How the oil price slump could reshape the oil industries in major economies

A historic drop is coming to the dialogue weekend US crude oil

price

s fall to a negative

price

per barrel Donald Trump suspends immigration to the US for the next 60 days and this week's news maker now on dialogue weekend welcome to this edition of dialogue weekend I'm Michigan, drew the Kobe 19 outbreak and the collapse of global oil prices have affected both oil supply and demand. and gas markets, the unprecedented collapse of the price of crude oil in the global market brings pains and gains to the

industries

of different countries and the daily lives of people. We begin the program by taking a look at the latest edition of Johnny my via satellite, our chief strategist at the Bank.

Antonin International Communications and Current Affairs Independent Commentator, So Hoo-Ha, Let's Start With You, As In General, We Have Been Seeing The Drop In Oil Prices For Some Time, So What Does This Drop In Oil Prices Mean who has been here for some time? people's lives and different

economies

, probably a lower price at a gas pump, you know, it's cheaper for people to drive now, but at the same time, the demand for oil has decreased substantially and people who don't drive, you know, everyone is being quarantined at home, even As the summer driving season approaches, I don't see that I know many Americans who drive during the holidays as usual, so I would say that even the price of prom is about less than two dollars now because people don't drive, they can.

I really benefit from a lower oil price mm-hmm tanker well if you look at the world economy differently, with some countries like China are importing the oil, others are exporting the products, so what is the impact on the country well? I mean, you can divide it into two regions, one is the developed world, global demand has fallen now, if you look at the entire world, you have a drop of about 30% and with this uncertainty about when things are going to be merged due to the lack of leadership and mosaic focus for these kono vid 19 it is not certain when that will return unfortunately the supply has apparently only been reduced by 10%, but this has geopolitical implications, especially for the United States, the US. produce around 12 billion barrels per day, they were a net. exporter but that was based on shale is about 60 percent of that figure, so about 7 million barrels a day represents about at least 5 million jobs because those shale producers can't stay in business , so they will go bankrupt or go into some form of possible administration. that Trump will try to rescue them, on the other hand there are the countries that supply oil and natural resources everywhere, from Venezuela to Saudi Arabia, and they are in a really serious situation, they depend on that money for their budgets, this is the worst possible time , especially facing this economic and health crisis for them, so you

could

see really big geopolitical implications, social unrest, the United States

could

be in a position where it starts having to rely on imports once again, which would change your strategy in the Middle East well and you wrote they lost this in the first quarter.

So what does the oil price work mean for China's oil industry chains? It used to be good news as lower oil prices tend to be good news for emerging markets and especially, you know, China is the largest importer of oil. the world, so China HS will benefit from the lower price of oil, but at the same time, you know how we discuss substantially lower demand for oil, so even China has been buying oil at a much lower price and filling the strategic reserve. and now I guess you know that the Chinese are also running out of room for excess oil, so as a result, you know that although you know that you have a lower input cost in the upstream process, but then in the downstream, even if you refine that crude oil, We are not getting the usual demand and therefore we can realize that there is a huge margin due to the low price of oil.

I would say it has traditionally been good news, but right now the effect is actually greater. to the negative side mm-hmm well, what about the impact, a potential impact, on the Chinese economic recovery? We know that the country is reopening the economy and what about the concern of deflation, you know, with these low oil prices that have persisted for a long time. ohhohh yeah I would say you know the long term if you look closely you know that lower input cost is definitely good for Chinese manufacturing industry and also you know I would say lower price for energy intensive economy Steel is also a very good option.

Good, very good news, right now you know that China is slowly recovering and reopening its economy. One set of images shows that you know manufacturing capacity is running at 60 to 80 percent of the usual capacity level, so it's coming back, but then it's not at the rate you want, you probably want it to be much higher. faster than that, so I would say right now you know we're benefiting from a lower price, but not to the extent that you want. to be mm-hmm well, turn to the United States is going down, as you mentioned the US, the shield producers, you know, the refineries and the pipeline companies, obviously, they are struggling because, in part , because of the debt problem, the heavy burden and also, I guess, the probable restructuring for It has to be done because of the situation there, so how will this oil and gas industry be sent?

Surry during this crisis. Well, if we go back to a year ago, there was a report that there are only five shale energy producers that can break even at thirty. one dollar a barrel, that means that there is no company that can break even for fifteen, so they are really going to go bankrupt or the government is basically going to intervene and say that for strategic reasons we are going to keep them open. That would mean a massive bailout for these companies that would have political implications for Donald Trump, who has been very critical of this type of action in the past, so he is caught in a dilemma, but remember that what we see fall, you are going to see a sharp decrease in oil capacity in the world and when that happens, when the economy eventually recovers after they get this kovat 19 under control, we will see a huge increase in oil prices as countries try to know that the capacity is In that time the man will be like this, then you will see a strong rally, you will be able to see oil go back to 120 150 a barrel just because of the demand.

