Archives for February 2020

The Bombay Stock Exchange’s Sensex index shed more than 1,100 points in the early hours of trading on Friday, falling by some 2.8 percent, while the Nifty – a benchmark of the National Stock Exchange – took a hit of more than 2.9 percent and dropped by some 340 points. The sharp decline is days in the making, with selloffs across multiple sectors driving markets lower for the sixth day in a row. The banking, automotive, petrol and metals industries have been the most severely affected.

Also on rt.com BIGGEST DROP IN HISTORY: Dow plummets by record 1,190 points as coronavirus panic week drags on

Though India’s three confirmed coronavirus patients have since recovered, recent COVID-19 flare-ups across Asia and parts of Europe have shocked markets around the world, sending indices from Japan to the US into a downward spiral and wiping out all gains made in 2020 on the SP 500, as well as the Dow Jones Industrial Average.

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The Dow Jones Industrial Average had the worst single-day drop on Thursday and has been pushed into a correction for the first time since November 2008, meaning it dropped by more than 10 percent from a recent high. 

Technology and airline stocks have been hit the hardest. Microsoft lost 2.8 percent after warning investors the disease will affect revenue.

American and Delta airlines dropped by 8.5 and 4.5 percent, respectively, thanks to delayed travel plans from consumers, as well as reducing flights overseas to nations hardest hit by the virus.

Also on rt.com Trump appoints VP Pence to lead coronavirus response, says US ‘totally prepared’

Other companies like Budweiser maker InBev and cloud-computing company Nutanix had also released financial warnings to investors about potential revenue losses due to the virus. 

The Dow is on track for its worst week since the financial crisis, down nearly 1,000 points already today in morning trading, following major declines earlier this week.

— Brian Klaas (@brianklaas) February 27, 2020

The Dow Jones down another 600+ points. The markets are not comfortable with Trump’s response either.

— Amy Siskind 🏳️‍🌈 (@Amy_Siskind) February 27, 2020

The latest hit on the Dow Jones follows President Trump announcing late Thursday he is stepping up US efforts to respond to the disease after another US patient was discovered in California, someone who has not traveled abroad recently, a common factor among patients.

Also on rt.com Dow crashes down more than 800 points, or 1,800 this week, amid coronavirus panic

The president previously blamed several mainstream media outlets and Democrats for trying to make the disease look “as bad as possible” to panic markets. Despite this, the president insisted on Thursday that the US is in “great shape.”

The coronavirus has affected 82,000 people worldwide.

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Article source: https://www.rt.com/business/481835-dow-plummets-coronavirus-fears/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The Dow Jones industrial average has been pushed into a correction for the first time since November 2008, meaning it dropped by more than 10 percent from a recent high. 

Technology and airline stocks have been hit the hardest. Microsoft lost 2.8 percent after warning investors the disease will affect revenue.

American and Delta airlines dropped by 8.5 and 4.5 percent, respectively, thanks to delayed travel plans from consumers, as well as reducing flights overseas to nations hardest hit by the virus.

Also on rt.com Trump appoints VP Pence to lead coronavirus response, says US ‘totally prepared’

Other companies like Budweiser maker InBev and cloud-computing company Nutanix had also released financial warnings to investors about potential revenue losses due to the virus. 

The Dow is on track for its worst week since the financial crisis, down nearly 1,000 points already today in morning trading, following major declines earlier this week.

— Brian Klaas (@brianklaas) February 27, 2020

The Dow Jones down another 600+ points. The markets are not comfortable with Trump’s response either.

— Amy Siskind 🏳️‍🌈 (@Amy_Siskind) February 27, 2020

The latest hit on the Dow Jones follows President Trump announcing late Thursday he is stepping up US efforts to respond to the disease after another US patient was discovered in California, someone who has not traveled abroad recently, a common factor among patients.

Also on rt.com Dow crashes down more than 800 points, or 1,800 this week, amid coronavirus panic

The president previously blamed several mainstream media outlets and Democrats for trying to make the disease look “as bad as possible” to panic markets. Despite this, the president insisted on Thursday that the US is in “great shape.”

