China reported earlier today that there was a decrease in the daily number of deaths from coronavirus. While this is certainly good news, there is no way of knowing whether the trend will continue. Many markets have been affected, and the oil market continues to suffer from it.
Oil Prices Slip
At 2:00 pm, oil is showing a slight dip on the markets. Brent crude is down by 0.22 points or 0.38% – now at $57.45 per barrel, and WTI crude is down by 0.29 points or 0.56%, for a value of $51.76 per barrel.
One of the reasons why oil is down is because there is a lack of demand for oil in China. Many parts of the country are still under lockdown but some areas are loosening their grip. Transportation is almost completely stopped. About 760 million people are affected by the quarantine, and employees who left the cities are being quarantined for 14 days when they return.
The International Energy Agency (IEA) announced this past week that they expect the oil demand in the first quarter to be down by as much as 435,000 barrels per day. OPEC and OPEC+ are either considering further cuts or have already planned to do so.
In the United States, there is still an abundance of oil and the low prices at the pump encourage people to travel more to use it up. Some analysts are predicting that gas prices may rise in the next couple of weeks due to lower production levels. Nationwide, the average price of gasoline is $2.43 per gallon.
Libya continues to have a blockade at its ports. General Haftar currently controls the ports and has put a blockade in place. Oil is currently reduced to about 200,000 barrels per day, but most of its storage tanks are already full. If the blockade is not lifted, Libya will suffer financially because oil production may be reduced to zero.
Russian Oil Firm Blacklisted
The Russian oil company – Rosneft Trading SA, has been blacklisted because it is enabling President Maduro of Venezuela to get around U.S. sanctions. The sanctions were put in place against the President because it accuses him of leading a brutal regime. Oil is almost the only export Venezuela has and the country is suffering economically from the sanctions.
Apple to Fall Short
Apple has announced that it is not expected to be able to meet the demand for its new iPhone this quarter. Some of the iPhone manufacturers in China are open but are operating with far fewer than normal employees.
Samsung may be able to get a lead on Apple this quarter because its factories are in Vietnam. Its factories continue to operate unaffected by coronavirus, which means its sales could easily surpass Apple’s this quarter.
China’s Market Already Recovering
In spite of coronavirus, the Chinese stock market is showing signs of recovery. Already some of its losses earlier this year have been recouped.
News has come out that a new fund in China has surpassed expectations by 20 times. The fund just opened and there was a goal to reach 6 billion yuan; instead, it sold as much as 120 billion yuan – equivalent to about $17.14 billion. The response was so great that the campaign was stopped.
China has been treating coronavirus patients with blood plasma from people who have recovered. The WHO is commending this process to help people recover from the virus, but it is still being tested and the results are still unsure as to its effectiveness. Hopefully, it will work and help many who are suffering from it.