Well, President Trump has said that he knows that the United States will fail the tanks at the price. a nosedive, that's a good idea, well, it sounds good, but oil capacity in the US only decreased slightly, whereas a while ago there simply wasn't enough storage capacity. China, on the other hand, as my colleague pointed out, is rising. I think people think that they are going from a two-month national oil reserve to a six-month national reserve, which is very smart given the possible extreme V shape that could occur once the world's economy takes off mm -hmm well again on the way back to China, US The West Texas Intermediate crude oil benchmark WTI was hoping this would bring the Bank of China into the spotlight as the bank's investors piled into all of their futures on themselves for a sum of money, sometimes millions, after they were asked to set the product at minus thirty-seven. point sixty-three dollars per barrel, so who?

How there is an ongoing dispute between the banks and also the individual investors, so who should be responsible for the loss of investment? Well, I didn't actually sit down and read the contract terms of that financial product, but you know, because of the payment scheme, it seems to me as if an individual lady had a real futures contract without a stop loss mechanism. I think it's probably a good thing that there was no stop loss, probably because the night the oil price went up with gir. the price drops to negative forty and forty dollars per barrel, you know, liquidity is very tight, so even if you want to terminate your contract you couldn't, I think there are only ten twenty thousand contracts traded at that level and at the same time You know which at that time most of the long term oil ETFs in the US actually moved the contract terms from May to June, so I think for some reason Chinese investors may be the only ones who There are left in the market that are holding back, so I think due to the lack of a stop loss mechanism, you know.

I know people are now subject to all those losses, it could be a flaw in the design of financial products and the lack of a signal of lack of risk management, so for me, I know intuitively, I would say it is a situation disastrous and also painful to watch, especially for individual investors, but I think it is up to the lawyer to determine who is responsible for all those losses. Well, yourself is not just an investment issue, it is a legal issue. Now let's turn our attention to President Trump in the United States. has signed an executive order raising immigration for sixty days, well, not without exceptions, once again this wizard is acting on immigration policy, this time of course during an election year, so what's behind it of Trump Crona's various immigration orders and what are the justifications and what impact does it have? taking and how the policy could evolve from here joining me via Skype is Professor John Chen Chen intellectual intercultural critic in New York welcome to our program so the latest policy aims to suspend the entry of immigrants who present a risk Well, that's understanding for the American labor sector. market during the economic recovery supposedly after this recovery in nineteen, so Joanne, who is included in this order and who is exempt, the target group of immigrants are those outside the United States of America seeking permanent residence, for what this is a very focused group of people. who are temporarily on hold, so they are the people who should stay away at this very moment.

Well, according to this latest development, you know that the administration will do a review within 30 days after the policy is implemented, so any changes what kind of changes are we going to expect? Well, the Department of Homeland Security is constantly modifying or drafting the outline of this particular order, so in the future we have to see how it works and how a temporary exemption works for those foreign farmers or those who are coming to help us medically, those are the people who can still come to the United States to join the force to rescue America from this same crisis mm-hmm, sinking, so what about this non-immigrant?

I mean, the policies say whether that will be affected. including the h-1b work visa for example, well, h-1b won't be the main source here, what you're really talking about is people, like Joanne said, who are outside the United States, about 50% of them are relatives of people. Inside, for example, Melania Trump was able to bring her parents to the United States based on this program. Now Trump is shutting it down, but it's essentially a racist dog whistle that he's using for political purposes to shore up his base and watch. strong, you have to be very careful on the legal side because there will be questions about why this particular group, what threat they pose and these types of things, that's why it was delayed a little while they were trying to make sure that they didn't have a legal loss since the beginning, but it's going to be contested mm-hmm well, Joanne, you know, we know this is the 60-day executive order, so we expect some additional action at the end of the 60 days.

I know the O in order is supposed to be finished right. I don't think 60 days will end well and I think this will probably drag on, that's my personal speculation, but I may disagree with mr. Tongan here and I think Trump has been making a decisive effort to confront this problem that has been destroying America as a whole in terms of having his own workers at Trump's behest, it is directed at people outside the United States, the The purpose of this is to keepworker. There's a job here so that we shouldn't always do a political stunt here and this issue is a public health issue and it's a national security issue, it's a political issue, but we shouldn't, I mean, try to take a political position on every time he criticized Trump, every action he makes, I think he's a little biased if I may say that's okay, but if you look at the article in The Wall Street Journal on this topic, the title of that article is that the district of Trump's immigration is basically a distraction.

