Sunday, May 28, 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

Seanergy ‘well positioned to benefit from positive trend in Capesize market’

Seanergy Maritime Holdings Corp., announced its financial results for the first quarter ended March 31, 2023, and declared a quarterly dividend of $0.025 per...

Dorian LPG sees Q1 revenue more than double year-on-year

Dorian LPG reported its financial results for the three months and fiscal year ended March 31, 2023. Highlights for the Fourth Quarter Ended March 31, 2023 Revenues of $133.6 million.Time...

Navios Holdings Posts $14.5 Mln Net Income in Q1

Navios Maritime Holdings Inc., reported its financial results for the first quarter ended March 31, 2023. Navios Holdings owns (i) a controlling equity stake...

BW LPG posts ‘strongest quarterly performance on record’

BW LPG has recorded its ‘strongest quarterly performance on record’ in the first three months of 2023. The company was boosted by strong exports...

ONE, Wan Hai agree to pay civil penalties to FMC

Ocean Network Express (ONE) will pay a US$1.7 million civil penalty to avoid a formal investigation by the US Federal Maritime Commission (FMC) for...

Nikolaus H. Schües elected BIMCO President

BIMCO has elected Nikolaus H. Schües , CEO and owner of Reederei F. Laeisz,...

Baltic Dry Bulk Index Ends Worst Day In Over Three Months

The Baltic Exchange’s main sea freight index declined the most since mid-February on Thursday...

Maritime UK appoints new Chief Executive Officer

Maritime UK, the umbrella organisation for the UK’s maritime sector, has appointed Chris Shirling-Rooke...

Baltic dry bulk index extends slide for 10th straight session

The Baltic Exchange’s main sea freight index of shipping rates for dry bulk commodities...

Baltic index hits over two-month trough on lower rates across vessels

The Baltic Exchange’s main sea freight index slumped to its lowest level in over...

DP World Completes Terminal Expansion Project Vancouver Port

DP World has completed the AED954 million ($259.78 million) Centerm expansion project, increasing container throughput at the Port of Vancouver by 60 percent. The terminal...

DP World completes AED 954 million Vancouver port expansion

DP World and the Vancouver Fraser Port Authority have celebrated two historic events – the completion of the Centerm Expansion Project at DP World...

Alexandroupolis port gets 24 million euros of EU funding

Greece has secured 24 million euros ($26 million) in European Union funding to upgrade its northern Aegean Sea port of Alexandroupolis, privatisation agency HRADF...

Port Hedland Iron Ore Exports Down 5% in April

Pilbara Ports Authority (PPA) has delivered a total monthly throughput of 57.7 million tonnes (Mt) for April 2023. This throughput was a two per cent...

APM Terminals Reveals $1 Billion Investment in Brazil

APM Terminals’ CEO Keith Svendsen has pledged an investment of about US$1 billion in the company's Brazilian operations up to 2026. The amount includes around...