Oil prices plunged to US$115 a barrel on Friday, driven lower by a huge jump in the US dollar, signs of moderating demand around the world and the burgeoning belief that commodities may have peaked.
Shrugging off concerns about a sabotaged oil pipeline in Turkey, investors pulled their money out of commodities and put it back into stocks — giving crude oil a weekly loss of nearly US$10 a barrel, and driving the Dow Jones industrial average up more than 300 points.
Light, sweet crude for September delivery slumped US$4.82 to settle at US$115.20 a barrel on the New York Mercantile Exchange — its lowest settlement since May 1, when it settled at US$112.52. During Friday’s trading, crude dipped as low as US$114.90. Prices for gasoline, heating oil and natural gas also dropped.
In London, Brent crude for September delivery fell US$4.53 to finish at US$113.33 a barrel.
Many analysts have pointed to the US$117-a-barrel mark for crude oil as technically significant — a move below this level suggests, they say, that oil’s recent slide is more than a brief pullback.
Crude is now down US$32 from its high of US$147.27 on July 11.
“You have to remember that this market has baffled anyone who’s used fundamentals or charts. But if you’re a chartist, today is the death knell for the possibility of new highs in the marketplace,” said Tom Kloza, publisher and chief oil analyst of the Oil Price Information Service in Wall, New Jersey.
Lehman Brothers chief energy economist Edward Morse issued a research note on Friday saying that, barring a physical disruption to supplies, “we think oil prices have peaked.”
As the US dollar launched a massive rebound against the euro and yen after the European Central Bank (ECB) and the Bank of England both left their benchmark interest rates unchanged, energy traders found reason to sell — especially since the ECB indicated that there probably wouldn’t be any more rate hikes to come.
The weak dollar had been boosting oil prices earlier this year, because dollar-denominated commodities are often used as hedges against inflation and a falling US currency.
Furthermore, the central banks’ actions bolstered the growing belief in the energy markets that economies around the world are slowing alongside the US, dampening global demand for crude oil products.
Beijing’s continued provocations in the Taiwan Strait reveal its intention to unilaterally change the “status quo” in the area, the US Department of State said on Saturday, calling for a peaceful resolution to cross-strait issues. The Coast Guard Administration (CGA) reported that four China Coast Guard patrol vessels entered restricted and prohibited waters near Kinmen County on Friday and again on Saturday. A State Department spokesperson said that Washington was aware of the incidents, and urged all parties to exercise restraint and refrain from unilaterally changing the “status quo.” “Maintaining peace and stability across the Taiwan Strait is in line with our [the
EXTENDED RANGE: Hsiung Sheng missiles, 100 of which might be deployed by the end of the year, could reach Chinese command posts and airport runways, a source said A NT$16.9 billion (US$534.93 million) project to upgrade the military’s missile defense systems would be completed this year, allowing the deployment of at least 100 long-range Hsiung Sheng missiles and providing more deterrence against China, military sources said on Saturday. Hsiung Sheng missiles are an extended-range version of the Hsiung Feng IIE (HF-2E) surface-to-surface cruise missile, and are believed to have a range of up to 1,200km, which would allow them to hit targets well inside China. They went into mass production in 2022, the sources said. The project is part of a special budget for the Ministry of National Defense aimed at
READY TO WORK: Taiwan is eager to cooperate and is hopeful that like-minded states will continue to advocate for its inclusion in regional organizations, Lai said Maintaining the “status quo” in the Taiwan Strait, and peace and stability in the Indo-Pacific region must be a top priority, president-elect William Lai (賴清德) said yesterday after meeting with a delegation of US academics. Leaders of the G7, US President Joe Biden and other international heads of state have voiced concerns about the situation in the Strait, as stability in the region is necessary for a safe, peaceful and prosperous world, Lai said. The vice president, who is to be inaugurated in May, welcomed the delegation and thanked them for their support for Taiwan and issues concerning the Strait. The international community
COOPERATION: Two crewmembers from a Chinese fishing boat that sank off Kinmen were rescued, two were found dead and another two were still missing at press time The Coast Guard Administration (CGA) was yesterday working with Chinese rescuers to find two missing crewmembers from a Chinese fishing boat that sank southwest of Kinmen County yesterday, killing two crew. The joint operation managed to rescue two of the boat’s six crewmembers, but two were already dead when they were pulled from the water, the agency said in a statement. Rescuers are still searching for two others from the Min Long Yu 61222, a boat registered in China’s Fujian Province that capsized and sank 1.03 nautical miles (1.9km) southwest of Dongding Island (東碇), it added. CGA Director-General Chou Mei-wu (周美伍) told a