Still, analysts worry that demand may plunge again: File Image/PixaBay
Even though pro-business health experts and some politicians said it would be an inevitable accompaniment to economies reopening, crude traders were shocked on Thursday by reports that new coronavirus infections in the U.S. were rising after five weeks of declines.
Jerome Powell, chair of the Federal Reserve, said "A series of local spikes could have the effect of undermining people's confidence in travelling, in restaurants, entertainment," and his comment caused Brent to fall $3.18, or 7.6 percent, to settle at $38.55 per barrel; West Texas Intermediate fell $3.26, or 8.2 percent, to settle at $36.34 per barrel.
The analytical community also reacted negatively to Powell noting that unemployment in his country was set to reach 9.3 percent a the end of 2020 - even though this percentage was considerably less than the current 13.3 percent, which itself was far less than had been forecast during the height of the pandemic.
Cailin Birch, The Economist Intelligence Unit
The global economy is now settling in for a long, slow recovery process
Gene McGillian, director of market research at Tradition Energy, worried that "The reality is we have glut levels of global fuel inventories; the fundamental picture still has bearish factors that the market was turning a blind eye to."
Cailin Birch, global economist at The Economist Intelligence Unit, said the dip in oil prices "Most likely reflects the end of the price boost that came from the initial economic re-opening; the global economy is now settling in for a long, slow recovery process, which we only expect to pick up in late 2021 assuming a COVID-19 vaccine becomes available then."
Birch has apparently overlooked widespread reports that of the 100-plus vaccines currently being developed, a handful are already in advanced trial stages and could be ready in the fall or early next year.
In a more positive sign, fuel demand was reported to be rising across Asia, with refineries in Japan, South Korea, and India/Pakistan at 77.9 percent, up to 80 percent, and 83 percent capacity respectively - although gloomy analysts noted that these percentages lagged behind China, whose consumption has already largely returned to levels of a year earlier.
Also, data showed that oil demand in the U.K. has been steadily recovering in recent weeks, but Jennifer Rowland, an analyst at Edward Jones & Co., warned that "Even at $45, there will be a lot of companies that can't survive; companies are still going to be bleeding cash at this level."
The worry over a second wave of coronavirus impacting demand is justified, considering how effectively news media - who are now mainly focused on being 'woke' - caused public panic when the pandemic first hit earlier this year.
However, cause for hope can be derived from a number of fronts: Unacast on Thursday said foot traffic at U.S. retail stores was solidly within 20 percent of 2019 levels, and weekly unemployment rates continues to fall.
Also, there is growing medical consensus that the lockdowns have caused more harm than the virus, and this has in part manifested itself in the new 'Flatten the Fear' campaign from the Jobs Creators Network Foundation, which has enlisted physicians to promote several key overlooked facts about the virus.
The facts include its death rate of just 0.4 percent globally (according to new calculations from the Centers for Disease Control, which also pegs fatalities from ages 0 to 49 at a minuscule 0.05 percent); a fatality rate of almost zero outside of large metropolitan areas; and 42 percent of all COVID-19 deaths in North America having occurred in nursing homes and assisted living centres.
Alfredo Oritz, president and CEO of the Network, said, "We can and must isolate the vulnerable few to protect the many instead of isolating the many to protect the few."
In the U.S. at least, this message has been embraced by treasury secretary Steven Mnuchin, who has ruled out another shutdown of the economy regardless of the trajectory of COVID-19.
In the vaccine development front alone, Thursday also saw a host of promising - if under reported headlines, from Regeneron seeing "a lot of reason for hope" as human testing of its vaccine candidate begins, to Moderna on track for final testing of its vaccine in July.