(Associated Press) Oil’s chaotic collapse deepened, and stocks around the world dropped on Tuesday as the economic carnage caused by the coronavirus pandemic turns markets upside down.
A day after oil futures plunged below zero for the first time, traders in one corner of the U.S. crude market were still close to paying others to take it off their hands. That’s a market quirk created by a glut of oil, which has traders running out of places to store it in the near term.
Prices remain well above zero for oil elsewhere in the world and for deliveries further into the future, which analysts consider to be closer to the “true” price of crude. But they also slid sharply Tuesday on the same ultimate concern: A global economy incapacitated by the virus outbreak doesn’t need to burn as much fuel. Airplanes are parked, cars are garaged and factories are idled with millions of workers losing their jobs every week.
The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Tuesday related to the global economy, the work place and the spread of the virus.
OPEN: There has been a lot of controversy over when it will be safe for businesses to reopen. In some areas hit early by the virus, attempts are underway.
— Austria intends to open all shops early in May, and restaurants in mid-May, said Chancellor Sebastian Kurz. Austria allowed small shops to open a week ago.
The plan for early May includes hair salons and manicurists. The government plans to allow the catering industry to restart May 15, with all staff required to wear masks.
LOOKING FOR JOBS: The virus has brought with it an unprecedented number of job losses. Companies bereft of revenue continue to slash positions.
— Hertz is laying off about 10,000 employees in North America with vacations and business travel on hold. The layoffs cross all divisions within the company, and began last week for non-union employees. Hertz anticipates approximately $30 million in costs tied to the layoffs.
ENERGY DRAIN: The price of crude and other fossil fuels are plunging and job cuts in the energy sector have already begun. The price for a barrel of oil in an expiring contract Monday went negative, which is unprecedented.
— Russian President Vladimir Putin’s spokesman warned markets against an “apocalyptic angle” on crude prices. Dmitry Peskov blamed oil speculators for plunging prices.
Russia has sufficient hard currency reserves to soft-cushion the economic impact, Peskov said Tuesday There are no immediate plan for Putin to set up another call with President Donald Trump to discuss the oil market situation.
— Crude prices plunged another 25% Tuesday for June contracts.
MARKETS: The Dow, S&P 500 and Nasdaq have all moved into deep negative territory for the year. That selloff continues Tuesday.
— World share prices skidded after the price of U.S. crude oil plunged below zero, with demand collapsing as the pandemic leaves factories, automobiles and airplanes idled.
PEANUT, PEANUT BUTTER … AND JELLY: A number of companies have filled a dire need during the pandemic, from streaming services, to delivery. Add J.M. Smucker to the list.
— J.M. Smucker is increasing production at all of its plants with demand for jellies, jams and coffee soaring. The company is raising its profit and sales expectations for the year.