Oil Steady as virus infections rise but hopes for vaccine lends support.
Oil prices were little changed on Monday as coronavirus cases increased in many countries, though a flurry of announcements about a potential COVID-19 vaccine and ongoing talks over a European Union fund to revive economies hit by the pandemic curbed losses.Brent crude LCOc1 settled up 14 cents, or 0.3%, at $43.28 per barrel, while U.S. West Texas Intermediate (WTI) CLc1 rose 22 cents, 0.5%, to $40.81.
“As things stand, prices are not likely to produce any sizeable gains very soon, until a signal that the pandemic slows down,” said Rystad Energy’s head of oil markets Bjornar Tonhaugen.
“Even though in Europe the virus has been cornered, the Americas and some Asian states still have a long way to go.”
More than 14.5 million people have been infected by the novel coronavirus globally and more than 604,000 have died of COVID-19, the disease caused by the pathogen, according to a Reuters tally.
Prices found support after three groups said their potential vaccines showed promising results.
An experimental coronavirus vaccine being developed by AstraZeneca (AZN.L) and Britain’s University of Oxford was safe and produced an immune response in early-stage clinical trials, data showed, keeping alive the hope it could be in use by the end of the year.
More than 150 possible vaccines are in various stages of development with U.S. drugmaker Pfizer (PFE.N) and China’s CanSino Biologics also reporting positive responses for their candidates on Monday.
Investors are also looking to the EU summit for trading cues, with leaders showing the first signs of compromise over carving up a proposed 750 billion euro ($858.3 billion) recovery fund to revive economies.
“Over the past few weeks, crude oil prices have actually been uncharacteristically quiet, suggesting a potentially sharp move could be on the cards soon,” said Fawad Razaqzada, market analyst with ThinkMarkets.
“If the recovery in demand turns out to be quicker and more robust than expected, the supply surplus could diminish fast given the ongoing supply restrictions by the OPEC+ group. This should mean higher oil prices, everything else being equal.”
While fuel demand has recovered from a 30% drop in April after many countries imposed strict lockdowns, usage is still below pre-pandemic levels. U.S. retail gasoline demand is falling again as infections rise.
Rising tension between China and the United States also put pressure on prices.
China’s embassy in Myanmar on Sunday accused the United States of “outrageously smearing” the country and driving a wedge between it and its Southeast Asian neighbours over the contested South China Sea and Hong Kong.
Saudi Arabia’s 84-year-old ruler, King Salman bin Abdulaziz, has been admitted to hospital, suffering from inflammation of the gall bladder. The king has ruled the world’s largest crude oil exporter and close U.S. ally since 2015.
Oil prices were little changed on Tuesday, trapped in the narrow trading band of the past three weeks as investors gauged hopes for a recovery in oil demand against fears of new lockdowns due to a growing number of coronavirus cases.
Prices were offered some support by positive news on the development of vaccines as drugmakers and medical institutions rush to find a way to counter the world’s worst health crisis in a century.
Brent futures were up 15 cents, or 0.4%, at $43.43 by 0117 GMT, while West Texas Intermediate (WTI) edged up 2 cents to $40.83.
The closing prices of both Brent and WTI have traded within a $2 channel so far this month.
In China, some cinemas reopened on Monday after a six-month closure, raising hope a recovery from the pandemic is holding in the world’s second-largest economy, where the outbreak first started.
“With major economies opening … demand should pick up for oil, and more so if a vaccine becomes available soon,” said Fawad Razaqzada, market analyst at ThinkMarkets.
However, other countries from the United States to India are still posting record numbers of infections, while some nations such as Spain and Australia are battling renewed outbreaks.
More than 14.6 million people have been reported to be infected by the novel coronavirus globally and 606,979 have died, according to a Reuters tally.
Hope is being giving from a number of studies and tests showing promise for various vaccines.
Early data from trials of COVID-19 vaccines released on Monday, raised confidence that a vaccine may be created although any breakthrough will take time to reach the billions of people needed.
In the first big energy deal since the coronavirus crushed fuel demand, Chevron Corp, said on Monday it would buy oil and gas producer Noble Energy Inc for about $5 billion in stock.
Oil steady as vaccine news counters rise in virus cases.
EU Leaders Clinch 750 Billion-Euro Coronavirus Recovery Fund.
European Union leaders agreed on a landmark stimulus package that will see the bloc issue 750 billion euros ($860 billion) of joint debt to help member states mitigate the economic downturn.
The agreement, which came after more than four days of acrimonious negotiations in Brussels, required the unanimous approval of all 27 member states and represents a victory for German Chancellor Angela Merkel and French President Emmanuel Macron, who drafted an early outline for the proposal in May. The emergency fund will give out 390 billion euros of grants and 360 billion euros of low-interest loans.
Oil Future close 20th July, 2020
Brent crude: $ 43.28 (+0.14) /brl FM delivery Sep
Light crude (WTI): $ 40.81 (+0.22) /brl FM delivery Sep (New Front Month)
Gasoil ARA; $ 370.50 (+3.00) /mton FM delivery Aug
NY Harbor Ulsd: $ 380.36 (+5.05) /mton FM delivery Aug
Oil edges up on Tuesday morning with support from U.S. equities, and also European leaders closed a deal on coronavirus recovery fund but pandemic-driven demand concerns capped the price rebound.
Oil Futures are trading at GMT 05.23, Brent up $0.12, WTI up $0.08.
The upward tendency is very small and it is expected to continue with little changes throughout the day.
Bunker prices today based on Oil Future close last night, Fuel Oil little change but with tendency upward. MGO and NY Harbor Ulsd up 3-5 usd/mton.