Crude oil fell sharply on Monday with U.S. crude briefly dropping below $20 and Brent hitting its lowest level in 18 years on heightened fears that the global coronavirus shutdown could last months and demand for fuel could evaporate further.
U.S. West Texas Intermediate (WTI) crude fell $1.14 or 5.3 per cent to 20.37 per cent.
“The price of oil is now so low that it is becoming unprofitable to many oil firms to remain active,’’ analysts said, and higher cost producers will have no choice, but to shut production, especially since storage capacities are almost full.
“Global oil demand is evaporating on the back of COVID-19-related travel restrictions and social distancing measures,” said UBS oil analyst Giovanni Staunovo.
He added that in the near term, oil prices may need to trade lower into the cash cost curve to trigger production shut-ins to start to prevent tank tops to be reached.
Hussein Sayed, analyst at FXTM also said:
“This game of attrition is likely to drag prices even lower and even a price of 10 dollars per barrel is no longer unimaginable.”
Besides demand destruction caused by the coronavirus pandemic, the oil markets have also been slammed by the Saudi Arabia-Russia price war that is flooding markets with extra supply.
On Friday, an official from Saudi Arabia’s energy ministry said the kingdom was not in talks with Russia to balance oil markets despite rising pressure from Washington to stop the rout that has cut prices by over 60 per cent this year.
With world demand now forecast to plunge 15 million or 20 million barrels per day, a 20 per cent drop from 2019, analysts say massive production cuts will be needed beyond just the Organisation of the Petroleum Exporting Countries.
“OPEC, Saudi Arabia and Russia could mend their differences, but there’s not that much OPEC could do. The demand shock from COVID-19 is just too big,” said Lachlan Shaw, National Australia Bank’s head of commodities research.
The spread between May and November Brent crude futures reached its widest ever at 13.45 dollars a barrel, while the six-month spread for U.S. crude broadened to minus 12.85 dollars a barrel, the widest discount since February 2009.
Prompt prices are lower than those in future months in a contango market, encouraging traders to store oil for future sales.
Asian shares also slipped on Monday despite the all-out efforts of the central banks to bolster the markets with rate cuts and asset-buying campaigns.
China’s central bank unexpectedly cut the rate on reverse repurchase agreements by 20 basis points, the largest in almost five years, as authorities ramped up steps to relieve pressure on an economy ravaged by the coronavirus pandemic.
Monkeys attack lab assistant, escape with COVID-19 samples
A gang of monkeys attacked a laboratory assistant and escaped with a batch of coronavirus test samples, it has been reported.
The bizarre incident saw the troop of primates launch their assault near Meerut Medical College in Delhi, India.
According to local media, the animals then snatched COVID-19 test samples from three patients and fled.
One of the monkeys was later spotted in a tree chewing one of the sample collection kits, the Times of India reported – adding that test samples from the patients had to be taken again.
It is the latest example of the highly intelligent, red-faced rhesus macaques taking advantage of India’s nationwide lockdown to combat the spread of coronavirus.
While they have proved an increasing problem in urban areas of the country in recent years, lockdown measures in the last two months have emboldened the monkeys.
Reports have shown them congregating in parts of Delhi normally crowded with humans.
Covid-19: Uganda records 36 new cases toll now 317
Uganda has recorded 36 new cases of COVID-19, bringing the total number of infections to 317, the country’s Health Ministry said late Thursday.
Out of the 2,230 samples collected from cross-border cargo truck drivers and communities, 24 Ugandan truck drivers and 12 close contacts of previously confirmed cases under quarantine tested positive for the virus, the ministry said in a statement.
Twenty-six foreign truck drivers, who tested positive at the country’s common border entry points, were handed over to their country of origin, it said.
Out of the 317 COVID-19 cases, 69 have recovered and no one has died of the respiratory disease in the country, according to the health ministry.
FG to use hotels, schools as quarantine, isolation centres
The Minister of Health, Dr Osagie Ehanire, said the Federal Government would require hotels and school dormitories as quarantine and isolation centres because of a shortage of hospital beds.
The minister noted that there were four levels of COVID-19 patients ranging from those on quarantine with zero or mild symptoms to those that would need to be in the intensive care unit.
The minister said,
“We have sadly recorded 254 deaths, most of them are persons associated with other ailments, confirming the general observation that risks are higher for those with illnesses such as hypertension, diabetes and non-communicable diseases.
“We need to continue increasing bed capacity to match the probable number of patients, so that we do not experience horrific scenes of bed space shortages seen in some European hospitals.
“In event of overflow, we can require hotels and school dormitories to be prepared for level 1 which is quarantine, and level 2, is isolation of COVID-19 positive with zero or mild symptoms, to free hospital beds to be dedicated to level 3 which are moderate to severe cases and level 4 which is for the high dependency and the intensive care unit.
“I, therefore, call on activists and philanthropists to work with state governments to scale up non-pharmaceutical measures and beef up infrastructural assets for isolation and treatment in their states.”
Ehanire said Nigeria would review its participation in the World Health Organisation solidarity trial. He also stated that proposals for trial of local remedies for COVID-19 had been sent to the relevant research and testing agencies for scientific evaluation.
“The Madagascar herbs have been received at the Ministry of Health, and were found to consist of two varieties; one labelled to be for prevention and the other for treatment. Samples have been given to three agencies of the Ministry of Health and also to the Ministry of Science and Technology.
“These are normal processes for new preparations to be approved for use in Nigeria, and include toxicological and efficacy tests and clinical trials. Government will investigate all genuine efforts to find homegrown solutions to the pandemic.”
The minister said Madagascar’s drugs had been sent to NAFDAC, National Institute for Pharmaceutical Research and Development, and the Nigerian Institute of Medical Research.
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