With the markets slowly recovering from the COVID-19 pandemic, the oil demand in Asia is starting to return to pre-pandemic levels. Saudi Aramco’s chief executive Amin Nasser said, “We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies”. This positive news echoes the statement that Nasser made at the end of June, when he stated that the worst of the demand destruction was over and there is an optimistic outlook for the second half of the year. In June, the global oil demand was about 90 million barrels per day (bpd) which was up from the 75-80 million bpd that we saw in April.
With California reporting a new daily high for new COVID-19 cases, 4,515 new cases on Sunday, the continual concern for virus spread should still be at the top of everyone’s priority list. Over just the last two weeks The United States has seen a 15% case increase. Typical travel destinations in the southeast and on the west coast seem to be the most dramatically affected. The work we have all put in to “flatten the curve” may all be for naught if we, as a nation, continue to jump back to the norm too early. Hospitals are feeling the effects of the dramatic spike in cases already. The White House is making efforts to concentrate on stocking up supplies to combat a potential COVID-19 case rise this coming Fall as lower temperatures may increase the spread.
Today, stocks stalled out near record highs which remain on track to be their best year in a decade. Optimism about the global economy is still at the fore as the U.S. and China continue to improve on trade relations.
Recent drone attacks have wreaked havoc on the Saudi Aramco oil facilities along with imposed sanctions on Venezuela and Iran. These events should all be pointing one direction for the crude prices…..up. Instead of the anticipated price increase, the recent fear of recession has helped keep the market in check.