Oil prices push higher as supply worries drive gains

Concerns about oil supplies outweigh fears of a slowing global economy. (Reuters)
Updated 01 April 2019
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Oil prices push higher as supply worries drive gains

  • US sanctions on Iran and Venezuela along with supply cuts by OPEC members and other major producers have supported prices
  • US energy firms last week reduced the number of oil rigs operating to the lowest level in nearly a year

TOKYO: Oil prices rose on Monday, adding to gains in the first quarter when the major benchmarks posted their biggest increases in nearly a decade, as concerns about supplies outweigh fears of a slowing global economy.
Brent crude for June delivery was up by 43 cents, or 0.6 percent, at $68.01 a barrel by 0214 GMT, having risen 27 percent in the first quarter.
US West Texas Intermediate (WTI) futures rose 32 cents, or 0.5 percent, to $60.46 barrel, after posting a rise of 32 percent in the January-March period.
US sanctions on Iran and Venezuela along with supply cuts by members of the Organization of the Petroleum Exporting Countries (OPEC) and other major producers have helped support prices this year, overshadowing concerns about global growth and the US-China trade war.
However, future gains will be limited by potential softness in the global economy as well as the ability of US oil producers to ramp up production when prices spike, said Phin Ziebell, senior economist at National Australia Bank in Sydney.
“It’s tough to see a really big rally from here,” he said.
Still, analysts have turned cautiously optimistic on crude oil prices this year, a Reuters poll showed on Friday.
US production has also steadied, with the US government reporting on Friday that domestic output in the world’s top crude producer edged lower in January to 11.9 million bpd.
US energy firms last week reduced the number of oil rigs operating to the lowest level in nearly a year, cutting the most rigs in a quarter in three years, Baker Hughes energy services firm said.
Sigal Mandelker, US under-secretary of the Treasury for Terrorism and Financial Intelligence, told reporters in Singapore on Friday that the United States had placed further “intense pressure” on Iran.
US officials are keen to ensure see that Malaysia, Singapore and others are fully aware of illicit Iranian oil shipments and the tactics Iran uses to evade sanctions, Mandelker said.
The US has also instructed oil trading houses and refiners to further cut dealings with Venezuela or face sanctions themselves, even if the trades are not prohibited by published US sanctions, three sources familiar with the matter said.
A deal between OPEC and allies such as Russia to cut output by around 1.2 million barrels per day, which officially started in January, has also supported prices.
Hedge funds and other money managers raised their net long US crude futures and options positions to 243,209 in the week to March 26, the US Commodity Futures Trading Commission said.


Samsung Electronics retrieving all Galaxy Fold smartphone samples

Updated 49 sec ago
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Samsung Electronics retrieving all Galaxy Fold smartphone samples

  • The retrieval comes as the world’s biggest smartphone maker met with embarrassment ahead of the foldable device’s US release on April 26
  • Samsung postponed the handset’s launch while it investigated the matter

SEOUL: Samsung is retrieving all Galaxy Fold samples distributed to reviewers to investigate reports of broken screens, a day after it postponed the phone’s launch, a person with direct knowledge of the matter said on Tuesday.
The retrieval comes as the world’s biggest smartphone maker met with embarrassment ahead of the foldable device’s US release on April 26, with a handful of technology journalists reporting breaks, bulges and blinking screens after a day’s use.
The South Korean tech giant postponed the handset’s launch for an unspecified period of time while it investigated the matter. It said initial findings showed the issues could be associated with impact on exposed areas of the hinges.
A representative declined to comment further on Tuesday.
A person with direct knowledge of the supply chain said KH Vatec conducted an internal review of hinges used in the Galaxy Fold and found no defects. The supplier declined to comment.
In March, Samsung released a video showing robots folding Galaxy Fold handsets 200,000 times for its durability test.
Samsung’s head of IT and mobile communications, DJ Koh, has repeatedly said foldables are the future of smartphones.
Though the issue does not hurt Samsung’s balance sheet, the postponement damages the firm’s effort to showcase itself as an innovative first mover, not a fast follower, analysts said.
In some cases, reviewers had peeled off a layer of film which they mistook for a disposable screen protector.
“It’s disastrous that Samsung sent samples to reviewers without clear instructions on how to handle the device, and that the firm needs to fix screen flickering,” said analyst Kim Young-woo at SK Securities.
One Samsung employee, speaking on condition of anonymity, said, “On the bright side, we have an opportunity to nail down this issue and fix it before selling the phones to a massive audience, so they won’t have same complaints.”
Samsung emailed pre-order customers upon delaying the launch, online outlets said on Twitter.
“Your pre-order guarantees your place in the queue for this innovative technology,” Samsung said in the email. “We’ll update you with more specific shipping information in two weeks.”