The Virus Variants
Virus Update: Variants & Transmissibility
“I do not agree with what you say, but I will defend to the death for your right to say” - Voltaire
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“The - likely, in our mind - event of a 3rd wave (and a subsequent 3rd lockdown) will have consequences for oil markets & their participants, as well as the broader global economy”
The UK is already weeks into that lockdown, and France is nearly there, under curfew (the writers of this newsletter are currently in the UK & France).
Fortunately for oil, we’ve been wrong on there being demand consequences, so far.
The past few weeks have seen new information about COVID emerge - information that we’ve found to be relevant.
And regarding these variants, there’s two things that we think are worth a closer look:
The good news is that on the topic of antibody immunity, studies are showing antigen persistence. In other words, antibodies broadly appear to hold up.
The bad news is in transmissibility.
There’ve been hundreds (if not thousands) of variants of this virus.
However, as of now, four stand out as having relatively high transmissibility (a higher R(0)):
UK variant (B.1.1.7)
California variant (L452R)
Brazil variant (P.1)
South Africa variant (501Y.V2)
This is the most discussed variant, so we’ll be brief:
In December, the Cali variant was in “3.8% of their samples. By January, it had jumped to 25.2%” (NYT). In the last ~6 weeks, California has seen a higher rate of spread, compared to other regions of the US.
Governments around the world got the message & issued flight bans
Appears to be ~as contagious as the UK variant
A specific mutation (E484K) reduces antibody recognition
Given the antibody recognition concerns in the South African variant & the mortality issues in the Brazilian variant, we expect to see extended travel bans to those regions.
Our immediate thought was “short LATAM Airlines”. Well, they’re already in Ch.11…
We also expect travel bans to pop-up with relative frequency for the short & medium terms.
If specific variants have antibody concerns & the current development vaccine process remains in place (requiring months of trials), then we expect (at least) regional outbreaks to continue -
That’s it for this week - GO PACK GO - catch y’all next Tuesday -