Energy 134, WTI crude touched below $1/barrel

All-time low oil prices today.
From the all-time high of $165/barrel in June 2008...

https://www.macrotrends.net/1369/crude-oil-price-history-chart

Today it touched near zero, 3 cents per barrel.

https://tradingeconomics.com/commodity/crude-oil

Producers cannot find enough storage for their excess production. Some producers in Canada are pricing negative, meaning they will even pay people to get and store their oil.

May WTI Contract Crashes To $1; Alaska, Bakken, & Edmonton All Pricing Negative

by Tyler Durden

Mon, 04/20/2020 - 12:56

https://www.zerohedge.com/markets/historic-oil-crash-sends-canadian-oil-prices-negative

The anti fossil fuel planet saviours shd be jumping with joy now, people are using very little oil, and gas and coal, their advocacy is accomplished by the China virus.

On the supply-demand oil, global demand in 2019 was 99 million barrels per day (mbpd). Projection for 2020 before the pandemic is 100-101 mbpd. With current global lockdowns and scare, demand is estimated at only around 70 mbpd. That's why the planned production cut of 20 mbpd failed to lift prices up.

These very low oil and gas prices can push oil export dependent countries like Saudi, Russia, Iran, Iraq, etc to the brink of domestic riots. Their dictatorial govts give lots of freebies to their citizens in exchange for their political obedience. Now these govts are suffering from very low oil revenues, cannot sustain the many freebies.

They should cut production by at least 25 mbpd. Big problem, who will cut by how much as they are scared of further losing their market shares abroad

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See also:

Energy 131, Labor productivity by power sources, November 19, 2019 

Energy 132, US crude oil production now 13 mbpd, January 24, 2020 

Energy 133, Oil prices decline with Covid scare, March 2, 2020

BWorld 429, Treatment innovation vs. politics of envy

* My article in BusinessWorld, April 16, 2020.

In an address to the nation last Monday, April 13, about government policies to fight the China virus, a.k.a. SARS-COV2 which causes COVID-19, President Rodrigo R. Duterte said that a new treatment, an “antibody” has been developed by a giant pharmaceutical company. Problem is that “we are on the last ladder. Ang mauna niyan ‘yung mga mayayaman” (the first to benefit are the rich).

We take this statement by the President to make the following arguments.

One, there are many new treatments and new vaccines being developed by many companies. So not just one or two but more than 300 from at least two dozen pharmaceutical and biotechnology companies and laboratories. Vaccines are used on healthy people to train their immune system to recognize pathogens like the one that causes COVID-19 and neutralize these diseases before they can harm the body (see Table 1).

Of the 300+ active clinical trials, the majority are antiviral or target the virus directly, the rest focus on related effects of COVID-19 like pneumonia, inflammation, monoclonal antibodies, cell therapies, etc.

Two, some existing drugs can be repurposed to fight the virus and be manufactured cheaply. Prices as low as $1 to $29 per course of treatment and still deliver some profits to the innovator companies. They still need further clinical trials to specifically address COVID-19 but they have been used in some countries already (see Table 2).

Of the 300+ active clinical trials, more than 200 are testing medicines previously approved for another indication like the above drugs, antiviral combinations, and novel compounds.

Three, public health policies, not country wealth, will determine who will get new medicines and vaccines. There is more competition among many medicines both existing and under development from many innovator companies, so physicians and patients will have more choices. Despite this, some governments are preparing anti-innovation, anti-IPR policies like compulsory licensing and drug price control that are meant to punish innovator companies (see Table 3).

Four, new drug price control policies should be reversed by the President to attract innovators. When any of those new medicines and vaccines under development become successful and are available in the market, let the innovators bring their products to the Philippines. Initial high prices to cover high costs and high risks of developing these products can be mitigated by bulk purchase, lowering the price. EO 104 aims to impose price controls at the maximum wholesale price (MWP) then maximum retail price (MRP) levels and one of the four criteria is if medicines are most prescribed by physicians. Like compulsory licensing, this is based on envy, penalizing successful, revolutionary, disease-killer medicines and vaccines. The anti-rich, anti-innovator philosophy is wrong.

