Crude carnage: Supply glut, coronavirus fears sink WTI crude oil price to sub-$1 level

News Network
April 21, 2020

New York, Apr 21: Oil prices plunged below zero on Monday as demand for energy collapses amid the coronavirus pandemic and traders don't want to get stuck owning crude with nowhere to store it.

Stocks were also slipping on Wall Street in afternoon trading, with the S&P 500 down 0.9%, but the market's most dramatic action was by far in oil, where benchmark U.S. crude for May delivery plummeted to negative $3.70 per barrel, as of 2:15 pm. Eastern time.

Much of the drop into negative territory was chalked up to technical reasons — the May delivery contract is close to expiring so it was seeing less trading volume, which can exacerbate swings. But prices for deliveries even further into the future, which were seeing larger trading volumes, also plunged.

Demand for oil has collapsed so much due to the coronavirus pandemic that facilities for storing crude are nearly full.

Tanks could hit their limits within three weeks, according to Chris Midgley, head of analytics at S&P Global Platts.

Benchmark U.S. crude oil for June delivery, which shows a more ”normal” price, fell 14.8% to $21.32 per barrel, as factories and automobiles around the world remain idled. Big oil producers have announced cutbacks in production in hopes of better balancing supplies with demand, but many analysts say it's not enough.

“Basically, bears are out for blood,” analyst Naeem Aslam of Avatrade said in a report. “The steep fall in the price is because of the lack of sufficient demand and lack of storage place given the fact that the production cut has failed to address the supply glut.”

Halliburton swung between gains and sharp losses, even though it reported stronger results for the first three months of 2020 than analysts expected. The oilfield engineering company said that the pandemic has created so much turmoil in the industry that it “cannot reasonably estimate” how long the hit will last. It expects a further decline in revenue and profitability for the rest of 2020, particularly in North America.

Brent crude, the international standard, was down $1.78 to $26.30 per barrel. .

In the stock market, the mild drops ate into some of the big gains made since late March, driven lately by investors looking ahead to parts of the economy possibly reopening as infections level off in hard-hit areas.

Pessimists have called the rally overdone, pointing to the severe economic pain sweeping the world and continued uncertainty about how long it will last.

The Dow Jones Industrial Average was down 364 points, or 1.5%, to 23,887. The Nasdaq was down 0.1%..

More gains from companies that are winners in the new stay-at-home economy helped limit the market's losses Amazon rose 1.4%, and Netflix jumped 3.8% as people shut in at home buy staples and look to fill their time. Clorox likewise rose toward a new record and was up 1% as households and businesses that remain open look to stay clean.

In Tokyo the Nikkei 225 fell 1.1% after Japan reported that its exports fell nearly 12% in March from a year earlier as the pandemic hammered demand in its two biggest markets, the U.S. and China.

The Hang Seng index in Hong Kong lost 0.2%, and South Korea's Kospi fell 0.8%.

European markets were modestly higher The German DAX was up 0.5%, the French CAC 40 was up 0.7% and the FTSE 100 in London gained 0.7%.

In a sign of continued caution in the market, Treasury yields remained extremely low. The yield on the 10-year Treasury slipped to 0.64% from 0.65% late Friday. It started the year near 1.90%. Bond yields drop when their prices rise, and investors tend to buy Treasurys when they're worried about the economy.

Stocks have been on a generally upward swing recently, and the S&P 500 just closed out its first back-to-back weekly gain since the market began selling off in February. Promises of massive aid for the economy and markets by the Federal Reserve and U.S. government ignited the rally, which sent the S&P 500 up as much as 28.5% since a low on March 23.

More recently, countries around the world have tentatively eased up on business-shutdown restrictions put in place to slow the spread of the virus.

But health experts warn the pandemic is far from over and new flareups could ignite if governments rush to allow ”normal” life to return prematurely.

The S&P 500 remains about 15% below its record high in February as millions more U.S. workers file for unemployment every week amid the shutdowns.

Many analysts also warn that a significant part of the recent recovery in stocks is due to the expectation among some investors that the economy will rebound sharply once economic quarantines are lifted. They're essentially predicting that a line chart of the economy will ultimately resemble the letter “V,” with a wild ride down but then a quick pivot to a vigorous recovery.

That may be to optimistic. “We caution that a U-shaped recovery is also quite likely,” where the economy bottoms out and stays at that low level for a while before recovering, strategists at Barclays warned in a recent report.

Without strong testing programs for COVID-19, businesses likely won't feel comfortable bringing back their full workforces for a while.

”With risk assets now overbought, the chance for a correction has increased,” Morgan Stanley strategists wrote in a report.

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News Network
April 5,2020

New York, Apr 5: New York State, the epicentre of the coronavirus pandemic in the US, continued to record the highest count of daily deaths from COVID-19 as a staggering number of 630 people died in a 24-hour period and Governor Andrew Cuomo said the outbreak in the state could peak in about seven days.

The state had recorded the highest single increase in the number of deaths from novel coronavirus in a single day between April 2 and 3 when 562 people had died, one person dying from the viral infection almost every two-and-a-half minutes.

