Sunday, January 29, 2023
HomeHeadlinesOil prices hammered by surge in coronavirus cases - report


To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

Oil prices hammered by surge in coronavirus cases – report

Oil prices have finally buckled after coronavirus cases surged in all the major oil-consuming regions, pushing back the anticipated easing of quarantines and resumption of international passenger aviation.

The number of new coronavirus cases confirmed each day around the world has almost doubled to 84 per million people this week, up from just 46 in late June, according to official statistics compiled by Our World in Data.

North America has seen the number of new confirmed cases soar to almost 300 per million per day up from just 40, while in Europe numbers have surged to 170 from 50, and in Asia to 60 from 30.

Most of the main consuming countries are now in the grip of the third or fourth wave of infections since the start of the pandemic or are fighting to contain local outbreaks.

In response, many governments have re-imposed some social-distancing restrictions, and deferred the planned easing of quarantines and travel bans, while businesses have postponed planned return to central offices.

If COVID-19 behaves like other respiratory diseases, it will spread faster in the Northern Hemisphere autumn and winter, when education resumes, social mixing increases and more activity moves indoors.

With incomplete vaccination programs and poor control of transmission, most governments are unlikely to remove remaining travel restrictions in the next few months.

As a result, the anticipated widespread resumption of long-haul passenger aviation expected in the second half of 2021 has now been pushed back closer to the end of the year or into 2022.

Reflecting this, share prices for major long-haul airlines such as United Airlines, American Airlines and International Airlines Group (owner of British Airways and Iberia) have been sliding since early June.

Yields on short and medium-term U.S. Treasury securities have also been falling over the same period as investors anticipate the lingering impact of the epidemic on parts of the service sector.

The oil market proved resilient for a while, but front-month Brent futures and calendar spreads peaked in early July and have been under gradual but consistent downward pressure since then.

Front-month futures prices, which had risen by more than 11% in the two months to July 5 (a change in the 77th percentile for all similar periods since 1993), have now fallen by 6% over the two months to Aug. 18 (24th percentile).

Brent’s six-month calendar spread has softened from a backwardation of $4.58 per barrel (98th percentile) to $2.50 (82nd percentile), implying traders expect a smaller drawdown in global oil inventories.

Until governments are comfortable enough with the transmission rate to ease international flying restrictions, oil prices are likely to remain capped.

Source: Reuters

Related Posts


Finance & Economy
Shipping News

Oaktree looking at block sale of existing shares in Hafnia Limited

OCM Luxembourg Chemical Tankers S.à r.l. which is ultimately controlled by funds managed by Oaktree Capital Management L.P. (the "Seller") has retained Fearnley Securities,...

John Fredriksen Increases Stake in Euronav

Norwegian billionaire John Fredriksen has once again increased his stake in Belgian tanker company Euronav in wake of Frontline’s termination of its combination agreement...

First Citizens Bank Arranges $44.2 Million of Debt Financing for Navios Partners

First Citizens Bank announced that its Maritime Finance group, part of the CIT division, served as sole lead arranger on $44.2 million in debt...

Eagle Bulk Appoints Kate Blankenship to Board of Directors

Eagle Bulk Shipping Inc., one of the world’s largest owner-operators within the midsize drybulk vessel segment, announced that it has appointed A. Kate Blankenship...

Golar LNG: Unwind of majority of TTF hedges of 2023 and 2024 Dutch Title Transfer Facility exposure

Golar LNG Limited (“Golar”) announced that it has unwound the majority of its swap arrangements for its Dutch Title Transfer Facility (“TTF”) linked production...

Baltic index hits fresh multi-year lows on capesize dip

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index falls for seventh session on lower capesize demand

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index hits fresh 2-1/2-year low as larger vessel rates slip

The Baltic Exchange’s main sea freight index extended losses to a sixth straight session...

Baltic index down for fifth day on lower vessel rates

The Baltic Exchange’s main sea freight index fell for the fifth straight session on...

Maritime UK: Net Zero Review published

On 13 January, the Department for Business, Energy and Industrial Strategy (BEIS) published the...

Port of Long Beach Closes 2022 with Second-Busiest Year

The Port of Long Beach marked its second-busiest year on record by moving 9.13 million twenty-foot equivalent units in 2022, allowing for a return...

Hapag-Lloyd AG acquires share in J M Baxi Ports & Logistics Limited

Hapag-Lloyd AG signed a binding agreement today under which it will acquire 35% of J M Baxi Ports & Logistics Limited (JMBPL) from a...

Nigeria opens ‘game changer’ billion-dollar deep seaport

Nigeria opened a billion-dollar Chinese-built deep seaport in Lagos on Monday, which is expected to ease congestion at the country’s ports and help it...

SC Ports handles nearly 3 million TEUs in record 2022

South Carolina Ports had a record 2022 with the most containers ever handled at the Port of Charleston. SC Ports moved nearly 2.8 million TEUs...

January oil loadings from Russia’s Baltic ports set to jump 50% vs Dec

Urals and KEBCO crude oil loadings from Russia’s Baltic ports of Primorsk and Ust-Luga in January are set to rise by 50% from December...