Oil, Gas, And Fracking News Reads 28May 2018 – Part 2

Written by rjs, MarketWatch 666

Here are some more selected news articles about the oil and gas industry from the week ended 27 May 2018. Go here for Part 1.

This will be a feature at Global Economic Intersection every Monday evening.

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Government announces plan to accelerate fracking developments by fast-tracking private companies’ planning applications – New plans to accelerate fracking development have been released by the government, amid accusations that the move will harm the environment and local communities. Proposed changes to the planning process could put an area nearly the size of Wales at immediate risk of drilling.The measures are intended to speed up planning applications and make decisions “faster and fairer” for all those involved. Greg Clark, the business, energy and industrial strategy secretary, and James Brokenshire, the housing and communities secretary, issued a joint statement in which they reiterated the government’s position on the importance of “safe and sustainable exploration and development of our onshore shale gas”. The government said it will streamline and improve the regulation process for fracking planning applications so decisions are made faster, describing recent decisions as “disappointingly slow”. Other measures proposed include a £1.6m shale support fund for local authorities and a consultation on whether exploration wells could be drilled without seeking a planning application.Campaigners said the latter move would “pervert the planning process” and open nearly 18,000 square kilometres of England’s countryside up to “cowboy” operations.

Green Groups Balk at England’s Plan to Fast Track Fracking — Government ministers published proposals Thursday that would speed the development of fracking in England, igniting opposition from environmental groups and local communities, The Independent reported .The rule changes could open an area almost as large as Wales for immediate drilling.”Communities and their local councils across the UK have said no in every way they can, but the government have turned a deaf ear to everyone who doesn’t own a fossil fuel company,” Rebecca Newsome of Greenpeace UK told The Independent.The proposals would give planning authorities £1.6 million to speed up application processing time, create a new shale environmental regulator, allow companies to drill at test sites without prior permission and shift approval for new wells from the local to the national level by declaring fracking sites “nationally significant infrastructure,” The Guardian reported.Greenpeace further criticized the proposals in The Guardian, saying they would make “exploratory drilling as easy as building a garden wall or conservatory.”The Local Government Association also expressed concern that fracking decisions would be taken out of the hands of impacted communities.”We are clear that it should be up to local communities to decide whether or not to host fracking operations in their areas,” environment spokesperson, councilor Judith Blake told The Guardian.

Cuadrilla seeks consent to frack UK´s first horizontal shale gas well – Cuadrilla has applied to the Government for consent to frack the UK’s first horizontal shale gas well, the company said.The well was completed last month at the firm’s Preston New Road site in west Lancashire, with drilling through the Lower Bowland shale at a depth of 2,700 metres below ground.Cuadrilla now needs the go-ahead from Greg Clark, the Secretary of State for the Department of Business, Energy and Industrial Strategy, for hydraulic fracturing to commence. Francis Egan, CEO of Cuadrilla, said: “Following the Government’s very recent announcement which underlined the national importance of shale gas, we are very pleased to submit our application for hydraulic fracturing consent to the Secretary of State. “We are now very close to demonstrating that Lancashire shale gas can be commercially developed in a safe and environmentally responsible manner. We look forward to receiving consent to progress from the Secretary of State at the earliest opportunity.” The drilling of a second horizontal shale gas exploration well through the Upper Bowland shale is nearing completion, added Cuadrilla. A similar application to the Government for fracking consent at the second well will then be submitted. Based on its current operations schedule, Cuadrilla said it plans to be in a position to conduct fracking in the second half of this year. Cuadrilla says it will then run an initial flow test of both wells for six months, with plans to then eventually connect those wells to the local gas grid network in 2019.

Experts warning of ‘serious earthquake risk’ posed by drilling for shale gas — Former advisor to No 10, Professor Peter Styles, said hydraulic fracturing in former coal mining areas increases the probability of earthquakes on faults that have already been subject to movement through mining. As the Government announced plans to speed up fracking developments by fast-tracking private companies’ planning applications, Professor Styles has called for more rigorous checks to identify the dangers. In his new report, Fracking and Historic Coal Mining: their relationship and should they coincide? He said there was a “serious earthquake risk” posed by fracking in former coalfields, because induced tremors would be “dramatically enhanced”. Although the Fylde has no mine workings, the Blackpool area was hit by two induced tremors in 2011 linked to Cuadrilla’s fracking operation at the now abandoned Preese Hall drill site.He said: “Unfortunately the physics of it means you cannot see those faults with the (survey) waves that you put into the earth. To date it does not appear that any proper industry or government due diligence has taken place with regards to fault lines mapped.” But shale industry body UKOOG said mapping had been done and that a “traffic light” monitoring system had been put in place to prevent tremors using Cuadrilla’s monitoring stations (pictured). Prof Styles recommends a 850-metre buffer zone between fracking and any significant natural fractures or faults. There are faults beneath the Fylde.

Russia Tightens Grip on Europe’s Gas With Gazprom Deal — Russia’s natural gas export monopoly is set to expand its position as the dominant fuel supplier to Europe after a deal between the two resolved a seven-year-old anti-trust dispute. The agreement between Gazprom PJSC and the European Commissiongives gas buyers more flexibility in handling imports and greater leverage to push for lower prices. That’s likely to make flows from Russia more attractive than alternatives such as expensive new links to fields at Europe’s southeast corner or tanker shipments of liquefied natural gas. Easing tensions with Russia will make it more difficult for countries from the Middle East and Americas to get a piece of Europe’s lucrative energy market, where gas is trading at roughly double the level prevailing in the U.S. Cheaper supplies on more flexible terms also makes it more difficult for Europe to broaden its sources of energy to reduce the risk of a cutoff from any one of them, an idea that President Donald Trump’s administration has been pressing.“Gazprom knows that Europe will always represent its key market, it knows that it’s very difficult to diversify away from Europe,” said Simone Tagliapietra, analyst at the Bruegel research group in Brussels. “If the Russian gas becomes cheaper, U.S. LNG will be less competitive if the U.S. is not able to cut down the price.” Europe relies on Russia for about a third of its gas, and Gazprom’s shipments to the continent reached a record a last year and are only expected to grow. In recent weeks, as the weather warms and demand for heating eases, the pipeline company is shipping in supplies of the fuel to replenish depleted storage sites at rates that are more typical for a hard winter.

Not so fast on fracking, UN agency tells developing countries – The hydraulic extraction of natural gas, commonly known as fracking, produces cleaner energy than oil and coal, but it is not necessarily in the best interests of the world’s poorest countries, UN development experts said on Thursday.A new report by UNCTAD, the UN Conference on Trade and Development, describes natural gas as a useful “bridge fuel” for States aiming to move towards more environmentally-friendly renewable power sources. But it has disadvantages too, not least the fact that its main component is methane gas, which has a global-warming potential 28 times higher than the carbon dioxide found in other fossil fuels. The fuel “should contribute…to achieving a low-carbon economy” by 2030, the report says, while pointing to “gaps in local geological and hydrological knowledge” and inadequate regulations that may represent “major obstacles to hydraulic fracturing as a method of extracting shale gas”. Janvier Nkurunziza, chief of UNCTAD’s Commodity Research and Analysis Section, said that the report was “not saying (fracking) is good or bad”. That was something that only governments could do, the UN official added, based on variables including their investment capacity and the possible contamination of underground water sources. “Whether it’s really good, or bad, depends on a number of factors that we analyse in this report: geology, sources of water for example; if you are increasing your water stress by using a lot of water, infrastructure and so on and so forth,” said Nkurunziza, adding that “we are not saying it’s good or bad, just look at the conditions and the region (where) you want to explore this resource, and then you can determine whether you can do it or not.” Citing data from the United States Energy Information Administration, the UNCTAD report indicates that the world has around 60 years’ worth of shale gas left before the resource is exhausted. Around half of the 215 trillion cubic metres this represents is in Algeria, Argentina, Canada, China and the United States – although the US is the world’s leading shale gas producer, with 87 per cent of total output. “The US is like an exception,” said Nkurunziza, noting that no other country has the “huge investments” necessary to fund shale gas exploration on such a scale.

Race on to boost gas supply to Australia’s east coast (Reuters) – A pipeline across Australia and gas imports from as far away as the United States are on the drawing board as the country races to plug a domestic supply gap that is driving up east coast gas prices and threatening jobs. Although Australia is the world’s No. 2 liquefied natural gas (LNG) exporter, much of its east coast gas is tied up in long-term export contracts while mainstay supplies in the populated southeast are drying up more quickly than expected. Imports will be needed within four years, warn industry executives and experts, which means gas prices that have more than doubled in the past three years aren’t going to fall and could even rise another 50 percent to match global spot prices. “Some people still find the import of LNG to what is meant to be an energy superpower absurd, and they have a point, it does seem very weird,” said Tennant Reed, national public policy adviser at the Australian Industry Group. The government is under fire from angry household gas users and industry, particularly big gas users such as petrochemical and fertilizer manufacturers which have warned that high prices are making some businesses uncompetitive. Coal seam gas from Queensland, which now supplies around 30 percent of the east coast market, costs around A$6 ($4.50) a gigajoule (GJ) to produce, then has to be piped at a cost of around A$1.85-A$2.45 per GJ, which has driven up gas prices to well above A$8. Shortages will grow from 2022 due to a steep output decline in the main gas field that has supplied southern Australia for five decades, the Australian Energy Market Operator has warned. In the longer term, gas is expected to flow from developments around the country, including more coal seam gas from Queensland, new finds off the coast of Victoria, and shale gas from the Northern Territory, but these are years from development.

