Spain's economy shrinks, oil looms large with oversupply

The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Thursday related to the global economy, the work place and the spread of the virus.

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CENTRAL GOVERNMENT & BANKS: Nations are continuing attempts to reopen businesses. But evidence of the economic damage from the virus is widespread.

— Spain’s economy shrunk by 5.2% in the first three months of the year. That breaks with 25 consecutive periods of positive economic activity going back to 2013.

Spain’s National Institute of Statistics said Thursday that the drop in economic activity came after 0.4% growth in the final quarter of 2019. The measurement was based on preliminary data.

— Ukrainian authorities have opened all 872 food markets in the country as the government prepares to gradually lift a lockdown enacted on March 12.

The decision to reopen the markets comes after a series protests all around Ukraine, during which entrepreneurs and farmers bemoaned the dire economic straits the lockdown has put them in.

Ukrainians will be allowed to go to the markets while wearing masks and observing social distancing. Two inspectors will be assigned to each market to make sure the rules are followed and to check visitors’ temperatures.

— Greece’s prime minister is outlining steps his center-right government is taking to aid the economy during the pandemic.

Prime Minister Kyriakos Mitsotakis announced plans this week to ease lockdown restrictions over two months, starting May 4.

Greece is widely expected to follow other European countries into recession in 2020. Government estimates say the contraction will be between 4% and 8% of gross domestic product. But financial sector estimates say the downtown could be more severe due to Greece’s heavy reliance on tourism.

ENERGY: Countries are currently grappling with an overabundance of oil supply. Some oil contract holders were forced to pay people to take crude off their hands last week. The price of U.S. crude has plunged 80% this year.

— President Donald Trump expects to announce a plan soon to aid the U.S. oil industry.

Treasury Secretary Steve Mnuchin says that administration officials are studying multiple options to assist the sector, including potentially stockpiling another several hundred millions of barrels of oil in the strategic reserves.

The president anticipates the oil industry will “have a couple of bad years” because of the “tremendous oversupply.” But he added that insuring U.S. energy independence was crucial to preserving U.S. national security and economic strength.

Trump didn’t offer a timeline for unveiling a plan to assist the oil industry, but he expects his administration will announce something “shortly.”

— Norway will reduce its off-shore oil production to “contribute to a faster stabilization of the oil market compared to letting the rebalancing take place only though the market mechanism.”

Energy minister Tina Bru said Thursday that Norwegian production will be cut by 250,000 barrels per day in June and by 134,000 barrels per day in the second half of 2020. The start of production of several fields will be delayed until next year.

Norway accounts for approximately 2% of global oil production.

EARNINGS RESULTS: The busiest week of the earnings season continues, with companies making gains in some areas of their business but struggling in others.

— Most McDonald’s restaurants in the U.S. and China are now open for drive-thru and delivery, but global lockdown orders still took a bite out of the company’s first quarter sales. The chain's sales fell 6% to $4.71 billion in the January-March period. Declines have persisted in April.

— Comcast’s net income slid in the first three months of the year as the pandemic forced it to shut down theme parks and its movies were kept out of closed theaters.

Comcast lost 409,000 cable TV customers, the biggest source of the company’s profits, as cord-cutting accelerated. But it added 477,000 internet customers, which it said was its best quarterly number in more than a decade. It came as U.S. workplace shutdowns began in March and a mass work-from-home migration underscored the role home internet plays in Americans’ lives.