Crude rally on bullish economic news tempered by Beijing outbreak escalation

摘要

Crude futures settled higher June 16, although heightened coronavirus response measures in Beijing tempered earlier gains from bullish demand projections from the International Energy Agency and stronger-than-expected US retail sales data in May. NYMEX July WTI settled up $1.26/b at $38.38/b while ICE August Brent rose $1.24 cents/b to $40.96/b, again crossing the $40/b threshold. NYMEX WTI initially spiked by nearly $2/b, rising above $39/b after the IEA said it saw global demand growth of 5.7 million b/d next year, and revised its 2020 demand growth up by almost 500,000 b/d. Still, that left 2020 demand at a 8.1 million b/d deficit to 2019. But the rally lost steam after Beijing raised its COVID-19 emergency response level and ordered schools closed. Crude prices then began to rise again late in the trading day amid reassurances that China would handle pocketed COVID-19 outbreaks, and following heightened geopolitical tensions between China and India after at least 20 Indian soldiers were killed during a border skirmish. "The Beijing school closures caught everyone off guard," said Edward Moya, senior market analyst with OANDA. "But I think financial markets are pretty confident China is likely to be successful in shutting down this virus."