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Trump’s surgeon general condemns CDC guidance

Former Surgeon General Jerome Adams advised against following recent COVID-19 guidance from the Centers for Disease Control and Prevention (CDC) asserting that some people infected with the virus could end their quarantine after just five days. “I love the CDC. Grew up wanting to work there and have been one of their most ardent defenders

. I never dreamed the day would come when I would advise people NOT to follow their guidance,” Adams said in a tweet on Tuesday. “They wouldn’t even follow it for their own family.”

I love the CDC. Grew up wanting to work there and have been one of their most ardent defenders. I never dreamed the day would come when I would advise people NOT to follow their guidance. Breaks my ❤️ But ask any of them. They wouldn’t even follow it for their own family.  “Regardless of what CDC says, you really should try to obtain an antigen test,” Adams added in another tweet. “There’s not a scientist or doctor I’ve met yet who wouldn’t do this for themselves/ their family.”

The surgeon general’s remarks come after the CDC reduced its recommended isolation period from 10 days to five days for people infected with COVID-19 who are asymptomatic.

The CDC added that people should continue masking around others for five days longer after leaving isolation. The agency said that the decision was rooted in science that indicated the majority of virus transmission occurs earlier in the illness’s course.

But Anthony Fauci, the Biden administration’s chief medical adviser, suggested the decision was for purposes of getting people back to work.

“The reason is that with the sheer volume of new cases that we are having and that we expect to continue with omicron, one of the things we want to be careful of is we don’t have so many people out,” Fauci said on CNN, adding that he thought the decision was a good choice.”If you are asymptotic and you are infected, we want to get people back to the jobs, especially those with essential jobs,” he added.NN: I am sitting here gutted. What a heart break. In essence infected people like hospital staff and airline workers will not  quarantine long enough. This is criminal negligence at least. This guarantees the 4th wave will be far worse…

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Oil stockpiles in US down by 3.1M barrels – report

Investing.com – U.S. crude stockpiles fell less than expected last week just as supply disruptions have provided a respite somewhat from concerns about omicron-led supply and demand imbalances.   West Texas Intermediate, the U.S. benchmark, traded at $76.13 barrel on the news, after settling up 0.54% at $75.98 a barrel. Oil prices ended the day higher as traders weighed production disruptions across Ecuador, Libya and Nigeria, Reuters reported, citing commentary from UBS. U.S. crude inventories fell by 3.1 million barrels for the week ended Dec.24. That compared with a draw of 3.7 million barrels reported by the API for the previous week. The API data also showed that gasoline inventories rose by 319,000 barrels last week, and distillate stocks decreased by 716,000 barrels.

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Global daily COVID-19 cases at record 1.2 million

(Bloomberg) — Two years after reports of a mysterious pneumonia first emerged in Wuhan, the pandemic shows no signs of abating, with the omicron variant pushing worldwide Covid-19 cases above 1 million for a second straight day. The Netherlands will require travelers arriving from the U.S. to self-quarantine for up to ten days. Rapid tests that are widely used to detect infections may miss some omicron cases, according to the U.S. Food and Drug Administration.  Covid hospitalizations are spiking from New South Wales to New York state, pressuring health systems. Overall, however, omicron appears to be triggering a lower rate of hospitalizations. In China’s Xi’an, an outbreak eased after residents were asked to stay indoors and driving was banned.

Virus Tracker: Cases top 282 million; deaths pass 5.4 millionVaccine Tracker: More than 9 billion shots given,  inaction sent a deadly Covid variant around the worldOmicron leaves Biden struggling for message as data roll in Flight attendants scorn CDC guidelines matching airlines’ plea What Covid therapies exist, and what omicron changes. Netherlands to Quarantine U.S. Travelers (5:10 p.m. HK) The Netherlands will require travelers from the U.S. to self-quarantine for up to ten days upon arrival starting Dec. 30, according to an updated travel advisory that now classifies the country as a “very high risk area.” Travelers will still have to provide a negative test. Home carrier KLM, which offers about 50 weekly flights to the U.S., told Dutch financial daily Het Financieele Dagblad that it’s “too early” to gauge the impact on bookings. Several U.S. carriers including Delta, United, and American Airlines also operate frequent flights to Amsterdam’s Schiphol airport.

More than 1.2 billion Chinese people, or about 86% of the country’s population, were fully vaccinated as of Dec. 28, an official at the National Health Commission said at a briefing. Some 465 million doses were administered to youngsters aged 3 to 17.