The coronavirus has affected 82,000 people worldwide.

If you like this story, share it with a friend!

Article source: https://www.rt.com/business/481835-dow-plummets-coronavirus-fears/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

A fall in prices for the Russian Urals oil, combined with US sanctions against Venezuela and Iran, were among the reasons for such an increase in purchases.

According to the data cited by business news outlet RBC, in October Russia became the second-largest supplier of oil and petroleum products to the United States. At the end of 2019, crude oil exports from Russia amounted to almost $2.2 billion, 2.4 times more than in 2018. In physical terms, the volume of oil exports from Russia to the US surged from 1.8 million to 4.7 million tons.

Also on rt.com One of the world’s largest oil companies just ditched the dollar

Deliveries of Russian crude to the United Kingdom have more than doubled, both in value terms (from $493 million to $1.2 billion) and in physical terms (from 0.98 million tons to 2.4 million tons).

The fact that the US and Britain started buying more Russian crude is not politically motivated, says Andrei Polishchuk, an analyst at Raiffeisenbank. This is “simple economics,” he told RBC, explaining that countries choose from whom to buy solely from the point of view of profit.

“Oil is sold by traders; there are very few direct contracts. Therefore, first of all, the price is the major factor. If it is more attractive than from other sellers, then buyers prefer Russian oil,” he said.

Also on rt.com Russia vows to defend its Venezuelan oil assets

Polishchuk noted that sanctions against Venezuela were one of the reasons that the United States began to search for additional volumes of oil, “and Russian oil turned out to be more attractive” under those conditions.

The total volume of Russian crude oil exports, according to the FCS, amounted to $121 billion in 2019. The largest buyers were China, the Netherlands and Germany.

The United States accounted for 1.8 percent of Russian oil sales last year, the United Kingdom for 0.9 percent, and Turkey for three percent.

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Article source: https://www.rt.com/business/481807-us-uk-russian-oil-purchases/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Lupton told CNBC he is projecting negative four percent growth for the first quarter, when the coronavirus outbreak brought much of China’s economy to a halt.

“It’s not just looking at things still depressed. It’s looking at where the bottom is and are we starting to march our way upward?” he said.

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Lupton added that 15 percent quarter-on-quarter annualized growth could still be possible. “If you get a rebound that’s happening, even if you’re still down 30 percent, if you were down 50 percent, that’s a 20 percentage point move that actually starts to impact growth not just in the second quarter but even in the late first quarter.”

According to the economist, there will be increased fiscal stimulus from China’s central bank, which will aid the country’s ability to recover economically.

Also on rt.com Coronavirus pandemic could wipe $1.1 TRILLION off global economy — Oxford Economics

The International Monetary Fund has cut its growth outlook for China’s economy by 0.4 percentage points to 5.6 percent, saying that announced policies are being implemented and China’s economy will return to normal in the second quarter.

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Article source: https://www.rt.com/business/481801-china-economy-recovery-jpmorgan/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The oil market faces a steep supply surplus in the near-term due to the coronavirus and the prospect of demand destruction and economic deceleration. But the US shale industry likely won’t rebound from its current slump, at least not to the explosive growth rates of recent years, keeping supply in check.

“Shale production economics in the US continue to point to a Brent price floor around $50/bbl or a WTI price floor of $45/bbl,” Bank of America Merrill Lynch wrote in its report. In other words, shale drillers cannot make money below $50 per barrel.

Also on rt.com Shale decline inevitable as oil prices crash

By the same token, shale will grow with WTI $65 per barrel or higher, the bank said.

But others have warned that this isn’t just a cyclical downturn – the shale industry’s blistering growth rate may be over. Schlumberger’s CEO Olivier Le Peuch sees US shale growth slowing to between 600,000 and 700,000 bpd this year before falling to 200,000 bpd in 2021. Beyond that, it could plateau and not return to growth, Le Peuch told Reuters. “Shale production growth will go to a new normal…unless technology helps us crack the code,” he said.

