But analysts warn that volatility will still reign for the foreseeable future: File Image/PixaBay
World economies continued to open on Friday despite the concerns of coronavirus health experts, demand continue to recover, and as a result oil prices enjoyed their second week of gains, this time rising by 5 percent in the latest session.
Perhaps not understanding the growing sentiment that life must continue in the face of a pandemic that has a 95 percent-plus survivability rate, Jim Ritterbusch, president of Ritterbusch and Associates, remarked, "This advance of the past couple of weeks has been a bit suspect given the fact that coronavirus cases continue to increase and the U.S. crude surplus is maintaining a steep up trend where a record U.S. stock level is likely to be achieved in next week's EIA report."
Other voiced concern that the Organization of the Petroleum Exporting Countries' (OPEC) historic reputation for not complying with cutback agreements may spoil sentiment in the weeks to come: "I expect now prices will pull back to $20 a barrel because skepticism will come into the market about the compliance of OPEC+ on the production cuts," said Andrew Lipow, president of Lipow Oil Associates, in reference to the cartel's decision to slash output by a record 9.7 million barrels per day to offset weakened demand caused by government lockdowns.
Andrew Lipow, president of Lipow Oil Associates
I expect now prices will pull back to $20 a barrel because skepticism will come into the market
Oyvind Eriksen, chief executive officer at Aker ASA, warned that it will take "some years" before the oil market is firmly back in balance, but he added that as demand continues to recover the market could even shift towards a dearth of supply because so few drilling companies are currently investing in development.
Nonetheless, with Australia on Friday becoming the latest country to enact an easing of lockdowns, and France, parts of the U.S. and Pakistan planning to ease restrictions, Brent settled up $1.51, or 5.1 percent, at $30.97 per barrel, while West Texas Intermediate gained $1.19, or 5 percent, to $24.74 per barrel.
This second week of gains saw Brent advancing over 18 percent and WTI rising a massive 33 percent.
Meanwhile, despite the horrific disclosure that the U.S. lost 20.5 million jobs in April according to the Bureau of Labor, the continued global reopening of businesses caused the Dow Jones, S&P 500 and the Nasdaq Composite to rally on Friday, as did markets across Asia and in Europe, reflective of the determination of the business sector to put unemployment in its rear view mirror.
Also coming to light on Friday was the mainstream media's role in causing the panic that facilitated the government lockdowns in the first place: Nate Silver, editor of FiveThirtyEight, blamed media for not giving proper context to stories on the rise of coronavirus cases, which he called a "basic error" revealed an agenda to prioritize narratives that "sound smart" over accuracy and truth.
He also noted that some stories failed to mention that some growth in the coronavirus infection number was a result of an increase in testing.
Meanwhile on the medical front, a research team led by Northwestern University analyzed data from hospitals and clinics across China, France, Germany, Italy, Iran, South Korea, Spain, Switzerland, the UK and the U.S. and discovered a strong correlation between vitamin D deficiency and mortality rates from the novel coronavirus; however, the study's authors cautioned against panicked citizens hoarding vitamin D supplements.