South Korea’s ruling Democratic Party and the government share a view that extending strengthened social distancing rules would be needed, a ruling party spokesperson said. It will take time for indicators, such as the intensive-care beds utilization rate and critical cases, to improve. South Korea reimposed tighter virus curbs, including cutting business hours of restaurants, movie theaters and coffee shops, on Dec. 18. The government will decide on Friday whether to extend the rules, which are set to end on Jan. 2.

Vietnam plans to initially limit the resumption of regular international flights to routes between the Southeast Asian country and Japan and the U.S. in early January, Tien Phong newspaper reported, citing the civil aviation authority. Earlier this month, the government said it would resume some international flights beginning Jan. 1 under a pilot program. The aviation authority is in discussions with counterparts in other countries about reopening Vietnam further by establishing quick Covid tests at foreign airports, the newspaper reported.

Rapid tests that are being widely used to detect Covid-19 infections in minutes may miss some cases caused by the omicron variant, the U.S. Food and Drug Administration said.  Early laboratory data suggest antigen tests do detect infections caused by omicron but they may have a reduced sensitivity, the agency said. The results come from an examination of the tests by the National Institutes of Health that used live virus samples, the best way to evaluate their true performance. Previous work showed the antigen tests were just as accurate when finding omicron as earlier strains, though the researchers used heat-inactivated samples that yield less precise results.

Cases in the western Chinese city of Xi’an eased after hitting a record high a day earlier. Xi’an reported 151 infections on Wednesday, down from 175 on Tuesday. The outbreak spread from a few dozen cases in early December to roughly 150 a day after the city was locked down last Thursday, the most dramatic curb China has enacted to stymie Covid since closing off Wuhan and the broader Hubei province in January 2020..

Hospitalizations are spiking from New South Wales to New York state, but the larger picture shows the omicron variant appears to be triggering less severe reactions than earlier outbreaks.

Hospitalization due to coronavirus in Australia’s most-populous state hit the highest level since mid-October. New South Wales on Wednesday recorded 11,201 new Covid cases, up 87% from the previous day’s figure. A total of 625 people in the state, which includes Sydney, are in the hospital, including 61 in intensive-care units.

In New York state, Covid hospitalizations are accelerating at a rate that hasn’t been seen since the early days of the pandemic. On Tuesday the state said hospitalizations rose by 647 to 6,173, marking the largest daily increase since early April 2020, according to data compiled by Bloomberg. 

But the total number of New Yorkers hospitalized with the virus remains far below last year’s peak of almost 19,000. And overall, hospitalization rates across the U.S. are lower than earlier waves. NN: remember the rate of hospitalizations are still increasing. I take no solace in the numbers because they will not peek until February. And i expect record numbers of people to be hospitalized.

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U.S. CDC estimates Omicron variant to be 58.6% of cases, revises projection

(Reuters) – The Omicron variant was estimated to be 58.6% of the coronavirus variants circulating in the United States as of Dec. 25, according to data from the U.S. Centers for Disease Control and Prevention (CDC) on Tuesday. The agency also revised down the Omicron proportion of cases for the week ending Dec. 18 to 22% from 73%, citing additional data and the rapid spread of the variant that in part caused the discrepancy. “We had more data come in from that timeframe and there was a reduced proportion of Omicron,” a CDC spokesperson said. “It’s important to note that we’re still seeing a steady increase in the proportion of Omicron.” The fast-spreading variant was first detected in southern Africa and Hong Kong in November, with the first known case in the United States identified on Dec. 1 in a fully vaccinated person who had traveled to South Africa. Since then, the strain has rapidly spread across the world and driven a surge in U.S. infections, causing widespread flight cancellations and dashing hopes for a more normal holiday season. The Delta variant, which had been the dominant strain in the past few months, accounts for 41.1% of all U.S. COVID-19 cases as of Dec. 25, the public health agency’s data showed. Former U.S. Food and Drug Administration Commissioner Scott Gottlieb said on Twitter that if the CDC’s new estimate of Omicron prevalence was precise, then it suggests that a good portion of the current hospitalizations may still be driven by Delta infections. The agency said the data includes modeled projection that may differ from weighted estimates generated at later dates. NN: Lots of games with the numbers. The infection rate is staggering of the Omicron mutation. Its now the dominate strain. And contrary to the spin hospitalizations are increasing. We will have a better idea of what we are facing in the coming weeks. Lack of leadership will turn new years events into the greatest disease spreading event mankind has ever seen. Reality is the politicians are pandering to the masses undisciplined desire to be entertained mistakes are being made. They are actually changing isolation times times cutting them in half. Their is virtually no screening, home testing is a joke and if you want to wait a day in a long line you can get tested. Record numbers of children are being admitted to hospital.

