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The Rally In Oil Stocks May Be Short-Lived – OilPrice.com

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The Rally In Oil Stocks May Be Short-Lived | OilPrice.com

Irina Slav

Irina Slav

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

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First Pfizer and now Moderna have provided a much needed shot in the arm to the embattled oil industry, with their news about vaccine candidate efficacy lifting stocks strongly in the past week.

The Pfizer news kicked off the best week ever for energy stocks, CNBC reported, and Moderna’s update marked the start of what could be another strong week, especially as it came on the same day as OPEC+ decided to extend the current oil production cuts for three more months, till end-March. But how stable is the rally? This is the question investors should be asking.

It all hinges on the prospect of efficacious vaccines becoming widely available soon, and mass vaccination leading to a strong rebound in oil demand as people start traveling again. But the trial data is very early and based on small samples of trial participants. Pfizer, Moderna, and all other vaccine makers must collect more data, and not just on efficacy but on safety before they start distributing it on a mass scale.

There are also logistics challenges for the speedy distribution of large quantities of vaccines for the coronavirus. As the Wall Street Journal’s Max Colchester and Drew Hinshaw noted in a recent report, previous large-scale vaccination initiatives took years to be successful. They also tended to target specific demographics, such as children.

This time, there is a strong sense of urgency, and the aim is to vaccinate as many people as possible, regardless of age. This means getting enough doses to people and then encouraging them to take the vaccine. All of this takes time, and we’re not talking about a few weeks.

So, oil demand is not rebounding in any meaningful way anytime soon, at least not in Europe and the United States. It is rebounding in Asia, although more weakly than many hoped. And the surge in new Covid-19 cases in Europe and the U.S. could eventually offset the optimism sparked by the announcements from Pfizer and Moderna.

And then there’s the U.S. election and the renewable energy agenda to consider, especially for the long term.

“When you think about the fundamental change in how we get energy, clean energy, the emphasis that a [Joe] Biden administration is likely to put on that, I would view this [last week’s oil stocks rally] as a cyclical trade but not a secular trend that I would want to hold onto as a long-term investor,” said Nancy Tengler chief investment officer at Laffer Tengler Investments this week, speaking to CNBC.

Related: Oil Markets See Light At The End Of The Tunnel

Indeed there is a growing awareness of sustainability in energy among investors, and this awareness is pushing them to either reduce or completely eliminate their exposure to oil stocks despite the allure of stable dividends. These, by the way, just proved not so stable this year thanks to the crisis, with some supermajors cutting the payout because of the oil price rout.

Oil stocks have always been in a direct relationship with economic news. Positive news about the economy, national or global, tends to benefit the shares of oil companies as economic growth has so far invariably meant improving oil demand. This may be about to change in the future, however, because of the attention renewables are getting. It will be energy demand that will be growing as economies grow, but not necessarily oil demand.

These are trends that are slower to unfold than a market rally sparked by a vaccine update—following which, the CEO of Pfizer sold $5.6 million worth of stock in the company. Oil stocks are having some of their best days this year right now, and there will be more rallies down the road. The important thing about them is that they are unlikely to be particularly lasting, not until the industries reliant on oil begin to recover.

By Irina Slav for Oilprice.com

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COVID-19 update for Dec. 1: 656 new cases, 16 more deaths in B.C. | Premier Horgan's popularity remains high – Vancouver Sun

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Fraser Health says the machines can remove viruses and bacteria from a room in as little as 20 minutes.

10:30 a.m. – Tam says older Canadians should be at front of line for vaccine

Chief public health officer Dr. Theresa Tam says when looking at people experiencing the most severe illness, older Canadians are more at risk than younger Canadians with pre-existing conditions.

She says that suggests after the initial round of vaccines goes to people in high-risk living or work situations, like long-term care centres and hospital staff, the next round of immunizations should be done by age, with the oldest Canadians at the front of the line.

— Canadian Press

8 a.m. – Premier Horgan’s popularity remains high

Despite surging COVID-19 cases in the province, Premier John Horgan continues to maintain a high level of approval among British Columbians.

In a recent Angus Reid poll, conducted Nov. 24-30, 64 per cent of respondents said they approved of Horgan’s performance during the pandemic while 30 per cent disapproved and six per cent were unsure.

Although his popularity among British Columbians has dropped five points since last quarter, Horgan’s approval rating is tied for the highest in country, with Quebec Premier Francois Legault, despite new wave of COVID-19 related physical-distancing and social restrictions in B.C.

7 a.m. – Canadians OK with vaccine wait: pollA new poll suggests most Canadians aren’t currently worried that people in other countries might get a COVID-19 vaccine first.Thirty-seven per cent of respondents to a survey conducted by Leger and the Association for Canadian Studies say they are very concerned that Canada may not receive doses of a new COVID vaccine as early as the United States while 48 per cent say they are not concerned.Ten per cent say they don’t care at all or are not planning to get vaccinated anyway.With the likelihood of multiple vaccines coming on to the market over a period of time, just 28 per cent of respondents said they will take the first vaccine they can get, while 45 per cent say they will wait for other vaccines to become available.The poll suggests that the vast majority of Canadians want people entering Canada to be vaccinated against COVID-19, with 83 per cent of respondents say being vaccinated should be required.The online poll of 1,516 adult Canadians was conducted from Nov. 26 to Nov. 29.– Canadian Press

12 a.m. – Vancouver police issue $7,130 in fines to hosts of four illegal parties

Vancouver police issued just over $7,000 in fines at four different parties over the weekend that were held despite current COVID-19 health orders.

