Archives of “May 2020” month

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US Sec State Pompeo says again China did not act fast enough over the coronavirus outbreak

  
Analysis, Politics

Pompeo speaking on Fox, dialling back his rhetoric a little.

He had previously said the virus was a deliberate man-made virus, basing his comments on media reports.
Now falling back on the ‘could have moved quicker’ attack. He is on much safer ground with this given the experience the US administration has had with moving slowly on the COVID-19 outbreak.
ADDED — Uh-oh, here we go, Pompeo with more:
  • reiterates he has seen evidence the virus came for a lab in China
Pompeo speaking on Fox, dialling back his rhetoric a little.

Pres. Trump: China may or may not keep the trade deal

  
Analysis, Politics

Will know over the next a few weeks

Pres. Trump is on the wires saying:
  • China may or may not keep the trade deal
  • He will be able to report on whether China is fulfilling its obligations under the phase 1 trade deal in about a week or 2
In other comments, Pres. Trump says:
  • Fauci and Birx will continue to hold same roles on coronavirus task force
  • fast food chain Wendy’s is going to be okay with regard to beef supply.
Earlier Pres. Trump said that public opinion is swing him to keep the coronavirus task force in place. That is something new.

S&P and Dow close at session lows

  
Analysis, US Market
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NASDAQ are on the day but off the session highs

the S&P index and Dow industrial average are both closing at/near session lows. The NASDAQ index remained higher on the day but well off its high levels.
The final numbers are showing
  • S&P index -20.02 points or -0.70% at 2848.42. The high percentage was 0.79%
  • NASDAQ index +45.266 points or +0.51% at 8854.38. The high percentage was 1.41%.
  • Dow industrial average -218.45 points or -0.91% at 23664.64.  The high percentage was up 0.72%.

DOE crude oil inventories 4590K versus 8800K estimate

  
Analysis, Crude

DOE crude oil inventories

The crude oil inventory showed a lesson expected build in inventories.  Gasoline inventories at a greater than expected drawdown, while distillates showed a greater than expected build.

The numbers are showing:
  • crude oil inventories 4590K vs 8800K estimate
  • gasoline inventories -3158K vs 1000K estimate
  • distillates 9518K vs 3000K estimate
  • Cushing 2068K vs 3637K last week
  • US refinery utilization 0.9% versus 0.4% estimate and 2.0% last week
  • crude oil implied demand 16956 versus 16118 last week
  • gasoline implied demand 7195.1 versus 6764.3 last week
  • distillates implied demand 4058.3 versus 4489.6 last week
Overall better demand this week and lower builds/supply.
WTI crude oil futures are trading around $24.00 or -2.4%. The high price reached $26.08 while the low extended to $22.58 and volatile trading.
FYI the private data from the API show the following last night:
API data

China considers dropping numerical GDP growth target for 2020 – report

  
  Analysis
  Tags

Bloomberg reports, citing people familiar with the matter

China

The report says that Chinese leaders at the upcoming National People’s Congress will unveil a description of the goal for GDP instead, although a final decision has not been made on how to characterise the target.

Adding that such a move would free up policymakers from the obligation of having to issue a significant amount of stimulus in order to meet a certain growth level as long as employment conditions remain stable.
China has always issued a growth target and to no one’s surprise, they have consistently achieved said target year after year. Last year, it was a range of 6.0% to 6.5%.
The National People’s Congress will take place later this month on 22 May.

Russia deputy energy minister: No reasons for oil to fall to or below zero now

  
Analysis, Crude

Comments by Russia deputy energy minister, Pavel Sorokin

OPEC+
  • We can see first signs of recovery in the oil market
  • Return to pre-virus oil demand will take a long time
  • Nobody is interested in breaking OPEC+ deal now
  • Full compliance may be difficult for some countries
  • Violation of OPEC+ deal would bring new collapse in oil
The fall to negative prices in the May contract was brought about by a confluence of black swan events working together. It was pretty much the perfect storm that will probably never be repeated in our lifetime ever again.
Anyway, it will be ironic if Russia is the one to not fully comply to the OPEC+ deal in the near future and bring about added concerns about the oil market.
For now, oil prices are continuing to stabilise and recover with WTI crude up 3.5% on the day to $25.40 currently after a monstrous surge higher in overnight trading.
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