geopolitics

The resurgence of coronavirus cases in parts of the world is “casting a shadow” over the oil market’s nascent recovery, the International Energy Agency warned last week.

Crude hit four-month highs on Thursday, aided by a tightening market and a better-than-expected US jobs report. The caveat is that the jobs survey took place before the latest Covid-19 wave and the associated business closures.

Oil posted its second weekly loss for the month as a surge in US coronavirus cases casts doubts on the market’s prospects for recovery. New York futures closed at $38 and London at $41 on Friday.

New York oil futures rose 2.3 percent on Friday to close at $39.75, the highest level since March 6th. The 9.6 percent increase for the week marks the seventh gain in the last eight weeks.

Oil futures fell by some 8 percent last Thursday, before closing out a quiet Friday at $36.26 in New York and $38.73 in London. Over the previous six weeks, prices have been climbing due to the OPEC+ and US shale production cuts, and the easing of pandemic lockdowns in China, Europe, and North America.

Oil prices posted a sixth weekly gain in London, more than doubling to $42.30 a barrel since April as demand recovers from the lockdowns. NY futures closed at 39.55 on Friday, up $2.14 for the day.

Futures were volatile last week with prices bouncing between $31 and $35 a barrel in response to the latest news. Oil closed out May on Friday with a record monthly gain of 88 percent on hopes demand for oil would continue to rise as economies reopen and crude production continues to fall.

The four-week run of climbing crude prices continued through Wednesday, but prices fell on Thursday and Friday as doubts arose over the prospects for China’s economy and rising tensions with the US over the virus, the trade deal, and Hong Kong.

Oil posted its first back-to-back weekly gain since February amid optimism that production cuts are beginning to eat into the massive supply glut. Futures in New York climbed 25 percent to circa $25 and $31 in London.

Crude posted its first weekly gain in a month as global production cuts start to lift physical markets. Futures in New York rose 17 percent last week to close at $19.78 in NY and $26.44 in London.

The long-awaited crash in the oil markets came last week when traders finally realized that oil consumption was so low and production was so high that the world was within weeks of having no place to store crude and oil products.