Oil prices fell today, Wednesday, due to fears that the demand for fuel will continue to decline in light of the high cases of Coronavirus in Europe and the United States, the largest country.
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Oil prices fell today, Wednesday, due to fears that the continued decline in fuel demand in light of the high cases of Corona virus in Europe and the United States, the largest consumer of crude in the world, may impede economic growth.
The monthly report of the Organization of Petroleum Exporting Countries (OPEC) said yesterday that oil demand in 2021 will increase by 6.54 million barrels per day to 96.84 million barrels per day, 800,000 barrels less than expectations a month ago, as a result of the economic disruptions caused by the Corona pandemic.
Brent crude for December delivery fell 17 cents, equivalent to 0.4%, to $ 42.28 by 0649 GMT, while US West Texas Intermediate crude lost 18 cents, equivalent to 0.5%, to $ 40.02.
On Tuesday, the Kremlin said that Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman discussed the current situation in energy markets during a phone call.
UAE Energy Minister Suhail Al Mazrouei said yesterday, Tuesday, that the oil producers in the OPEC + group will adhere to their plans to reduce the volume of oil production cuts, starting next January.
Oanda’s chief market analyst, Edward Moya, said, “Oil prices are stable in Asia with the upward trend of the dollar being halted, while the Russians and the Saudis are showing a united front to get OPEC + producers to fulfill their production-cut pledges.”
And he continued, “Crude prices appear to be greatly threatened with the continuing spread of the Corona virus, such as: forest fires in Europe, and an increase in infections in America.”
On the supply side, the recovery of production from the Gulf of Mexico in the United States continued four days after Hurricane Delta hit, and the proportion of interrupted production decreased to 44% yesterday from 69% last Monday.
Frankfurt When OPEC talks about the development of the crude oil market, there is usually a good deal of optimism. By 2022, the merger of 13 oil-producing countries expects oil demand to have returned to the level from before the outbreak of the corona crisis. Opec expects a growth market for the next 20 years, and the peak of oil demand will not be reached until the 2040s.
But even if the optimistic scenario of Opec becomes reality: For investors, that doesn’t mean the all-clear. Anyone who invested in oil at the beginning of the year, for example via exchange-traded oil index products (ETPs) or oil stocks, has not only lost a lot of money. The opportunities to benefit from a recovery in the oil markets were also limited.
Many products popular with private investors lag behind crude oil prices in terms of performance over the year. The strategy of staying invested and sitting out phases of losses, which is often promising on the stock market, has so far not worked for oil investments this year.
While tech stocks have sometimes far surpassed pre-Covid-19 levels, the oil market is still a long way from recovering from the pandemic shock. The most important reference price for Europe, the North Sea variety Brent, is currently quoted at around 42 dollars per barrel (around 159 liters). Since the beginning of the year, the minus is almost 36 percent.
It doesn’t look much better in the USA. WTI Texan oil is trading at around $ 40 per barrel, around 34 percent lower than at the beginning of the year.
High hurdles for OPEC
Oil prices were able to recover from their lows. Brent oil had meanwhile fallen to just under eleven dollars per barrel, WTI oil even to minus 37 dollars. The 23-nation Opec-plus alliance around Saudi Arabia and Russia responded with historic market intervention and suddenly took more than ten percent of global oil demand from the market. But since May the oil price has remained in a comparatively narrow corridor between 38 and 46 dollars per barrel. There are no signs that the oil price could break out of this range in any significant way anytime soon.
Giovanni Staunovo, oil analyst at the Swiss bank UBS, wrote in a recent study: “The recovery in demand continues, but the simplest gains are behind us.” He expects the price of Brent oil to reach the mark of 45 dollars Unlikely to exceed the end of the year.
Warren Patterson, chief raw materials strategist at the Dutch bank ING, comes to a similar conclusion. “The ongoing concerns about demand as well as a possible return of the oil supply from Libya are an obstacle for Opec-plus in balancing the market.”
