The year that is drawing to a close has not been good for oil. Despite production caps across OPEC and beyond, and despite the extra-large number and size of production outages, benchmark prices have stubbornly stayed range-bound below what oil-reliant OPEC economies consider a good price for their product. How did this happen?
First and foremost, it happened because of the U.S. shale boom, as Bloomberg’s Grant Smith wrote in a recent overview of oil in 2019. The consensus on the role of U.S. shale oil production growth seems to be unchallengeable. All oil price forecasts, including OPEC’s own, now regularly include U.S. oil production growth as the main reason for growth in non-OPEC supply that acts as counterweight to OPEC’s production curb efforts.
It was U.S. shale oil production—which hit a record-high this year turning the country into the world’s top oil producer—that caused what can only be called a growing apathy among traders. When OPEC is not the single large source of oil for energy-hungry nations, when there is another country pumping more than 11 million bpd with no risk of disruptions, the mood on the market is very different, and we saw this in 2019 more clearly than ever before.
The production outages at Libyan fields moved prices, but only for a few days. Even the biggest production outage in recent history, the drone and missile attacks on Saudi oil infrastructure, could not keep Brent at $70 for more than a few days. Of course, as usual, there was the hypothesizing that it could have spiked to $300 a barrel had the attacks led to an open war in the Middle East, but hypothesizing is part of the oil price game that has little bearing on actual prices. Related: From Boom To Bust: Permian Shale Towns Face Exodus
In further evidence that U.S. oil has become a force to be reckoned with, OPEC’s latest agreement to implement deeper production cuts failed to impress a market that was expecting the deepening and knew that this cannot stop U.S. production from growing. Oil prices habitually rise after an OPEC meeting or an update from inside the cartel—or from a Russian official now that the two have partnered on production—but this year the price rises have been short-lived.
Fundamentals forecasts have not helped. The International Energy Agency said in its latest Oil Market Report that the global oil market will likely be 700,000 bpd in excess of demand in early 2020. That’s despite the efforts of OPEC+ and, yes, thanks to growth in U.S. production. That production, the IEA said, would drive a 2.3-million-bpd growth in non-OPEC supply while growth in the demand for oil will continue to slow. Related: Iraq’s 550,000 Bpd Oil Deal Is In Jeopardy
Yet there is still hope for oil bulls. Goldman Sachs and JP Morgan recently revised their oil price forecasts for 2020 and they revised them upward. Goldman upped its outlook for both Brent and WTI, citing its expectations that OPEC+ will successfully cut more barrels from their daily production, shrinking any oversupply. JP Morgan seems to share the sentiment. It also cited OPEC+’s deeper cuts as reason for its price-forecast revision.
Trusting oil price forecasts from even the most reputable investment bank is something one does at their own risk, but there have been signs that prices could climb higher, even in the new apathetic market environment. Among the signs are the improving relations between the U.S. and China and, most recently, a WSJ report that banks are growing cold towards shale drillers. There is a very good chance that news like this could pull the market out of its apathy.
If shale drillers lose their easy access to cash, the fact could even erase the apathy entirely. For now, however, the overwhelming sentiment on oil markets is indifferent-for-longer.
By Irina Slav for Oilprice.com
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COVID-19 medical coverage now available even though Canadians advised to avoid international travel – CBC.ca
Canadians yearning to travel abroad — despite the COVID-19 pandemic — can now get medical insurance to cover costs if they get sick with the coronavirus while travelling.
In March, when the virus began its global spread and Canada advised against non-essential travel abroad, travel insurance providers stopped selling COVID-19 medical coverage.
Now, several insurance providers have resumed offering the coverage along with their regular travel insurance plans.
Air Canada, WestJet, Sunwing and travel agency Flight Centre have also joined in, offering free COVID-19 medical coverage to passengers booking certain international flights and vacation packages.
Travel insurance broker Martin Firestone said he’s surprised by the spate of offers — considering Canada’s advisory against international travel remains intact due to the ongoing pandemic.
“Your country is now currently under a Level 3 travel advisory, and you’ve got airlines enticing people with free medical coverage,” said Firestone with Travel Secure in Toronto.
