However, Vega Capital London profits from the Covid chaos: File Image/PixaBay
Just one day after crude prices rose due to unusually strong global economic recovery numbers, traders on Tuesday caused prices to drop in reaction to some governments tightening lockdowns to curtail new Covid infections.
West Texas Intermediate on Tuesday fell 30 cents to $40.71 per barrel while Brent fell 37 cents to $43.78 per barrel.
Lachlan Shaw, head of commodity research at National Australia Bank, said, "On the demand side, we had quite encouraging global manufacturing [data].....but there's still quite a bit of evidence of the oil demand recovery stalling in quite a few markets with a resurgence of Covid-19."
Lachlan Shaw, National Australia Bank
There's still quite a bit of evidence of the oil demand recovery stalling
Specifically, and despite many health experts saying that social distancing, hand-washing but little else is effective in keeping Covid at bay, cities from Manila to Melbourne have decided to reimpose lockdown measures as a response to new infections.
Tuesday's gloomy sentiment wasn't helped by BP reporting the damage the global lockdowns earlier this year caused to its balance sheet: second-quarter underlying replacement cost profit, used as a proxy for net profit, came in at a loss of $6.7 billion compared to a first quarter net profit of $800 million.
Still, life in the embattled energy sector continues: Britain's Neptune Energy on Tuesday reported the discovery of oil at a drilling license in the Norwegian part of the North Sea estimated to contain between 40 million and 120 million barrels of oil equivalent, making it the largest find off Norway so far this year.
Also, as if to prove there's always opportunity in chaos, media on Tuesday disclosed that a trading house called Vega Capital London made $500 million during oil's historic plunge below zero several months ago.
Looking forward, and given that lockdowns are once again making headlines, traders may or may not be swayed by the now-daily reports of all-important vaccine developments, the latest of which saw Novavax on Tuesday reporting that its candidate generates substantial antibodies in human test subjects and appears to be safe.