Oil finished higher on Monday, with prices staying above $ 40 a barrel as positive test results for a coronavirus vaccine helped offset concerns about energy demand linked to the surge in global cases of COVID-19 above 14.5 million.
Risk appetite received a boost “following news that a coronavirus vaccine developed by the University of Oxford and AstraZeneca appeared safe and triggered an immune response in the trials,” said Fawad Razaqzada, market analyst at ThinkMarkets.
Still, “in the past few weeks, crude oil prices have been unusually calm, suggesting that a potentially abrupt move could be soon,” he said in a market update. “Hopes to improve demand conditions can keep the bulls happy.”
A medical journal published a story that found that AstraZeneca’s AZN,
The candidate vaccine produced antibodies in an early clinical trial.
In this context, West Texas Intermediate crude for delivery in August CL.1,
On the New York Mercantile Exchange, it rose 22 cents, or 0.5%, to settle at $ 40.81 per barrel after hitting a low of $ 39.83. Prices ended last week with a slight 0.1% rise. The August contract expires at the end of Tuesday’s trading session.
September Brent crude BRN.1,
at ICE Futures Europe, it rose 14 cents, or 0.3%, to $ 43.28 a barrel, after the global benchmark index recorded a weekly decline of 0.2% on Friday.
Read:Why won’t Shanghai oil futures soon become a world benchmark for crude?
While early testing of the vaccine is clearly “good news, scientists say it is too early to know for sure whether it is enough to offer protection,” Razaqzada said, adding that “the Phase 3 tests, which involve Larger samples are underway, so we’ll find out in the not-too-distant future. “
The race to find a COVID-19 vaccine is accelerating, but infections “continue to accelerate in some US states like California, while Los Angeles appears to be on the verge of another shutdown,” he said.
According to information compiled by Johns Hopkins University, confirmed global deaths from the coronavirus pandemic rose to more than 606,000, and the United States topped the list with more than 140,000. Meanwhile, North Carolina, Louisiana and Kentucky reported record cases of cases on Sunday, while Florida has seen an average seven-day count of approximately 12,000 infections, and the Arizona hot spot recorded a record 147 deaths.
“However, with the opening of major economies elsewhere, demand should rebound from oil, and even more so if a vaccine is available soon,” Razaqzada said.
Furthermore, the decision by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC +, last week to relax their record supply cuts from August was “simply to do what they set out to do from the start ” said. “The supply of OPEC + will continue to be quite substantially restricted, which could result in a balanced market sooner than expected with potentially accelerated demand growth.”
Read:OPEC + move to cut production cuts may ‘keep a floor’ below prices
Also on the upside for prices, “crude inventories continue to drop,” Robbie Fraser, senior commodities analyst at Schneider Electric, told MarketWatch. “From US stocks to floating storage tanks, the data continues to show a market that is reducing oversupply, and that provides a buffer for current demand concerns.”
Commodity traders also noted efforts to implement stimulus measures in Europe and the US to help mitigate the negative effects of the viral outbreak. European Union leaders seemed close to reaching an agreement on a recovery package for the trade bloc, while US lawmakers were to discuss additional help to tackle the public health crisis.
Meanwhile, natural gas futures were very successful on Monday, with August NGQ20,
It fell 4.5% to $ 1,641 per million British thermal units, after a 4.8% decline last week.
Growing concern over a slow economic recovery put pressure on natural gas along with oil. “Temperature forecasts for the southwestern United States have cooled down to the 6-10 day forecast, although the rest of the country is expected to experience abnormally warm weather,” said Christin Redmond, a commodity analyst at Schneider Electric.
“Warmer-than-normal weather coupled with low gasoline prices have supported demand from power generators this summer,” but these gains “have been more than offset by losses from [liquefied natural gas] exports and industrial users “.
Completing the action on Nymex Monday August RBQ20 gasoline,
rose 0.3% to $ 1.2285 per gallon and August for HOQ20 heating oil,
it settled at $ 1,2355 per gallon, almost 1.4% more.
.
