Oil prices fell sharply on Friday, closing well under US$90 a barrel after a string of dismal economic reports renewed worries that a possible US recession could stunt oil demand.
Responding to recent price declines, OPEC said on Friday it would maintain current oil output levels.
The week ended with the US Labor Department reporting that employers cut 17,000 jobs last month, the first reduction in more than four years and a sign that the economy continues to weaken. Construction spending also fell by a record amount, according to the Commerce Department, reflecting a sharp pullback in residential building.
An expansion in the US manufacturing sector last month didn't inspire traders. The modest increase, reported by the Institute for Supply Management on Friday, follows a contraction in December.
"The jobs number is truly calling into question what kind of demand we're going to have in this first half of this year," said James Cordier, president of Liberty Trading Group in Tampa, Florida. "Economic conditions are deteriorating faster than earlier expected."
On Thursday, the US government said consumer spending in December posted its worst performance since June, while claims for unemployment benefits jumped more than three times what economists expected.
"All signs right now are pointing to a weaker economy," Cordier said.
Light, sweet crude for March delivery dropped US$2.79 to settle at US$88.96 a barrel on the New York Mercantile Exchange. In London, Brent crude futures settled US$2.77 lower at US$89.44 a barrel on the ICE Futures exchange.
On Friday in Vienna, OPEC said output levels would not be increased out of concerns that a weakening global economy will result in softer demand.
"The OPEC decision was telegraphed by oil minister comments over the past two weeks, so the market was well-prepared for a quota rollover," said Tim Evans, an energy analyst at Citigroup Global Markets.
Friday's special meeting was set in December after prices flirted with the US$100-a-barrel level to give the 13-nation organization a chance to step in and increase output in case volatile markets needed calming.
However, looking ahead to the next meeting next month, Qatar's Abdullah bin Hamad al-Attiyah said "all the possibilities are there" -- shorthand for a possible cut in production, if the US economy weakens enough to cut into demand.
Through Wednesday, oil prices had risen US$5.34 a barrel, or 6.1 percent, over five trading days on optimism that the US Federal Reserve's rate cuts and an economic stimulus package working its way through Congress will stave off a serious downturn. But many investors doubt the plans will work.
Heating oil futures decreased US$0.0802 to settle at US$2.4489 a gallon (US$0.6469 per liter), while gasoline prices lost US$0.0738 to US$2.2834 a gallon.
Natural gas futures declined US$0.334 to settle at US$7.740 per 1,000 cubic feet (US$0.2733 per cubic meter).
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from US President Donald Trump. The Fed cut its key lending rate by a full percentage point in the final four months of last year and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of 2 percent. “I think they will do nothing, and I think they should do nothing,” Federal Reserve Bank of St Louis former president Jim Bullard said. “I think the
Cryptocurrencies gave a lukewarm reception to US President Donald Trump’s first policy moves on digital assets, notching small gains after he commissioned a report on regulation and a crypto reserve. Bitcoin has been broadly steady since Trump took office on Monday and was trading at about US$105,000 yesterday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed. Smaller cryptocurrency ether has likewise had a fairly steady week, although was up 5 percent in the Asia day to US$3,420. Bitcoin had been one of the most spectacular “Trump trades” in financial markets, gaining 50 percent to break above US$100,000 and
RSS