US crude futures on Friday topped US$80 a barrel for the first time since November 2014 as a global energy crisis boosts demand at a time when OPEC+ producers are keeping supplies tight.
West Texas Intermediate (WTI) for November delivery popped above the key psychological level before pulling back and closing up 1.34 percent at US$79.35 a barrel, gaining 4.57 percent from a week earlier.
Brent crude for December delivery increased 0.54 percent a barrel to US$82.39, up 3.92 percent from a week earlier.
This week brought many indications that supplies would remain constrained: Saudi Aramco said a global natural gas shortage was already boosting oil demand for power generation and heating, and the US Energy Department said that it had no plans “at this time” to tap the nation’s oil reserves.
A weakening of the US dollar on the back of worse-than-expected US labor market data on Friday also boosted the appeal of commodities priced in the currency.
The US benchmark posted a seventh straight weekly gain, the longest stretch of advances since December last year.
The economic recovery from the COVID-19 pandemic, along with supply disruptions in the Gulf of Mexico, had already tightened the market before rising natural gas prices spurred additional demand for oil products such as diesel and fuel oil.
The decision by OPEC producers and their allies to only modestly increase output next month threatens to further constrain supplies.
Meanwhile, various underlying oil market gauges are also showing signs of strength. WTI’s nearest contract traded at the biggest premium to second-month futures since August in a sign of rising demand and tight supplies.
The so-called prompt spread has increased as more of the world attempts to substitute fuel oil for natural gas as quickly as possible.
“They don’t need to buy it a month from now, they needed it yesterday,” said Bob Yawger, director of the futures division at Mizuho Securities USA. “It’s a panic buyer’s situation.”
Meanwhile, China is still facing power outages, and Beijing has ordered state-owned firms to secure winter energy supplies at all costs. Chinese fuel oil futures jumped almost 10 percent on Friday.
Additional reporting by staff writer
SELF-SUFFICIENCY: Alibaba is one of a number of Chinese firms that has answered Beijing’s call to invest in the development of cutting-edge technologies Alibaba Group Holding Ltd (阿里巴巴) yesterday unveiled a new server chip that is based on advanced 5-nanometer technology, marking a milestone in China’s pursuit of semiconductor self-sufficiency. The Chinese tech giant’s newest chip is based on micro-architecture provided by the SoftBank Group Corp-owned Arm Ltd, it said. Alibaba, which is holding its annual cloud summit in Hangzhou, China, said that the chip is to be used in its own data centers in the “near future” and would not, for the time being, be sold commercially. “Customizing our own server chips is consistent with our ongoing efforts toward boosting our computing capabilities with better
‘SHORT-TERM ECONOMIC PAIN’: A military takeover would only temporarily weigh on wafer production on both sides of the Taiwan Strait, IC Insights said Taiwan has more chip manufacturing capacity than any other economy in the world, US-based market information advisory firm IC Insights said in a research paper last week, cautioning that the nation’s strength could prompt China to attempt to take over Taiwan. Taiwan commanded 21.4 percent of global installed IC capacity, ahead of South Korea’s 20.4 percent, Japan’s 15.8 percent and China’s 15.3 percent, North America’s 12.6 percent and Europe’s 5.7 percent, IC Insights said. Taiwan is one of two countries that uses 10-nanometer technology or better to produce wafers, holding 62.8 percent of global capacity, with South Korea holding the remaining 37.2
AGGRESSIVE STEP: With the new processors, Apple is aiming at the high-end chips Intel has provided for the MacBook Pro and other top-end Macs for about 15 years Apple Inc on Monday took the most aggressive step yet to strip Intel Corp chips from its computers, announcing more powerful homegrown Mac processors alongside a total revamp of its MacBook Pro laptop computers. The company showcased the chips at an event called “Unleashed,” which also included its latest audio products. The new components, called the M1 Pro and M1 Max chips, are 70 percent faster than its M1 predecessors, Apple said. It also unveiled a redesigned MacBook Pro, adding larger screens, MagSafe charging and better resolution. With the new processors and devices, Apple is aiming squarely at the high-end chips that Intel has
PRICE SPREAD: Oil trading under the Brent futures contract is giving the US a hefty edge in pricing, increasing the rush to secure cheap fuel as winter approaches Asian demand for US oil is rising as the energy crisis boosts prices for other crudes that are priced against the global Brent futures contract. China and other Asian buyers have been snapping up supertankers of US oil for delivery next month and seeking more for December, some traders have said. Most buyers are seeking US grades that had recently slumped to the lowest levels in more than a year, with an added incentive after Beijing awarded millions of tonnes of crude oil import quotas. A wide spread between Brent and West Texas Intermediate (WTI) oil futures is accommodating higher US crude