However, worry persists over the degree to which the lockdowns have wrecked the economy: File Image/PixaBay
Yet more price gains for oil occurred on Wednesday, due to U.S. crude inventories falling by 5 million barrels last week - but the gains were capped over worries about the economic fallout caused by the government-mandated coronavirus lockdowns.
These concerns come amid yet more signs that health authorities - which have been largely responsible for influencing the lockdowns - are changing their minds about some of the key messages they have been relaying to politicians and the public.
Brent on Wednesday settled up $1.10 at $35.75 per barrel while West Texas Intermediate rose $1.53 to $33.49 per barrel.
Phil Flynn, senior market analyst, Price Futures Group Inc.
Your worst nightmare - that we're going to run out of storage space - is probably not going to happen
With regards to the inventory drop as well as stocks at the Cushing, Oklahoma, delivery hub dropping by 5.6 million barrels, Phil Flynn, senior market analyst at Price Futures Group Inc., said, "What this report confirms is that your worst nightmare - that we're going to run out of storage space - is probably not going to happen."
Wednesday also saw further encouraging signs that members of the Organization of the Petroleum Exporting Countries (OPEC) are holding true to their vow to limit output until demand warrants otherwise: a Kuwait Gulf Oil Company official announced that Kuwait and Saudi Arabia will halt oil production from the joint Al-Khafji field for one month, as of June 1, in order to help "rebalance global oil markets."
Bloomberg noted that the cuts, along with the demand recovery, has caused oil to rally hard "From the Middle East to Siberia, the North Sea down to Latin America......almost everywhere."
Meanwhile, strong signs that consumer demand growth is strong and perhaps sustainable came in the form of Lowe's Cos. and Target Corp. reporting sales that topped estimates - which in turn caused the S&P 500 on Wednesday to erase all of Tuesday's losses; the Stoxx Europe 600 Index also erased an early decline to close higher.
But as traders pointed out on Wednesday, worries about the economic fallout persist; and so too does the uncertainty of critics over the veracity of health officials' claims about the coronavirus, case in point: the Centers for Disease Control and Prevention (CDC) now says the virus "does not spread easily" from "touching surfaces or objects"
In explaining the reversal of its thinking, which contributed to the global push for citizens to stay home and economies tanking, the federal agency stated, "COVID-19 is a new disease and we are still learning about how it spreads; it may be possible for COVID-19 to spread in other ways, but these are not thought to be the main ways the virus spreads."
Another occurrence on Wednesday supporting the growing contention that government response to the pandemic was more harmful than the virus itself was a letter signed by over 600 doctors and sent to U.S. president Donald Trump pushing him to end the "national shutdown."
The letter called the widespread state orders keeping businesses closed and kids home from school a "mass casualty incident" with "exponentially growing health consequences."
The letter pointed out that "The millions of casualties of a continued shutdown will be hiding in plain sight, but they will be called alcoholism, homelessness, suicide, heart attack, stroke, or kidney failure. In youths it will be called financial instability, unemployment, despair, drug addiction, unplanned pregnancies, poverty, and abuse.
"Because the harm is diffuse, there are those who hold that it does not exist; we, the undersigned, know otherwise."
In related news, Dr. Paul Stoffels, chief scientific officer for Johnson & Johnson, told media on Wednesday that "I think that early next year we will have significant numbers of vaccines which could help the world to start to get rid of COVID-19."