Oil prices tumbled on Friday as investors worried about demand amid a fragile global economic recovery and showed little reaction to renewed unrest in Nigeria’s oil-producing region.
New York’s main futures contract, light sweet crude for delivery next month, dropped US$1.39 to close at US$78 a barrel.
In London, Brent North Sea crude for March delivery dropped US$1.46 to settle at US$77.11.
The New York benchmark contract has fallen for five consecutive sessions since closing at US$82.75 a week ago.
Traders continued to weigh weak energy demand in the US that raised concern about the strength of a fragile recovery in the world’s largest economy, after official data showed unexpected increases in US petroleum reserves.
“The second consecutive weekly build to crude stocks has been disconcerting for investors who were expecting a drop as a consequence of rising heating demand,” Mike Fitzpatrick of MF Global said.
A bearish report on Friday from the International Energy Agency (IEA) also dented sentiment.
The IEA said oil demand this year would be “sluggish” in the developed world, with emerging markets accounting for any increases.
The agency left unchanged a prior forecast of a 1.7 percent rise in global demand this year to 86.3 million barrels per day.
“IEA has left its demand forecast unchanged, and reflects a still constricted global economy, which will be increasingly supplied by rising output room non-OPEC producers, showing the cartel’s dwindling ability to influence prices,” Fitzpatrick said.
Meanwhile, geopolitical tensions in Nigeria were drawing attention.
Nigerian gunmen demanded a ransom of 300 million naira (US$1.98 million) for the release of three Britons and a Colombian abducted this week, police said on Friday.
The four — contract workers for the Anglo-Dutch oil giant Shell — were abducted on Tuesday.
This was the first major kidnapping in southern Nigeria since last July in the wake of a government amnesty which saw thousands of militants lay down their arms.
Armed groups claiming to seek a fairer share of oil revenue for locals since 2006 have staged attacks on oil installations in the Niger Delta, wreaking havoc with crude output and international oil prices.
An attack on a Chevron pipeline last Friday forced a shutdown of 20,000 barrels a day.
Nigeria’s main rebel armed group, the Movement for the Emancipation of the Niger Delta, said it had approved the attack.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
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