Oil prices soared to new highs above US$111 a barrel in Asian trading yesterday as the US currency slumped to a fresh low against the euro, sparking a rush of funds into commodities, dealers said.
In afternoon trading New York's main contract, light sweet crude for delivery next month, was trading at US$111.06 a barrel after soaring earlier to a fresh all-time high of US$111.42.
Brent North Sea crude for May delivery was up US$0.83 to US$107.03.
The April contract expired on Friday at US$107.54.
The latest record-setting mark came as the euro rose to a lifetime peak of US$1.5905 while the US currency fell to as low as ?95.75, a bottom not seen since September 1995.
The dollar's continued plunge has triggered a flood of funds into commodities such as oil which are seen as safe havens amid rising concerns over the US economy and financial turmoil from a global credit squeeze.
"It really seems to be a case where the continued dollar weakness appears to be the key driver for oil," said Gerard Burg, a minerals and energy economist with National Australia Bank.
"The kind of evidence we are seeing at the moment in the US equity markets is counter-cyclical to the commodity markets," he said.
In the near-term, dealers said, oil prices are likely to trend higher with no relief seen for the US currency as investors worry about the US financial system following the woes of investment bank Bear Stearns.
"We can continue to expect strong prices for oil and commodities like gold in the near term," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
An emergency rate cut by the US Federal Reserve, made in a rare Sunday announcement, only added to the sense of crisis after the near-collapse of Bear Stearns, analysts said.
The US central bank said on Sunday it was cutting its primary credit rate by a quarter-point to 3.25 percent.
The rate is offered at the Fed's discount window for institutions "in sound condition."
The ailing greenback has helped drive up oil prices because crude is priced in dollars and becomes more affordable for purchasers holding stronger currencies.
Investors view oil futures as a hedge against inflation and the weak dollar.
Societe Generale said in a report yesterday that the dollar was "under sustained pressure."
Oil prices have soared by 90 percent over the past year, driven by tight supplies, political concerns in key producer nations and fierce demand for crude from China and India.
Prices have gained about 11 percent in value since the start the year, accelerating after the OPEC oil cartel decided earlier this month that it would not increase output.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS