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IMF sees less severe global recession in 2020

  • : Crude oil, Emissions, Metals, Natural gas
  • 20/10/13

The global economy is likely to contract less severely this year as a result of the Covid-19 pandemic than previously expected, the IMF said today.

But nearly every major economy next year will still be below 2019 levels, the IMF said in its latest World Economic Outlook report, which projects that the global economy will shrink by 4.4pc this year.

The IMF in June was anticipating a sharper contraction of 4.9pc this year, but it has since changed the metrics it uses to evaluate economic activity. Under the new metrics, the revised projection is an upgrade of 0.8 percentage points from its previous forecast. The IMF forecasts the global economy to grow by 5.2pc in 2021.

The less downbeat forecast reflects a lower than forecast contraction in the US economy and the eurozone during the second quarter, which the IMF attributes to trillion-dollar stimulus packages that helped consumer demand rebound following relaxation in travel and economic activity imposed to contain the pandemic.

China's emergence from the economic downturn also proved stronger than expected. The report projects China's economic growth at 1.9pc this year and 8.2pc next year, marking the country as an outlier with a combined growth of more than 10pc in 2020-21. By contrast, every other major advanced and emerging economy is projected to shrink or record zero growth this year. IMF forecasts are widely used in modeling for key oil demand projections, including those of the IEA.

The IMF attributes China's fast recovery to a rebound in its exports, including of medical devices and equipment to support the shift to remote working.

The IMF expects the US economy to contract by 4.3pc this year and expand by 3.1pc in 2021. Almost every other economy in Europe, the western hemisphere, Asia Pacific and Africa is expected to follow a similar pattern — a sharp contraction this year followed by a recovery in 2021 that still leaves the economy smaller than in 2019.

The eurozone is expected to shrink by 8.3pc this year and grow by 5.2pc next year. India's economy is forecast to contract by 10pc this year and expand by 8.8pc next year.

The projected economic contraction for oil exporters in the Middle East and north Africa is 6pc this year, followed by a 3.3pc growth in 2021.

"The ascent out of this calamity is likely to be long, uneven, and highly uncertain," IMF director of research Gita Gopinath said.

As in its previous forecasts earlier this year, containing the pandemic is a key uncertain variable behind the forecast. "The virus is resurging, with localized lockdowns being re-instituted," Gopinath said. "If this worsens and prospects for treatments and vaccines deteriorate, the toll on economic activity would be severe."

An alternative outlook scenario, which assumes renewed lockdown measures to contain the pandemic, would result in a sharper global contraction this year and keep next year's growth to just above 2pc. An upside alternative scenario, which assumes early advances in treating the coronavirus and widespread availability of a vaccine, would add an additional 0.5 percentage points of growth in 2021.


