Oil prices endured a roller-coaster week, with an upbeat economic growth forecast for the world economy giving way to concerns over Chinese output.
Commodity markets traders balanced the IMF’s global growth forecast upgrades against news that manufacturing activity in key commodity consumer China shrank this month for the first time in six months.
“Business surveys ... suggest that the eurozone recovery gained momentum in January, while China’s manufacturing slowdown has continued,” analysts at consultancy Capital Economics said.
Photo: Reuters
OIL: New York prices on Thursday jumped to US$97.84 a barrel, the highest level since Jan. 2, helped in part by a sliding US dollar that can make commodities priced in the US unit cheaper for buyers holding rival currencies.
However, crude futures declined on Friday, mirroring sentiment across equity markets, with traders banking recent profits amid strains across emerging markets, including China and Turkey, analysts said.
“The strong rebound of the WTI oil contract has been a result of the weaker US dollar that provided strong support to the market,” analyst Myrto Sokou at Sucden brokers said.
The oil market won support this week also on upgrades to economic growth forecasts from the IMF and crude demand growth predictions from the International Energy Agency.
The IMF lifted its estimate for world economic growth on Tuesday by 0.1 percentage point to 3.7 percent for this year, hiking its global forecast for the first time in two years.
The optimistic outlook was fueled by solid growth in the US as other countries also move away from austerity budgets.
In a further boost, the International Energy Agency also raised its prediction of global oil demand, which is dependent on the strength of the world economy.
And on Thursday, the US dollar sank against the euro as Markit Economics said its eurozone composite purchasing managers index for this month rose to 53.2 points from 52.1 last month.
That was the seventh monthly increase running and the fastest rate of growth since June 2011. A number above 50 denotes expansion.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in March rose to US$107.24 a barrel from US$106.73 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for March stood at US$96.64 a barrel compared with US$94.29 for the expired February contract a week earlier.
PRECIOUS METALS: Gold prices rebounded, winning strength from the flagging US dollar and haven demand amid losses on Wall Street.
“A rare combination of plunging stocks and US dollar has seen precious metals rally,” Forex.com analyst Fawad Razaqzada said.
“The greenback has retreated viciously on the back of mostly disappointing US data and some cheerful manufacturing PMIs out of Europe which have given the euro a shot in the arm,” Razaqzada said.
The US stock market fell heavily on Thursday after the poor Chinese data, sending investors fleeing for gold, which is regarded as a haven.
By late Friday on the London Bullion Market, the price of gold rose to US$1,267 an ounce from US$1,250 a week earlier.
Silver rose to SU$20.19 an ounce from US$20.01.
On the London Platinum and Palladium Market, platinum dipped to US$1,443 an ounce from US$1,447.
Palladium slipped to US$745 an ounce from US$747.
BASE METALS: Base or industrial metals prices dropped following the disappointing Chinese data.
HSBC’s China manufacturing sector purchasing managers index fell to 49.6, below the line between growth and contraction, raising concerns that the world’s second-largest economy is still trying to find its footing.
By Friday on the London Metal Exchange, copper for delivery in three months slid to US$7,210.50 a tonne from US$7,302.25 week earlier.
Three-month aluminum fell to US$1,768 a tonne from US$1,808.
Three-month lead retreated to US$2,152 a tonne from US$2,191.
Three-month tin slid to US$22,000 a tonne from US$22,301.
Three-month nickel dipped to US$14,553 a tonne from US$14,560.
Three-month zinc declined to US$2,027 a tonne from US$2,066.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in