This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.nytimes.com/2020/02/04/us/oil-coronavirus.html

The article has changed 45 times. There is an RSS feed of changes available.

Version 29 Version 30
Coronavirus Adds to Pressure for U.S. Oil Industry Coronavirus Adds to Pressure for U.S. Oil Industry
(7 days later)
HOUSTON — At a time when they are already cutting jobs and weighed down by debt, American oil producers are bracing for the latest shock to hit world energy markets: the economic effects of the coronavirus outbreak on China and beyond.HOUSTON — At a time when they are already cutting jobs and weighed down by debt, American oil producers are bracing for the latest shock to hit world energy markets: the economic effects of the coronavirus outbreak on China and beyond.
Oil and natural gas producers have been suffering from low commodity prices for the past year and now expect a sharp drop in global prices for their products. As a result, they are preparing to slash investments in exploration and production. The price of West Texas intermediate crude, a key benchmark, fell below $50 on Monday, a 20 percent decline in less than a month.Oil and natural gas producers have been suffering from low commodity prices for the past year and now expect a sharp drop in global prices for their products. As a result, they are preparing to slash investments in exploration and production. The price of West Texas intermediate crude, a key benchmark, fell below $50 on Monday, a 20 percent decline in less than a month.
After recovering slightly Tuesday morning, the price fell further, ending the day at $49.61, its lowest level in more than a year.After recovering slightly Tuesday morning, the price fell further, ending the day at $49.61, its lowest level in more than a year.
China buys only about 200,000 barrels a day of oil and refined transportation fuels from the United States, out of 8.5 million barrels of total daily American exports. But oil is a global commodity, and benchmark prices are set on world markets, not domestically. Lower prices mean lower profits.China buys only about 200,000 barrels a day of oil and refined transportation fuels from the United States, out of 8.5 million barrels of total daily American exports. But oil is a global commodity, and benchmark prices are set on world markets, not domestically. Lower prices mean lower profits.
“It’s a blow,” said Steven Pruett, chief executive of Elevation Resources, a Texas oil company, “especially when you add this to the fact that we’re getting almost nothing for our natural gas, and oil prices are sliding from $55 a barrel to $50. Credit availability is already tight, and it’s going to get that much tighter.”“It’s a blow,” said Steven Pruett, chief executive of Elevation Resources, a Texas oil company, “especially when you add this to the fact that we’re getting almost nothing for our natural gas, and oil prices are sliding from $55 a barrel to $50. Credit availability is already tight, and it’s going to get that much tighter.”
Those concerns reflect the growing influence that China exerts on international energy markets.Those concerns reflect the growing influence that China exerts on international energy markets.
Just a few weeks after the outbreak of the virus, daily Chinese oil demand is already down 20 percent because of dwindling air travel, road transportation and manufacturing. Since China consumes 13 of every 100 barrels of oil the world produces, every oil company is being hit to some extent.Just a few weeks after the outbreak of the virus, daily Chinese oil demand is already down 20 percent because of dwindling air travel, road transportation and manufacturing. Since China consumes 13 of every 100 barrels of oil the world produces, every oil company is being hit to some extent.
More than 50 million people are affected by a travel lockdown in Hubei Province, the center of the outbreak, slowing gasoline consumption, while international airlines are rapidly scaling back flights, leaving a glut of jet fuel and diesel on global markets at a time when petroleum supplies were already abundant and prices depressed.More than 50 million people are affected by a travel lockdown in Hubei Province, the center of the outbreak, slowing gasoline consumption, while international airlines are rapidly scaling back flights, leaving a glut of jet fuel and diesel on global markets at a time when petroleum supplies were already abundant and prices depressed.
For producers in places like Iraq and Saudi Arabia, that kind of price drop can mean a 10 percent loss in profits. But in the United States, where the break-even price for the average oil well drilled in shale fields is far higher at roughly $45 a barrel, some producers could lose as much as 60 percent of their profits, according to Michael Lynch, president of Strategic Energy and Economic Research.For producers in places like Iraq and Saudi Arabia, that kind of price drop can mean a 10 percent loss in profits. But in the United States, where the break-even price for the average oil well drilled in shale fields is far higher at roughly $45 a barrel, some producers could lose as much as 60 percent of their profits, according to Michael Lynch, president of Strategic Energy and Economic Research.
“The big question is whether the Saudis will put oil in storage and wait to ride this out; and if not, everyone is going to see less money coming in,” said Mr. Lynch, who has advised OPEC in the past. “For the big guys like Exxon Mobil and Chevron, it's not a big deal. But for the small guys, they are going to be hurting, and you could see the number of bankruptcies rise sharply in the next few weeks.”“The big question is whether the Saudis will put oil in storage and wait to ride this out; and if not, everyone is going to see less money coming in,” said Mr. Lynch, who has advised OPEC in the past. “For the big guys like Exxon Mobil and Chevron, it's not a big deal. But for the small guys, they are going to be hurting, and you could see the number of bankruptcies rise sharply in the next few weeks.”
Forty-two oil and gas companies filed for bankruptcy protection in North America last year; since oil prices plummeted in 2015, there have been 208 bankruptcy filings by producers, involving roughly $122 billion in aggregate debt, according to the Haynes and Boone law firm.Forty-two oil and gas companies filed for bankruptcy protection in North America last year; since oil prices plummeted in 2015, there have been 208 bankruptcy filings by producers, involving roughly $122 billion in aggregate debt, according to the Haynes and Boone law firm.
Oil prices have fallen despite the loss of up to one million barrels a day of Libyan exports because of political turmoil there. A hastily convened meeting of the Organization of the Petroleum Exporting Countries and Russia, a possible prelude to a production cut, helped to stem the price slide, perhaps only temporarily.Oil prices have fallen despite the loss of up to one million barrels a day of Libyan exports because of political turmoil there. A hastily convened meeting of the Organization of the Petroleum Exporting Countries and Russia, a possible prelude to a production cut, helped to stem the price slide, perhaps only temporarily.
