Oil prices rose sharply on Thursday despite more hints that energy use is way down, with traders focusing instead on a rising stock market and surprising news from retailers that suggests Americans are spending money.
If registers at the mall are ringing, that likely means people are driving.
Benchmark crude for May delivery rose nearly 6 percent, or US$2.86, to settle at US$52.24 a barrel on the New York Mercantile Exchange (NYMEX).
Trading was very light on a shortened trading week. The NYMEX was closed for Good Friday.
In London, Brent prices jumped US$2.47 to settle at US$54.06 a barrel on the ICE Futures exchange.
“A lot of little things are giving investors hope that maybe the economy has seen the worst,” said Andrew Lebow, senior vice president and broker at MF Global.
In the past week, home decor chain Bed Bath & Beyond Inc and restaurant Ruby Tuesday Inc have reported better-than-expected first-quarter results. Teen retailer Hot Topic Inc said sales at stores open at least a year rose more than analysts’ forecasts.
On Thursday, Wal-Mart Stores Inc said sales at stores open at least a year, excluding fuel, rose 1.4 percent, short of the 3.2 percent rise analysts were predicting. However, the world’s largest retailer said a later Easter was to blame and that this month’s sales were likely to be boosted by the holiday.
The US government on Thursday said new jobless claims fell more than expected. The Labor Department’s tally of initial jobless claims fell to a seasonally adjusted 654,000, down from a revised 674,000 the previous week. Analysts expected claims to drop only to 660,000.
“People are buying oil when they see signs of economic hope,” said Phil Flynn, analyst at Alaron Trading Corp.
Flynn said he would know that global demand has returned — and higher crude prices justified — when he sees both a significant drop in petroleum supplies and a decision by refineries to crank up their operations.
“Right now, we’re not seeing that,” Flynn said.
The US government reported on Thursday that natural gas storage levels in the US rose more than expected last week. Natural gas is a key energy source for many power plants and factories. Rising storage levels suggest that people are using less energy, and companies are making fewer products.
Workers in energy-intense industries like metals or manufacturing have been hit especially hard in recent rounds of job cuts. That is reflected in the growing stocks of oil and natural gas in US storage facilities. It is potential energy that is not being used, one side effect of a very bad recession.
The US Energy Department’s Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states rose by 20 billion cubic feet (566.3 million cubic meters) to about 1.67 trillion cubic feet for the week ended last Friday.
Analysts had expected a boost of between 11 billion to 16 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
On Wednesday, the US government reported crude supplies increased by 1.7 million barrels and gasoline inventories rose by 600,000 barrels,
OPEC countries continue to trim crude production in hopes of siphoning off a global surplus. Tanker tracker Oil Movements reported on Thursday that shipments from the Organization of Petroleum Exporting Countries are expected to drop another 280,000 barrels for the four-week period to April 25.
Meanwhile, with US gas supplies well above average for this time of year, refiners have cut back on gasoline production, which has in turn helped boost prices. The Energy Information Administration said 767,400 barrels of refining capacity will be offline this month, up 14.5 percent from the historical average of 670,000 barrels of offline capacity.
That could mean tighter supply and higher prices in some regions, particularly on the East Coast in the next couple of weeks.
This is the season when refineries shut down for repairs and switch over to summer blends. That, along with more people hitting the road, usually means higher gasoline prices.
In other NYMEX trading, gasoline for May delivery rose US$0.0414 to settle at US$1.4810 a gallon (US$0.3912 a liter) and heating oil gained just more than US$0.03 to settle at US$1.4288 a gallon.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College