Oil fell to the lowest in almost six years on Friday on speculation the death of King Abdullah of Saudi Arabia would not signal any change in strategy for the world’s largest crude exporter.
US benchmark oil futures slid 1.6 percent, reversing an initial gain of as much as 3.1 percent. Salman Bin Abdulaziz Al Saud, who succeeds Abdullah on the throne, said he would maintain his predecessor’s policies. The kingdom will not cut production to boost prices because other producers would fill in the gap, Saudi Prince Alwaleed Bin Talal Al Saud said. US crude inventories rose the most since 2001 last week, according to a government report on Thursday.
“There already has been a pretty well-established succession plan, so it’s not a big deal,” said Kyle Cooper, director of commodities research at IAF Advisors in Houston. “Supply has been very stout and demand’s not been what people had expected. It highlights the bearish sentiment in the market.”
Photo: Reuters
Oil has slumped about 36 percent since OPEC’s Nov. 27 accord to maintain production at 30 million barrels a day amid a glut caused in part by the fastest US output in three decades. Saudi Arabia’s oil strategy is likely to remain unchanged as King Salman assumes power, International Energy Agency chief ecoomist Fatih Birol said at the World Economic Forum in Davos, Switzerland.
West Texas Intermediate (WTI) crude for March delivery fell US$0.72 to end at US$45.59 a barrel on the New York Mercantile Exchange, the lowest settlement since March 11, 2009. Futures fell 6.4 percent this week. The volume of all futures was about 13 percent above the 100-day average.
Brent crude for March settlement advanced US$0.27, or 0.6 percent, to US$48.79 a barrel on the ICE Futures Europe exchange after climbing to US$49.80. Volume was 2 percent above the 100-day average. Brent, used to price more than half the world’s oil, ended at a premium of US$3.20 to WTI on the ICE, compared with US$1.04 on Jan. 16.
Photo: AFP
The euro dropped to the lowest level in more than 11 years versus the US dollar as the European Central Bank widened its stimulus program. A stronger dollar reduced oil’s investment appeal.
Meanwhile, gold futures fell on Friday, paring gains from a three-week rally, as Goldman Sachs Group Inc said low inflation and higher US interest rates would drag down prices later this year.
Goldman pegged the metal at an average US$1,089 an ounce for next year and US$1,050 in 2017, both down from forecasts of US$1,200. Gold will be supported at current levels for the next few months because of weaker-than-expected US economic data and more stimulus from the European Central Bank, the New York-based bank said on Friday in a report.
“We continue to expect that gold prices will decline,” analysts including Max Layton wrote. “Our confidence in lower gold prices for longer has increased on the back of lower expected inflation in the coming years.”
Gold futures for February delivery declined 0.6 percent to settle at US$1,292.60 at 1:52pm on Friday on the Comex in New York. On Thursday, the price reached US$1,307.80, the highest for a most- active contract since Aug. 15.
The STOXX Europe 600 Index rose on Friday to the highest since December 2007, and the euro pared declines against the US dollar, eroding the appeal of gold as an alternative asset.
Silver futures for March delivery fell 0.3 percent to US$18.30 an ounce. This year, the price has jumped 17 percent, the most among 22 raw materials in the Bloomberg Commodity Index.
Gold and silver posted the third straight weekly advances, the longest rallies since mid-July.
On the New York Mercantile Exchange, platinum futures for April delivery fell 1.3 percent to US$1,268.70 an ounce, the biggest drop since Dec. 29. Palladium futures for March delivery rose 0.2 percent to US$774.10 an ounce. This week, the price climbed 2.6 percent, the most in two months.
TECH TITANS: Amazon’s latest chip joins Google in competing for the 90 percent market share held by Nvidia, which claims it is ‘a generation ahead of the industry’ Amazon Web Services (AWS) on Tuesday launched its in-house-built Trainium3 artificial intelligence (AI) chip, marking a significant push to compete with Nvidia Corp in the lucrative market for AI computing power. The move intensifies competition in the AI chip market, where Nvidia dominates with an estimated 80 to 90 percent market share for products used in training large language models that power the likes of ChatGPT. Google last week caused tremors in the industry when it was reported that Facebook-parent Meta Platforms Inc would employ Google AI chips in data centers, signaling new competition for Nvidia. This followed the release last month of
INSULATED: The company said it is less exposed to global complications, as it has built a strong footprint worldwide, and has multiple sources of rare earths and raw minerals Merck Group yesterday said it would ramp up production next year at its new flagship facility in Kaohsiung’s Lujhu District (路竹) to satisfy growing demand for advanced semiconductor materials and specialty gases, and to address supply resilience issues amid mounting geopolitical risks. Merck made the remarks during a news conference before the inauguration of its 500 million euros (US$582.1 million) facility, which is also to supply other markets in the Asia-Pacific region, it said. Merck executive board deputy chair and electronics CEO Kai Beckmann told reporters the company adopted a “local-for-local” strategy about seven years ago to address the cycle time of
Two companies wholly owned by the daughter of the founder of Hon Hai Precision Industry Co (鴻海精密) on Monday reported to the Taiwan Stock Exchange that they would dispose of all of the Hon Hai shares they hold. In filings with the exchange, Hong Wei Investment Co (鋐維) said it would sell the 2.771 million Hon Hai shares it holds and Frontier Investment Corp (承鋒投資) said it would sell its 2.409 million Hon Hai shares from tomorrow until Jan. 3 next year. The two companies are wholly owned and chaired by Shirley Gou (郭曉玲), the eldest daughter of Hon Hai founder Terry
RIDING THE WAVE: The race to build AI infrastructure has lifted the valuations of top memory makers, such as Micron, amid dwindling inventories and supply challenges Micron Technology Inc is to spend ￥1.5 trillion (US$9.6 billion) to build a plant in western Japan to make memory chips for artificial intelligence (AI) applications, the Nikkei reported on Saturday. The move comes as Micron seeks to diversify advanced chip production outside of Taiwan, the Nikkei article said, citing people familiar with the matter. The new factory will manufacture high-bandwidth memory (HBM) chips, a key component for working with AI processors such as those made by Nvidia Corp, the report said. Micron would build the facility within the compound of its Hiroshima plant, starting in May next year, with plans to launch
RSS