Jul 12, 2018

Spare crude oil capacity could be "stretched to the limit"

Photo: Joe Raedle/Newsmakers

The International Energy Agency on Thursday welcomed higher production from the Middle East and Russia, but warned that it "comes at the expense of the world's spare capacity cushion, which might be stretched to the limit."

Why it matters: The commentary in the IEA's closely-watched monthly oil market report highlights a reason why the market could be in for more volatility and price jumps despite the recent decision by OPEC and Russia to boost output.

  • The report notes that the production boost comes at a time of pressure on supply from various sources, noting recent disruptions in Libya and elsewhere, as well as Venezuela's collapse and U.S. sanctions on Iran.
  • And global demand is rising. IEA says that during the first half of this year, it's running 1.5 million barrels per day higher than in 2017, although growth is slowing down as higher prices take their toll.

More on Iran: The report looks at the potential effect of the upcoming renewal of U.S. sanctions against buyers of Iranian crude. U.S. officials have signaled that they don't intend to provide waivers, although they've left some wiggle room.

  • "The clearly expressed determination of the United States to reduce Iran's exports by as much as possible suggests that shipments could be reduced by significantly more than the 1.2 [million barrels per day] seen in the previous round of sanctions," IEA said.

The intrigue: The report also sizes up the escalating trade battle with China, which intends to impose tariffs on U.S. crude.

  • U.S. crude oil exports to worldwide destinations have been rising, and reached a weekly average of 3 million barrels a day for the first time ever in mid-June but have fallen back into the 2-2.3 million range since.
  • "If China were to impose tariffs, US exporters would no doubt find other outlets (India, for example, has imported growing quantities of US crude in recent months, and Europe remains a major destination), but this crude would likely have to be discounted further and export quantities may fall," IEA said.

Go deeper: CNBC breaks down the report here.

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History's largest lockdown leaves Indian workers stranded, afraid

A migrant worker on the move with his child, in Gurugram, India. Photo: Parveen Kumar/Hindustan Times via Getty

Few moments better capture the world into which we've slipped than the decision of one man to order 1.4 billion into lockdown.

Why it matters: India’s three-week lockdown is the largest ever attempted, and it sparked South Asia's greatest migration since partition in 1947. While the economic effects could be devastating, the public health crisis it's intended to fend off could be more destructive still.

Go deeperArrow5 mins ago - World

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 7 p.m. ET: 782,319 — Total deaths: 37,582 — Total recoveries: 164,565.
  2. U.S.: Leads the world in confirmed cases. Total confirmed cases as of 5 p.m. ET: 161,807 — Total deaths: 2,953 — Total recoveries: 5,595.
  3. Federal government latest: The White House will extend its social distancing guidelines until April 30.
  4. State updates: Rural-state governors say testing is still inadequate, contradicting Trump — Virginia, Maryland and D.C. issue stay-at-home orders to residents, joining 28 other states.
  5. Business latest: Ford and General Electric aim to make 50,000 ventilators in 100 days.
  6. In photos: Navy hospital ship arrives in Manhattan.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

First U.S. service member dies from coronavirus

Photo: Yasin Ozturk/Anadolu Agency/Getty Images.

The Pentagon on Monday announced the death of a member of the New Jersey National Guard who tested positive for the coronavirus.

Why it matters: It's the first U.S. service member — active, reserve or Guard — to die from the virus, according to the Pentagon. The guardsman passed away on Saturday after being hospitalized for the novel coronavirus on March 21.

Go deeperArrow49 mins ago - Health