Concerns over Libya resuming output were also softened on Tuesday: File Image/Pixabay
While not conceding that they had misinterpreted earlier news, crude traders on Tuesday decided that renewed Covid restrictions in some parts of Europe would only have a limited impact on fuel demand, and accordingly the commodity eked out modest gains.
After UK prime minister Boris Johnson reiterated earlier promises that his country's restrictions would be limited to new operating hours for bars and nightclubs and large social gatherings would be discouraged - as opposed to businesses being ordered to lock down - Brent rose 28 cents to settle at $41.72 per barrel; West Texas Intermediate settled up 29 cents to $39.60.
Jim Ritterbusch, president of Ritterbusch and Associates, said, "The energy complex appears immune to negative news regarding the virus while case counts don't increase enough to force renewed widespread lockdowns."
Jim Ritterbusch, president, Ritterbusch and Associates
The energy complex appears immune to negative news regarding the virus
Stating what policy makers across Europe have been stressing for weeks now, Giovanni Staunovo, oil analyst at UBS, said, "As any new restrictions will likely be more localized, the oil demand recovery should still continue."
But he added, "Although at a slower pace with the easiest demand gains behind us."
Also lending support to oil was the expectation from analysts polled by Reuters, consistent with recent data, that U.S. crude oil and gasoline stocks likely fell last week (American Petroleum Institute figures later showed that both gasoline and distillate supplies shrank while crude stockpiles rose).
Meanwhile, the experts modified their previous worries about Libya resuming crude output as that country's National Oil Company on Tuesday said it was resuming exports at Zueitina oil terminal, in addition to Marsa El Hariga and Brega terminals; they now think exports are unlikely to quickly reach previous levels.
Also on Tuesday, China continued to press ahead with its recovery by vowing from October 1 to allow cargoes to clear customs before quality inspections have been finalized, thus boosting efficiency.
As for the ongoing promising Covid vaccine news that is habitually underplayed by media and pundits, China expects vaccine approval for public use (thousands of front line workers have already been innoculated) within months; Vaccines Europe told the EU Parliament on Tuesday that a price range of between 5 and 15 euros ($6 to $18) per dose was reasonable for the vaccines; and scientists now think lockdown- and mask-free Sweden (whose economy has shrunk by only 9 percent and the daily death rates are zero), may have beaten Covid by achieving herd immunity.