Oil, Gas, And Fracking News Reads 26August 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 26 August 2018. Go here for Part 1.

This is a feature at Global Economic Intersection every Monday evening.

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Betting Utah sands will be the next great oil source – Utah is a yawn amid the drilling frenzy that has upended the energy picture in recent years. It accounts for just one of every 100 barrels of oil produced nationwide.But a couple of executives who have spent decades hunting for oil across the Middle East, South America and Canada are betting that the next energy patch will be near here, in a remote stretch of craggy desert known as Asphalt Ridge.They are trying something that has repeatedly failed in Utah: mining the state’s enormous deposits of oil sands, an arduous process of extracting oil from hard rock.The two oversee Petroteq Energy, a Canadian company that aims to have the first commercially viable oil sands production in the United States underway here by early September. Petroteq’s claims challenge the notion that oil sands mining is in eclipse. The heavy oil produced from oil sands is among the most carbon-intensive fuels, a drawback as concerns about climate change grow. Even in Canada, where oil sands production dominates the energy industry, some major oil companies have written off or withdrawn their investments. The Keystone XL pipeline designed to carry the fuel to American refineries has been stalled by environmentalists with protests and lawsuits. They typically call oil sands “a carbon bomb.”David Sealock, Petroteq’s chief executive, is undeterred. He likens his tiny operation – with its modular mixing vessels, rock crushers and conveyor belt – to a humble Lego set. But when he picks up a canister of newly processed oil, he smiles at the acrid odor. “That’s the smell of money,” he said. “We have a very disruptive technology,” said Mr. Sealock, who has worked for Chevron in several countries and managed two oil sands companies in Canada. “There was a treasure chest here that didn’t have a key, and this technology is the key.”

Salting the earth: North Dakota farmers struggle with a toxic byproduct of the oil boom –For the past two decades, Daryl Peterson and his wife Christine have been dealing with the spillage of saltwater – a byproduct of oil production – on their land, which grows peas, soybeans and various types of grain. A In 1997, two spillscovered dozens of acres with more than 50,000 gallons of saltwater. A decade later, another 21,000 gallons of saltwater spilled. And since then, the Petersons say they have seen another 10 spills. They claim these spills were never properly cleaned up. Over the past decade, the biggest in a series of oil booms has transformed North Dakota, reinvigorating an economy that was largely known for its agricultural output. With an influx of new workers and jobs, North Dakota has consistently had one of the lowest unemployment and highest labor force participation rates in the country. But this prosperity has not come without consequence. Oil production has brought with it an ecological problem that threatens farms that have been in the same families for generations. A thousand miles from the nearest ocean, the fertile black earth of North Dakota is being destroyed by saltwater, which is brought from beneath the surface by oil and gas drilling. Landowners, like the Petersons, have to deal with the mess.North Dakota landowners who spoke with NBC raised concerns about the reporting and cleanup of saltwater or “brine” spills. They cited late reporting or nonexistent reporting of spills, a failure to return their land to the original condition, as the state requires, and a lack of compensation for lost farming revenue.

Property along Big Hole, Beaverhead rivers eyed for oil drilling, fracking – The Bureau of Land Management is considering opening thousands of acres of land for potential leasing for gas and oil drilling and hydraulic fracking along the Big Hole and Beaverhead watersheds. The BLM has opened up more than 12,000 acres of property along the Big Hole and Beaverhead rivers. Some of it in Madison County and much of it in Beaverhead County. It’s an issue of much concern since the Big Hole River is considered a blue ribbon trout river. One owner of a flyshop along the Big Hole River said this is a complicated issue that runs a delicate balance between jobs and protecting the environment. “Everybody’s trying to live here together and there’s a lot of different industries competing for the same natural resources and I think the only thing we can do is study it and have some regulations and be careful,” said Craig Jones, owner of Great Divide Outfitters.Some of the land being considered for leasing is an area south of Glen along the Big Hole River.“Obviously I’d been concerned if it affects the quality of the river and my livelihood, of course just looking at it from my viewpoint. But I can also understand the other side of the argument which is more energy for the country and potential revenues for the community,” said Great Waters Inn owner Mark Lane. However, if anyone seriously considers oil and gas exploration along this river, some people say they hope they make the environmental impact a priority.

Big Hole, Beaverhead no place for oil and gas development – This July the Bureau of Land Management (BLM) posted an obscure notice on its website that it will lease more than 12,000 acres of public land in the Beaverhead and Big Hole watersheds for oil and gas development. Many of the parcels up for potential eBay-style auction are located on public lands near important headwaters, such as areas outside the small community of Glen, or the parcels upstream from the city of Dillon directly off Rattlesnake Creek. These public lands would be auctioned off this December. Let’s be clear what proposed oil and gas leases on public lands mean for the Big Hole and Beaverhead watersheds:The BLM, under Interior Secretary Ryan Zinke’s leadership, wants to allow fracking and oil derricks, wastewater ponds and who knows what other type of industrial machinery and operations nearly adjacent to the treasured Big Hole River and its world-class blue-ribbon fishery, alongside Rattlesnake Creek and the City of Dillon’s drinking water supply, and even in prime deer and elk habitat on the backside of the Ruby Mountain Range.Oil and gas leasing, allowed under antiquated mineral laws nearly a hundred years old, means that while federal authority over public lands is not transferred to industrial interests, the power of public oversight – that which puts the “public” in public lands – is. Limiting public participation on public lands decisions is one of several key leadership failures of Secretary Zinke. Through a series of smarmy moves by this administration, public comment on oil and gas leases has been slashed to only 10 days, while efforts to offset potential degradation and impacts through mitigation have been reduced from mandatory, to voluntary, letting fat cat industry off the hook by being allowed to choose whether or not to clean up their wastes.

