Connect with us

Business

Oil prices fall as market weighs coronavirus demand impact – CNBC

Published

on


Oil pumpjacks in silhouette at sunset.

Oil prices fell on Tuesday, tracking losses in financial markets on lingering concerns over the economic impact of the coronavirus outbreak in China and its effect on oil demand.

Brent crude was at $57.07 a barrel, down 60 cents, or 1%, by 0348 GMT, while U.S. West Texas Intermediate crude fell 38 cents, or 0.7%, to $51.67 a barrel.

“Oil prices remain heavy as energy traders may have been overly optimistic as to the crude demand impact of the coronavirus, and in fading optimism that OPEC + will come through with deeper production cuts in March,” said Edward Moya, senior market analyst at OANDA.

“Optimism that China would see a return to normalcy in travel and trade next quarter was probably wrong… The rest of world is exercising caution on virus spreading fears and that will do no favors for crude’s demand outlook.”

U.S. stock futures slipped from record levels on Tuesday after Apple Inc, the most valuable company in the United States, said it will not meet its revenue guidance for the March quarter as the coronavirus outbreak slowed production and weakened demand in China. 

The number of new coronavirus infections in mainland China fell below 2,000 on Tuesday for the first time since January, Chinese health officials said, although global experts warn it is too early to say the outbreak is being contained. 

The International Energy Agency (IEA) said last week the virus was set to cause oil demand to fall by 435,000 barrels per day (bpd) year-on-year in the first quarter, in what would be the first quarterly drop since the financial crisis in 2009.

Still, with some Chinese independent refineries snapping up crude supplies after being absent from the market for weeks, traders held out hopes that China’s demand could recover in coming months. 

Investors are also anticipating that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, will approve a proposal to deepen production cuts to tighten global supplies and support prices.

The group, known as OPEC+, has an agreement to cut oil output by 1.7 million bpd until the end of March.

Oil output from Libya has fallen sharply since Jan. 18 because of a blockade of ports and oil fields by groups loyal to eastern-based commander Khalifa Haftar.

Libya’s national oil corporation, NOC, said on Monday that oil production was at 135,745 barrels per day as of Monday, compared with 1.2 million bpd before the stoppage.

Let’s block ads! (Why?)



Source link

Continue Reading

Business

Canadian restaurant sector laid off 800,000 in March, with wave of permanent closures expected this month – Financial Post

Published

on


The Canadian food service sector laid off 800,000 people in March as the coronavirus crisis forced shutdowns across the country, according to a survey released on Thursday.

Restaurants Canada, the industry association behind the survey, is now warning that nearly 30 per cent of restaurants will not reopen if the situation continues unchanged for another month.

“There’s a lot of people who just won’t make it through May 1 or June 1,” said David Lefebvre, the association’s vice-president for federal affairs.

The 800,000 out-of-work employees are about two-thirds of the country’s entire food-service labour force, which totals some 1.2 million people. Many more workers have likely been let go since the survey was conducted last week: 70 per cent of respondents said they were planning more layoffs in the near future.

A growing chorus of concerned restaurateurs have formed a coalition to pressure the federal government to do more, arguing that the 75-per-cent wage subsidy and $40,000 loans for small businesses won’t be enough to prevent damage that could take a generation to recover from.

Save Hospitality, a group of more than 1,000 restaurant owners, said it is meeting with political officials to develop a restaurant-specific stimulus plan, since wage subsidies won’t be able to prop up the hospitality sector amid blanket bans on social gatherings that stop most restaurants from operating. The $40,000 no-interest government loans will barely cover one or two month’s rent, the group said.

“Some of our rents are over $100,000 a month,” said Andrew Oliver, one of the Save Hospitality leaders and chief executive of Oliver & Bonacini Hospitality Inc., which has 26 locations in Canada, including the Bay Street institution Canoe and several other prominent downtown Toronto restaurants.

Food-service revenues are expected to drop by $20 billion during the second quarter of 2020, Restaurants Canada said. Some restaurants continue to offer takeout and delivery, but those options for most are the equivalent of “putting on a Band-Aid when you’ve lost your leg,” said Oliver, whose business has lost 99 per cent of its revenue despite offering take-out at a few locations.


Many establishments have locked their doors, and a number will stay that way after the pandemic passes.

Getty Images

“This has been one of the most devastating times of my life. I had to lay off thousands of people, ruin thousands of dreams,” he said. “One of the hardest things is I’ve had a dozen calls or text messages, people reaching out, asking me to take the keys to their place because they’re going to give up.”

The Restaurants Canada survey was conducted from March 25 to March 29 with 655 restaurateurs who operate 13,300 locations in total. It found that 10 per cent of the country’s 97,500 restaurants, bars and cafés have already permanently closed. Another 18 per cent said they will be forced to close for good within a month if current conditions continue.

“In the next 30 days, you have one in three restaurants boarded up. Think about that for a minute,” Oliver said. “If all of our costs continue to build with zero revenues for three months … when they come up with this report again, we might have it where one in 10 restaurants think they will survive. Imagine what that looks like for the economy.”

