After Coronavirus Measures, China’s Crude Oil Demand Plunges 20%: Industry Sources

“Probably the largest demand shock the oil market has suffered since the global financial crisis, and the most sudden since the Sept. 11 attacks.”

By Wolf Richter for WOLF STREET.

The measures imposed by Chinese authorities, by authorities in other countries, and by businesses and consumers to counter the spread of the coronavirus have slammed the demand for crude oil and petroleum products. In parts of China that now span an area producing nearly 70% of its GDP, many transportation systems have been shut down. Traffic has radically fallen off as people stay at home. Countless flights in China, and to and from China, have been cancelled. As I pointed out in my podcast on the economic effects of these measures, this comes at the worst possible time for the already beaten up US shale oil industry.

Now some numbers have emerged from “Chinese and Western oil executives, speaking on condition of anonymity because they aren’t authorized to discuss the matter publicly,” to what extent demand in China for crude oil has collapsed. They told Bloomberg that oil demand, as measured against normal levels in China for this time of the year, has currently dropped by 3 million barrels per day, or by 20% of total consumption.

“The drop is probably the largest demand shock the oil market has suffered since the global financial crisis of 2008 to 2009, and the most sudden since the Sept. 11 attacks,” Bloomberg reported.

The sudden drop in demand in China – the world’s largest oil importer – wiped out hopes that growing global demand for crude oil in combination with production cuts by OPEC could overcome surging US production in 2020.

In reaction, crude oil prices dropped across the board, starting in early January. Today, West Texas Intermediate (WTI) fell another 3.5% and is currently trading at $49.80, down 21% from January 6 and at the lowest since January last year:

The plunge in Chinese demand has already rippled across suppliers. Bloomberg, citing industry sources, reported last week that sales from Latin America to China have ground to a halt:

Zero sales have been reported since last week for March-loading cargoes from Brazil and Colombia and unsold cargoes are piling up, according to people familiar with the matter. Interest from buyers has been sluggish. China hasn’t so far canceled or postponed any cargoes set to load in February, the people said.

And it added:

Brazil has become the main Latin American oil supplier to China, surpassing Venezuela, which is plagued by sanctions and an economic and humanitarian crisis. Brazilian oil Lula is, after Russian ESPO, the most sought-after grade by China’s independent refineries, known as teapots. The teapots are the most exposed to a drop in domestic consumption and are likely to be hit the hardest by the impact of the coronavirus, according to oil traders in Asia.

Today, citing industry executives, Bloomberg reported that China’s refineries were storing unsold gasoline, jet fuel, and other petroleum products that they had already refined but couldn’t sell:

But stockpiles are growing every day, and some refineries may soon reach their storage limits. If that were to happen, they would have to cut the amount of crude they process. One executive said that refinery runs were likely to be cut soon by 15-20%.

There are signs that’s already happening. Sinopec Group, the nation’s biggest refiner, is in the process of reducing runs at its plants by an average of about 13-15% and will review whether further cuts are needed Feb. 9, according to one of the people.

China has about 40 teapots, accounting for about a quarter of China’s refining capacity. Of them, about 18 are facing storage capacity that is filling up or has already filled up, and they may cut the rate at which they process crude oil or may shut down processing completely, traders familiar with operations at the plants told Bloomberg.

In the US shale oil industry, all hopes are now ironically on OPEC and Russia to cut production further, after the production cuts late last year that had come before the demand swoon in China.

There are now efforts underway to move the March 5-6 OPEC meeting forward to February 14-15. Under consideration are two options, according to the Wall Street Journal: additional cuts of 500,000 barrels a day, or a temporary cut by Saudi Arabia of 1 million barrels a day, which, according to officials, would be  “aimed at creating a shock in oil markets.”

But the problem is that in China demand at the moment has dropped by 3 million barrels a day, while US production is still growing. And any OPEC cuts are just window dressing until Chinese demand resumes at a somewhat normal pace – and that is not yet on the horizon.

In the US shale oil patch, Texas is at the epicenter not only of oil production but of the destruction of money that loosey-goosey monetary policies encouraged. ReadThe Great American Shale Oil & Gas Bust: Fracking Gushes Bankruptcies, Defaulted Debt, and Worthless Shares

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  82 comments for “After Coronavirus Measures, China’s Crude Oil Demand Plunges 20%: Industry Sources

  1. Baker
    Feb 3, 2020 at 7:18 pm

    “The drop is probably the largest demand shock the oil market has suffered since the global financial crisis of 2008 to 2009, and the most sudden since the Sept. 11 attacks,” Bloomberg reported.

    When I see the price of gas back to far below $2.0 a gallon then we’ll be back to 2008 levels. Until then this supposed oil drop is a calculated scam to get people to short oil.

    In a few days Trump will come out and make a few anti-Iranian grunts and Oil will be back to $60 in a snap.

    Nothing in the markets is real anymore. Supply and demand does not matter. I’m convinced those numbers I see on the screens no longer have any correlation to reality.

