A former senior U.S. government official says it's the "best" deal they can get, while an analyst said this is more about "politics than policy."
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President Trump on Sunday said if his administration can keep the coronavirus death toll to 100,000 in the United States, it will have done a "very good job."Earlier in the day, Dr. Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, said the coronavirus pandemic could cause between 100,000 and 200,000 deaths in the United States. Trump said while 100,000 is "a horrible number," if the U.S. can keep its death toll to "100,000, so we have between 100,000 and 200,000, we altogether have done a very good job."Trump also announced he is extending social distancing guidelines to April 30, a departure from his earlier declaration of having the U.S. "opened up" by Easter on April 12. That proclamation was "aspirational," Trump said.As of Sunday night, there are more than 139,700 confirmed cases of COVID-19 coronavirus in the United States, and at least 2,400 people have died from the virus.More stories from theweek.com Fox News reportedly fears its early downplaying of COVID-19 leaves it open to lawsuits CDC is weighing advising Americans to wear face masks outdoors Trump's message to blue states battling coronavirus: Drop dead
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(Bloomberg) -- Saudi Arabia has made good on its pledge to ramp up oil exports in April, with a first wave of crude already on its way toward Europe and the U.S., a clear sign the price war remains in full swing.The kingdom has loaded several of the supertankers it hired earlier this month to boost its ability to increase exports, according to ship-tracking data. In addition, Riyadh has used the last few weeks to shuttle large amounts of crude into storage in Egypt, a stepping stone to the European market.The movements suggest that Riyadh is ramping up its oil production toward its target of supplying a record 12.3 million barrels a day in April, up from about 9.7 million in February, despite American pressure to end the price war.Saudi Arabia earlier this month slashed its official selling prices and announced the output hike after Russia refused to join other nations inside the OPEC+ alliance to cut output. The announcement, interpreted in the market as an oil price war, sent Brent and West Texas Intermediate crudes tumbling. Since then, the collapse in oil demand due to lockdowns to stop the spread of the coronavirus has depressed prices even more.In a sign that Riyadh is opening the valves, oil shipments have already surged in late March. For the first three weeks of March, Saudi Arabia was exporting at a rate of around 7 million barrels a day, but that jumped to more than 9 million barrels a day in the fourth week of the month.With oil prices at the lowest in nearly two decades, U.S. Secretary of State Michael Pompeo last week directly asked the kingdom to “rise to the occasion and reassure” the energy market, diplomatic language for ending the oil price war.American President Donald Trump and his Russian counterpart, Vladimir Putin, agreed in a phone call Monday that “current oil prices aren’t in the interests of our countries,” according to a Kremlin spokesman, though he declined to say what might be done to change the situation.Trump earlier indicated that he was concerned about the impact of low oil prices on the American petroleum industry. In an interview on “Fox & Friends,” he said Russia and Saudi Arabia “both went crazy” and started an oil price war.Despite the diplomatic pressure, Saudi Arabia is preparing to export more in the next few days. At least 16 very large crude carriers, collectively able to carry about 32 million barrels, are stationed near the Saudi oil terminals of Ras Tanura and Yanbu, according to shipping data tracked by Bloomberg.“Regardless of the recent headlines about the U.S. pressuring Saudi Arabia, we do not see any change in Saudi or Russian policy for now,” said Amrita Sen, chief oil analyst at Energy Aspects Ltd., a London-based consultant.Riyadh has already loaded three supertankers that are likely to head to the U.S., and it’s loading a fourth right now, according to oil market intelligence firm Vortexa Inc. The tankers, all hired by the Saudi national tanker company in the past few weeks to boost its shipping capacity, include the Dalian, the Agios Sostis I, the Maran Canopus, and the Hong Kong Spirit.Shipments to EgyptAlready through March, Saudi Arabia has exported about 1.3 million barrels a day into Egypt -- the highest level in at least three years -- to pre-position crude for re-export into Europe, according to shipping tracking data compiled by Bloomberg and people familiar with the operation.The surge in shipments to Egypt was so large that the African nation may become the largest destination for Saudi crude in March, displacing China and Japan, which traditionally top the ranking every month.The cargoes have gone to a terminal at the south end of the Suez Canal before getting pumped via pipeline across the country to a storage and export facility called Sidi Kerir on the Mediterranean Sea. From there, the crude will then get re-exported as part of Saudi Arabia’s plan to supply as much as it can, at deep discounts, into a market that doesn’t need the supply. The world’s largest oil tankers, known as VLCCs, cannot sail the Suez Canal fully loaded due to draft limitations.The next sign of whether the oil price war continues will come around April 5, when state-owned Saudi Aramco is expected to release its monthly official selling prices for May. Oil refiners and traders believe that Riyadh will have to deepen its discounts to sell all the oil the kingdom wants. If Aramco does indeed deepen the discounts, it will trigger a fresh round of tit-for-tat actions with other oil producing nations, piling further pressure on prices.