Oil prices surge as the world begins to emerge from lockdown

As countries begin to lift stringent lockdown conditions, the demand for oil rises once more.

Oil prices surge as the world begins to emerge from lockdown

Oil prices on Wednesday built on the previous day’s surge, boosted by signs of easing in the coronavirus that is allowing some countries to begin opening their economies, though traders are keeping an eye on brewing China-US tensions.

International benchmark Brent gained 0.45% to $31.11 a barrel, reversing early losses, having surged 14% above $30 on Tuesday for the first time since mid-April.

US marker West Texas Intermediate climbed 1.1% to $24.18 a barrel, after rising 20% the previous day.

Oil markets recover from April’s global lockdown

Oil markets were battered in April as the virus strangled demand owing to business closures and travel restrictions, with US crude falling into negative territory for the first time.

But they have started to rally — WTI has doubled since last Tuesday — as governments from the Pacific to Europe and some US states report lower new infection rates and deaths, and begin easing tough lockdowns from Europe to Asia ease curbs and economies start shuddering back to life.  

However, Donald Trump’s comments at the weekend hitting out at Beijing over its handling of the outbreak, saying it began in a Wuhan lab but so far offering no evidence, have raised tensions between the economic superpowers.

“Traders are incredibly cautious this morning, weighing all the possible China responses,” said Stephen Innes, chief global market strategist at AxiCorp. 

“And the one that would hurt the most would be for China to reduce imports of US oil.” 

The rally has also been supported by a deal agreed between top producers to reduce output by almost 10 million barrels a day, which came into effect on 1 May. 

And there are signs that the massive oversupply in the market is starting to ease as demand slowly comes back.

Energy data provider Genscape said earlier this week that stockpiles at the main US oil depot in Cushing, Oklahoma had increased by only 1.8 million barrels last week following weeks of major rises.

By Agence France-Presse (AFP)

Source : The South African More   

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German citizens revolt against stringent lockdown regulations

Merkel faces resistance from both the public and state premiers.

German citizens revolt against stringent lockdown regulations

Chancellor Angela Merkel faces a test of her authority on Wednesday as she meets Germany’s 16 state premiers, many of whom have brazenly ignored her pleas for caution on easing coronavirus restrictions.

Germany began tentatively lifting its lockdown two weeks ago, opening some shops and schools, after infection rates came down.

Merkel and the state leaders agreed last week to loosen the rules further, giving religious institutions, playgrounds, museums and zoos the green light to open.

But a national consensus on aligning measures to counter the virus — which was coupled with a sharp rise in Merkel’s popularity — appears to have crumbled, as many states have struck out alone to further ease lockdown rules.

State premier Markus Soeder supports ‘cautious reopening’

Wednesday’s meeting is expected to yield details on the reopening of schools and kindergartens, as well as whether the Bundesliga can become the first of Europe’s major football leagues to resume matches.

Also up for discussion will be an infection-rate threshold that would trigger a new lockdown, according to the Bild daily.

Ahead of the talks, Merkel had asked regional leaders to draw up concepts on how the food-and-drink industry could restart.

But on the eve of her discussions with regional leaders, Germany’s biggest state Bavaria preempted federal measures by announcing that its restaurants would open from May 18 and hotels and guest houses from 30 May.

State premier Markus Soeder said “the time has come for a cautious reopening”, pointing to the “success” in containing the spread of the virus.

Lower Saxony, Mecklenburg-Western Pomerania, Saarland and Saxony-Anhalt have also announced their own plans for everything from restaurants to care homes.

Merkel has repeatedly urged Germany’s states to proceed with caution when it comes to easing lockdown measures, even as Europe’s top economy flounders.

“It remains absolutely important that we stay disciplined,” she said after last week’s relaxing of measures, adding that the effects of the new rules would be watched carefully.

The restrictions — but also greater testing capacities — have seen Germany keep its death rate far lower than that of its European neighbours.

Although Germany has recorded over 160 000 coronavirus cases, it has one of the lowest mortality rates in the world — just over 6 800 people have died.

‘Resistance 2020’

But although Merkel’s conservative approach won her a rise in support in the early stages of the pandemic, the complaints have grown louder in recent weeks.

North Rhine-Westphalia state premier Armin Laschet, who has criticised Merkel’s firmer stance on restrictions, told public broadcaster ARD in late April that the negative effects of lockdown must be “weighed up”.

He attacked what he said were the pessimistic predictions of some medical experts, pointing out that “40 percent of intensive care beds are empty” in his state.

Demonstrations against the lockdown were held in several German cities last weekend, and a new political movement calling itself Widerstand 2020 (Resistance 2020) claims on its website to have more than 100 000 members.

The far-right AfD, Germany’s largest opposition party by number of MPs, has also attacked the lockdown measures. 

But experts continue to call for restraint. The Robert Koch Institute (RKI) for disease control has repeatedly warned of possible second or even third waves of the virus hitting the country.

At a briefing on Tuesday, RKI head Lothar Wieler urged vigilance.

“Social distancing is certainly the new normal and will help to ensure that the infection rate remains low,” he said.

“If we ease restrictions, this will of course increase the risk of new infections.”

by Femke COLBORNE for Agence France-Presse (AFP)

Source : The South African More   

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