Oil prices made their biggest single-day leap ever on Friday, dragging the Dow Jones industrials down about 400 points and raising the prospect of US$150 oil by early next month.
The meteoric rise of nearly US$11 for the day piled atop an increase of almost US$5.50 the day before, taking oil futures more than 13 percent higher in just two days, easily a record on the New York Mercantile Exchange.
Oil settled at US$138.54, a rise of more than 8 percent. The surged came after Morgan Stanley analyst Ole Slorer predicted strong demand in Asia and tight supplies in the Western hemisphere could drive prices to US$150 by early next month.
Even longtime market observers were shocked by the magnitude and speed of oil’s rally.
“We’re ... somewhat off the map as far as historical precedents are concerned,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Illinois.
On Wall Street, the Dow plunged 394.64 points, more than 3 percent, to close at 12,209.81, the biggest drop in more than 15 months in both percentage and points terms.
Wall Street shrugged off oil’s advance on Thursday, but succumbed to extreme anxiety on Friday.
The stock market’s great concern of late has been whether consumers would curb their spending on non-essentials as they were forced to pay more for gas and other staples.
The previously unthinkable idea of US$150 oil made it clear to investors that consumers would be forced to be even more conservative than they have been in recent months.
Oil had receded nearly US$13 a barrel from its highs, a respite from its nearly record-every-day march. But the end of the week sent it right back up again.
The burst also raised the prospect of accelerating inflation by adding to transportation costs.
Light, sweet crude for July delivery officially finished the day at US$138.54, up US$10.75 on the NYMEX. But after the settlement, the contract jumped as high as US$139.12. Prices hit a previous record of US$135.09 a barrel on May 22 and settled on Thursday at US$127.79.
The US Department of State yesterday criticized Beijing over its misrepresentation of the US’ “one China” policy in the latest diplomatic salvo between the two countries over a bid by Taiwan to regain its observer status at the World Health Assembly, the decisionmaking body of the WHO. “The PRC [People’s Republic of China] continues to publicly misrepresent U.S. policy,” Department of State spokesman Ned Price wrote on Twitter. “The United States does not subscribe to the PRC’s ‘one China principle’ — we remain committed to our longstanding, bipartisan one China policy, guided by the Taiwan Relations Act, Three Joint Communiques, and
FATES LINKED: The US president said that sanctions on Russia over Ukraine must exact a ‘long-term price,’ because otherwise ‘what signal does that send to China?’ US President Joe Biden yesterday vowed that US forces would defend Taiwan militarily in the event of a Chinese attack in his strongest statement to date on the issue. Beijing is already “flirting with danger,” Biden said following talks with Japanese Prime Minister Fumio Kishida in Tokyo, in which the pair agreed to monitor Chinese naval activity and joint Chinese-Russian exercises. Asked if Washington was willing to get involved militarily to defend Taiwan, he replied: “Yes.” “That’s the commitment we made,” Biden said. “We agreed with the ‘one China’ policy, we signed on to it ... but the idea that it can be
‘TOO RESTRICTIVE’: Ending US sales of weapons that do not fall under the category of ‘asymmetric’ would hamper Taiwan’s defense against China, two business groups said Taiwan’s weapons procurement decisions are made based on its needs, and are not influenced by individual arms dealers, the Ministry of National Defense (MND) said yesterday after two US business groups questioned a US official’s comment on arms sales to Taiwan. US Deputy Assistant Secretary of State for Regional Security Mira Resnick told the business groups via video link on Saturday that Washington would adjust the types of weapons sold to Taiwan and end “most arms sales to Taiwan that do not fall under the category of ‘asymmetric.’” The American Chamber of Commerce in Taiwan and the US-Taiwan Business Council on Monday
Local COVID-19 cases are expected to continue rising in the upcoming week, the Central Epidemic Command Center (CECC) said yesterday, as it reported a record-high 85,310 new domestic cases and 41 deaths. Daily case numbers had remained in the 60,000s for the past six days before surging about 30 percent yesterday, said Minister of Health and Welfare Chen Shih-chung (陳時中), who heads the center. Centers for Disease Control (CDC) Deputy Director-General Philip Lo (羅一鈞), deputy head of the CECC’s medical response division, said the number of polymerase chain reaction (PCR) tests conducted on Tuesday also marked a record-high of 112,915, with a