American oil companies had already tightened their budgets last year, with roughly 14,000 of 750,000 employees in the United States losing their jobs. Over the last week, Exxon Mobil, ConocoPhillips and Chevron reported disappointing earnings because of low oil and gas prices and narrow profit margins.American oil companies had already tightened their budgets last year, with roughly 14,000 of 750,000 employees in the United States losing their jobs. Over the last week, Exxon Mobil, ConocoPhillips and Chevron reported disappointing earnings because of low oil and gas prices and narrow profit margins.
A prolonged price collapse between 2014 and 2017 forced American oil and gas companies to lay off over 160,000 workers, and roughly 100,000 in Texas alone.A prolonged price collapse between 2014 and 2017 forced American oil and gas companies to lay off over 160,000 workers, and roughly 100,000 in Texas alone.
S&P Global Platts, the energy analytics firm, said the virus could shave global oil demand by as much as 4 percent, or 4.1 million barrels a day, in February. For the full year, the firm projects an average daily fall in global demand of 290,000 to one million barrels.S&P Global Platts, the energy analytics firm, said the virus could shave global oil demand by as much as 4 percent, or 4.1 million barrels a day, in February. For the full year, the firm projects an average daily fall in global demand of 290,000 to one million barrels.
“There’s still too much uncertainty on the virus spread and its consequences on the economy,” said Claudio Galimberti, head of demand and refining analytics at S&P Global Platts.“There’s still too much uncertainty on the virus spread and its consequences on the economy,” said Claudio Galimberti, head of demand and refining analytics at S&P Global Platts.
Analysts point to the SARS epidemic of 2002-3 for clues. Asian jet fuel demand fell by 1 percent in 2003 from the year before, after climbing an average of 7 percent per year during the prior five years, according to Citigroup Global Markets research. Demand snapped back powerfully in 2004, and otherwise the impact on global oil markets was short-lived and modest.Analysts point to the SARS epidemic of 2002-3 for clues. Asian jet fuel demand fell by 1 percent in 2003 from the year before, after climbing an average of 7 percent per year during the prior five years, according to Citigroup Global Markets research. Demand snapped back powerfully in 2004, and otherwise the impact on global oil markets was short-lived and modest.
Updated June 24, 2020 Updated June 30, 2020
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles.Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles.
A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.
The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.
The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
But China has become a much more important engine to the world economy over the last 17 years, and medical researchers cannot be sure that the new virus will fade during warmer weather like the flu.But China has become a much more important engine to the world economy over the last 17 years, and medical researchers cannot be sure that the new virus will fade during warmer weather like the flu.
But while lower oil prices hurt producers, they benefit American drivers. The average national price of regular gasoline has dropped 12 cents per gallon over the last month, according to the AAA motor club. That is a break particularly for lower-income motorists, who tend to drive older vehicles that are less fuel-efficient and spend a higher percentage of their income on energy.But while lower oil prices hurt producers, they benefit American drivers. The average national price of regular gasoline has dropped 12 cents per gallon over the last month, according to the AAA motor club. That is a break particularly for lower-income motorists, who tend to drive older vehicles that are less fuel-efficient and spend a higher percentage of their income on energy.
Refiners can buy and store cheaper fuels for the summer, when demand will be higher. Producers are not so lucky.Refiners can buy and store cheaper fuels for the summer, when demand will be higher. Producers are not so lucky.
The Chinese virus is spreading as oil producers are preparing their 2020 exploration and production budgets, which they will announce over the next two months. When the year began, oil prices had stabilized between $60 and $65 a barrel after cuts in OPEC production targets. But with prices now roughly $10 lower, executives predict that the industry will have to adjust.The Chinese virus is spreading as oil producers are preparing their 2020 exploration and production budgets, which they will announce over the next two months. When the year began, oil prices had stabilized between $60 and $65 a barrel after cuts in OPEC production targets. But with prices now roughly $10 lower, executives predict that the industry will have to adjust.
“People are going to have to drop rigs and scale back production growth,” said Scott D. Sheffield, chief executive of Pioneer Natural Resources, a major Texas shale oil producer. “The question is, how fast can the Chinese stop the virus from spreading and start picking up oil demand.”“People are going to have to drop rigs and scale back production growth,” said Scott D. Sheffield, chief executive of Pioneer Natural Resources, a major Texas shale oil producer. “The question is, how fast can the Chinese stop the virus from spreading and start picking up oil demand.”
Mr. Sheffield predicted that if oil prices did not go up soon, domestic shale oil production, recently expected to increase by 500,000 to 700,000 barrels a day this year, instead would be flat.Mr. Sheffield predicted that if oil prices did not go up soon, domestic shale oil production, recently expected to increase by 500,000 to 700,000 barrels a day this year, instead would be flat.
Other countries will come under pressure, too. Most of the 10 million barrels a day that China imports come from Russia, Africa and Iran and other Persian Gulf nations, and producers in those regions have already been forced to sharply discount their shipments.Other countries will come under pressure, too. Most of the 10 million barrels a day that China imports come from Russia, Africa and Iran and other Persian Gulf nations, and producers in those regions have already been forced to sharply discount their shipments.
“You have to be concerned when you see demand is going down and economies are faltering,” said J. Nelson Wood, chief executive of Wood Energy, an Illinois-based oil company with wells in four states. “And of course that has a direct impact on price.”“You have to be concerned when you see demand is going down and economies are faltering,” said J. Nelson Wood, chief executive of Wood Energy, an Illinois-based oil company with wells in four states. “And of course that has a direct impact on price.”