India’s GAIL to nearly double LNG imports in fiscal 2018-2019– India’s state-owned gas utility GAIL aims to almost double LNG imports to 100 cargoes in the fiscal year ending March 2019, up from 52 cargoes a year earlier, to meet India’s growing demand as the share of gas in the country’s energy mix is set to rise to 15% in five years, from the current 6.5%. GAIL will import 60 cargoes from the US and eight cargoes from Russia’s Gazprom under long-term contracts, and will buy the remaining 32 cargoes on a short-term basis, company officials said Thursday. GAIL’s focus is to acquire a larger share of its LNG from the short-term markets, and enjoy greater destination, volume and delivery flexibility to be able to more effectively hedge risks against price volatility, said GAIL Chairman B.C. Tripathi, after releasing the company’s annual results. He added that new long-term contracts are not a priority, as the global LNG market is moving from long-term deals to short-term and spot deals. GAIL will receive its first cargo under a renegotiated deal with Gazprom on June 4. The company plans to maintain an LNG portfolio of 14.3 million mt/year from fiscal 2022-23 to meet demand from cooking gas users, power and fertilizers plants and city gas distributors. The portfolio comprises 5.8 million mt/year from the US, 2.5 million mt/year from Gazprom, 5 million mt/year from India’s Petronet LNG and 1 million mt/year from Qatar. Tripathi said India’s gas market is expected to grow 6-7% annually over the next five years.

Venezuela’s oil meltdown – Despite holding one of the world’s largest reserves of heavy crude oil, Venezuela cannot feed its people.Hyperinflation, along with a $70bn bond default means that basic food and medicine can’t be imported. The military has been put in charge of food distribution, and the government is running out of cash.But despite the near economic collapse, President Nicolas Maduro is standing for re-election. The United States, the European Union and 15 of Latin America’s biggest countries have already said they will not recognise the result.The country’s sole source of income is oil, but even the industry is in meltdown.The oil price recovery has done little to help Venezuela. The Organization of the Petroleum Exporting Countries (OPEC) says oil production is down to a 30-year low of around 1.4mn barrels a day. And troubles are mounting for Venezuela’s state-run oil company PDVSA as lawsuits over unpaid bonds are bubbling. This week, the Caribbean Island of Curacao ruled that US oil major ConocoPhillips could seize assets owned by PDVSA. Venezuela uses refineries on the Island of Curacao to store a significant portion of the oil it exports to its foreign markets. Direct sanctions on the oil sector are also a possibility. “Until now, a perception within markets has been that Venezuela pays late, but pays,” explains Diego Moya-Ocampos, senior analyst for the Americas for IHS Markit.”Few creditors have dared to initiate or file legal actions against Venezuela to try to seize assets. Instead, they’ve preferred to look behind the scenes from some sort of payment agreement. After Conoco and the recent actions of these days, we’re seeing a more aggressive stance and less patience from creditors trying to seize Venezuelan assets, and certainly, no one wants to be the last in line.” Moya-Ocampos believes that even though global oil prices are increasing, “the market has already absorbed the idea that Venezuela increasingly will no longer be a key player within OPEC and that all production will systematically continue declining.”

Train Carrying 250,000 Liters of Fuel Derails on Kenyan Coast – A cargo train carrying 250,000 liters (66,000 gallons) of super petroleum , or unleaded gasoline, derailed off its tracks after taking a sharp turn along Kenya’s eastern coast, forcing the closure of a major highway over the weekend, according to local reports.The accident occurred early Sunday in Kibarani in Mombasa County, and prompted authorities to completely close off Makupa Causeway, the main link between the mainland and Mombasa Island, fearing a fire would break out after spillage of the highly flammable liquid, The Star, Kenya reported.Thousands of commuters were left stranded until the highway was reopened Monday after experts determined the area was safe. No injuries were reported and the exact cause of the derailment is not yet determined.The 16-wagon Kenya Railways train was headed towards Nairobi and was carrying fuel for Vivo Energy.Maritime and Shipping Affairs Principal Secretary Nancy Karigithu said about 3,000 liters (790 gallons) leaked from the impacted wagons. Authorities have contained the fuel with foam and coolant, she said.”The leakage came from two wagons, one of them was profuse. Luckily enough, no oil was spilled into theocean ,” Karigithu said, as quoted by The Star, Kenya. Karigithu added that experts are working to ensure the fuel does not enter the ocean and affect the marine system.

Europe to ditch US dollar in payments for Iranian oil – source – The European Union is planning to switch payments to the euro for its oil purchases from Iran, eliminating US dollar transactions, a diplomatic source told RIA Novosti. Brussels has been at odds with Washington over the US withdrawal from the Iran nuclear deal, which was reached during the administration of Barack Obama. President Donald Trump has pledged to re-impose sanctions against the Islamic Republic.“I’m privy to the information that the EU is going to shift from dollar to euro to pay for crude from Iran,” the source told the agency.Earlier this week, EU foreign policy chief Federica Mogherini said that the foreign ministers of the UK, France, Germany, and Iran had agreed to work out practical solutions in response to Washington’s move in the next few weeks. The bloc is reportedly planning to maintain and deepen economic ties with Iran, including in the area of oil and gas supplies.Mogherini stressed that the sides should jointly work on the lifting of sanctions as an integral part of the historic nuclear deal. “We’re not naive and know it will be difficult for all sides.”The Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), was sealed three years ago in Vienna between Tehran and the P5+1 powers (China, France, Russia, UK, US, plus Germany). The agreement saw decades-long international sanctions lifted in exchange for Iran curbing its controversial nuclear program. On January 16, 2016, the parties to the deal announced the beginning of its implementation. The lifting of international sanctions gave Iran access to the world’s markets for the first time in nearly four decades. Since then, Tehran has managed to significantly increase its exports of crude. However, oil is pegged to the US dollar on international markets, making it difficult for Iran’s partners to make payments for crude and for Tehran to receive them. With the dollar playing the leading role on international financial markets, re-imposing sanctions would mean cutting Iran off from the global financial system.

Iran says Europe’s support for nuclear deal not enough (Reuters) – The European Union is not doing enough to preserve the benefits for Iran from the 2015 international nuclear pact following the withdrawal of the United States, Iran’s foreign minister told the EU’s energy chief on Sunday. Miguel Arias Canete, European Commissioner for energy and climate, said Tehran wanted the 28-nation bloc to act fast to preserve its oil trade with Iran, and to consider making direct euro-denominated payments for Iranian oil to Iran’s central bank, bypassing the U.S. financial system. “With the withdrawal of America …. the European political support for the accord is not sufficient,” Mohammad Javad Zarif told Arias Canete in Tehran, Iran’s state news agency IRNA reported. Since President Donald Trump announced on May 8 that he would pull the United States out of the deal, the U.S. Treasury said Washington would reimpose a wide array of Iran-related sanctions after the expiry of 90- and 180-day wind-down periods, including sanctions aimed at Iran’s oil sector and transactions with its central bank. The EU leaders have pledged to try to keep Iran’s oil trade and investment flowing, but conceded that would not be easy. “Our message is very clear. This is a nuclear agreement that works,” Arias Canete told Western journalists after two days of meetings with Iranian officials in Tehran. With the threat of new U.S. sanctions looming over them, some foreign firms have already started signaling their intention to pull back from Iran. “The announcement of the possible withdrawal by major European companies from their cooperation with Iran is not consistent with the European Union’s commitment to implementing (the nuclear deal),” Zarif was quoted as saying. He appeared to be referring to announcements by several large European companies last week suggesting their activities in Iran would end or be curtailed because of the reimposition of U.S. sanctions.

Iran’s top envoy to China calls on Beijing to help safeguard nuclear deal | South China Morning Post: Iran has called on China to help safeguard the nuclear deal it reached with other major world powers, saying Tehran will resort to “other options” if its interests are threatened by US sanctions. The nation’s ambassador to China Ali Asghar Khaji said Beijing had a positive role to play in upholding the deal, and should boost economic cooperation with Tehran. He also said the Iranian foreign minister chose Beijing as his first stop on a whirlwind diplomatic tour last week because of China’s “importance” to Iran. “We expect other remaining members of the Joint Comprehensive Plan of Action, including China, to help implement and continue this deal, and fulfil their commitment and obligations according to this deal,” Khaji said, referring to the plan reached in 2015 that will see Iran significantly reducing its uranium stockpile by 2030 in exchange for the lifting of economic sanctions. “If we could gain these rights and benefits from this deal we will stay in it. If these Iranian rights were not satisfied, and our interests were not reached, we will think about other options,” he said in an interview with the South China Morning Post last week, without specifying what the other options were. >German newspaper Welt am Sonntag reported on Sunday that diplomats from Europe, China and Russia are discussing a new accord to offer Iran financial aid to curb its ballistic missile development, in the hope of salvaging the 2015 deal, according to Reuters. The officials will meet in Vienna in the coming week under the leadership of senior European Union diplomat Helga Schmid to discuss the next steps. Last week, Iranian foreign minister Mohammad Javad Zarif met his counterparts from China and Russia, as well as Britain, France, Germany and the European Union, in a bid to rescue the deal. Despite Washington’s withdrawal, all the other signatory nations have vowed to keep the pact alive.

Tehran eyes path ahead after US withdrawal from nuclear pact | Asia Times: The Trump administration’s withdrawal from the Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), has monopolized the highest levels of government in Tehran around the clock since the decision was announced on May 9. Prime Minister Mohammad Javad Zarif, who met yesterday with the European Union’s energy chief Miguel Arias Canete, reiterated that mere words of support from the Europeans are not enough. The JCPOA joint commission meets in Vienna this coming Friday to analyze all options ahead. EU diplomats in Brussels told Asia Times that, contrary to rumors, the European Union is not considering offering financial aid to Tehran in exchange for concessions towards a possible new nuclear deal. What Brussels is desperate to achieve before the first US sanctions kick in from August is to devise a mechanism to contest the dominance of extraterritorial American law – and reassure President Hassan Rouhani, who allegedly has “limited” trust that France, Britain and Germany will affirm an independent foreign policy. Tehran, meanwhile, is considering conducting all its trade and commercial transactions in euro and yuan.

