Carlos Monge

Oil and the pandemic

Oil was primed for its first weekly loss since October, as the discovery of a
potentially faster-spreading variant of Covid-19 in the UK increased the risk of
more lockdowns weakening demand. The mutated strain of coronavirus that has
been spreading in the UK appears to be more contagious and will likely lead to
higher levels of hospitalizations and deaths next year, a new study showed.
6 months ago: Oil prices tumbled more than 10% on Friday as reports of a new variant
of the novel coronavirus sparked fears of more pandemic lockdowns and another hit to
demand, while the United States plans to roll out more supply. U.S. oil benchmark West
Texas Intermediate fell 13% to $68.15 a barrel as U.S. traders returned after the
Thanksgiving holiday. International benchmark Brent crude fell 12% to $72.72 a barrel.
Both oil indicators had their biggest one-day losses since WTI prices briefly turned
negative in April 2020 at the height of the pandemic. A few days ago, the White House
announced it would release 50 million barrels of crude from its Strategic Petroleum
Reserve over the next few months -- the largest oil withdrawal in the state to date --
amid concerns about rising gasoline costs and widespread inflation. Inventory - along
with additional donations from five other countries. 
Personally, I think that the issue of the pandemic generated by the covid-19 virus was
terrifying in many aspects, one of them the economy, at a global level, obviously in this
case with the issue of oil, since the markets for said material they were affected by their
commercialization since the majority of clients (countries) had to restructure their
budgets since investing in health material was a priority, in addition, the majority of
people were confined to their homes and the teleworking modality was created, which
caused there to be fewer drivers on the street and therefore less oil consumption.

National market
This Wednesday the local market session remained extremely passive as
expected at the end of the year. $ 2.3 million were traded in just 6 operations with
government underlying assets in foreign currency. The bonds with the highest
volume traded were the tp $ 210229 with $ 1.04 million at a yield of 8.34%, and $
700 thousand of the tp $ 250533 at a yield of 8.65%.
Costa Rican Eurobonds registered a slight upward adjustment, averaging -2
basis points on the curve.
Finally, there were no transactions for sovereign securities in local currency.
The issuance of Eurobonds and low interest rates affected negotiation, according to the
National Stock Exchange of Costa Rica
The volume of resources traded in the stock market fell by 20% in the accumulated from
January 1 to December 4, compared to the same period in 2013. (FILE/JORGE ARCE)
The lower participation of the Central Government in the issuance of debt securities,
within the country, generated a reduction in the Costa Rican stock market during this
year.
That was the explanation given by the National Stock Exchange (BNV), this Tuesday,
December 10, to explain the 17.4% drop in resources traded on the local stock market
between January 1 and December 4. Above, compared to the same period in 2013.
During this year, about $48.3 billion were traded, while in 2013 they were $58.5 billion,
according to data provided by the BNV.
José Rafael Brenes, general manager of the BNV, said that the placement of external
debt, carried out by the Central Government, took away a significant part of the
resources that could have been traded in the country.
Brenes recognized that it was difficult to offer here the conditions of interest rates
obtained outside the country.
"Last year there was a lot of volatility in interest rates, so it was a good year. During
2014 interest rates have been low, there was less volatility and the volume traded fell,"
Brenes explained.
Operations. In the case of stock market operations, these fulfilled in 2014 the seventh
consecutive year of continuous decline, according to data provided by the BNV.
During this year, 85,534 operations have been carried out compared to 99,232 in 2013,
that is, a reduction of 17%.

International market
2020 is already beginning to close and with it a year full of great economic and
financial challenges. International markets are close to closing with mixed
results, as the German and United States stock markets maintain gains above
2019, while the remaining European economies have not yet recovered from the
COVID-19 shock. This behavior has been explained by a support of the monetary
and fiscal policy that have favored the global recovery, but partially offset by the
new waves of COVID-19 that have led to the application of containment measures.
Faced with this situation, the end of the year has been focused on the need for a
new stimulus package, which the United States Congress has just approved. The
relief plan is estimated to total $ 900 billion through unemployment benefits,
space credits for small businesses, and resources for the federal government.
This package is key, since it is projected that it will allow the North American
economy to accelerate its recovery, which has lost strength in the last quarter of
2020.
In relation to this issue, it should be clarified that the case of the United States is the
largest power in the world, therefore it has plenty of resources to have backup in case of
emergencies and support its citizens monetarily, Germany has a similar solvency, in
addition , it should be clarified that these governments implemented disciplinary or
restrictive measures to reduce the rate of infections, therefore spending on medical
supplies was going to be kept out, also the medical budget of these countries is much
larger than that of other countries, in addition, that eventually they already had enough
medical equipment to face this situation, unlike other countries, that is why perhaps they
were not as economically affected as other countries worldwide.