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The global energy crisis has 4 possible paths through 2022: BofA – Markets Insider



Oil pumps at sunset, industrial oil pumps equipment.
  • The worldwide energy crisis unfolding has thrown markets into unprecedented turmoil.
  • In Europe, natural gas prices are at record highs. And in China, thermal coal futures are also at all-time highs.
  • Francisco Blanch of Bank of America provided Insider with four possible paths through early 2022.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The worldwide energy crisis unfolding amid a surge in demand and an ongoing supply crunch has thrown the oil and gas markets into unprecedented turmoil.

Oil prices are up more than 60% this year, with West Texas Intermediate crude hitting a fresh seven-year high on Friday.

Elsewhere, the situation is even more extreme. In Europe, natural gas prices are at record highs, with wholesale prices on spot markets tripling this year. In China, thermal coal futures are also at all-time highs and have tripled this year as well.

As energy prices continue to rocket, Francisco Blanch, Bank of America Global Commodities and Derivatives Research Head, provided Insider with four possible paths he sees through early 2022. Each one holds the promise of prices cooling off, but some scenarios are more painful than others.

1. A spike in energy prices will lead to an economic crash

Francisco likened the energy crunch today to the run-up in oil prices between 2007 to 2008.

At the start of 2007, Brent crude was at just $50 a barrel, then nearly doubled to $95.98 a barrel towards the end of the year. And by July 2008, prices soared to an all-time high of nearly $150 a barrel. But prices crashed spectacularly as the Great Recession took hold.

If a similar spike in oil happens again, Francisco said major industrial firms may just sharply decrease production activities or shut down altogether, which will ultimately lead to a recession.

In fact, surging energy prices have already forced some businesses, especially in Europe and Asia, to halt manufacturing.

2. More production, substitution

An increase in the prices of any good will prompt any producer to either ramp up their production or to find more affordable alternatives, Francisco said.

So far, US shale companies have indicated they plan to invest more money next year in domestic production. But they don’t appear ready to unleash a flood of oil as investment remains constrained in favor of bigger shareholder returns.

Meanwhile, as natural gas and coal prices soar, some companies are shifting to using oil. That may add around 500,000 barrels a day to global demand, according to the International Energy Agency.

3. A warm winter that will temporarily cure the problem

Global energy prices are rising ahead of winter, when demand spikes for natural gas and coal to heat homes. Buyers across the globe are competing over a limited supply while energy prices remain high. The US Energy Information Administration on October 13 warned Americans to brace themselves for a heftier heating bill.

But what if we suddenly experience a warmer-than-expected winter? Demand will naturally slide, and the problem, according to Francisco said, would have momentarily cured itself “by chance.”

4. A hike in interest rates that will slow down aggregate demand

Then there’s the possibility that the central bank will slow down aggregate demand, Francisco said. This means allowing for somewhat higher interest rates and reduced quantitative easing, which will cool overall growth and energy consumption.

Federal Reserve officials have already signaled they will taper bond purchases later this year and start hiking rates next year, as the economy continues to rebound and inflation stays elevated.

“Remember, you can print US dollars, you can print euros, and you can print Philippine pesos. But you can’t print commodities,” he said.

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Pfizer says COVID-19 booster offers protection against Omicron – CTV News



Pfizer said Wednesday that a booster dose of its COVID-19 vaccine may protect against the new Omicron variant even though the initial two doses appear significantly less effective.

Pfizer and its partner BioNTech said lab tests showed a booster dose increased by 25-fold the level of so-called neutralizing antibodies against omicron.

Pfizer announced the preliminary laboratory data in a press release and it hasn’t yet undergone scientific review. The companies already are working to create an omicron-specific vaccine in case it’s needed.

Scientists have speculated that the high jump in antibodies that comes with a third dose of COVID-19 vaccines might be enough to counter any decrease in effectiveness.

Antibody levels predict how well a vaccine may prevent infection with the coronavirus but they are just one layer of the immune system’s defences. Pfizer said two doses of the vaccine may still induce protection against severe disease.

“Although two doses of the vaccine may still offer protection against severe disease caused by the Omicron strain, it’s clear from these preliminary data that protection is maximized with a third dose of our vaccine,” Pfizer CEO Albert Bourla said in a statement.


The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content

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Ontario COVID-19 science advisor recommends tighter restrictions in Thunder Bay –



THUNDER BAY — A leading Ontario epidemiologist believes the Thunder Bay District Health Unit should take measures immediately to mitigate the further spread of COVID-19.

“The trajectory is in the wrong direction. At this rate, they will start to be challenged” with managing the situation, says Dr. Peter Juni.

Juni is the scientific director of the province’s COVID-19 science advisory table.

