Oil prices turned negative. Hundreds of US oil companies could go bankrupt

In an unprecedented move, U.S. oil prices went negative Monday — meaning, companies paid to sell their oil — but don’t expect to get paid to fill up your tank at the gas station.

A oil futures contract expiring Tuesday went negative in bizarre move showing a demand collapse. … West Texas Intermediate crude for May delivery fell more than 100% to settle at negative $37.63 per barrel, meaning producers would pay traders to take the oil off their hands.

US crude for June delivery is still trading above $20 a barrel — but even that’s disastrous. “$30 is already quite bad, but once you get to $20 or …

Why is this happening?

The coronavirus pandemic has caused oil demand to drop so rapidly that the world is running out of room to store barrels. At the same time, Russia and Saudi Arabia flooded the world with excess supply.

That double black swan has caused oil prices to collapse to levels that make it impossible for US shale oil companies to make money. US crude for May delivery turned negative on Monday — something that has never happened since NYMEX oil futures began trading in 1983. It was easily the oil market’s worst day on record.

US crude for June delivery is still trading above $20 a barrel — but even that’s disastrous.

“$30 is already quite bad, but once you get to $20 or even $10, it’s a complete nightmare,” said Artem Abramov, head of shale research at Rystad Energy.

Many oil companies took on too much debt during the good times. Some of them won’t be able to survive this historic downturn.

In a $20 oil environment, 533 US oil exploration and production companies will file for bankruptcy by the end of 2021, according to Rystad Energy. At $10, there would be more than 1,100 bankruptcies, Rystad estimates.

“At $10, almost every US E&P company that has debt will have to file Chapter 11 or consider strategic opportunities,” Abramov said.

The president did try to intercede on behalf of American oil companies. He tried to negotiate reduced oil pumping to stabilize the price. Obviously he did not succeed.

It will be interesting to learn what happens next.

An Unmitigated Disaster

The president of the United States takes no responsibility. Those are his words.

While the number of new deaths from the coronavirus has slowed, the number of new cases has continued to climb. The real question should be how many people have the virus that are self-quarantining themselves but are unknown to the data collectors. The number of new cases has exceeded 30k every day, except one, starting April 2.

Meanwhile the total of new unemployment claims in the past three weeks exceeded 16 million people (BLS figures). Bloomberg Economics created a model last year to determine America’s recession odds. The chance of a recession now stands at 100%, confirming an end to the nation’s longest-running expansion.

The “stable genius” did not believe there would be a widespread epidemic in the United States. He fired the entire pandemic response team in 2018. On March 19, 2020, former Vice President and Democratic presidential candidate Joe Biden called the changes elimination. He tweeted: “The Obama-Biden Administration set up the White House National Security Council Directorate for Global Health Security and Biodefense to prepare for future pandemics like COVID-19. Donald Trump eliminated it — and now we’re paying the price.”

This graph compares unemployment today to the unemployment during the 2008-2009 Great Recession. The United States is already in a recession and will remain that way for the first half of the year, according to a survey of 45 economists. The assumption is that everyone will be going back to work very soon.

In an interview on Fox News on today Friday April 10, Surgeon General Jerome Adams emphasized that “now is the time for us to continue to lean into” the social-distancing recommendations first issued in mid-March and extended last week until the end of April.

“There are places around the country that have seen consistently low levels. And as we ramp up testing and can feel more confident that these places actually can do surveillance and can do public health follow-up, some places will be able to think about opening on May 1,” Adams said.

“Most of the country will not, to be honest with you, but some will,” Adams continued, “And that’s how we’ll reopen the country: place by place, bit by bit, based on the data.”

The End of The Shopping Mall?

Coronavirus closings: Macy’s, Apple, Sephora say they’ll reopen soon. But will they?

While it is impossible to forecast the recovery once the coronavirus crises has passed, you can easily see the result will be an impact on many store chains from restaurants to clothing retailers. The question is will shopping habits be permanently impacted?

Sears, JCPenney, Neiman Marcus and J. Crew were some of the most distressed companies prior to the outbreak, according to analysts. Forever XXI was in the process of being bought by Simon Shopping Centers.

7th Ave in Times Square April 7 2020 — **7th Ave in Times Square April 7, 2020**

The Cheesecake Factory has seen a decline in same store sales decline as far back as August 2017. Most recently the CEO sent a letter to all the property owners saying they are unable to pay April’s rent at all 300 of their locations.

