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OPEC cuts 2020 global oil demand growth forecast by 920K bpd

The latest from OPEC

In other times that would be a shocking drop but now it sounds behind the curve. Obviously demand is going to fall much more in a global pandemic.
  • Saudi Arabia pumped 9.68 mbpd in Feb
  • Cuts non-OEPC supply estimate by 490K bpd to 1.76 mbpd
WTI crude oil is down $1.18 to $33.17 today and is just off session lows. There’s been no reaction to this news.

EIA cuts forecast for 2020 world oil demand but still sees increase

OPEC and the EIA both see demand growth this year

  • EIA cuts forecast for 2020 world oil demand by 660K bpd but still sees 0.37 mbpd y/y increase
  • Raises 2021 world oil demand growth by 210K bpd, now sees 1.73 mbpd increase
Forecasting oil demand ahead of a pandemic is a fool’s game. Heck, forecasting oil demand at the best of times is a fool’s game.
EIA

BOE’s Carney: We can cut rates below 0.25% to close to but above 0%

Carney is taking questions from the press now

  • Still very early to judge scale of virus impact on UK economy
  • We have anecdotal evidence of sharp fall in UK trading conditions
  • Evidence of hit to UK retailers have mounted over past ten days
  • QE and assets purchases are very much part of BOE toolkit
  • Today’s move by the BOE is a ‘big, big package’

ECB’s Lagarde: Europe risks 2008-style crisis because of coronavirus outbreak

Comments by ECB president, Christine Lagarde

  • Warns European leaders of a major economic shock
  • Told European leaders that urgent action is needed now
  • ECB also looking at all policy tools
Her remarks are said to be in a conference call to European leaders yesterday, with Bloomberg reporting on the matter – citing a person familiar with the situation.
Adding that the ECB is said to be looking at measures to provide “super-cheap funding” and ensure that liquidity doesn’t dry up, with Lagarde mentioning that they can only work if governments also throw their weight behind them too.
It looks like she is getting fed up with waiting for lawmakers to do something but again, all she can do is plead so that they will actually start taking action. But as mentioned before, when they do decide to finally move, it may already be too late.
As for the ECB, there is little that they can do to provide actual relief in the market. Modifying TLTROs would be their best bet because lowering rates further and expanding QE is just doing more of the same – which isn’t really saying much after all these years.

China press warn of the danger of Trump administration downplaying the coronavirus

China’s Global Times with the piece. GT is not the most, err, independent of media but given the Chinese experience with the dangers of COVID-19 they do have a point:

  • coronavirus continues to spread rapidly across the US
  • officials including President Donald Trump and some in the public still seek to downplay the risk of the deadly virus
  • an apparent bid to avoid disruptions to economic activities by arguing the common flu is more fatal than COVID-19
  • raises questions about whether the epidemic can be contained effectively
  • irresponsible for public health security

Tokyo Olympic exec floats idea of postponing the Games

A piece in the Wall Street Journal, posting as an ICYMI:

  • Haruyuki Takahashi is a member of the Tokyo Olympic Committee’s executive board, says if the Olympics can’t go ahead (scheduled to commence in July)  the most realistic option would be to delay the event by one or two years
Japan has a lot riding on the success of the Games, huge investment has already been poured into preparation and a cancellation would have a terrible impact on tourism, retail and such.
Other execs have expressed confidence in proceeding as planned:
  • “Not a chance,” Tokyo 2020 Organizing Committee President Yoshiro Mori said Friday when asked whether the Games could be pushed back
A piece in the Wall Street Journal, posting as an ICYMI:

China offers to send Italy 1000 lung ventilators, 2 million face masks, 20,000 protective suits and 50,000 test kits.

Italy was quick to respond to the COVID-19 outbreak in China, sending supplies to the country.

China is responding in kind,
China’s embassy in Italy:
  • The Chinese government is ready to do its part as a sign of deep thanks to Italy for helping the country in times of need.
  • Beijing is willing to supply Italy with one thousand lung ventilators, in addition to two million masks, 100 thousand of which are high-tech, 20 thousand protective suits and 50 thousand swabs for coronavirus tests.