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Oil Prices Rise After Deal on Cutting Production: Live Updates

a ghastly effect of the pandemic: After weeks of concern about shortages in grocery stores, and scenes of food banks overrun by millions of unemployed and hungry Americans, farmers are liquidating their crops because big institutional buyers, like schools and hotels, have closed.

In Wisconsin and Ohio, farmers are dumping thousands of gallons of fresh milk into lagoons and manure pits. An Idaho farmer has dug huge ditches to bury one million pounds of onions. And in South Florida, tractors are crisscrossing bean and cabbage fields, plowing perfectly ripe vegetables back into the soil.

“It’s heartbreaking,” said Paul Allen, a co-owner of R.C. Hatton Farms, who has had to destroy millions of pounds of beans and cabbage in South Florida and Georgia.

Some farms have tried to donate crops to food banks and other charitable groups, but there is only so much perishable inventory that these organizations can absorb, with their limited numbers of refrigerators and volunteers. And many farms, already hurting financially, cannot take on the storage and transportation costs.

Farms are not well set up to sell into retail stores. The machines used by dairy processors, for example, are designed to package shredded cheese into large bags for restaurants, or put milk in small cartons for schools. Updating that equipment to make supermarket-friendly bags of cheese would require millions in capital.

Exporting much of the excess food is not feasible either, farmers say, because many international customers are also struggling through the pandemic and recent currency fluctuations make exports unprofitable.

China said it would delay the delivery of masks and ventilators to address quality concerns.

Hospitals struggling to cope with the coronavirus pandemic could face new delays in acquiring critical gear, after China announced that it will inspect shipments of N95 respirator masks, ventilators and other medical supplies before export. Depending on the city, the delays could range from a few hours to a few days or longer.

There has been a slew of complaints about defective Chinese-made protective equipment arriving in Europe. China is the world’s leading producer of a long list of medical supplies, and has expanded its manufacturing capacity since the crisis unfolded. At the start of February, the country produced 10 million respirators daily. Just a month later, its factories were producing 116 million, in part because facilities that once made, for example, cranes or winches were suddenly being repurposed.

The new rules come as countries have complained that a global free-for-all for personal protection equipment has left acute shortages for doctors and nurses.

Oil prices rise on deal for record production cut

Oil prices rose on Monday, one day after petroleum-producing nations agreed to the largest production cut ever negotiated.

Sunday’s agreement marked an unprecedented coordinated effort by Russia, Saudi Arabia and the United States to stabilize oil prices and, indirectly, global financial markets.

Saudi Arabia and Russia typically take the lead in setting global production goals. But President Trump, facing a re-election campaign, a plunging economy and American oil companies struggling with collapsing prices, took the unusual step of getting involved after the two countries entered a price war a month ago. Mr. Trump had made an agreement a key priority.

READ MORE:   These Surreal Pictures Show How Restaurants Are Adapting To The Pandemic

It was unclear, however, whether the cuts would be enough to bolster petroleum prices. Before the coronavirus crisis, 100 million barrels of oil each day fueled global commerce, but demand is now down about 35 percent. While the cuts agreed to on Sunday were significant, they still fall far short of what is needed to bring oil production in line with demand.

The plan by OPEC, Russia and other allied producers in a group known as OPEC Plus will slash production by 9.7 million barrels a day in May and June, or close to 10 percent of the world’s output.

Analysts expect oil prices, which soared above $100 a barrel only six years ago, to remain below $40 for the foreseeable future. The American oil benchmark price was just over $23 a barrel on Sunday night.

“This is at least a temporary relief for the energy industry and for the global economy,” said Per Magnus Nysveen, head of analysis for Rystad Energy, a Norwegian consultancy. “The industry is too big to be let to fail.”

On Monday oil markets cheered the prospect of production cuts. Futures for West Texas Intermediate, the U.S. oil price benchmark, were up more than 4 percent to about $24 a barrel. Futures for Brent crude rose by a similar amount, to about $33 a barrel.

Asian markets fall as investors weigh oil deal and outbreak news.

Global markets began the week in the red on Monday, as signs of progress in fighting the coronavirus as well as the new oil deal between major petroleum-producing nations failed to soothe investors.

Stocks in Japan fell 2.3 percent, leading the declines. Futures markets predicted Wall Street would open lower as well. Major European markets were closed for the Easter holiday.

Investors on Monday were parsing the implications of the oil production deal between members of the Organization of Petroleum Exporting Countries and other major countries to trim output to put a floor on fuel prices. Low oil prices are generally good for the world economy, but the disruptions to the energy industry and to countries that depend on selling petroleum have unnerved investors. Oil prices rose earlier in the day then lost steam as European trading began.