A rich family normally has drivers, helpers, other household and office workers. When that rich family is infected, chances are they might also infect their workers, who might infect the neighbors, vendors, family members and other people they interact with. When that rich family is protected by new medicines and vaccines, the threat of infection to other people is controlled. They might even shoulder the price of vaccination of their household staff. So the rich benefitting from new treatment will also benefit the poor.

The politics of envy is wrong and based on emotional and populist sentiments. Policies like compulsory licensing and drug price control should be avoided and abandoned. Attracting more innovation and competition is the way to help combat this virus scourge.

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See also:

BWorld 426, Electricity pricing under hysteria conditions, April 12, 2020 

BWorld 427, March lockdowns are not price infectious, why? April 16, 2020 

BWorld 428, Alcohol, tobacco and vapes, virus infection and WHO disinformation, April 17, 2020

Covid 6, Hysteria and disruptions in food production

Among the distortionary if not idiotic moves by the government in fighting the China virus aka Covid-19 are those many checkpoints and roadblocks that restrict if not prevent movement of people and goods, including agri products, their inputs.

(this photo I got from the web)
Government culture is often one size fits all. Once a lockdown is declared, many national to Brgy personnel take it as an order, or an opportunity for extortion. In Pangasinan town that I regularly visit, some corn planting djd not push through in many brgys because the tractors, fertilizers will come from another Brgy or town and they are restricted by the checkpoints. In the farm, eggplant planting for about half hectare was discontinued because the seedlings, high yielding variety, would come from about 4 towns away.

From Comelec Commissioner, also former Cadiz City, Negros Occ. Mayor Bing Guanzon: 

Here in Negros the milling season should have started but the sugarcanes are left drying in the haciendas because the trucks can't go through the checkpoints. We have the most number of sugar mills in the country and thousands of workers have no income. They depend on the landowner for day to day needs , even if some of them benefit from the cash assistance.

Hysteria de drama pa more.

A good article by Mahar here:

Allow people the freedom to earn a living

By: Mahar Mangahas - @inquirerdotnetPhilippine Daily Inquirer / 05:05 AM April 18, 2020

https://opinion.inquirer.net/129000/allow-people-the-freedom-to-earn-a-living

The responsibility for surviving the COVID-19 pandemic ultimately lies with the Filipino people, not the Philippine government….

COVID-19 testing does not cure the carriers, but only identifies them so as to prevent them from infecting others. Persons who are asymptomatic, and untested, do not deserve to be universally quarantined.

Unnecessary restrictions on personal movement. As long as persons wear face masks and keep adequate distance from each other, it does not make sense to inhibit them from moving across barangays, cities, or provinces within Luzon. The mere act of moving across a boundary does not imply the act of crowding. Checkpoints do not make sense; in fact, they promote crowding by creating queues where there were none….
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See also:
Covid Reflections 3, Economic hysteria getting worse, March 26, 2020 
Covid Reflections 4, Global deaths from previous pandemics, April 04, 2020 
Covid 5, Co-mortality of Covid + existing diseases, Philippines, April 11, 2020.

FNF webinar on freedom and the pandemic

This morning I joined the FNF’s "Freedom in the Time of a Pandemic" webinar via zoom. The topics and their speakers:

Democracy under threat - Ms. Marites Vitug, Rappler editor-at-large

Impacts on the economy - JC Punongbayan, Rappler columnist

Disinformation and freedom of expression - Matthew Reysio-Cruz,

Philippine Daily Inquirer Journalist

Philippine public health system - Dr. Joey Hernandez,

Philippine Society of Public Health Physicians

Understanding human rights - Marc Siapno, Commission on Human Rights

Suppression of freedom of movement - Ira Cruz, AltMobility

Frankly, I find some speakers more rhetorical than substantial. Maybe because I always look for numbers and hard data when I make any opinion. Here I will just post my comments and questions during the webinar.