Rally: Pipeline not wanted here – Opponents of a proposed natural gas pipeline and export facility rallied in Medford Thursday to urge the Oregon Department of Environmental Quality to deny state permits for the project. Canadian energy company Pembina wants to build a 229-mile, 3-foot-diameter underground pipeline that would cut through several southwest Oregon counties on its way to a proposed export facility near Coos Bay. The Pacific Connector pipeline project and the accompanying Jordan Cove export facility are under review by the Federal Energy Regulatory Commission and state agencies, including DEQ. FERC previously denied the project, saying potential benefits didn’t outweigh potential harms. But backers refiled their application after the election of President Donald Trump, who is seen as more friendly to traditional energy companies than his predecessor, Barack Obama. At the DEQ office in Medford, project opponents turned in boxes that symbolically represented the more than 25,000 comments already submitted to the state agency about the natural gas project. The boxes contained hundreds of additional comments for DEQ, which is accepting public input through Monday. Maya Jarrad of the No LNG Exports Campaign said the thousands of comments already received set a new record for the number of comments received by DEQ for a project of this type. She said officials have told opponents the vast majority of comments are against the pipeline and export facility. “It shows the massive opposition to this project,” she said.

California moving to block federal off-shore oil leases at the pipeline — The California Legislature is considering a bill that would bar new pipelines for new federal off-shore oil leases. (Los Angeles Times)The Trump administration’s decision to open nearly all federal waters for oil and gas drilling left California and other states scrambling to find ways to stop expanded drilling off their coasts. One tool, California officials noted at the time, is that the California controls the first three miles of ocean, and regulates the pipelines that bring the oil to shore.In fact, the State Lands Commission and the California Coastal Commission sent letters to the federal Bureau of Ocean Energy Management warning that neither body would approve new pipelines to service new wells, and would “not allow use of existing pipelines to transport oil from new leases onshore.”Now there’s a move in the Legislature to make that refusal law. AB 1775 would bar the state from authorizing new oil and gas infrastructure within state waters and tidal areas for leases issued after the start of this year. The law would not affect efforts to “repair or maintain any pipeline or other infrastructure used to convey oil or natural gas or any other activity necessary to ensure the safe operation of infrastructure used in the exploration, development, or production of oil or natural gas.”

Enbridge to buy Spectra Energy Partners in a $3.3 billion stock deal – Enbridge Inc. said Friday it will buy the pipeline master limited partnership Spectra Energy Partners in a stock deal valued at $3.3 billion. Under terms of the deal, Enbridge will exchange 1.111 of its common shares for each Spectra share. Based on Thursday’s stock closing prices, that values Spectra shares at $40.00 each, or a 5.6% premium. The deal is expected to close in the fourth quarter of 2018. “Significant weakening of the US Master Limited Partnership (MLP) capital markets has adversely affected the growth opportunities for MLPs, including [Spectra],” the companies said in a statement. “If [Spectra] were to continue as a stand-alone entity in such an environment, it would be required to transition to a self-funding model using internally generated cash flow.” Spectra shares were still inactive in premarket trade, while Enbridge’s stock slipped 0.7%. Year to date, Spectra shares have lost 4.3% and Enbridge’s stock has dropped 8.0%

This Super Basin Is About To Make An Epic Comeback –Alaska’s North Slope is a “Super Basin” awaiting a “resurgence” in oil production, according to a new report. Over the next eight years, oil production could rise by 40 percent. The North Slope has been a significant source of oil and gas production for decades, even though output has been in decline for a long time. Aging fields, such as the Prudhoe Bay field run by BP since the late 1970s, were once prolific sources of production, but have been gradually losing output year after year. Prudhoe Bay can claim to be the most productive oil field in U.S. history, having produced 12.5 billion barrels of oil as of last year. But it also peaked in the 1980s and has been losing output ever since. But the decline is not because Alaska is running out of oil. Output fell for a variety of reasons, including high costs of production, lack of infrastructure, federal regulations keeping reserves off limits, boom and bust price cycles, among other factors. More recently, the downturn in prices combined with skyrocketing shale production made risky plays like Alaska not worth the effort. However, Alaska’s North Slope may still have a lot of life left in it. A new report from IHS Markit concludes that the North Slope is “poised to re-emerge as a major source of U.S. energy production, with crude oil output potentially increasing as much as 40 percent during the next eight years.” Based on recent discoveries, IHS estimates that the North Slope Basin holds 38 billion barrels of oil equivalent (boe) in remaining recoverable resources. That figure includes 50 trillion cubic feet of natural gas and 28 billion barrels of oil. IHS says that the estimated ultimate recovery (EUR) of the North Slope is 54.8 billion boe – the 38 billion boe yet to be produced, combined with the 16.8 billion boe that has already been extracted. Those numbers are worth emphasizing: IHS is saying that there is twice as much oil yet to be produced than all of the oil produced from the North Slope to date.

Petroleum Resources Act in Quebec coming into force — Questerre Energy Corporation (“Questerre” or the “Company”) (TSX,OSE:QEC) reported today that the Government of Quebec announced its plans to officially implement or put into practice the Petroleum Resources Act (the “Act”). The Act will govern the development of hydrocarbons in the province of Quebec. The Act was passed as law in December 2016 by the Liberal government as a result of the adoption of Bill 106, “An Act to Implement the 2030 Energy Policy and to Amend Various Legislative Provisions in December 2016.” The industry recognized in 2009 when the Quebec Utica discovery was confirmed that a modern hydrocarbon law was a critical prerequisite to successful development. “Years ago, we said that a new hydrocarbon law was a key pre-condition for development. After over 100 independent studies and dozens of public consultations we now have a fundamental achievement that was made with bipartisan support in Quebec. I can’t exaggerate how important this step is for our project.”The Quebec Government also announced that it will proceed with the enactment of regulations that include last minute restrictions on oil and gas activities and hydraulic fracturing. As detailed in the brief Questerre filed with the Government and available online, these specific restrictions in the regulations are ultra vires, or beyond the legal power and authority of the government, contrary to the independent scientific studies, and moreover they do not meet the consultation requirements detailed in the Quebec government’s green book for social acceptability.

