EU urges gradual, co-ordinated reopening

The European Commission said today that lifting containment measures imposed to tackle the Covid-19 pandemic should be done in a gradual, co-ordinated manner and only when a number of criteria have been met.

Lifting of measures in the second half of the year is key to the IEA's projection made today that global crude demand will fall by 9.3mn b/d in 2020. Restrictions on movement and the subsequent drop in economic activity has crushed demand for refined products in Europe. In its monthly Oil Market Report, the IEA today said confinement measures will cut gasoline demand in Europe by 70pc in April and by 60pc in May, and restrictions on travel will cut jet fuel demand by 85pc in April and by 75pc in May. It said diesel demand will fall by 60pc in April and by 50pc in May.

The commission said that relaxing confinement measures should be done only when the spread of the disease "has significantly decreased and stabilised for a sustained period", and only then when there is sufficient health system capacity and appropriate monitoring capacity. It said measures should be lifted gradually, and the restart of economic activity and the reopening of internal borders should be phased. All this should be done in a co-ordinated manner as "a matter of common European interest," the commission said.

It said it will develop an economic recovery plan, based on a revamped proposal for the next long-term EU budget. The scale of the challenge is shown in recent leading and lagging indicators — the eurozone's manufacturing sector contracted sharply in March, according to the latest Purchasing Managers' Index data from IHS Markit, and the OECD's latest composite leading indicators (CLI) survey point to a sharp slowdown in the common currency area's economic activity.

By Ben Winkley

source: Argus Media