Archives of “April 2, 2020” day

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US does not know formal details of Russia/Saudi plans to cut supply – report

  
  Analysis

Reuters citing senior admin official

  • Trump does not plan to ask US domestic producers to agree to a specific cut
  • The US cannot orchestrate a mandated domestic cut
  • US companies are already lowering production as they run out of storage space
  • US considering suspending royalty payments on oil production to help domestic suppliers
If Saudi/Russian cuts are dependent on the US joining in, the entire thing is going to fall apart. Cutting royalties for US producers is helpful to US producers but isn’t the most politically attractive move.

US initial jobless claims surge again by 6648K vs 3700K estimate

  
  Analysis

US initial jobless claims for the week of March 28, 2020.

  • Prior week  revised to 3307K vs 3283K
  • initial jobless claims rise by greater 6648K vs 3700K estimate.
  • 4 week MA rises to 2612K vs 1004.25K last week
  • Continuing claims 3029K vs 4941K.  The prior week was revised to 1748K vs 1803K
  • The 4 week moving average moved to 2053.5K vs 1726.25K last week.
  • All states reported increases in initial claims for the week ending March 21. The largest increases were in Pennsylvania (+362,012), Ohio (+189,263), Massachusetts (+141,003), Texas (+139,250), and California (+128,727), while the smallest increases were in the Virgin Islands (+79), South Dakota (+1,571), West Virginia (+2,671), Vermont (+3,125), and Wyoming (+3,136).
  • Record levels for claims
US initial jobless claims for the week of March 28, 2020.Below is a look at the advanced state claims not seasonally adjusted.  California claims search by 692K. New York search by 286K. It might be expected that New York is lagging as processing may have a backlog. Him him
Jobless claims by state

For the full report from the Labor Department CLICK HERE

Fitch says : Deep Global Recession in 2020 as Coronavirus Crisis Escalates -Full Text

  
Analysis, Economy
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Fitch Ratings-London-02 April 2020: A deep global recession in 2020 is now Fitch Ratings’ baseline forecast according to its latest update of its Global Economic Outlook (GEO) forecasts.

The speed with which the coronavirus pandemic is evolving has necessitated another round of huge cuts to our GDP forecasts. We now expect world economic activity to decline by 1.9% in 2020 with US, eurozone and UK GDP down by 3.3%, 4.2% and 3.9%, respectively. China’s recovery from the disruption in 1Q20 will be sharply curtailed by the global recession and its annual growth will be below 2%.

“The forecast fall in global GDP for the year as a whole is on a par with the global financial crisis but the immediate hit to activity and jobs in the first half of this year will be worse”, said Brian Coulton, Fitch’s chief economist.

The spread of the pandemic and the actions necessary to control it mean that we now have to incorporate full-scale lockdowns across Europe and the US (and many other countries) in our baseline forecasts. This was not the assumption used in our March 2020 GEO forecast. There are many moving parts, but we now judge that lockdowns could reduce GDP across the EU and US by 7% to 8%, or 28% to 30% annualised, in 2Q20. This is an unprecedented peacetime one-quarter fall in GDP and is similar to what we now estimate occurred in China in 1Q20.

On the assumption that the health crisis is broadly contained by the second half of the year there should be a decent sequential recovery in activity as lockdowns are removed, some spending is re-profiled from 1H20, inventories are rebuilt and policy stimulus takes effect. But this has to be set against the many factors amplifying the depth of the dislocation, including job losses, capex cuts, commodity price shocks and the rout in financial markets.

“Our baseline forecast does not see GDP reverting to its pre-virus levels until late 2021 in the US and Europe,” said Coulton.

 

(more…)

Oil tanks at vital Africa storage hub said to be almost full as excess crude floods the market

  
  Analysis
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The Saldanha Bay storage hub is said to be nearing capacity

Oil

For some context, Saldanha Bay is a vital hub for crude oil storage because of its strategic location in which it allows for transport to demand centers in both Europe and Asia.

According to Bloomberg, the hub boasts about 45 million barrels in capacity but S&P Global’s latest report highlights that it has the capacity of up to 60 million barrels.
Nonetheless, sources familiar with the hub’s operations has told Bloomberg that the site is nearly at capacity – adding that there might be just room for a couple of tanks holding specific crude grades, but it is full otherwise.

This situation has already been forewarned by many oil traders and pipelines over the past few weeks and with Saudi Arabia continuing to flood the market, what we may be left with are a boatload of oil barrels going to be stuck at sea at this point.

6 companies working on vaccines against COVID-19

  
Analysis, Life
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A closer look at the companies developing vaccines to combat COVID-19

RB1
According to many experts in the healthcare sphere, the spreading of COVID-19 over the world has not reached its peak, and we do not have a vaccine against this disease yet.

Currently, the first place in terms of the number of diseased among countries is taken by the USA. China, though it was the source of the infection, has managed to stop its spreading, so now it occupies the third place in terms of the number of the sick.

Note that stopping the spreading of the virus is not the same as learning to cure people of it. There is no vaccine yet, and now it is very important to mark time until we get the vaccine. Hence, quarantine is the only way of fighting the virus.

Pharmaceutical companies have long started inventing a vaccine against the enemy; however, before it gets to the market, it has to pass all the stages of trials. As long as the WHO has announced a pandemics, the number of the stages is decreased.

For example, in normal conditions, pre-clinical testing (when the drug is tested on animals) takes 1 to 2 years, but in the present circumstances, this stage takes 1-2 months. The permission to sell the drug usually takes 4 years to receive, but this time the company may only need 4 months to get it.

In this article, we will discuss what companies are closer to the final stage of testing than others. The stocks of such companies will attract the most vivid attention of investors because the demand for the vaccine will exceed its production power, which means the company will make a maximum profit selling it.

Testing drugs (more…)

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