Oil slipped on Friday, paring a weekly gain, as concern of demand erosion from a COVID-19 resurgence countered strong US economic data.
Futures fell to about US$40 a barrel in New York as the virus continues to spread unabated across large parts of the US, clouding the outlook for energy demand.
Crude prices gained 4.2 percent for the week as data showed a rebound in the US jobs market accelerated early last month and US crude stockpiles shrank by the most this year.
Photo: Reuters
A survey showed that OPEC oil production dropped last month to the lowest since 1991.
The worsening pandemic might not have been fully captured in the jobs data, which provided a snapshot of hiring in the middle of the month before many states reversed course on their re-openings.
“We have had a sharp recovery in demand for energy products that has occurred from March to end of May,” said Daniel Ghali, a TD Securities commodity strategist. “Since then the pace of recovery has slowed. There is concern that this stall may be a signal of weakness in demand that’s tied to the rise in coronavirus cases in the US.”
Adding to the murky demand outlook, Chinese oil inventories swelled to a record this week, satellite data showed, after the world’s biggest oil importer went on a buying spree last quarter as the economy rebounded. The stockpiles might indicate a slowdown in buying by the East Asian country.
That outlook was balanced by the OPEC+ alliance’s commitment to reducing output, with Russia showing near total compliance with its targets. The group has not made any decision yet on whether to extend its full cutback — which stands at 9.6 million barrels a day — into next month, Russian Minster of Energy Alexander Novak said.
Ministers from the coalition next meet on July 15.
West Texas Intermediate declined 0.81 percent to US$40.32 a barrel, while Brent crude dipped 0.79 percent to US$42.80 a barrel.
Trading volumes were low as the US took a day off ahead of the July 4 holiday.
The global benchmark crude’s three-month timespread remained in contango — where prompt contracts are cheaper than later-dated ones — but the spread has narrowed in the past few days, indicating that concerns about oversupply have eased slightly.
The decline in US oil production continued as working rigs fell for a 16th week to the least since 2009, Baker Hughes data released on Thursday showed.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
RSS