COVID-19 Bulletin: December 3

Supply

After a volatile day of trading, oil prices rose about 1% Thursday even as OPEC+ surprised markets by keeping plans to release 400,000 bpd of crude in January. Futures continued rising in late morning trading, with WTI up 1.6% at $67.53/bbl and Brent up 2.1% at $71.10/bbl. U.S. natural gas was 3.5% higher at $4.20/MMBtu. 
OPEC added 350,000 bpd to its output in November, roughly 40% more than planned, driven by an excess of production in Iraq and a recovery in Nigeria. The output was higher than indicated by an earlier survey of OPEC members. 
The U.S. and other nations may delay recently announced releases of crude from their strategic oil reserves depending on oil prices.  
Goldman Sachs forecast Brent crude to average $85/bbl in 2023. 
In a bid to avoid another “Texas Freeze,” state utilities must prioritize key natural gas facilities that supply fuel to electric generators during emergencies, Texas’ energy regulator ruled. 
The value of the U.S.-Canada energy trade fell 31% in 2020, driven by demand drops and lower commodity prices during the first year of the pandemic. 
European energy majors have doubled planned spending on low-carbon energy over the last two years, led by Spain’s Repsol. 
Prices for European carbon futures rose above $90/ton Friday, almost tripling so far this year to a new record.  
BP has agreed to more than $500,000 in fines for emissions violations at an Indiana facility. 
Our most recent list of force majeure and allocation announcements from suppliers is here.

Supply Chain

A benchmark index of contracted container freight rates grew 16.3% in November for a year-over-year gain of 121.2%. 
Ocean freight rates from Asia to both U.S. coasts have fallen to their lowest levels since July, declining a respective 3.8% and 4.9% for routes to Los Angeles and New York last week. 
Port freight feeders in Southern China plan to extend their Chinese New Year suspensions by six weeks under state-mandated COVID-19 quarantine measures, potentially further disrupting global supply chains. 
Maersk had 84 vessels waiting an average of 18 days outside ports at the end of last week, led by backups on the U.S. West Coast.
Some seafarers are being forced to get several COVID-19 vaccinations to meet differing country rules. 
Trucking experts say California’s efforts to raise truck weight limits will do little to remedy shipping backlogs. 
Airfreight volumes fell a surprising 1.2% in November, largely due to ground handling congestion, while rates rose 8% for the period. 
Global shipping lines are on track to pull in $100 billion in operating profit this year, already doubling profit in just three quarters of 2021 compared to the entirety of the previous decade. 
Mediterranean Shipping Company surpassed Maersk as the world’s largest shipping line, fueled by its record acquisition of 125 used vessels during the pandemic. 
The U.S. administration sued to block Nvidia’s proposed landmark takeover of semiconductor designer Arm Holdings, citing antitrust concerns.
Chipmaker GlobalFoundries swung to third-quarter profit on a 56% rise in revenue from last year. 
The long-awaited abandonment of 25% U.S. tariffs on British steel and aluminum is being delayed over suspected political issues. 
Airbus is unlikely to meet its goal of delivering 600 jets this year over supply chain snags at facilities in Hamburg, Germany. 
Sustainable apparel retailer Allbirds managed to boost inventories 55% heading into the holiday season, citing a combination of supplier diversification and dual sourcing of products. 
Business is booming for cargo salvage companies amid record amounts of abandoned goods at ports. 
Singapore-based Samudera Shipping Line opened a new freight shuttle service with India, with plans to transport 3,800 TEUs weekly.
Singapore carrier X-Press Feeders has commissioned eight 1,170-TEU ships capable of running on conventional fuel or green methanol. 
Supply chain snarls dampened third-quarter profit at grocery giant Kroger, despite rising sales year over year. 
Ashley Furniture’s transport unit will expand operations in the western U.S. with the acquisition of Missouri-based Wilson Logistics. 
Siemens’ rail unit is testing hydrogen-powered trains as a potential replacement for battery-only locomotives with significantly shorter ranges. 
South Korea leads the world in electric vehicle infrastructure, with two public charging points for every one vehicle:

For a partial list of automotive disruptions caused by semiconductor and component shortages, click here.