Canadian oil exports by rail nearly double from last year – Canadian crude oil exports by rail surged 87%in June from a year ago to more than 204.5K bbl/day, according to the National Energy Board; June was the last full month for which the NEB has relevant data.Constraints on Canadian takeaway capacity has suppressed the price for the Canadian crude oil benchmark by as much as $30/bbl relative to the U.S. WTI benchmark, says Kevin Birn, director for regional energy projects at consultant group IHS Markit.”With western Canadian pipelines full, greater volumes crude by rail volumes will continue to grow into the fall,” Birn says, expecting movement to average between 200K-300K bbl/day for the full year. TransCanada is trying to expand that network to southern U.S. export terminals through the Keystone XL pipeline, although environmental challenges have delayed the project, and Kinder Morgan has tried to triple the capacity of its Trans Mountain network to British Columbia ports amid intense regional opposition.

These Giant Portraits Will Stand in the Path of Trans Mountain Pipeline – To put forth a “hopeful vision for the future” that includes bold climate action, a new installation project is to be erected along the controversial Trans Mountain pipeline expansion route to harnesses art’s ability to be a force for social change and highlight the fossil fuel project’s increased threats to indigenous rights and a safe climate.Called “People on the Path” and launched Sunday, the project organized by Climate Justice Edmonton features larger-than-life portraits of numerous Albertans from varying walks of life, with their bodies displaying messages such as “No justice on stolen land” and “For my daughter 100% renewable energy.”Part of the goal, organizers explained at the launch at Whitemud Park in Edmonton, is also to “dismantle the myth that everyone in this province is pro-oil.”The Edmonton Journal reported that the full series, which will include 25 portraits, will go up this fall. CBC added that it “will be exhibited around the city and then placed along the route of the proposed Trans Mountain pipeline expansion – through Edmonton, under the river, and west to Jasper.”

Top Canadian court quashes city’s challenge of Trans Mountain pipeline (Reuters) – Canada’s Supreme Court on Thursday dismissed an application by the City of Burnaby, British Columbia to appeal a regulatory decision that allowed expansion work on the Trans Mountain oil pipeline to skirt some bylaws. Burnaby sought to overturn a December ruling by Canada’s National Energy Board that allowed pipeline owner Kinder Morgan Canada to sidestep some municipal permits while building the project. The board found that Burnaby’s bylaw review process caused unreasonable delay. Burnaby is the end point of the Trans Mountain pipeline system on the Pacific Coast. The city had claimed that Trans Mountain’s applications were incomplete. The Supreme Court decision removes some legal uncertainty about whether the Trans Mountain expansion can be built. The project still faces other legal challenges – particularly a federal court case on whether there was adequate public consultation. The project has faced formidable environmental and political opposition, including concerns raised by British Columbia’s left-leaning government, and in May Kinder Morgan announced a sale of the existing pipeline and expansion to the Canadian government. Canadian Natural Resources Minister Amarjeet Sohi told reporters outside a Cabinet meeting in British Columbia that the ruling underlines that municipalities cannot unduly withhold permits on such projects. On Wednesday, he said that construction was delayed, but did not give a new timeline.

Canada’s Pipeline Crisis Is A Boon For Russia — The controversy of the Trans Mountain pipeline expansion projects has so far focused more on the implications of the project’s delay for Albertan crude oil producers. Yet, the developments around the pipeline also have reverberations for the U.S. refining industry and more specifically that part of it, which operates in the Pacific Northwest, a region without the luxury of many and different sources of crude to turn into fuel and other products for the local industries and households. Canadian crude and crude from Alaska have been the traditional feedstock for Pacific Northwest refineries. Now that production is growing and so are refining rates, local operators are buying oil from Russia, which, in the political context between the U.S. and Canada, and Russia, makes for an interesting ironic twist. Yet these are the realities of life, as Stewart Muir, executive director of Canadian think tank Resource Works, writes in a recent story. If you can’t get a commodity you need from one place, you’ll have to get it from another. Last month, Muir writes, a tanker under a Portuguese flag delivered between 600,000 bpd and 650,000 bpd of Russian crude to a refinery in Washington State, one of the two that produce fuel and oil products for Washington and Oregon. This might become a more frequent occurrence as crude oil production in Alaska steadily declines and Albertan oil sands miners cannot get their growing output to refineries because of pipeline constraints. An alternative – railway deliveries of Bakken crude – was rejected by the Washington governor who, unlike most Trans Mountain protesters, has obviously familiarized himself with the safety statistics of various crude oil delivery methods. When market logic trumps politics, this is what happens. Refineries need feedstock. They do not deal with politics. They deal with demand and supply. And because of this, the United States has been importing Russian oil for years, as strange as this may seem in the current political situation. Here are the facts: The U.S. began importing Russian crude in 1995. Since then, monthly deliveries have peaked at 25.083 million barrels in May 2009, with the latest monthly figure, for May this year, coming in at 15.216 million barrels, according to EIA data. This means that a little over half a million barrels daily of Russia oil were coming into U.S. refineries in May. Meanwhile, a round of sanctions that is being discussed in Congress could suspend all Russian oil and oil product exports to the United States, which may aggravate the situation of the two Washington refineries, one operated by Shell and the other by Andeavor. If Russian imports into the Pacific Northwest are indeed essential, the next round of sanctions will certainly aggravate this situation.

