Meanwhile, Royal Dutch Shell prepares for a new energy industry landscape: File Image/PixaBay
Friday trading saw another huge price surge for crude on the strength of Russia president Vladimir Putin reportedly saying the former Soviet Union wants to see global production cutbacks of at least 10 million barrels per day (bpd) to offset cratering demand caused by coronavirus inspired economic shutdowns.
Russia in March rejected additional cuts proposed by the Organization of the Petroleum Exporting Countries (OPEC).
West Texas Intermediate crude jumped11.93 percent to settle at $28.34 per barrel, while Brent crude rose 13.9 percent to settle at $34.11 per barrel.
The market will deliver cuts, and they will be deeper than any OPEC+ agreements
Paul Sankey, managing director, Mizuho
Paul Sankey, managing director at Mizuho, downplayed the move from government to reduce production by saying, “In our view there is no OPEC+ choice involved, the rhetoric is window-dressing, the market will deliver cuts, and they will be deeper than any OPEC+ agreements.”
Still, Fatih Birol, executive director of the International Energy Agency, reiterated the position of most experts when he told media on Friday that measures to contain the spread of the coronavirus had lead to an “unprecedented” demand loss that could reach as much as a quarter of global consumption.
He added that a meeting of OPEC on Monday to discuss cutting output “can well be a good start, but even the numbers people are talking about may not be enough to find a solution to the problem.”
Friday’s news also saw Royal Dutch Shell preparing for the possibility of a radically different energy industry in the foreseeable future by retraining its workers in artificial intelligence – although the petroleum giant pointed out that the training was underway long before the advent of the coronavirus.
Meanwhile in the race to develop coronavirus treatments and vaccines, there is bureaucratic resistance against the rolling out of strategies that doctors who have treated patients or undertaken trials insist are groundbreaking.
The latest example is University of Pittsburgh School of Medicine scientists who have developed a candidate vaccine against SARS-CoV-2, the virus that causes COVID-19; the university stated that it is possible to produce clinical-grade vaccines “for human testing and subsequent global distribution in time to significantly impact the spread of disease.”
However, a former FDA official told media that “The 12-18 month estimate for a widely available vaccine is ‘happy talk’ from developers and politicians and amplified by the media.”
And while in Europe treatments with drugs such as chloroquine/hydroxychloroquine are being widely used and said to achieve dramatic outcomes, governments closer to home will not commit to their use without lengthy testing, case in point: Canada‘s BC Ministry of Health on March 30 stated that “no treatment will be employed unless part of a randomized controlled trial,” although it acknowledges some of the positive findings in other countries.
Aware that the ‘equal pain for everyone’ approach to slowing the spread of the coronavirus has caused an unprecedented global economic meltdown, the business community and institutions are now gearing up to propose recoveries, and the Harvard Business Review in its blueprint proposed that reopening the economy should begin when a region is “over the peak of the current [coronavirus] wave.”