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.
STRONG INTEREST: Analysts have pointed to optimism in TSMC’s growth prospects in the artificial intelligence era as the cause of the rising number of shareholders The number of people holding shares of chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) hit a new high last week despite a decline in its stock price, the Taiwan Depository and Clearing Corp (TDCC, 台灣集保) said. The number of TSMC shareholders rose to 2.46 million as of Friday, up 75,536 from a week earlier, TDCC data showed. The stock price fell 1.34 percent during the same week to close at NT$1,840 (US$57.55). The decline in TSMC’s share price resulted from volatility in global tech stocks, driven by rising international crude oil prices as the war against Iran continues. Dealers said
PRICE HIKES: The war in the Middle East would not significantly disrupt supply in the short term, but semiconductor companies are facing price surges for materials Taiwan’s semiconductor companies are not facing imminent supply disruptions of essential chemicals or raw materials due to the war in the Middle East, but surges in material costs loom large, industry association SEMI Taiwan said yesterday. The association’s comments came amid growing concerns that supplies of helium and other key raw materials used in semiconductor production could become a choke point after Qatar shut down its liquefied natural gas (LNG) production and helium output earlier this month due to the conflict. Qatar is the second-largest LNG supplier in the world and accounts for about 33 percent of global helium output. Helium is
Taiwan’s natural gas supply remains stable through the end of May, despite rising concerns about potential disruptions to Qatari liquefied natural gas (LNG) supplies due to escalating conflicts in the Middle East, the Ministry of Economic Affairs said yesterday. The ministry in a statement said that Taiwan has completed preparations for natural gas supply and shipping schedules through the end of May. It has also made plans to increase natural gas imports from regions outside the Middle East in June to ensure a stable supply, it added. Taiwan sources natural gas from 14 countries and is not solely dependent on the Middle East,
China is clamping down on fertilizer exports to protect its domestic market, industry sources said, putting an additional strain on global markets that were already grappling with shortages caused by the US-Israeli war on Iran. China is among the largest fertilizer exporters — shipping more than US$13 billion of it last year — and it has a history of controlling exports to keep prices low for farmers. Shipments through the war-blocked Strait of Hormuz account for about one-third of the sea-borne supply. This month, Beijing banned exports of nitrogen-potassium fertilizer blends and certain phosphate varieties, sources said. The ban, which has not
RSS