UK fracking push could fuel global plastics crisis, say campaigners – The push for a large-scale fracking operation in England will fuel the global plastic crisis and undermines the government’s claims that it is tackling the issue, according to a leading charity.The Campaign to Protect Rural England (CPRE) says fracking will not only destroy large areas of the countryside, it will exacerbate the global plastic binge which is already causing widespread damage to oceans, habitats and the human food chain.Daniel Carey-Dawes, campaigner at the CPRE, said the government “risks shooting itself in the foot in its fight against plastic” with its continued support for fracking. “Not only will fracking industrialise our countryside, cause enormous amounts of landscape damage, air and water pollution, and pose grave risks to human health, it will also contribute to the production of new plastics,” he said. “By opening the floodgates to fracking, the government will be fuelling the plastic plague that is already putting our countryside, cities and oceans at risk of irreversible harm.”Campaigners warn that plans outlined by the business secretary, Greg Clark, earlier this year will mean that many of the democratic planning controls that are preventing the drilling of shale wells in England would be removed.Carey-Dawes said that such removals would have dire consequences for the fight against plastic pollution: “The government must drop its proposals to simplify fracking exploration immediately if it intends its environmental ‘promises’ to be taken seriously.” A spokesperson for the government reiterated its determination to reduce plastic pollution and added there was “no correlation between shale gas exploration and increased plastics production”. However, last year the Guardian revealed that a huge boom in the US shale gas industry has resulted in a £180bn investment in plastic production facilities by fossil fuel giants such as ExxonMobil Chemical and Shell Chemical – contributing to a 40% rise in global plastic production over the next decade.

Analysts Say No End In Sight for Europe’s Natural Gas Rally — Europe’s natural gas prices have risen to their strongest level for this time of year, lifting the cost of electricity for factories and utilities. Shaking off gloom depressing broader commodity markets, the U.K. benchmark for gas is nearing levels last seen in December when a key supply line exploded, and seven traders and analysts expect further gains. The move bucks the normal seasonal pattern of weaker prices in the summer when heating demand dwindles and contrasts with slumps in everything from oil to gold, sugar and zinc. China’s energy demand is drawing in cargoes of liquefied natural gas that might otherwise have stayed in Europe, firming the gas market at a time when power generators are demanding the fuel to meet rules from governments to lower pollution from coal. Those trends along with carbon emission prices at a 10-year high is increasing the cost of electricity in Britain to Germany and France. “You have a perfect storm,” said Wayne Bryan, a senior European energy and commodity analyst at Alfa Energy Ltd. “I don’t see any significant downside in the very near future.” There’s no real end in sight for the rally, with a Bloomberg News survey of traders and analysts indicating that the U.K. front-month contract could reach levels last seen in December, when an explosion at an Austrian gas hub and outages at North Sea facilities crippled supplies and caused the biggest one-day price jump for the contract in eight years. The market has picked up pace since the summer season started in April. The coldest winter since 2012 lifted demand for heating and drained storage tanks. Then, a heatwave across much of the northern hemisphere along with maintenance on pipelines and facilities feeding northwest Europe further tightened the market. Very little LNG was imported for consumption in the region, with most leaving for higher-demand markets in Asia and South America. Gas held in European storage tanks fell below 20 percent full for the first time by the end of the winter, and even if levels have since increased, they are still near the lowest ever for the time of year with just five weeks to go before the official heating season starts in October.

ConocoPhillips and Venezuela’s PDVSA reach $2 billion settlement (Reuters) – U.S. producer ConocoPhillips and Venezuela’s PDVSA have reached a payment agreement over a $2 billion arbitration, the companies said on Monday, suspending a dispute that blocked the state-run company from exporting oil from most of its key Caribbean facilities. The case relates to the nationalization of Conoco assets dating back over a decade in Venezuela. An international court ruled in favor of Conoco in April and ordered PDVSA to pay. But no payment has been forthcoming, leading Conoco to seize most of PDVSA’s Caribbean assets as it sought to enforce its claim. The settlement means that Conoco will suspend the legal enforcement, as long as PDVSA makes regular payments, spokesman Daren Beaudo said. He declined to say if payments would be made in cash or crude oil, adding that details of the agreement were confidential. PDVSA confirmed the agreement in a statement, adding that the deal “once again shows PDVSA’s firm will to reach commercial solutions with its creditors.” The state oil company has also made progress on similar payment agreements with Exxon Mobil Corp (XOM.N) and NuStar Energy LP (NS.N), the two confirmed. Venezuela’s crude production, a major source of revenue, has fallen to a six-decade low this year as lack of investment, recession and hyperinflation have pushed the OPEC-member country’s economy to near collapse. The settlement could restore a portion of lost exports by resuming shipping from the Caribbean.

ConocoPhillips, Venezuela’s PDVSA reach $2 billion settlement over seized oil projects in the Caribbean – More than a decade ago, Venezuela seized several oil projects from the American oil company ConocoPhillips without compensation. Now, under pressure after ConocoPhillips carried out its own seizures, the Venezuelans are going to make amends.ConocoPhillips announced on Monday that the state oil company, Petróleos de Venezuela, or Pdvsa, had agreed to a $2 billion judgment handed down by an International Chamber of Commerce tribunal that arbitrated the dispute. Pdvsa will be allowed to pay over nearly five years, but as it is nearly bankrupt, even those terms may be hard to meet.After winning the arbitration ruling in April, ConocoPhillips seized Pdvsa oil inventories, cargoes and terminals on several Dutch Caribbean islands. The move seriously hampered Venezuela’s efforts to export oil to the United States and Asia, and emboldened other creditors to seek financial retribution. “What they did was choke the exports and made it clear to Pdvsa that the cost of not coming to an agreement would be higher than actually settling on a payment schedule,” said Francisco J. Monaldi, a Venezuelan oil expert at Rice University.As its oil production has plummeted to the lowest levels in decades, Venezuela has fallen behind on more than $6 billion in bond payments. Pdvsa has already defaulted on more than $2 billion in bonds after failing to make interest payments over the last year, and owes billions of dollars more to service companies.Adding to Venezuela’s woes, the Trump administration has imposed sanctions that prohibit the purchase and sale of Venezuelan government debt, including bonds issued by the state oil company. Mr. Monaldi said Pdvsa would be forced to pay ConocoPhillips with money it would have paid other creditors and would probably delay some oil shipments to China it owes in separate loan agreements. He added that “there is not a negligible probability” that at some point it will discontinue payments for lack of money.

