This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.nytimes.com/2020/04/13/business/economy/coronavirus-oil-opec-trump.html
The article has changed 18 times. There is an RSS feed of changes available.
| Version 8 | Version 9 |
|---|---|
| The Big Deal to Cut Oil Production May Not Be Big Enough | The Big Deal to Cut Oil Production May Not Be Big Enough |
| (32 minutes later) | |
| HOUSTON — The agreement by major oil producers on Sunday to reduce their daily production by 9.7 million barrels was the largest cutback in history and a feat of remarkable coordination by more than 20 nations led by Saudi Arabia and Russia with unusual mediation from the United States. | HOUSTON — The agreement by major oil producers on Sunday to reduce their daily production by 9.7 million barrels was the largest cutback in history and a feat of remarkable coordination by more than 20 nations led by Saudi Arabia and Russia with unusual mediation from the United States. |
| But it probably still won’t be enough. | But it probably still won’t be enough. |
| Demand for oil has tumbled in recent weeks as the coronavirus pandemic has crippled global commerce and eliminated untold numbers of commutes, plane trips and cargo shipments. Experts estimate that demand has fallen by somewhere between 25 million barrels and 35 million barrels a day — or up to three and a half times as much as what the oil nations are promising to cut. | Demand for oil has tumbled in recent weeks as the coronavirus pandemic has crippled global commerce and eliminated untold numbers of commutes, plane trips and cargo shipments. Experts estimate that demand has fallen by somewhere between 25 million barrels and 35 million barrels a day — or up to three and a half times as much as what the oil nations are promising to cut. |
| News of the deal briefly lifted oil prices on Monday, but those gains faded over the course of the day. The U.S. oil price benchmark ended the day at $22.41, or less than half of where it was at the start of the year. Had the group of oil-producing nations, known as OPEC Plus, not reached a deal, oil prices would have collapsed, industry experts said. | News of the deal briefly lifted oil prices on Monday, but those gains faded over the course of the day. The U.S. oil price benchmark ended the day at $22.41, or less than half of where it was at the start of the year. Had the group of oil-producing nations, known as OPEC Plus, not reached a deal, oil prices would have collapsed, industry experts said. |
| Leaders of the American oil industry, which is responsible directly and indirectly for roughly 10 million jobs, welcomed the deal and President Trump’s role in mediating a halt to a Saudi-Russian price war. But even they acknowledged that it would not end their financial difficulties. | Leaders of the American oil industry, which is responsible directly and indirectly for roughly 10 million jobs, welcomed the deal and President Trump’s role in mediating a halt to a Saudi-Russian price war. But even they acknowledged that it would not end their financial difficulties. |
| “The problem is the demand is still not there,” said Kirk Edwards, chief executive of Latigo Petroleum, a Texas producer. “Even with these cuts there will be a tremendous amount of oversupply on the market, and that’s why you haven’t seen the oil prices dramatically increase.” | “The problem is the demand is still not there,” said Kirk Edwards, chief executive of Latigo Petroleum, a Texas producer. “Even with these cuts there will be a tremendous amount of oversupply on the market, and that’s why you haven’t seen the oil prices dramatically increase.” |
| Mr. Edwards predicted that 40,000 workers would be laid off in the West Texas Permian Basin alone. “There is no reason to drill or complete any more wells this year because there is nowhere to take the production,” he added. | Mr. Edwards predicted that 40,000 workers would be laid off in the West Texas Permian Basin alone. “There is no reason to drill or complete any more wells this year because there is nowhere to take the production,” he added. |
| Dozens of small independent oil producers are on the brink of bankruptcy, and the deal between the Organization of the Petroleum Exporting Countries and its allies probably will not save them. A few oil company stocks, which have been sliding for months, rose on Monday, but most, including the largest American oil company, Exxon Mobil, were down. | Dozens of small independent oil producers are on the brink of bankruptcy, and the deal between the Organization of the Petroleum Exporting Countries and its allies probably will not save them. A few oil company stocks, which have been sliding for months, rose on Monday, but most, including the largest American oil company, Exxon Mobil, were down. |
| Few American oil companies can eke out profits at current prices. Shale oil wells in Texas and North Dakota typically make money only when oil prices are above $40 a barrel, which is why the industry is rapidly decommissioning rigs and fracking equipment and laying off thousands of workers. | Few American oil companies can eke out profits at current prices. Shale oil wells in Texas and North Dakota typically make money only when oil prices are above $40 a barrel, which is why the industry is rapidly decommissioning rigs and fracking equipment and laying off thousands of workers. |
| “Low prices will still need to do the work of forcing production cuts in many parts of the world, including the U.S. shale patch,” said Jason Bordoff, director of the Center for Global Energy Policy at Columbia University. | “Low prices will still need to do the work of forcing production cuts in many parts of the world, including the U.S. shale patch,” said Jason Bordoff, director of the Center for Global Energy Policy at Columbia University. |
| Eventually low prices could also spur demand, but probably not until the coronavirus epidemic has been brought under control. | Eventually low prices could also spur demand, but probably not until the coronavirus epidemic has been brought under control. |
