Class those. Who would use it. And brazils president defends his controversial appearance with protestors on sunday and says he wants social distancing measures lifted this. Hello and welcome to the program for the 1st time benchmark u. S. Oil prices of crashed into negative territory meaning producers are now paying buyers to take it away in a massive one day drop west texas intermediate fell from about 17. 50 dollars a barrel to below 0 it was trading at around 60. 00 a barrel at the start of the year Global Demand has plummeted because of the coronavirus related lock downs and travel restrictions are stricture and fears of a lack of Storage Space this is despite continuous attempts to counter the havoc in Global Energy markets well earlier this month Russian Saudi arabia agreed to an unprecedented cut in output of almost 10000000 barrels a day to try to boost virus hit markets. Anish capacity is the rector of energy and Police Advisors an independent Research Provider in the oil and gas industry he joins me now by skype from london it really was a perfect storm we knew of the tensions within the opec the extended opec group they only came to a solution just over a week ago and of course its the lack of demand how i guess how tenuous a situation are we finding ourselves in now you know evening clearly unprecedented times at the moment in terms of both the wider Global Market for the oil market as well. I think were in a situation that we never seen before in in there especially at the moment were having massive impacts to Global Demand growth probably around 30 odd 1000000 barrels a day of demand being and impacted globally about a 3rd of global supply. And that combined with currently no opec cuts being emplaced actually the opec deal that broke down this is the aftermath was that the taps being opened i mean youve just got a huge amount of supply coming onto the market at a time when demand is completely down in the dumps so that the fundamentals and theres a further impact that the theres a nuance that the w. T. I contract is expiring today so the people that own those contracts are scrambling to. Get rid of that crude now because theyre worried that when its produced in may that theyll be no where to store that crude that we know what to tell you because storage is filling up. Obviously part of the lack of demand i mean all of it because of the corona Virus Outbreak but already were seeing countries that are slowly lifting a lot of their restrictions which will have to have an impact on the use of oil how much time do you think there is before that begins to happen for some breathing space over when it comes to storage of oil. The thing is theres 2 effects in terms of demand there is the temporary effect that were seeing at the moment which is the predominant effect so the people being stuck in a hurry money able to drive youve got big falls in gasoline demand theres a lack of demand and products so youve got that. Youve got all in diesel demand and then theres not a lot of whites. So theres a huge amount that has been sort of the moment a lot that demand will come back. And that will come back slowly as the as lock down is eased there will be. A lot larger long term legacy effects that we grow qana may for example g. D. P. Growth is very correlated will demand growth that youll youll start to see continuing for the remainder of the year i think the more important thing is from a supply perspective what you also see is that some of the supply that comes off the market wont come back on the market again so demand there is a big negative impact at the moment but eventually demand will recover over the course of the next 12 to 18 months however some of that supply that comes off the market in places like the u. S. Wells that are an economic at the moment a lot of those wont come back online which is why when you look at the futures price you see futures pricing significantly higher than that where you are even next month. The historic sort of news line right now is that the benchmark us or prices crashed into negative territory so thats the benchmark u. S. Oil price what is the situation looking like elsewhere in the world. Yes so the you know oil prices vary all around the world they very for reasons of the quality of the crude so how does our all that crude is also the location so in the u. S. At the moment theres clearly a lot more supply than there is demand and storage if you look at the probably more widely traded benchmark brant and you know that still trading in 20 its a very low price in in historical terms but its its still a reasonable price so you know i think that thats more a collective of where supply and demand or are coming out at the moment but needless to say i think oil prices are going to stay very weak for the next month or 2 until you see the impact of both demand recovering as restrictions lifted but also weve got the cuts to come from the opec plus agreement theyll come through start to come through in may and that should help ease some of this supply as well. Was an element of this predictable or were you also surprised to see the benchmark u. S. Oil price crash quite the way it has. Well i think. There has certainly taken people by surprise i think theres been some talk out there of oil prices in certain regions there are certain regions have turned negative. Places like canada places where the oil quality is low and theres very little storage of certain grades of crude has had to negative already and now i think that this is due to a combination of the expiry is coming up today so its limited volumes its lonely quit its easy but its on a benchmark route so it grabs all airlines now the actual