Oil On Track For Best Month Ever As More Criticism Heaped On Economy-Killing Virus Lockdowns

Meanwhile, India plans to store cheap oil in the U.S.: File Image/PixaBay

Due to holidays in Singapore, London, and New York, crude trading was sluggish on Monday - but Brent still rose to $35.81 per barrel, while West Texas Intermediate was flat at $33.74 per barrel, thanks to continued support from international production cutbacks and an economy that is itching to resume as the government-imposed coronavirus lockdowns ease.

Meanwhile, as demand slowly recovers and the energy sector struggles to regain a sense of normality, one of the lockdowns' most prominent advocates - New York governor Andrew Cuomo -  admitted on Monday that the infection and fatality projections that drove the lockdowns "were all wrong."

As crude found support with the double barrelled force of returning demand and cutbacks, strategies  to store oil and manage the global surplus continued to unfold on Monday, with India reportedly was looking at storing some low priced U.S. oil in stateside facilities there as its local storage is full.

The move was seen as similar to a plan by Australia, which last month said it would build up an emergency oil stockpile initially by buying crude to store in the U.S. Strategic Petroleum Reserve to take advantage of low oil prices.

On the analytical side of things, pundits pointed out that May is shaping up to be West Texas Intermediate's best month since the contract was conceived in 1983, thanks to improvements in demand and supply (WTI has jumped over 70 percent and posted four straight weeks of gains).

Goldman Sachs wrote, "The oil market rebalancing continues to gather speed, driven by both supply and demand improvements...These improvements are taking out the risk of a sharp pull-back in prices although we reiterate our view that the rebalancing will take time."

Raymond James, which has been tracking the government-mandated stay-at-home coronavirus orders , said that of the 3.9 billion people worldwide who have been under lockdown since January, 3.7 billion, or 95 percent, have experienced some sort of reopening.

The worry, of course, is if governments and health officials will try to reimpose their draconian shutdowns if a second wave of the virus occurs later this year, despite the computer modelling that informed the first wave having been proven deeply flawed: Francisco Blanch, head of global commodities at Bank of America, said this would have "devastating consequences."

But several factors suggest that even if so inclined, bureaucracy won't have such an easy go of it a second time around: in the past month the world has seen massive protests from hordes of the unemployed; disclosures of coverups and bungling on the part of the World Health Organization and the Centers for Disease Control; and vows from politicians such as U.S. president Donald Trump that no more lockdowns will be imposed, regardless of vaccine development.

Another force that may discourage power-hungry bureaucrats is the  medical community arguing that the lockdowns are a greater health threat than the virus itself (the latest such argument coming from Dr. Scott Atlas, senior fellow at the Hoover Institution, who pointed out that "the infection fatality rate is less than one-tenth of the original estimate" and said "the policy itself is killing people").

Atlas added that extending lockdowns is "a tragic, misguided policy," and he also criticized another impediment to economic recovery: "There's no science whatsoever to keep K-through-12 schools closed, nor to have masks or social distancing on children, nor to keep summer programs closed."

And then there's Monday's spectacular about-face from Cuomo, who now said he was unsure when New York City might reopen for business because predictions about the virus have all been wrong: "I'm out of that business because we all failed at that business. Right? All the early national experts. Here's my projection model. Here's my projection model. They were all wrong. They were all wrong."