Connect with us

Business

Stock market news live: Wall Street dives on coronavirus panic, stocks have worst day in 2 years – Yahoo Canada Finance

Published

on



<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="World markets got slammed on Monday, with investors unnerved by rising coronavirus concerns. An unexpected surge in confirmed infections within Italy and South Korea — which now has the largest cluster of cases outside of China — raised the possibility that the mystery virus could be mutating into a pandemic.” data-reactid=”15″>World markets got slammed on Monday, with investors unnerved by rising coronavirus concerns. An unexpected surge in confirmed infections within Italy and South Korea — which now has the largest cluster of cases outside of China — raised the possibility that the mystery virus could be mutating into a pandemic.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="4:15 p.m. ET: Shake Shack swoons after Q4 earnings” data-reactid=”17″>4:15 p.m. ET: Shake Shack swoons after Q4 earnings

FILE - In this April 15, 2015, file photo, a man walks out of a Shake Shack in front of the New York-New York hotel and casino in Las Vegas. Shake Shack reports financial results Wednesday, Aug. 10, 2016. (AP Photo/John Locher, File)

View photos

FILE – In this April 15, 2015, file photo, a man walks out of a Shake Shack in front of the New York-New York hotel and casino in Las Vegas. Shake Shack reports financial results Wednesday, Aug. 10, 2016. (AP Photo/John Locher, File)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Shake Shack’s fourth quarter earnings report is leaving investors hungry for more. The burger chain lost 6 cents per share and reported big jumps in quarterly revenue on relatively light sales, but its stock tumbled sharply in post-market trading after it gave guidance below Wall Street estimates.” data-reactid=”38″>Shake Shack’s fourth quarter earnings report is leaving investors hungry for more. The burger chain lost 6 cents per share and reported big jumps in quarterly revenue on relatively light sales, but its stock tumbled sharply in post-market trading after it gave guidance below Wall Street estimates.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Shake Shack’s (SHAK) stock plunged by nearly 11% from Monday’s close at $73.57, but have rallied 24% since 2020 began.” data-reactid=”39″>Shake Shack’s (SHAK) stock plunged by nearly 11% from Monday’s close at $73.57, but have rallied 24% since 2020 began.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="4:00 p.m. ET: Stocks walloped by coronavirus outbreak” data-reactid=”41″>4:00 p.m. ET: Stocks walloped by coronavirus outbreak

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Wall Street suffered its worst losses in 2 years on Monday, as fears of a global coronavirus pandemic forced investors out of stocks and into safe-havens like the dollar, gold and Treasuries. All of the Dow’s (^DJI) gains for 2020 have evaporated amid the volatility, which is unlikely to abate after an eruption of new infections outside of China.” data-reactid=”46″>Wall Street suffered its worst losses in 2 years on Monday, as fears of a global coronavirus pandemic forced investors out of stocks and into safe-havens like the dollar, gold and Treasuries. All of the Dow’s (^DJI) gains for 2020 have evaporated amid the volatility, which is unlikely to abate after an eruption of new infections outside of China.

Here’s where markets settled at the close:

  • S&P 500 (^GSPC): -3.35%, or -111.86 points to 3,225.89

  • Dow (^DJI): -3.56%, or -1,031.40 points to 27,961.01

  • Nasdaq (^IXIC): -3.71%, or -355.31 points to 9,221.28

  • Crude oil (CL=F): -3.95% or -$2.11 to 51.27

  • Gold (GC=F): +0.73% or $12.00 to 1,660.80

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="3:23 p.m. ET: Key pharma stocks hit by opioid fears” data-reactid=”54″>3:23 p.m. ET: Key pharma stocks hit by opioid fears

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Monday has been a bad day for pharma giants ensnared in opioid legal action. Mallinckrodt (MNK) crumbled by a whopping 40% at its lows, after a Wall Street Journal report that the company may be preparing for the bankruptcy of its U.S. generics unit, which is in the crosshairs of opioid lawsuits. Separately, Teva (TEVA) — another opioid maker — dropped by over 4%, in part because of a “sell” recommendation by Edward Jones.” data-reactid=”55″>Monday has been a bad day for pharma giants ensnared in opioid legal action. Mallinckrodt (MNK) crumbled by a whopping 40% at its lows, after a Wall Street Journal report that the company may be preparing for the bankruptcy of its U.S. generics unit, which is in the crosshairs of opioid lawsuits. Separately, Teva (TEVA) — another opioid maker — dropped by over 4%, in part because of a “sell” recommendation by Edward Jones.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="1:15 p.m. ET: Pandemic jitters send Europe to its worst day in 3 years” data-reactid=”57″>1:15 p.m. ET: Pandemic jitters send Europe to its worst day in 3 years

