Oil prices retreated Friday as the Norwegian government stepped in to resolve a strike that has hit output from the world's third-largest exporter.
The price of benchmark Brent North Sea crude oil for delivery in August fell by US$0.38 to US$34.92 in late trading here.
New York's reference light sweet crude for August delivery dropped by US$0.58 to US$37.35 in early deals.
The Norwegian government intervened to halt a week-long escalating strike in the country's oil sector by enforced mediation between unions and employers.
"The dispute on the Norwegian shelf is over," the Labor and Social Affairs ministry said in a statement.
"In parallel, it has been decided that continued strike action and the lock-out are prohibited," it said.
The trade union Oljearbeidernes Fellessammenslutning (OFS) on Wednesday vowed to step up its action from midnight today.
The move would have forced the daily Norwegian output down to just 75 percent of the usual capacity of around 3 million barrels per day (bpd). Employers meanwhile announced Thursday a lock-out of striking workers.
Even before news of the Norweigan government's intervention traders had been optimistic about the chances of a swift resolution.
"There is a building feeling that the strike in Norway will be short-lived and that the government will intervene and therefore the interruption of supplies will be very limited," Commerzbank analyst David Thomas said.
He added that the market was also reassured by the prospect of the Organization of Petroleum Exporting Countries pressing ahead with a planned output boost on Aug. 1 despite a recent fall in world prices.
At a meeting on June 3, OPEC decided to raise its output ceiling to 25.5 million bpd on July 1 and to 26 million bpd from Aug. 1 to try to push down high world prices.
"There are talks going on about OPEC invoking their 500,000 barrels a day production increase from August. That is easing concerns about supply," Thomas said.
"Pressure is still on OPEC to follow through on its commitment to put more oil" on the market.
The market was also nervous about the potential for more attacks by insurgents in Iraq in the run-up to the planned June 30 transfer of power to a new interim government in Baghdad.
"Iraq will continue to be the focus because there are potential supply disruptions and exports are still lower than their previous levels before the recent pipeline attacks," said Thomas.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in