Connect with us

Business

Why A COVID Vaccine Won't Invigorate The Oil Market – OilPrice.com

Published

 on



Why A COVID Vaccine Won’t Invigorate The Oil Market | OilPrice.com

Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

More Info

Trending Discussions

Premium Content

Oil rig

For those who have been transfixed on oil demand forecasts over the last eight months, the recent news that Pfizer’s Covid-19 vaccine is 92% successful likely came with a renewed hope that oil demand will finally tick up and bring the industry out of the doldrums in which it has been languishing since the start of the pandemic.

The lockdowns are to blame for the loss in oil demand. And now, invigorated with the possibility that this new vaccine will allow people to resume their normal way of life – air travel, dining out, and shopping – the price of crude oil is rising.

They are expecting oil demand to recover – and fast – and not even the news of a slew of additional lockdowns that go into effect this week is dampening the bullish oil spirit.

Hold Onto Your Bulls

The reality is, however, Pfizer’s vaccine – which hasn’t yet received FDA approval – won’t be available to the masses for months. Oil bulls may want to strap that truth on.

And while it certainly looks promising, the vaccine needs to undergo a rather rigorous approval process, and it is by no means a sure thing. If it were a sure thing, they’d skip the approval process and move forward.

What to Expect

That’s not to say that things aren’t looking promising in the longer term. But we are most definitely talking about the longer term.

In the short term, we have a new round of lockdowns sweeping the globe that includes Sweden, New Jersey, and New York – all of which have varying degrees of restrictions on activities. Most of those restrictions involve eating out and going to bars. Some include more restrictions on private gatherings.

These most recent restrictions on our way of life are just the latest. Last week, Austria, France, Germany, the UK, and Portugal all began implementing a wide variety of restrictions that will no doubt compound the oil demand problem. Related: Oil Funds Could See Record Gains In December

And while a vaccine is looking likely, things may not move as quickly as some are expecting. Below is a rough timetable of how the vaccine is expected to progress.

1) Safety

With efficacy now established, Pfizer must next establish safety, which comes after two months of tracking. This is to establish the likelihood of side effects. That two-month marker will come on November 16.

2) Emergency Use

Next, Pfizer must apply for emergency use authorization from the FDA. This allows Pfizer to skip over some of its study that is required for traditional approval. This isn’t typically a fast process. The FDA will deliberate in a public meeting to determine if the emergency use will be granted. It is very likely that this emergency use will only be granted for high-risk individuals such as those with co-morbidities and perhaps healthcare workers. There is no estimate, really, on how long this will take. The FDA has merely said that it plans to be quick.

3) Emergency Use Rollout

The good news is, Pfizer has already started to manufacture its Covid-19 vaccine, banking on an approval. This saves a lot of time. However, there are still limited quantities available during this stage, and the emergency use authorization does not cover everyone. Therefore, the initial rollout of the vaccine will be to a small number of people, who will then be tracked to ensure there are no other side effects that emerge.

4) The First 25 Million People

Pfizer has stated that by the end of the year, it will have 50 million doses available. It will likely start trickling in at the end of November or the beginning of December. That 50-million figure is good for 25 million people because each person must receive two doses. Whether this 25 million is used up in the emergency use portion of the process or whether some of it is left over for the full rollout is unknown. But either way, at most, 25 million people—worldwide—will receive the vaccine in 2020. At less than 0.3% of the world’s population, this isn’t going to make even the smallest dent in activity levels and hence, oil demand.

5) The next 1.3 billion doses

That brings us to 2021 when Pfizer expects to have 1.3 billion doses available, which means that 650 million additional people will be able to get vaccinated next year. Of course, this does not factor in other vaccine manufacturers such as Moderna, which announced on Wednesday that it was ready to begin analyzing interim data it amassed during its study, although we’re talking about just 53 cases. Other countries, too, may produce a viable vaccine. The U.S., the UK, Canada, Japan, and other European countries have already put their order in for millions of doses from Pfizer. In fact, just this week, it was revealed that the EU made a deal to purchase 300 million doses—for less than the U.S. will pay. This also means that those 650 million people will be spread across the globe—and across 2021—negating the possibility that any single location would be able to return to normal.

Many people likely heard Dr. Fauci say that the rest of the world may have the vaccine in April. But he’s referring to when the vaccine would start to be available to everybody, not that everyone would have it available. In fact, Dr. Fauci has said that it might take well into the second or third quarter of 2021 to even convince people to take it.

In other words, everyone should buckle up because oil demand isn’t going to snap back in January or even in Q1.

When Will Oil Demand Perk Up?

If you’re listening to Reuters market analyst John Kemp, we won’t see oil demand pick up for another six or even twelve months.