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25/04/10

New tariffs could upend US tallow imports: Correction

New tariffs could upend US tallow imports: Correction

Corrects description of options for avoiding feedstock tariffs in 12th paragraph. Story originally published 3 April. New York, 10 April (Argus) — New US tariffs on nearly all foreign products could deter further imports of beef tallow, a fast-rising biofuel feedstock and food ingredient that had until now largely evaded President Donald Trump's efforts to reshape global trade. Tallow was the most used feedstock for US biomass-based diesel production in January for the first month ever, with consumption by pound rising month to month despite sharp declines in actual biorefining and in use of competing feedstocks. The beef byproduct benefits from US policies, including a new federal tax credit known as "45Z", that offer greater subsidies to fuel derived from waste than fuel derived from first-generation crops. Much of that tallow is sourced domestically, but the US also imported more than 880,000t of tallow last year, up 29pc from just two years earlier. The majority of those imports last year came from Brazil, which until now has faced a small 0.43¢/kg (19.5¢/lb) tariff, and from Australia, which was exempt from any tallow-specific tariffs under a free trade agreement with US. But starting on 5 April, both countries will be subject to at least the new 10pc charge on foreign imports. There are some carveouts from tariffs for certain energy products, but animal fats are not included. Some other major suppliers — like Argentina, Uruguay, and New Zealand — will soon have new tariffs in place too, although tallow from Canada is for now unaffected because it is covered by the US-Mexico-Canada free trade agreement. Brazil tallow shipments to the US totaled around 300,000t in 2024, marking an all-time high, but tallow shipments during the fourth quarter of 2024 fell under the 2023 levels as uncertainty about future tax policy slowed buying interest. Feedstock demand in general in the US has remained muted to start this year because of poor biofuel production margins, and that has extended to global tallow flows. Tallow suppliers in Brazil for instance were already experiencing decreased interest from US producers before tariffs. Brazil tallow prices for export last closed at $1,080/t on 28 March, rising about 4pc year-to-date amid support from the 45Z guidance and aid from Brazil's growing biodiesel industry, which is paying a hefty premium for tallow compared to exports. While the large majority of Brazilian tallow exports end up in the US, Australian suppliers have more flexibility and could send more volume to Singapore instead if tariffs deter US buyers. Export prices out of Australia peaked this year at $1,185/t on 4 March but have since trended lower to last close at $1,050/t on 1 April. In general, market participants say international tallow suppliers would have to drop offers to keep trade flows intact. Other policy shifts affect flows Even as US farm groups clamored for more muscular foreign feedstock limits over much of the last year, tallow had until now largely dodged any significant restrictions. Recent US guidance around 45Z treats all tallow, whether produced in the US or shipped long distances to reach the US, the same. Other foreign feedstocks were treated more harshly, with the same guidance providing no pathway at all for road fuels from foreign used cooking oil and also pinning the carbon intensity of canola oil — largely from Canada — as generally too high to claim any subsidy. But tariffs on major suppliers of tallow to the US, and the threat of additional charges if countries retaliate, could give refiners pause. Demand could rise for domestic animal fats or alternatively for domestic vegetable oils that can also be refined into fuel, especially if retaliatory tariffs cut off global markets for US farm products like soybean oil. There is also risk if Republicans in the Trump administration or Congress reshape rules around 45Z to penalize foreign feedstocks. At the same time, a minimum 10pc charge for tallow outside North America is a more manageable price to pay compared to other feedstocks — including a far-greater collection of charges on Chinese used cooking oil. And if the US sets biofuel blend mandates as high as some oil and farm groups are pushing , strong demand could leave producers with little choice but to continue importing at least some feedstock from abroad to continue making fuel. Not all US renewable diesel producers will be equally impacted by tariffs either. Some tariffs are eligible for drawbacks, meaning that producers could potentially recover tariffs they paid on feedstocks for fuel that is ultimately exported. And multiple biofuel producers are located in foreign-trade zones, a US program that works similarly to the duty drawbacks, and have applied for permission to avoid some tariffs on imported feedstocks for fuel eventually shipped abroad. Jurisdictions like the EU and UK, where sustainable aviation fuel mandates took effect this year, are attractive destinations. And there is still strong demand from the US food sector, with edible tallow prices in Chicago up 18pc so far this year. Trump allies, including his top health official, have pushed tallow as an alternative to seed oils. By Cole Martin and Jamuna Gautam Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Quebec stands by GHG program


