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Crude oil futures drop at open on grim demand outlook – Investing.com

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© Reuters. FILE PHOTO: The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County

By David Gaffen

(Reuters) – Crude oil benchmarks slumped at the open of electronic trading on Sunday, extending last week’s losses as the global coronavirus pandemic worsened and the Saudi Arabia-Russia price war continued unabated.

In early trading, futures fell 7.1% to $23.15 a barrel as of 6:13 p.m. EDT (2213 GMT), while futures lost 5.6%, or $1.17, to $20.34 a barrel.

The oil markets are enduring a twin shock of demand destruction caused by the coronavirus pandemic and the Saudi-Russia price war that is flooding markets with extra supply.

The coronavirus pandemic has already killed about 32,000 people and sickened more than 500,000 worldwide. On Sunday, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, estimated the United States alone could suffer as many as 200,000 deaths.

The virus has brought the worldwide aviation industry to a standstill and put roughly 3 billion people on lockdown to limit the spread of the virus. With many eschewing daily automotive use, analysts have estimated worldwide fuel demand could fall by as much as 20% in the coming month.

Despite this, Saudi Arabia and Russia remain at loggerheads. Russian oil companies have said they expect the price war to continue, while the Saudis have not given any indication that there are new talks coming to curb supply.

Still, any move Saudi Arabia and the Organization of the Petroleum Exporting Countries makes may not be enough, Goldman Sachs (NYSE:) said last week in a note. They anticipated a fall of nearly 19 million bpd in global oil demand in April. “A demand shock of this magnitude will overwhelm any supply response including any potential core-OPEC output freeze or cut,” they wrote.

In recent days prices for crude oil traded at key locales such as Midland, Texas, have traded at several dollars less than U.S. futures, an indication that companies there are anticipating a flood of supply. U.S. oil production is currently running at roughly 13 million barrels per day, a record, but is expected to drop by more than 1.4 million bpd by the end of the third quarter 2021.

This past week, the Baker Hughes rig count fell by 40, the most since 2015, as companies swiftly pull in spending. Most global majors have announced plans to cut back on capital expenditures and hundreds have already been laid off in anticipation of oil prices falling through the $20-per-barrel mark.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Investors make Tesla most valuable car company in the world despite being outsold by Toyota 25-1 – CBC.ca

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Tesla Inc. became the most valuable car company in the world on Wednesday, a day before the electric car maker posted better-than-expected sales numbers.

Tesla announced that it delivered 90,650 vehicles during the quarter, better than the 74,130 vehicles that analysts who cover the company were forecasting.

That’s a decline of about five per cent from the number of cars it sold in the same period a year ago, but investors were impressed with the number because it’s less bad than the rest of the industry. New data on Thursday showed U.S. car sales in June were about 27 per cent below what they were in the same month last year.

Investors bid up Tesla share price to $1,218 a share before markets opened Thursday. That’s an increase of nine per cent.

It was enough to make Tesla the most valuable car company in the world, with the total value of all its shares on the Nasdaq, a figure known as market capitalization, adding up to $207 billion.

That’s more than any other car company and more than Toyota’s $203 billion, which was the previous highest value.

Toyota sold 8,958,423 cars worldwide last year. That’s almost 25 times the 367,500 cars Tesla said it cranked out in 2019. But Wall Street investors have decided Tesla is the better stock to buy.

Tesla’s current stock price values the company at more than GM, Chrysler and Ford combined, despite those three U.S. automakers also selling far more cars than Tesla does every year.

Regardless of the apparent disconnect between expectations and reality, some in the investment community think the stock has even more room to grow.

Chaim Siegel of Elazar Advisors expects the company’s stock price to rise to $1,545 US in the next year.

“If they are able to accelerate profitability in a quarter missing so many production days, imagine a normal quarter levering more fixed costs,” he said in a note to clients. “Profitability will be even better.”

Analyst Daniel Ives of Wedbush Securities called Tesla’s performance a “major home run” considering the backdrop of COVID-19. “In our opinion, a 90K delivery number in this COVID lockdown environment is a jaw-dropper,” Ives said. 

He has a price target of $1,250 on the shares, but his most optimistic scenario forecasts the stock at $2,000 US apiece.

Tesla may soon join S&P 500

While a lot of the excitement over Tesla is built on nothing more than hype, the company does have one fundamental factor going for it that is likely to add to the buying. Tesla isn’t a member of the influential S&P 500 collection of stocks.

But analysts expect S&P may soon have to include Tesla because it meets the requirements.

“Stringing together profitable quarters increases their chance for inclusion into the S&P 500,” Siegel said. “That would force many large funds to have to buy.”

Earlier this week in an internal email, CEO Elon Musk called on employees to work hard to allow Tesla to break even in the quarter despite the coronavirus crisis.

“While our main factory in Fremont was shut down for much of the quarter, we have successfully ramped production back to prior levels,” the automaker said in a statement.

During the period from April to June, most of the United States was under government-imposed stay-at-home orders to combat the spread of the virus, which impacted production and caused a plunge in auto sales.

The lockdown resulted in the shutdown of production at Tesla’s only U.S. vehicle factory in California for more than six weeks from the end of March to early May.

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Environment Canada issues heat warning for Montreal and Laval regions – CTV News Montreal

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MONTREAL —
Environment Canada has issued a heat warning for Montreal and the region with warm, humid air settling over the area.

“The combined values of temperature and humidity will give humidex values that will reach 40,” Environment Canada says.

The heat is expected hit the Montreal, Laval, Longueuil and Chateauguay areas and taper off in the evening as precipitation arrives.

During a heat wave, residents are reminded to drink plenty of water and stay in a cool area.

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No break from the heat in sight as Environment Canada issues alerts – SooToday

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Temperatures in the 30s are expected for the Sault and area Thursday and into the weekend, says Environment Canada. The humidex is going to make it feel more like 36 degrees Celsius and overnight lows will range from 16 to 20.

The full text of a release from Environment Canada follows:

Heat Warning in effect for:

  • Sault Ste. Marie – St. Joseph Island
  • Agawa – Lake Superior Park
  • Searchmont – Montreal River Harbour – Batchawana Bay

A heat event is expected Thursday into the weekend.

Inland from the Great Lakes, daytime high temperatures near 30 with humidex values near 36 are expected over the next few days. Overnight lows will range from 16 to 20 degrees Celsius.

Areas near the Great Lakes will feel slightly cooler temperatures.

Please refer to your public forecast for further details on expected temperatures.

Hot and humid air can also bring deteriorating air quality and can result in the Air Quality Health Index to approach the high risk category.

Extreme heat affects everyone.

The risks are greater for young children, pregnant women, older adults, people with chronic illnesses and people working or exercising outdoors.

Never leave people or pets inside a parked vehicle.

Outdoor workers should take regularly scheduled breaks in a cool place.

Please continue to monitor alerts and forecasts issued by Environment Canada. To report severe weather, send an email to ONstorm@canada.ca or tweet reports using #ONStorm.

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