Meanwhile, IMF downgrades Middle East, North Africa growth: File Image/PixaBay
News media's singular focus on rising coronavirus rates at the expense of positive virus news predictably caused crude prices on Monday to fall, this time slightly more than 1 percent, as the much-feared reinstatement of government-mandated lockdowns took the form of California's governor ordering the halt of indoor activities at certain businesses in 30 counties.
Brent on Monday fell 52 cents, or 1.2 percent, to settle at $42.72 per barrel, while West Texas Intermediate lost 45 cents, or 1.1 percent, to settle at $40.10.
Given the sheer volume of alarmist headlines influencing public policy, analysts worried that demand recovery will suffer, thus capping prices: "The California news puts the demand recovery question back on the table," said Phil Flynn, senior market analyst at Price Futures Group Inc.
John Kemp, Reuters
Traders are anticipating a slower pick up in oil consumption
John Kemp, commodities analyst for Reuters, noted on Monday that "Traders are anticipating a slower pick up in oil consumption as a result of a patchy economic recovery and the need to work down excess fuel stocks inherited from the lockdown."
Meanwhile, the pandemic prompted the International Monetary Fund to revise its growth forecasts for the Middle East and North Africa downward again amid an "unusually high level of uncertainty," according to its latest regional economic report.
Jihad Azour, director of the IMF's Middle East and Central Asia department, said the downward grade is "in line with most of the countries in the world, but in our part of the world, with the diversity of the economies and the linkages that exist between oil exporting and oil importing, this is going to be a challenge going forward."
Still, the global business community continues to strengthen despite analytical prognostications, perhaps encouraged by new findings from the Centers for Disease Control and Prevention that as much as 40 percent of people infected with Covid-19 are asymptomatic and (however, the bad news spin on this is that asymptomatic people spread the virus unknowingly to others, even though it's still not been determined if they spread it at all).
Completely ignored was the CDC's startling disclosure that that only 0.65 percent of those with the disease are now estimated to die.
Also, prior to California again shutting down portions of its economy, stocks om Monday surged on the news that Pfizer Inc. and BioNTech SE received fast-track designation for two of their experimental Covid-19 vaccines.
Even better news - also virtually ignored by mainstream media channels - was that Russia has become the first country to successfully complete clinical trials of vaccine on humans; Sechenov University in Moscow conducted the trials, and the results have proven the medication's effectiveness and safety.
Finally, as if to illustrate that virus policy in the U.S. is politically motivated, Dr. Scott Atlas, a senior fellow at The Hoover Institution, argued that the infection spikes in California, Arizona, and Texas are due to geography rather than businesses opening too soon: "When you look in the southern counties of California, Arizona and the bordering counties of Texas - with the Mexico border - these are where most of these cases are really exploding, and then you look at the Mexico map and in Mexico, that's where their cases are, in the northern border zone states; and it turns out the timeline here correlates much more to the Mexico timeline of increasing cases than anything else."
Atlas added, "When you really look closely at these so-called re-opening policies, whether it's in Georgia or Florida or Texas, you know, we didn't really see a big correlation of cases and hospitalizations from that."