Brazil restores lockdowns as pandemic escalates
Brazil's most populous and wealthiest states are restoring lockdowns after Covid-19 hospitalizations and deaths set new records, trends that could prolong the country's economic contraction through the first half of 2021.
Sao Paulo, Rio de Janeiro, Minas Gerais and other states have imposed two-week lockdowns with restrictions on all non-essential businesses. Mining, construction and agriculture are among the sectors classified as essential, putting the burden of the restrictions on the retail and service sectors.
"We are on the brink of the health system's collapse. Urgent and collective measures are required," Joao Doria, governor of Sao Paulo, Brazil's most economically important state, said yesterday when announcing the lockdown that starts on 6 March.
Brazil's economy shrank by 4.1pc in 2020 because of the pandemic, less than many had projected but still the worst setback on record, according to data released yesterday by the Brazilian statistics institute (IBGE).
Physicians are blaming the recent surge in virus deaths on mid-February Carnival celebrations. Carnival was officially cancelled in many parts of Brazil because of the pandemic but some revellers still flocked to private parties and festivities.
The health ministry reported daily deaths from Covid-19 reached a record 1,910 yesterday, up from 1,641 the day before and up sharply from the seven-day moving average of 1,331. Registered cases also surged to 71,704/d yesterday from 59,925/d the previous day. Total Covid-related deaths reached 259,271, with 10.7m confirmed cases. Many of the intensive care units in hospitals across Brazil's major cities are operating at full capacity.
New Covid-19 variants, including the so-called Manaus variant, as well as variants from the UK and South Africa which have turned up in the country, are of growing concern.
Vaccinations got off to a slow start in Brazil but are expected to pick up speed in the coming weeks as more doses are distributed. Only about 3.5pc of the population — 7.4mn people — has been vaccinated. The ministry as well as state governments are negotiating the purchase of more vaccines from Pfizer/BioNTech and other suppliers.
Brazil's president Jair Bolsonaro, who has long downplayed the pandemic, chastised governors' efforts to try to check contagion and avert the collapse of regional healthcare systems by using lockdown measures because of their impact on economic growth.
Because of the Manaus variant, 27 countries have adopted restrictions on international flights to and from Brazil. The resurgence of the pandemic is also expected to slow the recovery of domestic flight demand, which fell by 49pc in 2020 from the year before because of the pandemic.
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Aug wildfires in Brazilian state surge eightfold
Aug wildfires in Brazilian state surge eightfold
Sao Paulo, 26 September (Argus) — Fires in Sao Paulo, Brazil's most populous state, increased eightfold in August from the same month last year, an "alarming rate" amid extreme climate conditions that harm the sugarcane industry, sector associations said. The state had 11,628 fire outbreaks last month, more than triple the historic average of 3,550. Nearly half of the fires took place on 23 August alone, according to data from industry association Canaoeste and fire monitoring network GMG Ambiental. Fires hit 658,600 hectares. The town of Pitangueira had the most blazes, at 354. Altinopolis and Sertaozinho came in second and third, with 252 and 296, respectively. Nearly all of the most affected towns have high production of sugarcane. The groups highlighted that 20-24 August fires happened as low humidity, high temperatures and strong winds put Sao Paulo in "extreme risk" for wildfires. The data was shown in a meeting with several industry representatives, such as Canoeste, Unica and Orplana. The groups added that sugarcane producers were not responsible for the fires nor were benefiting from them, defending themselves from accusations that they could be lighting fires to accelerate harvesting — an old common practice supposedly abolished. By Maria Ligia Barros Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Gulf oil shut-ins drop as Helene nears landfall
US Gulf oil shut-ins drop as Helene nears landfall