Given that the industry is roughly $150 billion in hole over the past decade, the elusive promise of some future technology to “crack the code,” seems speculative. Shale’s best days may be in the past.

Also on rt.com Goldman: China coronavirus could push oil down by $3

The latest EIA data shows production set to decline in March in all major basins aside from the Permian, with the Anadarko basin in Oklahoma, for example, expected to lose 10,000 bpd. The Anadarko basin is expected to lose 16,000 bpd in February.

Meanwhile, pressure on global finance to back away from fossil fuels is likely to only grow. “[E]nvironmental risks will start to impact energy asset values in a meaningful way, further reducing investment and setting the stage for increased oil price uncertainty in the years ahead,” Bank of America said. Big banks have already announced a slew of new financing restrictions on oil sands, Arctic oil, and coal. A new campaign by environmentalists called Stop the Money Pipeline aims to ratchet up the pressure on banks, insurance companies, institutional investors and asset managers to shut off the financial spigot to oil and gas drillers. It’s still early days on this front.

Is the shale boom running on fumes?

For shale companies built on a mountain of debt, slower production and negative cash flow will push a lot of drillers under water and unable to avoid bankruptcy. Already, there have been more than 200 bankruptcies in the North American oil and gas sector since 2015, according to Haynes and Boone. More are inevitable.

So, slowing US shale could keep global supply growth in check. But peak demand also looms. In its report, Bank of America Merrill Lynch says that demand will peak by 2030. By that year, roughly 35 percent of global auto sales will be electric, the bank says, up from 5 percent today. By 2050, EVs will capture virtually 100 percent of the market. “In other words, a switch to electric vehicles starting in the early 2020s would be strong enough to cause demand to peak within a decade,” Bank of America said.

The bank said that global demand growth could slow from 1.35 million barrels per day (mb/d) in 2021 to just 0.59 mb/d in 2025.

Ultimately, then, that means that both supply growth and demand growth are slowing, which is a bad equation for a sector that needs to continually grow in order for a lot of the finances to make sense. The finances of shale EPs, as previously mentioned, are already a mess.

But OPEC, too, faces a conundrum. Bank of America assumes that the cartel continues to cede market share in order to prevent oil prices from falling. The group could cut deeper this year, and then be stuck at those production levels through the middle of the decade, the investment bank said.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/481798-bank-sees-low-oil-demand/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

According to a gauge measuring so-called animal spirits, activity has accelerated for a second straight month. Most of the eight high-frequency indicators tracked by Bloomberg News held their ground last month.

“Animal spirits” is a term coined by British economist John Maynard Keynes. It refers to investors’ confidence in taking action, and the gauge uses the three-month weighted average to smooth out volatility in the single-month readings.

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Signs that the economy has put the worst behind it allowed the central bank to ease its monetary policy. The government has widened budget deficit goals to spur economic growth, which is expected to be the weakest in more than a decade this year.

The Markit India Services PMI index climbed to 55.5 in January, which is the highest in seven years. That, together with an improved showing in the manufacturing purchasing managers’ survey, helped push the composite index higher to 56.3. A reading above 50 means expansion.

The country’s improvement in growth was accompanied by stronger inflationary pressures, according to the PMI surveys, with input costs rising by the most since February 2013, and output price inflation growing to a near two-year high.

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Meanwhile, exports dropped 1.7 percent in January from a year ago, mainly due to falling shipments of gems and jewelry, along with engineering goods. Consumer sentiment worsened to an almost five-year low, and industrial production contracted 0.3 percent in December from a year ago, led by weak manufacturing activity in the automobile sector. At the same time, other components on the production side, which are mining and electricity, grew at a healthy clip.

The index of eight core infrastructure industries has also showed positive signs, with activity rebounding in December after four months of contraction.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/481789-india-economy-recovery-2020/?utm_source=rss&utm_medium=rss&utm_campaign=RSS