(Updates with statement from Kremlin in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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Indian health workers caused outrage on Monday by spraying a group of migrants with disinfectant, amid fears that a large scale movement of people from cities to the countryside risked spreading the coronavirus. Footage showed a group of migrant workers sitting on a street in Bareilly, a district in the northern state of Uttar Pradesh, as health officials in protective suits used hose pipes to douse them in disinfectant, prompting anger on social media. Nitish Kumar, the top government official in the district, said health workers had been ordered to disinfect buses being used by the local authorities but in their zeal had also turned their hoses on migrant workers.
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The captain of a U.S. Navy aircraft carrier facing a growing outbreak of the coronavirus is asking for permission to isolate the bulk of his roughly 5,000 crew members on shore, which would take the warship out of duty in an effort to save lives. In a memo to Navy leaders, the captain of the USS Theodore Roosevelt said that the spread of the disease is ongoing and accelerating and that removing all but 10% of the crew is a “necessary risk” in order to stop the spread of the virus. Navy leaders on Tuesday were scrambling to determine how to best respond to the extraordinary request as dozens of crew members tested positive.
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Speaking at a makeshift hospital in Manhattan preparing to receive its first patients on Monday, Cuomo sought to divert attention from any tension with Trump, with whom he has tussled in recent days over the distribution of ventilators in storage. "I am not engaging the president in politics," said Cuomo, who has emerged as a leading national voice on the coronavirus pandemic. New York is at the epicenter of the crisis.
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The United States is preparing for a novel coronavirus epidemic that is national in scope."No state, no metro area will be spared," Dr. Deborah Birx, the coronavirus response coordinator for the White House Coronavirus Task Force, told NBC's Chuck Todd on Sunday's edition of Meet the Press.Birx was clear that no area of the country will evade the effects of the virus, but said the sooner places react and instill mitigation measures, the easier it will be to "move forward."> WATCH: Dr. Deborah Birx says "no metro area will be spared" of the coronavirus outbreak. MTP IfItsSunday> > Dr. Birx: "The sooner we react and the sooner the states and the metro areas react and ensure that they have put in full mitigation ... then we'll be able to move forward." pic.twitter.com/B9Fo3lUVHA> > -- Meet the Press (@MeetThePress) March 29, 2020Dr. Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, also provided a sense of scale Sunday, but he said he doesn't want to be held to any prediction. Fauci told CNN's Jake Tapper that he's never seen an outbreak match the worst-case scenario of its models, and he believes that remains unlikely for the coronavirus, as well. Nevertheless, he thinks it's possible the U.S. could be looking at somewhere between 100,000 and 200,000 deaths. > Dr. Anthony Fauci says there could potentially be between 100,000 to 200,000 deaths related to the coronavirus and millions of cases. "I just don't think that we really need to make a projection when it's such a moving target, that you could so easily be wrong," he adds. CNNSOTU pic.twitter.com/F2MOHY3xl4> > -- State of the Union (@CNNSotu) March 29, 2020More stories from theweek.com Trump's message to blue states battling coronavirus: Drop dead Fox News reportedly fears its early downplaying of COVID-19 leaves it open to lawsuits How coronavirus has reshaped Trump's economy-driven, rally-heavy re-election campaign
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Donald Trump has branded House speaker Nancy Pelosi “a sick puppy” during an interview with Fox and Friends after extending the timeline for the US to remain in lockdown over the coronavirus pandemic until at least 30 April, abandoning his “aspiration” to have the country back in business by Easter.The White House’s top infectious disease expert, Dr Anthony Fauci, has meanwhile warned that his projection of a potential 100,000 to 200,000 American deaths is “entirely conceivable” if not enough is done to mitigate the crisis, with the president commenting that containing the disaster to that level would represent “a very good job”.