This is bad news for investors, because the sideways movement of the oil markets is the most important reason why many investment products have performed even worse than the market. The best example is the US Oil Fund, a multi-billion dollar exchange-traded index fund (ETF) on the US oil price WTI. The ETF is actually supposed to map the price of crude oil one-to-one – but the US Oil Fund is around 70 percent in the red over the year, so the loss is twice as high as the collapse in the price of crude oil.
It looks less extreme, but tends to be similar, for investment products widespread in Europe. The minus of the index product on Brent oil from US asset manager Wisdom Tree is around 43 percent. This ETC also does worse than the market price. The competitor product of the Deutsche Bank fund subsidiary DWS Xtrackers also lagged slightly behind the market.
Index products on the price of crude oil suffer from so-called roll effects. They are based on futures, i.e. delivery contracts that are traded on the commodity exchanges. Whoever buys a future secures the right to a delivery of crude oil on a certain date, but is usually also obliged to purchase the physical oil. The oil funds are never interested in a physical oil delivery, however. Therefore, you have to sell an expiring future in good time and replace it with a longer-term futures contract.
This so-called “rolling” is largely automated, but costs are incurred. Because longer-term futures contracts are usually more expensive than oil for immediate delivery. These costs are not taken into account in the oil prices that investors can see on their smartphones, on handelsblatt.com or on financial portals. They usually show the price of the future with the shortest remaining term.
Rolling costs are always high when there is enough oil on the market in the short term, especially since storage causes long-term costs. And that is exactly what is currently the case, as UBS strategist Staunovo writes. There is a slight supply shortage. “But the market is artificially tight, not structural.”
The OPEC states still produced significantly less oil than they could. In doing so, they secured the oil price from falling further. But the OPEC states also had extremely large reserve capacities, explains Staunovo.
The oil exporting countries can therefore ramp up their oil production within a short period of time if prices recover slightly in order to at least reduce the losses this year somewhat. The reserve capacities of OPEC therefore limit the oil price upwards: “In order to see sustained higher prices, the oil market would have to slide from an artificial to a structural deficit. For this, the reserve capacity would have to decrease, ”writes Staunovo.
For this, however, a further significant increase in the demand for oil is necessary – and that could only be triggered by a vaccine that ensures broad immunization of the population and thus normalization of economic activity, including increasing demand for raw materials.
The commodity experts at Commerzbank see it similarly: a recovery in oil demand can be observed in China. In the long run, however, this is unlikely to be sufficient to compensate for other negative factors such as the overcapacities of the oil exporting countries – especially since if Joe Biden wins the US presidential elections, Iran could also return to the world market as a producer, says Commerzbank analyst Carsten Fritsch: ” We therefore expect a further decline in oil prices. “
The sideways movement of the oil markets is not only depressing the performance of exchange-traded index products. It also weighs on the stocks of major oil companies. Typically, oil stocks are less volatile than the market price. This was evident in the great oil market crash in March and April. While Brent oil fell by more than 60 percent between January and March, the index for European oil and gas stocks, the Stoxx Europe 600 Oil & Gas, fell by around 50 percent.
In the meantime, however, the oil producers have realized that the oil price is likely to remain for a long time at a level that is too low for many of these corporations. The prospects for growth are now gone. Shell, BP and Co. have cut massive investments and cut their dividends.
As a result, oil stocks are currently trading only around 25 percent above their March lows, while the price of crude oil has almost quadrupled. A quick rebound in oil stocks in April turned out to be a flash in the pan. Since then, the European sector index has been developing more or less sideways, after some massive fluctuations, and has lost a good third in the past twelve months. Only in the USA is the situation even dreamer: the most important industry barometer, the S&P 500 Energy Index, is around 45 percent in the red for the year.
“An efficient and widely available vaccine should act as a catalyst for higher prices,” says UBS strategist Staunovo. ” notoriously difficult undertaking. And as long as no protection against Corona has been found, both index products on crude oil and oil stocks are likely to perform below average.
More: Stagnating oil prices put producers in need.