physical volumes of crude being traded at this price are pretty low. And as the more widely traded benchmark brant is still in the twentys. Anish kapoor idea the rector of Energy Policy advisors sir thank you for sharing your views with us. And now lets cross to our White House Correspondent Kimberly Halkett kimberly the white house of course will be watching all of this very closely one more can you tell us about any reaction that we might have had. Yeah the white house has not officially reacted to this news it has been breaking rather dramatically though here in the us in the last hour or so but i can tell you that this is not the news that the president wants to hear because the president even some of his critics were touting what they believe was his success just a week or so ago in sort of scoring this deal if you will to try and tamp down this oversupply in the markets there was that Conference Call between the u. S. President the russian leader or the Saudi Crown Prince where they thought that they had been able to cut production rather significantly and deal with this oversupply the u. S. President for his part had at one point even looked at this as an issue of National Security for the United States so the feeling was that everything was going well this was enough to calm the markets this was going to help the Energy Industry and also that this was going to help the u. S. Economy of course weve seen all of that change in just the last few hours and that of course is going to make the u. S. President rather nervous and just adding to the concerns for this white house because it has been trying very hard to get the economy reopened as a result of the Global Pandemic even starting the 1st phases of lifting some of the social distancing that has taken place in terms of stay at home orders this is not the news that the president is hoping to hear he had really looked at 1st as a key target date for trying to reopen the economy and we know that in terms of this oversupply that exists when it comes to capacity which is what is really triggering the nervousness in the markets that we hear that early next month is that target date when those sort of supply will hit the limits and that is going to be a real problem for a president who is trying to reopen the economy in the u. S. At the very same time absolutely and can really while all of that is going on theres also going scrutiny over the coronavirus testing in the u. S. Because the hole there of course keeps rising. Yeah the death toll according to the numbers and i was just checking the rate before we came on in terms of infections we have 766000 in the United States the deaths topping 40000 in the United States and of course that is continuing but as we talk about the economy we talk about new infections the problem is heres what the governors are telling this white house we dont have enough tests in order to feel even confident about reopening our economy the white house for its part is insisting look at were getting you were getting you the test that you need the infrastructure is being built its sort of happening in real time we should have 5000000 tests by the end of this month but you do the math there are 330000000 plus people in this country if youre trying to get everyone back to work and youve only got 5000000. 00 test by the end of the month thats a significant shortage of diagnostic tests so what we see is the Vice President talking to some of the governors today trying to assure them that there will be an increase in capacity that event defense production act is being put in place to try and get up to 20000000. 00 tests hast but again looking at the math 20330000000. 00 people a significant short fall so this is really just adding to the problems for this white house theyre going to have to answer for them the briefing 21 g. M. T. Where theyre going to be talking about tasks but theyre also going to be talking about the instability in the oil markets as they try to deal with this and the reopening of the economy a high priority for this president and we will of course be taking that News Conference live here on out there will be interesting to see what the president says about all of these issues can really help with the latest from the white house thank you lets just remind you of our breaking news here and that is that the benchmark you were sold prices of crashed into negative territory well john hendren is in chicago and he looks at the Major Economic impact that the Oil Price Slump was having even before this crash. Across american oil country the pumps are shutting down since the coronavirus lost much of the western world in their homes the floor has dropped out of the oil market is a gas station selling gasoline for 99 cents a gallon now you would think was great and anybody going to run and there was a line of people there to fill the course the question is were you going to go the price of the benchmark american crude west texas intermediate has collapsed from 60. 00 a barrel in january to below 20 in the past week across the u. S. The price at the pump is lower than its been in years rick even at rush hour if you are vying the International Energy agency says the worlds appetite for oil hasnt been this low since 1905 especially hit hard the fracking industry that turned the u. S. Oil industry into a net exporter since 2011 Fracking Companies which break rocks to find fuel meet oil above 30. 