COVID-19 Bulletin: February 1

Good Afternoon,

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Supply

• Energy prices were higher in early trading today, with the WTI up 1.7% at $53.06/bbl, Brent up 1.6% at $55.93/bbl, and natural gas 11.6% higher at $2.56/MMBtu.
• Global consumption of petroleum and other liquid fuels fell 9% in 2020, the largest yearly drop since 1980, according to the U.S. Energy Information Administration.
• OPEC and its member nations implemented 99% of their agreed oil-supply curbs in December, equivalent to about 7% of global supplies. An official report is expected Tuesday. Overall, the cartel’s crude production increased by about 160,000 bpd in January from December as curbs were eased.
• The number of U.S. oil and gas rigs rose by 6 to 384 last week, the tenth consecutive weekly rise for a total gain of 74.
• Chevron is extending a suspension on growing shale production in the U.S. Permian Basin over uncertainty about the trajectory of the pandemic. The company posted its third consecutive quarterly loss of $665 million on Friday to close its worst year since 2016, with total losses amounting to $5.5 billion for the year.
• The Wall Street Journal reported that early in the pandemic the heads of Exxon and Chevron discussed a merger to form the world’s second largest oil company behind Saudi Aramco.
• Royal Dutch Shell is focusing on power trading, hydrogen and biofuels as it diversifies from oil, diverging from many of its competitors who are shifting to renewable energy.

Supply Chain

• A winter storm that blanketed much of the Midwest with snow last week is moving over the Northeast this week, with storm alerts covering about 100 million people as of Sunday afternoon, and threatening to disrupt travel and COVID-19 vaccination sites.
• More than a year into the pandemic, supply chains remain disrupted, causing short supplies of cars, electronics, wine, clothing and other consumer goods.
• A total of 155 passenger aircraft were reconfigured to transport cargo last year.
• Norfolk Southern’s operations picked up pace in the last quarter of 2020, notching a record-setting quarterly operating ratio of 61.8% while net income for the year decreased 26%. Canadian Pacific also reported a record operating ratio in the fourth quarter on its way to posting higher profit on lower revenue compared to the year-ago period.
• Logistics conditions remain strained, with trucking demand exceeding availability, continuing congestion at ports, and backlogs at warehousing and packaging facilities due in part to operating challenges related to the pandemic. Shipping containers are in short supply, with demurrage charges rising. Clients are advised to provide expanded lead times on orders to help ensure delivery dates. 

Markets

• Total COVID-19 infections in the U.S. topped 26 million over the weekend.

• January set more daily records for the worst COVID-19 numbers of any month, while the second half of the month has seen some of the sharpest improvements in the numbers.
• COVID-19 hospitalizations dipped below 100,000 for the first time in two months during the weekend, while new reported cases continued to fall.
• California surpassed 40,000 total COVID-19 fatalities while new cases continued a gradual decline from recent highs.
• New York City will reopen indoor dining on Feb. 14, with indoor capacity capped at 25%.
• Florida and California have both reported 92 cases of COVID-19 patients infected with the virulent virus strain discovered in the U.K. Florida’s cases encompassed nearly a third of the state’s counties. A White House health advisor is warning that the strain will likely become dominant in the U.S., potentially leading to lockdowns.
• Maryland became the second state behind South Carolina to find a COVID-19 patient infected with a virulent strain of the virus first detected in South Africa.
• The U.S. lacks widespread testing of genetic sequences needed to identify the presence of COVID-19 variants in the nation, potentially contributing to their rapid, undetected proliferation.
• U.S. vaccine company Novavax reported its COVID-19 vaccine was nearly 90% effective in clinical trials conducted in the U.K., but only 49% effective in trials conducted in South Africa, adding concerns that virus mutations are becoming more successful in eluding shots.
• New CDC guidelines require U.S. travelers and commuters to wear masks on nearly all forms of public transportation and inside of transportation hubs, such as airports and rail stations. The agency also listed new safety practices for Super Bowl get-togethers.
• Sixty percent of nursing home staff in Ohio haven’t elected to receive a COVID-19 vaccine, while New York expects 30% of healthcare workers to ultimately turn the shots down.
• The 17,584 COVID-19 infections among nursing home residents for the week ending Jan. 17 marked the fourth straight week of declines. Some senior citizens who have trouble navigating websites are finding themselves locked out from a competitive process to secure vaccine appointments.
• The origins of long-haul COVID-19 symptoms, including a prominent “brain fog,” are still unknown, although they could be experienced in up to 76% of infected people.
• Johnson & Johnson’s one-shot COVID-19 vaccine was 66% effective at protecting people from moderate to severe disease in a large clinical trial. The company expects to seek U.S. authorization in February, potentially bringing a third vaccine alongside Pfizer/BioNTech’s and Moderna’s.
• Racial disparity in the distribution of COVID-19 vaccines in New York City is prominent, with Latino and Black residents accounting for significantly lower vaccination rates.
• Some school districts are facing potential funding penalties from their state legislatures if they fail to reopen in-person.
• North Carolina’s home-school monitoring website crashed on the first day of enrollment after more than double the number of filings were submitted over the previous school year, indicating a larger trend of parents choosing to teach kids at home during the pandemic.
• U.S. household income rose 0.6% in December, the first gain in three months, partly due to a new round of government aid efforts. Meanwhile, household spending shrank, with a 0.2% decrease from the prior month, marking the second consecutive month of declines.
• Despite strong growth in the fourth quarter, U.S. GDP for 2020 ended down 3.5%, the biggest drop in nearly 75 years:

• The pandemic is accelerating a shift away from cash due to convenience and a desire to avoid bills and coins as potential sources of COVID-19 transmission.
• Older Americans are working longer, spurred by the elimination of commutes in the new age of remote working.
• Small businesses in rural parts of the U.S. have been more successful this time around at getting federal pandemic relief from the government’s reopened Paycheck Protection Program (PPP), with some states getting more than twice their share of PPP loans than before.
• Contract signings for U.S. homes fell 3.6% in the Midwest in December, the fourth consecutive monthly decline, suggesting further weakness in the housing market due to rising prices.
• United Airlines sent furlough notices to 14,000 employees warning of job losses when current government support ends on April 1 if more financial aid is not forthcoming from Washington.
• Production of Tesla’s first electric semi heavy-duty truck has been repeatedly pushed back over supply shortages of special battery cells, with the first delivery of the vehicle now expected late this year.
• The head of SoftBank Group expects mass production of self-driving vehicles to start in two years.
• Pandemic lockdowns have prompted a surge in sales of high-end liquor. Liquor giant Diageo’s net spirits sales in the U.S. grew 15% in the last six months of 2020 on an organic basis, driven by an 80% jump in tequila sales as the liquor was embraced by drinkers staying in.
• Caterpillar posted a 15% decline in fourth-quarter revenue on a slowdown in construction, especially for road construction projects funded by local and state governments.

International

• COVID-19 infections in Saudi Arabia more than tripled in January, prompting the government to extend an international travel ban for citizens until mid-May.
• The U.K. banned direct passenger flights from the United Arab Emirates, shutting down the world’s busiest international airline route from Dubai to London.
• Canada’s domestic airlines are halting service to the Caribbean and Mexico to thwart the introduction of highly infectious virus strains from inbound passengers. The country’s virus fatalities topped 20,000 over the weekend.
• Cuba is imposing new quarantine requirements for travelers after a surge in COVID-19 cases this month.
• After nearly 10 months without community transmission of COVID-19, the Western Australia city of Perth is locked down for five days after a quarantine-hotel security guard tested positive for the virus.
• Despite vaccinating more than 82% of its over-60 population, Israel continues to see elevated COVID-19 case rates due to mutations of the virus. Israel is sending 5,000 COVID-19 vaccine doses to provide shots for frontline Palestinian medical workers.
• Thailand is loosening restrictions across the country to allow businesses and schools to resume operations after reporting only 802 new COVID-19 cases at the end of last week.
• The European Union approved AstraZeneca’s COVID-19 vaccine for emergency use but cautioned that not enough data exists to determine the shot’s effectiveness in those over age 55. The company will send an additional 9 million doses to the European Union in the first quarter of 2021.
• South Africa secured an order of 20 million additional Pfizer/BioNTech COVID-19 vaccines, with the first batch set to arrive today.
• Hungary became the first European Union member to approve and purchase 5 million doses of COVID-19 vaccines developed by China’s Sinopharm.
• A group of leading Dubai companies have partnered in a plan to send 2 billion COVID-19 vaccines to countries in need in 2021.
• Lockdowns associated with a recent spate of COVID-19 infections in China slowed the nation’s economic activity in January, causing month-over-month declines in indexes of manufacturing and services.
• Despite a fourth-quarter resurgence in economic activity, Mexico’s economy suffered its biggest annual contraction since the 1930s last year with an 8.5% decline in GDP.
• The manufacturing sector in Italy expanded in January, with the Purchasing Managers Index rising to 55.1 from 52.8, while the services sector index remained below 50, indicating continued contraction.

Our Operations

• Our 3D Printing business unit has launched a new e-commerce site. Access the new site here.
• Market Expertise: M. Holland offers a host of resources to clients, prospects and suppliers across nine strategic markets. To arrange a videoconference or meeting with any of our Market Managers, please visit our website.  

Thank you,

M. Holland Company

We will provide further COVID-19 bulletins as circumstances dictate. For all COVID-19 updates and notices, please refer to the M. Holland website.