    • Rich
      Feb 3, 2020 at 9:26 pm

      I agree with you regarding “Nothing in the markets is real anymore. Supply and demand does not matter. I’m convinced those numbers I see on the screens no longer have any correlation to reality.”

      Fake news, fake markets, fake meat, and fake boobs!

      • Iamafan
        Feb 4, 2020 at 8:48 am

        It is real, alright. The rich is getting richer and the wealth divide is getting worse. The rich own the stocks and the poor don’t. Central banks policies are not working. Other than that, I’m not making a moral judgement, but the facts are glaring.

        If you want more proof of incompetence look at the Iowa caucus. We don’t know who won because they won’t tell us. That’s worse than what China is telling us about the virus.

    • 2banana
      Feb 3, 2020 at 9:42 pm

      The Iranian economy is going to get even more crushed than it already is.

      Low oil prices are like sanctions on steroids to Iran.

      You know what Iran’s second biggest export is (besides terror)?

      Pistachios.

      • normansdog
        Feb 4, 2020 at 2:22 am

        hmmm, I think that if yu are looking for the world’s main terror exporter you probably need to look closer to home. Iran is in comparison a minor league player.

        • timbers
          Feb 4, 2020 at 6:09 am

          This is correct.

          Also, any such actions one might attribute to Iran take might likely fall into a legally justifiable self defense, because according to international law, because under international law America is the clear aggressor because it’s economic sanctions are, according to international law, constitute an illegal Declaration of War against Iran

        • Harvey Mushman
          Feb 4, 2020 at 12:03 pm

          Agreed… reluctantly.

    • timbers
      Feb 3, 2020 at 10:04 pm

      “Nothing in the markets is real anymore. Supply and demand does not matter.” I tend to agree with you. After all, the stock “markets” surged on news China fired up it’s printing presses but apparently couldn’t care less abt the reported 20% decline – an actual economic related figure.

    • Weary Patience
      Feb 3, 2020 at 10:46 pm

      I just filled up yesterday for 1.959/gal

      It’s looking like it could go something like this: demand shock, price dip, more bankruptcy and shying away from lending to the shale patch due to losses, more opec cuts, recovery in demand leading to price spike due to less shale production and too much concerted/overzealous cutting from opec, leading to financial strain on bottom percents of population, leading to? Resurgence in shale “investment” or recession.

      Probably take a year or three to work through the motions though?

    • nick kelly
      Feb 5, 2020 at 3:45 pm

      Feb 5; ‘Dow rises 500 points as market shakes off virus fears’

      Meanwhile all news says threat rising.
      How dumb is this market?
      Guess they’ll come crying to the Fed soon: ‘Save us from the virus!’

  2. Javert Chip
    Feb 3, 2020 at 7:25 pm

    Coronavirus isn’t China’s only problem.

    Controlling (killing) the pork virus has consumed 50% of the herd, China’s most preferred meat.

    Soybean fields all over China are being attacked by an insect critter that devastates the crop.

    The NYT has recently reported that N5N1 (or is it H1N5?) bird flu is on the rampage; 12,000+ infected & 250+ dead.

    This is a lot of disruption to pump thru any national economic system, especially a primitive and not very truthful communist one.

    • Unamused
      Feb 3, 2020 at 7:49 pm

      This is a lot of disruption to pump thru any national economic system, especially a primitive and not very truthful communist one.

      Primitive? By several measures they have the US beat cold, and it’s the US that’s busily turning into a third world banana republic.

      Communist? Actually they’re capitalists now, sort of, and they’ve been eating your lunch for years.

      Not very truthful? With this potus? You’re kidding, right?

      As for the demand shock, it’s unlikely to affect US financial markets very much unless it’s prolonged, like, several months. US equity markets certainly seem unconcerned, but you know how they are.

      • Cas127
        Feb 3, 2020 at 7:55 pm

        Maybe the first and last time I agree with Una – the US is living in a glass house with more than a few panes broken – for decades.

        If the arrogance continues, the US will continue to get its ass handed to it economically – a very high pct of our current recovery is a ZIRP induced illusion.

      • Zantetsu
        Feb 3, 2020 at 11:43 pm

        There is some truth to what you say but you are vastly overstating your case.

    • Old Engineer
      Feb 3, 2020 at 7:51 pm

      And I read they are killing chickens to try to curb an H5N1 bird flu resurgence.
      They have their hands full.

    • Cas127
      Feb 3, 2020 at 7:51 pm

      “especially a primitive and not very truthful communist one.”

      And, yet, they have been handing DC/US our ass for the last 20 years.

      Look, China has its problems – but utterly unfounded American arrogance about a lot of things has led the US into a lot of decline over the last 20 years.

      More of the same is going to yield more of the same.

    • BobT
      Feb 3, 2020 at 8:51 pm

      Yes, with 4 major virus problems it is just like they were under attack. Not that could possibly be the case. Sarc.