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Carnival says most itineraries unchanged even as Omicron cases rise

https://youtu.be/Gy_LsL_H6tg

(Reuters) – Carnival Corp said on Tuesday a majority of its ships’ itineraries were unchanged, despite a surge in Omicron coronavirus cases that has threatened to stall a recovery in the cruise industry. The world’s largest cruise operator, however, said a few destination ports were reviewing their protocols and processes due to the fast-spreading new variant. Many passengers and reports, including those from CNN and Euronews, said authorities of a few ports in the Caribbean, Puerto Rico and Mexico disallowed passengers from cruise ships that were carrying active COVID-19 cases to disembark. “Looks like my cruise this Friday is a cruise to no where,” wrote one Reddit user on a Royal Caribbean forum late Monday. Carnival said on Monday it would find an alternative destination should it be forced to cancel a port. Royal Caribbean Group did not respond to a Reuters request for comment, while Norwegian Cruise Line Holdings Ltd declined to comment. “The cruise lines’ reaction to the substantial increase in COVID-19 cases caused by the Omicron surge is largely hit or miss,” said James Walker, a Miami-based maritime lawyer. Carnival’s shares were up 1%, while those of Norwegian Cruise and Royal Caribbean were largely flat. The Omicron variant has sparked concerns that the U.S. health officials may reintroduce a temporary ban on cruising, just months after U.S. cruise operators resumed guest operations.

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Italy adds record 78,313 new virus cases…..UK: COVID-19 infections at daily high of 129,471…..US adds 512,553 COVID cases amid backlog…Finland bans unvaccinated travelers

Italy set another record in daily COVID-19 cases, as the number of people who tested positive jumped by 78,313 during the last 24 hours, the Health Ministry’s data showed on Tuesday. Within the same timeframe, the country’s health authorities have detected 202 fatalities attributed to the virus, the data revealed. Italy’s COVID death toll, which is the second-highest in Europe, climbed to 136,955 after the latest updates.

UK: COVID-19 infections at daily high of 129,471

Health authorities of England and Wales reported 129,471 additional coronavirus infections on Tuesday, the largest single-day increase in cases in the entire United Kingdom since the pandemic began, even though figures from Scotland and Northern Ireland were not included in the final tally. Over 12.33 million cases were registered so far in the UK. On the other hand, the total number of deaths within 28 days of a positive test hit 148,021, after rising by 18. More than 51.67 million people in the country received at least one dose of a coronavirus vaccine, representing an 89.9% share of the population aged 12 and older, while 56.9% received either a booster or three doses.

US adds 512,553 COVID cases amid backlog

The COVID-19 case total in the United States grew on Tuesday by 512,553 as some states were late in reporting their daily figures over the holiday weekend. The US has seen 52,280,854 infections since the start of the pandemic, according to data from Johns Hopkins University. The death toll increased by 1,762 on Tuesday. There have been 816,436 fatalities attributed to COVID-19 so far.

Finland bans unvaccinated travelers

Finland announced on Tuesday an entry ban for people who are not fully vaccinated against COVID-19 or can present proof of recovery within the past six months. Travelers will also have to submit a certificate of a negative COVID-19 test taken less than 48 hours prior to arrival. The measure comes into force immediately and will remain in place until January 16. Finnish citizens, foreigners residing permanently in Finland, or persons who have an essential reason for entry will be exempt from the ban .NN: it will take a couple more weeks to know how serious this 4th wave is. I urge you to hunker down till we know more.

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Wall St rises for fifth day, S&P 500 hits record high