“Whether you have coverage or not, you may be in a very precarious position with [available] hospital beds and treatment and the ability to be flown back to Canada.”
Many companies providing COVID-19 coverage told CBC News they’re responding to consumer demand.
“People are looking to travel,” said Richard Job, Flight Centre’s vice-president of commercial partnership. “They are able to travel if they want to, and we just want to enable that to take place as safely as we can.”
International travellers returning to Canada must self-isolate for 14 days.
WATCH | The future of air travel:
Who’s offering coverage?
Manulife announced this week it will start offering the coverage in October.
The plans vary. For example, not all providers cover daily expenses if an infected traveller is forced to quarantine abroad.
Each company said it offers medical coverage for all ailments, including COVID-19, for up to $5 million — with the exception of Manulife, which has capped COVID-19 coverage at $200,000.
Manulife declined to comment on the cap.
Airline industry offering free coverage
Flight Centre and the airlines are providing free coverage only for COVID-19 illnesses and related expenses, such as accommodation costs while being quarantined. The offers are available for a limited time — ranging from the next seven months to a year.
Customers booking vacation packages with Flight Centre, Air Canada Vacations and WestJet to select destinations — which exclude the United States — are covered for up to $100,000 in medical bills. WestJet provides the same coverage for international flights, excluding the U.S.
Sunwing will cover up to $200,000 in COVID-19 medical expenses for passengers booking any of its vacation packages and flights departing on or after Oct. 16. Air Canada (which is separate from Air Canada Vacations) currently provides the same $200,000 coverage for customers purchasing international fights, including to the U.S.
Although the Canada-U.S. land border is closed to non-essential traffic, Canadians can still fly to the U.S.
Firestone questions if $200,000 would be enough to cover a severe case of COVID-19 in the U.S., where medical costs can run high.
“What if the bill is $500,000?” he said. “Then it becomes your problem.”
Manulife, which is partnering with Air Canada to provide the coverage, declined to comment.
Air Canada said that passengers wanting extra protection can consider purchasing an extensive travel insurance plan.
What about snowbirds?
Medipac’s main customers are snowbirds heading to the southern U.S. where the COVID-19 infection rate remains high. But the insurance provider said it’s confident it won’t be bombarded with COVID-19 claims, because Medipac’s clientele will likely play it safe.
“The people that we’re tailoring our product to are going to do what they’ve always done, travel down as a couple, go to their winter residence,” said Medipac spokesperson Christopher Davidge.
“We’re not talking about cramming into a discount airline … and staying at a resort hotel and going to a theme park.”
Snowbird Perry Cohen said he and his wife, Rose, plan to take all necessary precautions when they likely head to their condo this winter in Deerfield Beach, Fla., near Fort Lauderdale.
“Our community is pretty safe,” said Cohen, who lives in Toronto. “We’re not going to look for large crowds. We’re not running to the bars and the restaurants.”
Even so, Cohen said COVID-19 coverage is a game changer because he and his wife would never consider heading south if they couldn’t purchase it.
“Why take the risk?” he said. “I like a complete package to know I’m looked after.”
Cases ‘going up again’
But not all eager travellers will be swayed by COVID-19 coverage.
Avid international traveller Suzanne Chojnacki said she and her husband will stay put for now because they still have many concerns — such as getting stuck abroad if the country they’re visiting suddenly closes its borders.
“The [COVID-19 case] numbers are going up again,” said Chojnacki who lives in Richmond Hill, Ont. “So it’s really not a good time to think about going away — for us.”
Current plans offering travellers COVID-19 coverage don’t include compensation if a customer cancels a trip due to the pandemic. Firestone said that’s because cancellation insurance typically covers unexpected mishaps, not a “known” issue such as the coronavirus.
“It’s just so known, it’s not even funny.”
Some airlines are now offering free COVID-19 insurance – CTV Toronto
Many people don’t feel safe flying amid the COVID-19 pandemic and there are still government warnings in place against non-essential travel.
That is why airlines are now offering free COVID-19 insurance coverage.