  3. Anthony Aluknavich
    Feb 3, 2020 at 7:42 pm

    Paid $1.93 per gallon yesterday at Walmart. Maybe I should have waited a couple more days!

    OIl is in the tank anyway. Natural gas is even worse, price wise. Sit tight and buy XOM in the $40’s soon.

  4. nick kelly
    Feb 3, 2020 at 7:48 pm

    ‘Brace For Impact: Global Pandemic Already Baked In’

    This is the title of a piece by serious, non-alarmist blogger Charles Hugh Smith on Zero Hedge ( Feb 3)

    He outlines the case that it is too late to prevent a pandemic. Probably his key point: many carriers are asymptomatic for up to two weeks. Checking their temperature before letting them fly etc. does not catch them.

    Each carrier infects three to four others. Now they are carriers, some with symptoms, some not. This is a geometric progression.

    Second point: China has many millions of poor workers in the cities who can’t live there if they can’t work. They have to migrate if Wuhan bars, shops etc,. stay shut. Many already have.

    Read it if you like, but if not familiar with ZH take a salt shaker. There is good stuff there (WR stuff appears) but like the gold shows tell us, you have to sluice a lot of dirt for every oz of gold.

    • Unamused
      Feb 3, 2020 at 8:03 pm

      you have to sluice a lot of dirt for every oz of gold.

      ZH is too much work. It doesn’t repay the effort.

      • rhodium
        Feb 3, 2020 at 8:37 pm

        ZH has gotten dumber and dumber over the years. I’ll admit I still visit for entertainment occasionally. Some reposted articles are still good, but even though it’s the best gossip on many of the latest conspiracy theories, one should be highly skeptical of any of it. They’re very quick to play up anything they were right about years later while conventienly ignoring all the other stupid horseshit and heavily embellished or conveniently ignored facts that they peddled in the meantime. Don’t get me started either on the mind-blowing cognitive dissonance after 2016.

      • Feb 4, 2020 at 1:30 am

        And dear GOD don’t look at the comments! It’s like a prison cell counseling session in there!

        • DebtWazoo
          Feb 4, 2020 at 4:53 am

          I tried to read the comments on ZH once.

          I still have nightmares about that.

        • Paulo
          Feb 4, 2020 at 8:26 am

          To me the ZH comments are a good window into the
          last election (2016), and the growing divide. The racism and hate towards Israel as the puppeteer of all things is quite frightening, though.

          I was doing some research into some ham radio topic a few months ago and stumbled across a Ham blog site seemingly located in northern California. It was all about conspiracies; how Gubmint was asking a repeater site to move in order to control free speech and society. Them. Us. They’re all out to take away our rights and guns.

          The ZHedgers talk about how backwards the Chinese are, because they eat different foods, mostly. In my mind I compare the I5 in northern WA (State) to their new freeways, or the lumbering Amtrak to Vancouver BC vrs high speed rail in China; 35,000km of line with a new maglev able to run at 600km/hr.

          As to this article, I read it keenly because my son works in the oil patch in Alberta. The Oil Sands projects are so long term and it is relatively easy to control production. No market? Don’t step up processing and leave the sand in the ground. Shale, on the other hand, is effed. Drilled wells have to produce immediately for cash flow. If they don’t complete the wells, (DUCS), the drilling costs still have to paid off and there are no cash reserves to rely on. Plus, borrowing more funds is likely off the table, completely.

          Someone mentioned this will hurt Iran and cause them to knuckle under. I agree, it will hurt Iran, but likely just ramp up the drumbeats for war…by both sides. Did Russia roll over in WW2? Did Korea? The VC? Afghanistan? No, people and countries will fight to the bitter end, until they are overwhelmed by marching armies, and even that might be only temporary? Look for more terrorism, by both sides, regardless of The Virus.

          All I know the airlines have quit flying to China and those empty streets are very very frightening. Pre-market trading this morning at 390 pts and Tesla just rose again. Is it 1929, or just insanity?

        • Feb 4, 2020 at 10:16 am

          This is one of the first websites to rate other websites for troll activity.
          Trolls can take over any website, even this one. If Wolf gets tired of working for beer. http://www.propornot.com/p/home.html

        • Frasersgrove
          Feb 4, 2020 at 10:19 am

          Every time you go into the comments on ZH, you lose brain cells…

    • Nat
      Feb 3, 2020 at 8:15 pm

      For added “fun” apparently the viruses bonding motief to the human antigen it uses is one point mutation away from being much stronger (based on prior viruses that had the alternate motief). This means this virus is a single pint mutation away from potentially becoming much more lethal.

    • c1ue
      Feb 3, 2020 at 9:51 pm

      I kept looking for the /sarc tag, but apparently you are serious: that CHS is not an alarmist

      • David S.
        Feb 4, 2020 at 2:15 pm

        I used to enjoy and get quite a bit from his articles but the last few years it’s just the same recycled stuff. Mostly now just blah-blah-blah … buy my stuff.