New York, 26 September (Argus) — US Gulf of Mexico oil production shut-in levels fell today as Hurricane Helene bore down on Florida's west coast as a category 3 storm, bringing the threat of dangerous storm surge and winds. Around 441,923 b/d of US offshore oil output, or 25pc, was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE). That is down from 29pc on Wednesday as the eastern Gulf path of the storm took it farther away from most offshore production facilities. About 363.39mn cf/d of natural gas production, or 20pc of the region's output, was also off line today, up from 17pc on Wednesday. Operators have evacuated workers from 27 offshore platforms. Helene was last about 145 miles west-southwest of Tampa, Florida, packing maximum winds of 120mph, according to a 4pm ET advisory from the US National Hurricane Center. Further intensification is likely and Helene could approach the coast at category 4 strength, with winds of at least 130mph. Landfall is expected near Port Leon on Apalachee Bay Thursday evening before Helene is forecast to turn northwestward and slow down over the Tennessee Valley on Friday and into the weekend. Earlier this week, offshore operators including BP, Equinor and Chevron took the precaution of suspending some operations and evacuating workers from offshore facilities in advance of the hurricane. Some facilities have since started back up as the hurricane's track shifted away from the main oil and gas hub in the region. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil's drought: Northern rivers still dropping
Brazil's drought: Northern rivers still dropping
Sao Paulo, 26 September (Argus) — The worst drought in Brazil's history continues to reduce river levels in the Northern Arc region, hampering navigation on rivers that are used as waterways and are important routes to transport grains and fertilizers. Madeira waterway The waterway links Rondonia state's capital Porto Velho to the Itacoatiara port, in Amazonas state. Itacoatiara port is expected to receive around 371,435 metric tonnes (t) of fertilizers in September, according to line up data from shipping agency Unimar. Status: The situation is most critical in the Madeira waterway, the second largest in the northern region, in Porto Velho. The state's ports and waterways authority (Soph) halted operations there on 23 September because the Madeira River's depth at the port reached 25cm (9.8in), the lowest since monitoring began in 1967. The Madeira River depth in Porto Velho increased to 34cm on 26 September, according to monitoring data from the Brazilian Geological Survey (SGB). Amazonas waterway It is the main waterway in Brazil's north, handling around 65pc of the region's cargo, according to the national transportation and infrastructure department (Dnit). It links Amazonas' capital Manaus to Para's capital Belem. Status: The Negro River has also been falling. The depth was at almost 13.88m at the SGB monitoring point in Manaus on 26 September — an extreme drought level and very close to the historic low of 13.64m recorded in 2023. Tapajos waterway It is an important waterway to move production from Mato Grosso state's northern area, with the Santarem port, in Para state, as a destination. The Santarem port handled nearly 4mn t of cargo in 2023, with fertilizers accounting for 578,630t, according to the Para port authority. Status: The Tapajos-Teles Pires waterway is also facing a dire situation. The national water and sanitation agency ANA declared a water shortage on the Tapajos River on 23 September. Drier weather than usual has dropped the levels of Tapajos, especially in the stretch between Itaituba and Santarem cities, in Para state, where flows are below the minimum levels observed in history. The depth of the Tapajos River at the Itaituba monitoring point, where the transfer point for the Miritituba waterway is located, was at 92cm on 26 September, below the record low of 132cm, according to SBG data. At the Santarem monitoring point, where the port of Santarem is located, the Tapajos River was at 74cm, a level considered dry. The historical minimum at the location is -55cm below the port's reference point. A level below zero does not mean the river is dry, but a negative reading indicates very low conditions. Tocantins-Araguaia waterway The Tocantins-Araguaia waterway encompasses the Araguaia and Tocantins rivers. It runs from the Barra do Garcas city, in Mato Grosso, onto the Araguaia River, or from Peixes city, in Tocantins state, onto the Tocantins River, to the port of Vila do Conde, in Para. Soybeans, corn, fertilizers, fuels, mineral oils and derivative products are transported via the northern waterways. Vila do Conde port handled 19.3mn t of cargo in 2023, according to Para port authority. Status: The SGB has two monitoring points on the Araguaia River. In the Nova Crixas city, in Goias state, the river was at 299cm, below the historical level of 310cm. In Sao Felix do Araguaia city, in Mato Grosso state, the river was at 257cm, a situation of extreme drought and close to the historical minimum level of 251cm. In September, the federal government announced investments of R500mn ($91.4mn) to carry out dredging work on stretches of rivers in Amazonas. Para's state government requested another R146mn to address problems caused by the drought. By João Petrini Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Opec+, Saudis have no target oil price: sources
