Pump jacks draw crude oil from the Long Beach Oil Field near homes in Signal Hill, California, on March 9, 2020. (Photo by DAVID MCNEW/AFP via Getty Images)
Oil prices plunged early Monday on renewed fears of a prolonged slowdown in demand and an even greater glut in supply.
Prices of Brent crude, the benchmark for global oil prices and for U.S. gasoline, had fallen as low as $22.63 a barrel as of Monday morning, down 17% from Friday. The price of West Texas Intermediate, or WTI, the bellwether for U.S. shale oil production, also fell about 6% to roughly $20 a barrel.
The price drops came on the heels of President Trump’s decision Sunday to extend the country’s social distancing guidelines another 30 days – meaning that Americans and U.S. businesses will almost certainly need to continue following the practices as late as April 30. Trump had previously said that he’d hoped to see some businesses resume normal operations as early as Easter on April 12 – a prediction that was roundly criticized by health experts.
“That recommendation effectively stymies American oil demand by putting a lid on gasoline and jet fuel consumption,” said Ellen Wald, president of Transversal Consulting and a senior fellow at the Atlantic Council Global Energy Center.
Meanwhile, adding to the downward pressure on prices, Saudi Arabia on Monday morning announced that it plans to step up its oil exports in May. The move is being driven by the reduction in domestic demand – due to the kingdom’s own social distancing practices to slow the spread of coronavirus – and the completion of new power plants that burn natural gas instead of oil, Wald said.
The developments – and the resulting crash in prices – promise to prolong the pain for U.S. shale oil producers. The sector needs WTI prices to be, on average, more than twice as high as they are now – at least $46 a barrel – to turn a profit, according to a quarterly survey published last week by the Federal Reserve Bank of Dallas. The bank called the results the “bleakest since the survey’s inception” in 2016.
Saudi Arabia, the world’s No. 2 oil producer behind the US. and the top oil exporter, triggered the crash in oil prices earlier this month. The kingdom slashed prices and ramped up production in a move widely seen as aimed at Russia, after the Kremlin declined to renew an agreement with Saudi Arabia and OPEC to cut oil production to help shore-up global prices.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
