But despite reports, demand still seems to be holding steady: File Image/PixaBay
Oil prices on Friday fell slightly as rising coronavirus rates in several countries are said to be having a negative impact on fuel purchases; however, there seem to be a limited number of examples of lower purchases globally, and demand overall remains largely recovered from a 30 percent drop in April.
Brent dipped 23 cents to settle at $43.14 per barrel, while West Texas Intermediate fell 16 cents to $40.59; both contracts were little changed from a week earlier.
Also affecting prices was an easing of output reductions as some producers, bolstered by the relatively quick economic recovery, consider resuming operations; it is said that energy firms could start adding rigs later this year if prices remain stable at higher levels, and Raymond James estimates that rig activity will average 270 in the second half of 2020 compared to the present 250.
Sal Gilbertie, president and CIO, Teucrium Trading LLC
There's some trepidation.... [of] the resurgence of the virus around the world limiting people heading back to work
For his part, Alexander Novak, energy minister for Russia, doubted that the easing of curbs on oil production would significantly affect prices, and he added that prices in a range between $40 and $43 per barrel are more or less balanced.
The only examples of impacted demand due to the coronavirus infections reported on Friday were in India and Indonesia, the latter of whose oil lifting in January to June stood at 713,300 barrels per day (bpd), lower than the 755,000 bpd targeted in that country's state budget.
Dwi Soetjipto, chairman of regulator SKK Migas, said, "The upstream oil and gas sector nationally and internationally is going through extraordinary pressures due to lower prices; this is then followed by the Covid-19, which impacted consumption and demand.
"With these pressures, we are having problems achieving targets."
In India, road fuel sales fell in the first half of July as virus lockdowns occurred in several cities.
Sal Gilbertie, president and CIO of Teucrium Trading LLC, summarized the sentiment of the analytical community by stating, "There's some trepidation on people's part between the resurgence of the virus around the world limiting people heading back to work" and the anticipation of increased production.
Unfortunately the majority of traders are swayed by headlines, and news media's obsession over rising coronavirus rates is at the expense of highlighting a steady stream of positive news about treatment and vaccine development.
The focus on infection rates has also obfuscated criticism about the way the virus is perceived by health officials, and events this week in Western Canada demonstrate that nothing satisfies health authorities: B.C. on Thursday announced that radical mitigation efforts have led to an infection rate of less than 1 percent for the entire province, but this merely caused health minister Adrian Dix to worry that such a low level of transmission also means "very few people with antibodies to deal with future spikes of Covid-19."
Another media obsession shared by health officials - that of making mask wearing mandatory - has obscured several studies showing that unlike social distancing and hand washing, masks do nothing to slow transmission.
The latest study, Masks Don't Work: A Review of Science Relevant to Covid-19 Social Policy, found that "No study exists that shows a benefit from a broad policy to wear masks in public.
"In light of the medical research, therefore, it is difficult to understand why public-health authorities are not consistently adamant about this established scientific result, since the distributed psychological, economic, and environmental harm from a broad recommendation to wear masks is significant, not to mention the unknown potential harm from concentration and distribution of pathogens on and from used masks."
If crude traders still prefer the media and health officials' party line regarding the virus, presumably they might be buoyed by the latest news on the vaccine front: the European Union is negotiating advance purchase deals of potential vaccines with drugmakers Moderna, Sanofi, and Johnson & Johnson as well as biotech firms BioNtech and CureVac.
Over 150 possible vaccines are being developed and tested around the world, and of 23 in human clinical trials at least three are in final Phase III testing.