Oil futures slumped under US$40 a barrel on Friday at the end of a tough week for the commodity, as a weakening US economy hit demand causing energy inventories to pile up.
Unemployment in the US — the world’s biggest economy and a major consumer of commodities — surged last month to 7.6 percent, the highest since 1992, as 598,000 jobs were cut, the Labor Department reported on Friday.
The number of job losses for the recession-hobbled economy was the worst since 1974, according to the monthly report on nonfarm payrolls, seen as one of the best indicators of economic momentum. The department also revised up its estimate of December job losses to 577,000 from 524,000.
“Overall, another awful payrolls report and, with initial jobless claims still edging higher, February could be even worse,” Capital Economics’ US specialist Paul Ashworth said.
The market was rocked this week by heightened concerns that the US — the world’s biggest energy consuming nation — will slash energy demand to cope with a dramatic downturn, analysts said.
The price of New York’s light sweet crude oil tumbled as low as US$38.60 a barrel on Friday after the latest bad news from across the Atlantic.
“Crude oil fell on concern that fuel demand in the US ... may decline, as a report showed the number of newly jobless climbed,” BetOnMarkets analyst Dave Evans said.
The market was also dragged lower this week by news of rising American crude inventories. US government data showed on Wednesday that crude stockpiles had soared by 7.2 million barrels last week, more than double the 2.9 million barrels forecast by analysts. It was the fifth consecutive week of gains, and the sharp rise underlined slack demand amid the global financial crisis that has brought the world economy to a near-halt.
OPEC signaled last week that it would consider more reductions in output as its member countries try to lift prices and in turn their incomes. OPEC, which pumps about 40 percent of the world’s oil, announced production cuts totalling 4.2 million barrels per day late last year. The cartel is to meet again next month.
After plunging from record highs above US$147 last July, oil prices touched multi-year lows in December, at one point nearing US$32 a barrel.
By Friday on the New York Mercantile Exchange, light sweet crude for delivery in March tanked to US$39.54 a barrel from US$41.74 a week earlier. On London’s InterContinental Exchange, Brent North Sea crude for March sank to US$45.23 a barrel from US$46.00 a barrel.
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
UPDATED FORECAST: The warning covered areas of Pingtung County and Hengchun Peninsula, while a sea warning covering the southern Taiwan Strait was amended The Central Weather Administration (CWA) at 5:30pm yesterday issued a land warning for Typhoon Usagi as the storm approached Taiwan from the south after passing over the Philippines. As of 5pm, Usagi was 420km south-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost tip, with an average radius of 150km, the CWA said. The land warning covered areas of Pingtung County and the Hengchun Peninsula (恆春), and came with an amended sea warning, updating a warning issued yesterday morning to cover the southern part of the Taiwan Strait. No local governments had announced any class or office closures as of press time last night. The typhoon
At least 35 people were killed and dozens more injured when a man plowed his car into pedestrians exercising around a sports center in the southern Chinese city of Zhuhai on Monday night. Footage showing bodies lying on the pavement appeared on social media in the hours after the crash, but had vanished by early Tuesday morning, and local police reported only “injuries.” It took officials nearly 24 hours to reveal that dozens had died — in one of the country’s deadliest incidents in years. China heavily monitors social media platforms, where it is common for words and topics deemed
Typhoon Usagi yesterday had weakened into a tropical storm, but a land warning issued by the Central Weather Administration (CWA) was still in effect in four areas in southern Taiwan. As of 5pm yesterday, Tropical Storm Usagi was over waters 120km south-southwest of Oluanpi (鵝鑾鼻), the southernmost tip of Taiwan proper, and was moving north at 9kph, CWA data showed. The storm was expected to veer northeast later yesterday. It had maximum sustained winds of 101kph, with gusts of up to 126kph, the data showed. The CWA urged residents of Kaohsiung, Pingtung County, Taitung County and the Hengchun Peninsula (恆春) to remain alert to
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