Iran pins hopes on EU measures to get around US oil sanctions – Iran is pinning its hopes on the European Union in its efforts to skirt new US sanctions, while also courting Russian and Chinese investments to keep its oil ambitions alive. “We expect Europe to help us receive the money for the oil we are exporting. We are receiving most of our oil revenue in euros and it needs to have circulation in European banks. This is one of the main [items on the agenda] that we discussed with the European Union,” Iranian oil minister Bijan Zanganeh told journalists Saturday after meeting with EU officials in Tehran. Europe is a key outlet for Iran’s oil, taking around 700,000 b/d, or a third, of Iranian crude exports. A number of European companies have also signed agreements to help Iran develop its oil and gas sector. The EU itself wants to negotiate sanctions waivers with the US for contracts signed by European companies with Iran before May 8, and is committed to helping Iran maintain its crude oil exports, EU Climate Action and Energy Commissioner Miguel Arias Canete said Saturday. Ar “We are going to engage with the US to negotiate the possibility of acceptance of waivers, at least to grandfather contracts concluded at the time the US was a party to the [nuclear] deal, which is particularly important for our companies,” Canete said. This, along with a raft of measures announced on Friday, is designed to shield European companies from the impact of sanctions. France’s Total on Tuesday halted plans to develop Iran’s giant South Pars gas field as it seeks to clarify whether the investment can avoid falling foul of US sanctions. Speaking after a meeting in Tehran with Zanganeh, Canete said that the EU was “going to start legislation to protect companies against sanctions with the Blocking Statute.” This is meant to nullify the effects on the EU of any foreign court judgments.

‘Plan B’: Tehran Gives European Powers One Week to Salvage Nuclear Deal – The Western European signatories to the Iran nuclear deal have until next Friday to provide Tehran with concrete proposals to offset the consequences of the US decision to pull out of the Joint Comprehensive Plan of Action (JCPOA), a senior Iranian official said. “To be honest with you, we are not confident,” the official said, speaking to reporters before the start of Friday’s talks with representatives from Iran, Russia, China, the UK, France and Germany on how Tehran might mitigate the financial and economic impact of Washington’s withdrawal from the JCPOA.”We expect the (economic) package to be given to us by the end of May,” the official noted, according to Reuters. “I’m sorry to say that we haven’t seen Plan B yet. Plan B has just started to be figured out.” According to the official, European measures to encourage Tehran to remain committed to the nuclear deal would need to include guarantees concerning the continuation of Iranian oil exports, as well as guarantees about access to the SWIFT international bank payments system. Earlier Friday, Iranian Deputy Foreign Minister Abbas Araqchi confirmed that Tehran still had to make a decision on the JCPOA. “The European countries should tell us how they would be able to secure Iran’s interests in the JCPOA in the absence of the United States and with the return of the country’s sanctions,” he said. The JCPOA was signed in 2015 by Iran, the US, Russia, China, France, the UK, Germany and the European Union. President Trump’s decision to pull out of the deal was met with condemnation from the other signatories, which are concerned that the United States may be pushing the Middle East into a nuclear arms race.

Iran’s Demands: Europe Must Guarantee It Will Buy Iranian Oil… Or Else Iran’s Supreme Leader Ayatollah Khamenei has issued five demands to the European Union (EU) – including Europe guaranteeing Iran’s oil will be completely sold – that European leaders could find quite difficult to meet. “Iran will resume halted nuclear activities if Europe fails to provide guarantees,” Ayatollah Khamenei said, a week after the EU said that it would act to protect the interests of EU companies investing in Iran as part of the European bloc’s continued commitment to the Joint Comprehensive Plan of Action (JCPOA), commonly known as the Iran nuclear deal.After the U.S. withdrew from the deal, the EU, China, and Russia are trying to salvage the deal, and their diplomats are expected to meet with Iranian counterparts for talks in Vienna on Friday.Ahead of those talks, Iran’s Supreme Leader stated his demands:

• 1. “The US has rejected the Resolution 2231 [the UN resolution endorsing the Iran nuclear deal]; Europe needs to issue a resolution against the US’s violation of it.”
• 2. “Europe must promise not to raise the issues of missiles and regional affairs of the Islamic Republic.”
• 3. “Europe must encounter any sanction against the Islamic Republic and explicitly stand to US’s sanctions.”
• 4. “Europe must guarantee that Iran’s oil will be completely sold. If the US can damage the sale of our oil, we must be able to sell as much oil as we want. Europeans must guarantee that they compensate for the loss, and that they buy Iran’s oil.”
• 5. “European banks must guarantee transactions with the Islamic Republic. We have no conflicts with regard to these three countries; but we do not trust them, based on previous experience.”

According to Eurasia Group analyst Henry Rome who spoke to CNBC, Khamenei’s demands should not be taken as the final position, because he is known to have changed his mind in the past.

Analysis: India could provide Iranian crude with stable outlet at least in near term — Indian refiners could offer Iran some respite at least for the next few quarters as the South Asian crude oil importers are keen to adhere to their term supply contract obligations with the Persian Gulf producer, undeterred by Washington’s efforts to restrain Tehran’s oil sales. The US’ re-imposition of sanctions on Iran has exerted little impact on the trade flows between India and the OPEC producer so far. India’s state-run Bharat Petroleum Corp. Ltd., for one, is set to receive its regular monthly term crude oil cargo from National Iranian Oil Company in the coming days. BPCL’s 190,000 b/d Kochi refinery on the west coast of India will receive 130,000 mt of its monthly term Iranian crude oil for May, trade sources with knowledge of the matter told S&P Global Platts last week. Indian state-run refiners typically source their crude oil requirements through term contracts with a host of suppliers, including Iran. BPCL currently holds a term contract with NIOC to buy 1 million mt for its Kochi refinery over April 2018-March 2019. In April, the refinery received two cargoes totaling 260,000 mt of Iranian crude oil. The impact of US sanctions could be felt after six months, but “not immediately,” a New Delhi-based trade source said. India’s flagship state-run refiner Indian Oil Corp. also holds a term contract with Iran to receive 180,000 b/d in the current fiscal year ending March 2019.

Hedge funds exit crude oil but stay bullish on fuels: Kemp (Reuters) – For all the bullish commentary about oil prices at the moment, hedge fund managers have continued to take profits after the recent rally and are trimming their net long positions rather than adding to them.Focusing on what people do rather than what they say is one of the most important lessons for any good analyst (actions always speak louder than words).Hedge funds and other money managers cut their net long position in the six most important petroleum futures and options contracts by 16 million barrels in the week to May 15 (https://tmsnrt.rs/2Li5RO7).Fund managers have cut their net long position in the petroleum complex in each of the last four weeks by a total of 71 million barrels, according to records published by regulators and exchanges.Liquidation has been concentrated in crude oil, where the net long position in Brent and WTI has been reduced by a total of 124 million barrels over the last four weeks.Net long positions in Brent have fallen by 84 million barrels over five consecutive weeks, while net length in NYMEX and ICE WTI has dropped by 53 million over four weeks. But, while portfolio managers have been reducing their bullish exposure to crude, they have been boosting their net long positions in refined fuels. Portfolio managers have accumulated record net positions of 124 million barrels in U.S. gasoline and 160 million barrels in European gasoil, as well as a near-record 86 million barrels in U.S. heating oil.The rotation of positions from crude to fuels reflects strong consumer demand and shrinking inventories of products, coupled with profit-taking in crude oil after a strong rally since the end of June 2017.

Crude oil futures rise as US-China trade war on ‘hold’, US rig data –Crude oil futures were higher during mid-morning Asia trade Monday as concerns of a US-China trade war abated after US Secretary Steven Mnuchin said that both countries were “putting the trade war on hold” as they worked out an agreement. The bullish Baker Hughes report on US shale oil rig count had also provided some support to oil prices. At 11.25 am Singapore time (0325GMT), July ICE Brent crude futures was up 54 cents/b (0.69%) from Friday’s settle to $79.05/b, while the June NYMEX light sweet crude contract rose 59 cents/b (0.83%) to $71.87/b. The trade war between US and China is currently “on hold” after the two countries agreed to drop their trade tariff threats to work on a broader trade agreement, U.S. Treasury Secretary Steven Mnuchin Sunday said. Even though the agreement lacked the specific $200 billion reduction in the US trade deficit with China that was US President Donald Trump’s signature demand on trade, the president halted tariffs he had threatened to impose on $150 billion in Chinese products. Chinese Vice-Premier Liu He described the deal as a “win-win choice”. “The agreement to suspend plans for further imposition of tariffs ahead of the consultation deadline for the $150 billion tariff plan did help to hold up the near term sentiment with respect to this geopolitical concern,” IG market strategist Pan Jingyi said. Meanwhile, data released by Baker Hughes Friday showed that US shale rig count were unchanged for the week ending May 18 at 844.

Oil Prices Up almost 50% Year-over-year – First, an excerpt from a research note by Merrill Lynch economists today: If bad luck intersects with bad policy, a recession becomes a real risk. We would keep a particularly close eye on two traditional business-cycle killers-the Fed response to stronger-than-expected inflation in the US and a growing shortage of oil, pushing prices to new heights. So far the increase in oil prices isn’t a concern for the economy, but it is something to watch. The first graph shows WTI and Brent spot oil prices from the EIA. (Prices today added). According to Bloomberg, WTI is at $71.40 per barrel today, and Brent is at $78.30. Prices collapsed in 2008 due to the financial crisis, and then increased as the economy recovered. Oil prices collapsed again in 2014 and 2015, mostly due to oversupply. Now oil prices are rising sharply again. The second graph shows the year-over-year change in WTI based on data from the EIA. Six times since 1987, oil prices have increased 100% or more YoY. And several times prices have almost fallen in half YoY. Oil prices are volatile! Currently WTI is up about 50% year-over-year.

Rising Fuel Prices Could Offset Tax Cuts – The U.S. Environmental Protection Agency (EPA) is reviewing the fuel economy standards that is says are “not appropriate”, putting the federal government and California on a collision course over the plans to weaken the rules. Amid this debate and the rising oil prices that led to continuously rising gasoline prices for American consumers at the start of the peak summer driving season, Securing America’s Future Energy (SAFE) – an organization which advocates for policies to boost U.S. energy security by significantly reducing dependence on oil and promoting responsible use of domestic energy resources – is calling on EPA Administrator Scott Pruitt to seize the fuel standard revision opportunity “to protect American businesses and consumers by optimizing, not weakening, fuel economy standards.” Rising gas prices at the pump as we enter the summer driving season threaten to offset the benefits of President Trump’s tax cuts, John W. Handy and Michael Johnson – members of SAFE’s Energy Security Leadership Council (ESLC) – argue in an article published in The Hill. That’s why they are calling on U.S. policymakers to address both supply-and demand-side solutions for reducing America’s dependence on foreign oil. These include maintaining fuel economy standards to help cut the U.S. reliance on oil, whose price has jumped by 67 percent in the past 11 months to more than US$70 a barrel. “The U.S. consumes one-fifth of daily global supply and has a transportation system that is 92 percent dependent on oil, leaving our economy exposed on both the supply and demand side to an opaque, volatile, and unfree oil market,” SAFE’s leadership council members say. The key argument in their call on EPA’s Pruitt is that by maintaining the fuel standards by 2030, the U.S. will significantly boost its oil exports and cut reliance on oil imports.“Since they were introduced in response to the 1973 oil embargo, fuel economy standards are the single most impactful policy we have in protecting ourselves from oil price volatility,” Handy and Johnson wrote.

