Americas News
Yet More Gains For Crude As Back To Work Momentum Generates Upbeat Demand Forecasts
Friday's crude trading session saw yet more substantial gains for the commodity on the strength of increased demand as countries around the world eased the travel restrictions imposed several months ago to slow the spread of the coronavirus.
And even though media in lockstep with health authorities are warning that a second wave of the virus could occur later this year, Barclays raised its forecasts for benchmarks Brent and West Texas Intermediate by $5 to $6 per barrel for 2020 and by $16 per barrel for 2021.
That means Brent will average $37 per barrel and WTI at $33 this year, and $53 and $50 respectively next year.
Goldman Sachs on Friday also signalled optimism for oil by raising its May global demand estimate by 1.4 million barrels per day (bpd), enough to push the market into a deficit in June.
The bank stated, "We believe that the next stage of the oil market rebalancing will be one of range-bound spot prices with the most notable shifts being a decline in implied volatility."
For Friday's trading session, WTI settled up $1.87 at $29.43 per barrel, while Brent gained $1.37 to settle at $32.50.
An upbeat John Kemp, commodities analyst for Reuters, forecast that "In most cases, the recovery in petroleum demand is expected to be led by middle distillates, as the manufacturing, construction and freight transportation sectors return to work.
"Gasoline consumption will increase, with some diversion of travel from public transport to private motor cars for health reasons, but with the overall gain limited by the loss of leisure-related travel."
However, Kemp added that jet fuel use is likely to remain depressed for an extended period, "as continued quarantines and pressure to introduce social distancing on flights prevent the sector struggles from resuming meaningful schedules."
Friday also saw positive news on the pandemic front, starting with Denmark, one of the first countries in Europe to reopen: it reported no COVID-19-related deaths on Friday from the day before, marking the first fatality-free day in over two months.
In California, the biotech company Sorrento Therapeutics claimed to have found a cure for COVID-19 in the form of an antibody: founder and CEO Dr. Henry Ji said, "We want to emphasize there is a cure, there is a solution that works 100 percent: if we have the neutralizing antibody in your body, you don't need the social distancing [and] You can open up a society without fear."
While the medical community agreed that Sorrento's antibody STI-1499 shows strong promise as a treatment, its half life is much shorter than the antibodies produced as a result of vaccination; still, Ji is working towards the treatment being brought to market in a matter of months.
As for the growing divide between citizens across North America who are protesting to end the lockdowns and politicians who refuse to do so, in the U.S. it's becoming apparent that the states already reopened for business or about to are Republican held, compared to Democratic states.
As such, the widespread protests in the Democratic stronghold of California, where Los Angeles mayor Eric Garcetti has threatened to keep his city largely closed until a vaccine is developed, have led to Tesla CEO Elon Musk preparing to move jobs elsewhere; and earlier this week, U.S. Navy veteran Mike Garcia, a Republican, won a House seat in Southern California previously held by a Democrat.
