Oil settled back above US$69 a barrel and gasoline futures also rose on Friday on concerns about Iran's nuclear capabilities and on news that talks to end a general strike in Nigeria had failed.
The market has been fixated on US domestic supply concerns, but a lack of news from the US shifted traders' focus to international developments. The news about Iran and Nigeria sent light, sweet crude for August delivery up US$0.49 to settle at US$69.14 a barrel (159 liters) on the New York Mercantile Exchange, and gasoline for July was up US$0.0401 to settle at US$2.2868 a gallon (3.8 liters). August Brent crude rose US$0.96 to settle at US$71.18 a barrel on the ICE Futures exchange in London.
In other NYMEX trading, heating oil futures for July rose US$0.0133 to settle at US$2.038 a gallon while natural gas prices fell US$0.218 to US$7.13 per 1,000 cubic feet (28 cubic meters). A government report on Thursday showed natural gas supplies rose by 2.5 billion cubic meters in the week ended June 15, in line with expectations.
Traders began buying after Iran's interior minister, Mostafa Pourmohammadi, said his country had 100kg of enriched uranium. Investors' concern is that the West will at some point take action, military or economic, against Iran, which could disrupt oil supplies from the Persian Gulf.
"The market really started taking off from there," said Jack Hunter, an energy trader at FC Stone Group in Kansas City, Missouri.
In Nigeria, talks on Friday night between union leaders and the government failed to produce an agreement, sending Africa's largest oil-producing nation into a third day of a general strike. Strikers want the government to drop a 15 percent increase in gasoline prices, which the government subsidizes.
Later on Friday, labor leaders said the two sides continued to talk and could resolve the strike by tomorrow.
So far, the unions have failed in their threat to shut down Nigeria's oil industry.
"We don't see production being affected yet," said Michael Cohen, an industry economist at the US Energy Department's Energy Information Administration (EIA).
Nigerian oil supplies won't be affected unless the strike lasts at least a week, Cohen said, and even that is uncertain.
Still, geopolitical events that could affect supplies tend to make traders jittery, sending prices higher, analysts said.
Nigeria, which has proven oil reserves of 36.2 million barrels, according to the EIA, has been beset by political violence since December 2005 often targeting its oil infrastructure. The EIA estimates the violence has halted the production of about 587,000 barrels per day of the 2.28 million barrels of crude oil Nigeria produced each day last year. Nigeria is the third-biggest overseas supplier of oil to the US.
Analysts think traders long ago built a Nigerian violence premium into oil prices, and are taking a wait-and-see approach to the strike.
"There's historical precedent that these strikes don't last very long," said Jim Ritterbusch, president of Ritterbusch and Associates, an oil trading advisory firm in Galena, Illinois.
The EIA's report on Wednesday that showed crude inventories jumped by 6.9 million barrels in the week ended June 15 lent some support to prices. Analysts had expected crude stocks to drop by 150,000 barrels. Gasoline inventories rose by 1.8 million barrels, more than the 1 million-barrel increase expected.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his