Domestic Markets

The U.S. reported 140,875 new COVID-19 infections and 3,800 virus fatalities Thursday. 
COVID-19 vaccine demand in the U.S. is rising at a double-digit pace, straining short-staffed pharmacies that administer the shots. 
Minnesota and Colorado reported their first cases of the COVID-19 Omicron variant Thursday.
New York and Illinois reported their highest single-day COVID-19 infection counts since January.  
A third military medical team has been dispatched to Michigan to help the state’s hospitals manage a surge in COVID-19 patients, over 75% of whom are unvaccinated.
COVID-19 patients fill more than 25% of Ohio’s ICU beds, the highest level since January. 
California’s governor is holding off on imposing more pandemic restrictions in the wake of the state’s first case of the COVID-19 Omicron variant Wednesday. The state recorded its second Omicron infection yesterday.  
Hospitals in Alaska have stopped rationing care for the first time in two months amid a drop in COVID-19 cases.  
COVID-19 cases in the five least vaccinated states have dropped sharply in the past two weeks. 
U.S. health experts are renewing calls for all adult Americans to get COVID-19 booster shots, as the White House aims to boost advertising and make the shots more available. 
Pending further data, the U.S. administration has indicated uncertainty over what effects the COVID-19 Omicron variant will have on inflation, supply chains and global economic growth. The White House is urging Americans to keep their end-of-year holiday plans despite the emergence of the new variant. 
Pfizer’s chief executive predicts annual COVID-19 vaccines will be needed for several years to help populations maintain high levels of virus protection. 
A U.S. research group backed by $200 million in grants will focus on creating COVID-19 vaccines that can target multiple variants at one time. 
A new study shows that mRNA-based COVID-19 vaccines prevented infection in most cancer patients. 
More than 18,000 U.S. Navy personnel face potential expulsion after missing the federal government’s COVID-19 vaccine deadline Sunday. 
Google is indefinitely delaying return-to-office plans originally set for Jan. 10. 
Congressional lawmakers passed a stopgap spending bill Thursday night to keep the government funded through February. 
The U.S. added 210,000 jobs in November, well below predictions, as the unemployment level fell to 4.2%. 
The U.S. economy grew at a “modest to moderate” pace this fall amid continued supply chain disruptions and labor shortages, the Federal Reserve said. 
Almost half of American households said rising inflation is causing some degree of financial hardship, survey results show. 
Americans’ reluctance to dip into record savings piled away during the pandemic could pose near-term problems for an economy in which consumer spending makes up more than two-thirds of GDP, economists say. 
A lack of inventory was behind the sharp decline in suburban New York City home purchases in November. 
Ford is the only major automaker to report increasing sales in November, led by record demand for SUVs. 
Business jet flying is up 40% year over year as demand for used jets skyrockets. 
States are being asked to submit five-year plans for expanding broadband internet to receive a share of the federal government’s $42.5 billion in funding. 

International Markets

The COVID-19 Omicron variant could be three times more likely than other variants to reinfect, according to researchers in South Africa, where new infections doubled in a single day yesterday and tripled over the past three days. Omicron is spreading in Gauteng Province, the epicenter of the outbreak, faster than any prior variant.
European researchers predict the COVID-19 Omicron variant will make up more than half of the continent’s new infections within several months. 
France and Spain recorded their first cases of the COVID-19 Omicron variant Thursday. They were joined by Greece, Finland, Singapore and Norway, which reported at least 50 cases. 
The U.K. reported 53,945 new COVID-19 cases Thursday, the most in four months, including seven more cases of the Omicron variant. The nation purchased more than 100 million doses of vaccines for the next two years. 
Germany imposed a nationwide lockdown exclusively on unvaccinated people, barring them from all but essential businesses such as groceries and pharmacies. Lawmakers continue to push for a COVID-19 vaccine mandate for the general population. 
Croatia will impose fines on local government leaders who fail to enforce proof-of-vaccine requirements.
Slovakia will pay $570 to seniors who get their first COVID-19 vaccination or a booster dose.
South Korea reported 5,266 COVID-19 cases Thursday, its second daily record in a row. 
China’s latest COVID-19 outbreak grew by 53 cases Thursday. Beijing approved plans to resume quarantine-free travel with Hong Kong later this month.  
The United Nations’ ask for global humanitarian aid has ballooned more than 40% during the pandemic. 
India’s economy grew a lower-than-expected 8.4% in October on a weak rebound in consumer spending. 
British demand for fully electric vehicles grew 86% in 2021 from the previous year:

Shares of Boeing rose 7.5% Thursday after China outlined new safety regulations for Boeing 737 MAX jets to resume flying. 
India’s Jet Airways is in talks with Boeing and Airbus to purchase more than 100 narrow body jets in a projected $12 billion deal. 
Aerospace manufacturer Pratt & Whitney unveiled its new engine for a line of Airbus jets capable of boosting fuel efficiency by 1% and thrust by 4% when it rolls out in 2024. 
China’s Chengtun Mining Group will invest $245 million for its second nickel manufacturing site in Indonesia, a bid to start producing the key electric vehicle battery metal at scale.  

At M. Holland

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