Oil prices diverged this week as traders reacted to demand forecasts and the performance of the US dollar, while metals futures hit multi-month highs.
OIL: Crude oil began this week on a downbeat note, sinking under pressure from mediocre demand in the US, and falling further after the IEA warned about risks of high oil costs.
The IEA on Tuesday revised up its forecast for global oil demand this year by 30,000 barrels per day owing to unexpectedly strong economic activity in the US, Asia and the Middle East.
However, the IEA also warned in its latest monthly report that oil prices above US$80 a barrel could hamper economic recovery.
“While ongoing price subsidies may shield non-OECD consumers from the reality of any potential renewed surge in prices, this, plus tighter credit than two years ago, could stall OECD economic recovery or render it more ‘oil-less’ than we currently envisage,” the IEA said. “Ultimately, things might turn messy for producers if [oil at] 80-100 dollars a barrel is merely seen as the new 60-80 dollars a barrel, stunting economic recovery while prompting resurgent non-oil and non-OPEC supply investment.”
By late on Friday on the New York Mercantile Exchange, Texas light sweet crude for delivery in May slid to US$84.08 from US$85.45 a week earlier.
On London’s IntercontinentalExchange, Brent North Sea crude for June delivery stood at US$86.53 compared with US$85.23 for the May-expired contract a week earlier.
PRECIOUS METALS: Precious metals prices hit multi-month highs as the US dollar weakened.
Gold reached US$1,170 a barrel on Monday — the highest level since the start of December.
The price of gold is set to win further support as investors shun struggling currencies, notably the dollar, metals consultancy GFMS predicted on Wednesday.
“Looking ahead, further price gains were thought likely as the investment case was still perceived as strong, with for example all the major currencies now being questioned by investors,” London-based GFMS said in its latest annual survey on gold.
By late on Friday on the London Bullion Market, gold eased to US$1,151.50 an ounce from US$1,152.50 the previous week.
Silver grew to US$18.34 an ounce from US$17.69.
On the London Platinum and Palladium Market, platinum fell to US$1,708 an ounce from US$1,717.
Palladium jumped to US$532 an ounce from US$511.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
COORDINATION, ASSURANCE: Separately, representatives reintroduced a bill that asks the state department to review guidelines on how the US engages with Taiwan US senators on Tuesday introduced the Taiwan travel and tourism coordination act, which they said would bolster bilateral travel and cooperation. The bill, proposed by US senators Marsha Blackburn and Brian Schatz, seeks to establish “robust security screenings for those traveling to the US from Asia, open new markets for American industry, and strengthen the economic partnership between the US and Taiwan,” they said in a statement. “Travel and tourism play a crucial role in a nation’s economic security,” but Taiwan faces “pressure and coercion from the Chinese Communist Party [CCP]” in this sector, the statement said. As Taiwan is a “vital trading
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