1. Why not tax cut for people and SMEs, instead of more govt spending, more borrowings, which will require more taxes? Like waive VAT, car/motorcycle registrations for one year, count the total revenue loss as fiscal stimulus, billions of pesos.

JC Punongbayan replied:

Even if taxes are reduced, collections will be minimal because the economy is in shutdown, and people won’t go out and spend because of COVID-19 interventions. Payroll tax cuts also are regressive; many low-income workers already don’t pay taxes due to the TRAIN law, and payroll tax cuts won’t benefit those in the informal sector.

Me: No. All SMEs have a car, a van, even a tricycle or motorcycle. Just waive these registration fees, even the mandatory smoke emission fees racket.

Companies will recover mid or late this year, let them keep more money in their pockets via tax cut. But govt distrusts people. Govt does not believe that people can do good for themselves and their employees, only govt is trustworthy so govt will collect all taxes, centrally plan who will get how much. More central planning being aided by this hysteria.

Tax cut need not refer to personal income tax. It can refer to VAT, MVUC, excise tax, etc. Give people and companies breathing space, allow them to keep more money in their pockets for just one year, not surrendered to the govt bec govt is super bright, super sincere they won't waste or steal the money or spend on their friends and cronies.

2. Hi Wolfgang, the hysteria is leading towards one direction -- more govt, bigger govt. See how the President refers to Martial Law. See how the DOF, Congress talk about P1.2 trillion of extra spending on top of P4.1 trillion approved budget in 2020. See how they want to expand more borrowings from the multilaterals, and see how they already warn of more taxes, more regulatory fees, more fines and penalties starting next year. We prepare for more dictatorships, pol and economic, in the coming years.

(This question has been answered live)

3. Guys, have you seen the weekly data on "excess mortality", actual official registered deaths in EU and US? In EU, until week 15 2020, meaning until 4th week March, excess mortality in flu season 2016-17 are much larger than flu season 2019-20.

https://www.euromomo.eu/

The same for US, flu season 2017-18 has more excess mortality than flu season 2019-20 until week 13 2020, latest data.

https://gis.cdc.gov/grasp/fluview/mortality.html

What happens now why the hysteria is big is that people who died because they have cancer + Covid, acute hypertension + Covid, old age with many diseases + Covid, etc., are now counted as Covid deaths.

More hysteria, more government, bigger government.

Nonetheless, thank you FNF-PH, Wolfgang, for this webinar. 

BWorld 428, Alcohol, tobacco and vapes, virus infection and WHO disinformation

* My column in BusinessWorld last Tuesday, April 14, 2020.

In the ongoing Enhanced Community Quarantine (ECQ) in the Philippines, there are many prohibitions and closures — office or shop work, many businesses, and public transportation have been shut, strolling around and long travel are prohibited, etc. Also among the weird bans is a liquor ban in many cities in Metro Manila and provinces, and cigarette and e-cigarette bans in some small municipalities like General Luna in Quezon province.

The main reason given is that these three products are seen to weaken our body’s immune system against the China virus infection, so these should be restricted or prohibited for the ECQ duration.

And the World Health Organization (WHO) issued a paper, “WHO, Q&A on smoking and COVID-19” (posted March 24) saying that “smokers are likely to be more vulnerable to COVID-19 as the act of smoking means that fingers (and possibly contaminated cigarettes) are in contact with lips which increases the possibility of transmission of virus from hand to mouth.” (https://www.who.int/news-room/q-a-detail/q-a-on-smoking-and-covid-19)

Is the WHO correct here? I want to see numbers to verify if the WHO is correct or spreading disinformation. I searched many materials online and I found two case studies, in China and the US. The China case study, “Smoking, vaping and hospitalization for COVID-19,” (10 pages) was published (April 4) by three academics, Konstantinos Farsalinos, Anastasia Barbouni, and Raymond Niaura. The first two are from the University of West Attica, Athens, Greece and Dr. Niaura is from New York University, USA. The authors made a review of publications on PubMed using the terms “[SARS-CoV-2 OR COVID-19 OR 2019-nCoV] AND [Clinical OR Mortality OR Outcome].” Out of 432 studies in total, the authors identified 13 studies that included data about smoking status of hospitalized COVID-19 patients.