| Even as the United States, Canada, Brazil and Norway — countries that were not party to the OPEC Plus deal — independently cut their production, storage facilities and tankers are filling up fast. And experts point out that even the 9.7 million barrels OPEC Plus countries agreed to cut daily won’t take effect until May 1, almost three weeks from now. By then, most European refineries will have run out of storage space. | Even as the United States, Canada, Brazil and Norway — countries that were not party to the OPEC Plus deal — independently cut their production, storage facilities and tankers are filling up fast. And experts point out that even the 9.7 million barrels OPEC Plus countries agreed to cut daily won’t take effect until May 1, almost three weeks from now. By then, most European refineries will have run out of storage space. |
| “The demand implosion is immediate and deep, while the supply decline will likely happen in stages,” said Francisco Blanch, head of commodities and derivatives research at Bank of America. “Plenty of downside risks remain.” | “The demand implosion is immediate and deep, while the supply decline will likely happen in stages,” said Francisco Blanch, head of commodities and derivatives research at Bank of America. “Plenty of downside risks remain.” |
| One big risk is that the countries that made the deal, cutting 23 percent of their production, won’t abide by it because OPEC countries have been known to cheat. Several members of the oil cartel surpassed their production quotas as recently as last month, according to S&P Global Platts, a division of the credit ratings firm. | One big risk is that the countries that made the deal, cutting 23 percent of their production, won’t abide by it because OPEC countries have been known to cheat. Several members of the oil cartel surpassed their production quotas as recently as last month, according to S&P Global Platts, a division of the credit ratings firm. |
| “History indicates large, credible cuts can be expected from Saudi, Russia, the U.A.E. and Kuwait,” said Paul Sheldon, a political analyst at S&P Global Platts, referring to the United Arab Emirates. “But compliance with 23 percent reductions elsewhere will be challenging.” | “History indicates large, credible cuts can be expected from Saudi, Russia, the U.A.E. and Kuwait,” said Paul Sheldon, a political analyst at S&P Global Platts, referring to the United Arab Emirates. “But compliance with 23 percent reductions elsewhere will be challenging.” |
| After the production cut agreement was reached on Sunday, Saudi Aramco slashed its petroleum selling prices for the second month in a row. That move did not violate the agreement, but made clear that Saudi Arabia’s national oil company would defend its market share. | After the production cut agreement was reached on Sunday, Saudi Aramco slashed its petroleum selling prices for the second month in a row. That move did not violate the agreement, but made clear that Saudi Arabia’s national oil company would defend its market share. |
| Still while the agreement makes the sharpest cuts in May and June, it pledges to keep production lower through April 2022 in an acknowledgment that demand will not snap back. | Still while the agreement makes the sharpest cuts in May and June, it pledges to keep production lower through April 2022 in an acknowledgment that demand will not snap back. |
| Updated June 12, 2020 | Updated June 12, 2020 |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. | Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| The oil industry’s prospects will most likely be linked to how the pandemic evolves — something few experts can predict with certainty. | The oil industry’s prospects will most likely be linked to how the pandemic evolves — something few experts can predict with certainty. |
| “How cyclical is Covid?” asked Paul Sankey, managing director of Mizuho Securities in New York. “Is demand for oil structurally impaired by a future world of face masks? Keep in mind that demand collapse has only really been a monthlong effect so far.” | “How cyclical is Covid?” asked Paul Sankey, managing director of Mizuho Securities in New York. “Is demand for oil structurally impaired by a future world of face masks? Keep in mind that demand collapse has only really been a monthlong effect so far.” |
| Oil-producing countries across the Middle East, Africa and Latin America are bound to face not only economic difficulties, but possibly political turbulence as governments are forced to cut social programs and energy subsidies. Saudi Arabia’s efforts to diversify its economy, for example, could be in jeopardy because the country is earning a lot less from oil exports. | Oil-producing countries across the Middle East, Africa and Latin America are bound to face not only economic difficulties, but possibly political turbulence as governments are forced to cut social programs and energy subsidies. Saudi Arabia’s efforts to diversify its economy, for example, could be in jeopardy because the country is earning a lot less from oil exports. |
| In the United States, the slump in oil demand and production could depress the economies of states like Texas, Oklahoma, North Dakota and Alaska, especially in rural areas that depend on oil. Restaurants and hotels have already emptied in some areas that have not seen many coronavirus infections, but where drilling activity has effectively stopped. | In the United States, the slump in oil demand and production could depress the economies of states like Texas, Oklahoma, North Dakota and Alaska, especially in rural areas that depend on oil. Restaurants and hotels have already emptied in some areas that have not seen many coronavirus infections, but where drilling activity has effectively stopped. |
| Still, the OPEC Plus pact has helped establish a floor under oil prices, at least for now, which might have saved some American oil business, said Roger Diwan, a vice president at IHS Markit, an energy research and consulting firm. | Still, the OPEC Plus pact has helped establish a floor under oil prices, at least for now, which might have saved some American oil business, said Roger Diwan, a vice president at IHS Markit, an energy research and consulting firm. |
| “This is critically needed relief,” he said. “The direct involvement of President Trump to forge this historical deal is the most unusual aspect of it and reflects his visible concern for U.S. shale producers.” | “This is critically needed relief,” he said. “The direct involvement of President Trump to forge this historical deal is the most unusual aspect of it and reflects his visible concern for U.S. shale producers.” |