Oil broke out of a week-long slump on Friday, soaring 10 percent, as traders prepared for a long Presidents Day weekend said.
Light, sweet crude for March delivery rose US$3.53 to settle at US$37.51 a barrel on the New York Mercantile Exchange. Prices rose as high as US$38.25 in afternoon trading.
In London, the March Brent contract rose US$0.16 to settle at US$44.81 on the ICE Futures exchange.
“It’s very simply profit-taking going into a three-day holiday,” Phil Flynn at Alaron Trading Corp said.
Traders had been selling the March contract all week and buying the April, May, June and July contracts, but that changed on Friday, he said.
After opening above US$42 a barrel on Monday, crude prices have tumbled every day as traders showed little optimism that a US$790 billion stimulus package and the Treasury Department’s plan to spend more than US$1 trillion to help remove banks’ soured assets from their books would perk up the economy — and oil consumption — anytime soon.
The House on Friday passed the stimulus package 246-183 with no Republican help.
The prospect of a deal did not help the struggling Dow Jones industrial average, which fell 82 points.
Prices on Thursday closed at their lowest level of the year at US$33.98 a barrel, and appeared headed back toward the January and February contract lows of US$32.48 and US$32.70 as oil inventories continue to soar during the worst recession since at least the 1980s.
The US Energy Information Administration said on Wednesday that crude inventories for the week ended Feb. 6 jumped 4.7 million barrels to 350.8 million barrels, surpassing analyst expectations and climbing toward levels last seen in the summer of 1990 when Iraq invaded Kuwait. US oil storage sites, including the main depot in Cushing, Oklahoma, are brimming with crude, reflecting the drop-off in demand.
“During the last week, we have had fresh estimates for oil demand which now forecast the biggest decline in consumption in more than a quarter of a century,” Peter Beutel of Cameron Hanover said in his Friday report.
“We have had a merciless unemployment report showing a decline in January of nearly 600,000 jobs, and we have had yet another increase in crude oil stocks, leaving inventories at their highest levels in 15 years, and creating the biggest surplus against the previous year since 1990. These factors have worked together to press crude prices right back against their spine of support,” he said.
Traders did not read much into Friday’s jump in price, noting that markets will be closed because of the holiday tomorrow.
“I think people are taking some money off the table,” oil analyst and trader Stephen Schork said.
Prices rose even as countries using the euro said the economy contracted by a record 1.5 percent in the fourth quarter and new car sales in Europe plummeted 27 percent last month from a year earlier to the lowest level in two decades.
Meanwhile, leaders of the world’s major industrialized countries were meeting in Rome on Friday to come up with ways to repair the global financial system.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College