Oil Gains as COVID Cases in India Slow
CRANBURY, N.J. (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and the front month Brent crude contract on the Intercontinental Exchange shook off early session weakness on inflation jitters and rallied on hopeful signs the height of new daily COVID-19 cases in India has been reached, while traders also look ahead to U.S. holiday travel later this month with domestic air travel climbing to a pandemic high on Sunday.
John Hopkins COVID-19 dashboard updated early afternoon showed new cases of COVID-19 in India slowed from a daily peak on May 6 of nearly 415,000 to a still high 281,000 on Sunday, offering optimism the country is turning the corner on the crisis. Daily deaths in India due to the coronavirus that escaped China more than a year earlier causing the global pandemic remained elevated, with outdoor crematoriums remaining an eerie sight in the country of 1.4 billion.
Signs COVID-19 cases have plateaued in India coincide with increased vaccinations, with John Hopkins reporting more than 25 million vaccinations in the country so far in May through Sunday to more than 182 million. More than 115 million people in India have been vaccinated over the past 45 days. There are reports that suggest COVID-19 cases in India have been undercounted, and a lack of testing kits is the reason for the decline in new cases.
In the United States, total COVID-19 vaccines administered were nearly 273 million as of Sunday with 344.5 million total doses distributed in a country of 331 million. Most vaccinations in the United States have a two-dose regime. Earlier in the day, news broke the United States would send at least 20 million doses of vaccines overseas at the end of June, with the vaccines to have been approved by the Federal Drug Administration.
Late last week the Centers for Disease and Control and Prevention said individuals fully vaccinated would no longer be required to wear a mask in most indoor and outdoor venues, with Walmart on Friday indicating it would no longer require patrons to don the face covering. Other national retail outlets are easing restrictions.
The increased number of vaccinated individuals have been a catalyst in greater air travel, with air carriers suffering an enormous loss of passengers due to the pandemic. Data through Sunday show the largest number of individuals passed through Transportation Security Administration checkpoints at U.S. airports on Sunday at 1.85 million, a nearly 1.6 million or 629% increase against year ago, and more than 100,000 passengers above the previous pandemic high. While still down 770,000 or 29% against the comparable day in 2019, the sharp increase bodes well for fuel suppliers.
AAA forecasts 34 million Americans will travel more than 50 miles during the upcoming Memorial Day weekend, a 52% jump from year ago, although nearly 9% below the holiday weekend in 2019. Many in the U.S. southeast might have already loaded up on gasoline, with last week's panic buying following a ransomware attack on the Colonial Pipeline potentially reducing gasoline demand later this month amid the increase in gasoline placed in tertiary storage, e.g. a vehicle's gas tank.
NYMEX June West Texas Intermediate futures settled up $0.90 at $66.27 per barrel (bbl) ahead of expiration Thursday afternoon, with the July contract settling at $66.28 bbl. ICE July Brent futures settled up $0.75 at $69.46 bbl. June RBOB futures settled 3.17 cents higher at $2.1583 gallon, with the June ULSD contract gaining 2.42 cents with a $2.0604 gallon settlement.
Brian L. Milne can be reached at email@example.com