NEW YORK (Reuters) – Oil prices fell about 4% on Thursday as rising coronavirus cases around the world dampened the demand outlook, and a rise in OPEC output last month also pressured prices.
Brent crude futures fell $1.52, or 3.6%, to $40.78 a barrel by 2:04 p.m. EDT (1804 GMT) after dropping to a low of $39.92. U.S. West Texas Intermediate (WTI) crude futures were down $1.66, or 4.1%, at $38.56 after sliding to a session low of $37.61.
“It has become evident that the virus has not been contained. Infection rates are going up, the global death toll has surpassed the 1 million mark and the world is becoming a gloomy place once again,” said PVM Oil analyst Tamas Varga. In the United States alone, the pandemic has infected more than 7.2 million and killed more than 206,000.
Europe’s worst COVID-19 hot spot, Madrid, will go into lockdown in coming days and Moscow’s mayor ordered employers to send at least 30% of their staff home, as several European countries reported records in new infections. Standard Chartered analysts said they now expect global demand to fall 9.03 million bpd in 2020 and recover by 5.57 million bpd in 2021, leaving the 2021 average slightly below the 2016 average.
“Today’s trade is sending off some strong bearish vibes given the selloff across the energy complex that is developing despite a significant lift in risk appetite and weakening U.S. dollar,” said Jim Ritterbusch, president of Ritterbusch and Associates.
Increasing oil supply from the Organization of the Petroleum Exporting Countries (OPEC) also weighed on the market, with output in September up 160,000 barrels per day (bpd) from August, a Reuters survey found.
The rise was largely on the back of higher supplies from Libya and Iran, both exempt from an oil supply pact between OPEC and allies led by Russia, a grouping known as OPEC+.
Libya’s oil output has risen to 270,000 bpd as the OPEC member ramps up export activity following the easing of a blockade by eastern forces, a Libyan oil source told Reuters on Thursday.
“New Libyan barrels, and reports that Russia has been overproducing, had bulls on their heels earlier in the week. Reports today that Saudi Arabia had increased exports in September by 500,000 bpd seemed to be the final straw,” said Bob Yawger, director of energy futures at Mizuho.
OPEC members shipped out 18.2 million bpd in September, up from the 17.53 million bpd exported in August, data from IHS Markit Commodities at Sea showed, with Saudi Arabian exports returning to levels above 6.25 million bpd.
Earlier in the session, prices received some respite from progress in U.S. talks on a stimulus package for the world’s biggest economy.
U.S. President Donald Trump’s administration has proposed a new stimulus package worth more than $1.5 trillion.
Earlier, U.S. Treasury Secretary Steven Mnuchin said talks with House Speaker Nancy Pelosi made progress on COVID-19 relief legislation, and the House of Representatives postponed a vote on a $2.2 trillion Democratic coronavirus plan to allow more time to agree a bipartisan deal.
Google to pay publishers $1 billion over three years for their news
BRUSSELS (Reuters) – Alphabet’s Google plans to pay $1 billion to publishers globally for their news over the next three years, its CEO said on Thursday, a step that could help it win over a powerful group amid heightened regulatory scrutiny worldwide.
News publishers have long fought the world’s most popular internet search engine for compensation for using their content, with European media groups leading the charge.
CEO Sundar Pichai said the new product called Google News Showcase will launch first in Germany, where it has signed up German newspapers including Der Spiegel, Stern, Die Zeit, and in Brazil with Folha de S.Paulo, Band and Infobae.
It will be rolled out in Belgium, India, the Netherlands and other countries. About 200 publishers in Argentina, Australia, Britain, Brazil, Canada and Germany have signed up to the product.
“This financial commitment – our biggest to date – will pay publishers to create and curate high-quality content for a different kind of online news experience,” Pichai said in a blog post.
Google parent Alphabet reported a net profit of $34.3 billion on revenue of almost $162 billion last year.
The product, which allows publishers to pick and present their stories, will launch on Google News on Android devices and eventually on Apple devices.
“This approach is distinct from our other news products because it leans on the editorial choices individual publishers make about which stories to show readers and how to present them,” Pichai said.
German publisher the Spiegel Group welcomed the project.
“With News Showcase and the new integration of editorial content like from Spiegel, Google shows that they are serious about supporting quality journalism in Germany. We are happy to be part of it from the start,” said Stefan Ottlitz, managing director of the Spiegel Group.
News Corp, which has urged EU antitrust regulators to act against Google, was equally enthusiastic.
“We applaud Google’s recognition of a premium for premium journalism and the understanding that the editorial eco-system has been dysfunctional, verging on dystopian. There are complex negotiations ahead but the principle and the precedent are now established,” its CEO Robert Thomson said in a statement.
The European Publishers Council (EPC), whose members include News UK, the Guardian, Pearson, the New York Times and Schibsted, however, was critical.
“By launching a product, they (Google) can dictate terms and conditions, undermine legislation designed to create conditions for a fair negotiation, while claiming they are helping to fund news production,” said EPC Executive Director Angela Mills Wade.
Google is negotiating with French publishers, among its most vocal critics, while Australia wants to force it and Facebook to share advertising revenue with local media groups.
Google’s funding for news organisations has frustrated other internet publishers, such as weather websites and recipe tools, which say Google has hurt their revenue.