John, do you agree that the district obviously says no? I do not disagree I do not disagree Trump is taking an action that is necessary for the safety of the American people. You know that the United States has been very generous in the last 30 or 40 years and it is time for the United States to take a stone of defense, a defense, this is a DFS that the United States is putting and this virus is very malicious, very cunning , so we have to protect our own people at this very moment and we shouldn't always take a political turn at This critical moment of the virus is not political, so we should stay where we should be mm-hmm well, the article says no There is no economic or health argument to block all immigrants, so Ana, well, I will agree with Joanne, it is a slightly different view. about things sounds more like a republican talking point, but none of these immigrants believe this is a long drawn out process, they can insist on any kind of medical records they have, so what this represents is a pure fabrication. a health threat, the United States is doing well in terms of security, once again I have thoroughly investigated these people, as they said that fifty percent, including Millennia's parents, were not seen for some reason, like you you know.defensive threats, so I would rule that out.

I think it's very clear that this is a distraction from Donald Trump trying to appeal to his base. I agree that not everything Donald Trump does is purely related to Kovat 19, but at this point with his low numbers it is very clear. Donald Trump is using all the levers he can to distract the American people and attract his followers mm-hmm well, John, you know what happened is that in 2016 immigration has been one of the key elements, let's say that Donald Trump played to Win the election. You know why he won't play it again. I mean, this is an election year, well, this is not a game, this is about national security.

Why should Americans honor those illegal immigrants on Twitter? We are not talking about illegal immigrants, they are legal immigrants. true friend, today we are talking about legal immigrants, but if you mean 2016, Tom was trying to stop an illegal immigrant taxi driver, in fact, I say, but today we have legal immigrants, but those people who want to see them criminalized have to do it. Pause for this for the benefit of Americans right now and I think they could make the world one right now, we should help each other right now without spending political money all the time mm-hmm well ya You know about the political issue.

On the front line we're talking about the election, so President Trump's re-election prospects are closely intertwined. I think everyone agrees on this with the Cova 19 crisis on management, will it manage to change the attention, for example, from this failure, I mean until now? effort to contain an emetic help to the crisis Anna is fine, no, she is not going to be successful and I want to correct what Joanne said. Donald Trump said very clearly that he was in favor of a legal path to, you know, being a US citizen or green card, he made that statement many, many times in response to all the accusations that he was actually playing a racist card, so that right now we have a legal process in which he is interfering and there is no basis for any type of defense or health reason.

I think it's really a very thin field to be pronouncing these kinds of talking points as if this is legitimate, this is purely political and this is Donald Trump, you know, kind of flailing around trying to make issues out of some things that aren't They have nothing. what to do with COBIT 19 just distraction mm-hmm well let's leave it there for now and take a look at this week's news, dr. Anthony Fauci is the leading infectious disease expert and a key figure in the United States. The task force fighting The Cove in nineteen is its highly respected but also accused of undermining the WAMP president Joining me via Skype is Professor Glenn Gautam, director of the School of Medicine's center for global health Perelman of the University of Pennsylvania, but we start with a game of ten. here, speak, commit a mistake, what role will you describe with your word?

That hit the game in the fight against the club in nineteen. Well, you know, he's been doing this for 50 years, since 1984 under President Ronald Reagan. He is an 80 year old person who has There is nothing to show that his wife is head of bioethics for the clinical clinical services of the National Institute of Health, so I want to say that he has been involved in that, there is no evidence that he is purely a scientist and what he's trying to do is deal with a president who doesn't. I don't really believe in science, who would rather follow the advice of Christian pastors or people who were writing on Fox News about how you can deal with this type of Kovat 19 crisis and, unfortunately, it is very, very disturbing what has happened today ?

He was not present. in the audience, I don't mean the audience before the journalist and it's clear why, because they can barely contain themselves when he says these things about injecting bleach into the blood and, you know, shining a UV light inside your body, they've already come out with the report that says that their miracle, an anti-malaria drug, is not recommended, that it's actually your chance for it to kill you, so it will help you mmm-hmm, now we have Professor Glenn Goten from the University of Pennsylvania. Welcome to our program, a professor, so Dr. FATA is an outspoken advocate, you know, strong emergency measures, but he also faces a lot of false claims on social media in particular that cloud the mobilization towards Ant-Man, the present It's easy, no, I don't think so, dr.

