Oil climbed to the highest in nearly two months amid optimism that the US and China are close to locking down a partial trade deal.
Futures jumped 1.7 percent on Friday in New York, pushing a weekly advance to 0.8 percent after White House economic adviser Larry Kudlow late on Thursday said that negotiations between the two countries were coming down to the final stages.
That outweighed US government data earlier this week that showed an expansion in crude stockpiles and oil production at record-high levels.
“The most important factor is economic growth and demand growth, and the trade talks are going to be the indicator for expectations about how that’s going to play out,” said Gene McGillian, senior analyst and broker for Tradition Energy Group in Stamford, Connecticut. “We’ve seen optimism surrounding the trade deal bring some length into the market.”
Still, US crude is down about 13 percent since late April.
OPEC has indicated it would not cut output deeper to stave off the impending surplus and predicted worldwide supplies would exceed demand by about 645,000 barrels a day in the first half of next year.
Meanwhile, the International Energy Agency (IEA) said soaring production outside OPEC and high inventories would keep consumers comfortably supplied next year.
West Texas Intermediate (WTI) for December delivery gained US$0.95 to settle at US$57.72 a barrel on the New York Mercantile Exchange, up 0.8 percent for the week.
Brent for January settlement rose US$1.02 to end the session at US$63.30 a barrel on the ICE Futures Europe Exchange in London. The contract is up 1.3 percent for the week.
The global benchmark crude on Friday traded at a US$5.47 premium to WTI for the same month.
US crude output increased by 200,000 barrels a day to 12.8 million a day last week, according to US Energy Information Administration data on Thursday.
While nationwide crude inventories rose, stockpiles at the key storage hub at Cushing, Oklahoma, declined for the first time in six weeks.
Hedge-fund managers unwound bets that crude will fall at the fastest pace in 16 months as the prospects for a trade truce and a slowdown in shale drilling helped futures rebound.
Oil short-sellers slashed their bearish positions on WTI by 41 percent in the week that ended on Tuesday, data released on Friday showed.
As they come into the market as buyers to close positions, they are contributing to oil’s 10 percent rebound since early last month.
“We saw a pretty significant amount of short covering this last week,” TD Securities commodity strategist Daniel Ghali said. “That’s in line with recent optimism we have seen, much of which was driven by optimism on the trade file, and also a relatively more recent narrative that the shale patch is not going to be able to sustain its output profile.”
While US explorers are still pumping crude at a record clip, drilling has plunged to the lowest level in more than two years as companies come under increasing pressure to cut spending, with many strapped for cash.
That means an eventual slowdown in output.
It also helps that the US is signaling a truce with China.
Money managers’ WTI net-long position, or the difference between bullish and bearish bets, rose 32 percent to 153,174 futures and options, US Commodity Futures Trading Commission data showed.
The more bullish stance was entirely due to the short-selling slump, though, as long-only bets declined 3.3 percent.
This signals that the price rebound might be short-lived, especially because there are still concerns about the global economy and imminent supply influxes from places like Brazil and Guyana.
For now, it seems the world will still need more oil.
While legendary oil trader Andy Hall joined the IEA in predicting demand will probably plateau in about a decade, the organization has forecast the current growth rate of 1 million barrels a day — or about 1 percent — will hold for the next five years.
A key development is to be a meeting of OPEC and its allies next month.
If they decide to cut production further, that should give prices a boost. If not, worries about a world awash with oil probably will resurface.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
Nvidia Corp CEO Jensen Huang (黃仁勳) today announced that his company has selected "Beitou Shilin" in Taipei for its new Taiwan office, called Nvidia Constellation, putting an end to months of speculation. Industry sources have said that the tech giant has been eyeing the Beitou Shilin Science Park as the site of its new overseas headquarters, and speculated that the new headquarters would be built on two plots of land designated as "T17" and "T18," which span 3.89 hectares in the park. "I think it's time for us to reveal one of the largest products we've ever built," Huang said near the
China yesterday announced anti-dumping duties as high as 74.9 percent on imports of polyoxymethylene (POM) copolymers, a type of engineering plastic, from Taiwan, the US, the EU and Japan. The Chinese Ministry of Commerce’s findings conclude a probe launched in May last year, shortly after the US sharply increased tariffs on Chinese electric vehicles, computer chips and other imports. POM copolymers can partially replace metals such as copper and zinc, and have various applications, including in auto parts, electronics and medical equipment, the Chinese ministry has said. In January, it said initial investigations had determined that dumping was taking place, and implemented preliminary
Intel Corp yesterday reinforced its determination to strengthen its partnerships with Taiwan’s ecosystem partners including original-electronic-manufacturing (OEM) companies such as Hon Hai Precision Industry Co (鴻海精密) and chipmaker United Microelectronics Corp (UMC, 聯電). “Tonight marks a new beginning. We renew our new partnership with Taiwan ecosystem,” Intel new chief executive officer Tan Lip-bu (陳立武) said at a dinner with representatives from the company’s local partners, celebrating the 40th anniversary of the US chip giant’s presence in Taiwan. Tan took the reins at Intel six weeks ago aiming to reform the chipmaker and revive its past glory. This is the first time Tan
RSS