Trans-Atlantic Oil-Price Spread Soars as Supply Glut Disappears – WSJ — U.S. oil prices are lagging behind global oil prices climbing toward $80 a barrel, the latest sign of a market that has gone from glutted to exceptionally tight in the past year. U.S. oil futures are trailing Brent, the global benchmark, by nearly $7 a barrel, settling at $72.24 a barrel on Monday. Last week, the difference was even wider, approaching $8 a barrel, based on closing prices. The two benchmarks haven’t been that far apart since 2015, before U.S. crude could be freely exported. The divergence is a sign of how stretched global oil supplies have become even as U.S. output has marched higher, overtaking Saudi Arabia and rivaling Russia. That has contributed to soaring U.S. exports, which have hit a record of nearly 2.6 million barrels a day as users clamor for it. “The market is screaming right now, ‘We need every barrel we can get,’ ” said Phil Flynn, an analyst at the Price Futures Group. Both benchmarks have been on a tear lately. The Organization of the Petroleum Exporting Countries and its allies have been holding some oil off the market for more than a year, and demand has surged as the global economy roared to life. .Unexpected disruptions, such as plunging oil production from Venezuela, have tightened supplies even further. A glut of oil that held prices down for years is essentially gone. Higher oil prices are starting to boost inflation and some worry that they will rein in the pace of economic growth, cutting into disposable income. .U.S. gasoline prices have climbed to nearly $2.93 a gallon on average, and are already more than $3 in several states. Companies such as Walmart Inc. have warned that higher fuel prices are starting to threaten margins. Retail fuel prices have historically been more closely tied to the world benchmark rather than the national one, since gasoline is exported. Lately, Brent has been pulling ahead of West Texas Intermediate, the U.S. benchmark. Tensions in the Middle East and anticipation that renewed sanctions will crimp Iran’s oil exports are having an outsize impact on global prices.

Forget About Oil at $80. The Big Rally Is in Forward Prices — Brent crude oil grabbed all the attention after spot prices hit $80 a barrel last week. And yet, almost unnoticed, a perhaps more important rally has occurred in the obscure world of forward prices, with some investors betting the “lower for longer” price mantra is all but over. The five-year Brent forward price, which has been largely anchored in a tight $55-to-$60 a barrel range for the past year and a half, has jumped over the last month, outpacing the gains in spot prices. It closed at $63.50 on Friday. “For the first time since December 2015, the back end of the curve has been leading the complex higher,” said Yasser Elguindi, a market strategist at Energy Aspects Ltd. in New York. “It seems that the investor community is finally calling into question the ‘lower for longer’ thesis.” While spot prices fluctuate wildly, often driven by geopolitics such as U.S. sanctions on Iran, the five-year forward usually trades in a narrower range, anchored by longer views about future supply and demand. Over the past three years, long-dated prices had been weighed down by the belief the growth in U.S. shale production, combined with the adoption of electric vehicles, would keep prices under control. Investors are now questioning that hypothesis, pushing up forward prices. Over the past month, Brent five-year forward futures gained 11 percent, compared with a 6.8 percent increase in futures for immediate delivery.

Crude Oil Prices Settle Higher Amid Rising Geopolitical Uncertainty – WTI crude oil prices settled higher on Monday as geopolitical uncertainty rose after weekend elections in Venezuela viewed as illegitimate raised the prospect of US sanctions on the country’s exports. On the New York Mercantile Exchange crude futures for July delivery rose 1.4% to settle at $72.24 a barrel, while on London’s Intercontinental Exchange, Brent gained 1.06% to trade at $79.36 a barrel. Venezuela’s Nicolas Maduro risked further pressure from the International community as his re-election win on Sunday, raised the prospect of US sanctions on the Venezuela, which would further batter the country’s beleaguered energy industry. Ahead of U.S. sanctions on Iran, meanwhile, U.S. Secretary of State Mike Pompeo threatened even tougher sanctions against the Islamic Republic. Pompeo claimed the sanctions would be the “strongest in history when complete.” The prospect for a disruption to global oil supplies is expected to increase the pace of rebalancing in the oil market, prompting analysts to raise their forecast for oil prices. Citigroup raised its base-case oil-price forecast by $10 a barrel in 2018, up to $75 barrel annual average and said oil prices would continue to trend higher through 2018. “Our expectation for balancing, from a market currently in deficit, has been pushed to the second quarter of 2019 from the third quarter of 2018 period we expected previously,” Citigroup said. The bank sees Venezuelan production likely falling below 1 million barrels per day before the end of the year. Output in Venezuela has dropped by a third in two years to its lowest in decades, according to Reuters. Traders, continued, however, to take profits on the recent rally in oil prices as data showed they cut their bullish bets on crude oil for the fourth straight week.

Iran Tensions Send Oil Spiking Again – Oil prices rose on Monday after the U.S. announced a bellicose list of demands on Iran, leaving little chance of a new accord. Oil prices were up “specifically because of Pompeo’s speech,” Thomas Pugh, commodities economist at Capital Economics, told the Wall street Journal. “It certainly looks like the U.S. is going to go as hard as possible on sanctions and try their best to make it hurt.”. On Monday, Secretary of State Mike Pompeo issued a long list of extreme demands on Iran as prerequisites for a new deal, without offering any concessions or carrots. The demands include stopping all uranium enrichment activity and also stopping all support for militants in the Middle East. Unsurprisingly, Iran immediately rejected the demands. Pompeo’s speech was clearly not designed to reach an understanding between the two countries, and it puts the U.S. and Iran on track for more confrontation. America’s top diplomat also signaled that there would be little leeway granted to European companies seeking to do business with Iran. . Iran is leaning on the EU to make euro-denominated purchases of Iranian oil as a way to avoid U.S. sanctions. Iran says Europe’s effort to rescue the nuclear deal is so far insufficient. On Monday, the Trump administration barred the purchase and sale of Venezuelan government debt, including new debt issued by PDVSA and the central bank. The U.S. held off on sanctions on oil sales for now, but a State Department official said those measures were “under active review.” Venezuela might avoid being hit by those harsher measures because oil prices have climbed to three-year highs. “I really don’t think they will ban imports in this price environment,” David Goldwyn, president of Goldwyn Global Strategies and a former special envoy for international energy affairs under the Obama administration, told S&P Global Platts. OPEC is reportedly watching Venezuela’s plunging oil production, which could force the group to tweak its output limits at the upcoming meeting in Vienna. “Maybe, if the market is tight, there will be a need to make some adjustment,” one OPEC delegate told Reuters.

Crude higher on possible supply disruptions in Venezuela; ICE Brent at $79.64/b, NYMEX WTI $72.51/b– Crude oil futures trended higher during Tuesday morning European trading, underpinned by news that the US will impose new sanctions on Venezuela following Sunday’s re-election of Nicolas Maduro as president. At 1125 GMT, ICE July Brent crude futures were up 42 cents from Monday’s settle at $79.64/b, while the NYMEX June light sweet crude contract was up 27 cents/b at $72.51/b. “The market is contemplating the impact of further economic decline in Venezuela as a result of US sanctions and what this will mean in terms of the quantity of production and exports,” Ole Hansen, head of commodity strategy at Saxo Bank, said. The new penalties to be imposed by the US on the South American country will bar US companies from the purchase or sale of any debt or accounts receivable from the Venezuelan government, including PDVSA, the state-owned oil and gas company. In the meantime, speculation into whether OPEC and Russia will step away from the deal to cap crude oil production sooner rather than later was said to be preventing prices from climbing even higher. “It may not be in OPEC’s interest to see prices higher than they are now,” said Hansen. “The yet unquantifiable reduction in Iran has been priced in and hedge funds have been rallying to reduce positions in anticipation that OPEC may want to step away from the deal.”

Crude Oil Prices Settle Lower Despite Expectations for Global Supply Shortage – WTI crude oil prices settled lower after hitting a three-and-a-half year high on Tuesday as the prospect of global supply disruptions remained elevated amid looming sanctions on Iran and falling Venezuelan crude output. On the New York Mercantile Exchange crude futures for July delivery fell 11 cents to settle at $72.13 a barrel, while on London’s Intercontinental Exchange, Brent rose 0.52% to trade at $79.63 a barrel. The United States imposed new sanctions on Venezuela on Monday following President Nicolas Maduro re-election on Sunday – viewed as illegitimate. While the immediate sanctions were aimed at restricting the South American country from selling assets, reports said sanctions on the country’s oil industry may soon follow. Venezuelan production would likely fall below 1 million barrels per day before the end of the year, Citigroup said on Monday. The prospect of lower output from Venezuela raised expectations that the market will be undersupplied as Iran sanctions loom and global demand rises. The United States on Monday, meanwhile, threatened even tougher sanctions against Iran as U.S. Secretary of State Mike Pompeo claimed the sanctions would be the “strongest in history when complete.” “Our expectation for balancing, from a market currently in deficit, has been pushed to the second quarter of 2019 from the third quarter of 2018 period we expected previously,” Citigroup said. Heading into settlement, meanwhile, sentiment on oil prices were also supported by expectations U.S. crude supplies would fall for a third-straight week. A fresh batch of inventories data from the U.S. Energy Information Administration data on Wednesday is expected to show U.S. crude stockpiles fell by 1.567 million barrels last week.

