The OPEC cartel and a group of allied oil-producing nations on Thursday agreed to extend crude output cuts until the end of next year, continuing a policy that led to a significant rise in the price of oil over the past year.
At the same time, the 24-nation alliance led by OPEC member Saudi Arabia and Russia gave notice that it stands ready to revisit the move if price increases bring US shale operators — who suspended operations while crude was cheap — rushing back into the market.
“We are going to be agile, depending on how events unfold,” Saudi Arabian Minister of Energy and Industry Khalid al-Falih told reporters.
Announcing the extension decision after a day of meetings, he said: “It has been a great day.”
The success of the reduced output strategy has been reflected by crude’s rise. Benchmark oil prices are now close to US$60 a barrel, depending on the grades, up almost 20 percent from a year ago.
On Thursday, the US contract was trading at US$57.08 a barrel, down 22 cents on the day.
That partly reflects a rise in global economic growth since last year, but it also has been attributed to the OPEC-led decision to limit production, renewing the cartel’s reputation as a major player in controlling the oil market.
Not only the United States, but Brazil, China and other nations “could have increased incentive at the present price environment to increase their [oil] output,” said Jan Edelmann, an analyst at Germany’s HSH Nordbank AG.
While the prices of US$100 a barrel last seen a little over three years ago appear gone, al-Falih was mindful to address the perception that those rates evoked — that OPEC is interested only in cashing in on pricey crude.
“We are not looking to gouge the market with higher prices,” al-Falih said.
Crude’s value had to recover from previous lows to “create a market that is conducive to investment” and OPEC members drilling for more oil, he added.
The extension agreement represented a rare consensus between OPEC kingpin Saudi Arabia and Iran. Jockeying for Middle East dominance between the two countries has led to disarray in the past. Tensions have spiked in recent months, with the geopolitical struggle potentially exacerbating different positions on oil.
Russian Minister of Energy Alexander Novak, whose country is a key Iran backer, made a comment that could upset Tehran and endanger the tenuous Saudi Arabia-Iran balancing act at future OPEC meetings.
Novak said the relationship between Moscow and Riyadh “is developing faster than ever” on oil issues, as well as on other projects.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
RSS