Spread widened out. Thursday in terms of the eu, and theres going to be clashes about whether or not we see joint debt issuance. Vonnie we will speak to maria tadeo about that in just a few minutes. In the u. S. , we are seeing equities dragged lower by oil, down almost 40 at one point, and back there again now. We are trading at 10. 85 for a barrel of wti. It is really insane levels of trading. The contract expires tomorrow. Vix trading at about 40. One stock to point out, united airlines. Obviously, the airlines having a terrible time of it. It is talking about topol revenue in the First Quarter about total revenue in the First Quarter down 17 . It will get 5 billion through the payroll protection programs, but it is just one of the airlines having a hard time. Right now, homebuilders are the worst performers in the s p 500. Guy lets get back to that board we were showing you at the top of the program, the price of debbie ti crude of wti crude trading 10 a barrel. That is the lowest level in over two decades. Lets get some analysis on what happens next. Senior oil ands gas analyst joining us on the line. For wtie the lows in crude, at least in the short term . Paul i think they are for this week because you are going to roll the contract tomorrow, and it will pop up closer to 20 a barrel, but i do feel we will go through this all over again at the end of the month, and a months time, and that is actually a tougher set up because at that point, industries will be very much close to the top of the tank, and we will have the saudi surge in production hitting the u. S. We dont see in new york the potential for a significant end to the lockdown for at least a good couple of weeks, i would say. I think it is going to be very terrible today and tomorrow, we will rolet back down to these levels in a month. Guy weve got a Texas RailroadCommission Meeting tomorrow. Are we going to see any action taken in the United States to at least have a structured approach to dealing with the excess supply . It. i doubt the commission has a long hearing with numerous speakers, and the most impressive and influential speakers were very ation,d to pror cutting across producers in texas. As you know, it goes against everything that texas stands for in terms of free markets. It is really seen by many of the players as being Certain Companies wanting to avoid obligations, and therefore being able to call force majeure. That hasnt really been confirmed, but on balance, most people dont want the cuts to occur because they are happening anyway. The interesting thing here, as you can see from the spot price of wti, the physical market is going to force shutins by millions of barrels a day. That is essentially what we are watching unfold in real time. Vonnie a few days ago, the president was talking about pay and producers to keep oil in the ground. Where does that go, and does it protect many of them . Paul that one is another head stretcher. One of the things we set about oil if the cycle is bad enough as it is. Then the government gets involved at just the wrong moment. There hasnt been much more clarity on what that pay not to produce plan would be. Very difficult to see that people will really prove that in places like texas, which is still oriented to a free market. It was yet another head scratcher for us, trying to just follow the market in logical terms and find these very illogical government interventions that really just something market even further. If you check mobility, you will see that Global Mobility is down 85 in almost every country in the world, and that is the problem. Until we get to the demand side, we will remain under severe pressure on the oil prices. We called for negative prices potentially a couple of months ago. We are not far off getting there. Many grades are actually pricing right now towards zero. Vonnie it is phenomenal. India is down 82 , the u. K. Down 65 , just a couple of examples. Cars arent on the roads. Maybe even the truck routes are not as busy as they were at the very beginning of the lockdown at least. When this starts to come back, when people start to be able to drive, visit each other again, do we see ramping up of demand pretty quickly . Paul we think so. Thategressions we run show there were issues with efficiency and gasoline, just a few tesla sales, barely relevant in the grand scheme of things. Factorthe single biggest historically in gasoline demand in the u. S. Is price. We think that the very low prices we are seeing here which, for example, you saw during the Global Financial crisis, actually, demand is extremely robust because people do consume more gasoline at low prices in the u. S. We are optimistic that the second half is going to be great for refiners. The overhang of inventory and Spare Capacity we are getting you veryof this makes concerned about crude oil prices for at least another year, but the potential for very wide refining margins in the second half is pretty clear. Going on with particularly u. S. Refineries right now . How much output is there . What is the capacity for more production on the storage for dissolutes desk for distillates . The storage for distillates . Maybe get that ready for some of the demand we are going to see further down the road. Paul in general terms, the way the oil market works is it doesnt store very much oil at all relative to consumption. That is why youre having such a cataclysmic market here, because really, the market operates on producing a barrel and selling april and trying to store as little as possible. Secondly, you dont intend to store product because they kind of go off. The way you store crude come of the way you store oil is in the form of crude, so you need it. Has refinery utilization fallen down towards 70 utilization. It is an interesting conundrum because for individual refineries, it is hard to run below 60 utilization to maintain pressure and safety. You actually have to turn the refinery off. They are probably running more than they may want to on average in total, but ultimately there is still space in inventory, both in product and still somewhat in crude, but ultimately, the way you manage the excess supply is to firstly store the crude, most importantly, and secondly to not produce. What we see happening is over the next month, inventories completely filling absolutely, over the next six weeks, and then in force shutins, which havent really quite happened yet. Weve seen economic and preemptive shutins, but just this year you cannot produce this oil anymore with it will represent about 1. 