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="European stocks suffered their worst day since 2016 on Monday as coronavirus infections climbed in Italy, the eurozone’s third-largest economy.” data-reactid=”58″>European stocks suffered their worst day since 2016 on Monday as coronavirus infections climbed in Italy, the eurozone’s third-largest economy.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The pan-European STOXX 600 index (^STOXX) closed down by almost 3.8%, with stocks on Italy’s FTSE MIB Index (FTSEMIB.MI) sinking by more than 5.4%. The FTSE 100 (^FTSE) declined by more than 3.3% in London. Germany’s DAX (^GDAXI)&nbsp;was down by 4%, while France’s CAC 40 (^FCHI)&nbsp;was down by more than 3.9%.” data-reactid=”59″>The pan-European STOXX 600 index (^STOXX) closed down by almost 3.8%, with stocks on Italy’s FTSE MIB Index (FTSEMIB.MI) sinking by more than 5.4%. The FTSE 100 (^FTSE) declined by more than 3.3% in London. Germany’s DAX (^GDAXI) was down by 4%, while France’s CAC 40 (^FCHI) was down by more than 3.9%.

__

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Noon ET: Stocks take new leg lower; travel and leisure lead the rout” data-reactid=”61″>Noon ET: Stocks take new leg lower; travel and leisure lead the rout

United Airlnes and American Airlnes planes are shown on the tarmac from an outdoor terrace and observation deck at San Francisco International Airport in San Francisco, Thursday, Feb. 20, 2020. (AP Photo/Jeff Chiu)United Airlnes and American Airlnes planes are shown on the tarmac from an outdoor terrace and observation deck at San Francisco International Airport in San Francisco, Thursday, Feb. 20, 2020. (AP Photo/Jeff Chiu)

View photos

United Airlnes and American Airlnes planes are shown on the tarmac from an outdoor terrace and observation deck at San Francisco International Airport in San Francisco, Thursday, Feb. 20, 2020. (AP Photo/Jeff Chiu)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="All of Wall Street’s major benchmarks are hunkered near session lows on coronavirus selling, with airlines and other leisure stocks bearing the brunt of selling. Some of the sector’s prominent names, like American Air (AAL), Norwegian Cruise (NCLH), Delta (DAL), Carnival (CCL), Royal Caribbean (RCL) and Booking.com, are off by at least 7% on the day. Travel and leisure has long been seen as most vulnerable to the pathogen (the Diamond Princess fiasco a prime illustration of why).” data-reactid=”82″>All of Wall Street’s major benchmarks are hunkered near session lows on coronavirus selling, with airlines and other leisure stocks bearing the brunt of selling. Some of the sector’s prominent names, like American Air (AAL), Norwegian Cruise (NCLH), Delta (DAL), Carnival (CCL), Royal Caribbean (RCL) and Booking.com, are off by at least 7% on the day. Travel and leisure has long been seen as most vulnerable to the pathogen (the Diamond Princess fiasco a prime illustration of why).

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="11:25 a.m. ET: Why Apple, tech stocks are sinking” data-reactid=”83″>11:25 a.m. ET: Why Apple, tech stocks are sinking

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For Apple (AAPL) and several other tech bellwethers, the heavy reliance on China (both from a demand and supply perspective) are an albatross as coronavirus fears crimp the global supply chain.” data-reactid=”84″>For Apple (AAPL) and several other tech bellwethers, the heavy reliance on China (both from a demand and supply perspective) are an albatross as coronavirus fears crimp the global supply chain.

In a note to clients on Monday, D.A. Davidson cited the iPhone maker as the biggest loser in the current environment. Analyst Tom Forte told Yahoo Finance in an interview that Grubhub and Netflix could benefit, as homebound citizens order in and binge on television.

The firm also listed the following as having “significant risk”:

In late morning trading, Apple dived by 4% to trade around $300 per share, while Facebook slumped by nearly 5%.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="11:00 a.m. ET: Stocks pull off troughs, still sharply lower” data-reactid=”100″>11:00 a.m. ET: Stocks pull off troughs, still sharply lower

Wall Street has clawed off session lows, but indexes remain well underwater as traders aggressively price in a worsening of the coronavirus outbreak. Here’s where major benchmarks are currently:

