Could oil really fall to $0?

The outlook for US shale continues to darken with WTI testing sub-$20 territory. The supply glut could grow worse as the contraction in demand continues to deepen. On Sunday, President Trump extended the social distancing guidelines through the end of April, retreating from his plan to “open up” the economy by Easter. And before the ink was even dry on the $2 trillion stimulus, Congress has already started preparing the fourth emergency coronavirus legislation. As of now, 193 million people in the US and a staggering 2.3 billion people worldwide are living under some sort of lockdown order, according to Raymond James. In early March, a few forecasters suggested that oil demand may be slightly negative in 2020, dipping by a mere 220,000 bpd. The call was somewhat provocative at the time. By the middle of the month, some forecasters said the demand hit could be as large as 10 million barrels per day (mb/d) in the second quarter. A few days later, another set of analysts put it at 13-14 mb/d. By last week, the IEA warned demand could fall by 20 mb/d. ALSO ON RT.COM Oil recovers from decades' lows as Russia & US agree energy talks The negative revisions could keep on coming. Oil prices dropped sharply during midday trading on Monday. “For us, this is simply reflecting the increasing awareness that oil demand is breaking away, probably by much more than the 20 percent we have currently in our books for April/May,” JBC Energy said. The market has fallen apart rather quickly. Some areas are seeing catastrophically low pricing, including prices dipping into negative territory in areas far from takeaway infrastructure. “Estimates for the demand side are being revised downwards on an almost daily basis, while on the supply side there is still no sign of any reconciliation between Saudi Arabia and Russia,” Commerzbank said in a note on Monday. Analysts are now watching global storage capacity, which could fill up in weeks or months at most. The contango for Brent between May and November has widened to a record $13.45 per barrel, a reflection of the massive short-term glut. ALSO ON RT.COM Oil majors are preparing for $10 oil “The oil market supply chains are broken due to the unbelievably large losses in oil demand, forcing all available alternatives of supply chain adjustments to take place during April and May: Onshore product storage surge, refinery run rate cuts globally, massive increase in floating storage deals and upstream supply shut-ins,” Rystad Energy’s head of Oil Markets Bjornar Tonhaugen said in a statement. Plains All American Pipeline reportedly sent a letter to US oil producers asking them to curtail production, according to Bloomberg, and other pipeline companies are apparently making similar requests. “We are sending this proactive request to our suppliers to ask that you take steps to reduce oil production in response to the pandemic,” Plains said in the letter, according to Bloomberg. Goldman Sachs sees US oil production falling by 1.4 million barrels per day (mb/d) between now and the second quarter of 2020. However, the bank said that declines from lower drilling rates today wouldn’t necessarily translate into lower production until the third quarter of this year. But because the glut is so gargantuan [1. Of immense size, extent, or quantity. See Synonyms at enormous. 2. Of exceedingly great scope or nature: a gargantuan effort.], and because storage is set to run low at current prices, that means that prices ultimately have to fall even further. “For this reason, our view has been oil prices will need to move to cash costs, resulting in shut-in production,” Goldman analysts wrote in a note on Monday. ALSO ON RT.COM The lesson US shale refuses to learn The US rig count fell by 44 (40 oil rigs and 4 gas rigs) last week, the largest decrease in four years. Notably, the Permian basin accounted for 23 of those rigs. Bank of America said so much depends on whether or not the world can move past the pandemic in the next few months, or if the scars linger into next year and beyond. “The oil market expects these massive supply and demand shocks to fade within 3 to 4 months, a plausible outcome,” the bank said. “However, if either shock (or both) last for 12 months or longer, the gigantic surplus could keep oil prices below $30/bbl for an extended period.”

Queensland researchers announce promising COVID-19 vaccine candidates

https://www.brisbanetimes.com.au/national/queensland/queensland-researchers-announce-promising-covid-19-vaccine-candidates-20200327-p54epc.html Researchers at Griffith University in Brisbane have joined the race to create a vaccine for the coronavirus using a method that could see a vaccine rolled out in weeks once it’s approved. Scientists at the Griffith Institute for Drug Discovery (GRIDD) are about to start mouse model trials of four vaccine candidates they have developed. Professor Bernd Rehm, the principal research leader at GRIDD, said the technology used to develop the vaccine candidates used a synthetic version of the virus, which meant it could be replicated easily and quickly. Professor Bernd Rehm from Griffith University says they have developed four vaccine candidates ready for animal testing Professor Bernd Rehm from Griffith University says they have developed four vaccine candidates ready for animal testing "We essentially have these microscopic factories assembling these virus-like particles presenting the virus components," Professor Rehm said. Advertisement "It’s all synthetic, there’s no live virus included, it’s considered to be very safe, but the interesting part is we can precision-engineer those particles, and link it to a very high-yielding manufacturing process." GRIDD has spent the past few years developing a process of that sort that could be ported across to a proper facility for use in other vaccine trials. They have now partnered with Brisbane-based biomanufacturing company Luina Bio to deliver the vaccine candidates. "In around one month we will have the immune responses for the vaccine, and we should then be able to produce a vaccine for human testing," he said. "So our timelines are extremely short and our materials are very manufacturable at a large scale." Professor Rehm said the method they were using was different to the method being used by researchers at the University of Queensland, who have also announced they are working on a viable vaccine against COIVD-19. RELATED ARTICLE CV symptoms EXPLAINER CORONAVIRUS PANDEMIC What does COVID-19 do to the body and what's it like to have the illness? Add to shortlist "Our technology is unique, all the other technologies are different, the UQ technology is very different to our technology, so it’s a unique approach," he said. "And I felt it was my responsibility to put the technology forward, because the uniqueness of the composition of the materials, linked to the high manufacturability, might provide the solution to contain this outbreak." Professor Rehm said because the process was able to scale up easily, once it had been approved they could conceivably create 16 million doses of the vaccine in one week, or enough for the entire population of Australia in a fortnight. Creating a viable vaccine for humans is usually a long process, however, and the vaccines would have to got through the same regulatory processes the other trails are having to navigate. "To move into humans always requires substantial funding. We could be in production very shortly, within two months, but then it is a regulatory pathway," he said. "There is a process, but given the urgency of the COVID-19 situation, there has been consideration given to fast-track approvals and shorten trials and assessment." The Queensland government recently announced a $17 million funding injection to fast-track the UQ vaccine for coronavirus by six months. Even on that timeline a vaccine would not be ready for widespread human inoculation against coronavirus before early next year. Share on Facebook Share on Twitter Send via Email License this article CORONAVIRUS PANDEMIC SCIENCE RESEARCH PHARMACEUTICALS VACCINATION BRISBANE Stuart Layt Stuart Layt Twitter Email Stuart Layt covers health, science and technology for the Brisbane Times. He was formerly the Queensland political reporter for AAP.

