Tag: news

Via S&P Global Platts Insight blog,

A look at crude oil quality across countries that have committed to cutting production, tumbling global gas prices, and trends in steelmaking raw materials all feature in this week’s pick of visuals.

1. As OPEC+ agreement kicks in, heavier crude could see bulk of cuts

 

What’s happening? The OPEC+ production cuts go into effect May 1, and the beleaguered oil market will be watching to see if the 23-country alliance led by Saudi Arabia and Russia fulfills its commitment to rein in 9.7 million b/d of crude output.

What’s next? The market will also be counting on economically forced shut-ins by other key producers, such as the US and Canada, to bring global supply down in line with coronavirus-hit demand. Crudes towards the heavier end of the quality spectrum are likely to see the bulk of OPEC+ cuts, though the coalition produces grades of all qualities.

2. Singapore oil trader’s bankruptcy stuns bunker, storage sectors

What’s happening? Hin Leong Trading’s financial crisis is likely one of the world’s biggest bankruptcies in oil trading and the most significant after this year’s historic oil price crash. It has shunted Singapore’s bunker and oil storage sectors into uncertainty, with banks heard to be tightening credit to many players. Bunker suppliers including Minerva Bunkering and TFG Marine, who were both awarded bunker licenses recently, are expected to fill the supply gap. Gasoline has also been affected. Overall, the company’s trades represented 55% of total gasoline trades during the Platts MOC process between April 2019 and March 2020. Rivals like Saudi Aramco and Petronas are likely to fight for market share after HLT’s ouster.

What’s next? Market participants will be monitoring developments, to determine if the possibility of HLT’s successful restructure exists, while keeping an eye on commodity prices to asses if they stay supported, reflecting the supply shock created by the situation.  The HLT debacle has also sparked  opportunities for further consolidation in the Singapore market, with several suitors including Sinopec heard to be interested in acquiring assets of the beleaguered company.

3. Gas prices, margins plunge as coronavirus slashes global demand

What’s happening? Global gas prices continue to converge around record lows, with prices in the US, Europe and northeast Asia all now trading at or below the $2/MMBtu mark. The coronavirus outbreak has hit global gas demand hard, impacting a market that was already reeling from the mild northern hemisphere winter, record high gas stocks and continued oversupply.

What’s next? The JKM, TTF, and Henry Hub prices are now essentially interchangeable which is fully compromising any arbitrage. Market players are seeing only tiny margins from trading gas, and with storage sites filling quickly, prices could still have room to fall further as the summer progresses. Producers are feeling the pinch and industry is watching closely for signs of further supply curtailments in the coming weeks.

4. Coking coal prices fall as faltering economies pressure steel demand outside China

What’s happening? Coking coal prices have weakened through April toward $120/mt FOB Australia, as global steel output fell from the economic fallout of the coronavirus pandemic. European, Indian and US steel mills suddenly reduced demand for coke, the processed form of coking coal, in Q2. Steel output is expected to fall significantly this year, based on company plans. China’s dependence on iron ore imports, along with production disruptions in Brazil, South Africa, India and Canada, kept spot prices of the product relatively steady. China has maintained strong steel production so far this year, with pig iron rates growing in the first quarter on 2019.

What’s next? The decline in benchmark coking coal prices to the lowest in almost four years is leading mines to be idled, especially in the US, as higher cost production squeezes mine margins. Demand may fall longer term, as environmental controls continue to challenge permitting for new and existing steel and coke operations. Coke plants in Europe and Japan have idled with plans for permanent closures. Steel margins globally remain weak, which could slow restarts of idled steelmaking plants in the US, Europe and India, with longer-term potential for greater use of scrap and direct reduction iron.

5. French winter power rallies as nuclear cuts outweigh demand losses   

What’s happening? French Q4 2020 power prices rose over 30% after the country’s dominant generator utility EDF detailed nuclear reactor shutdowns due to the coronavirus crisis. Restrictions on movement are impacting summer maintenance and refueling across the nuclear fleet in France, with many reactors now unable to refuel before the winter. This has forced EDF to shut some units now to preserve fuel ahead of winter, with a knock-on impact stretching deep into 2021.