        Seems like a nice enough guy, though.

      • nick kelly
        Feb 4, 2020 at 5:28 pm

        Check CNN today: ‘Doctor who tried to save lives now has N virus’

        Doctor Li became worried when several workers from the same market became very ill. He posted on- line and then saw his message blurred out.
        Soon he was detained by police and severely reprimanded for disturbing social order.

        Now after treating a patient he has the virus and is on oxygen. (For the buddies who think this mainly affects the old: he’s 34.)

        It would be another 10 + days after Li’s warning before Wuhan lock down, but by that time 5 million had left the city for the holiday.

        All in all a considerably more alarming story than Smith’s.

        BTW: no one can survive in the media by down playing stuff. WR is often accused of being alarmist along with super-bear David Stockman.

        In the case of this virus, so far fact is running ahead of most speculation.

    • nick kelly
      Feb 4, 2020 at 7:43 pm

      Just in on CNN: Princess Cruise ship with 3700 aboard will be quarantined at Yokohama for two weeks.
      How’s that for a holiday? Passengers will be fed but will there be an open bar?

      And here is the bad news: the apparent carrier had no symptoms when he was aboard. They backtracked when he finally tested positive and then found 40 testing positive on board.

      Recall that according to CNN, not abnormally alarmist, 5 million left Wuhan before the lock down, dispersing all over China.

      Prediction: over the next few days there will be a distinct reduction in comparisons to the hazards of seasonal flu, traffic accidents, opium etc.

      I’m Canadian and right now our media is basking in the praise from China for being one of the few countries not banning arrivals from China.

      We’ll see how long that lasts.

  5. Andre the New Giant
    Feb 3, 2020 at 7:54 pm

    https://www.boxofficemojo.com/weekend/by-year/?area=CN&ref_=bo_in_table_65

    Movie tickets sales in China last weekend fell by over 99% compared to the previous weekend.

    • Mike G
      Feb 4, 2020 at 3:34 pm

      Now THAT’S a bear market.

  6. Keepcalmeverythingisfine
    Feb 3, 2020 at 8:51 pm

    Per Wiki: A pandemic is an epidemic of disease that has spread across a large region; for instance multiple continents, or even worldwide. A widespread endemic disease that is stable in terms of how many people are getting sick from it is not a pandemic. Further, flu pandemics generally exclude recurrences of seasonal flu.

    We can watch China and the economic impact and extrapolate that to other heavily populated countries and cities. Or, have faith our leaders will contain it, and that they care. Hmmmm.

    • nick kelly
      Feb 4, 2020 at 10:50 am

      ‘A pandemic is an epidemic of disease that has spread across a large region; for instance multiple continents, or even worldwide’

      Yes. Right or wrong that is what he is postulating. He says that since tens of thousands of asymptomatic carriers left China and each will infect others who will infect others….

      He is hopefully wrong about his prediction but he knows the definition.

  7. David Hall
    Feb 3, 2020 at 9:00 pm

    After being scolded for cash burning, Tesla is celebrating. People may not need gasoline if they buy EV autonomous. Less air pollution in the big city. The short sellers stampeded to cover as Tesla stock rose 19% in a day.

    Some E&P companies have contracts to pay pipeline company transport fees, even if they do not ship any oil. They will ship oil as long as the economics allow. If they miscalculated, their assets might be sold at bankruptcy auction. Oil shortages did more damage to commuters than oil gluts.

    • 2banana
      Feb 3, 2020 at 11:11 pm

      Just where do you think the electricity to run a Tesla exactly comes from? Especially in China?

      Hint. Four letter word. Starts with a “C” and ends with virtual signaling of the rich and uber rich using government credits and tax subsidies to buy a toy…

      • Raymond Rogers
        Feb 4, 2020 at 12:59 am

        Rainbows and unicorns. That is where it all comes from. Ir maybe it’s from that magical box where all the “free” stuff comes from.

  8. Willy Winky
    Feb 3, 2020 at 9:20 pm

    Wolf – is it ok if I post this? People can work out the implications for themselves.

    • Feb 4, 2020 at 12:30 am

      You already posted the same link yesterday. Once is enough.

      • Raymond Rogers
        Feb 4, 2020 at 12:59 am

        Can I have some more, sir.

  9. Makruger
    Feb 3, 2020 at 9:27 pm

    Hmm…maybe the U.S. and Canadian oil producers should cut back production as OPEC and Russia have done and may need to do again. If pumping more oil is only resulting in less profit and even causing bankruptcy, perhaps pumping less will reverse the trend. Makes sense to me at least.

    • Feb 4, 2020 at 12:35 am

      The only way US producers are seriously cutting production is if they run out of money and are pushed into bankruptcy. The incentives are all wrong. Executives are rewarded for production, not cash flow or profits.

