Americas News
More Gains For Oil As Economic Recovery Data Continues to Contradict Gloomy Analytical Forecasts
Compared to the previous session's minimal losses based on the singular assertion that the economy would take months to recover thanks to the government virus lockdowns, crude traders on Thursday were enthused by the International Energy Agency forecasting lower global stockpiles in the second half of 2020 - and as a result oil prices rose substantially.
Brent settled up $1.94 to $31.13 per barrel, while West Texas Intermediate settled up $2.27 to $27.56 per barrel.
Adding to Thursday's good news was that U.S. unemployment benefits totalled 2.98 million for the week ended May 9, still remarkably high but contributing to the sixth straight weekly decline; correspondingly, as more people people went back to work U.S. crude inventories fell for the first time in 15 weeks, according to the Energy Information Administration.
This and other data coming in from other parts of the world compelled Olivier Jakob, analyst at Petromatrix, to remark, "The supply and demand balance is tightening; the physical market is moving towards some rebalancing and away from the heavily over-supplied condition."
A North Sea trade source added, "There is an improvement: people are getting back to work, and hopefully we'll see some crude that's in storage being drawn on."
Judith Dwarkin, chief economist at RS Energy Group, pointed to a variety of countries slashing their output and said, "There is a little more optimism that the darkest days for the market may be behind us."
Looking ahead, two factors hamper a full-throttle economic recovery: the argument from health officials that easing lockdowns will cause more coronavirus infections and that the virus could come in a second wave this fall: "Major uncertainties remain," the EIA said.
But given that global infection rates and fatalities have proven to be just a fraction of the numbers produced by what epidemiologists now admit were deeply flawed computer models that caused the lockdowns in the first place, the U.S. continues to follow many European countries and China in reopening - the latest example being a scheduled reopening of the New York Stock Exchange, Nascar, and New Jersey beaches.
Still, the rate of recovery isn't quick enough for angry citizenry and critics who accuse government and health officials of being reluctant to relinquish the power they have wielded throughout the pandemic; and yet more signs of the damage the media-induced panic over COVID-19 has caused emerged on Thursday, with doctors reporting a dramatic decrease in cancer diagnoses.
They worried that people avoiding screenings for fear of contracting the virus are hurting their chances to overcome undiagnosed cancers, a disease that to date this year has killed over 3 million people globally compared to 302,965 COVID 19 fatalities; for the record, of the 4.5 million total global coronavirus cases as of May 14, 1.6 million people were hospitalized and recovered, and the remaining 2.5 million experienced mild to no symptoms, according to Worldometer.
