By Barani Krishnan
Investing.com – Oil prices recouped early losses to settle up on Monday, after talk of safe human clinical trials for a Covid-19 vaccine licensed to AstraZeneca (NYSE:). But fear of coronavirus cases raging anew in the United States kept the crude market anchored at just above $40 per barrel.
The AZD1222, a vaccine developed by Oxford university and licensed to AstraZeneca, was put into large-scale, late-stage trials that included 1,077 healthy adults aged 18 to 55 years with no history of Covid-19. The vaccine’s marketers have already signed deals to produce and supply over 2 billion doses, once the shot proves successful.
News on the AZD1222’s progress came as 31 of the 50 U.S. states saw more new cases of the virus this past week, with some cities overwhelmed by new hospitalizations or deaths.
Los Angeles Mayor Eric Garcetti said he was on the “brink” of making another stay-at-home order, saying things “reopened too quickly” in California’s most economically-vibrant city, which had a record daily hospitalization of 2,216 people as of Sunday. In Florida, at least 49 hospitals had no more ICU space available while Arizona reported its highest number of Covid-19 deaths in one day — 147.
Crude prices, which fell more than 1% earlier on Monday during the Asian and European sessions, returned to positive territory by New York’s close.
The rebound came as traders went with the progress on the vaccine development despite indications that it could take at least until the year-end or longer for a successful shot to reach the market. Meanwhile, immediate risk from the virus to both people and the economy is real and needs to be contained.
New York-traded , the benchmark for U.S. crude futures, settled up 17 cents, or 0.4%, at $40.77 per barrel. It hit a session low of $39.98 earlier.
“If the bulls manage to defend their ground here, we may well see a new high above the most recent peak of $42.60 soon,” said Fawad Razaqzada, market analyst at ThinkMarkets.
“However, a decisive breakdown could pave the way for a move to the next support at $39 next,” he added.
London-traded , the global benchmark for oil, settled up 14 cents, or 0.3%, at $43.16.
Oil bulls have managed to keep crude tethered at the $40 mark despite the Organization of the Petroleum Exporting Countries announcing last week that it would roll back from next month 20% of production cuts it had maintained since the start of May.
For granularity, that meant that the Saudi-led and Russia-assisted OPEC+ alliance will withhold 7.7 million barrels a day from the market from August onward, compared with the 9.6 million in July.
Reuters oil analyst John Kemp noted late last week that price premiums for gasoline and diesel over crude have been flat or falling for almost four weeks since June 23 despite a strong drawdown in U.S. for the week ended July 10.
Data on Monday also showed that oil stockpiles at the facility, which stored crude delivered against contracted barrels of WTI, may have risen last week.
Genscape, the market intelligence firm that leads on Cushing data, reported a build of 816,443 barrels for the week to July 17, according to traders who saw the data.
Seevol.com, another source on Cushing data, meanwhile, said in an email to Investing.com that the storage hub saw an increase of 769,919 barrels for the period.
Some 3.9 million Americans have been infected and more than 143,000 killed by the pandemic. President Donald Trump, in an interview with Fox News aired Sunday, insisted that the leap in Covid-19 positive cases among Americans was the result of increased testing and the current rage in caseloads were “burning embers” that will “just go away”.
Published at Mon, 20 Jul 2020 18:59:50 +0000-Oil Rebounds on Covid Vaccine Hopes, But Anchored at $40