I repost their table below but I did not include three studies which have small sample sizes of below 140 patients. The median interquartile (IQR) or mean standard deviation (SD) age of patients are given. There is an interesting revelation – in China, with high smoking prevalence of 26.6%, only about 7% of the hospitalized COVID-19 patients are current smokers (see Table 1).

The authors concluded, “The generalized advice to quit smoking as a measure to improve health risk remains valid, but no recommendation can currently be made concerning the effects of smoking on the risk of hospitalization for COVID-19. No studies recording e-cigarette use status among hospitalized COVID-19 patients were identified. Thus, no recommendation can be made for e-cigarette users.”

Next the US case. I found a report from the US Centers for Disease Control and Prevention, “Preliminary Estimates of the Prevalence of Selected Underlying Health Conditions Among Patients with coronavirus disease 2019 — United States, February 12–March 28, 2020” (posted April 30). An attached table shows the total cases with case report forms, 74,439, of which (a.) with missing or unknown status for all conditions, 67,277, and (b.) with completed information, 7,162.

And the table shows another interesting revelation — only 3.6% of the US’ COVID-19 cases as of March 28 are former or current smokers. Meaning 96.4% are non-smokers, past or present, and they still got the infection (see Table 2).

In the two cases, the big lesson is that the WHO is spreading disinformation when it announced that “Smokers are likely to be more vulnerable to COVID-19…”

And If we follow the WHO’s logic that hand to mouth actions like smoking or vaping increase the risk of transmission, then finger-lickin-good foods like potato chips, KFC chicken should also be avoided or banned?

The WHO and many national governments’ Health Departments or Ministries seem to have PhD and post-doctorate degrees in regulating, banning certain products to deal with non-infectious diseases, but they seem to have only an AB or high school degrees in dealing with really killer infectious diseases like dengue and many strains of corona viruses. They should learn to reverse their priorities.

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See also:

BWorld 425, Virus, bacteria, and pneumococcal diseases, April 11, 2020 

BWorld 426, Electricity pricing under hysteria conditions, April 12, 2020 

BWorld 427, March lockdowns are not price infectious, why? April 16, 2020

IPR and Innovation 46, IP rules and Covid-19

I am reposting a good article by my friend Philip and his buddy Mark.
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Messing with IP rules may affect COVID-19 response

April 8, 2020 | 5:20 pm

By Prof. Mark Schultz and Philip Stevens

https://www.bworldonline.com/messing-with-ip-rules-may-affect-covid-19-response/

With around a third of the world’s population in lockdown, humanity desperately needs new treatments to turn the tide against COVID-19. Our hopes depend on sensible coordination between the government and private sector.

Government and the private sector have essential roles to play. With irreplaceable expertise in practical research, clinical trials, manufacturing and distribution, the private sector knows how to take treatments from lab to bedside.

Public sector leadership, meanwhile, can direct resources where they are most needed, clearing obstacles and coordinating efforts.

Globally, researchers are racing to develop technologies to keep people out of intensive care and allow health systems to cope. Their tireless efforts fuel hopes of a treatment to ease the worst symptoms within weeks, and a vaccine within 18 months.

The private sector is rising to this Herculean research and development effort. At least 20 companies are conducting clinical trials of potential treatments, with a further six racing to be the first to find a vaccine.

Many governments are working to quickly clear the approval path for desperately needed treatments. Brazil is removing regulatory bottlenecks by relying on approvals for medicines in other major markets. We hope other countries will follow.