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(Bloomberg) -- The Kremlin’s sudden shift of ownership of multi-billion-dollar oil projects in Venezuela shields oil giant Rosneft PJSC from further U.S. sanctions but keeps Moscow firmly behind embattled President Nicolas Maduro amid a wider stand-off with Washington.“Russia is not walking away from Maduro and will seek to thwart U.S. efforts to depose him,” said Vladimir Frolov, a former diplomat and foreign policy analyst in Moscow. “Moscow is just shielding Rosneft from sanctions which could result in a blanket embargo on all Rosneft exports.”Fears of broader sanctions have grown after the U.S. in recent months slapped restrictions on Rosneft trading companies for handling business with Venezuela. More recently, the U.S. has hinted that it might step up pressure on the Russian oil sector to reduce production. That followed Moscow’s decision early this month not to deepen output cuts agreed with OPEC led Saudi Arabia to boost output, flooding the market and pushing prices to the lowest levels in decades.The administration of President Donald Trump has already reached out to Saudi leaders to reconsider their strategy, which has battered producers in the U.S. with low prices. Trump said Monday he plans to speak by phone with Putin later in the day to talk about the oil market and may discuss sanctions and Venezuela.Read: Putin and MBS Draw Trump Into Grudge Match for Oil SupremacyRosneft late Saturday announced it’s turning over its Venezuelan projects to an unnamed state-owned company in what it called an effort to protect its shareholders’ interests.Sechin AutonomyAs part of the deal, Rosneft gets 9.6% of its own shares previously held by state holding company Rosneftegaz, bringing direct government ownership to just over 40%, according to two people familiar with the transaction. While Rosneft will remain firmly under Kremlin control, the shift in ownership could give Igor Sechin, who as chief executive and a longtime Putin ally is already one of Russia’s most influential people, even more autonomy, these people said.“Sechin gets Rosneft shares and Putin gets the chance to trade with Trump,” said Konstantin Simonov, head of the National Energy Security Fund in Moscow.Neither the company nor the government would comment on whether the deal will bring state ownership below 50%.Rosneft, which produces 40% of Russian oil and 5% of world output and has substantial exposure in the western financial system, can’t afford the risk of broad U.S. sanctions that could cripple its operations. Earlier this month, a Chinese company said it wouldn’t buy crude from Rosneft because of the risks caused by the sanctions on the trading companies.“As recently as February, the Venezuelan business was profitable, which offset the sanctions risk,” said Ivan Timofeyev, an analyst at the Kremlin-founded Russian International Affairs Council. “Now the desire to avoid sanctions coincided with the need to avoid losses” after oil prices plunged, he added.The Russian giant has already cut its exposure under multi-billion-dollar prepayment deals reached several years ago. Venezuela’s oil producer PDVSA owes Rosneft only $800 million at the end of the third quarter of 2019, according to the last available data, down from $4.6 billion at the end of 2017.Sanctions ProtectionThe latest Russian maneuver mirrored its strategy in 2018 when it used Promsvzyabank to set up a new banking vehicle to serve the defense industry after state-owned weapons producers came under U.S. sanctions, thereby shielding the country’s two largest banks, government-controlled Sberbank and VTB. Unlike those big lenders, which have significant exposure to western financial institutions and thus are at risk from sweeping U.S. sanctions, the new special entity operated largely out of Washington’s reach.While Rosneft may even push to have the recently imposed sanctions on the trading units lifted, risks remain.“Rosneft is trying to stay out of the firing-line but nothing stops the Americans from finding another pretext to sanction it,” said Fyodor Lukyanov, who heads the Council on Foreign and Defense Policy, a research group in Moscow that advises the Kremlin.“Russia understands that Maduro is in an awful situation, especially with oil prices at rock bottom,” he said. “But Putin’s psychology is that you should stick with partners in difficulty.”Frolov said, “Moscow thinks that Maduro is actually winning the fight with the opposition and is likely to split it to the point where he would be able to win parliamentary elections this year.” Russia has backed Maduro even as the U.S. and its allies back opposition leader Juan Guaido.Maduro said on state TV on Saturday evening that ”President Putin sent me a message through his ambassador reaffirming their strategic and integral support to Venezuela in all areas.”(Updates with Rosneft stake shift in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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In late November 2018, just over a year before the first coronavirus case was identified in Wuhan, China, U.S. Customs and Border Protection agents at Detroit Metro Airport stopped a Chinese biologist with three vials labeled “Antibodies” in his luggage.
