Oil fell for a second consecutive month as a deteriorating demand outlook offset concerns about tight physical supplies.
West Texas Intermediate (WTI) for September delivery on Friday rose 2.28 percent to US$98.62, bringing this week’s gain to 4.14 percent.
Brent crude for September delivery rose 2.1 percent to US$103.97, up 0.75 percent from a week earlier.
Photo: EPA-EFE
Futures nevertheless recorded their first back-to-back monthly decline since 2020 as fears of an economic slowdown fueled bearish sentiment across markets.
The US economy shrank for a second quarter as rampant inflation undercut consumer spending, while Citigroup Inc said there are signs the oil market is moderating.
Still, Exxon Mobil Corp does not see any signs of major fuel demand destruction.
“I wouldn’t tell you that we’re seeing something that would say we are in a recession, or near recession,” Exxon Mobil chief executive officer Darren Woods said.
While oil has given up most of the gains seen following Russia’s invasion of Ukraine in late February, the US benchmark is still up more than 30 percent this year. The surge in energy prices has underpinned oil producer earnings, with Exxon and Chevron Corp joining Shell PLC with record profits. A weaker US dollar has also helped to boost commodity prices.
“The underlying fundamentals for oil still remain quite strong,” said Edward Bell, senior director of market economics at Emirates NBD Bank PJSC. “There are serious risks around supply: sanctions on Russia that will kick in more meaningfully later this year, OPEC+ topping out in terms of what it can add to the market and the supply response in the US not coming on.”
Oil production in Texas and New Mexico dipped in May, US government data showed, in the latest sign that growth is slowing the prolific Permian Basin. Growth has largely stalled even as producers add drilling rigs due to rising inflation in everything from labor to equipment costs.
The spread between WTI and Brent, also known as the arb, has widened as a reduction in Russian crude flows tightened markets in Europe. The global benchmark was at a premium of around US$11 to US crude, compared with about US$6 at the start of the month.
The move is exacerbated by Brent crude’s September contract expiry, but the October spread is also wide at about US$7 a barrel.
“With no major signs of fuel demand destruction, oil seems like it will soon find a home above the US$100 a barrel mark,” Oanda Corp senior market analyst Edward Moya said.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that