“Coronavirus vaccines are expected to boost international passenger transportation and oil consumption, but the first significant impact will not be felt until well into the second half of 2021, based on futures price movements on Monday,” Kemp said in a commentary on Monday. Related: EIA Sees WTI Crude Averaging $44 In 2021

This view is likely shared by OPEC, which released its MOMR on Wednesday. In it, OPEC forecast that oil demand will fall this year 300,000 bpd more than it thought last month. OPEC also said that this weak demand would continue into next year. Cutting next year’s demand outlook as well, OPEC now sees 2021 oil demand 300,000 bpd lower than it thought last month. This means it sees 2021 oil demand at just 6.2 million bpd over 2020 levels, and still under 2019 levels.

Why So Glum?

“These downward revisions mainly take into account downward adjustments to the economic outlook in OECD economies due to COVID-19 containment measures, with the accompanying adverse impacts on transportation and industrial fuel demand through mid-2021,” OPEC said in its MOMR, adding that the oil demand recovery “will be severely hampered and sluggishness in transportation and industrial fuel demand is now assumed to last until mid-2021.”

Regarding a Covid-19 vaccine, OPEC had few words. “Further support, currently unaccounted for, may come from an effective and widely distributable vaccine as soon as 1H21. However, further downside risks to the current growth outlook may stem from ongoing challenges due to Brexit, rising geopolitical challenges in selective regions, unexpected repercussions from quickly rising global debt levels, and mounting social unrest in some countries as a consequence of COVID-19 and rising inequality.”

In other words, OPEC at least believes that the vaccine may help to boost oil demand at some point in 2021, but there are a whole host of other challenges that may dent the economy – and therefore oil demand – next year.

What Say the IEA?

The IEA on Thursday released its own vaccine-oil-demand bombshell, saying that oil demand is unlikely to see any substantial increase from a new vaccine – even one that starts to be distributed in a limited capacity at the end of this month – until well into 2021.

“It is far too early to know how and when vaccines will allow normal life to resume. For now, our forecasts do not anticipate a significant impact in the first half of 2021,” the IEA said, adding that “The poor outlook for demand and rising production in some countries … suggest that the current fundamentals are too weak to offer firm support to prices.”

And while the market largely ignored OPEC’s pessimistic view of the vaccine’s effect on oil demand, the IEA’s prognostication did not go unnoticed; in the early morning hours on Thursday, oil prices started to sink.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today


Back to homepage

<!–

Trending Discussions

–>



Related posts

Let’s block ads! (Why?)



Source link

Continue Reading

Business

Coronavirus: Here’s a look at what provinces, territories have said about vaccine plans – Global News

Published

 on


The federal government is laying plans for the procurement and distribution of COVID-19 vaccines, inking contracts with seven potential manufacturers and saying six million doses could arrive in the country in the first quarter of 2021.

The most recent development from Ottawa came Friday when Prime Minister Justin Trudeau tapped former NATO commander Maj.-Gen. Dany Fortin to lead the national distribution effort. But various provinces have started spelling out their plans as well. Here’s a look at what they’ve said so far:

Read more:
Support for mandatory coronavirus vaccine keeps falling even as cases spike: Ipsos

Nova Scotia

The province’s chief medical officer of health says he will release a detailed plan for the distribution of a COVID-19 vaccine once Ottawa shares more information.

Story continues below advertisement

Dr. Robert Strang said Friday there is no certainty yet about the availability of a vaccine, but expressed hopes an initial supply will trickle into Nova Scotia early in the new year.

Strang said a detailed provincial plan, to be released once the federal government has shared more specifics on its end, will include tight control of the supply and clear rules dictating who can be first in line for immunization.


Click to play video 'Coronavirus: Canadians moving away from idea of mandatory vaccine says Ipsos poll'



0:49
Coronavirus: Canadians moving away from idea of mandatory vaccine says Ipsos poll


Coronavirus: Canadians moving away from idea of mandatory vaccine says Ipsos poll

He said he’s waiting for more federal guidance on issues ranging from priority groups to transportation and storage logistics.

Quebec

The province will be ready to start rolling out its vaccine plan as of Jan. 1, say senior politicians.

Premier Francois Legault said Thursday that public health officials have already settled on the list of priority vaccine recipients, but did not release details.

Story continues below advertisement

Legault said the province is also working to put the necessary infrastructure in place to support a vaccine rollout. That includes obtaining fridges capable of maintaining the extremely low temperatures needed by one of the most promising potential vaccine options, currently in development through pharmaceutical giant Pfizer.

Read more:
Why are they still sick? The search for answers inside Canada’s first post-COVID clinic

Quebec has also tasked assistant deputy health minister Jerome Gagnon, and former provincial public health director Dr. Richard Masse to oversee the province’s vaccination effort.

[ Sign up for our Health IQ newsletter for the latest coronavirus updates ]

Ontario

Premier Doug Ford is among those leaders calling on Ottawa to provide more clarity as officials scramble to develop a provincewide vaccination strategy.

Early speculation on the number of doses the province could receive was put to rest earlier this week when federal Health Minister Patty Hajdu said such details were still in the works.

But Ford has forged ahead, naming former chief of national defence Gen. Rick Hillier to oversee the province’s vaccine rollout.


