Oil prices sank this week to three-and-a-half-year lows close to US$50 a barrel, prompting the OPEC exporters’ cartel to call an emergency meeting to discuss a mooted output cut.
Commodity markets took a heavy knock as recession swept across the world’s advanced economies, with the eurozone, as well as Italy and Germany, all recording two straight quarters of negative economic growth.
“We believe the depth and duration of the current economic downturn will sustain downward pressure on metal and energy prices into 2009,” Deutsche Bank analyst Michael Lewis said. “We view any recovery in commodity prices, and specifically energy and metal prices, as a 2010 event.”
The price of crude oil fell sharply as the International Energy Agency (IEA) warned that global energy demand was being severely crimped by the effects of approaching worldwide recession.
Brent North Sea crude for delivery in December on Thursday dived to US$50.60 a barrel — the lowest level since May 2005.
At the same time, New York’s light sweet crude for December delivery slid to US$54.67, a level last seen in January last year.
Crude prices have collapsed by about two-thirds since striking record peaks above US$147 in July, on concern that a prolonged global recession could slam the brakes on energy demand.
That, in turn, has sparked alarm among the OPEC cartel, whose member nations pump 40 percent of the world’s crude supplies, because their oil revenues have been slashed.
OPEC will hold a special meeting in Cairo on Nov. 29, a spokesman for the organization said on Friday amid some pressure in its ranks, notably from Iran, for a new output cut to hold up prices.
OPEC agreed in October to reduce production by 1.5 million barrels a day from Nov. 1, but prices have continued to slide since then.
Iran, No. 2 oil producer in OPEC after Saudi Arabia, said it would support a decision to cut production by the cartel at the meeting.
On Thursday, the IEA slashed its oil price forecast for next year to US$80 from US$110, saying imminent recession was strangling demand in rich countries and crimping emerging economies.
The IEA made further big cuts to its estimates of global demand growth in its monthly report but said that despite recent heavy price falls to the US$60 range, prices on futures contracts still hovered around US$85 a barrel.
By Friday on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in December fell to US$57.58 a barrel from US$62.96 a week earlier.
On London’s InterContinental Exchange (ICE), Brent North Sea crude for January dropped to US$55.34 a barrel from US$58.80.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so