WASHINGTON (DTN) -- At the beginning of a new trading week, crude and refined products futures on the New York Mercantile Exchange and the Brent contract on the Intercontinental Exchange pushed higher following comments from top heath advisors to Joe Biden's coronavirus task force suggesting a Biden administration would target local measures rather than a nationwide lockdown to tackle the spread of the virus.
A national lockdown is "a measure of last resort," said Vivek Murthy, the co-chair of Biden's coronavirus taskforce, on Sunday. "We have got to approach this with the position of a scalpel rather than the blunt force of an ax," the former surgeon general told Chris Wallace on "Fox News Sunday," arguing for a more nuanced approach to slow the surge in coronavirus cases.
U.S. daily infections reset the high on Friday with 170,000 new cases for the day, with COVID-19 hospitalizations climbing to more than 69,000 -- more than at any other point during the pandemic, according to the data from the COVID Tracking Project.
Last week, traders speculated the new U.S. administration would push for a second nationwide lockdown should the cases continue to rise, which would harm the country's economic performance and fuel demand. The speculation intensified with comments from Dr. Michael Osterholm, an adviser to Biden, who said the United States should institute six-week lockdown to avoid "the coronavirus hell." He later walked back his comments.
Regardless of policy direction out of Washington, D.C., governors in more than half of the states began tightening quarantine restrictions last week which doesn't bode well for fuel demand heading into Thanksgiving and Christmas holidays.
Road usage in the United States fell more than 35% from its post-lockdown peak in September as people travel less amid surging infections. Underlining consumer's angst, confidence index from the University of Michigan plunged to a three-month low reading of 77 in early November, with consumers increasingly citing the rising cases as their main concern heading into winter.
Oil futures move higher Monday was also underpinned by solid economic data out of China, showing month-on-month improvement in industrial production and crude processing in October, according to the Bureau of National Statistics. China's crude refining rose to 14.14 million barrels per day (bpd) last month, matching a record set in June, as more plants processed oil to replenish inventories after a holiday demand boost. Industrial production posted 6.9% year-on-year growth in October and fixed asset investments climbed above expectations at 1.8%. But retail sales rose only 4.3% year on year, below expectations of a 5% gain. That's nevertheless still the strongest rise this year, which was led by 12.5% growth in auto sales. Overall, the set of data suggests China's economy maintained broad-based growth in October, which will likely continue through the rest of the fourth quarter.
West Texas Intermediate also got a boost from a weaker U.S. dollar, which eased against a basket of foreign currencies at a 92.435 one-week low overnight.
December WTI futures traded more than $1.50 higher near $41.60 barrels (bbl) and the January Brent contract on ICE gained a like amount to near $44.25 bbl. December ULSD futures advanced nearly 4 cents to $1.2440 gallon, while front-month RBOB futures climbed 3.9 cents to near $1.1650 gallon.
After registering modest gains overnight, early morning news Monday that Moderna announced its coronavirus vaccine was nearly 95% effective. The news comes a week after Pfizer and BioNtech announced late state success with its vaccine, which was more than 90% effective. The results suggest more vaccines would be ready this year than previously expected.
Liubov Georges can be reached at firstname.lastname@example.org
(c) Copyright 2020 DTN, LLC. All rights reserved.