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Saudi Arabia halted entry and exit into Jeddah governorate on Sunday, expanding lockdown rules as it reported four new deaths from a coronavirus outbreak that continues to spread in the region despite drastic measures to contain it. The Saudi health ministry said four more foreign residents, in Jeddah and Medina, had died from the virus, taking the total to eight. Oman, Kuwait and Bahrain reported more cases, taking the total in the six Gulf Arab countries to over 3,200, with 15 deaths.
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Legal groups across the US are calling on federal and state governments to halt debt collection as it continues unabated * Coronavirus – live US updates * Live global updates * See all our coronavirus coverageVeronica Cavalli was at home in New York City last week, laid off from her job amid the Covid-19 pandemic and, as instructed by New York’s governor, trying to minimize her contact with others to halt the spread of the virus.When supplies ran low she sent her teenage children to the grocery store only to discover her debit card wasn’t working. She checked her account. It was thousands of dollars overdrawn.Cavalli suspected fraud and after spending hours on the phone with her bank trying to find out what happened, she was informed a court judgment had been made against her by a creditor to garnish her wages directly from her bank account for credit card debt she accrued a few years ago while her husband, who is now disabled, was experiencing a debilitating illness.“I didn’t know anything about the wage garnishment until it was posted on my account,” said Cavalli. “I have zero funds. I have no money. I’m at the breaking point.”One out of every six Americans has an unpaid medical bill on their credit report, amounting to $81bn in debt nationwide. Every year, about 530,000 Americans who file bankruptcy cite medical debt as a contributing factor.In the wake of the coronavirus pandemic, several legal groups across the US are calling on federal and state governments to halt private and public debt collection, including wage garnishment, and preventing any federal stimulus checks to Americans from being garnished by debt collectors. For now the debt collection continues unabated.Millions of US workers have wages garnished from their paychecks for consumer debts every year, and those with low incomes are disproportionately affected.Cavalli, the sole income earner of her household, has been trying to file for unemployment benefits, but as she has previously claimed them in the past 18 months, the online system won’t accept her application. She has not been able to get in touch with someone at the state unemployment office due to the recent flood of applications.Because the courts in New York City have closed except for essential matters, Cavalli and her attorneys have yet to gain full access to the court files on the wage garnishment order. The vast majority of consumer debtors have no legal representation and often are not given notice they face a lawsuit.Joseph Walker of Lawrence, Kansas, went to the emergency room last year on advice of his doctor after he experienced sudden chest pressure. Despite having health insurance through his employer, he left with a medical bill for a few thousand dollars and still owes about $2,800.Last week, Walker, who drives a construction dump truck, had the last $200 in his bank account garnished by a debt collection agency for the bill. After the agency obtained a judgment against him to collect the debt, Walker tried to work out a monthly payment plan, but his wages have been garnished anyway.“The garnishment came with no warning. You don’t know until your bank account is locked and your money is gone,” said Walker, who didn’t receive the order of garnishment in the mail until 24 March, after money was taken from his account, and he has already started to fall behind in paying bills.“Unlike the rest of my bills that I can see, the debt collection agency doesn’t send you one. You can’t arrange to auto-pay and they don’t send anything showing what you paid. It’s like they are set up to make you fail. With the coronavirus they shouldn’t be allowed to harass and garnish bank accounts while Americans are in this crisis.”