      • Feb 4, 2020 at 10:49 am

        Today Fed put 100B, 120B offered in the markets. Rates fall, and boosts corporate HY which is the funding source for E&P, shale oil and fracking; company profits made off cheap credit. They continue to increase supply. Coronavirus is an exogenous tamp down on demand. The only thing that will slow production at this point is a tightening of liquidity and FED is going the opposite direction, to save the markets. We passed irrational on the way to insane.

        • Feb 4, 2020 at 12:19 pm

          Ambrose Bierce,

          “Today Fed put 100B, 120B offered in the markets.”

          No! This is what happened today, and it amounted on net to $2.5 billion:

          — 14-day repo fr Jan 21 unwound today: -$32.1 billion
          — Overnight repo unwound today: -$59.8 billion
          — New 14-day repo today: +$30 billion
          — New overnight repo: + $64.4 billion

          Net: +2.5 billion

          And rates offered did not fall. They’re up from last year through January 28. Today at 1.60% for overnight and 1.61% for 14-day repos, up from 1.55% and 1.58 through Jan 28.

        • Anmol
          Feb 4, 2020 at 1:32 pm

          Thanks for posting the repo details constantly. I get my !Ind blown with the doom porn at zh then go through your comments for a dose of reality.

    • Brant Lee
      Feb 4, 2020 at 9:04 am

      Russia and our “Friends” OPEC may look at this situation as an opportunity to knock out the competition from U.S. fracking by letting prices plummet quickly. D.C. will have to step in to give a more direct subsidization to the failing industry if prices keep falling.

  10. John
    Feb 3, 2020 at 9:30 pm

    WTF! Thanks Wolf.

  11. Dave
    Feb 3, 2020 at 9:32 pm

    Has anyone asked Alexa what to do about containing the virus? I bet you she knows.

    • sierra7
      Feb 4, 2020 at 1:18 pm

      Dave:
      Asking Alexis if she knows what to do….
      Reply:
      “How do I know; I’m too busy spreading my own!”

  12. raxadian
    Feb 3, 2020 at 10:21 pm

    Can you say “There is no business like fracking business?”

    • WT Frogg
      Feb 4, 2020 at 10:54 am

      Raxadian: I can say it but only while clicking my ruby work boots together

      with my eyes closed. LOL. ;)

  13. WES
    Feb 4, 2020 at 1:00 am

    Arctic:. One thing nobody seems to be talking about is that somewhere between 20% to 25% of coronavirus patients required serious medical treatment to survive.

    That likely means many especially in China most sick people are simply being left to die at home. They are not being counted because there are not enough test kits so they are being cremated no questions asked!

    In addition to people to people transmission, it is now coming out that the virus can be spread via door knobs, keyboards, fausets, etc. Let that fact sink in!

    The more we learn about this virus the worst it is. Checking/screening people for temperatures is pretty well useless because most carriers show no signs until it is way too late!

    Look at how one Chinese lady infected so many of her co-workers in Germany! Over 10!

    If you think we in the west could do better, I think you are very wrong!

    We in the west don’t have enough beds nor enough test kits either!

    I wonder why western governments are now quarantining everyone?

    • Forest Gump
      Feb 4, 2020 at 2:08 am

      More alarm, in SE asia there has been one death in the Philipines, this is of the 100’s of positive tests. Everybody with a fever, runny nose, or cough south of China is going to the doc. Nobody is dying at home.

      That means that outside and near China, the rate of death is less than 1%, let that sink in, and extrapolate that back to China….

      In China proper its another problem.

      In China, the problem is “People” think 1,000X or 100X of any time you have been to Disneyland. It’s always that way in China. You have to fight to get on a bus, you have to fight for your reserved seat.

      So the same now, everybody in China that feels ill wants to go the doctor, but the hospitals are 100X over-capacity. The only people dying are old people who are dying of pneumonia, but the problem is the over-taxed system, not so much the virus.

      Another thing, what is this about “Dying at home” in the USA when I was a kid, my family was proud of dying at home, nobody sent granny to die in the hospital. In all of Asia, in general people die at home, the death is certified, there is a 3 day memorial, then burial/cremation. There is absolutely nothing that can be done when the hospitals are packed to the ceiling. They could have a ‘lottery’ but people would still be ‘dying at home’, well they would be sick at home. 99% of the time when you have pneumonia, you just stay in bed and shake it off if your strong, you don’t get cold to begin with, and you don’t breath cold air, which usually starts the process.

      The problem unique to China is its winter, and they don’t have ‘central heat’, so going to the hospital means laying on a cold floor, which if your already sick, now you get pneumonia.

      If all the places outside of China are running less than 1% mortality, then you can assume its the safe in China.

      Nobody talks, because if you call the ‘gov’ then they quarantine your home, which means your house becomes a prison. In general just like modern USA, in ASIA nobody call’s the police into their home.

      • david sharma
        Feb 4, 2020 at 2:22 pm

        “The problem unique to China is its winter, and they don’t have ‘central heat’, so going to the hospital means laying on a cold floor, which if your already sick, now you get pneumonia.”

