Oil prices shot up more than US$6 a barrel on Friday, breaking back into US$100 territory as a sweeping government plan to rescue the imperiled US financial system emboldened investors to re-enter the markets.
Light, sweet crude for October delivery rose US$6.67 to settle at US$104.55 a barrel on the New York Mercantile Exchange, after earlier rising as high as US$105.25. It was oil’s first close above US$100 in a week. In London, November Brent crude rose US$4.42 to settle at US$99.61 a barrel on the ICE Futures exchange.
Crude has climbed more than US$13 in the past three days as the US government carried out a historic intervention into the financial system. But analysts say prices could resume their downward trend, noting that demand for energy will likely remain weak as a slumping economy leads Americans to drive less and businesses to scale back operations.
On Friday, US Treasury Secretary Henry Paulson said the rescue plan was aimed at removing billions of dollars of troubled assets from the books of banking institutions and restoring calm to panicky financial markets after a week of intense volatility.
The US Securities and Exchange Commission also temporarily banned short-selling — or betting that a stock will fall — of about 800 financial firms, hoping to stem heavy losses in that sector.
The moves soothed skittish traders and sent stocks surging on Wall Street, giving a boost to energy and other commodities. Crude jumped nearly US$5 in morning trading, gave back most of the gains later in the day and then climbed again toward the end of regular trading.
“The government rescue plan has reduced the likelihood of a financial meltdown, so the theme of energy demand deterioration is being pushed to the back burner for the time being,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Illinois.
But he and other analysts said that oil’s fundamentals remain largely bearish.
Crude prices have fallen about US$43 since reaching a record US$147.27 a barrel on July 11 on concern that slowing economic growth in developed countries will undermine crude demand.
Those fears deepened this week as turmoil in the US financial system led to the bankruptcy of investment bank Lehman Brothers Holding Inc and an US$85 billion government rescue of insurer American International Group Inc.
“People realize we still have a weak economy and US$100 oil in these conditions is still very expensive,” said Stephen Schork, an analyst and oil trader in Villanova, Pennsylvania.
“I’m not a believer that the ship has been turned around and that we’re going back toward US$150 oil,” Schork said.
Nigeria’s main militant group said on Thursday it bombed another oil pipeline, marking a sixth straight day of stepped-up violence in Africa’s oil giant.
The Movement for the Emancipation of the Niger Delta said in a statement it used high explosives to destroy the conduit run by a unit of Royal Dutch Shell PLC.
Shell officials could not immediately be reached for comment.
The militants have declared an “oil war” in the Niger Delta, where militants demanding more oil-industry funds from the federal government have increased attacks. About 40 percent of Nigeria’s normal daily oil production is now off-line, severely curtailing exports.
Still, oil traders seemed to largely ignore the violence, repeating a trend of recent weeks in which normally bullish news fails to rally the market.
“The focus of the market right now has switched from supply to demand,” said Mark Pervan, senior commodity strategist with ANZ Bank in Melbourne.
“So these stories will have some impact, but not as much as they had during the last six months when the market was supply-driven,” Pervan said.
Taiwan aims to open 18 representative offices and seven Taiwan Tourism Information Centers worldwide by next year to attract international visitors, the Tourism Administration said on Saturday. The agency has so far opened three representative offices abroad this year and would open two more before the end of the year, it said. It has also already opened information centers in Jakarta, Mumbai and Paris, and is to open one in Vancouver next month and in Manila in December, it said. Next year, it would also open offices in Amsterdam, Dubai and Sydney, it added. While the Cabinet did not mention international tourists in its
EYES AT SEA: Many marine enthusiasts have expressed interest in volunteering for coastal patrols, which would help identify stowaways and illegal fishing, the CGA said Six thousand coastal patrol volunteers are to be recruited for 159 inspection offices to enhance the nation’s response to “gray zone” conflicts, Coast Guard Administration (CGA) sources said yesterday. Volunteer teams would be established to increase the resilience of coastal defense systems in the wake of two unlawful entries attempted by Chinese over the past three months, Ocean Affairs Council Minister Kuan Bi-ling (管碧玲) said. A former Chinese navy captain drove a motorboat into the Tamsui River (淡水河) in Taipei on the eve of the Dragon Boat Festival in June, while another Chinese man sailed in a rubber boat into the Houkeng
NEXT LEVEL: The defense ministry confirmed that a video released last month featured personnel piloting new FPV drone systems being developed by the Armaments Bureau Taipei and Washington are pushing for their drone companies to work together to establish a China-free supply chain, the Financial Times reported on Friday. A delegation of high-level executives and US government officials were yesterday to arrive in Taipei to discuss with their Taiwanese counterparts collaboration on drone technology procurement and development, the report said. The executives represent 26 US manufacturers of drone and counter-drone systems, while the officials are from the US Department of Commerce and the US Department of Defense’s Defense Innovation Unit, along with Dev Shenoy, principal director for microelectronics in the Office of the Under Secretary of Defense
‘ANONYMOUS 64’: A national security official said that it is an attempt by China to increase domestic anti-Taiwanese sentiment and inflame cross-strait tensions The Ministry of National Defense’s (MND) Information, Communications and Electronic Force Command (ICEFCOM) yesterday denied accusations by China that it had undermined regional security by carrying out cyberattacks against targets in China, adding instead that Beijing was responsible for raising tensions and undermining regional peace. The Chinese Ministry of State Security on WeChat accused a hacker group called “Anonymous 64” of targeting China, Hong Kong and Macau starting earlier this year through frequent cyberattacks. The group carried out cyberattacks to seize control of Web sites, outdoor electronic billboards and video-on-demand platforms in China, Hong Kong and Macau, it said, adding the hackers’