Exclusive: Trump takes aim at Venezuela lifeline, which could raise prices at the pump – The White House is once again considering sanctions that could choke Venezuela’s oil production as the Trump administration weighs its next “strong and swift” action to take against Venezuelan President Nicolfls Maduro, two senior administration officials told McClatchy..While a full embargo on purchasing Venezuelan oil – the so-called “nuclear option” – is being actively discussed, the administration is zeroing in on more surgical sanctions that block the sale of oil and oil processing products by U.S. companies to Venezuela and hinder Caracas’s oil industry without directly impacting the Venezuelan people.“It’s very real,” a senior administration official told McClatchy. “It’s a matter of considering when doing the next sanction or the next round of sanctions will maximize the pressure.”Specifically,the government is looking at prohibiting the sale by U.S. companies of about 3.5 million barrels of oil and other refined oil products to Venezuela, such as the diluent naphtha, which is used to thin the tar-like heavy oil so that it can flow through more than 60 miles of pipelines from the Orinoco oil belt to the nation’s coast, where it can be either upgraded or exported.. It’s been months since the United States imposed its last significant set of sanctions against the Caracas government leading to concerns among Venezuelans in Miami and elsewhere in the United States that the Trump administration has eased up on the Maduro government. But administration officials say the Maduro government continues to find excuses to abuse and consolidate its power, such as the arrests of opposition leaders without real evidence for a foiled drone attack against the president.

India to step up use of biofuels to cut oil import bill (Reuters) – India aims to increase the use of biofuels to cut its oil import bill by 120 billion rupees ($1.7 billion) by 2022 and reduce carbon emissions, Prime Minister Narendra Modi said on Friday. India is the world’s third-biggest oil importer and consumer and ships in about 80 percent of its crude needs, but is gradually building capacity to increase its output of biofuels. The South Asian nation plans to build 12 bio-refineries costing 100 billion rupees to produce fuel from items including crop stubble, plant waste and municipal solid waste, Modi said. “Biofuels can help reduce import dependency on crude oil. They can contribute to a cleaner environment, generate additional income for farmers and rural employment,” he said at an event in New Delhi to celebrate World Biofuel Day. Modi, who faces elections next year, said building the bio-fuel refineries would create 150,000 new jobs, but did not give a timeframe for when they would all be up and running. India, a signatory to the Paris Climate deal, plans to reduce its carbon footprint by increasing ethanol content, a sugar byproduct, in its gasoline to 10 percent by 2022 and to 20 percent by 2030, Modi said. Supplies of ethanol to fuel retailers have jumped to about 1.41 billion litres in the current sugar year, which ends in September, from about 380 million litres in 2013/14, helping the nation cut energy imports by 40 billion rupees, he said. India aims to ramp up ethanol production to 4.5 billion litres in the next four years, a move that could cut the country’s gasoline consumption. Use of gasoline in India has been growing rapidly as millions more households buy motor cars and motor cycles due to rising income levels and cheaper credit. ($1 = 68.9575 Indian rupees)

Thailand’s EGAT seeks up to 1.5 mil mt/year LNG for 4-8 years – Thailand’s EGAT seeks up to 1.5 mil mt/year LNG for 4-8 years – State-owned power utility Electricity Generating Authority of Thailand, or EGAT, has issued a Request for Expression of Interest for importing 800,000-1.5 million mt/year of LNG for four to eight years starting March 2019, according to documents reviewed by S&P Global Platts. The REOI will be followed by a tender in end-September to early October, making it the power producer’s first LNG purchase tender that signals the opening up of the country’s gas markets, which have been controlled by state-run oil and gas company PTT. Thailand has been working to liberalize its natural gas markets and allow third parties to supply gas to end-users through PTT’s import infrastructure. This was driven by the need to boost competition and energy security, as domestic gas production has been unable to keep up with demand growth. EGAT, Thailand’s largest power producer, will import the gas at PTT’s Map Ta Phut LNG receiving terminal where the utility has acquired access to 1.5 million mt/year of regasification capacity from PTT LNG for a 38-year period from 2019-2056. EGAT expects to sign the terminal user agreement for third-party access of the 10 million mt/year Map Ta Phut LNG terminal by December 2018, finalize a sale and purchase agreement by February 2019 and receive its first cargo by March 2019. The power producer, which has an installed generation capacity of over 15 GW as of March 2018, will use the imported gas to feed its gas-fired power plants including 1,220 MW of capacity at South Bangkok, 710 MW at Bang Pakong and 750 MW at Wang Noi. EGAT expects a significant portion of its gas demand to be met through direct LNG imports instead of having to rely on PTT. However, PTT will have rights to participate in any LNG import tenders issued by EGAT.