Global investors were also parsing the latest developments in the coronavirus fight. While the United States and other countries appeared to continue to make progress in containing the outbreak, signs of disarray within the Trump administration sowed doubts.

Reflecting the mixed sentiment, prices for U.S. Treasury bonds were lower, generally an indication of improved sentiment.

In Asia, South Korea’s Kospi fell 1.9 percent. The Shanghai Composite Index in mainland China fell 0.5 percent. Hong Kong markets were closed for a holiday.

Catch up: Here’s what else you need to know.

  • After slashing the majority of its trips domestically and abroad, United Airlines said it would add a few international routes next month. The carrier plans to start daily service on May 4 on three routes: Chicago to London, Newark to Amsterdam and Washington to Frankfurt. It also plans to offer three flights a week between Washington and Buenos Aires starting on May 5.

READ MORE:   American Airlines stock jumps after 'steady' rise in demand leads to increased flying

David Yaffe-Bellany, Michael Corkery, Matt Phillips, Clifford Krauss and Carlos Tejada contributed reporting.

  • Updated April 11, 2020

    • When will this end?

      This is a difficult question, because a lot depends on how well the virus is contained. A better question might be: “How will we know when to reopen the country?” In an American Enterprise Institute report, Scott Gottlieb, Caitlin Rivers, Mark B. McClellan, Lauren Silvis and Crystal Watson staked out four goal posts for recovery: Hospitals in the state must be able to safely treat all patients requiring hospitalization, without resorting to crisis standards of care; the state needs to be able to at least test everyone who has symptoms; the state is able to conduct monitoring of confirmed cases and contacts; and there must be a sustained reduction in cases for at least 14 days.

    • How can I help?

      Charity Navigator, which evaluates charities using a numbers-based system, has a running list of nonprofits working in communities affected by the outbreak. You can give blood through the American Red Cross, and World Central Kitchen has stepped in to distribute meals in major cities. More than 30,000 coronavirus-related GoFundMe fund-raisers have started in the past few weeks. (The sheer number of fund-raisers means more of them are likely to fail to meet their goal, though.)

    • What should I do if I feel sick?

      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.

    • Should I wear a mask?

      The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.

    • How do I get tested?

      If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.

    • How does coronavirus spread?

      It seems to spread very easily from person to person, especially in homes, hospitals and other confined spaces. The pathogen can be carried on tiny respiratory droplets that fall as they are coughed or sneezed out. It may also be transmitted when we touch a contaminated surface and then touch our face.

    • Is there a vaccine yet?

      No. Clinical trials are underway in the United States, China and Europe. But American officials and pharmaceutical executives have said that a vaccine remains at least 12 to 18 months away.

    • What makes this outbreak so different?

      Unlike the flu, there is no known treatment or vaccine, and little is known about this particular virus so far. It seems to be more lethal than the flu, but the numbers are still uncertain. And it hits the elderly and those with underlying conditions — not just those with respiratory diseases — particularly hard.

    • What if somebody in my family gets sick?

      If the family member doesn’t need hospitalization and can be cared for at home, you should help him or her with basic needs and monitor the symptoms, while also keeping as much distance as possible, according to guidelines issued by the C.D.C. If there’s space, the sick family member should stay in a separate room and use a separate bathroom. If masks are available, both the sick person and the caregiver should wear them when the caregiver enters the room. Make sure not to share any dishes or other household items and to regularly clean surfaces like counters, doorknobs, toilets and tables. Don’t forget to wash your hands frequently.

    • Should I stock up on groceries?

      Plan two weeks of meals if possible. But people should not hoard food or supplies. Despite the empty shelves, the supply chain remains strong. And remember to wipe the handle of the grocery cart with a disinfecting wipe and wash your hands as soon as you get home.

    • Can I go to the park?

      Yes, but make sure you keep six feet of distance between you and people who don’t live in your home. Even if you just hang out in a park, rather than go for a jog or a walk, getting some fresh air, and hopefully sunshine, is a good idea.

    • Should I pull my money from the markets?

      That’s not a good idea. Even if you’re retired, having a balanced portfolio of stocks and bonds so that your money keeps up with inflation, or even grows, makes sense. But retirees may want to think about having enough cash set aside for a year’s worth of living expenses and big payments needed over the next five years.

    • What should I do with my 401(k)?

      Watching your balance go up and down can be scary. You may be wondering if you should decrease your contributions — don’t! If your employer matches any part of your contributions, make sure you’re at least saving as much as you can to get that “free money.”

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