(Reuters) – The S&P 500 hovered around record highs on Tuesday as conviction in the U.S. economy helped investors shrug off concerns over Omicron-driven travel disruptions and store closures, and extended Wall Street’s four-day rally amid thin trading volumes. The Centers for Disease Control and Prevention (CDC) on Monday shortened the recommended isolation time for Americans with asymptomatic cases of COVID-19 to five days from the previous guidance of 10 days. The CDC’s update, along with approvals to new pills and more vaccines to fight COVID-19, have all helped investors look past thousands of flight cancellations and Apple Inc shutting its New York stores due to surging cases, and put the three main indexes on pace for monthly gains. “This policy change is sending the message that it is becoming more like the flu and less like the variants we saw early on when we had no treatments, no vaccines and it was much more deadly,” said Thomas Hayes, managing member at Great Hill Capital in New York. The S&P 500 and Nasdaq on Monday posted their best four-day rally since November 2020, with the S&P 500 closing at a peak. Among the 11 major S&P 500 sector indexes, eight traded higher on Tuesday and financials led the charge. At 9:44 a.m. ET, the Dow Jones Industrial Average was up 114.24 points, or 0.31%, at 36,416.62, the S&P 500 was up 7.62 points, or 0.16%, at 4,798.81, and the Nasdaq Composite was up 3.97 points, or 0.03%, at 15,875.23. Some megacap companies have roared in the recent rally, with Tesla Inc jumping 0.8% after surging nearly 22% in value over the past four sessions. Apple dipped 0.4% after coming within spitting distance of becoming the first U.S. company to hit $3 trillion in market capitalization in premarket trading. Boeing added 1.9% as Indonesia lifted a ban on the company’s 737 MAX, three years after the crash of one of its aircraft that led to the loss of all 189 people on board. Markets are in one of the seasonally strong periods, also called the Santa Claus Rally, with CFRA Research data showing the S&P 500 has on average risen 1.3% in the last 5 trading days of the year, and first two days of the new year since 1969. Advancing issues outnumbered decliners by a 1.93-to-1 ratio on the NYSE and by a 1.20-to-1 ratio on the Nasdaq. The S&P index recorded 60 new 52-week highs and no new low, while the Nasdaq recorded 68 new highs and 69 new lows. NN: Its one hell of a party they are throwing… Be ready for the hang over….. As you are seeing we are standing aside waiting for our turn……..

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The S&P 500 is trading at $4,725.79 to close 2021 – up 28% YTD.

  • The S&P 500 is trading at $4,725.79 to close 2021 – up 28% YTD.
  • With the Federal Reserve planning to raise interest rates in 2022, investors are expecting more moderate gains than the rise seen in 2021.
  • There are two major policy decisions to follow in the first quarter of 2022. 1.) The outcome of the Biden spending package 2.) The Federal Reserve raising interest rates
With only a few more days of trading left in 2021, the S&P 500 will likely finish at ~ 29% YTD. Compared to the 2020 gains of 16%, the index and any funds that track the index had quite a remarkable year.

Typically, the common barometer of if a stock performed well in a given year is how it’s done relative to its peers. The S&P 500 is a popular index to use in these situations. This past year, beating the S&P was harder than it’s ever been. Comparing the performance of the index to years past, it may be time to adopt a more conservative perspective on the 2022 outlook of the 500 companies included within Standard & Poor’s stock market index. To put it plainly, interest rates were low in 2021. More specifically, the federal funds rate was low. This is the interest rate that banks use to lend money to each other overnight. A look behind the curtain would show you that banks are constantly lending money back and forth to each other in order to keep the required percentage of their customer’s money on reserve.The federal funds rate is used to control the supply of money as a way to manage inflation. When the Federal Reserve raises the fund’s rate, like they’re expected to do shortly, it becomes more expensive to borrow. When rates are low, as they have been through all of 2021, investors are more likely to acquire risk assets such as stocks to take advantage of the cost of borrowing. With economic stimulus and low rates, Americans were throwing money into a variety of risk assets such as stocks, cryptocurrency, and NFT’s.

Federal Funds Rate Chart

Source: Macro Trend

Looking ahead, the Federal Reserve has already announced that it will begin tapering interest rates to address inflation acceleration. Higher interest rates devalue the future projected earnings of companies and, in turn, negatively impact their share prices. Interest rates were at a bottom in early 2020, largely due to the pandemic and economic stimulus efforts in both fiscal and monetary policy. With Wall Street expecting interest rates to increase in the near term, the question becomes, how soon do portfolio managers and investors as a whole begin selling off their risk? Once these initial sell-offs happen and the idea of interest rate hikes becomes more of a reality, the S&P will suffer a blow.

As excerpted by Karen Langley of the Wall Street Journal,

“We know there’s going to be a rate hike,” said Tiffany Wade, senior portfolio manager at Columbia Threadneedle Investments. “How soon before that do you start to position around valuations maybe coming off?”

Karen continues in her article,

“The S&P 500 has averaged an annual gain of 8.4% from 1957, the year it was introduced, through last year. But it is coming off three much stronger years. The index jumped 29% in 2019, even more than its advances in 2020 and so far in 2021.

