Oil prices rose sharply on Thursday despite more hints that energy use is way down, with traders focusing instead on a rising stock market and surprising news from retailers that suggests Americans are spending money.
If registers at the mall are ringing, that likely means people are driving.
Benchmark crude for May delivery rose nearly 6 percent, or US$2.86, to settle at US$52.24 a barrel on the New York Mercantile Exchange (NYMEX).
Trading was very light on a shortened trading week. The NYMEX was closed for Good Friday.
In London, Brent prices jumped US$2.47 to settle at US$54.06 a barrel on the ICE Futures exchange.
“A lot of little things are giving investors hope that maybe the economy has seen the worst,” said Andrew Lebow, senior vice president and broker at MF Global.
In the past week, home decor chain Bed Bath & Beyond Inc and restaurant Ruby Tuesday Inc have reported better-than-expected first-quarter results. Teen retailer Hot Topic Inc said sales at stores open at least a year rose more than analysts’ forecasts.
On Thursday, Wal-Mart Stores Inc said sales at stores open at least a year, excluding fuel, rose 1.4 percent, short of the 3.2 percent rise analysts were predicting. However, the world’s largest retailer said a later Easter was to blame and that this month’s sales were likely to be boosted by the holiday.
The US government on Thursday said new jobless claims fell more than expected. The Labor Department’s tally of initial jobless claims fell to a seasonally adjusted 654,000, down from a revised 674,000 the previous week. Analysts expected claims to drop only to 660,000.
“People are buying oil when they see signs of economic hope,” said Phil Flynn, analyst at Alaron Trading Corp.
Flynn said he would know that global demand has returned — and higher crude prices justified — when he sees both a significant drop in petroleum supplies and a decision by refineries to crank up their operations.
“Right now, we’re not seeing that,” Flynn said.
The US government reported on Thursday that natural gas storage levels in the US rose more than expected last week. Natural gas is a key energy source for many power plants and factories. Rising storage levels suggest that people are using less energy, and companies are making fewer products.
Workers in energy-intense industries like metals or manufacturing have been hit especially hard in recent rounds of job cuts. That is reflected in the growing stocks of oil and natural gas in US storage facilities. It is potential energy that is not being used, one side effect of a very bad recession.
The US Energy Department’s Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states rose by 20 billion cubic feet (566.3 million cubic meters) to about 1.67 trillion cubic feet for the week ended last Friday.
Analysts had expected a boost of between 11 billion to 16 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
On Wednesday, the US government reported crude supplies increased by 1.7 million barrels and gasoline inventories rose by 600,000 barrels,
OPEC countries continue to trim crude production in hopes of siphoning off a global surplus. Tanker tracker Oil Movements reported on Thursday that shipments from the Organization of Petroleum Exporting Countries are expected to drop another 280,000 barrels for the four-week period to April 25.
Meanwhile, with US gas supplies well above average for this time of year, refiners have cut back on gasoline production, which has in turn helped boost prices. The Energy Information Administration said 767,400 barrels of refining capacity will be offline this month, up 14.5 percent from the historical average of 670,000 barrels of offline capacity.
That could mean tighter supply and higher prices in some regions, particularly on the East Coast in the next couple of weeks.
This is the season when refineries shut down for repairs and switch over to summer blends. That, along with more people hitting the road, usually means higher gasoline prices.
In other NYMEX trading, gasoline for May delivery rose US$0.0414 to settle at US$1.4810 a gallon (US$0.3912 a liter) and heating oil gained just more than US$0.03 to settle at US$1.4288 a gallon.
‘REGRETTABLE’: TPP lawmaker Vivian Huang said that ‘we will continue to support Chairman Ko and defend his innocence’ as he was transferred to a detention facility The Taipei District Court yesterday ruled that Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) be detained and held incommunicado over alleged corruption dating to his time as mayor of Taipei. The ruling reversed a decision by the court on Monday morning that Ko be released without bail. After prosecutors on Wednesday appealed the Monday decision, the High Court said that Ko had potentially been “actively involved” in the alleged corruption and ordered the district court to hold a second detention hearing. Ko did not speak to reporters upon his arrival at the district court at about 9:10am yesterday to attend a procedural
Thirty Taiwanese firms, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and ASE Technology Holding Co (日月光投控), yesterday launched a silicon photonics industry alliance, aiming to accelerate the medium’s development and address the energy efficiency of artificial intelligence (AI) devices like data centers. As the world is ushering in a new AI era with tremendous demand for computing power and algorithms, energy consumption is emerging as a critical issue, TSMC vice president of integrated interconnect and packaging business C.K. Hsu (徐國晉) told a media briefing in Taipei. To solve this issue, it is essential to introduce silicon photonics and copackaged optics (CPO)
The High Court yesterday overturned a Taipei District Court decision to release Taiwan People’s Party Chairman Ko Wen-je (柯文哲) and sent the case back to the lower court. The Taipei District Prosecutors’ Office on Saturday questioned Ko amid a probe into alleged corruption involving the Core Pacific City development project during his time as Taipei mayor. Core Pacific City, also known as Living Mall (京華城購物中心), was a shopping mall in Taipei’s Songshan District (松山) that has since been demolished. On Monday, the Taipei District Court granted a second motion by Ko’s attorney to release him without bail, a decision the prosecutors’ office appealed
GRAFT PROBE: Critics questioned Ko claiming he did not know about the Core Pacific floor area ratio issue until this year, citing a 2021 video in which he was asked about it Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) was released without bail early yesterday, while his deputy during his tenure as Taipei mayor was detained and held incommunicado after being questioned since Friday over graft allegations related to a shopping center redevelopment project. Prosecutors on Saturday filed a request with the Taipei District Court to officially detain Ko and former Taipei deputy mayor Pong Cheng-sheng (彭振聲) over allegations surrounding the redevelopment of Core Pacific City, also known as Living Mall (京華城購物中心). The court yesterday determined that the evidence provided by prosecutors was insufficient to justify the detention of Ko and ordered his