Oil headed for its biggest weekly drop since 2008 as an unprecedented dual supply-demand shock showed no signs of abating.
Futures on Friday reversed a loss to rise, tracking a rebound in US equity futures, while a retaliatory US attack on an Iraqi militia might have lent some support. They were still down 21 percent this week as COVID-19 batters demand.
The schism between former OPEC+ allies appeared to harden as Russian oil producers said that they plan to ramp up production next month, while the Kremlin said that there are no plans for discussions with Saudi Arabia.
The kingdom earlier in the week said that it would boost output by more than 25 percent next month.
The deluge of new supply coinciding with evaporating demand threatens a major shakeout on the US shale patch and could destabilize the governments of some OPEC producers. It has pushed a gauge of oil volatility to record levels and sent Brent’s market structure into a super-contango, where prompt prices are more than US$10 per barrel cheaper than contracts for delivery in 12 months.
“That supply-side shock that we’re seeing is expected to start almost immediately,” Australia & New Zealand Banking Group Ltd senior commodities analyst Daniel Hynes said in a Bloomberg TV interview. “The market is still hopeful of some sort of stimulus-led recovery later in the year, so that’s why the back end of the curve is holding up relatively well.”
West Texas Intermediate futures for delivery next month rose 3.7 percent to US$32.65 per barrel on the New York Mercantile Exchange as of 7:28am on Friday in London after dropping as much as 3.7 percent earlier. They closed down 4.5 percent on Thursday.
Brent crude for May settlement on Friday added 3.3 percent to US$34.32 per barrel on the ICE Futures Europe exchange. The contract on Thursday plunged 7.2 percent and has fallen 24 percent this week. The global benchmark traded at a US$1.21 premium to West Texas Intermediate for the same month, near the narrowest since late 2016.
In the US, several independent oil companies have already announced plans to scale back operations amid the flood of cheap crude. The US industry is also encouraging the Trump administration to waive a law that mandates only domestic vessels can be used to transport goods between US ports.
The response from US drillers will not be enough to prevent a record crude production surplus of 6 million barrels per day next month, Goldman Sachs Group Inc said in a note.
Napoleon Osorio is proud of being the first taxi driver to have accepted payment in bitcoin in the first country in the world to make the cryptocurrency legal tender: El Salvador. He credits Salvadoran President Nayib Bukele’s decision to bank on bitcoin three years ago with changing his life. “Before I was unemployed... And now I have my own business,” said the 39-year-old businessman, who uses an app to charge for rides in bitcoin and now runs his own car rental company. Three years ago the leader of the Central American nation took a huge gamble when he put bitcoin
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
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
PARTNERSHIPS: TSMC said it has been working with multiple memorychip makers for more than two years to provide a full spectrum of solutions to address AI demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it has been collaborating with multiple memorychip makers in high-bandwidth memory (HBM) used in artificial intelligence (AI) applications for more than two years, refuting South Korean media report's about an unprecedented partnership with Samsung Electronics Co. As Samsung is competing with TSMC for a bigger foundry business, any cooperation between the two technology heavyweights would catch the eyes of investors and experts in the semiconductor industry. “We have been working with memory partners, including Micron, Samsung Memory and SK Hynix, on HBM solutions for more than two years, aiming to advance 3D integrated circuit
RSS