Oil prices fell to a three-year low below US$49 a barrel yesterday in Asia as plunging stock markets, driven down by more bad US economic news, battered investor confidence.
Light, sweet crude for January delivery was down US$0.95 to US$48.47 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.
The December contract, which expired on Thursday, fell overnight by US$4.00 to settle at US$49.62 after sliding to US$48.50, the lowest level since May 18, 2005.
PHOTO: AP
“Sentiment is totally bearish, parallel to the stock market,” said Gerard Rigby, an energy analyst at Fuel First Consulting in Sydney. “Everyone is just doom and gloom and not seeing any light on the horizon for the next 12 months.”
Traders are worried that a global recession will undermine energy demand. Already, oil prices have tumbled by two-thirds from their peak of nearly US$150 a barrel in mid-July.
The Dow Jones industrial average fell 5.6 percent on Thursday to its lowest level since March 2003 after the Labor Department said new applications for jobless benefits exceeded analyst estimates and rose to the highest level of claims since July 1992.
The S&P 500 index fell 6.7 percent on Thursday to an 11-year low.
The S&P 500 has dropped more than 52 percent below its record from last October, making this the second-biggest bear market on record, exceeded only by the 83 percent drop between 1930 and 1932.
Asian stock markets followed their US counterparts down yesterday, but they pared losses as trading progressed. Japan’s benchmark Nikkei index was down 1.2 percent, Hong Kong’s Hang Seng index was down 1.4 percent. South Korea’s key index was up 0.4 percent.
“US$50 [per barrel of oil] was a psychological support level,” Rigby said. “Since we haven’t traded this low for so long, it’s hard to find a new support level.”
OPEC, which accounts for about 40 percent of global supply, may cut production before its next official meeting on Dec. 17, Rigby said. OPEC president Chakib Khelil has signalled the group may announce output reductions at the meeting, but some members, such as Iran, have called for earlier cuts.
OPEC lowered production quotas by 1.5 million barrels a day last month.
“Their revenues are dropping so much, I think OPEC will have to call an extraordinary meeting and cut quotas to try to support the market,” Rigby said. “Their last cut had zero impact on the market.”
In other NYMEX trading, gasoline futures fell US$0.01 to US$0.997 a gallon. Heating oil gained US$0.0214 to US$1.65 a gallon while natural gas for delivery next month slid US$0.038 to US$6.28 per 1,000 cubic feet (28.3m3).
IDENTITY: Compared with other platforms, TikTok’s algorithm pushes a ‘disproportionately high ratio’ of pro-China content, a study has found Young Taiwanese are increasingly consuming Chinese content on TikTok, which is changing their views on identity and making them less resistant toward China, researchers and politicians were cited as saying by foreign media. Asked to suggest the best survival strategy for a small country facing a powerful neighbor, students at National Chia-Yi Girls’ Senior High School said “Taiwan must do everything to avoid provoking China into attacking it,” the Financial Times wrote on Friday. Young Taiwanese between the ages of 20 and 24 in the past were the group who most strongly espoused a Taiwanese identity, but that is no longer
A magnitude 6.4 earthquake and several aftershocks battered southern Taiwan early this morning, causing houses and roads to collapse and leaving dozens injured and 50 people isolated in their village. A total of 26 people were reported injured and sent to hospitals due to the earthquake as of late this morning, according to the latest Ministry of Health and Welfare figures. In Sising Village (西興) of Chiayi County's Dapu Township (大埔), the location of the quake's epicenter, severe damage was seen and roads entering the village were blocked, isolating about 50 villagers. Another eight people who were originally trapped inside buildings in Tainan
‘ARMED GROUP’: Two defendants used Chinese funds to form the ‘Republic of China Taiwan Military Government,’ posing a threat to national security, prosecutors said A retired lieutenant general has been charged after using funds from China to recruit military personnel for an “armed” group that would assist invading Chinese forces, prosecutors said yesterday. The retired officer, Kao An-kuo (高安國), was among six people indicted for contravening the National Security Act (國家安全法), the High Prosecutors’ Office said in a statement. The group visited China multiple times, separately and together, from 2018 to last year, where they met Chinese military intelligence personnel for instructions and funding “to initiate and develop organizations for China,” prosecutors said. Their actions posed a “serious threat” to “national security and social stability,” the statement
CLASH OF WORDS: While China’s foreign minister insisted the US play a constructive role with China, Rubio stressed Washington’s commitment to its allies in the region The Ministry of Foreign Affairs (MOFA) yesterday affirmed and welcomed US Secretary of State Marco Rubio statements expressing the US’ “serious concern over China’s coercive actions against Taiwan” and aggressive behavior in the South China Sea, in a telephone call with his Chinese counterpart. The ministry in a news release yesterday also said that the Chinese Ministry of Foreign Affairs had stated many fallacies about Taiwan in the call. “We solemnly emphasize again that our country and the People’s Republic of China are not subordinate to each other, and it has been an objective fact for a long time, as well as
RSS