00 a barrel to make a profit its not its not just that it will come you know its the Oil Service Companies its the little towns in the oil patch that you know the motels the diners restaurants you know those types of things the Ripple Effect is tremendous when you go move out from the old gas company and all the ancillary companies that provide them services and parts so im afraid its going to be ugly the 1st casualty came on april 1st denver based Whiting Petroleum declare bankruptcy if prices dont increase soon whiting will likely become only the 1st of hundreds of oil and related companies to do so right now and then theyre like well if. Were not able. To have 80 you know maybe whatever. So the oil industry waits and worried until all the pumps return to service john hendren aljazeera chicago coming up in this hour of news outrage in kurdistan after the Government Forces the doctor to apologize for complaining about lack of protective appointment. Some shops have reopened in germany as europes largest economy slowly restarts public life after a 4 week shutdown to stop the spread of coronavirus only Small Businesses have been given the all clear to open their doors as part of a deal between federal and State Government the mccain has more now from berlin for many weeks germany has been in lockdown the possibility of inadvertent infection too high to allow most every day life to go on but now in some states many shops are open once more as here in cologne on monday the 1st step by the government to test how safe it is for Economic Life to resume. Fits us sheer of course is difficult but if we now ease restrictions then we dont know exactly what the repercussions will be and thats why we have to take it slowly and to stop as a time it would be tragic if we knowingly relapsed and if we knowingly in dangers these 1st successes. And perhaps because of that fear not everywhere in germany has reopened for business some states want more stringent protective measures in place before Opening Stores so far at least federally the government is only encouraging recommending people to wear these masks in public but certainly some parts of this country that is changing in the eastern state of saxony masks are now mandatory for people in public and the conservative heartland of the varia is about to follow suit you know when im asking for just as of next week well introduce a noise mask obligation this will be in place for all public transport for all shops including those that have been open all this time we are the 1st station with germany to do that. And then theres the dilemma of how to reopen schools safely most will remain closed until early may but some have now gone back to allow teenagers to sit important end of year exams and who lives in the get us. Of course im somewhat worried the more students there are in the building the more complicated it gets to stick to the framework conditions ultimately were talking about youths here who might not always been a position to evaluate the dangers 100 percent which sounds very much like the dilemma ministers are facing right now easing restrictions should help the economy but it could cause a 2nd wave of infections dominic came out just 0 berlin. And as germany returns to some kind of normality there are some positive news from italy for the 1st time the number of people currently reported to have corona virus has fallen from yesterday by 20 more than 24000 people have died in the hardest hit country in europe but the World Health Organization has cautioned that easing lockdowns does not mean the pandemic is over its warned that without countries working together the worst could be yet to come and has more morning one of their own medical staff at a hospital in madrid. The chief of surgery can trying to the virus whilst treating patients. After the silence of. These medics is spains best hope in the battle to save lives a fight the country believes its slowly starting to win. Arriving in the capital 2000000 protective masks purchased from china by the Spanish Government theyll be shared across the country helping parts of spains economy to reopen. Builders are back to work some heavy industries operating again. These are carefully controlled steps spains infection rate is now stable but the number of people diagnosed with the virus passed 200000 a 2nd only to the u. S. The World Health Organization urged countries to act fast to limiting the spread of the virus without National Unity and Global Solidarity classed as the worst is yet of us lets prevent this tragedy. Its a virus that many people still dont understand. The slowdown in deaths in spain and italy has returned some optimism to europes Financial Markets share prices edged higher on monday from their lowest since the 2008 crash but businesses are bracing for a lengthy global downturn. In russia the crisis is deepening with a lockdown entering its 4th week chairing a video meeting with regional officials president putin warned the worst is still to come. If. The peak incidents is still ahead and now we need to do everything to flatten this pete. The french government says its making progress restrictions remain in place until at least may the 11th. But there were social consequences to frances Strict Lockdown rules over the Weekend Police in new this clashed in paris his poor suburbs mediators have been sent in to soothe tensions. The u. K. s lock down remains in place with the government saying its waiting for the right data before easing restrictions the country hopes to start Clinical Trials for a vaccine next week. As countries consider their options here in portugal a reminder of how virulent coronavirus is a total of 138. 00 refugees out of 175. 