OPEC looking closely at Venezuelan oil output drop: sources (Reuters) – OPEC is looking closely at a drop in oil output from Venezuela to see if the loss of supply from the member state warrants action by the group, sources familiar with the matter said. This marks a shift from earlier this year, when OPEC officials downplayed the drop in Venezuelan production. And it follows a rise in prices and a decline in global inventories that is making tighter supply more significant. Falling Venezuelan output due to an economic crisis has helped the Organization of the Petroleum Exporting Countries deliver a bigger cut than intended under its pact with Russia and other producers to curb supplies and remove a global glut. The pact, which began in January 2017 and runs to the end of 2018, will be reviewed when OPEC meets on June 22 to review policy. OPEC’s compliance with the deal reached an unprecedented 166 percent in April, meaning it has cut well above its target. “Maybe, if the market is tight, there will be a need to make some adjustment,” one OPEC delegate who declined to be identified said, referring to the June meeting. Global inventories have eased back close to their five-year average, the measure originally targeted by OPEC and its allies. The output reductions combined with worries about supply disruptions due to U.S. sanctions on Iran pushed oil prices above $80 a barrel last week, the highest since November 2014. Brent crude, the global benchmark, was trading at $78.33 on Monday. Iranian supply has not yet been affected by the U.S. decision to withdraw from an international nuclear deal and its warning of that it would impose touch sanctions. The energy minister for the United Arab Emirates, which currently holds the OPEC presidency, said last week that OPEC had more significant issues to deal with than Iran. He cited Venezuela.

Oil Holds Near 3-Year High Amid Venezuela Sanction Concerns — Oil settled slightly lower after trading near the highest price in almost 3 1/2 years as new sanctions on Venezuela and shrinking U.S. crude inventories spurred concerns about tightening worldwide supplies.Futures fell 0.2 percent on Tuesday after rising earlier. President Donald Trump’s latest sanctions against the regime of Venezuelan leader Nicolas Maduro that threaten to further choke the Latin American nation’s already-hobbled petroleum industry. Meanwhile, a U.S. government tally on Wednesday is expected to show crude inventories fell for a third straight week, which would be the longest streak of declines since January. Oil is trading at the highest levels since late 2014 as Middle East conflicts, U.S. sanctions on Iran and plunging Venezuelan output intensify supply concerns. The Organization of Petroleum Exporting Countries and allied nations have been curbing output since the start of 2017 to prop up prices. Still, some traders were cautious about how durable the rally will be, given weakness in the spread between futures contracts pegged to different months, a gauge of the health of the physical market. OPEC may raise oil output as soon as June on concerns about Venezuelan production and possible Iranian supply shortages, Reuters reported, citing OPEC and oil industry people that weren’t identified. “That means inventories wind down a little slower than people thought,” West Texas Intermediate for June delivery, which expired Tuesday, fell 11 cents to settle at $72.13 a barrel on the New York Mercantile Exchange, after earlier touching $72.83. The July contract fell 15 cents to $72.20. Brent futures for July settlement advanced 35 cents to $79.57 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $7.37 premium to WTI for the same month.

RBOB Extends Losses After Surprise Gasoline Inventory Build — After the worst day for energy stocks in two weeks as crude turned negative amid reports that OPEC is said to be considering raising oil output, WTI rallied and RBOB kneejerked lower after API reported a smaller than expected crude draw and surprise gasoline build. API:

• Crude -1.3mm (-1.9mm exp)
• Cushing -822k (-250k exp)
• Gasoline +980k
• Distillates -1.3mm

The International Energy Agency has started discussions with major oil-producing countries about their ability “to make up the loss from Venezuela or elsewhere,” Executive Director Fatih Birol said in a Bloomberg Television interview.But, analysts remain convinced that things are going to get tighter…“The fundamental picture continues to show signs of tightening,” said Gene McGillian, market research manager at Tradition Energy. “The uncertainty on geopolitical issues is also contributing to the rally.”But prices slid today into the API print…then diverged (WTI higher, RBOB lower) after…

How To Mitigate The Risk Of Peak Oil Demand – There is a lively debate in the world of oil & gas surrounding the concept of peak demand. In essence, this debate centers around the question of when oil & gas demand will reach its peak and begin to decline. This debate has become especially heated due to three recent catalyst. Firstly, the adoptions of electric vehicles (EVs) and their potential to disrupt oil’s number one pillar of demand: gasoline. Secondly, the continued growth of renewables, which have the potential to disrupt the largest natural gas market: electricity generation. Finally, the general public’s increasing awareness of, and concern about, greenhouse gas emissions and their impact on the climate. The subject of peak demand has raised concern among shareholders of International Oil Companies (IOCs), and some are now even trying to force their companies to study the subject. The shareholders’ concern is explained by the fact that if peak demand occurs, the oil companies might be left with “stranded assets” – assets in which billions of shareholder dollars have been invested. However, since the lion’s share of oil existing reserves are not held by the IOCs, but by OPEC’s members (and the NOC’s that produce these resources), it would seem logical that it is the NOCs that have to worry most about peak demand and stranded assets. If/when peak demand hits, the global oil & gas markets will change fundamentally. Not because oil and gas demand would disappear overnight – that is not a realistic assumption considering the multitude of uses of the two commodities. But peak demand would result in another major supply glut, especially as shale technology is opening up new opportunities for production, putting downward pressure on oil prices. In the “lower forever” environment that might result from this permanent glut, profit focused organizations would look to the lowest cost basins, most of which are located in OPEC’s major oil producing nations – Venezuela, Saudi Arabia, Iran, UAE, Kuwait, and Russia. Therefore, in what seems an ironic twist of fate, the countries that seem to have most to fear from peak demand will also most likely be the ones that remain standing if / once peak demand happens. It is other nations with more complex geological or political realities such as Indonesia that will feel the immediate pain of peak demand. Interest in their production potential will disappea as drillers will find it too burdensome and thus too costly to explore, develop or produce at lower prices levels.

WTI/RBOB Plunge After Massive Surprise Crude Inventory Build – WTI and RBOB are trading lower since last night’s API data, but plunged as DOE reported a massive surprise 5.78mm crude build, a surprise gasoline build, and a new record for US crude production.Bloomberg Intelligence Senior Energy Analyst Vince Piazza notes that inventory draws across the petroleum value chain are supporting oil prices and refining margins, though unexpected strength in output is a counterweight.“It’ll be interesting to see how the data will look today, especially with pressure ahead of Memorial Day,” says Tariq Zahir, commodity fund manager at Tyche Capital Advisors LLC.“We’ll be expecting to see a bit of a tick up in gasoline demand” DOE

• Crude +5.778mm (-2mm exp)
• Cushing -1.123mm (-250k exp)
• Gasoline +1.883mm (-1.43mm exp)
• Distillates -951k

Shockingly yuuuuuge crude build… and not helped by a big surprise gasoline build… Total crude and product inventories increased 6.73 million barrels, the biggest jump since February. On the supply side, there has been a steeper than usual rise in rig counts since the start of April and production continues to surge to ever-increasing record highs as crude prices – although the last week saw only a modest rise of 2k b/d…A production decline in Alaska was more than offset by a 24,000 barrel-a-day increase in the Lower 48. On the demand side of the equation, Bloomberg’s David Marino notes that gasoline is nearing $3 a gallon for the first time since 2014 as Memorial Day weekend approaches. The IEA, Total’s CEO and India’s oil minister all expressed concern last week that crude above $80 a barrel may deflate demand growth. Crude exports slowed by 818,000 barrels a day, not helping the overall bearish picture for oil.

Oil falls on shock U.S. stock builds, OPEC supply worries – (Reuters) – Oil benchmarks fell on Wednesday after an unexpected build in U.S. crude and gasoline inventories despite strong demand, and as traders weighed a possible increase in OPEC crude output to cover any shortfalls in supply from Iran and Venezuela. U.S. crude inventories rose 5.8 million barrels last week, while gasoline stocks increased by 1.9 million barrels, the Energy Information Administration said. [EIA/S] “Normally, you don’t see builds at this time of year. With Memorial Day Weekend and summer driving season coming up, we were expecting a draw. And getting a build – and such a large build, was surprising,” said Tariq Zahir, managing member at Tyche Capital Advisors. Brent crude LCOc1 futures slipped 23 cents to settle at $79.80 a barrel, while U.S. crude CLc1 lost 36 cents to $71.84 a barrel. “A 5.8 million-barrel build is kind of like a slap in the face, where it’s like, ‘Where did this oil come from?’ And as you look through the numbers, it doesn’t make a lot of sense,” said Phil Flynn, analyst at Price Futures Group in Chicago. “It is definitely a shock to the system.” The increase in U.S. inventories came from a combination of reduced exports and rising imports. The latter is somewhat surprising, Flynn said, because Brent crude is trading at more than a $7 premium to U.S. crude, making exports more attractive.

Has oil price reached its peak? OPEC could swing into action that may turn the heat off of oil – Crude oil price has surged about $30 a barrel in last nine months, unleashing anxiety on countries such as the United States, India, and China. The crude oil price rallied mainly on production cuts by OPEC-members and non-members led by Russia but other geopolitical factors contributed too.Now that the oil is hovering around $80 a barrel, a Reuters report said that OPEC may decide to raise oil output, which subsequently may bring down the international oil prices. Gulf OPEC countries are leading the initial talks on when the exporting group can boost oil production to cool the oil market after crude rose above $80 a barrel last week, and how many barrels each member can add, Reuters reported quoting unnamed sources.The production cut target reached unprecedented 166% in April as Venezuelan economic crisis led to a bigger cut than intended. Meanwhile, Saudi Arabia is also monitoring the impact on oil supplies of the US withdrawal from the Iran nuclear deal and is ready to offset any shortage but it will not act alone to fill the gap. Oil prices fell on Thursday, pulled down by expectations that OPEC members could step up production. International benchmark Brent futures were down 15 cents, or 0.19%, at $79.65 per barrel and US West Texas Intermediate (WTI) crude futures were down 10 cents, or 0.14%, at $71.74 a barrel.

