Optimism among oil traders is rising despite mixed signals from the world’s top oil consumers, largely thanks to signs that pressure is easing between Washington and Beijing and the latter’s record-breaking oil imports.
Brent crude and West Texas Intermediate have both been on a more or less steady rise for about four weeks now. During that period, OPEC+ agreed to deepen its production cuts by half a million bpd, China continued importing crude at record-breaking rates, and U.S. industrial production rebounded in November.
While not everyone was convinced that the deeper cuts will make much of a difference if not everyone in OPEC and outside it complies with their new quotas, the fact of the announcement of additional cuts must have made the right impression. That’s despite a warning from the International Energy Agency that next year the global oil market could swing into oversupply.
Meanwhile, China reported yet another record-breaking month of oil imports: the average daily for November was 11.18 million bpd, which, according to Bloomberg, was unprecedented. This was largely thanks to the ramp-up of two new refineries with a combined capacity of almost 900,000 bpd, but also because of signs of thawing between the U.S. and China.
The two have been cautiously getting closer to a preliminary deal despite setbacks. The latest from President Trump on the topic was that the parties are almost done with the so-called “phase-one” deal, and all that remains is for it to be translated. Related: Texas Driller Goes All-In On This New Oil Frontier
“I said make sure you have the right translators because you can lose a lot with bad translation. So we’re working on getting that done,” Trump said, as quoted by CNN.
While translators are working on the document, the U.S. administration is focusing on the economy. As Reuters’ John Kemp pointed out in his latest column on prices, this year the Fed cut interest rates by as much as 75 basis points to sustain growth and spur it on. The latest data in jobs and industrial production is encouraging for oil demand.
Payrolls in November shot up by 266,000, beating analyst expectations of 187,000 new additions, and industrial activity inched up by 1.1 percent last month after a fall of 0.7 percent in October. However, it bears noting here that the expectation-beating November figure was the result mainly of a pick-up in the carmaking industry after the six-week strike of UAW workers for GM.
Industrial activity data from China added to the optimism about the immediate future of oil demand. Like the U.S. November figures, those for China exceeded expectations. The combined positive effect of U.S. and China data offset bad economic news from India, where industrial activity shrunk by 3.8 percent in November. Eurozone industrial activity also fell, but that region is not among the top oil consumers, and economic updates are not high on the watch-out-for agenda of oil traders. Related: The 5 Biggest Threats To Oil & Gas In 2020
In further good news for oil bulls, as Reuters’ Kemp noted in his column, the governments of China and India have set up economic stimulus packages, whose effect on oil demand will be certainly positive. Even the German government is considering economic stimulus after a contraction earlier this year.
No wonder, then, that hedge fund managers are increasing their bullish bets on oil—to almost 320 million barrels since mid-October, according to Kemp—and that investment banks are raising their price forecasts.
Goldman Sachs said last week it now expected Brent crude to average $63 per barrel in 2020, with West Texas Intermediate seen at $58.50 per barrel. The so-called long-term anchor price for Brent was set at $55 per barrel, with WTI pegged at $50 per barrel.
Then yesterday JP Morgan followed suit, raising its Brent crude forecast to $64.50 a barrel, up from $59 per barrel, and its WTI forecast to $60 per barrel. The bank even expects the oil market to swing into a deficit of some 200,000 bpd.
The thing to bear in mind, however, is that this optimism is fragile. Any piece of bad news regarding oil consumption in any of the top consumers and importers will pressure prices. So would any bad news about supply, as the latest API weekly inventory report proved yet again yesterday.
By Irina Slav for Oilprice.com
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Sleep Country Canada buys controlling stake in Hush Blankets – CBC.ca
Sleep Country Canada Holdings Inc. has signed a deal to buy Hush Blankets, a direct-to-consumer seller of weighted blankets, pillows, sheets and bed-in-a-box mattresses.
Under the deal, Sleep Country will acquire a 52 per cent stake in Hush for $25 million.
The company has also agreed to buy the other 48 per cent in annual 16 percentage point stake increments starting March 31, 2023, at a price based on the business’s financial performance.
Hush was founded in 2017 by Lior Ohayon and Aaron Spivak and launched a weighted blanket in Canada in 2018.
Sleep Country says Hush will continue to operate as an independent business led by Ohayon and Spivak and a board including senior management from Sleep Country and Hush.
These countries are vaccinating children against COVID-19 – CTV News
Pfizer Inc and BioNTech SE have asked U.S. regulators to authorize their COVID-19 vaccine for emergency use in children aged 5-11, with an expert panel to the Food and Drug Administration scheduled to meet later this month to review data.
But with many parts of the world still awaiting doses for more vulnerable people, the World Health Organization has urged countries and companies that control the global supply of the vaccines to prioritize supply to COVAX.
The following is a list of some countries that have approved or are considering vaccinating children:
- In June, Denmark said it would offer COVID-19 shots to children aged 12-15 to boost its overall immunity against the virus.
- France has started vaccinating those from 12 years upwards, provided they have parental consent.
- Germany in August agreed to make vaccination available to all children aged 12-17.
- Austria has started vaccinating children aged 12-15.
