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London (CNN Business) JPMorgan Chase ( JPM ) told investors on Tuesday that it has set aside $6.8 billion to protect against an expected wave of loan defaults. Wells Fargo ( WFC ) is also bracing for trouble, earmarking $3.1 billion to protect against bad loans.

Jamie Dimon, the CEO of JPMorgan, said the first quarter had presented the bank with "unprecedented challenges." The lender witnessed record demand for revolving credit facilities as the coronavirus crisis deepened.

Companies drew on their credit lines at "probably twice the rate than in the financial crisis [of 2008]," Dimon said on an earnings conference call. "I think companies are very rationally getting their liquidity in order ahead of what could be a significant downturn," he added.

JPMorgan's economists now predict US unemployment will soar to 20% in the second quarter before recovering in the final six months of the year, with annualized GDP contracting by 40% in the April-June period.

The reserve build at Wells Fargo "reflected the expected impact these unprecedented times could have on our customers," CFO John Shrewsberry said in a statement.

As we wrote on Tuesday, big banks have an excellent vantage point from which to observe the fallout from the coronavirus pandemic. They have real time data on credit use, as well as business and consumer behavior.

As the global economy tailspins into what the IMF reckons will be the worst economic downturn since the 1930s, it's worth paying close attention to what bank executives say and do.

Bank of America BAC Citigroup C Goldman Sachs GS There's more bank earnings on tap Wednesday, with reports expected from lenders includingand

Investors will also get another round of economic data. US retail sales for March will be published at 8:30 a.m. ET, along with the Empire State Manufacturing report covering April. Industrial production data for March will be released at 9:15 a.m. ET.

An 'unprecedented' decline for US oil

The United States is facing an "unprecedented" decline in oil production following a historic collapse that has pushed US crude prices below $20 a barrel, according to a new report from the International Energy Agency.

Analysts at the Paris-based agency think low prices and brimming inventories will sharply reduce US crude production, with output in December expected to be down 2 million barrels per day compared to the same month in 2019.

That's despite an agreement by major oil producing nations including Saudi Arabia and Russia to slash their output by 9.7 million barrels a day in May and June with the aim of supporting prices.

Those cuts are unprecedented in size, but still not big enough to counter the destruction in demand for energy products caused by the coronavirus pandemic.

How bad is it? The IEA expects global demand in April to plunge by 29 million barrels a day, compared to a year ago, reaching a level last seen in 1995. For the year, demand will drop by a record 9.3 million barrels a day.

Another problem: The world is running out places to store oil, and the IEA warns that the build up "threatens to overwhelm the logistics of the oil industry -- ships, pipelines and storage tanks -- in the coming weeks."

The brutal market dynamics leave US oil companies in an extremely tough spot. Producers, which were already planning to cut spending this year, are slashing budgets for exploration and drilling.

Independent producers have already cut spending by up to 40%, according to the IEA, and oil majors such as ExxonMobil, Chevron and BP are slashing their estimates for US production this year. Over the past four weeks, producers have idled 26% of active oil rigs in the United States.

"While in the past, it has taken four to five months for a decline in prices to impact new drilling and a further five to six months for output to start declining, the speed at which the industry adjusts this time has been much faster," the IEA said in its report.

The big picture: US crude futures were down over 3% to $19.50 a barrel on Wednesday. Prices are likely to remain depressed until lockdowns are lifted and people start moving around again.

Meanwhile, the expected drop in US production means that tens of thousands of well-paid jobs are now at risk in states including Texas and North Dakota. Even more jobs are on the line when refineries are included.

Bank dividends are under fire as profits plunge

America's big banks paid out fat dividends to shareholders during the Great Recession, leaving them with less capital to absorb massive losses.

Faced with another economic collapse, some players involved in the last crisis are urging regulators to force lenders to preserve cash by suspending dividend payouts, reports my colleague Matt Egan

"Every dollar of capital that goes to shareholders is a dollar not there to absorb losses and support their lending. Keep it!" Sheila Bair, who led the Federal Deposit Insurance Corporation during the 2008 crisis, told CNN Business.

The nation's eight biggest banks, seeking to get ahead of political pressure to lend to Americans hurt by the coronavirus pandemic, announced in mid-March they would all halt their generous share buyback programs. But that still may not be enough.

Former Federal Reserve Chair Janet Yellen thinks America's banks need to halt dividends, too, because of the vast uncertainty facing the country.

"We need a banking system that's able to meet the credit needs of the economy," Yellen told CNBC last week. "And we don't know how severe or how long-lasting this pandemic will be."