South Korea data: Iranian crude imports drop 46% on year in Jul, Kazakhstan crude intake soars – South Korea’s crude oil imports from Iran dropped 45.8% year on year in July in the wake of the re-imposition of US sanctions, while intakes from Kazakhstan, the US and Mexico jumped as alternative sources. The Northeast Asian country imported 6.2 million barrels of crude from Iran last month, compared with 11.44 million barrels a year ago, data released late Thursday by the Korea National Oil Corp. showed. This marks the ninth consecutive decline since November last year when imports from Iran fell 26.8% year on year to 10.37 million barrels. The July imports, however, were up 12.8% from 5.49 million barrels in June. For the first seven months of this year, Iranian imports fell 36% year on year to 56.2 million barrels, compared with 87.81 million barrels in the year-ago period.In 2017, Iranian crude oil imports increased 32.1% to 147.87 million barrels. The country’s monthly imports of Iranian crude had increased since January 2016 when the US and EU lifted sanctions on Iran. The sharp decline in crude imports from Iran was largely attributable to fewer condensate purchases following the startup of new condensate splitters in the Persian Gulf nation. The decline is also due to South Korea trying to pare back crude shipments from Iran in a bid to secure an exemption from the US’ decision to re-impose sanctions on Tehran over its nuclear program, according to a KNOC official. South Korea has called for a US sanctions waiver to keep buying Iranian condensate saying it is hard to find alternative sources of condensate due to limited suppliers. About 70% of Iranian crude brought into South Korea is condensate, and more than half of the condensate which South Korea imports are from Iran. In order to fill the loss of Iranian barrels, South Korean importers have increased intakes from Kazakhstan, the US, Mexico and other non-OPEC suppliers. The country’s imports of Kazakhstan’s light CPC Blend soared more than seven times to 7.68 million barrels in July, from 1.07 million barrels a year ago. This made Kazakhstan the fourth-biggest crude supplier to South Korea in July, overtaking traditional Middle East suppliers such as the UAE, Iran and Qatar. Over January-July, intakes from Kazakhstan jumped nearly four times to 31.15 million barrels, from 7.32 million barrels a year ago. South Korea imported 5.37 million barrels of crude from the US, compared with no purchases a year ago. For the first seven months, South Korea’s intakes of US crude jumped more than six times to 19.7 million barrels, from 3.08 million barrels a year earlier. South Korea’s imports of Mexican crude also doubled to 3.98 million barrels in July, from 1.95 million barrels a year earlier. The country’s imports of Mexican crude are expected to further increase as Hyundai Oilbank said it would purchase more Mexican Maya, and other sour and heavy grades thanks to its expanded refining capacity and improved heavy oil upgraders.

Oil giant Total has pulled out of Iran and giant gas project, reports say — French oil giant Total has officially left Iran and abandoned its deal to develop a giant natural gas field in the country, Iran’s oil minister reportedly told state television Monday, leaving the isolated republic to look for a replacement. “Total Iran has officially left the contract to develop the South Pars Gas project’s phase 11… the process to replace with another company is underway,” Bijan Namdar Zanganeh was quoted as saying, Reuters reported. Total had already signaled that it could pull out of the Islamic republic, and its intention to develop part of the world’s largest gas field at South Pars, after the U.S. said it would reimpose sanctions on the country after pulling out of the 2015 nuclear deal in May.The first series of sanctions were reinstated in early August and target the country’s automotive sector, issuance of debt and metals trade. But more are to come in November; these will hit Iran’s crucial oil sector, shipping industry and financial institutions. Foreign companies like Total that have business dealings with Iran were told they could face secondary sanctions for doing business in the country, prompting a number to pull out. Maersk, Peugeot, GE, Boeing and Siemens have all cut ties with Iran in a bid to avoid U.S. sanctions, while Russian oil company Lukoil has also said it would put plans to pursue joint ventures with Iran on hold. The collapse of the deal with Total to develop the South Pars gas project is a blow for major OPEC oil producer Iran. Total had signaled in May that it could pull out once it had assessed the ramifications of President Donald Trump’s decision to reimpose sanctions and if it was not granted a sanctions waiver.Total CEO Patrick Pouyanne told CNBC in June that U.S. sanctions mean that “there’s not a single international company like Total who can work in any country with secondary sanctions. I don’t have the right. It’s just the reality of the world.” Iranian officials had earlier suggested that China’s state-owned CNPC, which also has a stake in the South Pars project, could take over Total’s stake, lifting its interest to from 30 percent to more than 80 percent, Reuters reported Monday.

Iran Oil Exports Fall By More Than 500,000 Bpd — Iran’s oil customers may have started to drastically wind down purchases of Iranian crude ahead of the U.S. sanctions, with Platts preliminary tanker tracking data showing that in the first half of August, Iran’s exports plunged by 600,000 bpd compared to July loadings, due to plummeting flows to India, Tehran’s second-largest oil customer.Between August 1 and 16, Iranian oil exports averaged 1.68 million bpd, Platts tracking data showed. This compares to average exports of 2.32 million bpd in the whole month of July, and to 2.10 million bpd in the first 16 days in July, according to S&P Global Platts estimates.In the first half of August, Iran’s biggest customer, China, scaled back loadings to 615,688 bpd from 722,100 bpd in July. But the second-biggest importer of Iranian oil in the world, India, saw crude flows from Iran plummet to 203,938 bpd in the period August 1-16, compared to 706,452 bpd in July, according to Platts trade flow data.Demand from Japan remained steady, but South Korea is not importing Iranian condensate for a second consecutive month in August. Demand in Europe was up strongly, especially from Italy, during August 1-16, according to Platts data. Iran’s oil exports in July were already lower, having dropped by 7 percent to 2.32 million bpd – their lowest level in four months. Analysts expect Iranian exports to drop even more noticeably next month, the rate of decline expected to accelerate as the United States looks to have Iran’s current customers reduce oil imports to ‘zero’.

Europe must ‘pay price’ to save nuclear deal: Iran FM (AFP) – Iran’s Foreign Minister Mohammad Javad Zarif said Sunday that Europe had not yet shown it was willing to “pay the price” of defying Washington in order to save the nuclear deal. Zarif said European governments had put forward proposals to maintain oil and banking ties with Iran after the second phase of US sanctions return in November. But he told Iran’s Young Journalist Club website that these measures were more “a statement of their position than practical measures”. “Although they have moved forward, we believe that Europe is not yet ready to pay the price (of truly defying the US),” Zarif said. US President Donald Trump pulled out of the 2015 nuclear deal in May, and began reimposing sanctions earlier this month that block other countries from trading with Iran. A second phase of sanctions targeting Iran’s crucial oil industry and banking relations will return on November 5. Europe has vowed to keep providing Iran with the economic benefits it received from the nuclear deal, but many of its bigger companies have already pulled out of the country for fear of US penalties. “Iran can respond to Europe’s political will when it is accompanied by practical measures,” said Zarif. “Europeans say the JCPOA (nuclear deal) is a security achievement for them. Naturally each country must invest and pay the price for its security. We must see them paying this price in the coming months.”