Oil slips further below $80/bbl on talk OPEC may lift output (Reuters) – Oil prices fell about $1 on Thursday, with expectations building that reduced supplies from Venezuela and Iran could prompt OPEC to wind down output cuts in place since the start of 2017. Brent crude LCOc1 futures fell $1.01 to settle at $78.79 a barrel, a 1.27 percent loss. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $1.13 to settle at $70.71 a barrel, a 1.57 percent loss. The Organization of the Petroleum Exporting Countries may decide in June to lift output to make up for reduced supply from crisis-hit Venezuela and Iran, which was stung by the U.S. decision to withdraw from the nuclear arms control deal, OPEC and oil industry sources told Reuters. Russian Energy Minister Alexander Novak said production cuts could be eased “softly” if OPEC and non-OPEC countries see the oil market balancing in June, the Interfax news agency reported. Russia and Saudi Arabia have a common position on the future of the oil output cut deal, Novak told Interfax news agency, though he said the deal would stay in place for now. Russia’s Lukoil said the deal should remain in place but needs to be altered. “We still believe that a production increase will still be forthcoming that will become official at next month’s OPEC meeting,” “In the meantime, even the slightest suggestion of such a decision, especially from the Saudis, could force a 1-2 percent price selloff as seen this morning.” Venezuela’s output has fallen to about 1.4 million barrels per day, according to OPEC secondary sources, as its economic crisis grows and state-run PDVSA struggles to pay debts and fund operations. Supply concerns have pushed crude to multi-year highs, with Brent last week breaking above $80 a barrel for the first time since November 2014. OPEC and some other major oil producers, scheduled to meet in Vienna next month, previously agreed to curb combined output by about 1.8 million bpd to boost prices and clear a supply glut.

OPEC may decide to ease oil supply curbs in June: sources (Reuters) – OPEC may decide to raise oil output as soon as June due to worries over Iranian and Venezuelan supply and after Washington raised concerns the oil rally was going too far, OPEC and oil industry sources familiar with the discussions told Reuters. Gulf OPEC countries are leading the initial talks on when the exporting group can boost oil production to cool the oil market after crude rose above $80 a barrel last week, and how many barrels each member can add, the sources said. The Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russia have agreed to curb output by about 1.8 million barrels per day (bpd) until the end of 2018 to reduce high global oil stocks, but the inventory overhang has now fallen close to OPEC’s target. “All options are on the table,” one Gulf oil source told Reuters, adding that a decision to raise output might be taken in June when OPEC next meets to decide on its output policy, but there is no certain number yet by how much the group would need to ease its oil supply curbs. OPEC and its non-OPEC allies may opt to relax record high compliance with the supply curb agreement, another source said. OPEC’s compliance with the deal reached an unprecedented 166 percent in April, meaning it has cut well above its target. “We are still studying the different scenarios,” the second source said, adding that even if OPEC decided to ease the output restrictions in June it may take three to four months to put into effect. “That is one of the options,” an OPEC source said, referring to adding more supply at the June meeting.

Compliance relaxation on St Petersburg agenda — Saudi Arabia, Russia and the president of Opec are likely this week to discuss a controlled relaxation of over-compliance with the Opec and non-Opec production-cut target. Saudi oil minister Khalid al-Falih, his Russian counterpart Alexander Novak, and UAE energy minister Suhail al-Mazrouei, the Opec president, will meet in St Petersburg. Such a relaxation is a “big possibility”, said a Gulf source familiar with Saudi thinking. An agreement would mean Opec’s kingpin, the leading non-Opec participant in cuts, and the current Opec head would have a strong proposal to take to next month’s gathering of oil ministers in Vienna. An early full unwinding of the Opec and non-Opec cuts is not currently under consideration. The production agreement, which runs to the end of this year, aims to take around 1.7mn b/d out of production. A collapse in Venezuelan output means compliance of Opec’s 14 members rose to a record high of 181pc in April, according to Argus estimates. Non-Opec discipline is less impressive but overall compliance still provides scope for participants with spare capacity to relax their output constraint and bring the overall rate closer to 100pc. Saudi Arabia is the custodian of the bulk of Opec spare capacity and Russian companies are keen to boost output. Saudi Arabia is keen to preserve long-term co-operation with Moscow on balancing the market and so is very likely to agree that Russia benefits from a relaxation. In assessing the current market, Opec confronts several issues. The source said “fundamentals are sound” – OECD commercial inventories are falling and are likely to hit their moving five-year average by the end of 2018 or sometime in the first quarter of next year, which would argue for keeping current production levels in place. Opec had indicated that bringing down OECD commercial stocks to their five-year average would indicate a balanced crude market. Al-Falih and ministers from participating countries have over recent weeks said the search for alternative metrics is underway. The Gulf source said prices are rising on expectations of a further decline in Venezuelan output and a possible decline in Iranian exports because of US sanctions, rather than on actual current supply-demand fundamentals. The uncertainty surrounding how US sanctions will affect Iranian exports means Opec and its main Mideast Gulf producers – particularly Saudi Arabia, the UAE and Kuwait – will keep issuing reassurances that they will plug any shortages that arise.

OPEC, Russia prepared to raise oil output under U.S. pressure (Reuters) – Saudi Arabia and Russia are discussing raising OPEC and non-OPEC oil production by some 1 million barrels a day, sources said, while OPEC’s chief said a complaint from U.S. President Donald Trump over high prices had triggered the idea of upping output. Riyadh and Moscow are prepared to ease output cuts to calm consumer worries about supply adequacy, their energy ministers said on Friday, with Saudi Arabia’s Khalid al-Falih adding that any such move would be gradual so as not to shock the market. Raising production would ease 17 months of strict supply curbs amid concerns that a price rally has gone too far, with oil LCOc1 having hit its highest since late 2014 at $80.50 a barrel this month. OPEC began a discussion about easing production cuts following a critical tweet from Trump, OPEC’s Secretary-General Mohammad Barkindo said. Trump tweeted last month that OPEC had “artificially” boosted oil prices. “We pride ourselves as friends of the United States,” Barkindo told a panel with the Saudi and Russian energy ministers in St. Petersburg at Russia’s main economic forum. The Organization of the Petroleum Exporting Countries and allies led by Russia have agreed to curb output by about 1.8 million barrels per day (bpd) through 2018 to reduce global stocks, but the inventory overhang is now near OPEC’s target. In April, pact participants cut production by 52 percent more than required, with falling output from crisis-hit Venezuela helping OPEC deliver a bigger reduction than intended. Sources familiar with the matter said an increase of about 1 million bpd would lower compliance to 100 percent of the agreed level.

A meeting between Secretary Perry and OPEC? Unlikely, say analysts — It would be unprecedented, but Senate Democrats want the Trump administration to send Energy Secretary Rick Perry to Vienna next month for an OPEC meeting. Perry should go to the June 22 meeting in Vienna “to personally communicate the importance of maintaining stable crude oil prices,” four senators wrote in a letter to President Trump Wednesday. The letter, signed by Democratic senators Chuck Schumer of New York, Maria Cantwell of Washington, Robert Menendez of New Jersey and Edward Markey of Massachusetts, includes a list of requests to Trump, including pressing Saudi Arabia to increase oil production, all aimed at lowering domestic gasoline prices. Trump is unlikely to even consider most of the requests, sources said, but could his recent focus on OPEC’s supply cut agreement and political pressure from Democrats on gasoline prices prompt the first-ever visit by a US energy secretary to an OPEC meeting? “It’s pretty unlikely to me that they would even send Secretary Perry to Vienna,” said Jason Bordoff, a former energy policy adviser to former President Barack Obama and founding director of Columbia University’s Center on Global Energy Policy. Bordoff said in previous administrations officials have pressed some OPEC ministers to consider the impact high energy prices may have on global economic growth.

Factbox: OPEC strategy reversal hits energy resources – Platts – Global oil prices fell by up to 3% Friday after Saudi Arabia said it is working on a plan with allies to boost oil supplies in the second half of this year. OPEC and its partners led by Russia had been expected to maintain their strategy of 1.8 million b/d of cuts until the end of the year. However, the group has faced mounting criticism from major consuming nations over failing to dampen prices climbing above $80/b. Saudi energy minister Khalid al-Falih said Friday that the OPEC-led coalition will consider gradually increasing oil production quotas within the next few weeks. The reversal in strategy comes as the market faces a loss Venezuelan barrels and disruption to Iranian crude exports following the introduction of new US sanctions by year-end. ICE Brent futures fell to an intra-day low of $76.63/b in London mid-morning trade, a fall of $2.18/b from the Thursday’s settlement. OPEC and 10 non-OPEC producers, led by Russia, are in the midst of a 1.8 million b/d supply cut deal which is scheduled to run through the end of 2018. The Vienna-based group and other key producers will meet in late June in the Austrian capital to review the oil market. The following is a summary of background details to Falih’s remarks and energy market price reaction. The International Energy Agency has warned that a potential supply crunch from Iran and Venezuela could present a “major challenge” for oil producers if they are to fend off sharp price rises and fill the gap. The IEA also said OECD oil stocks had fallen below the five-year average level for the first time in March, by 1 million barrels, representing a benchmark for the success of OPEC/non-OPEC production cuts. In its monthly oil market report the IEA lowered its estimate for growth in world oil demand this year to 1.4 million b/d, from 1.5 million b/d due to higher oil prices.

U.S. Rig Count Rises Amid Crashing Oil Prices – US drillers added 13 rigs to the number of oil and gas rigs this week, according to Baker Hughes, with oil rigs increasing by 15 and gas rigs dipping by 2. The oil and gas rig count now stands at 1,059 – up 151 from this time last year. The Permian basin saw the biggest increase in the number of rigs, at 11. Meanwhile, neighboring Canada lost 2 oil and gas rigs for the week. Both the Brent and WTI benchmark took a steep nosedive on Friday day at 9:03am EST with both benchmarks sustaining more than a 2% loss on the day, as Saudi Arabia – OPEC’s largest member by production – and Russia were reportedly discussing lifting production by some 1 million barrels per day, with a decision expected on June 22 at the OPEC meeting in Vienna. This, despite OPEC’s compliance which has been over 100% for every month this week. Saudi Arabia and Russia are working to offset market fears that there will be imminent supply issues courtesy of Venezuela and Libya, and the possibility of disruption in oil supply from Iran due to the US sanctions that will go into effect later this year. At 9:03 am, WTI crude was trading down $1.90 (-2.69%) at $68.81, with Brent crude trading down$1.91 (-2.42%) at $76.92 – an almost $3.00 loss over last week. US oil production is also pressing down on oil prices, and for the week ending May 18, reaching 10.725 million bpd – the thirteenth build in as many weeks, although this week saw a smaller growth than in recent weeks. US production has steadily increased since OPEC engaged in a supply cut deal that sought to remove 1.8 million bpd from the market. At the time the deal was announced, the US was producing 8.6 million bpd. Today, the US is producing more than 2.0 million bpd over that figure, while OPEC/NOPEC continues to curb supply on its end. At 8 minutes after the hour, WTI was trading down 4.02% at $67.87, with Brent trading down 3.04% at $76.43 – for a staggering loss week on week.