It may seem reprehensible or unknown to many, but there is a World Mental Health Day, scheduled for October 10 every year. While many people wonder about the goal of this day, when reading the figures related to mental health worldwide issued by the World Health Organization and other institutions concerned with this field, we find that there must be a global day that pushes governments, civil society institutions, and workers in this field. The field is to raise awareness of the suffering of billions of people, and try to find solutions to reduce their suffering.
Almost one billion people in the world suffer from mental disorders, and alcohol and drug abuse kills 3 million people annually, while suicide kills one person every 40 seconds, which is the second leading cause of death for young people between the ages of 15 and 29 years. Today, billions of people around the world are affected by the Corona pandemic, which is also exacerbating the damage to human mental health. Depression is one of the main causes of illness and disability among adolescents and adults, with 1 in 5 children and adolescents suffering from a mental disorder. And people with severe mental disorders such as schizophrenia often die ten or twenty years earlier than others.
More than 75 percent of people with mental illnesses, in low- and middle-income countries, receive no treatment at all, as a result of the decades-long chronic shortage of mental health promotion, disease prevention and care. Stigma, discrimination and human rights violations against persons with mental illness are still widespread in these societies.
The loss of productivity caused by depression and anxiety is one of the most common mental disorders, costing the global economy nearly $ 1 trillion annually, while governments allocate less than 2 percent of their national budgets to mental health. And that is despite every dollar invested in expanding treatment for depression and anxiety, it brings a return of $ 5.
Corona and mental health
Prior to the outbreak of the Coronavirus, high-cost care services in the field of mental health were limited around the world, but this outbreak and its implications for the weakness of the health system, home quarantine and social distancing led to an exacerbation of the situation, due to fear of the spread of infection and the risk of its spread in the residence facilities for mental patients, such as Care and psychiatric institutions, in addition to closing mental health facilities to divert their use to care for people with HIV. The measures to restrict the movement of people and home quarantine, cancel the daily routine of employees and workers, change the pattern of business and close schools in the interest of distance education, temporary unemployment and the absence of direct contact with other family members, friends and colleagues, manage feelings of fear of infection with the virus, and concern about close people at risk. In particular, all are reasons that have led to more alertness and vigilance to pay attention to mental health at the time of the Corona outbreak, especially for previously mentally ill people.
For this reason, the World Health Organization joined forces with partner organizations, United for Global Mental Health and the World Federation for Mental Health, to call for this year’s World Mental Health Day, for a significant increase in Investments are directed at the mental health sector, especially since the economic consequences of this pandemic are already being felt, as companies have laid off their employees in an attempt to save their business, or have already closed their doors. It is expected that the need for support in the field of mental health and psychosocial support will increase in the coming months and years due to the pandemic that is ravaging the world. Investing nationally and internationally in mental health programs, which have already suffered for years from chronic underfunding, is now more important than it has ever been.
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Events on the International Day
In the context of the increasing interest in this global day this year and in light of the Corona crisis, the major demonstration for mental health was held on October 9th, which was joined by mental health activists from all over the world, and its activities were broadcast live on Facebook 24 hours , As well as content from the opinions of moderators and first-hand experiences of influential people and personalities from around the world. The virtual audience heard stories of the dedication of civil society activists from 19 countries and influential figures from civil society groups who participated in the campaign, “Speak Your Mind”. Participants in the campaign are specialists and interested persons from the following nineteen countries: Argentina, Australia, Ghana, India, Indonesia, Kenya, Liberia, Nepal, New Zealand, Nigeria, Pakistan, Peru, the Philippines, Sierra Leone, South Africa, Sri Lanka, Tonga, the United Kingdom, and the states United. Ingrid Daniels, President of the World Federation of Mental Health, said: “It has now been nearly 30 years since the World Mental Health Federation launched the first World Mental Health Day. During this period, we have witnessed an increasing openness to talk about mental health in many countries of the world.” The World Federation for Mental Health is an international organization established in 1948 to advance the issues of prevention of mental and emotional disorders, provide those with them with the necessary treatment and care, and promote mental health.