What’s next? A return to anything near normal electricity demand in the second half of the year would leave a significant cut in supply from nuclear, with the final quarter of 2020 most at risk of a capacity squeeze during cold snaps, when French electric heating demand spikes. Gas and modern coal units in France and across its borders would be called on to fill any “thermal gap” in supply, which opens as cheaper nuclear, renewables and hydro sources fail to meet demand. Increase fossil generation would in turn increase demand for European carbon allowances, this offering further support to near-term power prices.

Add Scott Minerd, the chief investment officer of Guggenheim Investments, to the growing list of financial professionals who understands that capital markets no longer exit, and it’s all thanks to the Fed.

In his latest letter to investors Minerd writes that “if you go back 10 years to when the Fed started quantitative easing (QE), the debate was about how long QE would last and when would an exit strategy begin. I remember saying to people at the time, “The Fed will never be able to end quantitative easing; it’s here forever.” And now the new Fed backstop for credit for corporate America is here forever.” It’s funny, because we said the exact same thing on that fateful day in March 2009 when the Fed announced QE1.

So here we are now, and Minerd now fears that “this policy blunder will have long-term implications for our society. The Fed and Treasury have essentially created a new moral hazard by socializing credit risk. The United States will never be able to return to free market capitalism as we knew it before these policies were put in place.”

And there you have it: the US is now (and has been for the past decade) just a more dignified form of USSR-style central planning, one where prices are set by decree and a decline in asset levels is prohibited for one simple reason: with financial assets over 6x global GDP, any crash in markets would result in a depression that would promptly spiral in social collapse.

Among the various other points Minerd makes is his gloomy forecast that it “four years from now the economy will most likely recover to the same level of activity that it was in January” adding that “to think that the economy is going to reaccelerate in the third quarter in a V-shaped recovery to the level where gross domestic product (GDP) was prior to the pandemic is nrealistic.”

As this realization becomes clearer that the US economy has years to go before it recovers “we will be nearing the era of recrimination. Monetary and fiscal policymakers are pulling out all the stops to keep the economy and citizenry afloat during this crisis… but ultimately we will likely discover that they are insufficient, misdirected, and full of unintended consequences.” 

Minerd predicts that policy responses—including trillions of dollars of Federal Reserve emergency lending and debt purchases, direct payments to individuals, grants and forgivable loans to particularly hard hit industries and small business—will fail because economic restrictions on the economy of some sort could last until 2022.

As a result, Minerd expects the “finger-pointing to begin”, although we are confident that once again it will be broken down by party lines instead of targeting the real culprit behind the bursting – and reflating – of yet another bubble: the Federal Reserve.

And while people are accusing each other of crashing the economy, the unemployment rate could rise to as high as 30% and could still be in double digits by the end of the year, Minerd wrote, adding that while it took “nearly 10 years for the unemployment rate to return to levels we saw before the Global Financial Crisis, and this labor market shock will likely be between three and five times more severe.”

Consumer confidence, meanwhile, is set to take a massive hit as half of all Americans were unprepared to weather the storm, with less than $500 in savings. As a result, “few people will immediately go out and buy automobiles and return to movie theaters. The damage to the household sector is so severe that it is going to impair living standards for most of the decade.”

Efforts to help small and large businesses will also fail, because they are not taking into account the likelihood that coronavirus and its weakening effect on the economy will be here until a vaccine can be safely and widely distributed.

“I can’t fault the Fed for the good intentions of trying to do virtually everything in its power in a time of crisis, but the unintended consequences of its policies are considerable,” including propping up zombie companies that aren’t economically viable and preventing the sort of business turnover that is the hallmark of innovative capitalism.

Meanwhile the damage to the household sector is so severe that it is going to impair living standards for most of the decade, writes Minerd, adding that “this problem is compounded by the fact that the most financially vulnerable households are experiencing the majority of layoffs. Young, hourly workers in lower-paid service industry jobs are bearing the brunt of economic pain, and these are the people least able to deal with an interruption to income, which will compound the economic pain from layoffs as consumption falls even more sharply. Meanwhile, the disruption in corporate cash flows will be pervasive and will rebound unevenly. There will be few positive outcomes in credit as companies are encouraged to accumulate more debt in the already overleveraged corporate sector. These failures will stunt the eventual recovery and make it much more uneven” and eventually result in even more destabilizing policy responses.