OPEC Sends Oil Prices Crashing – Oil prices plunged in early trading on Friday on news that OPEC and its partners, including Russia, are considering a loosening of their production limits (more below). Both WTI and Brent fell by more than 3 percent Friday morning. Saudi Arabia and Russia are in discussions about raising their production limits, perhaps adding as much as 1 million barrels per day to the market. The group could announce a change in Vienna next month. The steep losses from Venezuela meant that OPEC’s compliance with the cuts surpassed 150 percent last month. The idea would be to bring compliance back down to 100 percent, which would mean allowing members to produce more to offset Venezuela’s declines. Nothing is finalized yet and the talks will continue for the next few weeks. Oil prices sank on the news. U.S. oil exports hit a new record at 2.6 million barrels per day two weeks ago, but have dipped since then. Most analysts see exports continuing to rise, particularly with WTI trading at a steep $8-per-barrel discount relative to Brent. However, there are concerns that U.S. port infrastructure won’t be able to handle much higher levels of exports. Export capacity data isn’t tracked and the exact capacity is not known, although it is thought to be around 3.5 mb/d. As of now, the Louisiana Offshore Oil Port (LOOP) is the only Gulf Coast port that can handle very large crude carriers (VLCCs). “So far, export capacity is keeping pace, but we are walking a tightrope,” Bernadette Johnson, vice president at DrillingInfo, told Reuters. BP said it will slash 3 percent of its workforce in its upstream unit this year, eliminating more than 500 positions. The oil giant said the move was done in the name of efficiency and competitiveness. Industry veteran Mark Papa, CEO of Centennial Resource Development and former head of EOG Resources says that the growth projections for U.S. shale are overly optimistic. Papa says growth disappointed last year and would continue to undershoot expectations, largely because the best sites have already been drilled. In the Eagle Ford and the Bakken “my estimate is that about 70% of the good quality drilling locations have already been drilled,” Papa said, according to S&P Global Platts.

Oil Plunges Below $70 After Saudis, Russia Say “Likely Supply Boost” In Second Half Of 2018 – There are certain benefits when the president of the US is BFFs with the ruling Saudi regime, especially when the price of oil rises so high it threatens to not only undo the US president’s tax reform, but to slowdown the overall economy even as said president is injecting a $1 trillion fiscal stimulus in it. We saw that in practice moments ago when Saudi energy minister Khalid Al-Falih said OPEC and Russia are prepared to adjust policy in June, and that it is likely that there will be a gradual oil supply boost in the second half. The stated reason: “The anxiety of consumers is now a concern to us”, translated: between the IEA’s forecast of demand destruction the higher the price of oil rises, and Trump’s periodic reminders to pump more as US gas prices are getting too high, Saudi Arabia had no choice but to take the first step toward undoing the Vienna oil supply cut agreement. As Bloomberg adds, “the proposal would end a period where the group made significantly deeper output reductions than specified in their original agreement, while also preserving the political and economic alliance between Moscow and Riyadh that has reshaped the global oil market and the balance of power in the Middle East.” The group is still debating whether resuming normal compliance with the accord would mean nations individually return to 100 percent compliance with their targets, or whether the group as a whole would aim for that level, the people said, asking not to be identified because the talks are private. The Saudi hedged, saying “we will ensure that the market remains in its trajectory towards rebalancing, but at the same time we will not over-correct,” Al-Falih said. While scaling back the supply caps is “on the table,” no decision has been made.

Crude Oil Prices Settle 4% Lower as Traders Cut Bets on Global Supply Shortage – A wave of selling hit crude oil prices Friday on signs of increasing U.S. oil expansion and reports OPEC and its allies could lift output to counter a supply shortage from Iran and Venezuela. On the New York Mercantile Exchange crude futures for July delivery fell 4% to settle at $67.88 a barrel, while on London’s Intercontinental Exchange, Brent fell 2.98% to trade at $76.44 a barrel. The number of oil rigs operating in the US jumped by 15 to 859, its highest level since March 13, 2015, according to data from energy services firm Baker Hughes, pointing to signs of an expansion in U.S. output. That comes as the Energy Information Administration said Wednesday U.S. oil output rose to 10.7 million barrels a day last week. “The data is likely seen to be as a slight negative for WTI oil prices as the oil rig count had its biggest one week increase in three and a half months,” National Alliance said. Oil prices started the session on the back foot as Reuters said major oil producers could raise output by as much as 1 million barrels, eroding the risk-premium in oil prices. OPEC and its allies had been expected to adhere to the production-cut agreement to curb 1.8 million barrels of oil per day through 2018 but that now looks increasingly unlikely as major oil producers consider exiting the deal. “The moment is coming when we should consider assessing ways to exit the deal very seriously and gradually ease quotas on output cuts,” Novak said in televised comments, according to Reuters. Over recent weeks, oil prices had rallied sharply on expectations that falling Venezuelan and Iranian output would disrupt global supplies. Oil prices snapped a three-week winning streak and suffered their biggest weekly fall since February.

Russia’s OPEC Deal Dilemma Worsens as Idled Crude Capacity Grows – Russia will face a tough choice in talks with OPEC next month as an increasing number of its valuable oil wells lie idle. Almost 4 percent of Russian production capacity isn’t being used, Citigroup Inc. said in a report on Wednesday. That raises questions about how the country will approach its June summit with OPEC amid growing signals of a tighter market, including shrinking global inventories and possible supply losses from Iran. “The Kremlin faces the dilemma of either continuing to extend” output cuts or allowing companies to boost production, Citi analysts said. “Either way, Moscow is flexing its muscles globally with oil as an instrument of strategic policy.” Russia will meet its OPEC allies next month in Vienna, where the signatories to 2016’s landmark deal to cut production will discuss the future of the accord. Several Russian companies have in the past questioned the wisdom of prolonging output curbs when oil prices are rising. The country has about 11.3 million barrels a day of production capacity, of which an estimated 408,000 barrels a day are idle, according to Citigroup, which cited growth in new oilfield startups. That puts it in second place behind Saudi Arabia, which has 2.12 million barrels a day of spare capacity, according to the International Energy Agency. ‘

The Crown Prince of Riyadh vs. the Crown Prince of Jihad: Al-Qaeda Responds to Mohammed Bin Salman’s Reforms – Mohammed bin Salman, the 32-year-old crown prince of Saudi Arabia, recently wrapped up a highly touted and well-choreographed tour of the West, during which he appeared with prime-time television journalists, celebrities, business leaders, and presidents. Major media outlets seemed to unquestionably portray the royal descendant as a forward-looking reformer on a courageous crusade to “transform the Middle East.” There was dissent, of course. MBS, as he has come to be called, was met by pockets of protestors from Washington, D.C., to London, Paris, and Madrid. Human rights activists and organizations expressed concern over issues such as the prince’s role in the Yemen conflict, which has been dubbed the “world’s worst humanitarian crisis,” and his repression of dissidence. Yet a more dangerous reaction to Salman’s charm offensive has come from someone with a comparable pedigree. Al-Qaeda has been seeking to exploit domestic skepticism of the prince’s modernization efforts, which are aimed at changing the way the country engages with gender, culture, religion, and the economy. The jihadi organization hopes to foment a backlash that helps it to better position Hamza bin Laden, son of Osama, as heir to his father’s throne and to continue a longstanding feud between al-Qaeda and the House of Saud. These efforts, if successful, will pit the reformist ambitions of the crown prince of Riyadh against the revolutionary Salafi-jihadism promoted by the crown prince of jihad. This war of two princely visions may shape the future of the Middle East. Al-Qaeda is positioning itself to reclaim the mantle of jihad from ISIL and to reassert itself through a more population-focused and long-term strategy. If Salman’s reforms fall short or fail, al-Qaeda will seek to fill the void with a jihadist alternative that will have greater resonance, just as it did after the failure of the Arab Spring. The United States should not be fooled by the cosmetic reforms that MBS is promoting. The roots of extremism in Saudi Arabia run deeper, and HBL and his associates in al-Qaeda have been able to target these points of weakness through their own counter-propaganda offensive.

Here’s The Viral Interview Of Exiled Saudi Prince Calling For Regime Change In Riyadh (video) Speaking to Middle East Eye early this week, Prince Khaled appealed specifically for his relatives Prince Ahmed bin Abdulaziz and Prince Muqrin bin Abdulaziz to mount a coup, saying that “99 percent of the members of the royal family, the security services and the army would stand behind them.” Ahmed bin Abdulaziz was longtime deputy minister of interior from 1975 to 2012 and briefly served as minister of interior in 2012; and Muqrin bin Abdulaziz was briefly named crown prince in 2015 before quickly being replaced, and was head of Saudi intelligence until 2012. “There is so much anger within the royal family,” Prince Khaled told Middle East Eye, “I took this information and appeal to my uncles Ahmed and Muqrin, who are the sons of Abdulaziz and are highly educated, well versed and able to change things for the better. I can say that we are all behind them and support them.”Though it’s unclear how much clout, if any, Prince Khaled actually has inside the kingdom, his interview went viral this week amidst speculation and wild rumors claiming that Mohammed bin Salman (MbS) was injured or killed after not being seen in public since April 21 – the same day gunfire was widely reported near the prince’s residence, which the Saudis blamed on a toy drone breaching the security perimeter.The Saudis appear to have quieted the stories questioning bin Salman’s whereabouts and status by releasing a official photo of him chairing a meeting of government ministers. Much of the initial sourcing behind claims that the toy drone incident was actually a coup attempt come from both Iranian state media and a mysterious Saudi opposition blogger only known under the pseudonym Mujtahidd.Prince Khaled, however, said the drone was a cover story which makes no sense: “I personally believe that this was not necessarily an attempt to bring down Mohammed bin Salman but rather an act of protest against him” he explained.