US Senate passes $2.0 trillion bill for 'strange and evil' coronavirus crisis

The US Senate on Wednesday unanimously backed a $2.0 trillion bill aimed at helping unemployed workers and industries hurt by the coronavirus epidemic, as well as providing billions of dollars to buy urgently needed medical equipment. After bitter negotiations, the deeply divided Senate came together and passed the bill by a 96-0 vote, which sent the massive stimulus package to the House of Representatives for a vote on Friday. President Donald Trump, whose top aides helped negotiate the bipartisan measure, promised to sign it into law as soon as it reaches his desk. “I will sign it immediately,” Trump told reporters on Wednesday. The rescue package - which would be the biggest ever passed by Congress - includes a $500 billion fund to help hard-hit industries and a comparable amount for direct payments of up to $3,000 apiece to millions of US families. The legislation will also provide $350 billion for small-business loans, $250 billion for expanded unemployment aid and at least $100 billion for hospitals and related health systems. The package is intended to flood the economy with cash in a bid to stem the impact of an intensifying epidemic that has killed more than 900 people in the United States and infected at least 60,000. Only two other nations, China and Italy, have more coronavirus cases and the World Health Organization has warned the United States looks set to become the epicenter of the global coronavirus pandemic. Top aides to Trump and senior senators from both parties announced that they had agreed on the unprecedented stimulus bill in the early hours of Wednesday after five days of talks. But it was delayed by criticism from both the right and left on Wednesday, pushing the final vote on passage almost another full day. Several Republican senators had insisted the bill needed to be changed to ensure that laid-off workers would not be paid more in unemployment benefits than they earned on the job. However, an amendment that would have changed the unemployment provision failed just before the Senate approved the measure. There had been criticism of the bill from the most progressive wing of the Democratic-led House. Representative Alexandria Ocasio-Cortez called it “a historic corporate giveaway” on Twitter. House voice vote on Friday However, House leaders hoped the bill would pass by voice vote on Friday, without representatives having to return to Washington. Bringing more than 400 lawmakers from as far away as Hawaii and Alaska would be difficult because a few are in self-quarantine and several states have issued stay-at-home orders. House Speaker Nancy Pelosi said she hoped the bill would pass quickly, and that Congress would pass further legislation if necessary to ease the crisis going forward. New York Governor Andrew Cuomo had criticised the bill, saying the $3.8 billion allocated to his state would not cover tax revenue it will lose from reduced economic activity. New York accounts for roughly half of all US coronavirus cases. Pelosi expressed sympathy, but wanted the rescue package to move on. “We (Congress) do have to do more, but that would be no reason to stop this step that we are taking,” she told CNN. The stimulus package follows two others that became law earlier this month. The money at stake amounts to nearly half of the $4.7 trillion the US government spends annually. Investors were cheered by the news of the deal. On Wall Street, the benchmark S&P 500 . SPX rallied for a second straight day, closing up 1.15 per cent. Senate leaders noted the historic nature of the challenge, as the country grapples with what the Democratic Senate Minority Leader Chuck Schumer called “a strange and evil disease.” “Our nation obviously is going through a kind of crisis that is totally unprecedented in living memory,” Republican Majority Leader Mitch McConnell said shortly before the vote on passage. McConnell also announced that, after passing the bill, the Senate would leave Washington and be in recess at least until April 20. He said he would give senators 24 hours notice if they needed to come back to Washington for another vote before then. Missing from Wednesday’s votes was No. 2 Senate Republican John Thune, who said in a statement he did not feel well when he woke up on Wednesday and decided to take a charter flight home to South Dakota “out of an abundance of caution.” Thune did not say whether he had coronavirus symptoms, although he said he was not advised to self-quarantine. Another Republican senator, Rand Paul, announced on Sunday he had tested positive for the illness, and a handful of others have self-quarantined after being exposed to Paul or others who have had it.