The COVID-19 caseload has been rising steadily in the Thunder Bay area since mid-November, including cases at numerous schools.

The 54 new cases reported on Monday was the largest number of new cases reported since March 17, 2021.

It brought the active case count to 137, including some cases of the new Omicron variant.

The risk for TBDHU, Juni said, is that “You can’t just get contact tracing, testing and management done as efficiently as before….Omicron pops up now, and you potentially have a problem.”

He said although the challenges presented by the new variant aren’t fully known yet, it needs to be taken very seriously.

It’s why, Juni said, he recommends swift action to slow the spread of the Delta variant while simultaneously preventing Omicron from becoming dominant.

“If I were in the shoes of the local public health unit, and the medical officer of health, I would really follow the same sort of decision-making that Windsor-Essex has just had,” he told TBNewswatch on Monday.

The Windsor-Essex County Health Unit announced Sunday that it is introducing new measures that go beyond current provincial regulations.

In its service area, where the rate of COVID-19 infections is starting to put a strain on local hospitals, the following restrictions will take effect on Dec. 10:

  • social gatherings limited to 10 people indoors and 25 outdoors
  • added measures for wedding receptions and for social events tied to funerals and religious services
  • limiting indoor capacity for bars and restaurants to 50 % of their usual occupancy limit
  • strict adherence to face-covering requirements in all public settings

“The virus loves indoor spaces. It hasn’t changed for Delta and it won’t change for Omicron either,” Dr. Juni said.

He said it’s also essential that people “don’t cut corners with masking.”

At sports venues specifically, he said, he would seriously consider disallowing the consumption of food and drink in order to keep masks in place.

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Pandemic expert group to issue recommendations on COVID-19 rapid tests in Ontario – CTV News Toronto



Science experts advising Ontario on the pandemic are set to release new recommendations on rapid testing, with one of the group’s leaders saying it makes sense to use the tests more often.

Dr. Peter Juni, the scientific director of Ontario’s COVID-19 Science Advisory Table, said the group plans to publish a science brief on the issue Wednesday. The group’s communications director later said it would be published in the coming days.

There have been growing calls for the tests to be made more widely available as COVID-19 cases rise. While it’s still unclear how they perform with the new Omicron variant, Juni said they are effective with the Delta variant that accounts for the bulk of Ontario’s cases.

“It makes sense from a scientific perspective to use rapid tests more frequently, for example, schools, in workplaces, in congregate settings, and to make rapid tests more available in this province,” Juni said in an interview.

Opposition legislators have been calling for the province to distribute rapid tests more broadly, particularly in schools.

Rapid tests are currently offered for free to businesses, and also sold in some pharmacies for asymptomatic people who have not been in contact with a confirmed case.

They have also been distributed in schools in areas of high transmission for students with COVID-19 symptoms or considered a close contact of a confirmed case. The government has also said it plans to send all students home with five rapid tests over the December holidays.

But aside from that holiday plan, rapid tests have not been made available to all students, though families across the province have sought access to them.

Health Minister Christine Elliott said Tuesday that Ontarians have access to some form of COVID-19 testing for free in most cases.

“The only time we’re really asking people to pay for tests is if they need it for purposes of travel, which I think is fair,” she said.

Ontario offers free PCR testing to those with COVID-19 symptoms, close contacts of a case and members of certain groups. Those tests are available at assessment centres and pharmacies, among other locations, and the province says most results are ready in 48 hours.

Results from most rapid tests are available in about 15 minutes, according to the province.

A spokeswoman for the minister said the province currently has 5.75 million rapid antigen tests in its inventory, and as of Nov. 29, has handed out 33.35 million.

Ontario has been distributing about a million tests each week and is ramping up during the holiday period, Alexandra Hilkene said. That includes 11 million tests earmarked for public and First Nation schools and tests that will be sent to pop-up sites in higher-risk areas, she said.

Ontario’s top doctor, Dr. Kieran Moore, said the province is working with the federal government to broaden its testing strategy, and expects to make an announcement on the increased availability of tests in the coming weeks.

Liberal Leader John Fraser said more rapid tests should be handed out, particularly in the winter months, which have typically seen infections rise.

“I’m still bewildered as to why millions and millions of rapid tests are sitting in warehouses unused, undistributed, when jurisdictions across the world who use rapid tests, they’re giving them to families, they’re giving them to people at airports,” he said. “It’s just another tool to protect us.”

NDP Leader Andrea Horwath said Monday the tests should be free for everyone.

“Nobody should have to pay for a rapid test. That should be part of our public health-care system,” she said.

— with files from Maan Alhmidi.

This report by The Canadian Press was first published Dec. 7, 2021.

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