Saudi Women’s Driving Activists Accused Of Running “Spy Cell” – Could Face Execution -Weeks before Saudi Arabia is set to lift its longtime ban on women driving, a group of seven women’s rights activists has been arrested on treason and espionage related charges – offenses which can bring the death penalty. The kingdom plans to lift the driving ban on June 24th, though significant restrictions will still remain to allow women to drive “in accordance with Islamic laws.” On Saturday Human Rights Watch (HRW) and the Gulf Centre for Human Rights issued a statement indicating the seven activists have been detained since May 15th, and further that they had come to the attention of Saudi authorities as leading voices campaigning on behalf of women driving, and against the male guardianship system in general. They had reportedly been previously ordered by the royal court to cease all contact with foreign media, something which they apparently defied. The detained include a prominent Saudi blogger, Eman al-Nafjan, and Lujain al-Hathloul, who had previously been imprisoned for 73 days after driving from UAE into Saudi Arabia. Multiple reports indicate further that the crackdown on women’s rights activists may be ongoing, and that charges have reached the level of espionage.And perhaps most shockingly, the detained activists could face the death penalty, as Middle East Eye reports: According to Saudi lawyers and judges, the prominent women’s rights activists, who were arrested last week and branded as “traitors” by government-aligned media outlets, may by sentenced to death should investigations result in the charge of treason and conspiracy against the state. The Riyadh-based English language daily newspaper, Arab News, has accused the women of being part of a “spy cell” supported by hostile foreign entities – echoing the claims of Saudi authorities and the official Saudi Press Agency: Members of a “spy cell,” arrested by Saudi Arabia’s state security presidency two days ago, sought to “incite strife by communicating with foreign entities hostile to the Kingdom and to establish a false legal organization,”according to information received by Asharq Al-Awsat from informed sources.

Iraqi voters undermine Trump’s Iran strategy | Asia Times: In an ironic twist, May 12, which was the deadline for US President Donald Trump’s decision on the Iran nuclear deal, also happened to be the day the Iraqi parliamentary elections took place. Yet no one seemed to take note of the symbolism. In the event, the Iraqi election results seriously hinder Trump’s agenda of rolling back the Iranian presence in the northern tier of the Middle East comprising Iraq, Syria and Lebanon. Of these three countries, Iraq is arguably the most crucial theatre of contestation between the United States and Iran. The fate of the Iranian presence and Iranian capacity to influence the politics of the entire Shi’ite arc will be critically dependent on its standing and influence in Baghdad. The stakes have never been as high as they are today. To be sure, the Iraqi election results that were formally announced on Sunday constitute a stunning setback for Trump’s containment strategy against Iran. Washington had bet heavily on the alliance led by Prime Minister Heidar al-Abadi to win, but it has been relegated to third place, winning only 42 seats in the 329-member parliament. Worse still, two staunchly anti-American alliances – led by Muqtadar al-Sadr and Hadi al-Amiri – secured first and second places respectively. Coalition making will be a long drawn out process, but what is clear is that the next government in Baghdad will have a pronouncedly anti-American tilt and the probability is high that it could evict US troops and contractors totaling 100,000 in Iraq.

The Gaza Massacre. Western Governments Complicit in Crimes against Humanity — This week, 61 killed and over 770 wounded: Palestinian civilians were targeted by IDF snipers with live ammunition. Not a single Western country has sofar ordered the expulsion of Israeli diplomats in protest over the mass killings of Palestinian civilians by IDF snipers. A crime against humanity under international law is casually dismissed. Double standards is an understatement: Flashback to early March 2018. When the Skripal affair broke out in the U.K., the Kremlin was accused without evidence of poisoning double agent Peter Skripal and his daughter Yulia, with the deadly novichok nerve gas. Pressured by London and Washington, more than twenty Western countries ordered the expulsion of more than 100 Russian diplomats. In the meantime the Skripals have fully recovered. Nobody was killed. In contrast, following the Gaza massacre, not a single Israeli diplomat has been expelled from the member states of the European Union. “Israel has the right to defend itself”, says US Secretary of State Mike Pompeo. No UN member “would act with more restraint than Israel has.” said US Ambassador to the UN Nicki Halley.The lie becomes the truth. These statements are tantamount to an endorsement of crimes against humanity by the self-proclaimed “international community”.And the corporate media applauds. Palestinians are tagged as terrorists. While the Skripal affair was the object of extensive (invariably biased) coverage largely with a view to upholding Theresa May’s baseless accusations against Russia, the reports pertaining to the Gaza killings largely uphold the notion that “Israel has the right to defend itself”. The broader issue of crimes against humanity under international law is barely mentioned. What we are facing is the political acceptance of the Gaza massacre which is tantamount to the criminalization of the Western governments which represent us.

Calls for international force for Gaza – Turkish president Recep Tayyip Erdogan has called for an “international peace force” to protect Palestinians after dozens were shot dead by Israeli forces on the Gaza border. Speaking at the 57-member Organisation of Islamic Cooperation (OIC), which was hosted in Istanbul on Friday, Erdogan said Israel should be held accountable for the killings. “To take action for Palestinians massacred by Israeli bandits is to show the whole world that humanity is not dead,” Erdogan said. Muslim leaders pledged to take “appropriate political [and] economic measures” against countries that followed the US in moving their Israel embassies to Jerusalem from Tel Aviv. Erdogan, who is campaigning for re-election next month, used the summit to verbally attack Israel. He also castigated America, saying its decision to move its embassy had emboldened Israel to put down the protests at the border with Gaza with excessive force. Most countries say the status of Jerusalem – a sacred city to Jews, Muslims and Christians – should be determined in a final peace settlement between Israel and Palestinians and that moving their embassies now would prejudge any such deal. Donald Trump’s step to recognise Jerusalem as Israel’s capital and move the embassy there reversed decades of US policy, upsetting the Arab world and Western allies. Guatemala last week became the second country to move its embassy to Jerusalem, and Paraguay said it would follow suit this month. The final declaration of the meeting of the OIC described the killing of 60 Palestinians, protesting against the embassy move on Monday, as “savage crimes committed by the Israeli forces with the backing of the US administration”. It said the violence should be put on the agenda of the UN Security Council and General Assembly, and called on the United Nations to investigate the killings.

Israel, US attempt to block Security Council resolution on Gaza – Israel and the United States made a joint effort Sunday to foil a similar Kuwaiti-Palestinian attempt to pass a resolution in the United Nations Security Council calling for the stationing of an international force in the Gaza Strip to defend Palestinians from “Israeli aggression.” The Israeli-American push was intended to head off Palestinian attempts to secure the nine country majority – out of the Security Council’s 15 member states – needed to pass the resolution. The current council makeup could be said to be especially troublesome in this regard – with African, Asian and Latin American countries having a significant majority – giving Palestinians a more than fair chance of passing the resolution in its current wording. If that eventuality comes to pass, US Ambassador Nikki Haley has already promised to her Israeli counterpart Danny Danon that the US will exercise its veto power. If the US does veto the pro-Palestinian measure, the Palestinian delegation has announced they will summarily appeal to the organization’s General Assembly and pass it there, where they enjoy something of an automatic majority. However, unlike the Security Council, the General Assembly’s resolutions are merely declarative in nature and it lacks any concrete means to implement its resolutions. The original draft resolution was submitted by Security Council member Kuwait, with the text speaking of defending civilians in zones of armed conflict and denouncing Israel for its excessive use of live fire against civilian protesters and for the killing and wounding of many civilians, including children, doctors and journalists.

Image Of Jewish Temple Photoshopped Over Jerusalem Mosque Embroils US Embassy In Controversy –As if US-Palestinian relations weren’t already at the lowest point in perhaps all of history, they just sank even lower after a controversial photo (to put in mildly) surfaced of the American Ambassador to Israel, David Friedman, receiving a large aerial photograph of Jerusalem as he toured the largely ultra-Orthodox Jewish city of Bnei Brak, just east of Tel Aviv.As Ambassador Friedman attended an event sponsored by an Israeli charity, one of the staff members presented him with the framed photograph which featured a photoshopped imagined Jewish Temple in the place where Al-Aqsa mosque and the Dome of the Rock currently stand. The Israeli Haaretz newspaper describes the image as “bearing a simulation of the Third Temple” placed in the photograph at the heart of Jerusalem’s walled old city, with the ‘Third Temple’ featured front and center. Israelis refer to the area on top of which Islam’s third holiest mosque sits as the “Temple Mount” as it is purported to be the site of two Jewish temples in ancient times, now the location of the Western Wall. There has long been a Jewish and Christian Zionist movement dedicated to restoring the temple, which was destroyed by the Romans in about 70 A.D. – an initiative that’s practically impossible because it would mean razing the Islamic holy site. Concerning the long-term controversy that’s raged over the fate of the Temple Mount and the Dome of the Rock, the US has long held its official position of observing the status quo of the separate religious communities being allowed access their respective sites.

Erdogan calls on Muslim countries to unite and confront Israel – Turkish President Recep Tayyip Erdoganhas called on Muslim leaders to unite and confront Israel, days after scores of Palestinians were killed by Israeli snipers as they marked 70 years of Israeli occupation. Speaking at an extraordinary summit of the Organization of Islamic Cooperation (OIC) on Friday, Erdogan said Israel should be held accountable over the killings which drew widespread international condemnation and triggered a wave of protests from Asia, through the Middle East, to North Africa.”To take action for Palestinians massacred by Israeli bandits is to show the whole world that humanity is not dead,” Erdogan told the group of Muslim leaders gathered in Turkey’s largest city, Istanbul. The Turkish president described Israel’s killing of Palestinians as “thuggery, atrocity and state terror,” and said the US’ recognition of Jerusalem as Israel’s capital would inevitably haunt it.