Under current B.C. health orders, social gatherings aren’t permitted with anyone outside of the household bubble. The orders were implemented to cut down on the transmission of COVID-19.

12 a.m. –B.C. posts record 46 deaths over the past three days

B.C. reported 46 deaths between noon Friday and noon Monday and 2,077 new cases of COVID-19.

Provincial health officer Dr. Bonnie Henry also added another 277 cases to B.C.’s total caseload after an earlier accounting mistake was corrected in Fraser Health.

Henry said 36 of the deaths over the previous three days were in residents of long-term health care facilities.

Between noon Friday and noon Saturday there were 750 cases reported, 731 between noon Saturday and noon Sunday and 596 between noon Sunday and noon Monday.

12 a.m. – Another vaccine candidate submitted to Health Canada for approval

Federal Health Minister Patty Hajdu says Johnson & Johnson has submitted its COVID-19 vaccine candidate for Health Canada’s approval.

It’s the fourth potential vaccine sent for assessment in Canada and the first that would require one dose to confer immunity instead of two.

Health Canada has been examining vaccine candidates from Pfizer, Moderna and AstraZeneca since October, when those companies sent partial data on their drugs for what’s called a “rolling review.”

If the Johnson & Johnson vaccine meets Health Canada’s standards for safety and effectiveness, the Canadian government says it has a deal to buy 10 million doses and an option on up to 28 million more.

— Canadian Press

12 a.m. – Liberals to post $381B deficit as debt levels as percentage of economy surge higher

The Liberal government expects to post a $381-billion deficit in 2021, not including a new pool of stimulus funds announced on Monday that will put further strain on Ottawa’s finances as pandemic spending continues to climb.

Finance Minister Chrystia Freeland tabled the updated figures in her fiscal update, which showed the deficit rising still higher than Ottawa’s earlier projection of $343 billion in 2020-21.

The Liberals on Monday also promised another $70 billion to $100 billion over the next three years in stimulus measures, but declined to outline the details of the new spending, saying it was “highly dependent on the evolving health and economic situation” in Canada.


LOCAL RESOURCES for COVID-19 information

Here are a number of information and landing pages for COVID-19 from various health and government agencies.

B.C. COVID-19 Symptom Self-Assessment Tool

Vancouver Coastal Health – Information on Coronavirus Disease (COVID-19)

HealthLink B.C. – Coronavirus (COVID-19) information page

B.C. Centre for Disease Control – Novel coronavirus (COVID-19)

Government of Canada – Coronavirus disease (COVID-19): Outbreak update

World Health Organization – Coronavirus disease (COVID-19) outbreak

–with files from The Canadian Press

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Conservatives push for parliamentary committee study of failed vaccine deal – CBC.ca

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The federal Conservatives are calling for a parliamentary committee probe of the Liberal government’s plan to refit a National Research Council facility in Montreal to start producing a COVID-19 vaccine.

The government announced the $44 million project in May as part of a partnership between the NRC and a Chinese company to develop a made-in-Canada vaccine.

By August, the Liberals had confirmed the partnership with CanSino Biologics had fallen apart after the Chinese government blocked shipments of vaccine samples meant to be used in clinical trials in Canada.

Conservative Leader Erin O’Toole has criticized the Liberals for putting too much faith in Beijing, and blamed the failed deal for Canada being late to order vaccines from other foreign companies.

The proposed committee probe would look at the investment intended to upgrade the NRC facility and how the deal affected Canada’s efforts to ensure the country has timely access to vaccines.

Prime Minister Justin Trudeau admitted last week that Canada might have to wait for other countries to get access to vaccines, though the government and vaccine-makers have since downplayed any delay.

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Toronto's top doctor says COVID-19 numbers sound 'blunt warning' as city logs record 761 new cases – CP24 Toronto's Breaking News

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Toronto’s top doctor says the latest COVID-19 data collected for the city should send an urgent warning to residents to change their behaviour.

Toronto reported 761 new cases of COVID-19 Tuesday, breaking the previous record of 643 set just a day earlier on Monday.

“Today’s case counts are a blunt warning,” Medical Officer of Health Dr. Eileen de Villa said in a statement. “COVID-19 continues to spread easily and widely.”

De Villa pointed out that younger adults (people between the ages of 20 and 49) account for more than half (57 per cent) of today’s new cases, including 167 people in their 20s, 154 people in their 30s and 112 people in their 40s.

“It is a warning that everyone at every age shares the risk of infection, just as all of us have the ability to reduce the risk through the actions and choices we take in the next several weeks,” de Villa said.

She said data gleaned from the city’s newly launched Source of Infection Survey, given to those who test positive for the virus, are also shedding light on where people are getting infected.

One on five respondents confirmed that they had been part of a gathering of fewer than 10 people either in their own home or in someone else’s home during the period when they acquired COVID-19.

“While most cases reporting close contact with a known COVID-19 case identified their spouse or partner (21 per cent) as the case, the next most common relationships reported were friends (16 per cent) and co-workers (16 per cent),” de Villa said. “In total, 35 per cent of cases reporting close contact indicated that their close contact with known cases were only non-household contacts.”

She said the latest data underscores the importance of limiting contact with those outside of your household in order to contain the spread of the virus. She noted that some of the cases reported today would have acquired their infections prior to new lockdown restrictions placed on the city a week ago.

The number of people hospitalized with COVID-19 in Toronto also climbed by 13 Tuesday to 258. One more patient with COVID-19 entered the Intensive Care Unit, for a total of 49.

While the province reported a slightly lower number of new cases (727) for Toronto Tuesday, the discrepancy arises from the fact that the city and the province use different data entry systems, each with their own cut off time for reporting cases.

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