China defies U.S. pressure as EU parts ways with Iranian oil (Reuters) – China, seeking to skirt U.S. sanctions, will use oil tankers from Iran for its purchases of that country’s crude, throwing Tehran a lifeline while European companies such as France’s Total are walking away due to fear of reprisals from Washington. The United States is trying to halt Iranian oil exports in an effort to force Tehran to negotiate a new nuclear agreement and to curb its influence in the Middle East. China, which has cut imports of U.S. crude amid a trade war with Washington, has said it opposes unilateral sanctions and defended its commercial ties with Iran. On Monday, sources told Reuters Chinese buyers of Iranian oil were beginning to shift their cargoes to vessels owned by National Iranian Tanker Co (NITC) for nearly all their imports. The shift demonstrates that China, Iran’s biggest oil customer, wants to keep buying Iranian crude despite the sanctions, which were reimposed after the United States withdrew in May from a 2015 agreement to halt Iran’s nuclear program. “The shift started very recently, and it was almost a simultaneous call from both sides,” said one source, a senior Beijing-based oil executive, who asked not to be identified as he is not allowed to speak publicly about commercial deals. Tehran used a similar system between 2012 and 2016 to circumvent Western-led sanctions, which had curtailed exports by making it virtually impossible to obtain shipping insurance for business with Iran. Iran, OPEC’s third-largest oil producer, relies on sales of crude to China, Japan, South Korea, India and the EU to generate the lion’s share of budget revenues and keep its economy afloat. The United States has asked buyers of Iranian oil to cut imports to zero starting in November. Japan, South Korea, India and most European countries have already slashed operations.

Chinese Oil Imports From Iran Surge As Beijing Shifts To Iran Tankers To Bypass Sanctions – One month ago, when discussing the shift in Iran’s oil customer base as a result of Trump’s withdrawal from the 2015 Nuclear treaty and the potential blowback from China, we noted that in a harbinger of what’s to come, an executive from China’s Dongming Petrochemical Group, an independent refiner from Shandong province, said his refinery had already cancelled U.S. crude orders. “We expect the Chinese government to impose tariffs on (U.S.) crude,” the unnamed executive said. “We will switch to either Middle East or West African supplies,” he said. We also said that China may even replace most if not all American oil with crude from Iran: “Chinese importers are not going to be intimidated, or swayed by U.S. sanctions.”And sure enough, today Reuters reported that Chinese buyers of Iranian oil are starting to shift their cargoes to vessels owned by National Iranian Tanker Co (NITC) for nearly all of their imports to keep supply flowing amid the re-imposition of economic sanctions by the United States.To safeguard their supplies, state oil trader Zhuhai Zhenrong Corp and Sinopec Group, Asia’s biggest refiner, have activated a clause in its long-term supply agreements with National Iranian Oil Corp (NIOC) that allows them to use NITC-operated tankers, according to four sources with direct knowledge of the matter. The expected shift demonstrates that China – Iran’s biggest oil customer with India and the EU in 2nd and 3rd spot – will keep buying Iranian crude despite the US sanctions .

Exclusive: China’s Unipec to resume U.S. oil purchases after tariff policy change – sources (Reuters) – China’s Unipec will resume purchases of U.S. crude oil in October after a two-month halt due to the trade dispute between the world’s two largest economies, three sources with knowledge of the matter said. The decision to start buying crude oil again from the United States comes after Beijing earlier in August excluded it from its import tariff list. A source with knowledge of the matter said Unipec will “buy some U.S. crude, loading in October, following the change in Beijing’s policy.” “Unipec’s imports shrunk when China retaliated by putting crude oil on the tariff list but now it is coming back to normal business with import volumes recovering,” a second source said. The sources spoke on condition of anonymity as they were not authorized to discuss commercial deals with media. Unipec did not respond to a request for comment. For a graphic on U.S. crude oil exports to China, click tmsnrt.rs/2P4zVOn

Bullish oil bets fall to 11-month low: Kemp (Reuters) – Hedge funds have cut their bullish position in crude oil and refined fuels to the lowest level for almost a year, as fund managers continued to close out former long positions.Hedge funds and other money managers cut their net long position in the six most important petroleum futures and options contracts by 69 million barrels in the week to Aug. 14.Net length has been cut in 12 out of the last 17 weeks with a total reduction of almost 460 million barrels since April 17.Portfolio managers now hold a net position of just 952 million barrels, down from a peak of 1.484 billion in January, and the lowest since September 2017.Fund managers are becoming less bullish on the outlook for prices but few have dared to bet on substantial price falls (https://tmsnrt.rs/2OQQrkO).Gross long positions across the six major contracts have fallen by 464 million barrels since late April, while short positions have also fallen by 10 million barrels over the same period.Last week, as in most previous weeks, the reduction in net length was led by crude, with Brent down by 17 million and WTI by 41 million.By contrast, U.S. gasoline positions were down by 14 million barrels, but U.S. heating oil was unchanged and European gasoil rose by 4 million. And as in previous weeks, the reduction in net length was driven by the liquidation of former long positions (-67 million barrels) rather than the creation of new short ones (+2 million).