        That explains why every picture and video of people in the hospitals in China show them wearing heavy winter coats. Even the people just sitting waiting.

    • TonTon
      Feb 4, 2020 at 3:53 am

      This is not the case. We are only seeing the numbers from the most vulnerable in Hubei. By the time they started confirming the cases and publishing the numbers there were most likely tens of thousands of cases (Lancet article estimated 75,000 in Hubei alone by Jan 23 I think it was. Might have been Jan 25). As far as I remember a Business Insider article from Jan 23 said that China only had the capacity to test 2000 cases per day. Compare this to USA, the top healthcare system in the world, whereby it’s taking a week to test the 30 schoolchildren from Florida. It’s difficult to test people.. I have also read that the USA only has 100,000 ICU beds (ominous) although I could have misheard this.

      A better example of the true numbers is a region where the medical facilities were not yet overwhelmed. Zhejiang has slowly creeped up to 829 cases. 0 Deaths. 49 recoveries.

      Given that people are wary of the Chinese numbers we can also look to cases outside mainland China. All the German cases are doing well with the first person infected just taking 2 days off work and having felt only mild symptoms. The numbers outside of China will give a much better indication of the death rate and the critical rate. It will be far below the percentages we are currently seeing. However, this virus does seem incredibly infectious so it might affect an incredibly high percentage of the world’s population.

      All the early deaths, seem to be of the elderly or people with a secondary illness. There are a couple of cases of younger people dying (those under 40), but those individuals may have a genetic predisposition to being more vulnerable to this particular virus.

      • Cas127
        Feb 4, 2020 at 11:16 am

        “Compare this to USA, the top healthcare system in the world, ”

        Cough, cough.

        Literally – cough, cough.

        The only people who still believe in the wonderfulness of the US healthcare system…are those who have had very, very little contact with it.

        As with most of America’s rotting institutions, the HC system performs worse and worse while consuming more and more resources.

      • Wisdom Seeker
        Feb 4, 2020 at 6:07 pm

        If you take China-outside-of-Hubei the data show a mortality rate among confirmed cases (deaths / recovered) of 4%. Recoveries take longer than deaths, so the recovery number might be low. Non-confirmed cases may be much larger and have a lower or higher mortality rate, depending. Could be lower if people who get only mildly ill don’t bother getting tested and “confirmed”. Could be higher if people are dying at home without care.

        Also lost in all of this is that with the hospitals overwhelmed, mortality rates for Every Other Illness will also be higher. Even seasonal flu becomes more fatal than the usual 0.1% when treatment isn’t available. Those deaths could be attributed to the coronavirus second-hand.

        • Wisdom Seeker
          Feb 6, 2020 at 1:47 pm

          Here’s the logic on calculation of case fatality rate (“death rate”), from WHO regarding SARS but applicable to 2019-nCoV:

          “While an epidemic is still evolving, only some of the individuals affected by the disease will have died or recovered. Only at the end of an epidemic can an absolute value be calculated, taking into account total deaths, total recoveries and people lost to follow-up. Calculating case fatality as the number of deaths reported divided by the number of cases reported irrespective of the time elapsed since they became ill gives an underestimate of the true case fatality ratio.” — WHO, May 7, 2003, “Update 49 — SARS case fatality ratio, incubation period”.

          https://www.who.int/csr/sars/archive/2003_05_07a/en/

    • SwissBrit
      Feb 4, 2020 at 5:51 am

      “In addition to people to people transmission, it is now coming out that the virus can be spread via door knobs, keyboards, fausets, etc. Let that fact sink in! ”

      Most if not all viruses can spread in this manner; the flu virus can live 24 hours or longer on plastic and metal surfaces like cafeteria tables, doorknobs, and cups.

  14. KGC
    Feb 4, 2020 at 1:29 am

    If the price of crude drops below 50 and stays there for any significant amount of time it’s going to have social impact in a number of countries. Iran and Russia cannot sustain their economies at those prices, and even the Saudi’s are going to be hit hard. But places like Algeria (which is on the edge of a major revolution) and Libya (currently torn by fighting funded on opposite sides by Russia and Iran) are going to get bad.
    Maybe not Venezuela bad, but worse than they are now. Those are countries kept semi-stable by oil revenues.

    Sub-Saharan Africa too is going to have problems with Nigeria headed back to open warfare as oil theft keeps entire tribes from starving. Six months of below $45/bbl crude could very well see Russia leaving the Crimea, Iran changing from a religious autocracy, and Turkey becoming the next Argentina.

