Meanwhile, a new Covid test could restore all-important air travel volumes: File Image/PixaBay
Crude prices on Thursday enjoyed another modest round of gains, based largely on U.S. stockpile drawdowns reported in the previous sessions, but said to be limited by the usual worries that demand recovery will be impeded by government restrictions intended to slow the spread of the coronavirus.
Phil Flynn, senior market analyst at Price Futures Group Inc., also pointed out that prices were supported by a rise in the stock market and that they "are holding up pretty well despite the lack of additional U.S. government stimulus" - a reference to the White House's failed attempts to date to support the business sector against the still-lingering Covid restrictions.
However, the scuttlebutt in political circles is of a growing willingness to resume the talks, and this caused Josh Graves, senior market strategist at RJ O'Brien & Associates, to remark, "Prospects of any kind of stimulus deal would be a big positive for energy."
Phil Orlando, chief equity strategist, Federated Hermes
All of the things you want to see are happening
Brent on Thursday settled 17 cents, or 0.4 percent, higher at $41.94 per barrel, while West Texas Intermediate gained 38 cents, or 1 percent, to end at $40.31.
The latest Covid related worries are that new restrictions in Britain, Germany, and France all potentially affect fuel demand, although in Britain and France the restrictions are limited to a crackdown in mass gatherings and shorter operating hours for bars and nightclubs.
Also, depending on one's perspective, fuel demand recovery is not as moribund as some headlines would suggest: in the U.S., government data showed that the four-week average gasoline demand last week was down just 9 percent from a year earlier.
Encouraging economic news continues in other countries: refiners in Japan went on a buying spree last week, boosting the prices of some crude cargoes in the Middle East; and in Brazil, run rates of Petrobras's 13 refineries jumped to their highest since January 2016, according to data from the country's oil regulator.
As for economic recovery in general, Phil Orlando, chief equity strategist at Federated Hermes, insisted that in the U.S. economy it is still, despite hiccups, on a powerful V-shaped trajectory as evidenced in auto sales, the housing market, and overall consumer spending.
He said, "All of the inventory rebuilding is starting, all of the things you want to see are happening."
Meanwhile on the Covid front and in addition to the progress in vaccine development, crude traders waiting for the all-important full-blown resumption in air travel learned on Thursday that airlines across Europe are planning to initiate pre-flight virus tests that deliver results as fast as pregnancy tests, to help restore passengers' confidence in taking to the skies; Lufthansa, which is depending on government support for survival, is said to be in talks with drugmakers to deploy the tests as early as next month.