US oil rises above $70 for first time since November 2014 on Venezuela, Iran worries

Hedge funds cut their net long US crude futures and options positions in the week to May 1 by 11,825 contracts to 444,060, according to the US Commodity Futures Trading Commission. (Reuters)
Updated 07 May 2018
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US oil rises above $70 for first time since November 2014 on Venezuela, Iran worries

  • Worries over a looming decision on whether the US will walk away from a deal with Iran and instead re-imposes sanctions on Tehran keep market on edge
  • Some traders, however, are becoming cautious about ever higher oil prices

SINGAPORE: US oil prices rose above $70 a barrel on Monday for the first time since November 2014, as a deepening economic crisis in Venezuela threatened the country’s already tumbling oil supplies.
The concerns added to worries over a looming decision on whether the United States will walk away from a deal with Iran and instead re-imposes sanctions on Tehran, keeping international oil markets on edge.
US West Texas Intermediate (WTI) crude futures rose 0.7 percent to trade at $70.18 per barrel at 0242 GMT, up 46 cents from their last settlement.
Brent crude oil futures were at $75.22 per barrel, up 35 cents, or 0.5 percent from their last close.
Analysts warned that the deepening economic crisis in major oil exporter Venezuela threatened to further crimp its production and exports.
Shannon Rivkin, investment director of Australia’s Rivkin Securities, said that oil prices had been driven up due to “growing concerns over the economic collapse of Venezuela and its oil industry, plus possible new sanctions against Iran from the Trump administration.”
US oil firm ConocoPhillips has moved to take key Caribbean assets of Venezuela’s state-run PDVSA to enforce a $2 billion arbitration award, actions that could further impair PDVSA’s declining oil production and exports.
Venezuela’s oil output has halved since the early 2000s to just 1.5 million barrels per day (bpd), as the South American country has failed to invest enough to maintain its petroleum industry.
Beyond Venezuela’s woes Greg McKenna, chief market strategist at futures brokerage AxiTrader, said “the big story this week is going to be about oil and the Iran Nuclear deal.” Most market participants expect Trump to withdraw from the pact, he said.
Iran re-emerged as a major oil exporter in 2016 after international sanctions against it were lifted in return for curbs on Iran’s nuclear program.
Expressing doubts over Iran’s sincerity, Trump has threatened to walk away from the 2015 agreement by not extending sanctions waivers when they expire on May 12, which would likely result in a reduction of Iran’s oil exports.
Some traders, however, are becoming cautious about ever higher oil prices.
Hedge funds cut their net long US crude futures and options positions in the week to May 1 by 11,825 contracts to 444,060, according to the US Commodity Futures Trading Commission.
Looming over markets is surging US output, which has soared by more than a quarter in the last two years, to 10.62 million bpd.
US output will likely rise further this year, toward or past Russia’s 11 million bpd, as its energy firms keep drilling for more.
US energy companies added nine oil rigs looking for new production in the week to May 4, bringing the total count to 834, the highest level since March 2015, energy services firm Baker Hughes said last Friday.


Search engine Baidu becomes first China firm to join US AI ethics group

Updated 17 October 2018
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Search engine Baidu becomes first China firm to join US AI ethics group

  • The Partnership on AI (PAI), which counts Alphabet Inc’s Google, Apple Inc. and Facebook Inc. as members, is a body that develops ethical guidelines for AI research
  • Baidu’s inclusion in the group comes as Chinese and US companies are looking to ramp up cooperation on AI

BEIJING: Chinese search engine Baidu has become the first Chinese company to join an artificial intelligence (AI) ethics group led by top US tech firms, amid wider political clashes over AI competition between China and the US.
The Partnership on AI (PAI), which counts Alphabet Inc’s Google, Apple Inc. and Facebook Inc. as members, is a body that develops ethical guidelines for AI research, including ensuring research does not violate international conventions or human rights.
Last year China’s industry ministry named Baidu as one of four national AI champions, and the search firm has invested heavily in autonomous driving and deep learning in recent years.
“Baidu’s admission represents the beginning of PAI’s entrance into China. We will continue to add new members in China and around the world as we grow,” said PAI in a statement on Tuesday.

 

Baidu’s inclusion in the group comes as Chinese and US companies are looking to ramp up cooperation on AI, despite a looming political scuffle between the US and China over technology transfers.
Last year China set out a roadmap to become a world leader in AI by 2025, with plans to invest roughly $400 billion in the industry in the coming years.
The ambitions have rankled the US government, which has discussed plans to bolster security reviews of cutting-edge technology, including AI, over fears that China could access technology of strategic military importance.
China’s AI roadmap encourages technology sharing between private, public and military research groups.
Despite the clash, US companies have expanded their AI presence in China while Baidu and other Chinese firms have launched AI research labs in the US.
Last month China’s cyber ministry hosted Google, Amazon Inc. and Microsoft Corp. at its annual AI forum. All three companies have launched AI research labs in China over the past year, despite tightening censorship and data restrictions that limit the companies’ involvement in the market.
At the forum, top government officials stressed that China’s development of AI technology would be ethically conducted, adding that they have plans to retrain workers who lose their jobs to AI.

Decoder

China’s AI roadmap encourages technology sharing between private, public and military research groups.