The virus is said to be causing energy giants to reposition their investments: File Image/PixaBay
Concern that rising coronavirus infections in large gasoline consuming U.S. states may stall demand recovery led to crude benchmarks on Friday dipping in price, albeit minimally.
Brent settled down 3 cents at $40.91, falling 1 percent on the week, while West Texas Intermediate fell 23 cents to $38.49, down 1.6 percent on the week.
Traders were said to have erased earlier gains when Texas Governor Greg Abbott reversed that state's reopening plan, ordering most bars to close due to the surge in cases.
Gene McGillian, VP of market research, Tradition Energy
We have record amounts of oil and fuel in storage and still uncertainty about demand going forward
Andrew Lipow, president of Lipow Oil Associates, remarked, "Employers are delaying the return of their employees back to the office and that will impact the return of gasoline demand."
Gene McGillian, vice president of research at Tradition Energy, added, "This week the market pushed through a 3 1/2 month high, and then all the sudden reporting about new cases seemed to break the back of the rally.
"We have record amounts of oil and fuel in storage and still uncertainty about demand going forward."
Even though breakthroughs in treatment and vaccine development strongly suggest that Covid will soon be a nasty memory, the pandemic is being cited as a reason energy companies are changing their investment decisions.
Jennifer Rowland, an analyst at Edward D. Jones & Co., explained, “Some companies are starting to make investment decisions today and starting to pivot either towards shorter-cycle projects like shale or pivot towards renewables.”
BP has already stated that production will decline in the long term and whatever is pumped in 2050 “will have to be de-carbonized”; and Total SA has already started its pivot to renewables.
But for the short term at least, traders along with the general public will continue to be influenced by the undue fear being generated by news media with regards to the new infection and the virus itself.
As usual, Friday saw startling disclosures about the virus from world-leading sources that were all but buried in the press's haste to deliver and pontificate over the rising Covid infection numbers: for example, data compiled by Oxford University revealed that patients in hospital with the disease (the majority of these people being the elderly with underlying medical conditions) are four times less likely to die now than they were in April.
The improvement is being credited on better treatment methods.
Also debunking another fallacy stoked by media on Friday was news that British researchers analyzed data on 582 youths aged three days to 18 years who sought care for coronavirus across Europe; some 62 percent were admitted to hospital but only 8 percent required intensive care and fewer than 1 percent died.
Dr Marc Tebruegge of the Imperial College London said, “Our study provides the most comprehensive overview of Covid-19 in children and adolescents to date....the vast majority of children and young people experience only mild disease."
Finally, AstraZeneca’s experimental vaccine has become the most advanced of many in development, with the British drug maker having begun large-scale, mid-stage human trials and signing its tenth supply and manufacturing deal; Moderna is said to be in close second among more than 200 candidates, 15 of which have entered clinical trials.