00 house at a hostel in lisbon tested positive there are concerns about infection spreading quickly in other hostels where social distancing is difficult. Europes shouted societies on very different paths relaxing things too soon too fast could risk a 2nd spike in cases governments are struggling to balance the health of their economies with the health of the people needs barkha aljazeera. And lets go to our top story now and that is the price. In the u. S. Crashing into negative territory for the 1st time in history while our economics editor i bitterly joins me live now with more analysis on this obviously heir historic moment there explain to us that i guess how we got to this point well barbara what happened was that some of the time of the coronavirus with it took a hold in the world saudi arabia and russia decided that was the time to have a crisis will. They couldve come to an agreement as to how much of a Production Cuts the world really needed at that particular moment in time they were talking about 1500000 barrels but. As the current a virus and governments around the world dot flights close their borders and put people in lockdown now we have about 3000000000 people in lockdown weve seen an absolute massive destruction in demand and theres no way to store all the oil which is being currently produced currently more than 35000000 barrels of oil is being produced which is more than the isnt necessary at this particular moment in time and theres no way to store this or every single tanker every single bunker which is available has already been hired to store oil away and in the United States even according to the i. A. E. A. Study itself. The cushing reserve can hold 76000000 barrels but right now its at 55 so there is this little discrepancy it can hold a little bit more oil but it could be getting filled up a carton were rather rapid clip at this present moment in time and so this is a reason why traders are now dumping them a contract so were rolling over into the 2 contract the may contract is coming to a halt and that means that they have to offload any of the contracts or any of that oil that they have in there which theyve basically hold hold so but theres no one to actually barley the oil off them so whereas in this unusual situation where even at minus 40. 00 a barrel you cant sell oil to anybody at this very critical moment now the hope is that the june contracts which is currently at 22. 00 a barrel will al allow a longer length of time for some of that oil to be actually used or for the world to find somewhere else to story oil the other hope is that the Opec Plus Group come together with the United States and they decide on another Production Cuts which will which would take effect immediately the world really needs to get rid of 35000000000. 00 barrels and that would mean that United States russia and saudi arabia would have to turn off the taps completely but thats never going to happen because of once you turn the taps off it takes a long time to restart them and by turn got the taps you can actually wreck well so that basis theyre going to have to get a lot of other countries involved in actual production because where everybody agrees that they were half their production and he has to happen rapidly how it has to happen quickly otherwise we could see the bottom completely falling out of the oil market and that bit of course opec and opec plus so that the wider group had to come together to. Try to put together a coordinated a Production Cut precisely because i guess you know everyone can see what the Coronavirus Impact was going to be so what was wrong with that agreement between the opec members. So saudi arabia thought they had an agreement they were going to they and russia and the other opec plus nations agreed that they were coached oil by 9700000. 00 barrels a day the respect in the rest of the cut another 10000000. 00 barrels to come from the United States from mexico so from the United States canada norway and the u. K. But after that phone call the video Conference Call that they had which took 4 days in fact you know to try and come to that agreement and the only happened on the sunday just before the markets open on monday for that agreement to come through. There was no cuts coming from the United States now the President Trump said will allow the markets to take take out any Excessive Oil and thats happening this is whats happening right now what the market is saying is that we cant take any more oil and we have seen a number rigs already shut than that 20. 00 a barrel 80 percent of all Oil Production in the United States in specially in the in the shell basin was expected to shut down completely and would not reopen because those companies are hugely in debt and thats a lot of unemployment to come because the oil industry in the United States employs 10000000. 00 people and the union and the number of people who apply for unemployment benefit over the last 4 weeks alone is 22000000 so were going to see a lot of those job job losses coming from the oil industry reading into this those days job numbers. Will of course be following the story closely in the next hours for the moment there economics editor added thank you. Now despite mexicans being told to stay at home to stop corona virus spreading sunday was the countrys most violent day of the year so far 105. 