“Garnishment is a really important issue, especially for low-income, economically vulnerable families, the exact workers being laid off in the US right now,” said J Michael Collins, faculty director of the Center for Financial Security at the University of Wisconsin-Madison.He noted it is still unclear if any federal stimulus checks will be subjected to wage garnishment, but warned courts can freeze bank accounts over debt, making these funds inaccessible if they are deposited.In November 2018, Kathy Johnson of Appleton, Wisconsin, had a life-saving kidney surgery.Uninsured at the time, Johnson was able to find a charity to cover the majority of the surgical expenses, but she still owes about $3,500 after the garnishing of her wages from her job at a Batteries Plus retail store started a few months ago. It has continued through the coronavirus pandemic, as her work schedule hasn’t been affected yet by the shutdowns caused by the pandemic.“It’s $350 to $400 a month. I don’t deny I owe this money because they saved my life, but it is detrimental to my health now because I don’t have the money for what I need. I have no money for groceries – I’m only paying my rent and utilities, there’s no money left over,” Johnson said.Kristinea Stillmunkes of Cedar Rapids, Iowa, received a notice last week that a debt collector won a judgment to start garnishing her wages for a car repossessed two years ago during a divorce, with added interest, and she has been out of work because the retail store she works at is closed. More than 25% of her last paycheck was taken.“I’m completely devastated. I have been out of work for over a week and have no idea how I’m going to feed my family now,” she said. “I received no notice of this happening and was advised they don’t have to give notice.”Among the Americans still experiencing wage garnishment through the coronavirus pandemic are those who have defaulted on their federal student loans. About 45 million Americans owe more than $1.7tn in student loan debt. According to an analysis by Student Loan Hero, between July 2015 to September 2018, 18 private student debt collection agencies contracted by the US Department of Education added $171bn to their debt inventory, and collected $2.3bn during the same period through wage garnishments.Justin McKinnon, a digital communications professional in Dallas, is currently having 15% of his income garnished to pay off roughly $10,000 in student loans.“The Department of Education has not decided to do anything, as far as I know, to ease the burden from the coronavirus,” said McKinnon. “They took my tax return also, in the middle of this epidemic. It’s heartless.”Danelle Tavares of Denver receives $1,086 a month in social security disability benefits, and $16 a month for Snap food assistance benefits, but $250 is garnished from her benefits income each month by the Department of Education to pay off her student loan debt of $16,000.A spokesperson for the US Department of Education said they are evaluating options for borrowers and will be sharing information in the coming days. In the meantime the Covid-19 pandemic is making life almost impossible for debt-ridden Americans.“With this lockdown, food banks are overrun. I sometimes go two or three days without food,” Tavares said. “I haven’t been able to afford my medications this month. I know for most $250 isn’t much but for people like me it can make a huge difference.”She noted the federal stimulus relief package for the coronavirus pandemic is supposed to increase social security income by $200, but that she will still be receiving less than she would before the garnishment. “Even though I paid for years and I’ve tried to utilize their system to take care of my student loans they still decided to garnish my already-below-poverty-line social security income,” Tavares added.
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CARACAS/WASHINGTON (Reuters) - The former head of Venezuela's military intelligence unit, Hugo Carvajal, is discussing his possible surrender with U.S. authorities, three people familiar with the matter said on Saturday, after prosecutors charged him this week with drug trafficking alongside Venezuelan President Nicolas Maduro. Carvajal, a former general and ally of late Venezuelan leader Hugo Chavez, has been in hiding since a Spanish court in November approved his extradition to the United States.
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Former U.S. Sen. Tom Coburn was stubborn as a mule and conservative to his core. Coburn, who died early Saturday at age 72, joined the U.S. Senate the same year as President Barack Obama, and the pair became fast friends despite their contrasting ideologies. In Oklahoma, where Obama failed to carry a single county in his 2008 presidential bid, voters took note.