While it’s not going to be the popular opinion, being realistic about the market outlook in 2022 is going to pay investors’ dividends. The gains recognized by the market in the years following the introduction of COVID-19 to the global economy were being propped up by stimulus packages and government spending, loan forbearance, and near-zero interest rates across the board. To adopt a term currently being used by the National Basketball Association to describe cases in which unforeseen events occur, we can refer to these policies as “hardship policies”. These hardship policies are not sustainable policies for a country of any size – let alone the United States. If not at its boiling point already, inflation will become a major priority to address and interest rates will have to be raised as a means to curb spending and the output of money.

Per Nick Timaraos of the Wall Street Journal,

Fed officials are facing two opposite risks. One is that they tighten monetary policy that causes the economy to slow on top of a sharp drop in the rate of inflation next year. The other is that inflation stays higher and households and businesses come to expect prices to keep rising, leading to a wage-price spiral.

The economy is in a period of really high growth, strong demand, and high incomes. The issue is, these have all been manufactured. Normally, after a downturn akin to the one we faced at the start of the pandemic, the economy takes longer to return to normalcy. The aggressive monetary and fiscal policies initiated in 2019 have caused the Federal Reserve to become stuck between a rock and a hard place. Their alternatives are to tighten up monetary policy to address inflation or allow prices to keep rising and handle the future ramifications as they present themselves. At the end of the day, investors in ETFs that track the performance of the S&P 500 (SPY) can rest easy at night with ~28% YTD returns on their investments. With so much uncertainty at both the fiscal and monetary levels, there is a legitimate concern for the valuation of the index’s companies moving forward. Some of these companies are trading at abnormal P/E ratios. The stocks that comprise the S&P 500 trade at high multiples. Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), and Tesla (NASDAQ:TSLA) are all trading above 30 Trail PE. This is a valuation multiple that is based on the last 12 months of actual earnings. By taking the current stock price and dividing it by the trailing EPS for the past 12-months. Tesla, in fact, is trading at 289.59 Trailing Price-to-Earnings. It seems inevitable that a correction is coming, regardless of whether or not the Fed raises rates tomorrow or in six months. That reality, coupled with the sky-high valuations of the major players in the S&P 500, should be reason enough to adopt a conservative outlook on 2022 performance. Something just has to give…and soon.

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U.S. CDC investigating nearly 70 cruise ships hit by COVID-19 cases

As omicron continues to spread across the country, COVID-19 cases are continuing to emerge on cruise ships. Carnival Cruise Line, Royal Caribbean International and MSC Cruises are among the cruise lines currently dealing with clusters of cases on board resulting in a myriad of scenarios including protocols kicking in to mitigate spread, itinerary changes and the Centers for Disease Control and Prevention investigations. The CDC has been working with global public health experts and industry partners to learn about omicron, spokesperson Dave Daigle told USA TODAY Thursday. “We are still learning how easily it spreads, the severity of illness it causes, and how well available vaccines and medications work against it.”

He continued that “cruise travel is not a zero-risk activity.”

