Oil & Gas Prices - Feb 27

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dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Oil & Gas Prices - Feb 27

Post by dan_s »

Opening Prices:
WTI is down $1.94 to $46.79/Bbl, and Brent is down $1.85 to $51.58/Bbl.
Natural gas is down 6.4c to $1.773/MMBtu.

Closing Prices:
WTI prompt month (APR 20) was down $1.64 on the day, to settle at $47.09/Bbl.
NG prompt month (APR 20) was down $0.085 on the day, to settle at $1.752/MMBtu.

What's going on in the market is based on FEAR. Yes, travel restrictions will lower demand for oil. However, the one sided reporting from the media, in my opinion is creating an unnecessary level of panic. All previous "epidemics" have had very little long-term impact on the global economy. SARS and MERS both caused double-digit drops in the S&P 500 Index and six month later the markets moved higher. I've been doing some research and here is what I found.

1. By "one sided" I mean the cable news networks are reporting the number of deaths each day (about 1,000 times each day) but not reporting the number of people that are fully recovering. FACT: The number of people that are fully recovered from COVID-19 is growing at a much faster pace and the number of people dying has slowed.
> Of the 82,541 people hospitalized due to the virus, 33,212 have fully recovered. 2,810 have died, but most were elderly and/or had previous health problems.
> People with a healthy immune system are getting over COVID-19 at about the same pace as people who get the seasonal flu. Many had much milder symptoms.

2. 705 people on the "Diamond Princess" crude ship tested positive for COVID-19, but only 4 have died. Susan & I been on a lot of cruises and I can tell you for sure that the average age on that ship was much higher than the normal population. We've actually been on five cruises where someone has died during the week. On our most recent cruise, about 5% of the people on board had one foot in the grave. [I have nothing against elderly people because I am one. Plus, I think dying on a cruise would be a cool way to go.]

3. Most import to know: SARS and MERS were also coronaviruses. Just Google "sars epidemic curve" to see how they ramped up quickly (starting early in the year) and they faded out in the summer. They both were contained within six to eight months. Just like the regular flu, they were "seasonal" and by the next winter there was a cure or they just faded. Obviously, COVID-19 may be different.

4. A lot of people that have tested positive for COVID-19 have no or very mild symptoms. That is good because the death rate is probably much lower than what is being reported and bad because they can still infect other people.

From CDC: "While the impact of flu varies, it places a substantial burden on the health of people in the United States each year. CDC estimates that influenza has resulted in between 9 million – 45 million illnesses, between 140,000 – 810,000 hospitalizations and between 12,000 – 61,000 deaths annually since 2010." < Just in the United States. Global deaths per year from the flu are estimated at ~400,000 per year.

Go to this website each day for updated FACTS on COVID-19: https://gisanddata.maps.arcgis.com/apps ... 7b48e9ecf6
Dan Steffens
Energy Prospectus Group
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