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Supply
- Oil prices rose then dipped on Monday over concerns about weakening demand and a potential increase in OPEC production. Prices were lower in early trading today, with the WTI at $48.21/bbl and Brent at $51.46/bbl.
- Natural gas prices sank yesterday on forecasts for warmer winter weather. Natural gas was lower in early trading today at $2.30/MMBtu.
- Global oil demand will likely wait until early 2022 to return to pre-pandemic levels, according to corresponding forecasts from IHS Markit and the International Energy Agency.
- Considering jarring oil price shifts in the spring, questions are being raised about whether benchmarks used since the 1980s accurately reflect the modern oil market.
Supply Chain
- Container freight rates from China to the rest of the world rose again last week, the 11th consecutive rise in rates led by increases for Europe-bound shipments.
- Natural disasters caused record damage and displaced millions of people in 2020, with the U.S. leading the list by incurring $60 billion in damages, largely the result of weather events.
- More than 10 million people suffered electricity outages in Mexico yesterday on an imbalance in the nation’s network.
- Container line ONE is chartering six new 24,000-teu containerships that will be built in the next few years, following rival Hapag-Lloyd’s recent order of new mega ships.
- 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
- New COVID-19 infections and fatalities fell around 17% for the week ending December 27, likely a result of reporting gaps caused by the holidays. There were 168,817 new infections and 1,718 deaths reported yesterday.
- U.S. COVID-19 hospitalizations hit a record 121,000+ yesterday. The seven-day average of COVID-19 hospitalizations rose to 118,000, also a record.
- Doctors around the world are reporting rare instances of COVID-19 patients with no previous mental health issues developing severe psychotic symptoms weeks after recovering from the virus.
- Constraints on social gatherings and business activities will likely be extended for three weeks in many parts of southern California, the governor said Monday, as surging COVID-19 cases continue to completely fill the region’s hospitals.
- The U.S. military has received its first batches of COVID-19 vaccines at bases in Japan and South Korea.
- The U.S. stock markets set record highs Monday after the White House approved a COVID-19 aid bill, bringing several unemployment programs back to millions of Americans and providing cautious optimism for continued economic recovery.
- The Treasury Department will begin sending $600 direct payments to many Americans by the end of the week, part of the $900 billion coronavirus aid package recently approved by Congress and the White House. Meanwhile, the U.S. House approved a measure to increase the size of direct payments to $2,000, a change that would need to be approved by the Senate and White House.
- The U.S. dollar is off more than 6% this year versus an index of foreign currencies, with traders expecting further weakness ahead.
- More than 1.28 million holiday travelers were screened on Sunday at U.S. airports, fueling concerns about a post-seasonal surge in new COVID-19 infections.
- The Federal Aviation Administration is sharpening its certifications for new airplanes following crashes in recent years that killed 346 people.
- The U.S. EPA set its first-ever emissions standards for commercial airliners and business jets, set to take effect in 2028.
- Carnival’s largest ship ever, capable of housing 6,500 passengers alongside a roller coaster on deck, will be forced to wait months or more before setting off on its maiden voyage due to pandemic-induced hits on the cruise line industry.
- Landlords are hopeful that vaccine rollouts will prompt companies to return to physical offices, but the office landscape will likely be very different in the post-pandemic world.
- Porsche has introduced its first 3D-printed electrical drive housing using laser fusion technology.
International
- European countries continue to see elevated levels of COVID-19 infections as the continent begins distributing the first COVID-19 vaccines to the public. The rollout is expected to be about three months behind vaccine campaigns in the U.S. and Britain, with countries including Germany and Italy pressing for increased production.
- Britain reported 41,385 new COVID-19 cases Monday, a record. A study forecasts the nation of 65 million must vaccinate two million people per week to prevent a third, more dangerous COVID-19 wave.
- A U.K. study suggests that front-line healthcare workers are 7 times more likely to suffer severe COVID-19 symptoms than other victims.
- COVID-19 fatalities in Spain passed 50,000.
- While new COVID-19 cases in Sydney, Australia, trended downward yesterday, the region reported its first infections outside the initial small cluster that began last week, prompting a “high alert” warning from officials.
- India became the latest country to report a small cluster of COVID-19 patients infected with the highly contagious strain recently found in Britain.
- South Africa is banning alcohol sales and extending a curfew in the wake of rising COVID-19 infections that recently pushed the country past the 1 million mark for total infections.
- Indonesia is imposing a ban on all foreigners entering the country from January 1 to January 14, a response to the spread of the highly infectious COVID-19 strain recently discovered in Britain.
- The Philippines is banning travelers from 19 countries and territories until mid-January over fears of importing a fast-spreading COVID-19 strain.
- South Korea is purchasing enough of Moderna’s COVID-19 vaccine doses to inoculate 20 million people.
- Concerns are mounting over the safety and efficacy of a China-developed COVID-19 vaccine, as a lack of clinical testing results prompt hesitancy from the public.
- Drug company Novavax will begin clinical trials of up to 30,000 people in the U.S. and Mexico for an experimental COVID-19 vaccine.
- Factory activity in China likely sustained a strong expansion in December, putting the nation on track to be one of the first to reverse widespread industry shutdowns.
- Many loans for Chinese retailers are being denied amid a weak recovery in consumer spending, with rejection rates increasing to 38% in the final quarter of 2020 compared to 14% the previous quarter.
- Tesla, the dominant electric vehicle producer in China, faces increasing competition from homegrown rivals that threaten the company’s growth and earnings trajectory.
- Consumer confidence in South Korea declined sharply in December from a 10-month high, with rising COVID-19 infections prompting lawmakers to impose tighter social and business restrictions.
Our Operations
- M. Holland will be closed on Friday, January 1, for New Year’s Day.
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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.