As for Elisha London, founder and CEO of United for Global Mental Health, she said, “It is now more necessary to invest in mental health than at any time in light of the lack of access to adequate and quality mental health services for many.” On October 10, the World Health Organization will, for the first time, host a global online event on awareness-raising around the world to reduce mental illness and the harmful use of alcohol and drugs. World leaders and mental health experts will join the WHO Director-General to speak about their commitment to mental health and the additional work that can be done in this area. World-renowned musicians who have raised their voices loudly in advocating the importance of mental health will participate in performing musical connections. Sports figures of both genders, whose lives have been affected by mental health conditions, will also participate to talk about their experiences and showcase their ways of dealing with health conditions such as depression and anxiety.
Brent is the most important type of oil for Europe. The WTI variety comes from the USA.
New York On Tuesday, oil prices in Asian trading held their previous day’s gains. Investors have become more optimistic about another US aid package for the economy, which has been ailing because of the corona crisis. The corresponding talks between the Democrats and the Republicans continue, although there has not yet been a breakthrough. US President Donald Trump is pushing for a deal.
Most recently, a barrel (159 liters) of North Sea Brent cost 41.55 US dollars. That was 26 cents more than the day before. The price of a barrel of the US West Texas Intermediate (WTI) rose 24 cents to $ 39.46.
The day before, oil prices had risen significantly due to signals of health progress from Trump, who was infected with the corona virus. His admission to hospital and the resulting political uncertainty initially unsettled investors over the weekend.
Meanwhile, Trump has been released from the hospital. The doctors have not yet given a final all-clear regarding his state of health.
Whether oil prices will continue their recent recovery depends largely on the economic outlook. New economic stimuli from the US government and signs of economic recovery would help.
More: This is how Trump’s infection affects the election campaign.
Click here to go to the Brent price page, here to the WTI rate.
The prices of oil and gasoline fluctuate aimlessly. An exciting debate is contributing to the uncertainty on the oil market: Has the oil demand peaked – will it never be possible again to use as much oil as in 2019?
Investors hope for further economic recovery in the US.
New York Speculations on new billions in aid for the US economy have caused prices to rise on Wall Street. The Dow Jones index of standard values closed on Thursday 0.1 percent stronger at 27,816 points. The broader S&P 500 gained 0.5 percent to 3380 meters. The index of the technology exchange Nasdaq rose by 1.4 percent to 11,326 positions.
A few weeks before the elections, the tough negotiations on a new aid package for the US economy shaken by the corona crisis are moving. The US government has proposed a new stimulus package worth more than $ 1.5 trillion to Democrats that will extend aid to ailing aviation industry by $ 20 billion, said White House chief of staff Mark Meadows. American Airlines, Delta, United Airlines and JetBlue stocks rose between 0.6 and 1.8 percent.
“Today it’s all about whether or not the economic stimuli are approved,” said Kim Forrest, founder and head of investment house Bokeh Capital Partners. With the presidential elections coming up and increasing corona numbers worldwide, stronger fluctuations on the stock exchanges can be expected in the coming weeks. “The volatility will come back in a big way, unlike the second quarter when we could just forget everything and throw money in the market and move on.”
Investors in the oil market could not ignore the rising number of corona infections. “It has been shown that the virus has not been contained,” said PVM Oil analyst Tamas Varga. “Infection rates are rising, the global death toll has exceeded one million and the world is becoming a gloomy place again.”
Investors feared a further crumbling demand for the raw material. An increase in production in the OPEC countries last month also made investors frown. A barrel of North Sea Brent was 3.5 percent cheaper to $ 40.82, while the price of US WTI light oil slipped 3.9 percent. As a result, energy stocks were among the biggest losers on the stock market. Tech values, however, were in demand. Apple, Nvidia and Microsoft rose by up to one percent, Tesla by 4.5 percent
Individual values at a glance
STMicro: The shares of the French-Italian chip manufacturer STMicro, which are listed on Wall Street, rose by 6.6 percent. The group had increased its sales in the third quarter more than expected and is now looking more optimistically about the year as a whole.