Going back to the Fed, Minerd writes that the “central bank will never be able to get back to normal. The Fed’s balance sheet has expanded from $4.5 trillion to $6.6 trillion in just about a month, and it is likely on its way to over $9 trillion soon.”

Our central bank will never be able to get back to normal. The #Fed’s balance sheet has expanded from $4.5 trillion to $6.6 trillion in just about a month, and it is likely on its way to over $9 trillion soon. https://t.co/jcbtrJNFHk pic.twitter.com/sjEWiB2Xhr

— Scott Minerd (@ScottMinerd) April 27, 2020

The Fed is not alone in this endeavor: “As Ed Hyman of Evercore ISI pointed out, G7 central banks collectively purchased in March $1.4 trillion in financial assets. This annual rate of $17 trillion is nearly five times the previous monthly record set in April 2009.”

And so, as we enter this era of recrimination, it will have broad political and social implications: “as the death toll mounts it will be used as political fodder. To say “These people died from coronavirus because of mistakes made in Washington” is an effective tactic. After the Civil War, politicians used the image of the Bloody Shirt to remind voters that honoring fallen Union soldiers demanded a Republican vote. Deservedly or not, today’s Republican administration will have a hard time fending off that argument. As the Hoover Administration bore the consequences of the economic collapse of the 1930s, so quite possibly the pandemic will be viewed as Washington’s failure.”

His concluding thoughts are the same that we uttered almost a decade ago – namely that the Fed is setting the stage for bloody conflict within the US (a conclusion for which Time magazine mocked us at the time):

Eventually, a populist revolt to address the current massive inequality of income and wealth, will happen. Soon pressure will mount on policymakers to bolster the social safety net and increase things like healthcare and job security and maybe even institute a guaranteed living wage. My only concern is that it will be done in a way that is not productive for long-term growth. These programs will create incentives that will  reduce overall productivity, Instead, policymakers should address fundamental reforms in the economy to restore growth and reduce inequality.

They should… but they won’t. Instead the fiscal and monetary programs that are being put in place are fundamentally redefining how the government interacts with businesses and individuals, warns Minerd adding that  “some programs will work, and some will not, but they will remain in some form or fashion forever.”

Well, not forever. That paradigm of central planning the USSR eventually collapsed. And so will the USSR’s replacement: the United States.

Two more sources have come forward to corroborate sexual assault claims against Joe Biden by former staffer Tara Reade, who claims that in 1993 Biden forced himself upon her and penetrated her against her will with his fingers.

Two people have already come forward to say that Reade told them of the incident shortly after it allegedly occurred; her brother Collin Moulton, and a friend who wishes to remain anonymous for fear of retribution.

Now, two more witnesses have come forward to Business Insider; former neighbor Lynda LaCasse – a self-described “very strong Democrat,” and Reade’s former co-worker, Lorraine Sanchez, who worked in the office of a California state senator in the mid-1990s.

“This happened, and I know it did because I remember talking about it,” said LaCasse, a retired former medical staff coordinator and emergency room clerk for San Luis Obispo General Hospital in California, who lived next door to Reade in the mid-1990s in an apartment complex in Morro Bay, CA. LaCasse said she and Reade shared a bond because they were both mothers whose daughters swam together in the apartment complex’s pool.

In a series of interviews with Insider over the last week, LaCasse said she decided to speak up now, at a time when Reade’s story is under intense scrutiny in the media and facing denials from the Biden campaign, because she believed Reade’s account when she first heard it.

“I have to support her just because that’s what happened,” LaCasse said. “We need to stand up and tell the truth.” –Business Insider

“I remember her saying, here was this person that she was working for and she idolized him,” she added. “And he kind of put her up against a wall. And he put his hand up her skirt and he put his fingers inside her. She felt like she was assaulted, and she really didn’t feel there was anything she could do.”

“She was crying,” LaCasse said. “She was upset. And the more she talked about it, the more she started crying. I remember saying that she needed to file a police report.”

“I don’t remember all the details,” LaCasse said. “I remember the skirt. I remember the fingers. I remember she was devastated.“

Sanchez told Insider that she recalls Reade complaining that her former boss had sexually harassed her, and that after raising concerns she had been fired.