Falchi has been director of one of our most prestigious National Institutes of Health for 36 years. He served six presidents with incredible distinction. He is one of the most talented physician-scientists in the United States, and in particular, his expertise lies in both immunology and virology. so his advice has been consistent and accurate and the challenge is that it's often a different Rinna with what the president says and there are segments of our population in the world's population that may be inclined to believe the president at times when, like mentioned above Often his comments are not based on objective information, so we must listen to dr. bag at all times mm-hmm well, in many cases more or less as you mentioned, you know Trump, who disagrees with dr.

Fauci, for example, Trump Assad, the government is doing a great job on testing where dr. Fauci said you know we absolutely needed to significantly increase not only the number of tests but also the capacity to do them, so professor, why are there so many disagreements? You know among leading scientists and politicians, including the president, well, there are. There are always policy disagreements on related issues, you know, complicated issues in this case related to both the health of our country in the world and the economics and politics of the situation, our president has the unfortunate habit of exaggerating and exaggerating, and as mentioned above.

The victory with hydrochloric is not a great example. The recent examples with cleaners and UV light are all your attempt to create positive momentum and a positive spin that the situation is not as bad as it could be or that there are easy solutions to the situation. This is yours alone. Unfortunately, people listen to him when he says these kinds of ridiculous things, so in fact, with respect to testing, the United States did not have the ability to test in the first place. It has now been proven that there were contaminations from the beginning in the laboratory tests prepared by the The United States Center for Disease Control delayed the tests and even now the tests are much larger than before, they are still not enough to meet the need and unfortunately the president continues to preach that everyone could get a test when in reality everyone can't, another outstanding difference seems to be, I mean, between the administration or the president and that medical bonus, is when to restart the economy, so that You know, if you follow scientists and health professionals, it probably wasn't the right time for them to continue the practice of social distancing that others down, stay home, others, but for the president and some of the governors to go down, They probably can't wait to open up some of the

economies

, at least, how do you see that?

Yes, well, it is a very, very big concern. Like China, we are a big country. There are tremendous regional differences in our cultures, but in fact, in the levels of infection that we have seen and there has been a disconnect between the leadership of the White House and their relationship, in this case I think the disconnect is even more with the then governor Dr. Pouchy and the other health sciences leaders on the Presidential Council advise him on these matters and, in fact, right now the governors of our various states are really the ones who have the responsibility of deciding when to open the states in which the content and reduce the amount of quarantine and isolation that the government has put in place the federal government has put in place guidelines for this it's not even clear that governors like the governor of Florida and the governor of Georgia are following these guidelines so there is a tremendous risk in This is because if people go out too quickly and uncontrolled it can break out and cause local centers with high infection rates in areas where we have not seen it before and then of course we have unrestricted travel within the United States among our cities and states and, therefore, a high incidence. in one place and we saw that this in New York City can happen in other parts of the United States, but then you know that by June or July people will get back on planes and travel around the world to some extent and, of course if there is some of the infection in the US and people travel to other countries then we will just see a second and third round of infection that really shouldn't be happening so people in the US need to increase testing, people should get tested. and then contract tracing needs to be done in the United States and this really requires a huge lack of staff and, in my opinion, it is a federal responsibility mm-hmm well, I disagree, you know, the reopening of The economy in some of the states probably in the United States, for example, Georgia and Florida, are going too fast or too far, even in terms of the national situation.

I agree with my colleague. I mean, if he put it very succinctly, what we have here is something that is not political, a health crisis. pandemic that is global and unfortunately the response we are getting in the United States is a partisan response Trump and the Republicans versus the Democrats has been too busy pointing at the Democratic governors and saying that they are doing a terrible job and they say that the Republican governors They're doing a good job, with one exception, they reversed their position on Georgia and that was very telling. It's also a sign to many people in the Republican Party that Trump is once again returning to an unreliable state.

Be careful to what extent he is willing to risk himself for his political agenda, but at this point it is absolutely clear that we are not past the first phase of this and are already starting to talk about the second and third of this opening. It's not about opening up the economy, it's about opening it up to the dangers of a massive surge in infections. Remember that at this moment we are more than 50,000. There is an estimate that 40% there is an additional 40% to that number due to hardship. in reporting and capturing all the data in moments like this, well, with that we come to the end of today's program.

Many thanks to Professor Goten, Professor, join a tanning game in the living room. You can also see us on the CGG app on youtube, im sue. Jindal you can find me on Twitter, huge patience, thanks for seeing us until next time