Oil futures slumped under US$40 a barrel on Friday at the end of a tough week for the commodity, as a weakening US economy hit demand causing energy inventories to pile up.
Unemployment in the US — the world’s biggest economy and a major consumer of commodities — surged last month to 7.6 percent, the highest since 1992, as 598,000 jobs were cut, the Labor Department reported on Friday.
The number of job losses for the recession-hobbled economy was the worst since 1974, according to the monthly report on nonfarm payrolls, seen as one of the best indicators of economic momentum. The department also revised up its estimate of December job losses to 577,000 from 524,000.
“Overall, another awful payrolls report and, with initial jobless claims still edging higher, February could be even worse,” Capital Economics’ US specialist Paul Ashworth said.
The market was rocked this week by heightened concerns that the US — the world’s biggest energy consuming nation — will slash energy demand to cope with a dramatic downturn, analysts said.
The price of New York’s light sweet crude oil tumbled as low as US$38.60 a barrel on Friday after the latest bad news from across the Atlantic.
“Crude oil fell on concern that fuel demand in the US ... may decline, as a report showed the number of newly jobless climbed,” BetOnMarkets analyst Dave Evans said.
The market was also dragged lower this week by news of rising American crude inventories. US government data showed on Wednesday that crude stockpiles had soared by 7.2 million barrels last week, more than double the 2.9 million barrels forecast by analysts. It was the fifth consecutive week of gains, and the sharp rise underlined slack demand amid the global financial crisis that has brought the world economy to a near-halt.
OPEC signaled last week that it would consider more reductions in output as its member countries try to lift prices and in turn their incomes. OPEC, which pumps about 40 percent of the world’s oil, announced production cuts totalling 4.2 million barrels per day late last year. The cartel is to meet again next month.
After plunging from record highs above US$147 last July, oil prices touched multi-year lows in December, at one point nearing US$32 a barrel.
By Friday on the New York Mercantile Exchange, light sweet crude for delivery in March tanked to US$39.54 a barrel from US$41.74 a week earlier. On London’s InterContinental Exchange, Brent North Sea crude for March sank to US$45.23 a barrel from US$46.00 a barrel.
RESPONSE: The transit sends a message that China’s alignment with other countries would not deter the West from defending freedom of navigation, an academic said Canadian frigate the Ville de Quebec and Australian guided-missile destroyer the Brisbane transited the Taiwan Strait yesterday morning, the first time the two nations have conducted a joint freedom of navigation operation. The Canadian and Australian militaries did not immediately respond to requests for comment. The Ministry of National Defense declined to confirm the passage, saying only that Taiwan’s armed forces had deployed surveillance and reconnaissance assets, along with warships and combat aircraft, to safeguard security across the Strait. The two vessels were observed transiting northward along the eastern side of the Taiwan Strait’s median line, with Japan being their most likely destination,
‘NOT ALONE’: A Taiwan Strait war would disrupt global trade routes, and could spark a worldwide crisis, so a powerful US presence is needed as a deterrence, a US senator said US Senator Deb Fischer on Thursday urged her colleagues in the US Congress to deepen Washington’s cooperation with Taiwan and other Indo-Pacific partners to contain the global security threat from China. Fischer and other lawmakers recently returned from an official trip to the Indo-Pacific region, where they toured US military bases in Hawaii and Guam, and visited leaders, including President William Lai (賴清德). The trip underscored the reality that the world is undergoing turmoil, and maintaining a free and open Indo-Pacific region is crucial to the security interests of the US and its partners, she said. Her visit to Taiwan demonstrated ways the
GLOBAL ISSUE: If China annexes Taiwan, ‘it will not stop its expansion there, as it only becomes stronger and has more force to expand further,’ the president said China’s military and diplomatic expansion is not a sole issue for Taiwan, but one that risks world peace, President William Lai (賴清德) said yesterday, adding that Taiwan would stand with the alliance of democratic countries to preserve peace through deterrence. Lai made the remark in an exclusive interview with the Chinese-language Liberty Times (sister paper of the Taipei Times). “China is strategically pushing forward to change the international order,” Lai said, adding that China established the Asia Infrastructure Investment Bank, launched the Belt and Road Initiative, and pushed for yuan internationalization, because it wants to replace the democratic rules-based international
RELEASED: Ko emerged from a courthouse before about 700 supporters, describing his year in custody as a period of ‘suffering’ and vowed to ‘not surrender’ Former Taiwan People’s Party (TPP) chairman Ko Wen-je (柯文哲) was released on NT$70 million (US$2.29 million) bail yesterday, bringing an end to his year-long incommunicado detention as he awaits trial on corruption charges. Under the conditions set by the Taipei District Court on Friday, Ko must remain at a registered address, wear a GPS-enabled ankle monitor and is prohibited from leaving the country. He is also barred from contacting codefendants or witnesses. After Ko’s wife, Peggy Chen (陳佩琪), posted bail, Ko was transported from the Taipei Detention Center to the Taipei District Court at 12:20pm, where he was fitted with the tracking
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