However, Chinese and India demand recovery still poses challenges: File Image/PixaBay
Oil prices finally retreated on Friday, this time as traders questioned the strength of China's economic recovery from the coronavirus - however, crude was on track for a fourth weekly gain, plus analysts said the market is in far better shape than it was just a few weeks ago.
Moreover, even the bad news that caused traders to retreat was far less severe than was hoped for, case in point: state-owned China National Petroleum Corp. said fuel demand in the country will drop by 5 percent in 2020, while India's consumption may not recover to pre-coronavirus levels for months.
Brent fell 93 cents to settle at $35.13 per barrel, while West Texas Intermediate ended 67 cents lower at $33.25 per barrel; however, for the week the benchmarks gained 8 percent and 13 percent respectively.
Paola Rodriguez Masiu, Rystad Energy
Supply has been curtailed significantly.....and demand has also started to recover
Paola Rodriguez Masiu, senior oil market analyst at Rystad Energy, pointed out that "A constant increase is not sustainable or justified," and he added that "the market situation is definitely better than a few weeks ago, supply has been curtailed significantly one way or another and demand has also started to recover."
The resurgence in demand was keenly appreciated by commodities trader Trafigura, which pundits on Friday reported had taken a gamble on the post lockdown revival by snapping up 14 North Sea crude cargoes over the past two weeks; such large-scale positions have not been seen in the past few years.
However, Masiu warned that if more government-imposed lockdowns accompany an expected second wave of the virus later this year, "they could send prices back to much lower levels very quickly, and the market knows it."
For the record, U.S. president Donald Trump, buoyed by massive protests across North America from citizens demanding an end to what they perceive to be government overreach, said there will be no lockdowns regardless of a second wave.
Fortunately for the business sector, criticism of governments' reaction to Covid-19 is growing almost as fast as the initial wave of the virus itself: addiction specialist Dr. Drew Pinsky became the latest medical expert to condemn the stay at home orders, and on Friday he stated that "There is no science of lockdown, there is not: we don't have that science, it's all models, conjecture, theory."
He added that "The idea of quarantining a healthy population has never been done before in human history," and he emphasized that much of the spread of coronavirus has happened in homes and in tight spaces like mass transit.
Most encouragingly for those terrified by the notion of another economic closure, media is beginning to more aggressively criticize the chain of events leading to the lockdowns: broadcaster Tucker Carlson, in noting that the World Health Organization initially predicted a 3.4 percent case fatality rate, said the number "Scared the hell out of us, [and] I think we repeated those numbers to you on this show.
"But they were totally wrong: we now know, thanks to widespread blood testing, that the virus isn't that deadly....an enormous percentage of coronavirus infections produce mild symptoms or no symptoms at all......they're asymptomatic."
Carlson added that the highest fatality figure his news team had been able to find from a credible blood test study "comes from Spain, and it produced a death rate of just over 1 percent, and that's still far below what they told us it would be."
Meanwhile, for those who prefer to rely on the creation of a Covid-19 vaccine for peace of mind, a potential vaccine developed in China appeared to provoke neutralizing antibodies in dozens of patients in an early-stage clinical trial, it was reported on Friday.
Also on Friday, Mark Esper, U.S. secretary of defence said of his country's race to produce a vaccine, "We've been ahead of the curve and in the fight from day one, and this is the next phase of this battle, and we will deliver on time the vaccines," and he added that he was "completely confident" the Pentagon will deliver by the end of this year.