Oil fell the most in more than a week on Friday as US equities dropped from all-time highs, the US dollar firmed and demand concerns from India continued to muddle the global economic outlook.
Futures in New York slid nearly 3 percent as raw materials and US equities cooled from a scorching rally, while the US dollar climbed, making commodities priced in the currency less attractive.
A viral onslaught in India is the most notable threat to a worldwide oil recovery.
Imports from the South Asian country could fall by more than 1 million barrels a day in the coming weeks, if not three times more, consultant Kpler said in a report on Friday.
However, prices rose last month, with a slew of positive economic data and signs of a budding fuel consumption revival in key economies offsetting the worsening crisis in India.
Futures in New York rose for the week, extending its monthly gain to 7.5 percent.
OPEC and its allies see world consumption rebounding by 6 million barrels a day this year, while Goldman Sachs Group Inc this week said that demand could post a record jump as vaccination rates increase.
The near-certain likelihood of higher fuel consumption in the US, China and the UK have brightened the overall outlook, with traders betting that a steady reopening of economies will continue to improve demand.
“This unbridled optimism on demand is taking a pause” as the crisis in India is getting worse, Commodity Research Group senior partner Andrew Lebow said.
However, OPEC+ can react quickly if demand drops more than expected, giving the market confidence going forward, Lebow said.
“The US is going to lead the demand recovery” and “now that COVID cases are declining across most of western Europe, there’s excitement around a strong pickup in global economic activity and improved air travel in the coming months,” Oanda Corp senior market analyst Edward Moya said.
However, “to take out the March highs, the situation in India needs to be heading in the right direction,” he added.
West Texas Intermediate for June delivery on Friday fell US$1.43 to settle at US$63.58 a barrel, up 2.3 percent for the week.
Brent crude for June delivery on Friday fell US$1.29 to US$66.76 a barrel, up 2 percent weekly.
Goldman Sachs Group Inc this week said demand could post a record jump as vaccination rates increase, while Bank of America Global Research flagged that the summer travel increase could be “significantly more robust” than is being priced in.
“Global oil demand is set for a massive boost in the coming months that will offset Indian demand losses and OPEC’s supply comeback, and that is why prices have been mostly rising during the week,” Rystad Energy head of oil markets Bjornar Tonhaugen said. “This summer’s tightening is not fully priced in yet, and if the India malaise starts to stabilize, oil prices can rally further into a hot, hot summer crude market.”
Oil’s overall advance is in keeping with a broad-based surge in interest in commodities this week, driven by optimism in key economies and tightening supplies of raw materials.
That ha pushed the Bloomberg Spot Commodity Index to the highest level since 2012 in previous sessions.
Some technical gauges of market health reflect the short-term risks to oil demand. The structure of the Middle Eastern Dubai benchmark flipped to a slight contango on Thursday, an indication that market tightness might be easing. The bullish backwardation structure in the prompt timespread for Brent crude has also softened in recent sessions from an intraday high of US$0.72 a barrel at the start of the week.
Additional reporting by staff writer
UNWANTED ATTENTION: In the past two months, the automaker has made headlines, with a Chinese military ban of its vehicles and a protest at an expo Electric vehicle maker Tesla Inc, facing scrutiny in China over safety and customer service complaints, is boosting its engagement with regulators and beefing up its government relations team, industry sources said. Tesla’s change of strategy leading to more behind-the-scenes interaction with policymakers in Beijing compared with relatively little previously shows the seriousness with which the US automaker views the setbacks in its second-biggest market. TALKING SHOP It also comes at a time when China is trying to regulate large and powerful private companies, especially in the technology sector, on concerns about their market dominance. As they do elsewhere, regulators in China, the world’s biggest
Dell Technologies Inc has agreed to sell its Boomi cloud business to private equity firms Francisco Partners and TPG in a cash deal valued at US$4 billion, as part of efforts by chief executive officer Michael Dell to trim down the PC maker. The deal is expected to close by the end of this year, the companies said in a statement on Sunday without providing additional details of the terms. Dow Jones had earlier reported that the companies were near a deal. Boomi specializes in integrating different cloud platforms for companies and has more than 15,000 customers. Dell agreed to acquire the company for
Intel Corp wants 8 billion euros (US$9.7 billion) in public subsidies toward building a semiconductor factory in Europe, chief executive officer Pat Gelsinger was cited as saying on Friday, as the region seeks to reduce its reliance on imports amid a shortage of supplies. The pitch is the first time that Gelsinger has publicly put a figure on how much state aid he would want, as Intel campaigns to take on Asian rivals in contract manufacturing. “What we’re asking from both the US and the European governments is to make it competitive for us to do it here, compared to in Asia,”
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that it is considering further capacity expansion as customers are requesting more capacity due to rising end-market demand and persistent supply constraints. The Hsinchu-based company said that emerging technologies and applications from 5G, artificial intelligence and electric vehicles are driving semiconductor demand. The semiconductor industry has a positive outlook for this year and beyond, with shipments of all diameters of wafers to increase through 2023, GlobalWafers said. “We have received requests for expansion from many strategic partners. We are now in discussions with customers,” company chairwoman Doris Hsu (徐秀蘭) told a
RSS