Oil prices weakened in Asian trade yesterday with OPEC’s decision to cut supply at a time of global financial turmoil seen as further hurting already weak energy demand, dealers said.
New York’s main contract, light sweet crude for December delivery, slumped US$1.08 to US$63.07 a barrel.
Brent North Sea crude for December delivery fell US$0.95 to US$61.10 a barrel.
OPEC, in a bid to shore up falling prices, announced on Friday its output would be reduced by 1.5 million barrels per day to 27.3 million barrels starting next month.
“OPEC is obviously aware of the problems facing the global economy,” said David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia.
“They were responding to weaker oil consumption ... It was quite a decisive move by OPEC on Friday,” he said.
OPEC’s No. 2 producer, Iran, said on Sunday the cartel was likely to cut back further on production if the latest reduction did not stabilize prices.
“Be assured that if [Friday’s] decision is not effective on the market, OPEC will take steps to consolidate the market and stabilize prices at its next meeting,” Iranian representative Mohammad Ali Khatibi said in an interview on state television.
OPEC said its decision on Friday to slash output would be reviewed at the cartel’s next meeting in Oran, Algeria, on Dec. 17.
Many analysts have questioned the effectiveness of measures taken by OPEC, given the seriousness of the global financial crisis that has sharply reduced the prospects for economic growth and thus oil consumption.
Humphrey Harrison, managing director of energy consultants Horizon Strategies said the market can expect more OPEC meetings on output policy over the next few months.
“We’re in wholly unchartered territory right now” regarding the financial crisis, Harrison said.
“We’re probably going to see many OPEC meetings for a while,” the oil analyst said.
OPEC said in its statement on Friday published alongside its output decision that “the financial crisis is already having a noticeable impact on the world economy, dampening the demand for energy, in general, and oil in particular.”
“Moreover, forecasts indicate that the fall in demand will deepen, despite the approach of winter in the northern hemisphere,” the cartel said.
OPEC produces about 40 percent of the world’s crude.
Rainfall is expected to become more widespread and persistent across central and southern Taiwan over the next few days, with the effects of the weather patterns becoming most prominent between last night and tomorrow, the Central Weather Administration (CWA) said yesterday. Independent meteorologist Daniel Wu (吳德榮) said that based on the latest forecast models of the combination of a low-pressure system and southwesterly winds, rainfall and flooding are expected to continue in central and southern Taiwan from today to Sunday. The CWA also warned of flash floods, thunder and lightning, and strong gusts in these areas, as well as landslides and fallen
WAITING GAME: The US has so far only offered a ‘best rate tariff,’ which officials assume is about 15 percent, the same as Japan, a person familiar with the matter said Taiwan and the US have completed “technical consultations” regarding tariffs and a finalized rate is expected to be released soon, Executive Yuan spokeswoman Michelle Lee (李慧芝) told a news conference yesterday, as a 90-day pause on US President Donald Trump’s “reciprocal” tariffs is set to expire today. The two countries have reached a “certain degree of consensus” on issues such as tariffs, nontariff trade barriers, trade facilitation, supply chain resilience and economic security, Lee said. They also discussed opportunities for cooperation, investment and procurement, she said. A joint statement is still being negotiated and would be released once the US government has made
SOUTH CHINA SEA? The Philippine president spoke of adding more classrooms and power plants, while skipping tensions with China over disputed areas Philippine President Ferdinand Marcos Jr yesterday blasted “useless and crumbling” flood control projects in a state of the nation address that focused on domestic issues after a months-long feud with his vice president. Addressing a joint session of congress after days of rain that left at least 31 dead, Marcos repeated his recent warning that the nation faced a climate change-driven “new normal,” while pledging to investigate publicly funded projects that had failed. “Let’s not pretend, the people know that these projects can breed corruption. Kickbacks ... for the boys,” he said, citing houses that were “swept away” by the floods. “Someone has
‘CRUDE’: The potential countermeasure is in response to South Africa renaming Taiwan’s representative offices and the insistence that it move out of Pretoria Taiwan is considering banning exports of semiconductors to South Africa after the latter unilaterally downgraded and changed the names of Taiwan’s two representative offices, the Ministry of Foreign Affairs (MOFA) said yesterday. On Monday last week, the South African Department of International Relations and Cooperation unilaterally released a statement saying that, as of April 1, the Taipei Liaison Offices in Pretoria and Cape Town had been renamed the “Taipei Commercial Office in Johannesburg” and the “Taipei Commercial Office in Cape Town.” Citing UN General Assembly Resolution 2758, it said that South Africa “recognizes the People’s Republic of China (PRC) as the sole
RSS