The likelihood of contracting coronavirus on cruise ships is “high because the virus spreads easily between people in close quarters aboard ships,” Daigle saidThe CDC advises people who are not fully vaccinated against COVID-19 to avoid cruise travel and advises travelers get a booster shot if eligible. MSC Seashore, which was scheduled to disembark passengers Thursday, sailed with 28 passengers who tested positive for COVID-19.”During a routine monitoring aboard MSC Seashore, a limited number of guests and crew tested positive for COVID-19. Twenty-eight (all fully vaccinated) of the 4,714 guests and crew members – 0.59% of the onboard population – were discovered to be positive,” MSC said in a statement provided by spokesperson Stephen Schuler. MSC health protocols were implemented “immediately” and all who tested positive and their close contacts were isolated in balcony cabins in a separate area on the ship. The majority of those who tested positive are asymptomatic, some have mild symptoms. The cruise line said Wednesday it would continue to monitor the health of those passengers and crew members and would offer complimentary testing for passengers who wished to have it “to feel reassured and for peace of mind.” Carnival Freedom, which is sailing in the Caribbean according to Cruise Mapper, has a “small number” of coronavirus cases on board and is following protocols, spokesperson AnneMarie Mathews told USA TODAY Thursday. Mathews did not immediately specify the number of cases on board when asked. “Our protocols anticipate this possibility and we implement them as necessary to protect the health and safety of our guests and crew,” she said. “This is a vaccinated cruise and all guests were also tested before embarkation.” Aruba and Bonaire did not permit Carnival Freedom to call at their ports. “We are working closely with the CDC and local health authorities in all ports and destinations that we visit,” Mathews said. “Unfortunately, the rapid spread of the omicron Variant may shape how some destination authorities view even a small number of cases, even when they are being managed with our vigorous protocols. Some destinations have limited medical resources and are focused on managing their own local response to the variant.” When port visits are canceled, she said, the cruise line will try  to find an alternative destination. “CDC is investigating the recent increase in COVID-19 cases identified on Royal Caribbean International’s Odyssey of the Seas,” CDC spokesperson David Daigle told USA TODAY Thursday. “All cases appear to be mild or asymptomatic. Additionally, there have been no COVID-19 related hospitalizations, medical evacuations, ventilator use, or deaths from this ship.” Fifty-five passengers and crew members have tested positive for COVID-19 on Royal Caribbean’s Odyssey of the Seas cruise ship, which departed Fort Lauderdale, Florida, on Saturday for an eight-night Caribbean trip, Royal Caribbean said in a statement shared by spokesperson Lyan Sierra-Caro. The ship, which returned briefly to port on Sunday to disembark a passenger with COVID-19, is carrying 3,587 passengers and 1,599 crew. With vaccinations required among all crew members and guests 12 and older, 95% of those on board were fully vaccinated, according to Royal Caribbean. The health agency is working closely with Royal Caribbean and will “consider multiple factors” before marking the ship as “Red” status at which point it would be required to return to port. As of Thursday afternoon, Odyssey of the Seas was classified as “Yellow” status meaning the “CDC has investigated and ship remains under observation.” Royal Caribbean announced Wednesday that the cruise will not stop in Curacao or Aruba as planned.”The decision was made together with the islands and out of an abundance of caution due to the current trend of cases in the destination communities and having COVID-19 positive cases on board … representing 1.1% of the onboard community,” according to a statement shared by Sierra-Caro. NN: I am sorry to report people can not bunch up. No on planes, trains, cruise ships, sporting event, movie theater and even restaurants.

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Venezuela pulled its oil production out of a tailspin

Dec 27 (Reuters) – Venezuela this year almost doubled its oil production from last year’s decades-low as its state-owned company struck deals that let it pump and process more extra heavy crude into exportable grades. The surprising reversal began as state-run Petroleos de Venezuela, known as PDVSA, won help from small drilling firms by rolling over old debts and later obtained steady supplies of a key diluent from Iran. The two lifted output to 824,000 barrels per day (bpd) in November, well above the first three-quarters of the year and 90% more than the monthly average a year earlier.Whether it can continue to ramp up production is unclear. Years of unpaid bills, mismanagement and, more recently, U.S. sanctions here have cut its access to specialized drilling equipment and foreign investment. The sanctions have also limited its customers to firms with no track record of trading.PDVSA’s latest gains – including reaching 1 million barrels of daily output for the first time in nearly three years, which Oil Minister Tareck El Aissami described in a Christmas day message as a “great victory” – still fall short of current management’s 2021 goal of producing 1.28 million bpd. Workers in producing regions say the reopening of oilfields continues and more flow stations are expected to restart. However, oil experts said PDVSA has done all it can and further gains might be capped by a lack of additional rigs and functioning upgraders for its tar-like crude.“Base production in 2021 was way below PDVSA’s production capacity,” said Francisco Monaldi, director of the Latin American Energy Program at Rice University’s Baker Institute in Houston. “We are reaching that capacity now. To see an output increase during 2022, investment in new wells and upgrading infrastructure is needed,” he added. The main turning point came from a swap deal between state-run firms PDVSA and National Iranian Oil Company (NIOC) that began in September. It proved crucial for generating exportable grades from the extra-heavy crude produced at Venezuela’s top region, the Orinoco Belt. Hard-currency proceeds from domestic fuel sales and higher oil exports to Asia have also allowed PDVSA to amortize some debts with service companies and settle overdue debts with a promise of future work and permits that allowed some domestic firms to operate workover rigs. A few service companies also accepted payments in kind, mainly oil byproducts and residual fuel later sold domestically and overseas, according to people familiar with the matter. By mid-December, there were a total of 47 workover and maintenance rigs active in the Orinoco Belt and 29 more in other regions, according to a PDVSA internal document seen by Reuters. That same report showed 19 others that were inactive. No active drilling rigs, which are needed for building output capacity, were reported.PDVSA did not reply to a request for comment. The U.S. Department of Treasury, which enforces sanctions on PDVSA, did not immediately reply to a request for comment.