- Estonia could start vaccinating teenagers by the autumn, public broadcaster ERR reported, citing the head of the government’s COVID-19 council.
- Hungary started vaccinating 16 to 18-year-olds in mid-May, according to Xinhua news agency.
- Italy on May 31 approved extending the use of Pfizer’s vaccine to 12-15 year olds.
- Lithuania’s prime minister said the country could start vaccinating children from age 12 in June, news site Delfi reported.
- Spain begun vaccinating children between 12 and 17 years old around two weeks before the academic year in September, the health minister said.
- Swedish PM says children aged 12-15 will be offered COVID vaccine later this autumn.
- Greece in July said children aged 12-15 could be vaccinated against COVID-19 with Pfizer/BioNTech and Moderna shots.
- Finland’s capital Helsinki in June said it will begin giving COVID-19 vaccines to children aged 12 to 15 who are at risk of contracting a severe coronavirus infection.
- Britain’s top medical advisers in September recommended that 12 to 15-year-olds receive a first dose of a COVID-19 vaccine.
- Switzerland approved on June 4 vaccinating 12 to 15-year-olds with Pfizer’s shot, while Moderna’s shot was approved in August for the age group.
- In September, Norway started to offer one dose of Pfizer and BioNTech COVID-19 vaccine to children aged 12 to 15
- San Marino has opened vaccinations for children aged 12-15, reported San Marino RTV, citing its Institute for Social Security.
- In August, Israel on Sunday began offering a COVID-19 booster to children as young as 12.
- The United Arab Emirates said in August rolled out China’s Sinopharm COVID-19 vaccine to children aged 3-17.
- Indonesia on June 28 recommended China’s Sinovac vaccine for children aged 12-17.
- An advisory committee to the Indian regulator recommended emergency use of Bharat Biotech’s COVID-19 shot in the 2 to 18 age-group. The regulator’s nod is awaited.
- New Zealand’s medicines regulator has provisionally approved use of Pfizer’s vaccine for 12-15 year olds, Prime Minister Jacinda Ardern said on June 21.
- Australia said on Sept. 12 it will expand its COVID-19 vaccination drive to include around one million children aged 12-15.
- China on June 5 approved emergency use of Sinovac’s vaccine for those between three and 17.
- Hong Kong said on June 3 it would open its vaccine scheme to children over the age of 12.
- Singapore opened up its vaccination program to adolescents aged 12-18 from June 1.
- Japan on May 28 approved the use of Pfizer’s vaccine for those aged 12 and above.
- The Philippines on May 26 decided to allow the Pfizer-BioNTech’s vaccine for emergency use in children aged 12-15.
- Jordan in July begun vaccinating children aged 12 years and older against COVID-19.
- The COVID-19 vaccine by Pfizer-BioNTech will be the only one used in Mexico for at-risk children aged 12-17.
- Brazil on June 11 approved use of Pfizer’s vaccine for children over 12.
- Chile has approved use of Pfizer’s vaccine for 12 to 16-year-olds.
- Pfizer and BioNTech have asked U.S. regulators to authorize emergency use of their COVID-19 vaccine for children ages 5 to 11. An advisory committee to the FDA will meet later this month to review the data.
- Canada in early May approved use of Pfizer’s vaccine for use in children aged 12-15. The country has fully vaccinated more that 80% of its eligible population ages 12 and over.
- Cuba’s vaccination campaign includes children as young as two.
- South Africa will start vaccinating children between the ages of 12 and 17 next week using the Pfizer vaccine
Canadian National Railway CEO to retire following investor pressure
Canadian National Railway (CN) said on Tuesday Chief Executive Officer Jean-Jacques Ruest will retire at the end of January, following investor demands for his exit after the railroad operator’s failed bid for Kansas City Southern.
TCI Fund Management, which owns 5% of CN, in August pitched former Union Pacific executive Jim Vena for the top job and on Tuesday urged Canada’s largest railroad operator to secure his leadership.
“Dismissing the same CEO that the Board put in place just three short years ago is a good start, but it does not address the fundamental problem of a lack of leadership,” TCI Founder Chris Hohn said. The hedge fund had earlier cited the company’s “ill-conceived” efforts to pursue the Kansas City merger for demanding Ruest’s ouster.
Last month, CN lost a bidding war to create the first direct railway linking Canada, the United States and Mexico as rival Canadian Pacific Railway Ltd signed a $27.2 billion deal to buy Kansas City.
CN has now set up a committee to look for a new CEO both within and outside the company.
“(The board) is not on the clock. It doesn’t mean that they will go slow,” Ruest said in an earnings call, adding that he would leave it to the board to engage with TCI.
Ruest had deferred discussions on his retirement plans in order to see the company through the merger, it said, and he could helm CN until it names a replacement.
In the third quarter ended Sept. 30, adjusted profit rose 9.5% on a surge in petroleum and chemicals shipments. But its operating ratio, a key profitability metric for investors, worsened to 62.7% from 59.9% a year earlier.
($1 = 1.2365 Canadian dollars)
(Reporting by Abhijith Ganapavaram, Amruta Khandekar and Praveen Paramasivam in Bengaluru; Editing by Devika Syamnath)
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