25/04/10
25/04/10

Quebec stands by GHG program

Houston, 10 April (Argus) — Quebec legislators and government officials reaffirmed their support for the province's cap-and-trade program on Wednesday. The National Assembly of Quebec unanimously adopted a joint resolution expressing continued support for the provincial program, which was introduced by members from opposition parties Quebec Liberal Party, Québec solidaire, Parti québécois and Quebec environment minister Benoit Charette of the majority party Coalition avenir Québec. The resolution's passage came a day after US president Donald Trump issued an executive order taking aim at state climate policies as an "overreach" of their authority, specifically citing California's cap-and-trade program, which formed a joint market with the province in 2013. While Trump's order cast a wide net over potential areas the administration intends to scrutinize, a familiar theme from his previous term did appear around state climate policies interacting with international relations. "These state laws and policies try to dictate interstate and international disputes over air, water, and natural resources," Trump said. While Quebec's Ministry of Environment declined to comment on the order, the province's link with California's program was an area of contention between the state and the first Trump administration. The Trump administration in October 2019 filed a lawsuit that sought to sever California's link on the grounds the state had unlawfully overstepped federal powers to negotiate independent foreign policy for greenhouse gas (GHG) regulation and was "inconsistent" with Trump's then-ongoing withdrawal from the Paris Agreement started in 2017. But the lawsuit ultimately failed following two separate rulings by the same federal judge in 2020, with a subsequent appeal by the Trump administration withdrawn after the election of former US president Joe Biden. Trump's new executive order roiled environmental markets on Wednesday, with California Carbon Allowances (CCAs) for December delivery trading as low as $22.51/metric tonne on the Intercontinental Exchange (ICE), before partially rebounding as participants expressed concern about potential federal action against the program. While state and government officials continue to evaluate the order, the office of California attorney general Rob Bonta (D) said the state's Department of Justice will use the "full force of the law and tools of this office to address the climate crisis head on." The California and Quebec programs aim for economy-wide reductions in GHG emissions, including from power plants, refineries and on-road fuel use. Both jurisdictions are seeking to increase the stringency of their respective programs to remain on course for statutory targets through a pair of rulemakings that may be implemented next year. The joint market, known as the Western Climate Initiative (WCI), is also evaluating linking with the Washington "cap-and-invest' program, which would make the state the first one to join California in the WCI, creating a larger North American carbon market. Quebec seeks to reduce GHG emissions by 37.5pc below 1990 levels by 2030, and achieve carbon neutrality in 2050. Provincial regulators are considering removing 17.5mn allowances from the program to speed emissions reductions, while tapering the use of carbon offset credits by 2030, among other changes. California requires a 40pc reduction from 1990 emission levels by the end of 2030, and net-zero in 2045. CARB is considering changing the 2030 target to 48pc. By Denise Cathey Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EIA slashes WTI outlook by $7/bl on trade uncertainty


25/04/10
25/04/10

EIA slashes WTI outlook by $7/bl on trade uncertainty

Calgary, 10 April (Argus) — The US light sweet crude benchmark will be nearly $7/bl lower this year than previously expected, with an ongoing trade war stifling global demand by nearly 500,000 b/d, the Energy Information Administration (EIA) said today. WTI at Cushing, Oklahoma, is expected to average $63.88/bl in 2025, the agency said in its latest Short-Term Energy Outlook (STEO), lower by $6.80/bl from its March forecast. It will fall further to $57.48/bl in 2026, or $7.49/bl lower from the prior STEO. Brent prices saw similar downward revisions and is now forecast at $67.68/bl in 2025 and $61.48/bl in 2026. The latest STEO was to be released on 8 April, but the EIA said it needed more time to rerun its models in light of last week's sweeping tariff action by US president Donald Trump and subsequent retaliation by China. The protectionist measures have led major banks to cut oil price forecasts amid growing concerns over a stagnating US economy. The EIA completed its analysis on 7 April meaning it did not incorporate the most recent developments, including Trump's 9 April pause on the highest levels of punitive tariffs against key US trading partners and an increase in Chinese tariffs . The latest forecast is "subject to significant uncertainty," said the EIA. Global consumption of oil and liquid fuels is now expected to average 103.64mn b/d in 2025, lower by 490,000 b/d from the previous forecast. Consumption in 2026 is forecast at 104.68mn b/d, lower by 620,000 b/d. Global production meanwhile was lowered by to 104.1mn b/d for 2025 and to 105.35mn b/d for 2026. These are lower from the prior forecast by 70,000 b/d and 43,000 b/d, respectively. In the US, domestic consumption is projected to average 20.38mn b/d in 2025, lower by 70,000 b/d compared to last month's STEO. Consumption was lowered for 2026 by 110,000 b/d at 20.49mn b/d. Domestic production will come in at 13.51mn b/d in 2025 and 13.56mn b/d in 2026, the EIA said. This is lower by 100,000 b/d and 200,000 b/d, respectively, compared to the March STEO. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Norway plans to cut GHGs, but remain oil, gas producer