In the 24 hours since April 4, the death toll grew to 630, "all-time increase" up to a total of 3,565, up from 2,935 on Friday morning, Cuomo said.

The daily death toll in New York continues to grow at record numbers as the state remains the most impacted in the US from coronavirus.

Coronavirus cases in New York State now stand at 113,704, out of the country's total number of 312,146. New Jersey, the second most impacted state in the US, has about 30,000 COVID-19 cases.

New York City alone has 63,306 coronavirus patients, up from 57,169 the previous 24 hours, and 2,624 deaths.

Cuomo said the apex in the state, the point where the number of infections on a daily basis hits the high point, is still about 4-8 days away.

"We have been talking about hitting that apex, the high point of the curve. I call it the battle of the mountaintop. That's going to be the number one point of engagement of the enemy," he said.

"But our reading of the projections is we're somewhere in the seven-day range, four, five, six seven, eight day range. Nobody can give you a specific number, which makes it very frustrating to plan when they can't give you a specific number or a specific date, but we're in that range," Cuomo said.

"We are not yet at the apex. Part of me would like to be at the apex and just let's do it. But there's part of me that says it's good that we're not at the apex because we're not yet ready for the apex either, still working on the capacity of the (healthcare) system," the governor said.

Cuomo has expressed anger over the short supply of essential medical equipment for healthcare professionals to help them deal with the surge in coronavirus cases across the state and the country.

He said personal protective equipment (PPE) such as masks, gowns and face shields are in short supply in New York as they are across the country and there is need for companies to make these materials.

"It is unbelievable to me that in the New York State, in the United States of America, we can't make these materials and that we are all shopping China to try to get these materials and we're all competing against each other," he had said earlier.

Cuomo said on Saturday that the state has 85,000 volunteers, including 22,000 from outside the state, and he will also be signing an executive order to allow medical students who were slated to graduate to begin practising, supplementing the state's healthcare professional capacity.

On ventilators, he said the state had ordered 17,000 but there was not enough supply in the federal stockpile to meet this growing demand across the state.    

"China is remarkably the repository for all of these orders - ventilators, PPE, it all goes back to China, which long term we have to figure out why we wound up in this situation where we don't have the manufacturing capacity in this country," he said, adding, "New York has been shopping in China."

The Chinese government helped facilitate a donation of 1,000 ventilators that will arrive at the JFK Airport in the city, he said, as he thanked the Chinese government, Alibaba head Jack Ma, the Jack Ma Foundation, Alibaba co-founder co-founder Joe Tsai and China's Consul General Huang Ping.
In addition, the state of Oregon would deliver 140 ventilators to New York.    

Cuomo has signed an executive order allowing the state to redistribute ventilators and personal protective equipment from hospitals, private sector companies and institutions that don't currently need them and redeploy the equipment to other hospitals with the highest need.
Those institutions will either get their ventilator back or they will be reimbursed and paid for their ventilator so they can buy a new ventilator.
The 2,500-bed facility at the Javits Convention Centre, which was supposed to be used for non-COVID patients, will now be used as COVID-positive facility.

"The federal government will staff that and the federal government with equip that. That is a big deal because that 2,500-bed facility will relieve a lot of pressure on the downstate system as a significant number of beds and that facility has to make that transition quickly and that's what we're focused on," Cuomo said.

Cuomo emphasised that he wants the pandemic to end as soon as possible as it is taking an unprecedented strain on life.

"I want this to be all over. It's only gone on for 30 days since our first case. It feels like an entire lifetime. I think we all feel the same. This stresses this country, this state, in a way that nothing else has frankly, in my lifetime. It stresses us on every level.

The economy is stressed, the social fabric is stressed, the social systems are stressed, transportation is stressed," he said.

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News Network
April 26,2020

Washington/Seoul, Apr 26: A special train possibly belonging to North Korean leader Kim Jong Un was spotted this week at a resort town in the country, according to satellite images reviewed by a Washington-based North Korea monitoring project, amid conflicting reports about Mr. Kim's health and whereabouts.

The monitoring project, 38 North, said in its report on Saturday that the train was parked at the “leadership station” in Wonsan on April 21 and April 23. The station is reserved for the use of the Kim family, it said.

Though the group said it was probably Kim Jong Un's train, Reuters has not been able to confirm that independently, or whether he was in Wonsan.

“The train's presence does not prove the whereabouts of the North Korean leader or indicate anything about his health but it does lend weight to reports that Kim is staying at an elite area on the country's eastern coast,” the report said.

Speculation about Mr. Kim's health first arose due to his absence from the anniversary of the birthday of North Korea's founding father and Mr. Kim's grandfather, Kim Il Sung, on April 15.

North Korea's state media last reported on Mr. Kim's whereabouts when he presided over a meeting on April 11.

China has dispatched a team to North Korea including medical experts to advise on Kim Jong Un, according to three people familiar with the situation.

A third-generation hereditary leader who came to power after his father's death in 2011, Kim has no clear successor in a nuclear-armed country, which could present major international risk.