Pepsico: At Pepsico, the quarterly figures presented only hesitantly met with a positive response. After a weak start, the shares made it 1.6 percent in the plus. The beverage company exceeded expectations with the figures and, after business was going better, dared to set new goals for this year.
Bed Bath & Beyond: Among the small caps, Bed Bath & Beyond caused a sensation with a fireworks display. The shares of the retailer for household goods soared at times by more than a third, at the end of the plus was about a quarter. Better than expected quarterly figures thanks to high online sales were seen as the driver for the price jump.
More: The German benchmark index fluctuates on Thursday around its previous day’s value.
Opec turns 60 and has to realign its strategy. Image: dpa
The OPEC is looking for a reason to exist. Because the cartel has lost its influence. Its only product, a finite raw material from the earth, has no future.
Ahen the Organization of Petroleum Exporting Countries Opec was founded in September 1960, the world was a different one. Fifteen years after the Second World War, the United States and the Soviet Union faced each other internationally. The historically in part not long independent oil states fought for their independence from the large industrialized countries and their oil companies. That was the time when Venezuela, Saudi Arabia, Iran, Iraq and Kuwait united in the old trading city of Baghdad to form OPEC. A “very exclusive club”, as Venezuela’s oil minister, Pérez Alfonso, put it at the time. The founding story of Opec was also one of “decolonization” and the emergence of “petro-nationalism”, as the historian Giuliano Garavini describes in his book “Rise and Fall of Opec”.
60 years later, OPEC has grown to 13 member states and has also won important non-member countries such as Russia as allies under the slogan “OPEC plus”. When representatives of the organization exchanged views on the status of their own oil production this Thursday, the main focus was on the weak demand for oil around the world due to the corona crisis and kept the members busy. In addition, states that had produced more oil in the last few months than the agreements actually provided were given more time to compensate for this. The deadline is now until the end of the year instead of the end of September.
Brent is the most important oil for Europe. The WTI variety comes from the USA.
Singapore Oil prices rose slightly on Friday. In the morning, a barrel (159 liters) of North Sea Brent cost $ 43.14. That was 20 cents more than the day before. The price of a barrel of the American variety West Texas Intermediate (WTI) rose by eleven cents to $ 40.03. On Thursday, weak economic data from the United States and a generally cloudy mood on the financial markets temporarily put oil prices under severe pressure.
Shortly before the weekend, oil prices are supported by the exchange rate development. After extremely weak US economic data and a worsening of the corona crisis with a high number of new infections, the US dollar has recently come under pressure. A weak dollar makes crude oil cheaper in countries outside the dollar zone, thereby supporting demand.
For the third month in a row, the oil market is showing an increase in prices. The onset of economic recovery in leading economies after the dramatic slump in the corona crisis caused prices on the oil market to rise. For August, however, experts do not want to rule out setbacks in the oil price if leading oil countries, which are grouped together in the Opec +, want to increase their production volume again somewhat.
Click here for the Brent price page, here for the WTI course.
Thomas Markle criticized his daughter, Meghan, the wife of British Prince Harry, saying that he “does not appreciate the image she has become” in the recent period, and she and her husband told her that “this period in the world is the worst time you can complain and complain.”
This came during an interview that Thomas conducted with the British newspaper “The Sun”, days after the announcement of the publication of a book containing the autobiography of Prince Harry and his wife called “Finding Freedom: Harry and Megan and Making a Modern Royal Family”, which is expected to lead to an increase Tension with the relationships between the couple and the royal family.
Commenting on the publication of the book, which was written by royal observers Omid Scooby and Caroline Durand, Thomas (76 years) said, guiding his words to his daughter and her husband, “This period in which the world lives cannot tolerate grumbling”, referring to the crisis of the outbreak of the new Corona virus. “This is the worst time when they can complain and complain about anything, because people everywhere suffer because of the Corona pandemic,” he explained. “I love Megan, my daughter … but I really do not appreciate the picture she has become in the recent period,” he added.
There were reports that Harry and Meghan had spoken to the authors of the book personally, and that the “dissatisfied” couple would use the book to “settle accounts”, although Harry and Meghan had recently stated that they had made no contributions to the book.
