Meanwhile, U.S. top doctor warns that social distancing, not lockdowns, will slow the virus's spread: File Image/PixaBay
The seemingly endless news coverage of the resurgence in coronavirus infections impacted the optimism of crude traders, who on Friday triggered a slight dip in prices; however, both benchmarks were still headed towards weekly gains thanks to lower inventories and ongoing signs of economic recovery.
Fear generated by health officials and media that the U.S. July 4th celebrations would cause already substantial infections rates to skyrocket resulted in Brent falling 38 cents to $42.76 per barrel and West Texas Intermediate dipping 44 cents to $40.21.
This was countered somewhat by news that the decline in U.S. oil production continued as working rigs fell for a 16th week to the least since 2009, according to Baker Hughes data.
Stephen Brennock, crude oil derivatives broker, PVM
The fragile U.S. economic rebound is at risk of being undone
Also presumably keeping traders' spirits somewhat lifted was news on Friday that a private survey showed China's services sector to be expanding at the fastest pace in over a decade in June.
However, all media eyes continue to be locked on the virus's spread in the U.S., and Stephen Brennock, crude oil derivatives broker at PVM, worried that "The fragile U.S. economic rebound is at risk of being undone by the latest surge in new infections."
But that's only if governors decide to repeat their mistake of reimposing lockdowns and stay at home orders: Surgeon General Jerome Adams argued on Friday, social distancing is the only way to slow the spread of Covid; he noted that California maintained the strictest lockdown measures of any state and is still experiencing a resurgence.
Meanwhile, in going over the startling economic figures released Thursday, Andy Puzder, CEO of Hardee's, noted that unusually strong manufacturing numbers, along with retail and homes sales for June, bode well for a v-shaped recovery.
He added, "There are plenty of lockdown orders still in place all over the country, meaning we've got ample potential for additional growth just by continuing to responsibly return to normal, even if we occasionally need to douse the embers of the pandemic here and there."
For his part, David Henderson, a research fellow at the Hoover Institution, believes the recovery will grow even stronger if Washington lets its $600 per week unemployment benefit expire at the end of the month: ""There are about 20 million people who would make more being unemployed than being employed; if [the policy expires], the [jobs] numbers, which will come out in September, will be great."
Friday also saw vindication for the Covid treatment drug hydroxychloroquine, widely used in Europe but fallen into disfavour by certain health officials and media after U.S. president Donald Trump touted its benefits: a study by the Henry Ford Health System shows that early administration of the drug results in a 66-71 percent "hazard ratio reduction."
Finally, Gilead's COVID-19 antiviral remdesivir on Friday became the European Union's first authorized therapy to treat the virus in those sick enough to require hospitalization; it is already authorized for use in Japan, Taiwan, India, Singapore, and the United Arab Emirates,