Sephora, a subsidiary of LVMH, announced that all stores in the U.S. and Canada will close indefinitely due to the spread of COVID-19.

We are all buying everything on line. Parking at my nearest malls has always been a challenge. Unless you just like window shopping why would you go to a mall? I’m not the only person asking this question. I will miss JCPenny.

Coronavirus Confusion – Making America Great Again

Doctor Trump know best. Except he really isn’t a doctor.

Lagos, Nigeria (CNN)Health officials in Nigeria have issued a warning over chloroquine after they said three people in the country overdosed on the drug, in the wake of President Trump’s comments about using it to treat coronavirus.

Washington Post reported that a man and wife in Arizona to chloroquine. He died. she is hospitalized in serious condition.
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Now the president is more concerned with the state of the economy than the health of the citizens of this country. It is evident that he intends to tell us that the emergency is over and we should all go back to work. Will anyone be listening?

Hottest Economy in the World

The reality is that you can make the statistics lie. The United States government has been telling these lies for decades. Presidents of both political parties have promoted the lies. They keep telling the lies because Americans are gullible. If the next president is a Democrat he too will tell us the same lies.

McDonald’s enters Chicken Sandwich War

Chick-fil-A is a fabulously successful fast food drive through sensation that has become a burr in the side of McDonald’s. The boneless breast of chicken sandwich seasoned, hand-breaded, pressure cooked in 100% in refined peanut oil and served on a toasted, buttered bun offered by Chick-fil-A seems to be the challenge for all other fast food providers.

This past spring while walking through the airport in Detroit I saw a line of people trying to buy a Chick-fil-A sandwich. There was no line at the McDonald’s unit. McDonald’s is determined not to lose its number one position in the fast food market. They are testing two new sandwiches in Houston and Knoxville.

You can be sure that McDonald’s will conduct an advertising campaign to stay number one in the fast food market place.

Chick-fil-A on the left. McDonald’s on the right.

Last call for these cars

It’s all about demand. The Chevrolet Cruze and the Chevrolet Volt have been on the market for a very short time but apparently never met public approval. Kelly Blue Book (an expert on car pricing and quality reports that these cars will not be produced in 2020. Should we care?

VW Bettle 2019

Buick Cascada
Cadillac CTS
Cadillac ATS Coupe
Chevrolet Cruze
Chevrolet Volt
Ford Taurus
Ford Fiesta
Lincoln MKT
Volkswagen Golf Sportwagon
Volkswagen Beetle

Democratic Party Debate does Provide Valuable Information about the Candidates

For me these debates, which are not really debates but are position statements, do help to determine who you would vote for in the primaries. That is the reason to watch them again tonight.

It was the first and perhaps the most contentious issue of the night. Health care. As the assembled Democrats compared the merits of a more comprehensive single-payer plan like Medicare For All, which would completely eliminate private insurance versus a more incremental step of a government-funded public option.

NBC’s Lester Holt asked for a show of hands on the biggest question about Medicare-for-all, a top progressive policy goal: Would you abolish private insurance?

Only two Democratic candidates — Sen. Elizabeth Warren (D-MA) and New York City Mayor Bill de Blasio — put their hands up.

The standout moment came from Sen. Elizabeth Warren of Massachusetts who gave an impassioned defense of the more expansive position, her first time really doing so.

“Look at the business model of an insurance company. It’s to bring in as many dollars as they can in premiums and to pay out as few dollars as possible for your health care. That leaves families with rising premiums, rising copays, and fighting with insurance companies to try to get the health care that their doctors say that they and their children need. Medicare for all solves that problem.”

“There are a lot of politicians who say it’s just not possible, we just can’t do it, have a lot of political reasons for this,” said Warren of the fight for single payer. “What they’re really telling you is they just won’t fight for it. Well, health care is a basic human right and I will fight for basic human rights.”

“… and that is that the insurance companies last year alone sucked $23 billion in profits out of the health care system, $23 billion. And that doesn’t count the money that was paid to executives, the money that was spent lobbying Washington.”

“We have a giant industry that wants our health care system to stay the way it is, because it’s not working for families, but it’s sure as heck working for them. It’s time for us to make families come first.”