In interviews with Insider, The New York Times, The Washington Post, and politics podcaster Katie Halper (who broke the story of the assault allegations), Reade has said that in the spring or summer of 1993, she was told to meet Biden in a semi-private corridor to deliver a duffel bag. There, she said, Biden pushed her up against a wall, reached under her skirt, and penetrated her with his fingers. When she resisted his advances, Reade said, Biden expressed annoyance and said, “Aw man, I heard you liked me.” Then, she said, he pointed a finger at her and said, “You’re nothing to me.” After that, she said, he shook her by the shoulders and said, “You’re OK, you’re fine,” before walking away. –Business Insider.

Added to the four witnesses involved in this ‘credible accusation’ is a 1993 clip of a CNN episode of “Larry King Live” in which Reade’s mother called the network to ask how to resolve a complaint against a ‘prominent senator,’ as nobody in Washington D.C. would help her.

#BREAKING: HERE is the video from August 11,1993’s ‘Larry King Live’ described by @TheIntercept (and Tara Reade) as allegedly featuring her mother calling in and alluding to Reade’s sexual assault claims against @JoeBiden (blog here by @ScottJW) https://t.co/fCgEqBnX7n pic.twitter.com/V5FGHskv56

— Curtis Houck (@CurtisHouck) April 24, 2020

Biden’s handlers have denied Reade’s allegations, saying in a carefully crafted statement “Women have a right to tell their story, and reporters have an obligation to rigorously vet those claims,” a courtesy which was not afforded to Supreme Court Justice Brett Kavanaugh during his confirmation process. “We encourage them to do so, because these accusations are false,” Biden’s team added.

The fourth witness to come forward, Lorraine Sanchez, told Insider that Reade complained at the time about being sexually harassed.

After she left Washington, DC, Reade worked for California State Senator Jack O’Connell. Lorraine Sanchez, a former legislative staffer in O’Connell’s office, mentored Reade and worked alongside her from 1994 through 1996. Sanchez told Insider that Reade complained at the time about being mistreated by her former employer.

“[Reade said] she had been sexually harassed by her former boss while she was in DC,” Sanchez said, “and as a result of her voicing her concerns to her supervisors, she was let go, fired.” –Business Insider.

“What I do remember,” said Sanchez “is reassuring her that nothing like that would ever happen to her here in our office, that she was in a safe place, free from any sexual harassment.”

Sanchez added that “it takes great courage and strength to come forward,” adding “It’s much easier to keep silent. However, I also understand the duty we have as women to share our story regardless of who the perpetrator may be.”

Remember kids:

Read the rest of the report here.

 

In a shocking example of the psychic toll that those fighting on the front lines of the coronavirus outbreak endure, a top emergency room doctor who treated coronavirus patients at a hospital in Manhattan has committed suicide, the New York Times reports.

Dr. Lorna M. Breen, the medical director of the emergency department at New York-Presbyterian Allen Hospital, died in Virginia on Sunday, where she was staying with family, according to her father who discussed her death with the Times.

Her father said she had described to him “devastating scenes of the toll the coronavirus took on patients,” the NYT reported.

“She tried to do her job, and it killed her,” he said.

Breen’s father, also an MD, said his daughter had contracted the virus, but had gone back to work after recuperating for about a week and a half. Then, the hospital sent her home again, but at this point her family moved to bring her back to Charlottesville, Va.

Breen, 49, had no history of mental illness, but when she last spoke with her father, she reportedly described a horrifying onslaught of patients found DOA in ambulances, all of them COVID-19 patients.

Dr. Breen

Her father asked the NYT to “make sure [Breen] is treated like a hero,” since she died doing her job and protecting this country from a devastating health care epidemic.

“She was truly in the trenches of the front line,” he said. “She’s a casualty just as much as anyone else who has died.”

Dr. Lawrence A. Melniker, the vice chair for quality care at the NewYork-Presbyterian Brooklyn Methodist Hospital, told the NYT that Dr. Breen was well-respected and well-liked in their hospital system.

“You don’t get to a position like that at Allen without being very talented,” he said.

The coronavirus has presented unusual mental health challenges for emergency physicians throughout New York, the epicenter of the crisis in the United States. As the paper added, while ER doctors are inured to treating patients will all kinds of grisly injuries, they’re not accustomed to being at risk of infection themselves, or of passing it to their colleagues.