5 Million Barrels a day in the u. S. Alone. Weve got a question in from a viewer which is interesting. Refineries are. Going to benefit more with the lower price in the United States versus those that take crude on a brent contract. Will you walk me through how it works in the continental United States and some of the european refineries around rotterdam . Paul your viewer is exactly right. First of all, the gasoline price ,rades globally, so eventually the margin is set by the price of crude relative to a global price of gasoline. U. S. Gasoline is as good as european gasoline is as good as asian gasoline, so the key difference is between crude prices. As your viewer is rightly pointing out, u. S. Crude prices will be significantly discounted relative to global, all keeping mind that paper prices are well above the physical. Secondly, that the market crude , or notuse, wti, brent actually the most favored barrels for refiners. Cruderefer the saudi type , just in terms of how the refineries are set up. Even then, when you added altogether, if rent is significantly higher than wti, you accrue the difference per barrel as a margin to the u. S. Refiner, and that has been a significant part of people case for u. S. Refining over the last 10 years because u. S. Production growth started so aggressively. Vonnie we have to leave it there. Thank you, paul sankey of mizuho securities. Lets check markets now. Heres Abigail Doolittle. Abigail we have stocks looking past, to some degree, that drop in oil. In the u. S. And in europe, stocks well off the lows, even higher. The s p 500 down 0. 6 . At the lows, down about 2 . Both crude oil and stocks. Risk assets now trade in a similar fashion. You would think that would hurt stocks, but the s p 500 off of its lows. In europe, we are actually looking at small gains. The emergingmarket is about flat. Not a lot of action happening at this point as investors continue to try to sort through the clues. One of the clues has been the big rally weve had over the last couple weeks, some calling it a reflex route within a bear market. Those who have invested with the fed, they have been handsomely rewarded. The s p 500 up 27 from its march lows. It will be interesting to see whether or not that continues. Probably much of it will depend on the data that will come out on whether or not the bottom will be a ushaped recovery as opposed to a v. Right now, the momentum is to the upside. That may be why we see the losses declining, or lessening, i should say, on the day. Thats go to currencies. The dollar about flat, up just slightly. Cad and the krone taking a bit of a hit on oil. The kiwi up on the news that new zealand is easing the restrictions in about a week. Finally, just to take a look at a few movers on the day, stay at home stocks are doing well. A thermal Camera Company popping higher. Pharmaceuticals higher on the announcement of a phase three trial for patients with severe covid19. Netflix and amazon continue to do well, and that is one reason why here in the u. S. , the nasdaq and the faang index are higher. Guy they are getting more and more heavy with those tech stocks and health care stocks. Thank you very much, indeed. A bit of breaking news now in the u. K. The daily total gets higher and higher. U. K. Reporting 449 new coronavirus deaths. That takes the total to 16,509. This is bloomberg. Guy from london, im guy johnson, with vonnie quinn in new york. This is the european close on bloomberg markets. Lets turn our attention to what is happening in the u. K. And elsewhere. We are going to get a first word news update. Here with that, ritika gupta. Ritika the white house and democrat leaders are close to agreeing on the next coronavirus aid bill. This measure would be for as much as 500 billion. It includes more money for the Small Business loan program. Theres also funding for hospitals and testing. Vice president mike pence will discuss testing shortages with governors today. President trump says some governors are relying strictly on state laboratories. He says they should turn to large commercial and academic labs as well. Governors of both parties have called for more widespread testing. They say they cant start to reopen the u. S. Economy without it. British Prime MinisterBoris Johnson resisting pressure to ease the coronavirus lockdown. Johnson fears a second wave of the pandemic could hit the u. K. Johnson hasnt returned to work after being struck by the virus. In germany, the number of coronavirus cases in the last 24 hours rose by the least this month. The number of fatalities was the lowest since april 1. Germany will begin allowing some shops to slowly begin opening backup for business. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Guy thanks very much, indeed. Germany beginning to reopen. Angela merkel warning that there may be a rise in the number of cases. Prime minister Boris Johnson in the United Kingdom has decided that that second wave risk is too high, and hes very worried about it, and therefore it is likely the u. K. Economy will remain on lock down little longer. Lets get the latest on what is happening in the u. K. We are joined on the phone by bloombergs ed evans. The Prime Minister is worried that this second wave could be quite severe. One would have to assume that the u. K. Lockdown is likely to last for still some time to come. Ed yes, they extended it by three weeks last week, and johnson again says he is concerned about a second wave. That suggests that when the restrictions are lifted, it is going to take some time. The problem for the government is these restrictions have brought