The latest rumblings in the Yukos affair this week have raised more questions about OPEC's ability to control oil prices and further strengthened a widely-held view that a US$50 barrel might not be too far in the future.
OPEC, which has in the past been known to keep a tighter ship, has recently issued a string of contradictory statements which question its ability to react to the current ructions.
Its president Purnomo Yusgiantoro began by putting the wind up traders by declaring the current rates "mad" and adding that even Saudi Arabia, fittest of all OPEC's members, could not increase production in the immediate future.
Prices surged as experts interpreted the declaration as a sign there was no margin for safety available should a country default, an eventuality that gains extra significance in the context of Iraq, Nigeria, Venezuela and Russia, where oil giant Yukos staggers from one setback to the next.
Yusgiantoro attempted to make amends by saying shortly afterwards that OPEC did in fact have spare production capacity of up to 1.5 million barrels per day, before adding that whatever happened, no decision would be taken before the organisation's next meeting in mid-September.
The inconsistency must also be seen in the light of a clear error in evaluation in April which resulted in OPEC reducing its production ceiling by 1 million barrels a day, even though the price of oil was already above US$30 a barrel.
It also led analysts and consumers to doubt OPEC's determination to genuinely stabilise the market. Since then the cartel has performed a U-turn, raising its quota several times.
These difficulties, compounded by the increasingly tenuous state of Yukos and the concerns swirling round a referendum in Venezuela that could lead to a change of regime, sent oil prices spiralling upwards.
On Friday they were hovering around the US$41.5 per barrel mark in London and were at an historic peak of US$44.77 in New York.
Analysts said there was little sign of any real let-up for several months given the patent imbalance between supply and demand.
Indeed, demand looks set to grow sharply in the months ahead (an increase of 3.2 percent to 81.4 million barrels a day), nudged on by the recovery of the world economy and by rapid growth in India and China. Supply, on the other hand, already virtually at a standstill, will almost certainly not keep up.
Experts rule out another major oil crisis, even though many now accept that the US$50 a barrel price is on the cards.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
CRITICAL MOVE: TSMC’s plan to invest another US$100 billion in US chipmaking would boost Taiwan’s competitive edge in the global market, the premier said The government would ensure that the most advanced chipmaking technology stays in Taiwan while assisting Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in investing overseas, the Presidential Office said yesterday. The statement follows a joint announcement by the world’s largest contract chipmaker and US President Donald Trump on Monday that TSMC would invest an additional US$100 billion over the next four years to expand its semiconductor manufacturing operations in the US, which would include construction of three new chip fabrication plants, two advanced packaging facilities, and a research and development center. The government knew about the deal in advance and would assist, Presidential
RSS