Glacier FarmMedia COVID-19 & the Farm

Global Markets: COVID-19’s effects on crude oil, airlines

By MarketsFarm

WINNIPEG, March 4 (MarketsFarm) – The following is a glance at the news moving markets in Canada and globally.

– The Organization of Petroleum Exporting Countries (OPEC), Russia and their oil-producing allies, known together as OPEC+, are again considering deeper crude oil production cuts as global demand has sagged due to the COVID-19 coronavirus outbreak. China, the world’s largest crude importer, reportedly slashed its intake by 900,000 barrels per day (BPD), according to the CBC. That has played a significant role in pushing down crude oil prices by 20 per cent so far this year. The international oil cartel already deepened it cuts to 2.1 million BPD at the beginning of 2020 due a global oil glut. As of Wednesday, the latest proposed cuts could increase that to 2.7 million BPD or more.

– Faced with nearly 350,000 flights to and from China cancelled from Jan. 24 to Feb. 27, the Chinese government is offering financial support to airlines, according to Reuters. The move is to reinvigorate the country’s sagging airline industry, which has suffered severely from the COVID-19 outbreak. The Civil Aviation Administration of China said on Wednesday it will pay national and foreign airlines between a quarter to three-quarters of a cent per kilometer, depending how many carriers fly to a given Chinese destination. The payments will apply to flights between Jan. 23 to June 30.

– In the aftermath of ‘Super Tuesday’ in the United States, the Democratic Party primaries became a race between former Vice-President Joe Biden, a moderate, and Vermont Senator Bernie Sanders, the self-proclaimed democratic socialist. Biden’s once floundering campaign roared to life in scoring several victories among the 14 states choosing a Democratic nominee for president. Biden won nine states while Sanders took three. The largest prize, California, has Sanders in the lead with results yet to be finalized. Maine as well had yet to determine a winner. Massachusetts Sen. Elizabeth Warren, former New York City Mayor Michael Bloomberg and Hawaii Rep. Tulsi Gabbard finished well back of Biden and Sanders.

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