Oil posted its first weekly loss in two months as traders weighed heightened geopolitical tensions over Ukraine against the potential for Iranian barrels to be added to the market.
West Texas Intermediate (WTI) for March delivery closed down 0.7 percent at US$91.07 a barrel on Friday.
US crude fell 2.2 percent this week, fluctuating as prices of commodities from gas to metals and food swung with every twist and turn in the standoff between the West and Russia.
Brent crude for April delivery on Friday rose 0.6 percent to US$93.54 a barrel, down 0.95 percent weekly.
While the US ramped up warnings of a possible Russian attack on Ukraine, Russian officials continued to reiterate that no invasion was under way and none was planned.
US Secretary of State Antony Blinken and Russian Minister of Foreign Affairs Sergei Lavrov have agreed to meet for talks next week.
Even with its most recent leg higher, oil’s recent rally has shown signs of cooling.
The North Sea market has seen differentials for physical barrels ease, while refining margins have come under pressure. One oil-focused exchange-traded fund saw its biggest daily withdrawal since July 2020.
Additionally, mounting speculation that Iran’s nuclear deal might be revived is damping some of the bullish signals. The deal could pave the way for the removal of US sanctions on the nation’s crude exports, adding much-needed supply to the market.
WTI’s prompt spread — the difference between its nearest two contracts — dropped to US$0.86, down sharply from its US$2 premium earlier this week. The narrower spread signals that traders expect supplies to be somewhat less tight next month amid muted exports. March crude futures expire on Tuesday.
Crude rose to the highest since 2014 this week in a blistering rally underpinned by roaring demand, constrained supply and declining inventories.
The underlying market is one of the strongest its been in years, and Dated Brent, a more immediate measurement of oil prices, hit US$100 a barrel.
While the market remains strong, prices have weakened as the geopolitical risk premium has declined in the past few days.
“It doesn’t matter how tight the oil market is right now, energy traders are taking risk off the table,” Oanda Corp senior market analyst Ed Moya said. “In addition to the Ukraine situation, Iran nuclear talks continue to head in the right direction, potentially paving the way for more barrels of crude to hit the oil market later this year.”
Issues surrounding Iran’s nuclear accord are set to be discussed at a key transatlantic security meeting in Munich, Germany, this weekend.
Additional reporting by staff writer
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his