Opec+, Saudis have no target oil price: sources
Dubai, 26 September (Argus) — Neither Saudi Arabia nor the wider Opec+ group have any specific target for oil prices, and no member of the producers' alliance is about to abandon output discipline in favour of chasing market share, multiple Opec+ sources have told Argus . Oil prices fell earlier on Thursday following unconfirmed press reports that Saudi Arabia may be willing to tolerate lower oil prices as part of a plan to increase crude output to regain market share. Sources within Opec+ have since dismissed those assertions outright, insisting that the basis for the group's collective decision-making will always be market fundamentals, and in particular the five-year average of crude inventories, rather than targeting any particular oil price. "Neither Opec+, Opec nor the Saudis have any price target, let alone $100/bl," one source said, in response to a Financial Times report that stated Saudi Arabia is ready to "abandon its unofficial price target of $100/bl". A second source said the $100/bl figure being reported is not a target but is more likely to refer to a recent estimate issued by banks and other financial institutions of Saudi Arabia's "so-called break-even oil price" — that is, the price the kingdom needs to cover its spending plans. In April, the IMF estimated Saudi Arabia's breakeven oil price at $96.20 for 2024, almost 20pc above the previous year and around a third higher than current Ice Brent futures. "The breakeven is, at best, indicative, but does not tell the full story," the source said. Focusing on it "is totally devoid of the idea that a government has a host of other tools to manage an economy — issuing bonds, borrowing, adjusting one's budget". Eight Opec+ producers, led by Saudi Arabia and Russia, were due to begin a phased return of around 2.2mn b/d of "voluntary" output cuts from the start of next month. But mounting concerns over the strength of the global economy, and in turn oil demand, prompted the group to defer the plan by two months to December. With worries around oil demand not going away, and the market looking likely to flip into a surplus from the start of next year, some observers are questioning whether there will be any need for an increase in Opec+ supply from December. And if the eight members go ahead with unwinding the cuts regardless, whether that would signal a shift in the group's focus to chasing market share. But a third source rejected that view, as the group would "only be reversing what we have cut". "As a group, we have said time and time again that these cuts were both voluntary and temporary, and always stressed that they could be paused or reversed," the source said. "And earlier this month, that's exactly what we did with the two-month deferral to December." December or bust? The rationale to delay the increase in production to December was twofold, according to Opec+ sources. It not only reflected the uncertainty around the global economy, the US and Chinese economies, interest rates and demand. But more importantly, the decision was made to allow Opec+ members that have overproduced this year ꟷ namely Iraq, Kazakhstan and Russia ꟷ more time to show they are serious about compensating for exceeding their output targets. "There is so much uncertainty today which we, as Opec+, have no control over," one of the sources said. "But what we do control is our own affairs." Iraq and Kazakhstan have been under intense pressure in recent months to not only adhere to their pledged targets, but also compensate for past overproduction. While Kazakhstan did manage to produce below its target in August, Iraq continued to struggle. All eyes will be on how these countries do in September. "The overproduction is impacting our credibility, and we need to tackle that. Discipline is paramount," the source said. Reports that Saudi Arabia is committed to start unwinding cuts from December, come what may, are wide of the mark for several reasons, another source said. "First, this is not a decision for Saudi Arabia to make. It is for all eight to decide," he said. The group also still has several weeks before it has to decide whether to proceed with the plan, or defer again, the source added. A decision is due in the first week of November, by which time the group should have better visibility on market fundamentals and Iraqi and Kazakh compensation efforts. "How could we make a decision now when we don't even have September production figures?" the source said. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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