Energy firms took a hit yesterday after crude prices plunged almost 5 percent the previous day as traders were left disappointed by OPEC’s latest output cuts.
Keenly awaited talks between the bloc and Russia ended on Thursday with news that a deal to reduce output for six months until the end of next month would be increased by another nine months in a bid to address an ongoing supply glut and support prices.
However, there had been hopes that the flagged extension would be 12 months or that the cuts would be deeper, fueling a rally in crude prices.
The final decision sent both main oil contracts plunging on Thursday, which in turn dragged energy firms lower.
“The market obviously for some reason closer to the OPEC meeting started to factor in that there would be a cut in production, that OPEC would announce a cut in their ceiling of 32.5 million barrels,” said David Lennox, resource analyst at Sydney-based Fat Prophets. “I am not sure how that came about, because with OPEC, the rhetoric was just whether or not to extend the time period.”
While oil prices edged up slightly in Asian trading, energy plays took a hit.
CNOOC Ltd (中國海洋石油) fell 1.4 percent and PetroChina Co (中國石油天然氣) lost 1.5 percent in Hong Kong, while Sydney-listed Woodside Petroleum Ltd sank 2.7 percent and Rio Tinto PLC was off 1.8 percent. Inpex Corp dived 2 percent in Tokyo.
“It’s the old market axiom — buy the rumor and sell the fact — that worked again for oil,” AxiTrader chief market strategist Greg McKenna said in a note.
Commodities-linked currencies were also lower, with the Australian dollar — already under pressure owing to fears over China’s slowing economy — diving 0.4 percent against the greenback and the Canadian dollar down 0.4 percent.
Asian stock markets were broadly weaker, despite another record close for the S&P 500 and NASDAQ on Wall Street that came on the back of upbeat US retail data. Tokyo’s Nikkei ended 0.6 percent down, while Hong Kong slipped 0.1 percent in the afternoon and Sydney finished 0.7 percent off. Singapore eased 0.2 percent, while Taipei was also lower.
However, Shanghai edged up 0.1 percent and Seoul added 0.5 percent.
West Texas Intermediate crude fell US$0.31 to US$48.59 per barrel in New York, after sinking 4.8 percent in the previous session, while Brent crude dropped US$0.27 to US$51.19 a barrel in London.
Hypermarket chain Carrefour Taiwan and upscale supermarket chain Mia C’bon on Saturday announced the suspension of their partnership with Jkopay Co (街口支付), one of Taiwan’s largest digital payment providers, amid a lawsuit involving its parent company. Carrefour and Mia C’bon said they would notify customers once Jkopay services are reinstated. The two retailers joined an array of other firms in suspending their partnerships with Jkopay. On Friday night, popular beverage chain TP Tea (茶湯會) also suspended its use of the platform, urging customers to opt for alternative payment methods. Another drinks brand, Guiji (龜記), on Friday said that it is up to individual
UNCERTAINTIES: Exports surged 34.1% and private investment grew 7.03% to outpace expectations in the first half, although US tariffs could stall momentum The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday raised its GDP growth forecast to 3.05 percent this year on a robust first-half performance, but warned that US tariff threats and external uncertainty could stall momentum in the second half of the year. “The first half proved exceptionally strong, allowing room for optimism,” CIER president Lien Hsien-ming (連賢明) said. “But the growth momentum may slow moving forward due to US tariffs.” The tariff threat poses definite downside risks, although the scale of the impact remains unclear given the unpredictability of US President Donald Trump’s policies, Lien said. Despite the headwinds, Taiwan is likely
READY TO BUY: Shortly after Nvidia announced the approval, Chinese firms scrambled to order the H20 GPUs, which the company must send to the US government for approval Nvidia Corp chief executive officer Jensen Huang (黃仁勳) late on Monday said the technology giant has won approval from US President Donald Trump’s administration to sell its advanced H20 graphics processing units (GPUs) used to develop artificial intelligence (AI) to China. The news came in a company blog post late on Monday and Huang also spoke about the coup on China’s state-run China Global Television Network in remarks shown on X. “The US government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon,” the post said. “Today, I’m announcing that the US government has approved for us
The National Stabilization Fund (NSF, 國安基金) is to continue supporting local shares, as uncertainties in international politics and the economy could affect Taiwanese industries’ global deployment and corporate profits, as well as affect stock movement and investor confidence, the Ministry of Finance said in a statement yesterday. The NT$500 billion (US$17.1 billion) fund would remain active in the stock market as the US’ tariff measures have not yet been fully finalized, which would drive international capital flows and global supply chain restructuring, the ministry said after the a meeting of the fund’s steering committee. Along with ongoing geopolitical risks and an unfavorable
RSS