    And it’s really hard to justify EV’s when gas is cheap…

    • char
      Feb 5, 2020 at 11:57 pm

      Russia is more gas and that is more long term contract. It finances are also fine.
      Iran just got a shot of nationalism and they could export more oil. Which China good buy to keep them stable. Their finances are also not that bad. US economic war does not only make selling stuff hard. It also makes buying stuff hard,
      In Libya the side that controls the oil has stopped exports. Iran is not in Libya. The opposite sides are paid by Qatar vs the other Arab Gulf state(mainly UAE). Turkey gets money but i don’t know if it covers their bills but for Russia it is more a financial transaction.
      Russia will never leave Crimea. Local population is Russian, conservative estimates are that 80% wants to stay in Russia and what is left is more for independence than Ukraine. Their economy has also three main planks. Russian navy base, tourist place for Russians and produce supplier for Russia.
      Iran changing from a religious autocracy is already happening but that does not mean they will become America’s bitch.
      Turkey likes low oil prices. It is a workshop not a raw material exporter. It is true that they have ïsues with the US just as Argentina had when they became “Argentina” but the US is much less important now

      US has low gas taxes. here the price of gas is only a little bit cheaper. Does not change the EV buying prospect. Not driving to A’dam is more important

  15. ConfirmationBias
    Feb 4, 2020 at 1:40 am

    Here’s a boost to useless consumption of energy.

    China has just 100% banned ‘home food delivery’ for the entire country. Nobody wants a virus delivered to their home. U got to wonder when this stuff coming to USSA???

  16. Willy Winky
    Feb 4, 2020 at 4:19 am

    BOOM!

    Cathay Pacific plans deep flight cuts worldwide amid coronavirus woes

    Sources say passenger numbers have collapsed by 50 per cent in recent days.

    https://www.scmp.com/news/hong-kong/transport/article/3048918/hong-kongs-cathay-pacific-airways-plans-deep-flight-cuts

    And meanwhile the SCMP reported that the virus is mutating.

    Mutating is a word that scares people. It panics them. They dont buy fly or do much more than cower in fear.

    This is just beginning.

    It will not end well

    • Mike G
      Feb 4, 2020 at 3:40 pm

      Cathay’s volume was already down like 40% from the months of street protests and police violence in HK.

      • char
        Feb 6, 2020 at 12:01 am

        Cathay’s union is also virulent anti Beijing. Them going tits up is not something the Beijing government would mind.

  17. unit472
    Feb 4, 2020 at 6:40 am

    Right now the price of oil is the least of our problems. I’m worried about a collapse of China’s healthcare system. Those Chinese nurses are being worked to death ( perhaps literally). Taking throat swabs to determine nCoV status is dangerous work and doing it in full body protective suits adds to the problem. They breathe thru a double layer of N95 masks and can only wear the gear for an hour at a time before they have to stop to rest. They also have to turn and clean up after those too weak to do it themselves. Not much information on how many healthcare workers are themselves becoming victims.

    Another worrying data point. The number of ‘recovered patients’. It is is about 50% more than the official tally of the dead. Three weeks into this drama that, to this layman, seems low. Most people get over ‘the flu’ in just a few days. Why are so many nCoV patients still in hospital?

    • Xabier
      Feb 4, 2020 at 8:30 am

      That’s why there is a lock-down of the worst-affected areas: it manages the pressure on the hospitals, supplies and staff.

      Also, I suspect, to avert any upsurge in looting of empty properties, which has always accompanied plagues since time began.

      At the moment, I think it is fair to say that we have no trustworthy figures of any kind on this outbreak, except -maybe – in the West/Japan.

      On the positive side, we have a huge and very mobile Chinese community -mostly students – here (Cambridge, UK) and not one reported case so far.

  18. Paulo
    Feb 4, 2020 at 8:38 am

    Evacuated Canadians are being tested in Vancouver then flown to Trenton ON military base for a 2 week quarantine. This is a pretty big deal for Canada, actually. While our Country is huge and sparsely settled, it is very urban with over 80% living in cities within 100 miles of the US border.

    Overreaction? Time will tell.

  19. Michael Engel
    Feb 4, 2020 at 9:58 am

    1) Somebody told the market that Chines oil consumption
    is down 20%, sending CL (future market) down.
    2 Yesterday at 6PM at nadir, whenCL hit 49.66 he clicked in Chicago
    tons of contracts. Volume was unusually high, when Putin talked
    to the prince on the phone, in preparation to OPEC meeting today. 3) Dr Copper HG (future market) in a trading range since Nov 2016,
    perhaps in accumulation.
    4) RE all over the world was hit by the coronavirus : Chinese RE
    workers, building highways, ports, hospitals, apartment buildings,
    were blocked from coming back and developers scramble to fill the gap, paying higher wages, whatever it take.
    5) On March, every type of flue outbreak fade and expire.
    6) Premier Xi showed the world how powerful he is. China locked up 100M, when he gave the order, while US cannot lockup even one criminal,
    or traitor.

  20. Michael Engel
    Feb 4, 2020 at 10:29 am

    1) Dia 15 min, the DOW ETF is happy. It popped up to close Jan 30/31 open
    gap above, while opening another huge gap below.
    2) Jan 17 is peak.
    3) DIA in a trading range, since Jan 27, at lower level, below the peak.
    4) Today DIA high is at about the same as Jan 2 high, for a count.
    5) Today DIA is building cause #1.
    6) Dia bounced on Ichimoku cloud on Jan 31, but next week will
    breach the cloud on the way down.