But at least one travel expert says that may not be enough of a reason to book a flight anytime soon.
Martin Firestone, the president of Travel Secure, said, “I think insurance companies are looking to get back some lost sales that don’t exist right now and the airlines are of course looking for business.”
Taking a flight is more stressful these days with social distancing, mandatory temperature checks and having to wear a mask for the duration of a flight.
Now as summer comes to an end this is the time of year that many Canadians plan vacations to Mexico, Cuba and other parts of the Caribbean, but due to COVID-19 many travelers may opt to stay home this winter.
In an effort to try filling seats, Air Canada and WestJet are now offering free COVID-19 insurance coverage on some flights of up to $100,000 and Manulife has announced it will roll out a COVID-19 policy in October that will provide up to $200,000 in coverage.
The coverage for someone testing positive for COVID-19 would pay for emergency hospital and medical costs, quarantine accommodations and transportation home via ambulance or air ambulance.
Firestone said people need to realize that if they get a serious case of COVID-19 while travelling in another country and are hospitalized and on a ventilator for weeks, the costs could add up to much more than the coverage currently being offered.
“A claim upward of a half a million dollars is a possibility and the insurance company’s exposure may be capped at $100,000 to $200,000. Who is going to pay the rest? That would be the consumer,” said Firestone.
Firestone said COVID-19 insurance policies come at a time when borders to the U.S. remain closed and the Canadian government continues to warn against non-essential travel.
“I think this is a marketing plan that someone has devised, but a lot of thought has not really gone into it, because it totally goes against the government’s position on travel at this time,” Firestone added.
Many Canadians will be tempted to book vacations to sunny destinations as the cold weather arrives, but Firestone said until travel advisories are lifted and there is a vaccine people may want to stay put.
“The next two or three months I’m suggesting to hold tight and stay home,” Firestone said.
Even though some airlines are including free COVID-19 insurance coverage that is not the same as travel medical insurance. If you book a trip you still need to pay for that yourself in case something else happens while you’re away.
B.C. RCMP reminds Tesla owners not to push limits with automation feature – News 1130
SURREY (NEWS 1130) — B.C. Mounties are reminding Tesla owners not to test the autonomous driving feature on our roads.
On Thursday, the RCMP said they had charged a man from B.C. with dangerous driving after an officer pulled over a speeding Tesla on a central Alberta highway that appeared to be driving itself in July.
According to the RCMP, the car appeared to be travelling over 140 km/h and both front seats were completely reclined and two people in the car appeared to be sleeping.
“…but if they’re caught napping behind the wheel, it’s drive without due care at a very minimum, and as high up as a criminal charge for dangerous driving.” #bctransportation
— Ria Renouf (@riarenouf) September 18, 2020
Cpl. Mike Halskov, with BC RCMP’s traffic services, says if you’re thinking of doing the same and testing out the autopilot system in your Tesla, please think again.
“I don’t think anyone should rely 100 per cent on any automated systems that are equipped with some vehicle. They’re not foolproof. And that is why steering wheels are still in vehicles, even the ones with automated systems in it because there does need to be the human component,” he says.
In the case of the Tesla in Alberta, a 20-year-old is accused of speeding and dangerous driving and has a court date in October.
While each traffic stop is different, Halskov says there are penalties under our Motor Vehicle Act you could face in B.C.
“If somebody is testing their automated systems and they’re taking liberty with the Motor Vehicle Act … [by] excessive speed or whatever the case may be, certainly those tickets would apply,” he says.
I spoke w/Cpl. Mike Halskov who says as far as he knows, no one has been ticketed for a similar offence involving autonomous driving. He’s hoping it stays that way.
— Ria Renouf (@riarenouf) September 18, 2020
So for Tesla owners thinking of testing the feature, Halskov adds “You’re putting yourself and your passengers and the motoring public in harm’s way by doing so, and the outcome can be tragic for you and or other people, and obviously we don’t want that to happen.”
“So don’t rely 100 per cent on your automated systems in your car if you do have them. There does need to be driver input and the driver does need to be paying attention to what’s happening and have their hands on the wheel and providing some input where it may be required.”
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