Oil prices were broadly stable on Thursday after sharp losses in the previous session, with investors hoping that a big build-up in U.S. inventories may mean producers have little option but to deepen output cuts as the coronavirus pandemic ravages demand.
With official data showing U.S. inventories surging the most on record, U.S. West Texas Intermediate fell on Wednesday to its lowest since February 2002, with Brent losing more than 6%.
Brent crude gained 86 cents, or 3.1%, to trade at $28.57 per barrel. WTI was up 26 cents, or 1.3%, at $20.12 per barrel.
Jamaica will play a key role in restoring global tourism when the coronavirus (COVID-19) pandemic ends, says Tourism Minister, Hon. Edmund Bartlett.
He said that the country is not only working on recovery efforts locally, but is also reaching out to assist its counterparts in the Caribbean region and elsewhere.
“Jamaica is not just talking about itself…Jamaica is not just talking about how we build back our product…Jamaica also has an international role that we are playing in helping to build back global tourism,” the Minister noted, while addressing a digital media briefing on Thursday (April 9).
Bartlett informed that the Global Tourism Resilience and Crisis Management Centre established in Jamaica, is being called upon “to provide global responses.”
Spanish-owned companies that hold investments in Jamaica have donated US$200,000 to the Government to aid in the fight against the coronavirus (COVID-19).
The donation is being made through the Spanish-Jamaican Foundation, which was established by the group of Spanish investors in Jamaica to channel their corporate social responsibility activities through a single entity.
Spanish Ambassador to Jamaica, His Excellency Josep Bosch Bessa, announced this during a digital press conference hosted by the Ministry of Tourism on Thursday (April 9).
He noted that as part of their desire to help in combatting COVID-19, the investors decided to support the Ministry of Health’s efforts through the Spanish-Jamaican Foundation, adding that “almost every dollar that is now in their account, has been allocated for a special donation to the Ministry of Health”.
The global Covid-19 pandemic will hit the Caribbean region hard in the coming months, as the tourism industry grinds to a halt and domestic activity contracts given restrictions on travel and commerce.
Fitch has sharply revised down its 2020 real GDP growth forecasts across the region, using historical benchmarks such as the Global Financial Crisis and major hurricanes to estimate the likely impact.
While it is expected the region will begin to recover in late H220 as the coronavirus is contained globally, risks to this view are high, potentially pushing a recovery into 2021.
The global economy is expected to shrink by 3.0% during 2020 in a stunning coronavirus-driven collapse of activity that will mark the steepest downturn since the Great Depression of the 1930s, the International Monetary Fund said on Tuesday.
The IMF, in its 2020 World Economic Outlook, predicted a partial rebound in 2021, with the world economy growing at a 5.8% rate, but said its forecasts were marked by “extreme uncertainty” and that outcomes could be far worse, depending on the course of the pandemic.
A longer pandemic that lasts through the third quarter could cause a further 3% contraction in 2020 and a slower recovery in 2021, due to the “scarring” effects of bankruptcies and prolonged unemployment.
Oil prices edged lower on Tuesday, with investors apparently unconvinced that record supply cuts could soon balance markets pummeled by the coronavirus pandemic, though a predicted plunge in U.S. shale output provided some support.
Brent futures fell 52 cents, or 1.6%, to $31.12 per barrel after settling up 0.8% on Monday. U.S. West Texas Intermediate crude was down $1.06, or 4.7%, to trade at $21.38 per barrel, having dropped 1.5% in the previous session.
The Organization of the Petroleum Exporting Countries (OPEC), along with Russia and other producing countries - a grouping known as OPEC+ - agreed over Easter to cut output by 9.7 million barrels per day (bpd) in May and June, equating to about 10% of global supply before the coronavirus outbreak.
Jamaica’s fiscal surplus will decline over the coming quarters as the government’s economic stimulus response (approximately 1.1% of GDP) to the coronavirus pandemic reduces revenue intakes and increases expenditures.
A sharp contraction in real GDP growth in 2020, driven by public health restrictions on economic activity, will further undermine revenues.
In addition, it is expected that the government’s proposed reduction of the general consumption tax (GCT) from 16.5% to 15.0% and a one-time tax credit to small and medium-sized enterprises (SMEs) will provide additional drag on revenue intakes.
Notably, the economic effects of the coronavirus pandemic will slow the pace of Jamaica’s debt drawdown and like force legislators to seek an exemption from Jamaica’s fiscal responsibility law, which mandates that debt as a percent of GDP falls below 60.0% by March 2026.
President of the Jamaica Promotions Corporation (JAMPRO), Diane Edwards, says Jamaica’s agriculture sector will be key to the country’s recovery from the coronavirus (COVID 19) pandemic.
She told JIS News that the large acreages of land currently under production, as well as the linkages with other sectors, present a number of opportunities for Jamaican entrepreneurs to exploit. She noted that increasing production to supply the demand for Jamaican produce would position the country to recover quickly.
“We have supply lines, we have markets that have already been identified and, in fact, in most of the overseas markets we have seen that we are not producing enough to fulfil them,” Ms. Edwards said.
“So I think in the short-term there are some extraordinary measures that we are going to have to take, but if we take them, I think we can see agribusiness return to a pretty robust and even expanded level of production,” she added.
The company is asking holders of the DIFL 8.75% Sr Secured due 2024 to consent to an increase of secured debt at DIFL (the most senior part of the capital structure) by up to US$100Mn and to change the required leverage ratios to accommodate the higher secured debt.
DIFL is required to maintain a secured debt leverage below 3x; it was 2x at the end of 2019 but with the issuance of new secured debt at that entity as proposed by the exchange offer, the leverage would surpass 3x, breaching the covenant.
There seems to be opposition from holders of the '24s to this change as those holders only get less asset coverage as more secured debt is added onto DIFL.