Crucially, public health authorities are collecting data, sharing vital information, and directing treatments where they are most needed.

Public-private coordination will give us a fighting chance.

But campaigning by health NGOs such as Médecins Sans Frontières and the UN-funded South Centre is pressuring governments into drastic action. They are calling for new legislation to pre-emptively confiscate the intellectual property (IP) of any coronavirus treatment yet to be invented, in the hope that treatment will be free for all.

This short-sightedness has struck already. Canada, Chile, Ecuador, and Israel have already moved to suspend IP rights such as patents for new COVID-19 treatments with others set to follow. The Philippines may follow.

Crisis demands extraordinary efforts, but these populist proposals risk undermining the global system for developing and delivering urgent treatments.

For instance, drug makers must spend millions to ramp up manufacture for any new treatment. Yet this is fraught with commercial risk. Kenneth Kaitin, director of the Tufts Center for the study of drug development, says: “You don’t want to invest a lot in manufacturing before you know you are going to have a drug on the market. [Yet] you want to make sure you can manufacture as much as needed, perhaps hundreds of thousands of doses at the end of the day.”

IP rights enable firms to mobilise the money for these massive manufacturing and supply chain investments and manage that risk.

IP is also vital to turning a promising idea into a real treatment. Dr. Derrick Rossi is the founder of Moderna, a young biotech company that brought the first potential COVID-19 vaccine to clinical trials in record time. We asked him recently if the government could replace the private sector in bringing treatments to patients. His response: “not a chance.”

Funding basic research is key, but just the start. “Academics are good at academia and fundamental science. They are not good at developing drugs for patients,” says Dr. Rossi. Nor do governments have the expertise, facilities, or resources to take a new treatment to market, and they usually cannot tolerate the risk of losing massive amounts of money on treatments that often don’t work out.

The existence of IP rights has enabled a rapid response to COVID-19 by the private sector. Companies are looking afresh at old drugs in their patent portfolios that never made it. Others are investigating repurposing existing medicines for other diseases. Short term, they offer the best hope of an effective COVID-19 treatment.

IP rights have not stood in the way so far. The UK will shortly make available millions of new antibody tests at minimal cost. Investigations continue into the usefulness of chloroquine, a malaria drug whose patent has long expired. A promising HIV drug has been licensed for global generic production by its US owner. And many of the other existing drugs that are being repurposed for COVID-19 are off-patent.

The private sector is mobilizing not for their share prices, but because it’s the right thing to do. But removing IP rights will only inject uncertainty into an already difficult picture.

 Technology will play the key role in allowing us to get back to our normal lives. But globally, we need governments to lead and not get distracted by counterproductive ideas.

Prof. Mark Schultz is the Goodyear Tire & Rubber Company Chair in Intellectual Property Law, University of Akron School of Law. Philip Stevens is Executive Director of the Geneva Network.

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See also:

IPR and Innovation 43, Recent news on India, China and HK on IP, May 14, 2019 

IPR and Innovation 44, Plain packaging on sweets, soda -- impact on investment and health, June 04, 2019 

IPR and Innovation 45, PH IPR courts, BOI-IPO, GII 2019, August 6, 2019

BWorld 427, March lockdowns are not price infectious, why?

* My article in BusinessWorld, April 8, 2020.

When I saw the huge drop in electricity demand for March 2020 compared to March 2019, -5.5%, a result of business shutdowns and enhanced community quarantine (ECQ) in the second half of the month, I was expecting that March inflation would be something like 1.5%. I was wrong.

I checked other major economies with March 2020 inflation data, and it shows that deflationary pressure is building up fast in Europe, in places like Italy, Spain and France, but not so much in Asia (see the Table).

The reason for my rather bleak expectation for the Philippines’ March inflation is that I was expecting that less economic activities and business shutdowns means less income for the people and so their demand for various goods and services will decline, leading to decreased prices.

