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Post by bjspokanimal on Nov 28, 2020 23:30:03 GMT -5
Just saw a report from rystad energy reporting on the magnitude of demand destruction for transportation fuel in Europe as a result of the current, covid-related restrictions and shutdowns. The verdict?... Europeans aren't taking the restrictions NEARLY as seriously as they did last April. Let's call it the "covid fatigue" syndrome, shall we?
Last April, the falloff in demand for transportation fuels was a whopping 2.7 million barrels a day. This time around?... 1/3 the falloff... just 900,000 barrels a day.
Same thing in the US too. Airline travel for thanksgiving hit a post-covid record... even as Joe Biden and Andrew Cuomo pleaded with Americans to stay home and watch Biden take cream puff questions from his lovey-dovey mainstream media admirers during his fully-scripted news conferences.
What we're seeing, people, is the gravity of oil's legendary "economic inelasticity" in all its glory. It's been tough, for sure, but its always good to remember that people will give up a lot of things before they'll give up their car keys...
... even in Europe.
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Post by Blitz on Nov 29, 2020 8:45:14 GMT -5
I think people are discovering that Covid is not the death sentence that governments want people to believe. The key metric is the Infection Fatality Ratio (IFR). IFR is around 0.6%. Young people and those below 80 simply get it and get better. Younger people are risking it after being told the sky is falling. Old people need to heed the warnings. And by the way, the USA is still not doing enough to protect the elderly and those living in elderly care. Why not? The IFR would plummet if we did a better job of protecting them.
Protecting the elderly would get the price of oil rising. Why don't we do that and keep people working instead of paying people $48,000 per year to do nothing and stay home. (That $48K is based on $600 per week in Federal Pay Check Protection unemployment pay and $400 per week in state unemployment.)
reason.com/2020/09/29/the-latest-cdc-estimates-of-covid-19s-infection-fatality-rate-vary-dramatically-with-age/
Excerpt:
That finding is roughly consistent with the CDC's most recent "best estimate," based on studies of the epidemic's impact in other countries, that the overall COVID-19 infection fatality rate (IFR)—the share of Americans infected by the virus who will die as a result—is about 0.65 percent. According to Worldometer's tally, the current death toll in the United States is about 210,000. The CDC's IFR estimate therefore implies that around 32 million Americans, a bit less than 10 percent of the U.S. population, have been infected.
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Post by bjspokanimal on Nov 30, 2020 15:52:43 GMT -5
After being down by as much as $1.11 in trading today, New York Crude oil spiked late in the day to trade almost even with Friday's close as news leaked out of the first day of the 2 day OPEC+ meetings.
Although there was no resolution of quotas from the first day, nor any info on Russian involvement, there appeared to be widespread resignation on the part of members that some kind of a delay in a further reduction of the current cuts would need to be agreed on. The late day oil spike appears to be in response to that news.
Recall that under the current agreement, OPEC+ is scheduled to trim it's current cuts by about 1.9 million barrels a day starting on January 1st and the current discussions are about postponing those cuts until April 1st.
One of the main reasons for extending the cuts, is Libya, where a ceasefire there has allowed the warring factions to agree to resume oil production/exports... from minimal output to a current rate of 1.2 million barrels a day. For it's part, Libya has stated that they won't participate in the OPEC+ production quotas until they can attain their previous, pre-war output of 1.7 million barrels a day.
Current U.S. production is still between 2 and 3 million barrels a day below pre-covid levels.
S
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Post by bjspokanimal on Dec 2, 2020 12:41:09 GMT -5
This was a bit of a problem on the debt front for RIG. A byproduct of their debt swap this fall was that certain existing bondholders claimed that part of the swap violated the seniority covenants on the debt they held and unfairly subordinated their own bonds to some of the newly issued ones in the debt swap. The issue has been in court and Transocean has maintained that their seniority hadn't actually been violated. However, they took steps to ensure it just the same in the hopes that there would be no doubt in the eyes of a judge that all seniority covenants on existing debt were secure. Here is the company's press release on the steps they took: finance.yahoo.com/news/transocean-ltd-announces-amendments-certain-055000046.html
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Post by bjspokanimal on Dec 4, 2020 12:11:14 GMT -5
OPEC+ came to a "difficult" conclusion about their production curtailments yesterday.
The original agreement was for them to taper their cutbacks by 2 million barrels a day beginning January 1st. Because of the surge in covid and a related concern that it would depress demand for hydrocarbons awhile longer, OPEC+ met this week to discuss delaying the january 1st taper for another 3 months or so.
The first day of the meeting on Monday went so badly that they delayed the decision until Thursday to give them more time to hammer out an agreement between the 23 countries involved with OPEC+.
Yesterday, they announced that they would taper the cutbacks by 500,000 barrels a day for JANUARY ONLY.. and meet an unprecedented EVERY MONTH to determine how much to taper on a month by month basis.
The markets appear to have taken this news well, with crude oil advancing to a 9 month high above $46 on NYMEX.
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