the u. K. Economy to a near halt. Youve seen a surge in furloughs and where fair and welfare applications. As some countries are lifting restrictions, britain isnt. The problem now is they need to figure out how to do this. Theres a debate going on in government about whether or not you do a kind of staged lifting of these restrictions or not. And why thee, government is so keen to play any of this debate down, is if we talk about lifting these restrictions, people will immediately stop obeying them and we will see another spike in the virus. Vonnie how much resistance is he actually facing . It seems like this is the debate in every economy going through this, and it is probably a wise thing to keep the economy closed. Ed correct. The thing to look at here are the opinion polls because these restrictions are astonishingly popular. Something like 90 of the population was in favor of keeping these restrictions. You can see that, given that people are concerned that they or their loved ones may get this virus. Johnson has got a lot of space there to keep these restrictions in place for the time being. That said, theres a risk that the longer he keeps them in place, Public Opinion turns very quickly, and he will not want to get caught out by that. Guy the possibility of a second economic shock from a hard brexit is something that now needs to be talked about as well. Weve got brexit talks restarting. Having read a lot of the papers over the weekend, there is this fear, particularly among conservative party press, that there is a danger that the u. K. Gets sucked into helping the euro zone. Weve got a big meeting coming up on thursday. How finely balanced is the decision at this point . It is a very straightforward decision right now for johnson, and that is it is very easy to do nothing. He doesnt have to decide whether to apply for an extension until then. So for now, the best thing to do is to let the talks run on, see if he can get that limited trade deal that he wants with the eu, and if he can get that by june, you would expect them to sign it. I think where it becomes more difficult is if by june, the two sides are still as far apart as they always have been. Does he then decide i am going to need to extend . The consequence of that would be having to pay into the eu budget. Does he turn around and say the cost of brexit is going to be relatively small relative to the much larger economic costs of the coronavirus, and there is therefore a political opportunity to go ahead with effectively a hard brexit while coronavirus is going on . Very hard are pushing for a delay. They dont want that double whammy of brexit and coronavirus. But politically, you can see a path through that. Vonnie we have to leave it there. That is edward evans reporting for us in britain. This is bloomberg. Vonnie live from new york, im vonnie quinn, along with guy johnson in london. This is the european close on bloomberg markets. United airlines posted a 2. 1 billion loss in the First Quarter. The coronavirus pandemic essentially halting all air travel. United revenue was down 70 , and it will get worse, according to the airline, expecting 90 drop in capacitance month incapacity next month. Thertis will run a study of antimalaria drug hydrochloric when as a treatment for coronavirus drug hydrochloric chloroquine as a treatment for coronavirus. Bloomberg has learned that more than a dozen publicly traded companies with revenues of more than 1 billion received loans. Guy maybe a few holes in the was suggesting to larry kudlow earlier. Volume today is really quite light. As you the story conceive are the main markets. And the 100, the dax, cac 40 all in positive territory. Oil stocks, while down, are not the lead losing sector in europe today. We will run through the details of what is in just a moment. In terms of what we are seeing, a light volume session. I expect everybody is waiting to see what is going to happen for the rest of the week. At has been quite a run. The u. S. Putting back to back games together back to back games together. Some posit backtoback gains together. European close is next. We will go over the details then. This is bloomberg. Guy 30 seconds until the end of regular trading in europe. Lets take a look at where the action has been. We have come back this afternoon. A more positive session. We are finishing at session highs or near session highs. We are up around. 5 . S midmorning into the lunch time period. Since then weve been climbing back as the u. S. Has turned around. Lets take a look at the individual markets. There is a bit of difference. The main markets are higher. Some of the peripheral markets are under more pressure. The dax and germany, stocks coming back into positive territory. Then you take a look at what is happening with the madrid market, or you still have tax under pressure. The blade the big global retailer. You saw santander getting pummeled once again. The percent of those trading at lows we have not seen for many decades. The Spanish Banks continue to drag on that market. In terms of the sector breakdown , lets walk through the numbers again to give you an idea of what kind of rotation we are seeing around europe. What is interesting today is the oil and gas stocks are not losers despite the fact we are the top end of the Market Driven by a more defensive bias in terms of sector breakdown in the market rotating back into the safer stocks with more visibility. Earnings season starting to get into gear this week. Stocks like Credit Suisse reporting numbers. More focused on what is happening in the United States. Individual names worth focusing on. Some of the tech stocks have come back nicely. Down. 2 . Ing sap only the oil stocks are down, but total only down. 6 . Kpn has a bit of a bumpy journey, indicating kpis will not be affected but the market still tracking that stop down. We are seeing a turnaround. Most of those stocks were much worse earlier in the session when i put this together. Most of them rotated back up and we see the general market coming back as well. Vonnie, what are you seeing in th