Of the 11 commodity groups that constitute the inflation basket, only Transport registered a price contraction in March, -1.8%, and it is understandable. But with closure of all malls and movie houses, all restaurants and bars (except food take out and delivery), I was expecting that at least these three commodity groups — Recreation and culture, Alcoholic beverages and tobacco, Restaurants and Misc. — would experience price contractions too. Did not happen. Prices of alcohol and tobacco products are now determined more by high and rising taxes, not consumer demand.

What spiked inflation instead was in Food and Non-alcoholic beverages, from 2.1% in February, it went up to 2.6% in March. The likely reason for this are those blockades and lockdowns starting March 15 when Metro Manila quarantine was implemented, worsened by the so-called “enhanced community quarantine” (ECQ) for Luzon by March 17. These adversely affected food supply — chickens, hogs, beef, vegetables, fruits, rice, etc. — with delayed or even spoiled products.

Government cash and food distribution started around March 27 when P65 billion of the P275 billion in new spending under the Emergency/Bayanihan law have been released to local government units and have given spending power to some poor households.

So three factors — high taxes on alcohol, tobacco, sugar products; blockades and delays in transportation of raw food products; and government cash handouts — were the main reasons why a decrease in economic activities did not result in significant decrease in prices.

I am expecting that inflation will decline significantly in the next two to three months, then go up in the succeeding months as the impact of Central Bank money printing will kick in.

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See also:

BWorld 424, Medicine innovation and politics vs innovators, April 04, 2020 

BWorld 425, Virus, bacteria, and pneumococcal diseases, April 11, 2020 

BWorld 426, Electricity pricing under hysteria conditions, April 12, 2020

Earth Hour 10, Higher electricity consumption in EH 2020

Late post, from the IEMOP/WESM data on electricity consumption in the Luzon and Visayas grids, Philippines, EH 2020 on March 28 Saturday, 8:30-9:30pm -- there were even higher electricity demand or consumption at 8 and 9pm, than 7pm or 10pm.

Meaning people were just leaving their lights on that night nd ignored the idiotic campaign to glorify darkness for one hour. If it's not idiotic and a bright thing to do, then campaigners and believers should turn off their lights one hour (or more) every night, 365 nights a year. They won't do that of course, precisely because they think it is idiotic to glorify darkness.

Meanwhile, based on Paris Agreement 2015, the global ecological central planning and socialist movement were waiting for climate money of $100 billion/year starting 2020. Not happening so they could be shifting their effort now.

Meanwhile, I like these two articles:

1. Good stuff:
Why Severe Social Distancing Might Actually Result In More Coronavirus Deaths

APRIL 3, 2020

The author is an academic physician and researcher at an Ivy League institution in New York City.

https://thefederalist.com/2020/04/03/why-severe-social-distancing-might-actually-result-in-more-coronavirus-deaths/

The only way we are going to beat COVID-19 is by developing something called “herd immunity.” Herd immunity basically means that once a certain percentage of the population develops immunity to a virus, the rest of the population will also be protected. That percentage varies, but is often around 60-70 percent. This is why we don’t need to vaccinate 100 percent of people to eradicate or severely limit the spread of infectious diseases (e.g., polio, smallpox, and measles).

2. Lousy stuff:

California announces $125 million fund for undocumented immigrants impacted by coronavirus

PUBLISHED WED, APR 15 20204:16 PM EDTUPDATED WED, APR 15 20204:28 PM EDT

https://www.cnbc.com/2020/04/15/california-to-give-cash-payments-to-immigrants-hurt-by-coronavirus.html

California has an estimated 2 million immigrants living in the country illegally.

Immigrants are not eligible for the $2.2 trillion stimulus package approved by Congress last month, which gives cash payments to most Americans plus boosts unemployment benefits by $600 per week.

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See also:
Earth Hour 7, Lesson in basic electrical engineering, March 21, 2016 
Earth Hour 8, Celebrate darkness vs modernization, March 23, 2017 
Earth Hour 9, Hate-love of fossil fuels, March 24, 2018