Brent oil yesterday edged higher in Asia after closing at the highest in almost 13 months, as a deepening energy crisis in the US disrupted crude production and forced the shutdown of some of the nation’s biggest refineries.
Futures in London traded above US$63 a barrel after rising 1.4 percent on Monday.
Freezing weather has crippled Texas’ power system and blackouts are spreading to other states in the central US.
More than 1 million barrels per day of oil output has been halted and pipelines have declared a force majeure.
Energy Aspects Ltd estimates that 3 million barrels per day of processing capacity could be offline.
The combination of frigid temperatures and refinery closures has spurred a scramble for fuels, and is likely to lead to higher US prices for everything from gasoline to propane. The US crisis is just the latest in a series of cold snaps in the northern hemisphere that have boosted oil consumption this year.
In Europe, the North Sea oil market, which helps price more than two-thirds of the world’s crude, also saw its biggest spate of bullish activity in years on Monday.
Meanwhile, a potential refinery worker strike in Norway was averted after the SAFE union struck a deal with the Norwegian Oil and Gas Association.
Saudi Arabia’s unilateral output cuts have helped the global crude benchmark rally more than 20 percent this year, as swollen global stockpiles are drawn down even as COVID-19 leads to more lockdowns.
The global oil market is “balanced,” with prices reflecting the current state of play, Russian Deputy Prime Minister Alexander Novak said on Sunday.
“Global supply is getting tighter with the US cold snap here to stay for now, and there are also expectations for demand to improve,” said Yun Sung-chil, a senior commodities analyst at VI Investment Corp in Seoul.
West Texas Intermediate (WTI) oil at US$65 per barrel “doesn’t look impossible anymore,” he said.
The rebalancing has reshaped oil’s futures curve.
Brent’s prompt timespread is US$0.61 per barrel in backwardation — a bullish market structure where near-dated prices are more expensive than later-dated ones — compared with a US$0.07 contango at the beginning of the year.
However, concerns remain over the sustainability of crude’s rally, as Brent and WTI’s 14-day relative strength indices remain well above 70 — a sign that prices could be due for a pullback.
In China, the world’s biggest oil importer, travel over the Lunar New Year holiday has been well below normal levels amid a resurgence of COVID-19 in parts of the country.
Google on Thursday restructured its responsible artificial intelligence (AI) efforts to centralize teams under a single executive, Marian Croak, a move by the Internet giant to stabilize groups working on ethics research and products after months of chaos. Croak, a vice president of engineering, would be the lead for the Responsible AI Research and Engineering Center of Expertise, she said in a YouTube video announcing her appointment. The Alphabet Inc unit has sought to defuse employee rancor stemming from the acrimonious departure of a prominent black researcher, Timnit Gebru. Croak, a black Google executive who is currently focused on site-reliability matters, would report
‘LESS DUMB’ LIQUIDITY: If more companies start to speculate in cryptocurrency, ‘we’re going to be in bubble territory before you know it,’ a market analyst said Bitcoin is closing in on a market value of US$1 trillion, a surge that is helping cryptocurrency returns far outstrip the performance of more traditional assets such as stocks and gold. The largest token has added more than US$415 billion of value this year to about US$956 billion, data compiled by Bloomberg showed. The Bloomberg Galaxy Crypto Index, which includes bitcoin and four other coins, has more than doubled. Speculators, corporate treasurers and institutional investors are thought to have stoked bitcoin’s volatile ascent. Crypto believers are dueling with skeptics for the dominant narrative around the climb: The former see an asset being
PUNCTURE-PROOF: Air Fom tires are made of material used in sports shoe soles and offer a comfortable ride, although people are still skeptical about solid tires Getting a flat tire is a nightmare for cyclists, sending home early any rider who had ventured outdoors without a repair kit or spare inner tubes. Although punctured tires have long been a pain point for cyclists, the problem has never been effectively resolved, despite the bicycle industry going back centuries. A few products have been developed to help reduce the likelihood of flat tires: puncture-resistant tires, which are thicker than usual tires or come with a protective layer; anti-puncture tapes, which are placed between the tire and inner tube to offer extra protection; and tubeless systems that use sealant to close
LONG-TERM PLAN: The company expects growth in revenue from its automotive business this year and that it would contribute meaningfully to sales from 2023 Hon Hai Precision Industry Co’s (鴻海精密) new electric vehicle (EV) platform is expected to help launch vehicles later this year, chairman Young Liu (劉揚偉) said on Saturday, signifying major progress in the electronics giant’s push into the automotive industry. Two light vehicles designed using the company’s MIH Open Platform would be unveiled in the fourth quarter, Liu told reporters at the company’s headquarters in New Taipei City’s Tucheng District (土城). Hon Hai might at the same time also help launch an electric bus, he said. Hon Hai has been seeking to expand its automotive capabilities at a time when technology companies including