Click to play video 'Ex-NATO mission head Fortin to lead Canada’s COVID-19 vaccine rollout'



2:06
Ex-NATO mission head Fortin to lead Canada’s COVID-19 vaccine rollout


Ex-NATO mission head Fortin to lead Canada’s COVID-19 vaccine rollout

Hillier said on Friday he hopes to have a plan developed by year’s end, while Ford urged Ottawa to provide detailed information on potential vaccine delivery.

Story continues below advertisement

“We need a clear line of sight into the timelines of the shipments,” Ford said.

Alberta

The province’s top medical official has said she expects to receive 680,000 doses of COVID-19 vaccine early in the new year, a figure not yet confirmed by the federal government.

Dr. Deena Hinshaw has also said a number of hurdles and unknowns remain as the province works to devise its vaccination scheme.

Read more:
When will the coronavirus vaccine be available in Canada? Here’s what we know so far

“These (vaccine) numbers, of course, depend on many factors,” Hinshaw said on Nov. 18. “They depend on the final pieces of the trials that are underway going well. They depend on ensuring that the safety and the effectiveness of the early vaccines can be assured. All of those checks and balances must be cleared.”

On Friday, Hinshaw said the province is working with Ottawa to get vaccine, but it is “a bit of a moving target” on when vaccines might be available.

“But our goal is that whenever vaccine is available, we will be ready to start immunizing individuals on that highest priority list.”

British Columbia

Provincial health officials announced on Wednesday that a vaccine strategy for the province is already in the works.

Story continues below advertisement

Dr. Bonnie Henry, the province’s top doctor, said Dr. Ross Brown of Vancouver Coastal Health will join the group working to organize the logistics around the distribution of vaccines.

Henry said front-line workers as well as those in long-term care homes will likely have priority for vaccinations.


Click to play video 'Ontario government pushes for vaccine answers from Ottawa'



2:06
Ontario government pushes for vaccine answers from Ottawa


Ontario government pushes for vaccine answers from Ottawa

She cautioned that while the province has contracts with vaccine makers, there can be challenges with offshore manufacturing.

“It’s very much focused on who is most at risk and how do we protect them best,” Henry said. “There’s a lot of discussion that needs to happen.”

Henry said the province hopes to have vaccines in hand by January.

Yukon

Premier Sandy Silver told the legislature on Wednesday that the territory has been in discussions with various levels of government on a vaccine rollout plan.

Story continues below advertisement

He said the goal will be to provide vaccines to elderly people and health-care providers.

Silver said rural and remote communities should also get priority status in northern regions, a fact he said he’s emphasized with federal authorities.

The premier said he has joined the other provincial and territorial leaders in pushing for a national strategy to distribute the vaccine.

Read more:
Canada sets another daily record with nearly 6,000 new coronavirus cases

“How confusing would it be for 13 different strategies right across the nation?” he said.

Silver said the Pfizer vaccine could cause logistical problems for remote communities because of its cold-storage requirements, but those issues may not apply to other vaccines under development.

© 2020 The Canadian Press

Let’s block ads! (Why?)



Source link

Continue Reading

Business

COVID-19 concerns raised after video shows crowding at Chinook Centre – Calgary Herald

Published

 on


Article content continued

Alberta is in the midst of the second wave of the COVID-19 pandemic, having recorded more than 1,000 new infections daily in the last 10 days, including a record 1,731 cases reported Saturday.

The Alberta government released a series of new measures Tuesday meant to combat rising case counts, including at businesses.

According to Alberta Health, retail businesses within malls, as well as the malls themselves, are allowed to remain open with capacity limited to 25 per cent of their fire code occupancy.

It’s the responsibility of mall owners to ensure a process is in place to meet that capacity limit, the province said.

In a statement Saturday, Cadillac Fairview, the company which owns and operates Chinook Centre, said it has worked to combat crowding in the wake of government restrictions.

“The health and safety of our community of guests, clients and employees is our primary concern, and we continue to follow guidance from all levels of government and public health officials,” the company said.

“Regarding the Province of Alberta’s new restrictions for shopping centres, we have been actively monitoring capacity levels throughout the holiday shopping season.”

A Calgary police representative reached Saturday said officers attended the mall Friday and escorted a group of patrons out of the building.

No charges were laid, as police said the focus was on public safety and education, but they added that if the same individuals were to crowd the mall again, fines would be given. Officers maintained a presence at the mall Saturday.

Let’s block ads! (Why?)



Source link

Continue Reading

Business

The SHA Releases The November 28th COVID-19 Update – SwiftCurrentOnline.com

Published

 on


[unable to retrieve full-text content]

  1. The SHA Releases The November 28th COVID-19 Update  SwiftCurrentOnline.com
  2. Latest COVID update Nov. 28: 1 death, 197 new cases  CKOM News Talk Sports
  3. COVID-19 in Sask.: 1 more death, 197 new cases announced Saturday  CBC.ca
  4. Sask. reports 1 more coronavirus death, 197 new cases  CTV News
  5. One new COVID-19 death reported, the eighth since Nov. 25  paNOW
  6. View Full coverage on Google News



Source link

Continue Reading

Trending