  21. Mean Chicken
    Feb 4, 2020 at 10:34 am

    Drink plenty of fluids and avoid imbibing in your favorite drugs, at least until you begin feeling better and maybe even till they’re legalized.

    I felt deathly ill for quite a while, experienced profuse sweating, vomiting and violent convulsions for days on end. People around me were beginning to ask questions.

    Hope I never get the HIV flu again! ;(

  22. Feb 4, 2020 at 11:05 am

    China also has ways to outsource their manufacturing. If they can build a hospital in 7 days why not an Iphone plant in Brazil? The US seems to have all sorts of problems negotiating these myriads of trade agreements, why not deal with one country directly and let them subcontract? No hassles with supply lines, transportation, and labor. This virus may turn out to be the catalyst for China’s next big economic step forward. Such a move might help the climate change problem, and give them carbon credits trading manufacturing to nations with more renewables, and clean energy like hydro. Too bad the US can’t figure this stuff out.

    • nicko2
      Feb 5, 2020 at 3:31 am

      Uh…. China is way ahead of you there.

  23. Michael Engel
    Feb 4, 2020 at 11:10 am

    1) China is locked up by spaceship health care workers.
    2) You cannot see them, talk to them, when they do their job.
    3) US HAZARD teams training.
    4) One day there was some kind of smell in the the street, in NYC.
    5) HAZARD space ship team came out of their space ship trucks, and
    ordered evacuation of every building, instance shutdown of street
    level store, ==> out, out now, while they were doing their drill.
    6) HAZARD supremacy

  24. akiddy111
    Feb 4, 2020 at 11:33 am

    I think that crude oil prices are crashing because hardly anybody needs oil anymore. Similarly, no one needs U.K. manufactured vehicles anymore either.

    I saw that Tesla’s stock was up 20% earlier today for the umpteenth time in the last several days. It’s revenue is expected to hit $30 billion this year up from $7 billion as recently as 2106.

    Yahoo Finance forecasts 41% growth in revenue Y/Y for Tesla next quarter. Elon Musk, eh. What a guy !

    Parabolic growth for Tesla. Everyone sees it. Well…. almost everyone. Blinkers and biases are very, very hard to remove. It’s just the way it always is.

    • Feb 4, 2020 at 11:45 am

      akiddy111,

      Tesla’s revenue in 2019 edged up only 2% from 2018. Now the Gigafactory in Shanghai is shut down. Model S and X sales are collapsing, with sales shifting to the cheaper Model 3. But for each Model S or X it doesn’t sell, it has to sell two or three Model 3 just to stay even, dollar-wise. When the Model Y comes out, it will cannibalize Model 3 sales, just like Model 3 sales killed Model S and X sales.

      Hot off the press. Look at the other charts in it too:

      https://wolfstreet.com/2020/02/04/im-in-awe-of-how-tesla-is-now-a-supernatural-phenomenon/

  25. Macau
    Feb 4, 2020 at 9:14 pm

    Macau shutting downs Casinos

    Now this is big, Macau is bigger than Vegas; Macau is the biggest casino country on earth, and its 100% open to Chinese, well it was, its also since 1997 run by China, former Portuguese colony.

    HK is closed to Chinese, now effectively Macau will be closed, as with no casinos, there will be no reason to go there.

    Wow, think about this, much worse than HK, in terms of shutting a place down, what will the people do who live there? Essentially it just becomes another ‘quarantine center’, but they don’t even grow their own food. So they’ll just be spending money, and not making any money.

    • nicko2
      Feb 5, 2020 at 3:36 am

      China is not revealing the full truth of the virus…. But the big picture is starting to become clear. It’s bad.

  26. TonTon
    Feb 5, 2020 at 3:40 am

    I have been to Vegas a couple of times in January and the place was filled with Chinese gamblers. I have not seen this talked about too much anywhere. They would arrive long before the Chinese New Year also, as everyone gets off at least a week or two beforehand. I’m kind of amazed that there have been no cases of the virus in the Vegas area. It’s quite cold there in January also so the virus would not be killed off easily if it was on surfaces. The more days that pass the more unusual it appears that this virus is not spreading so much in the rest of the world. Even given the 2 week incubation period. It has been a global health scare for at least 2 weeks now.

    I might have been off on the US being the top Healthcare System Cas127. I haven’t been to a medical facility within 4000 miles of the US. I should have said ‘The top healthcare system in the world, in the movies,’ or ‘the most expensive healthcare system in the world’….
    either way though, it’s a lot better than China. Many in the less progressive areas of China don’t understand anything about healthcare or western medicine and many don’t even believe in germs. I know this firsthand from the children (It can still be a small percentage and be many people in China).

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