On Thursday, U.S. President Donald Trump downplayed reports that Mr. Kim was ill. “I think the report was incorrect,” Mr. Trump told reporters, but he declined to say if he had been in touch with North Korean officials.

Mr. Trump has met Mr. Kim three times in an attempt to persuade him to give up a nuclear weapons program that threatens the United States as well as its Asian neighbors. While talks have stalled, Mr. Trump has continued to hail Mr. Kim as a friend.

Reporting from inside North Korea is notoriously difficult because of tight controls on information.

A Trump administration official said continuing days of North Korean media silence on Mr. Kim's whereabouts had heightened concerns about his condition, and that information remained scant from a country U.S. intelligence has long regarded as a ”black box.”

The U.S. State Department did not immediately respond to questions about the situation on Saturday.

Daily NK, a Seoul-based website that reports on North Korea, cited one unnamed source in North Korea on Monday as saying that Kim had undergone medical treatment in the resort county of Hyangsan north of the capital Pyongyang.

It said that Mr. Kim was recovering after undergoing a cardiovascular procedure on April 12.

Since then, multiple South Korean media reports have cited unnamed sources this week saying that Mr. Kim might be staying in the Wonsan area.

On Friday, local news agency Newsis cited South Korean intelligence sources as reporting that a special train for Mr. Kim's use had been seen in Wonsan, while Mr. Kim's private plane remained in Pyongyang.

Newsis reported Mr. Kim may be sheltering from COVID-19, the respiratory disease caused by the novel coronavirus.

Mr. Kim, believed to be 36, has disappeared from coverage in North Korean state media before. In 2014, he vanished for more than a month and North Korean state TV later showed him walking with a limp.

Speculation about his health has been fanned by his heavy smoking, apparent weight gain since taking power and family history of cardiovascular problems.

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Agencies
March 14,2020

Nairobi, Mar 14: Kenya and Ethiopia on Friday announced their first confirmed cases of coronavirus, as East Africa, which has so far been unscathed by the global pandemic, scaled up emergency measures to contain its spread.

In Kenya, a 27-year-old Kenyan woman tested positive for the virus on Thursday in Nairobi, a week after returning from the United States via London.

She was in a stable condition and recovering, Health Minister Mutahi Kagwe told reporters.

"We wish to assure all Kenyans that the government will use all the resources available to fight coronavirus," he said, as the government rolled out a raft of new containment measures.

The government had traced all the contacts of the patient since she arrived back in Kenya on March 5, he said.

"At the moment, there is absolutely no need for panic and worry," he said.

Kenya, with a population of 50 million people, saw a spree of panic buying among the middle-class in Nairobi supermarkets, in the wake of the announcement.

Meanwhile Ethiopia, Africa's second most populous nation with over 100 million people, said a 48-year-old Japanese man who had arrived in the country on March 4 from Burkina Faso was confirmed to have contracted the virus.

"He is undergoing medical follow-up and is in a stable condition. Those who have been in contact with this person are being traced and quarantined," the health ministry said in a statement.

Burkina Faso only confirmed its first case on Tuesday -- a couple returning from France -- and the Japanese patient had been in that country since February 24.

Ethiopian Health Minister Lia Tadesse said three other patients were in isolation.

Ethiopia becomes the 15 country in Africa with a confirmed case of the virus that has swept the globe, infecting more than 130,000 people and killing nearly 5,000 since it first emerged in China.

But to date the continent has been spared the worst of the pandemic.

Only five people have succumbed to coronavirus so far -- all in north Africa -- with the sub-Saharan region recording no deaths and very low numbers of confirmed cases.

But countries in East Africa -- which until the positive case in Kenya, had only recorded negative test results -- have been taking precautions.

Some flights have been restricted, with Kenya Airways suspending its route to Rome, and charter flights from Italy to the Kenyan coast on hold.

It has also suspended international conferences, a top earner in Nairobi, a hub for such events in the region, and non-essential travel abroad for politicians.

The government announced more expansive restrictions on Friday, including a temporary ban on major public gatherings, prison visits and activities between schools.

Other countries in the region have been rolling out their own measures.

In Rwanda, which shares a border with the Democratic Republic of Congo, which has confirmed cases, washing basins with soap and sanitiser have been placed on streets for commuters to use before boarding buses.

Authorities in Kigali, the capital, have also banned concerts, rallies and trade fairs -- although like in Kenya and Uganda, church services have been proceeding and bars, restaurants and entertainment precincts remain open.

Neighbouring Burundi, meanwhile, has quarantined 34 people in a hotel in Bujumbura as a precaution.

Uganda has ordered that visitors from a number of affected countries self quarantine for 14 days, or consider simply not visiting at all.

South Sudan's health ministry said meanwhile that it was "temporarily suspending direct flights between South Sudan and all affected countries".

Kagwe, the Kenyan health minister, also addressed a rumour circulating on social media that people with black skin cannot contract the virus.

"I would like to disabuse that notion. The lady (confirmed with coronavirus in Kenya) is an African, like you and I," he said.

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