Oil futures hit a new closing high in London on Friday as a forecast of slower growth in worldwide crude demand did little to ease speculative fervor.
Analysts said the International Energy Agency’s (IEA) forecast of a “dramatic” slowing of the US economy that would curb energy demand failed to dent prices. Instead, traders looked to oil amid turmoil in stock markets after a weak outlook from General Electric.
In London, Brent North Sea crude for May firmed US$0.55 to a settlement high of US$108.75 per barrel, after striking a historic US$109.98 on Thursday.
New York’s main oil contract, light sweet crude for delivery in May, fell US$0.02 to close at US$110.14 a barrel. The contract had rocketed to a record US$112.21 on Wednesday.
The IEA warning came in a week in which the US government announced heavy falls to its energy stockpiles, news that sent crude futures soaring.
In its monthly report on trends in the energy market, the IEA revised down “significantly” its estimate for global demand for oil this year to 87.2 million barrels per day, a reduction of 310,000 barrels per day from the estimate in last month’s report.
Still, the market showed little reaction.
“Oil’s long bullish odyssey continues and seems like it wants to continue despite the fact there are ominous signs that demand in the good old gas guzzling US of A is continuing to slow and slow dramatically,” Phil Flynn at Alaron Trading said.
“Despite this gloomy oil demand outlook, the market is assuming either that the demand destruction in the US will be short-lived or demand in the rest of the world will stay strong enough to not make a difference to the unrelenting bullish trend,” Flynn said.
The IEA’s oil demand growth forecast for 2008 was cut from two percent last month to 1.5 percent this month, noted Sucden analyst Nimit Khamar. “This goes to show how the whole mechanics of the oil markets have changed, as market participants are ignoring the fundamentals of supply and demand and are instead plowing money into the oil markets in search for better returns and as a means of hedging against inflation and their dollar exposure,” he said.
John Kilduff at MF Global said even if demand weakens in the US, growth in China may take up the slack.
The market has so far been able to limit concerns over slow oil demand due to resiliency in demand from China,” he said. “In fact, China imported a record amount of crude oil in March, up 25 percent from a year ago, and this news helped to underpin oil prices overnight.”
Crude futures were boosted on Wednesday after the US Department of Energy reported that US energy stockpiles fell across the board during the week ending April 4.
US crude reserves slumped by 3.2 million barrels and gasoline inventories shed 3.4 million barrels, the department said. Both falls were higher than market expectations.
Traders are focused on supplies of gasoline ahead of peak demand in the US driving season, starting next month, when many Americans hit the roads for their holidays.
STILL COMMITTED: The US opposes any forced change to the ‘status quo’ in the Strait, but also does not seek conflict, US Secretary of State Marco Rubio said US President Donald Trump’s administration released US$5.3 billion in previously frozen foreign aid, including US$870 million in security exemptions for programs in Taiwan, a list of exemptions reviewed by Reuters showed. Trump ordered a 90-day pause on foreign aid shortly after taking office on Jan. 20, halting funding for everything from programs that fight starvation and deadly diseases to providing shelters for millions of displaced people across the globe. US Secretary of State Marco Rubio, who has said that all foreign assistance must align with Trump’s “America First” priorities, issued waivers late last month on military aid to Israel and Egypt, the
France’s nuclear-powered aircraft carrier and accompanying warships were in the Philippines yesterday after holding combat drills with Philippine forces in the disputed South China Sea in a show of firepower that would likely antagonize China. The Charles de Gaulle on Friday docked at Subic Bay, a former US naval base northwest of Manila, for a break after more than two months of deployment in the Indo-Pacific region. The French carrier engaged with security allies for contingency readiness and to promote regional security, including with Philippine forces, navy ships and fighter jets. They held anti-submarine warfare drills and aerial combat training on Friday in
COMBAT READINESS: The military is reviewing weaponry, personnel resources, and mobilization and recovery forces to adjust defense strategies, the defense minister said The military has released a photograph of Minister of National Defense Wellington Koo (顧立雄) appearing to sit beside a US general during the annual Han Kuang military exercises on Friday last week in a historic first. In the photo, Koo, who was presiding over the drills with high-level officers, appears to be sitting next to US Marine Corps Major General Jay Bargeron, the director of strategic planning and policy of the US Indo-Pacific Command, although only Bargeron’s name tag is visible in the seat as “J5 Maj General.” It is the first time the military has released a photo of an active
CHANGE OF MIND: The Chinese crew at first showed a willingness to cooperate, but later regretted that when the ship arrived at the port and refused to enter Togolese Republic-registered Chinese freighter Hong Tai (宏泰號) and its crew have been detained on suspicion of deliberately damaging a submarine cable connecting Taiwan proper and Penghu County, the Coast Guard Administration said in a statement yesterday. The case would be subject to a “national security-level investigation” by the Tainan District Prosecutors’ Office, it added. The administration said that it had been monitoring the ship since 7:10pm on Saturday when it appeared to be loitering in waters about 6 nautical miles (11km) northwest of Tainan’s Chiang Chun Fishing Port, adding that the ship’s location was about 0.5 nautical miles north of the No.
RSS