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The Daily Dose: What Looks Like Recovery Is Only A Mirage

Daniel J Graeber profile picture
Daniel J Graeber


  • Signs of recovery are only a mirage.
  • Brent takes a nosedive after grim US unemployment figures.
  • Growth will be in fits and starts.

Things are going to get messy. Stock indices from the United States to Europe were in rally mode as investors bet on a return to business activity in the eurozone and some US states. In energy, most segments of the US economy are seeing an increase in refinery activity and implied demand for petroleum products is on the rise.

For the month so far, Brent crude oil prices are up some 25% and the late-April nose-dive into negative territory for WTI is a distant memory. But most models show too much optimism about recovery could cause another round of exponential spikes in coronavirus infections. For the economy, growth will be in fits and starts. In both cases, recovery will be uneven and fragile.

The price for Brent crude oil faltered after flirting with $31 per barrel mark in the previous session. The global benchmark was down by a half percent as of 8 a.m. ET to hit $30.81 per barrel.

A push by US President Trump to reopen the economy gave investors reasons to jump into the market even as corporate earnings continue to disappoint. Stock futures were pointing up early Wednesday, though much of the gains may be due to sentiment rather than positive data on growth trends. In Detroit, one of the US cities hardest hit by the pandemic, automakers are pondering when to shift their lines from making masks to making vehicles again. Michigan Gov. Gretchen Whitmer, a frequent target of criticism from Trump's base, has extended the state's stay-at-home orders through the middle of May to much frustration. Beneath the din of partisan rancor, players with boots on the ground remain pessimistic. The CFO at General Motors (GM), which released earnings on Wednesday, warned employees of "significant austerity measures" and the United Auto Workers labor union

This article was written by

Daniel J Graeber profile picture
Daniel is a long-time veteran of oil industry reporting, serving as the lead energy correspondent for United Press International, contributor to OilPrice and Petroleum Economist and former chief editor at ClipperData. Elsewhere, he's served in news radio and teaches occasional courses in international relations theory and general semantics.His blog, The GERM Report, is an intersection between oil markets, geopolitics and language theory. The outlook here is unconventional, drawing on a background in international relations theory and the philosophical aspects of a social culture created by language.

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