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No need to panic about coronavirus impact on oil markets

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US Secretary of Energy, Dan Brouillette, delivers opening remarks while meeting with 17 business leaders from Confederação da Indústria Portuguesa (CIP) and the American Chamber of Commerce at the Intercontinental Hotel on February 13, 2020 in Lisbon, Portugal.

Horacio Villalobos | Corbis via Getty Images

The U.S. energy secretary does not believe the ultimate impact of China’s fast-spreading coronavirus is a cause for concern for markets.

His comments come shortly after both OPEC and the International Energy Agency (IEA) both dramatically lowered their oil demand growth forecasts this year as a result of the deadly flu-like virus.

“I think we are going to pay close attention to what is happening with the virus itself. We are still analyzing, not only the actual virus to learn more about it, but also the response to it,” Dan Brouillette told CNBC’s Hadley Gamble in an exclusive interview on the sidelines of the Munich Security Conference on Friday.

“So, we are looking to see if the Chinese government will be able to contain or at least help contain the spread of the virus. At this moment, while we are seeing some slight reductions in production as a result of the virus, we are not yet concerned about its ultimate impact.”

International benchmark Brent crude traded at $56.40 Friday morning, up around 0.1%, while U.S. West Texas Intermediate (WTI) stood at $51.49, around 0.15% higher.

Both crude benchmarks have fallen nearly 20% since climbing to a peak in early January, dragged lower by concern over demand in China during the coronavirus outbreak.

Earlier this week, OPEC slashed its demand outlook for oil demand growth this year, citing China’s coronavirus outbreak as the “major factor” behind its decision.

The Middle East-dominated producer group downwardly revised its 2020 outlook for global oil demand growth to 0.99 million barrels per day (bpd) on Wednesday. That’s down by 0.23 million bpd from the previous month’s estimate.

The IEA has also cut its 2020 oil demand forecast, predicting 0.825 million bpd this year — the lowest since 2011.

When asked why the U.S. was not more concerned given that both OPEC and the IEA had both lowered their oil demand growth expectations this year, Brouillette replied: “We have to put these things into context.”

“We have to put together very, very tough measures to contain the virus and if we do that effectively then I think you’ll see the markets bounce back and you’ll see the economies continue to grow.”

OPEC meeting

Led by Saudi Arabia, OPEC had pushed for an emergency meeting with non-OPEC partners earlier this month in order to cut oil production to offset the impact of the virus.

A committee advising the group, which consists of some of the world’s most powerful oil-producing nations, reportedly recommended a 600,000 bpd reduction in oil production to bring relief to the energy market.

However, Russia is still considering whether to sign up for the additional cuts, more than one week after the recommendation.

OPEC’s regular meeting is set for March 5. An earlier meeting than scheduled is still possible, but there has been no announcement.

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Trump suspends travel from Brazil as coronavirus pandemic worsens in South America

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US President Donald Trump arrives to take part in a joint press conference with Brazil’s President Jair Bolsonaro in the Rose Garden at the White House on March 19, 2019 in Washington, DC.

Jim Watson | AFP | Getty Images

President Donald Trump is suspending travel from Brazil to the U.S. as the coronavirus pandemic worsens in Latin America’s largest nation and economy. 

The president’s order, published Sunday, denies entry to “all aliens” who were in Brazil two weeks prior to their attempted entry into the United States. The order takes effect May 28 at 11:59 pm ET. 

Brazil has rapidly become one of the hardest hit countries in the world as the World Health Organization warns that the epicenter of the pandemic has shifted from Europe and the U.S. to South America. 

“We’ve seen many South American countries with increasing numbers of cases and clearly there’s a concern across many of those countries, but certainly the most affected is Brazil at this point,” Mike Ryan, executive director of the WHO’s emergencies program, said Friday during a news briefing at the organization’s Geneva headquarters. 

Brazil has more than 347,000 confirmed cases of the virus and at least 22,013 people have died, according to data from Johns Hopkins University. At this point only the United States is harder hit in terms of total positive cases. 

Brazil President Jair Bolsonaro has repeatedly downplayed the virus, dismissing it as a “little flu” and attacking stay-at-home orders imposed by governors as a “crime.” He is a close ideological ally of Trump. 

Bolsonaro’s own press secretary tested positive for the virus in March after attending a gathering with the Brazilian president and Trump at Mar-a-Lago. The incident raised concern about the health of Bolsonaro and Trump at the time, though both leaders have tested negative for the virus.  

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U.S. likely impose sanctions against China over Hong Kong law

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Hong Kong Chief Executive Carrie Lam attends the opening session of the National People’s Congress (NPC) at the Great Hall of the People in Beijing on May 22, 2020.