00 murders were reported while april has seen an average of 84 homicides a day it comes as mexico braces for its peak of corona infections which is expected sometime in may analysts fear the slowing economy will lead to more extortion and kidnapping by mexicos cartels and criminal groups get the latest on the situation in latin america now john holeman joins us from mexico saying so lets start with mexico atrocious numbers there really tell us a little bit more about it especially how the corona virus may be having an impact on the homicide rate. But its quite curious as well the numbers because in other hotspots in latin america for violence coronavirus its been reported in the last month that their home aside numbers seem to be going down and weve seen in other countries such as brazil you know some of the dog gangs even trying to sort of help out in this time of coronavirus but in mexico thats not happening with the number of homicides with the number of kidnappings in the country which means that its fighting a sort of you program that you threat at the moment last year mexicos numbers in terms of homicides reached record levels so this is another sort of epidemic thats happening at the moment in the country we have heard in mexico is of armed groups gangs also distributing dispenses distributing help in different parts of the country particularly in the southwest theres been reports of the gangs there in forcing social distances or handing out sort of hampers of aid to people what analysts have said is that one of the reasons to do that is the move that they can consolidate their sort of rule in those places. The more they become the authority the think they are and also the more that they can continue to demand things from the population especially in the south west of the country theres already a lot of extortion thats happening so this shouldnt necessarily be c its just generous gestures from mexicos organized crime but sort of more of a political way to exert more influence he talked very as well about the fact that mexico is going to be going into may and thats when Authorities Say its really going to hit hard coronavirus and that will be the peak at this moment one thing that weve see over the last weekend here according to mobile stats is that people are already going out on the streets a little bit more in mexico city so thats something to watch actually as this goes on and people get tired of the quarantine which the government isnt sort of imposing by force its voluntary and if people do start going out more they specialize those numbers start to go up of corona cases and infections but the government of mexico may not be enforcing it by law but meanwhile in brazil president was not actually says that he wants social isolation policies that end this week and hes the fan that his appearance on sunday at a protest calling for the army to intervene i mean were used to some pretty controversial statements and actions from us and i dont know whats significant about this. I think its been seen as very worrying especially obviously by his critics in brazil obviously isnt in a country that less than 40 years ago was under military rule so a lot of people there remember when they did actually have military dictatorships and also know himself is an ex army captain hes spoken to my ringleader of the military dictatorships in the past so i think even the spur of the moment that he going our there was worry for some about the direction the country might be going in what he tried to do. Actually earlier on today hes trying to tamp down that sort of worry and said basically that he believes in democracy he believes in keeping Congress Open and the Supreme Court opened becoming a day after he appeared in front of the Army Headquarters in brasilia with lots of people around him with banners sort of supporting military intervention isnt it sort of sends quite worrying signals the other worrying thing for many people in brazil as well about the way hes handled the Coronavirus Crisis is that he has disregarded social distancing himself or maybe he was at that rally yesterday he also fired his Health Minister last week and he sort of saying well 70 percent of the country is going to get this anyway hes sort of statistics on that we need to get out because if not its going to be worse because the economy is going to go belly up as well obviously thats against the advice of a lot of medical personnel and brazil does have the highest rate of corona seem fictions in latin america at the moment so its sort of worrying times for that country and many people thinking that what the president is doing isnt necessarily helping. To home with the latest there from mexico city john sinking. Still to come in this hour Benjamin Netanyahu signs a deal with his rival benny gantz to form a unity government in israel and the void yet more elections. But i dont see any conflict has no place in canada shocking canada as the death toll rises to 18 after a shooting rampage by a man dressed as a police officer. But. You probably dont want to be in the mediterranean the western mediterranean the next couple days and that might be the clue why. General patton is still the cold down the eastern side of europe not the cold front representative of the sons so on the whole its not that bad this is developing into rotating rain spreading all the way from the spanish coast through italy towards the adriatic more or less so rain is the blue it is orange thats heavy red circulation here in the coast of spain is not going to be good but further west in spain and portugal its cloudy here and its only in the teens but not quite as well i have to say if you are in london you wont like that when its been a chilly easterly for days and still the sun is compensating this depicts for wednesday more of a hint of this rain heading towards its chilly course consult india and leaving for example pass the adriatic and spain into the sunny weather at least where the focus around to far as that is raining on wednesday cotton foggy on thursday the suns out on friday the temperatures slowly rising now whats happening in eastern spain usually happens in morocco algeria not
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