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The U.S. government has begun to use cellphone data to get a better sense of people's movement in up to as many as 500 cities amid the novel coronavirus pandemic, The Wall Street Journal reports.The tactic is not meant to track individuals, and names aren't included in the data, but instead is geared toward figuring out where people might be congregating in large numbers as calls for social distancing and lockdowns become the norm across the country. In doing so, the Centers for Disease Control and Prevention, in conjunction with state and local officials, hope to get an idea of how the coronavirus might be spreading so they can further curb its advance.The data, which is coming from the less-regulated mobile advertising industry rather than cell phone carriers, could also provide information on whether people are complying with their area's shelter-in-place or stay-at-home orders.Despite the intentions of the efforts, such projects will undoubtedly raise concerns about government invasion of privacy, and, while even some privacy activists understand the necessity of such efforts, they want stronger safeguards in place. Read more at The Wall Street Journal and read more about coronavirus surveillance here at The Week.More stories from theweek.com Once coronavirus infects a human body, what happens next? Elton John to host 'Living Room Concert for America' with stars performing from home Trump brags about his television ratings as pandemic intensifies
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Spain broke another national record of daily coronavirus deaths Sunday as more than 40 percent of the world's population was asked to stay at home to halt the deadly march of a disease that has claimed some 33,500 lives. Hospitals are rapidly filling with a deluge of patients in Europe and the United States, now the focal points of a pandemic that began in Asia but is now upending the global economy and upsetting everyday life in unprecedented ways. Spain announced 838 deaths in a 24-hour period, the third consecutive day it has seen a rise.
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A plane carrying eight people, including an American and a Canadian, burst into flames Sunday while attempting to take off from Manila’s airport on a flight bound for Japan, killing all those on board, officials said. The Westwind 24 plane, which was carrying six Filipino crew members and the American and Canadian passengers, was bound for Tokyo on a medical mission when it caught fire near the end of the main runway, Manila airport general manager Ed Monreal said. The Civil Aviation Authority of the Philippines said the aircraft apparently encountered an unspecified “problem which resulted in a fire” as it rolled to take off, adding its chief investigator was on the way to the scene.
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Even with a massive economic stimulus bill on the horizon, House members had recently returned home to wait out the new coronavirus outbreak upon reassurance the bill would pass unanimously.But on Thursday, Rep. Thomas Massie (R-Ky.) disrupted that plan by suggesting he might oppose a unanimous voice vote. His waffling now has much of the House rushing back to Washington, scrambling to find uncancelled flights and worried about spreading COVID-19 even further, Politico reports.Beyond just allowing congressmembers to get home, the voice vote would've prevented all House members from having to come together in the Capitol in a clear violation of the CDC's social distancing guidelines. The House only needs 216 members for a quorum, but others are worried about the optics of not showing up if it comes down to a roll call vote. So even Rep. Grace Meng (D-N.Y.), who represents the swamped Elmhurst hospital in Queens, New York, boarded a near-empty flight back to D.C.House Speaker Nancy Pelosi (D-Calif.) said the House will have a roll call if there's a quorum on Friday, but Massie's disruption could push it to Saturday. House members on both sides of the aisle are "furious" about the plans, with some blaming Pelosi and others blaming Massie, Politico reports. President Trump agreed with the latter in a Friday tweet and called for Massie to be thrown out of the Republican party. > ...& costly. Workers & small businesses need money now in order to survive. Virus wasn't their fault. It is "HELL" dealing with the Dems, had to give up some stupid things in order to get the "big picture" done. 90% GREAT! WIN BACK HOUSE, but throw Massie out of Republican Party!> > -- Donald J. Trump (@realDonaldTrump) March 27, 2020More stories from theweek.com Why Minnesota's coronavirus response is different Elton John to host 'Living Room Concert for America' with stars performing from home Biden could reportedly soon embrace 'key planks' of more progressive agenda
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New Orleans rushed to build a makeshift hospital in its convention center Friday as troubling new outbreaks bubbled in the United States, deaths surged in Italy and Spain and the world warily trudged through the pandemic that has sickened more than a half-million people. In a reminder no one is immune to the new coronavirus, it pierced even the highest echelons of global power as British Prime Minister Boris Johnson became the first leader of a major country to test positive. The escalation of cases worldwide came as the U.S. Food and Drug Administration cleared a new rapid test from Abbott Laboratories, which the company says can detect the coronavirus in about 5 minutes.
