Americas News
Huge Gains For Crude Over Demand Resurgence And Virus Vaccine News
People returning to work, positive news of a Covid-19 vaccine, and the sense that the will for a return to normal living is greater than that of politicians and health officials who want their draconian lockdowns to be maintained caused crude prices on Monday to surge to a massive two-month high.
Brent rose $2.31, or 7.1 percent, to $34.81 per barrel, while West Texas Intermediate rose $2.39, or 8.1 percent, to $31.82.
Better still, the rally in the June WTI contract that expires on Tuesday suggested last month's historic plunge to negative-$40 per barrel will not be repeated.
Still, the economic wreckage caused by world governments to contain Covid-19 based on the advice of health organizations - much of whose credibility is now being challenged - was apparent when Bob Yawger, director of energy futures at Mizuho, said of Monday's trading activity, "It has taken WTI over two months to basically clean up the wreckage from the March (OPEC+) meeting."
He was referring to the failure of a production cut agreement between the Organization of the Petroleum Exporting Countries and Russia, since rectified due to the massive downturns resulting from the global economic shutdowns.
For the record, Kpler, a company that tracks oil flows, said OPEC+ seaborne oil exports have declined by 6.3 million barrels per day (bpd) over the past month towards 27 million bpd, calling the decline a "stunning reversal" from April when producers pumped at will - and a strong start in complying with the output cut agreement.
Also, U.S. crude production from seven major shale formations is expected to fall by a record 197,000 bpd in June to 7.8 million bpd, according to the Energy Information Administration.
Helima Croft, head of global commodities strategy at RBC Capital Markets, remarked, "We think fundamental right steps have been taken to get us on sounder footing," and she added that the "green shoots of recovery" are in place as demand in China and the U.S. improves (U.S. government data shows implied demand for gasoline was up at 7.4 million bpd from the early April trough of 5.1 million bpd; normal demand for this time of year is about 9.5 million bpd)
Summer weather was credited on Monday for helping to entice the world to emerge from the lockdowns, and early data from Moderna Inc's (MRNA.O) Covid-19 vaccine, the first to be tested in the U.S. showed that it produced protective antibodies in a small group of healthy volunteers - which in turn caused stock markets to rise.
Meanwhile, presumably fuelling peoples' eagerness to get back to normal are on-going disclosures that the panic over the coronavirus was unjustified and that media coverage of the pandemic was at least in part politically motivated.
Case in point: hydroxychloroquine, which the mainstream media and health officials took pains to dismiss as a Covid-19 treatment drug after it was endorsed by U.S. president Donald Trump, is being tested for its efficacy - and 25 percent of physicians around the world believe health care workers should take the drug to prevent infections, according to a new Sermo survey (Trump is reportedly taking the drug daily).
Also, in response to widespread criticism that Covid-19 deaths globally are being falsely inflated, Colorado's Department of Public Health admitted that its death toll was counting those who tested positive for the coronavirus but had died of other causes.
The health officials made the about-face only when a report came to light that a 35-year-old man from Montezuma County who died May 4 of alcohol poisoning was counted in Colorado's Covid-19death toll.
The department now says 1,150 Coloradoans who died had Covid-19 but only 878 of those deaths were "due to" Covid-19.