  • S&P 500 (^GSPC): -2.69% or -89.92 points to 3,247.83

  • Dow (^DJI): -2.79%, or -808.98 points to 28,183.43

  • Nasdaq (^IXIC): -3.31% or -316.59 points to 9,260.00

  • Crude oil (CL=F): -4.40% to $51.03 a barrel

  • Gold (GC=F): +1.77% to $1,678 per ounce

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="10:50 a.m. ET: Italy, already reeling, takes new blow from virus outbreak” data-reactid=”109″>10:50 a.m. ET: Italy, already reeling, takes new blow from virus outbreak

Via Reuters, Italy — a G7 economy that’s seen sluggish (if nonexistent) growth for much of the last decade, is all but certain to take another hit from the coronavirus’ appearance there. Over 220 people have been infected since Friday with six dead.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="From the story:” data-reactid=”111″>From the story:

The euro zone’s third-largest economy has been the most sluggish in the 19-nation bloc since the start of monetary union. It shrank by 9% in the wake of the 2008 global financial crisis and has recovered only about half of that since then.

Italian GDP fell by 0.3% in the fourth quarter of last year from the previous three months, yielding full-year growth of just 0.2%. Economists expected it to fare little better this year — and that was before the coronavirus hit.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="10:15 a.m. ET: WHO on coronavirus pandemic: ‘Not yet’” data-reactid=”119″>10:15 a.m. ET: WHO on coronavirus pandemic: ‘Not yet’

In its daily update, the World Health Organization’s director general made a distinction between the coronavirus being a contagious epidemic and a full-fledged pandemic:

“Our decision about whether to use the word “pandemic” to describe an epidemic is based on an ongoing assessment of the geographical spread of the virus, the severity of disease it causes and the impact it has on the whole of society.

“For the moment, we are not witnessing the uncontained global spread of this #coronavirus, and we are not witnessing large-scale severe disease or death. Does this virus have pandemic potential? Absolutely. Are we there yet? From our assessment not yet.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Meanwhile, The White House may seek up to $1 billion to prevent the virus from worsening in the United States.” data-reactid=”123″>Meanwhile, The White House may seek up to $1 billion to prevent the virus from worsening in the United States.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="10:14 a.m. ET: How the coronavirus will affect the global economy” data-reactid=”125″>10:14 a.m. ET: How the coronavirus will affect the global economy

Suppliers are already seeing delivery times soar because of the epidemic that's crippled China.Suppliers are already seeing delivery times soar because of the epidemic that's crippled China.

View photos

Suppliers are already seeing delivery times soar because of the epidemic that’s crippled China.

Goldman Sachs took a knife to its U.S. estimates, shaving 0.2 percentage points off estimated Q1 GDP given the widening coronavirus outbreak. The bank warns that “risks are clearly skewed to the downside” in light of supply chain troubles, and will be felt in the following four ways:

The impact of the coronavirus on US growth is likely to come from four main channels, namely 1) reduced US goods exports to China, 2) reduced spending in the US by Chinese tourists and students, 3) a decline in US retailers’ services value added through lower US consumption of imported goods, and 4) a decline in US production due to supply chain production disruptions. The first two channels reduce output through lowering demand, while the latter two channels reduce output through a reduction in supply. 

In a separate note, Goldman cited evidence that suggested the virus’s spread “is likely having a somewhat gradual but still sizeable impact on macro data.”

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="9:50 a.m. ET: Expect cheaper energy prices until 2025: BofA” data-reactid=”151″>9:50 a.m. ET: Expect cheaper energy prices until 2025: BofA

The upside of the coronavirus crisis will be sharply lower energy prices, with the hit to global demand expected to keep crude depressed, according to Bank of America. In a research note to clients on Monday, analysts said they expect Brent to range-trade between $50 and $70 until 2025:

As prices become more anchored around $60, we believe volatility implied in oil options could trend lower in the medium term. In contrast to last year, we see more support to our price outlook on increased capital discipline across the US shale industry, despite coronavirus risks. Our projections assume OPEC+ is prepared to continue to lose share in the global oil market, particularly if pandemic risks rise again.

More broadly, we expect oil as a share of the global energy pie to will drop as well as the petroleum consumption mix keeps rotating away from gasoline and heavy ends into distillates and NGLs (natural gas liquids).

The bank also expects the oil market to need additional production cuts this year amid “modest” demand that will keep Brent averaging $62 per barrel in 2020.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="9:30 a.m. ET: Wall Street plunges at the opening bell” data-reactid=”157″>9:30 a.m. ET: Wall Street plunges at the opening bell

The escalating coronavirus crisis is taking a huge toll on financial markets. The bloodletting that started on Sunday with stock futures and continued through Asia and European session has now hit U.S. blue-chip and tech stocks. Some of the day’s biggest losers include bellwether names like Apple, Google and Tesla — all of which fell by around 5% on the day.

