for delivery in October, touched a high of US$70.80 and was trading at US$69.87 at 2:20pm, up US$3.74 from its close of US$66.13 in the US market on Friday.
PHOTO: AFP
Share markets across Asia and the Pacific tumbled, with dealers saying the cost of crude had struck a level widely seen as a break point -- at which oil costs begin eroding economic growth, weakening currencies, fuelling inflation and pressuring central banks into raising interest rates.
Facing the skyrocketing oil prices, state-run Chinese Petroleum Corp (CPC,
CPC and Formosa raised wholesale gasoline prices by 7.64 percent and 7.39 percent, respectively, on Aug. 3, when the oil price was about US$61 to US$62 per barrel.
Should the price continue to stay above US$70 per barrel for the rest of the year, CPC will see NT$20 billion in losses, a company official said yesterday.
Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo, said the market will await the actual impact of the hurricane on production but he believed US$70 oil may not be sustainable because the US summer holidays are now drawing to a close, reducing gasoline demand.
"US$70 is completely far away from the fundamentals," he told AFP. "It's quite difficult to sustain."
But Dariusz Kowalczyk, a Hong Kong-based investment strategist at CFC Seymour Securities, feared that the impact would be longer-lasting as damage to offshore oil rigs and onshore refineries would take time to repair.
Weather forecasts showed Katrina, one of the most powerful Atlantic hurricanes on record, would hit US oil and refinery operations in the Gulf of Mexico, forcing the evacuation of oil rigs and refineries to be shut down.
Kowalczyk compared Katrina to Hurricane Ivan which pummelled the US Gulf Coast last September, causing widespread damage to the region's oil production infrastructure and leading to a 22 percent rise in prices.
"The similarity with Katrina is so strong that the market really got nervous so prices soared this morning," Kowalczyk told AFP.
While prices have stabilized after breaching US$70 a barrel, "we are still in a very bullish market," he said, adding it was possible prices could even hit US$80 a barrel.
"I think it will be a more sustained move higher ... There is room for significant volatility in the days ahead," he said.
Gasoline prices in particular have shot up 3 percent from Friday's close -- a worrying trend because of its direct impact on US consumers, he said.
Economists said the higher oil prices would restrain Asia's growth momentum, but agreed the impact would be cushioned by other factors such as continued investment growth and strong export demand from the US and China.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)
RESTAURANT POISONING? Deputy Minister of Health and Welfare Victor Wang at a press conference last night said this was the first time bongkrekic acid was detected in Taiwan An autopsy discovered bongkrekic acid in a specimen collected from a person who died from food poisoning after dining at the Malaysian restaurant chain Polam Kopitiam, the Ministry of Health and Welfare said at a news conference last night. It was the first time bongkrekic acid was detected in Taiwan, Deputy Minister of Health and Welfare Victor Wang (王必勝) said. The testing conducted by forensic specialists at National Taiwan University was facilitated after a hospital voluntarily offered standard samples it had in stock that are required to test for bongkrekic acid, he said. Wang told the news conference that testing would continue despite