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(Bloomberg Opinion) -- Under the watchful eye of Beijing’s energy hawks, China’s oil and gas majors have splurged for more than a decade, first on deals abroad and then drilling at home. Yet with crude prices at less than half where they were at the start of the year and demand battered by a coronavirus epidemic, they’re preparing to cut back.Cnooc Ltd. signaled Wednesday it might reduce its 2020 capital expenditure budget, which was set at as much as $13 billion, the highest since 2014. PetroChina Ltd., the country’s largest oil producer with a market value of $117 billion, suggested Thursday that it would do the same. Given the delicate politics involved, it’s a welcome hint of rational frugality.Energy security has always been a top concern for China’s leadership. Overseas deals peaked at $28 billion in 2012, the year Cnooc bid for Canada’s Nexen. Local production growth has been less exuberant, and China has been importing ever more. As trade tensions with Washington rose in 2018, President Xi Jinping urged the country’s state-owned titans to drill. That set off a frenzy from deepwater fields in the South China Sea to shale gas in Sichuan, where China Petroleum & Chemical Corp., known as Sinopec, has led. Performing national service is fine when oil is at $60 a barrel, even if the improvements are unimpressive compared to the capital spent. It’s a different matter when West Texas Intermediate is just coming off an 18-year low of less than $20. That’s a price at which no one can make money — not even Cnooc, with an all-in production cost of less than $30 per barrel of oil equivalent. Cnooc’s adventures in U.S. onshore and Canadian oil sands look terrible; its buccaneering domestic ventures are little better.Overseas, oil majors from Chevron Corp. to Saudi Aramco are cutting spending to preserve capital. Dividends are precarious. Logic dictates that China’s producers, even with healthier balance sheets, will follow the same pattern. The question is whether they can put financial logic ahead of political necessity. So far, the message is cautious: Cnooc executives pointed out that 2020 spending targets were drawn up when oil was at $65, so adjustments would be made. It gave no specifics. PetroChina, meanwhile, didn’t disclose precise targets for the year. That’s no accident, given a volatile market. After a string of personnel changes, there are new bosses across the industry. Political priorities haven’t been set in stone, given the delay in the annual National People’s Congress meeting. Still, the official message has been clear: Life is returning to normal after a devastating shutdown. Announcing a drastic spending cut, or anything that might hint at job losses or a weak economy, simply isn’t on the cards. PetroChina employed 476,000 at the end of 2018.That doesn’t mean that there won’t be mild cuts followed by steeper ones later in the year, a pattern seen before.How steep? Unlike during the last price crunch, in 2014 and 2015, the forward curve suggests prices will remain low, with little prospect for a quick solution to the Russia-Saudi spat that has worsened a global supply glut. Demand, meanwhile, is in the doldrums. China’s economy, and therefore its own appetite for oil and gas, is recovering only slowly, and the rest of the world is ailing as more lockdowns, factory closures and travel restrictions are imposed to limit the spread of the coronavirus. Analysts at UBS Group AG forecast Cnooc’s capex could come down 25% over the next two years, a cut that could be far deeper if oil averages closer to $30 this year. Overall, they project Chinese state-owned oil producers could cut spending by over a third, dragging production down 8% to 9%. Exploration budgets may be trimmed, though domestic production — where job preservation remains key — will mostly be spared. That leaves refining and other downstream activities, plus projects abroad, to bear the brunt. Low energy prices aren’t all bad for China, which imports more than 70% of the crude it consumes. Even liberalization of the domestic gas market becomes easier when prices are low enough for consumers to cope with change, Michal Meidan of the Oxford Institute for Energy Studies points out. Cheaper oil could eventually stimulate demand. For now, a little less drilling all round. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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The Tehran government urged the United States on Friday to release Iranians held in U.S. jails on sanctions-related issues due to fears about the coronavirus epidemic. The death toll in Iran, one of the countries worst hit by the disease, meanwhile rose to 2,378 on Friday, a jump of 144, while its number of cases rose to 32,332, according to Health Ministry spokesman Kianoush Jahanpour. Foreign Minister Mohammad Javad Zarif accused the United States of holding a number of Iranians in its prisons and said that under the circumstances they should be set free.
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Stock futures fall as investors eye Israel-Iran conflict: Live updates CNBC View Full Coverage on Google News from "news" - G...