Crude oil fell for a third day in New York on concern the slowing US economy will cut consumption and the dollar's gain will reduce demand for commodities as a hedge against inflation.
Oil dropped 1.8 percent to US$100.02 a barrel after losing 7.6 percent last week. US crude prices are likely to fall toward US$90 this spring as the country's slowing economic growth encourages traders to exit commodity markets, Goldman Sachs Group Inc said in a report on Thursday.
"Fundamentals have been weak for some time now, so the recent trigger has definitely been the bottoming dollar," said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp in Tokyo.
Investors "are still not convinced the downtrend has finished," he said.
Crude oil for delivery in May traded in Singapore at US$100.64 a barrel at 2:43pm. Futures are still up 60 percent in the past year.
The dollar climbed to US$1.5341 per euro, the highest since March 12, before trading at US$1.5360 as of 12:58pm in Singapore, from US$1.5431 in New York on Friday, when it posted its first weekly advance against the euro in more than a month.
The threat of recession and a credit freeze caused the US Federal Reserve to cut its main lending rate by three-quarters of a percentage point on March 18.
Crude oil may extend declines after dropping last week for the first time in almost two months, Andy Lipow, president of Houston-based Lipow Oil Associates LLC, said in a Bloomberg interview yesterday.
"We have the ingredient for a pullback in prices in the next few months," he said. "Worldwide, crude oil inventories are rising and we are in the midst of a significant turnaround season in the US."
The Reuters/Jefferies CRB Index of 19 commodities tumbled 8.3 percent last week, the most since at least 1956, after touching a record on Feb. 29.
"Investors are re-allocating assets and taking profit from commodities to offset earlier losses from equities," said Tetsu Emori, a fund manager at Astmax Co in Tokyo. "On the fundamentals side, things are gloomy with demand to drop."
Brent crude for May settlement traded at US$99.07 a barrel at 12:24pm in Singapore after falling as much as US$1.46, or 1.5 percent, to US$98.92 a barrel on London's ICE Futures Europe exchange.
Commodities are undergoing "cyclical weakness" and fundamentals will reach their "weakest point" next month as economic conditions and high prices weigh on demand, Goldman analysts including Jeffrey Currie in London wrote in a report. Oil will rebound in the second half, returning to US$105 by the end of the year, they said.
US consumer spending was up 0.1 percent last month, the smallest gain in more than a year, according to the median estimate of economists surveyed by Bloomberg News before a US Commerce Department report due on Friday.
Combined sales of new and existing homes dropped to the lowest level in at least nine years, government and private figures may also show. The biggest job losses in five years and record fuel costs are eroding consumer confidence and spending.
Crude oil prices may fall this week as the dollar rebounds and the slowing US economy curbs consumption of fuels.
Twenty-nine of 34 analysts surveyed by Bloomberg News, or 85 percent, said prices will drop through Thursday. Four of the respondents, or 12 percent, said futures will rise and one forecast that prices will be little changed.
OPEC has no plans to reduce output after prices fell from a record, Chakib Khelil, the president of the producer group, said on Saturday. OPEC controls more than 40 percent of the world's crude supply.
Saudi Arabia, the world's biggest oil exporter, will work with OPEC and non-OPEC countries to ensure stability and "prevent the effects of harmful speculation," said a statement from the Supreme Council of Petroleum and Mineral Affairs posted on its Web Site late yesterday.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary