Oil fell on Friday as the COVID-19 outbreak accelerated beyond China, intensifying concerns about the infection’s economic fallout.
Futures fell 0.9 percent in New York.
China revised how it calculates infection totals for the third time this month, raising questions about data reliability and confirming the virus’ growing reach.
Meanwhile, a key IHS Markit gauge of factories and service providers in the US dropped for the first time in seven years, sparking sell-offs in government bonds and equities.
“The market is seeing a broad risk-off move,” Cornerstone Macro global energy economist Jan Stuart said. “Just when the outbreak was beginning to turn, the new cases are making investors wonder if we have more to worry about. There was no move in the structure however, the backwardation in Brent held. Oil followed the move down as investors took money off the table.”
Oil has fallen more than 12 percent this year as the outbreak in China crippled industrial activity and transportation at a time when energy supplies already were abundant.
The WHO said if countries do not respond strongly now, the spread outside China might become a wider threat.
Still, crude posted a second consecutive weekly gain, supported by supply disruptions in Venezuela and Libya.
West Texas Intermediate (WTI) for April delivery fell US$0.50 to settle at US$53.38 a barrel on the New York Mercantile Exchange, ending the week 2.6 percent higher.
Brent for April settlement declined US$0.81 to settle at US$58.50 on the ICE Futures Europe exchange putting its premium over WTI at US$5.12. The global benchmark rose 2.1 percent for the week.
OPEC and its allies are to meet next month as originally scheduled after efforts by Saudi Arabia to hold an emergency meeting failed to materialize amid resistance from Russia.
Saudi Arabian Minister of Energy and Industry Khalid al-Falih dismissed a Dow Jones report on Friday that Riyadh was considering a break from its four-year oil production alliance with Russia.
Russia has remained noncommittal to an OPEC proposal for additional production cuts.
“Saudi Arabia needs the production cuts more than Russia,” Rabobank NV commodities strategist Ryan Fitzmaurice said. “Russia will eventually come to the table in March and participate but Saudi Arabia will likely shoulder most of burden to get them to come on board.”
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
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