I had to lay off thousands of people, ruin thousands of dreams

Andrew Oliver, CEO, Oliver & Bonacini Hospitality

Save Hospitality wants forgivable government loans to keep businesses alive through the coronavirus crisis and incentivize them to reopen and hire back employees as soon as it’s safe to do so. The group is suggesting the loans should count for 10 per cent of a restaurant’s annual revenue, and could be provided by the banks, but funded and guaranteed by the federal government.

“Make that investment for us so that we can continue to pay you guys the tens of billions of dollars in taxes that we contribute to our communities,” Oliver said.

Federal programs to support laid-off workers and even calls to defer rent payments and property taxes are only stop-gap measures, Oliver said. If the only solution is to delay paying expenses, he said business owners — in an already low-margin industry — will emerge from the crisis with crippling debt, leading to a much higher vacancy rate and a steep drop in market rents.

Financial Post

• Email: jedmiston@nationalpost.com | Twitter:

Let’s block ads! (Why?)



Source link

Continue Reading

Business

Russian Oil Firms Ready To Agree To A Production Cut Deal – OilPrice.com

Published

on



Russian Oil Firms Ready To Agree To A Production Cut Deal | OilPrice.com

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Related News

Russia

With oil prices below Russia’s budget breakeven and with over 20 percent of global oil demand wiped out by the coronavirus pandemic, Russian oil firms could be ready to participate in a global production cut deal with Saudi Arabia, the United States, and other major producers, sources familiar with the matter told Bloomberg.  

Russian oil firms, who did not increase production this month as promised weeks ago when the OPEC+ deal collapsed, have signaled a readiness for global coordinated action to stop the price crash, as the demand destruction during the lockdowns from India to the U.S. turned out much more than initially thought, according to Bloomberg’s sources.   

Four sources at Russian oil firms told Bloomberg that they could be ready to agree to some kind of a three-way deal among Russia, Saudi Arabia, and the United States.  

Two weeks ago, Russia was dismissing all calls for and reports about returning to the negotiating table, confident that it would outlast Saudi Arabia in the oil price war.

However, the global oil demand outlook has become more and more pessimistic by the day, with some analysts expecting the demand loss in April at 30 million bpd – nearly a third of the world’s typical consumption of oil.

Russia’s President Vladimir Putin is slated to hold a video call with oil executives from the local firms later on Friday to discuss the “unfavorable” situation in the oil market, Putin’s press secretary Dmitry Peskov said today.

Related: Goldman Sachs: Prepare For A Massive Oil Demand Shock

On Thursday, Peskov told reporters that no one had launched any talks about a potential new oil-production deal to replace the OPEC+ format, but noted that “no one is happy” with the current oil price.  

The current prices of Brent Crude are well below Saudi Arabia’s fiscal break-even price of $80 a barrel oil, below the break-evens of nearly all U.S. shale production, and below the Russian breakeven price, too.  

Shortly after Kremlin’s spokesman said no talks were being held, U.S. President Donald Trump said that he hoped and expected that Saudi Arabia and Russia would “cut back approximately 10 Million Barrels, and maybe substantially more,” while OPEC’s top producer and de facto leader Saudi Arabia called for an emergency meeting of OPEC+ and “another group of countries” to try to find “a fair solution” to the current market imbalance. The video meeting will be held on Monday, and the U.S. oil regulator will also be invited to take part in the discussions.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Related posts

Let’s block ads! (Why?)



Source link

Continue Reading

Business

IEA: OPEC Can't Save The Oil Market – OilPrice.com

Published

on



IEA: OPEC Can’t Save The Oil Market | OilPrice.com

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Related News

OPEC Oil Market

Even if the OPEC+ group and other major oil producers in the world were to agree to deep production cuts, they would be unable to prevent what is sure to be an enormous global inventory build this quarter due to unprecedented demand destruction, Fatih Birol, Executive Director of the International Energy Agency (IEA), told Reuters on Friday.

The measures many countries have taken to try to flatten the curve of the coronavirus pandemic are destroying unprecedented volumes of oil demand as more than 3 billion people—from India to Europe to the United States—remain in lockdown.

As a result of restricted commuter travel, grounded flights, and economic slowdown, demand for oil in April is expected to drop by 20 million bpd year on year, and probably more.

Even if OPEC+ plus other producers were to discuss, agree to, and implement a collective cut of 10 million bpd, global oil inventories would still rise by 15 million bpd in the second quarter, the IEA’s chief told Reuters.  

Earlier this week, the IEA said that the world has seen some oil shocks before, but “none has hit the industry with quite the ferocity we are witnessing today.”

The reason the shock is unique this time around, the IAE says, is because one of the usual stabilization factors, consumers, is unable to do its part. As billions of people around the world are still in lockdown, consumers are unable to react to falling prices like they usually do—by consuming more. So for as long as the pandemic lasts, boosts in demand that were seen during other oil shocks are “highly unlikely.”

Meanwhile, producers from the OPEC+ group and from another group are expected to discuss potential ways to react to the massive demand loss and the low oil prices that hit their lowest level in 18 years earlier this week.

While U.S. President Donald Trump touted a cut of 10 million bpd, and possibly 15 million bpd, many oil analysts, cited by Reuters, remain highly skeptical that an agreement of these proportions could be reached and implemented.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Related posts

Let’s block ads! (Why?)



Source link

Continue Reading

Trending