Here’s where the markets began Monday’s trading session, which is shaping up to be an ugly one:

  • S&P 500 (^GSPC): -3% or -100 points to 3,237.52

  • Dow (^DJI): -3.2% or -918.19 points to 28,074.13

  • Nasdaq (^IXIC): -3.52% or -336.76 points to 9,245.73

  • Crude oil (CL=F): -4.72% to $50.86 a barrel

  • Gold (GC=F): +2.18% to $1,684.70 per ounce

Analysts, however, don’t think the current drop will last. Invesco’s Brian Levitt told Yahoo Finance on Monday that the current scare is little more than a blip in a longer secular bull that won’t trigger a recession. “We will be back sometime later in this year talking about stabilizing economic activity.”

7:30 a.m. ET: Stock futures slump in early trading

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="U.S. stock futures appeared poised to extend last week’s losses, with each of the three major indices indicating a lower open as Wall Street grappled with the widening coronavirus crisis.” data-reactid=”174″>U.S. stock futures appeared poised to extend last week’s losses, with each of the three major indices indicating a lower open as Wall Street grappled with the widening coronavirus crisis.

Here’s were the main moves during the pre-market session, as of 7:30 a.m. ET:

  • S&P 500 futures (ES=F): 3,265.00, down 74.25 points or 2.22%

  • Dow futures (YM=F): 28,293, down 688.00 points or 2.37%

  • Nasdaq futures (NQ=F): 9,222.25, down 235.75 points or 2.49%

  • Crude oil (CL=F): $51.39 per barrel, down $1.99 or 3.73%

  • Gold (GC=F): $1,682.50 per ounce, up $33.70 or 2.04%

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="An unexpected surge in confirmed infections within South Korea and Italy — which now has the largest cluster of cases outside of China — raised the possibility that the mystery virus could be mutating into a pandemic. Last week, the Hubei province at the epicenter of the coronavirus outbreak revised its method of counting cases for the third time this month, further undermining confidence in the country’s official counts.” data-reactid=”182″>An unexpected surge in confirmed infections within South Korea and Italy — which now has the largest cluster of cases outside of China — raised the possibility that the mystery virus could be mutating into a pandemic. Last week, the Hubei province at the epicenter of the coronavirus outbreak revised its method of counting cases for the third time this month, further undermining confidence in the country’s official counts.

It raises the stakes for the entire global economy rather than just China, where the overwhelming majority of the world’s nearly 80,000 cases are located. According to Marc Chandler at Bannockburn Global Forex:

The [coronavirus] has not only crippled the Chinese economy, but its sheer size and magnitude of its integration in the global supply chains have far-reaching knock-on effects.  Asia-Pacific economies that were increasingly reliant on Chinese input and demand are the most vulnerable.  Estimates suggest that the world’s second-largest economy is operating well less than 50% of capacity. 

Indeed, the extension of the stoppages and disruptions increase the likelihood that the Chinese economy contracts in Q1 [and] The supply chain disruptions are adversely impacting Japanese and Korean automakers.  German automakers derived a substantial share of their profits from China, and car sales continue to weaken. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The virus is sending ripples across the global supply chain, with names like Volkswagen, Burberry, Starbucks and Apple among the growing list of multinationals whose operations are being adversely impacted by the outbreak.” data-reactid=”186″>The virus is sending ripples across the global supply chain, with names like Volkswagen, Burberry, Starbucks and Apple among the growing list of multinationals whose operations are being adversely impacted by the outbreak.

Numbers showing the state of the Dow Jones Industrial Average are displayed above the floor after the closing bell at the New York Stock Exchange (NYSE) in New York City, U.S., February 21, 2020. REUTERS/Andrew KellyNumbers showing the state of the Dow Jones Industrial Average are displayed above the floor after the closing bell at the New York Stock Exchange (NYSE) in New York City, U.S., February 21, 2020. REUTERS/Andrew Kelly

View photos

Numbers showing the state of the Dow Jones Industrial Average are displayed above the floor after the closing bell at the New York Stock Exchange (NYSE) in New York City, U.S., February 21, 2020. REUTERS/Andrew Kelly

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on&nbsp;Twitter,&nbsp;Facebook,&nbsp;Instagram,&nbsp;Flipboard,&nbsp;LinkedIn, and&nbsp;reddit.” data-reactid=”208″>Follow Yahoo Finance on TwitterFacebookInstagramFlipboardLinkedIn, and reddit.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Find live stock market quotes and the latest business and finance news” data-reactid=”209″>Find live stock market quotes and the latest business and finance news

Let’s block ads! (Why?)



Source link

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