The International Energy Agency on Thursday lowered its demand forecast for the second half of this year and the first quarter of next year, and pointed out that in Europe and the United States, the recovery of the coronavirus will put pressure on fuel consumption.
The Paris-based organization said: “It will not be until next year that the demand for vaccines will increase substantially.”
Early results show that the Covid-19 vaccine developed by Pfizer and BioNTech is more than 90% effective, pushing the global benchmark Brent crude oil futures to break through $45 per barrel early this week, the highest level in more than two months. Traders are betting that the vaccine will encourage people to return and travel, thereby increasing the demand for fuel.
Bjornar Tonhaugen, head of oil markets at Rystad Energy, said in a recent report to customers: “The problem is that demand growth will not happen just because of the positive news of the vaccine trial results.”
Producers agree: OPEC said on Wednesday that weaker-than-expected demand from the US transportation industry and the European blockade will drag down crude oil demand this year and next.
The Group of Petroleum Producing Countries stated in its monthly report: “The recovery of oil demand will be severely hampered, and the weakness in transportation and industrial fuel demand is now expected to continue until mid-2021.”
Price outlook: As there are signs that OPEC member countries can extend the current production cuts by about three to six months, thereby alleviating the challenge of oversupply, prices may continue to rise. However, the situation in Europe and the United States is a major issue.
JPMorgan Chase strategists told clients last week: “Like all commodities, oil is a spot asset. The current imbalance between supply and demand must be eliminated before long-term price increases.” “With the acceleration of the European blockade and the US The expansion of local outbreaks may further test the oil balance in the coming months.”
According to JPMorgan, these two regions account for one-third of global oil demand.
The big picture: The complex environment surrounding oil prices highlights the calculations that are difficult for investors right now. Given the good news about vaccines, in the long run, those people may start to repurchase risky assets and feel comfortable. But in the short term, there is still a lot of pressure.
The messy Trump-Biden transition is bad for the economy
My CNN business colleagues Matt Egan and Chris Isidore report that Trump can help millions of Americans by securing a major economic stimulus plan to prevent the wave of layoffs and bankruptcy before Biden takes office. However, because Trump disputed the election results, pandemic aid is relegating to a secondary position.
Eric Winogler, an economist at the Bernstein Union, said: “People generally think that stimulus measures are needed.” “But if people don’t cooperate on the basis, it’s difficult to see how they cooperate in stimulus. “
There are precedents for political opponents to cooperate in a crisis.
In December 2008, Republican President Bush approved a $17.4 billion rescue of General Motors and Chrysler because he did not want the auto industry to collapse before Barack Obama was sworn in.
Bush said at the time: “I feel that my successor has an obligation.” “I believe that a good policy does not bring him a major disaster on his first day in office.”
But economists do not expect a repeat.
Winograd said: “2008 is a good example of how this should work.” “Obviously, this is not the model we are going to follow this time.”
After the pandemic, should a work-at-home tax be imposed?
Working from home can be stressful. However, there are also benefits from the savings in transportation costs, convenience and flexibility-Deutsche Bank’s research team believes that after the pandemic, those who choose to stay at home should start paying dues.
“Suddenly turned [work from home] Thematic research analyst Luke Templeman said in a new report that this means that, for the first time in history, a large proportion of people are out of touch with the face-to-face world, but they still live A full economic life. Workers in remote areas contribute less to the economic infrastructure while still reaping economic benefits. “
A survey by Deutsche Bank found that after the Covid-19 crisis, more than half of people who tried to work from home wanted to continue working for two to three days a week forever. Templeman believes that this will hit the overall economy designed to support individual work.
Answer: To solve this problem, Templeman proposes to levy a work-at-home tax at 5% of salary. If the employer does not provide a permanent desk, the employer will pay; if the employee chooses to spend part of the week at home, the employee will pay on a daily basis. This is roughly equivalent to their expenditure on commuting and lunch expenses.
Templeman said: “At this tax rate… their lives will not be worse than they choose to enter the office.” He added that the government can spend the money on subsidies for low-wage workers who cannot work remotely. Jin Shang.
Wait, really? Such a proposal is undoubtedly controversial. But as the nature of work changes, discussions about the consequences (and costs) of change will only become more common.
Today is also today: U.S. inflation data at 8:30 am Eastern Time in October and the number of initial unemployment benefits last week. It is estimated that 735,000 will apply for benefits for the first time.
Tomorrow is coming: DraftKings, which went public during a difficult time in sports betting, reported earnings.