25/04/10
25/04/10

Norway plans to cut GHGs, but remain oil, gas producer

London, 10 April (Argus) — Norway's government has proposed a greenhouse gas (GHG) emissions reduction of a minimum 70-75pc by 2035, from a 1990 baseline, but has also committed to the country remaining "a stable and predictable supplier of oil and gas produced with low emissions". The government today set out plans for a 2035 GHG reduction target, as well as a wider climate plan for the country. The 2035 GHG reduction targets build on Norway's 2030 goal of "at least" a 55pc reduction in GHGs, again from 1990 levels. Norway has a legislated goal of "a low-emission society" by 2050 — GHG reductions of 90-95pc from the 1990 baseline. Norway's government underlined its commitment to Paris climate agreement goals and phasing out the use of fossil fuels "towards 2050", but also said that it would "not prepare a strategy for the end phase of Norwegian oil and gas". "The government's plan is about phasing out emissions, not industries", it said, noting that Norway is "a significant contributor to Europe's energy security". Norway is the largest producer and only net exporter of oil and gas in Europe. "The government will further develop the petroleum industry and facilitate the future provision of fields… production will continue to be efficient and with low emissions," the government said. It aims for the country's oil and gas sector — the country's highest-emitting industry — to bring emissions from production to net zero in 2050. The bulk of oil and gas emissions are from downstream use — known as scope 3. Norway plans to achieve the majority of its proposed 70-75pc GHG cuts through national measures, including reduced fossil fuel use and both technical and nature-based carbon removals. It also plans to purchase emissions reductions from outside the EU and European Economic Area. This refers to internationally transferred mitigation outcomes (ITMOs) — emission credits — under Article 6 of the Paris climate agreement. Norway's parliament will consider the proposals. Once legislated in the country's climate act, Norway plans to communicate its updated plans to the UN. Signatories to the Paris climate agreement are expected to submit updated climate plans — known as nationally determined contributions (NDCs) — to UN climate body the UNFCCC every five years. The deadline for NDCs setting out climate goals up to 2035 was in February, but many countries have yet to submit plans . By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US inflation eased for 2nd month in March


25/04/10
25/04/10

US inflation eased for 2nd month in March

Houston, 10 April (Argus) — US inflation slowed more than forecast in March, pulled lower by falling gasoline prices and slowing shelter inflation, as the new US administration's tariff policies have prompted concerns of a global economic slowdown. The consumer price index (CPI) slowed to an annual rate of 2.4pc in March, down from 2.8pc in February and the lowest rate since November 2024, the Labor Department reported Thursday. Analysts surveyed by Trading Economics had forecast a 2.6pc rate for March. Core inflation, which strips out volatile food and energy, rose at a 2.8pc annual rate, down from a 3pc annual rate the prior month and the lowest since March 2021. The deceleration in inflation came a month after President Donald Trump began to levy tariffs on imports from China and on steel, aluminum and automobiles, starting in February. Several tariff deadlines were pushed back, including a three-month pause enacted this week on much steeper tariffs for most countries. The tariffs have prompted companies and consumers to pull back on investments and some purchases while shaking up financial markets, and heightening concerns of a global recession. The energy index fell by an annual 3.3pc in March following a 0.2pc annual decline in February. Gasoline fell by 9.8pc after a 3.1pc decline. Piped natural gas rose by 9.4pc. Food rose by an annual 3pc, accelerating from 2.6pc. Eggs surged by an annual 60.4pc, as avian flu has slashed supply. Shelter rose by an annual 4pc in March, slowing from 4.2pc in February and the smallest increase since November 2021. Services less energy services rose by 3.7pc, slowing from 4.1pc in February. New vehicles were unchanged after an annual 0.3pc drop in February. Transportation services, which includes what maintenance and repair, insurance and airfares, rose by an annual 3.1pc, slowing from 6pc in February. Car insurance was up by an annual 7.5pc and airline fares fell by 5.2pc. CPI fell by 0.1pc in March after a monthly 0.2pc gain in February. Core inflation rose by 0.1pc for the month. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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