Leo Ramirez | AFP | Getty Images

The U.S. government will likely impose sanctions on China if Beijing implements national security laws that would give it greater control over autonomous Hong Kong, White House National Security Advisor Robert O’Brien said Sunday. 

The draft legislation represents a takeover of Hong Kong, O’Brien said, and as a consequence U.S. Secretary of State Mike Pompeo would likely be unable to certify that the city maintains a “high degree” of autonomy. This would result in the imposition of sanctions against China under the Hong Kong Human Rights and Democracy Act of 2019, O’Brien said.  

Pompeo has already called the proposal a “death knell” for Hong Kong’s autonomy. O’Brien warned that Hong Kong could lose its status as a major hub for global finance. 

“It’s hard to see how Hong Kong could remain the Asian financial center that it’s become if China takes over,” O’Brien told NBC’s Chuck Todd on “Meet the Press.” He said financial services initially came to Hong Kong because of the rule of law that protected free enterprise and a capitalist system.

“If all those things go away, I’m not sure how the financial community can stay there. …They’re not going to stay in Hong Kong to be dominated by the People’s Republic of China, the communist party.” 

The legislation was announced during the annual session of China’s parliament, the National People’s Congress. The session had been delayed for months during the coronavirus pandemic. Hong Kong faced months of at times violent anti-government protests before the pandemic effectively shut China down.  

Hong Kong has been governed under the “one country, two systems” principle since the former British colony was returned to Chinese rule in 1997. The system gives Hong Kong a high degree of autonomy and a greater degree of freedom for the special administrative region than the rest of China. 

A draft decision on “establishing and improving the legal system and enforcement mechanisms” for Hong Kong was submitted to China’s parliament Friday, according to state news agency Xinhua. A document explaining the decision said the one-country two systems principle “has achieved unprecedented success in Hong Kong,” but the “increasingly notable national security risks” in the city “have become a prominent problem,” according to Xinhua.  

The document says activities “have seriously challenged the bottom line of the ‘one country, two systems’ principle, harmed the rule of law, and threatened national sovereignty, security and development interests,” according to Xinhua.

The move from China has incited strong opposition from pro-democracy activists and politicians. Thousands of protesters demonstrated for the first time since the introduction of the national security laws on Sunday. Hong Kong police fired tear gas and pepper spray to disperse the crowd.

Nearly 200 political figures from the U.K., Europe, Australia, North America and Asia condemned the laws in a joint statement. 

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Airlines change summer air travel procedures

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Ahead of the Memorial Day holiday weekend, all states in the U.S. began to lift some restrictions implemented to halt the spread of the coronavirus. Government officials are still urging people to practice social distancing and to wear masks in public. 

Changing opinions from scientists and health officials have contributed to some people refusing to wear masks because public health authorities initially advised against wearing masks, saying there was little evidence that it would help prevent people from getting sick.

China’s top diplomat criticized U.S. efforts to hold China accountable for its alleged role in the spread of the coronavirus, calling any aims to force Beijing to pay compensation for the coronavirus a “daydream.”

The number of coronavirus fatalities in New York state fell below 100, Gov. Andrew Cuomo said on Saturday, marking the lowest daily death toll since March 24.

This is CNBC’s live blog covering all the latest news on the coronavirus outbreak. This blog will be updated throughout the day as the news breaks. 

  • Global cases: More than 5.33 million
  • Global deaths: At least 341,513
  • U.S. cases: More than 1.62 million
  • U.S. deaths: At least 96,046

The data above was compiled by Johns Hopkins University.

Air travel is going to look different this summer because of the coronavirus

9:03 a.m. ET — Memorial Day weekend is the traditional kickoff to the peak travel season and while demand is showing some signs of life, it is still down about 90% from a year ago. The virus and concerns about it spreading have prompted new procedures at airlines and federal agencies.

The Department of Homeland Security, which includes TSA and customs, is exploring temperature checks at airports. The Transportation Security Administration is also changing some polices to limit physical contact, such as asking travelers to scan their own boarding passes and that they remove food and other items from their bags so officers don’t have to touch bins.

Starting this month, U.S. airlines require that travelers wear masks on board. They are tweaking boarding to fill seats from back to front to limit contact with other travelers. Some airlines are limiting the number of travelers on board, or letting travelers know when their flights are full. Experts warn its nearly impossible to socially distance on an aircraft, however. —Leslie Josephs

AngloGold Ashanti closes mine in South Africa after 53 employees tested positive

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