Sentiments are broadly improving across the market, as COVID-19 cases in most countries appear to have peaked and moved into remission. Now on the other side of the curve, many European countries and American states are looking at reopening their economy in a slow, measured way to aid suffering businesses.
At the forefront, Georgia is reopening certain businesses today, with more businesses reopening on Monday. Although the measure will help correct abysmal hairstyles throughout the state, some have called the decision premature. Despite some concerns of insufficient testing capabilities, Georgia Governor Kemp is prioritizing business interests, noting that companies should continue following social distancing guidelines throughout the reopening process. Other states are also putting together timelines for reopening their economies.
Yesterday the House of Representatives passed an additional $484 billion in coronavirus relief funding for small businesses and hospitals, providing further support for the US economy. Between reopenings and federal stimulus, analysts are beginning to believe that America is past the worst. Still, economic data reports at a lag to real-time data, so expect many headlines in the coming months regarding slow growth and laggard demand.
It’s worth keeping in mind that during periods with so much volatility, it’s nearly impossible to predict fundamental oil market changes. For that reason, most of the price fluctuations have more to do with sentiment and market psychology than real, concrete changes. With that in mind, crude prices are up this morning even as fuel prices are falling. WTI crude is trading at $17.07, up 57 cents (3.5%) from Thursday’s closing price.
Fuel prices are taking a hit, with diesel experiencing the heaviest rout. Following Wednesday’s hefty inventory build, diesel prices are currently trading at $.6780, down 5.7 cents (-7.7%). Gasoline prices are $.6224, down 2.1 cents (-3.3%).