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Morning India (13/April/20): 1. Oil & Gas (OPEC+ announcement of production cut paltry); 2. Godrej Consumer; 3. Expert Speak (a. Financials; b. Healthcare)

Morning India (13/April/20):

Today’s top research idea
Oil & Gas: OPEC+ announcement of production cut paltry
** The collapse in global fuel demand owing to the world-wide spread of the Coronavirus (COVID-19) has led to a sharp decline in crude oil prices.

** The OPEC secretariat's analysis suggests that the market is expected to see demand contraction of ~6.8mnbopd in 2020 (with ~12mnbopd in Apr-Jun'20).

** Thus, in an effort to balance the global oil markets and stabilize prices, a record production cut of 10mnbopd has been announced by the OPEC+ starting May'20.

** The deal announced by OPEC+ on 9th Apr'20 has a set of phased-out cuts until Apr'22 (cut by 10mnbopd starting May-Jun'20, reduced to 8mnbopd during Jul-Dec'20 and to 6mnbopd over Jan'21-Apr'22), and extension of this agreement would be reviewed in Dec'21.

** The cut is with respect to Oct'18. Baseline production for Saudi Arabia and Russia has been set at 11mnbopd (in Oct'18, the former produced 10.6mnbopd while the latter produced 11.6mnbopd).

Piping hot news
Lockdown 2.0: Hotspots in focus as India explores decentralized exit strategy
As the nationwide lockdown nears an end, hotspots or infection clusters across India have risen three-fold to 150 in the past week, complicating the government’s efforts to contain the spread of covid-19. To make matters worse, nearly 100 districts that have such hotspots are also major manufacturing hubs of the country—posing difficulties in reopening factories quickly. The surge in infection clusters comes amid India exploring a decentralized strategy to exit the lockdown that may involve dividing the nation into green, orange and red zones. Prime Minister Narendra Modi had earlier made it clear that the lockdown cannot be lifted across the country in one go.