Americas News
Oil Steady Despite Bleak OPEC Demand Forecast and As Trump Unveils Back To Work Plans
Despite the Organization of the Petroleum Exporting Countries (OPEC) lowering its global oil demand forecast due to the government-enacted economic shutdown caused by the coronavirus pandemic, oil prices on Thursday held steady and even saw marginal gains.
West Texas Intermediate settled unchanged at $19.87 per barrel, the lowest level since February 2002, and Brent settled up 13 cents at $27.82 per barrel.
In its latest monthly report, OPEC forecast global demand to contract this year by 6.9 million barrels per day (bpd), or 6.9 percent, and it warned the reduction may not be the last.
This caused Norbert Ruecker, head of economics at Julius Baer, to note that "Oil prices must remain depressed to force shut-ins among non-cartelised producers" - referring to producers such as the U.S., where a lot of production is unprofitable at current prices.
Continued efforts to restart the economy in the U.S. may influence crude trading in the days and weeks ahead: on Thursday U.S. president Donald Trump unveiled broad new federal guidelines that lay out three "phases" aimed at guiding parts of the country to move incrementally toward loosening restrictions on businesses and individuals.
The guidelines come as many Americans are taking to the streets to demand a relaxation of stay-at-home orders: Michigan, Ohio, Kentucky, Minnesota, North Carolina, and Utah - states led by both republican and democratic governors - have all seen protests in recent days.
But many politicians are resisting any semblance of a return to normal: "The more they [the protestors] are out and about, the more likely they are to spread Covid-19 - and the more likely we're going to have to take this posture for a longer period of time," said Michigan governor Gretchen Whitmer.
Meanwhile, new coronavirus antibody testing now underway in California is said to be a substantial breakthrough due to its ease and efficiency and may greatly help governments determine how and when to reopen economies in different regions.
Potentially helping this along is the experimental treatment drug remdesivir, which in a Chicago clinical trial has caused patients to experience rapid recoveries from fever and respiratory symptoms; nearly all patients were discharged in less than a week, according to health news site STAT.
News of the drug's effectiveness caused the Dow on Thursday night to shoot up 800 points.