The couple now live in Los Angeles after they gave up their royal roles in March. And in January, we announced plans to start a more independent life.
Harry, 35, married Meghan, 38, in May 2018. They had their baby, Archie, in May 2019.
Thomas and Megan have suffered from severe tension in relations since the latter’s association with Prince Harry. This tension increased after Thomas delivered to Mail on Sunday a message Megan sent to him, in which they discussed the dispute between them over events that occurred before the wedding.
The newspaper published the letter, which prompted Megan to sue the Supreme Court in London against the Associated Pressers, which publishes the newspaper for allegedly violating her privacy.
Thomas indicated that he delivered the newspaper in an attempt to defend himself after he told Megan’s friends, “People,” that she wrote a “touching and loving” letter to her father in an attempt to repair her relationship, while the father stressed that the letter did not include any attempt to bridge the rift. Between him and his daughter, describing them as “a dagger in the heart.”
The 23 states of the OPEC Plus formed in 2017 want to increase their oil production by two million barrels per day (bpd) from August 1. This was decided on Wednesday by the joint coordinating body, the Joint Ministerial Monitoring Committee. The committee’s twentieth meeting took place this time as a video conference because of the corona pandemic. The ministers of energy were chaired by Saudi Arabia and Russia.
With their decision, the OPEC Plus countries reacted to the relative stabilization of the international oil market and prices by a recovery in demand. This had dropped sharply in the first phase of the corona pandemic, i.e. in March and April. The main reason for this was the shrinking of road and air traffic due to the lockdown practiced almost worldwide. Due to easing, however, the demand for crude oil and crude oil products such as gasoline has increased again since around mid-May. As a result, prices rose again. For example, while the Brent variety fell below $ 20 a barrel (159 liters) several times in April, it rose to $ 30 a barrel in May on average, to $ 40 in June, and was close to $ 43 on Friday morning Barrel noted. However, that’s still $ 20 less than exactly a year ago. A significant further increase in oil prices in the current and even next year is generally not expected.
Regarding the situation and future developments, the OPEC Plus coordinating committee said: There are »encouraging signs of an improvement because the economy around the world is opening up again. Local or partial lockdowns may be reintroduced in some locations, but the signs of recovery are clear. «
The usual detailed report, which OPEC also presented at the same time, does not sound quite as confident. According to this, new restrictions to combat the COVID-19 pandemic could cause demand to plummet again by eleven million bpd. At the same time, global inventories would have reached an all-time high of 1,218 billion barrels. Large inventories have the consequence that the immediate influence on the markets and prices decreases due to production cuts.
On April 12, after a tough negotiating poker match between Saudi Arabia and Russia, OPEC Plus agreed to cut its oil production by a total of 9.7 million bpd. The quotas were set so that all participating countries should reduce their production by 23 percent. Initially, a reduction of ten million bpd was aimed for, but failed because of the swerve from Mexico.
The measures adopted at the time were to enter into force on May 1 and be continued until the end of June. From July to December, the restriction should only be eight and in the following 16 months to the end of April 2022 six million bpd. On June 6, however, the responsible ministers of OPEC Plus agreed in a video conference to extend the first phase until the end of July.
The number now reported in the media of reducing the production cut to 7.7 million bpd does not appear in the communique of the recent meeting. There is only talk of entering the second phase of the plan agreed in April, which had planned a reduction of eight million bpd by the end of December. How far and how long this second phase will actually be adhered to, should be decided based on the development of demand, as stated in the communique. A review could take place on August 17th and 18th the next time the Joint Ministerial Monitoring Committee meets.
The July 15 video conference final statement emphasized that almost all participating countries followed the April agreement, which was not always the case in the past. Some countries that, for various reasons, did not quite achieve the “target” of the cuts, have committed to reducing accordingly in the second phase. As a result, the actual production cut by OPEC Plus could amount to 8.1 to 8.3 million bpd, rather than 7.7, as the Saudi Minister of Energy announced.