What Caused Oil’s Longest Losing Streak In Years? — Oil prices seemed to have leveled off after seven consecutive weeks of weekly declines, the longest streak in years. But the next steps are unclear. In the battle over the market narrative, concerns about the health of the global economy are up against the potential for serious supply outages in Iran. A lot could change by the end of this year, but as the summer draws to a close, it isn’t clear which narrative will win out. The fears about the global economy have moved to the front burner in recent weeks. The trade war between the U.S. and China still threatens to drag down global growth, although the news that the U.S. and China will resume talks this week for the first time since June seemed to buoy the markets. But the talks will be conducted at a lower level – the U.S. point person is an undersecretary at the Department of Treasury, not Secretary Steven Mnuchin, which raises questions about the authority to ink a deal.More importantly, Treasury isn’t even the agency that leads on trade. That adds up to U.S. and China essentially keeping their lines of communication open, but not actively seeking a resolution in any big way, at least not from this venue.But the talks at least increase the odds, however slightly, that the proposed $200 billion in U.S. tariffs on Chinese goods do not go forward. The U.S. Trade Representative is holding a six-day process beginning this week to look at those tariffs. Meanwhile, the meltdown in Turkey’s currency, the lira, has set off a different source of trouble. The turmoil spread to other emerging markets, dragging down a whole host of currencies. Weaker emerging market currencies threaten to seriously slow down demand – not just for oil, but for a range of commodities. The Bloomberg Commodities Index has declined by 3 percent this month and by more than 9 percent in the last three months. Oil prices are down by more than 10 percent since May.

Oil faces pressure on concerns of slowing economic growth –Oil prices dipped on Monday as concerns over slowing economic growth weighed on markets.International Brent crude oil futures were at $71.78 per barrel at 0019 GMT, down 5 cents from their last close.U.S. West Texas Intermediate (WTI) crude futures were down 4 cents, at $65.87 per barrel.”Disappointing industrial data out of China along with concerns over emerging market economies centered on Turkey weighed on commodities,” Edward Bell of Emirates NBD bank said in a note on Sunday.In the United States, U.S. energy companies last week kept the oil rig count unchanged at 869, according to Baker Hughes energy services firm on Friday.”The recent softening in benchmark prices should temper the pace of growth in U.S. exploration and production activity and lead to slower overall output growth,” Bell said.Outside the United States, traders said U.S. sanctions against Iran could soon impact prices.The U.S. government has introduced financial sanctions against Iran which, from November, will also target the country’s petroleum sector. Iran produced around 3.65 million barrels per day of crude in July, according to a Reuters survey, making it the third biggest producer within the Organization of the Petroleum Exporting Countries (OPEC), behind Saudi Arabia and Iraq.

Oil’s uptrend remains intact – A little over a month ago I wrote about NYMEX oil and suggested that the pullback was a buying opportunity. Investors watch for the opportunity to add to long positions as the price rebounds from any of the three support features on the oil price chart.To date, the price has not rebounded. Does that analysis still hold as oil falls towards $65?The short answer is “yes,” but with the repeated caveat that traders need to wait for evidence of a rebound before taking a long position. The analysis holds because the technical structure of the NYMEX oil market remains the same.The fall below the long-term uptrend line is potentially bearish, but other features suggest the bear is not in command of the market. The future importance of the uptrend line is the way this will now act as a resistance level for future rallies. Extending the line into the future suggests that it may be early 2019 before there is a serious challenge to the $76 price level. The extended line acts as a resistance level. That time frame changes if oil is able to move above the trend line and again use it as a support level.

Oil prices rise on easing trade war concerns, sanctions on Iran – (Reuters) – Oil futures rose on Monday after weeks of declines, as investors grew more concerned about an expected fall in supply from Iran due to U.S. sanctions and worried less that a trade war between the United States and China would hurt economic growth. Brent crude futures rose 38 cents to settle at $72.21 a barrel, a 0.5 percent gain. U.S. West Texas Intermediate (WTI) crude rose 52 cents, or 0.8 percent, to end at $66.43 a barrel. Last week, Brent declined for a third consecutive week, while WTI fell for a seventh week due to concerns that economic growth would slow because of U.S.-Chinese trade tensions and weakness in emerging economies. China and the United States will hold trade talks this month, the two governments said last week, hoping to resolve an escalating tariff war between the world’s two largest economies. Still, White House economic adviser Larry Kudlow said Beijing should not underestimate President Donald Trump’s resolve. “Part of the weakness we’ve seen in crude oil has largely been due to trade as people are concerned that increasing tariffs and tensions on trade are going to increase the level of uncertainty and potentially reduce global GDP demand,” s “Anything that reduces those tensions, you can see oil generally move back the other way.” Traders said U.S. sanctions against Iran were supporting prices. The U.S. government has introduced financial sanctions against Iran which, from November, will also target the petroleum sector of OPEC’s third largest producer. On Monday, Iran asked the European Union to speed up efforts to save a 2015 nuclear deal between Tehran and major powers, which Trump abandoned in May. Most EU companies have pulled out of Iran for fear of U.S. sanctions and Tehran said France’s Total had officially exited Iran’s South Pars gas project. “The Iranian sanctions will likely remain as a latent bullish force for another month or so until more definition is provided with regard to the impact on the country’s oil exports,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. China signaled it wanted to continue buying large volumes of Iranian oil despite U.S. pressure and was now switching to Iranian tankers to skirt U.S. sanctions on ship insurers.

Oil Edges Higher On Iran Fears — Oil prices edged up Monday and at the start of trading on Tuesday. “Prices are being supported by the prospect of lower oil supply from Iran,” Commerzbank said in a note. Also, the sharp fall over the past few weeks may have run its course, taking some steam out of the market, which reduces some of the downside risk. Still, concerns about the health of the global economy, and the recent rout in emerging market currencies, raises the threat of lower-than-expected demand. In order to get around U.S. sanctions, China is reportedly seeking to use oil tankers from Iran for its purchases. “Chinese buyers of Iranian oil were beginning to shift their cargoes to vessels owned by National Iranian Tanker Co (NITC) for nearly all their imports,” Reuters reported. The move could keep Iran’s oil exports from falling more than they otherwise would. According to Bloomberg and JPMorgan Chase, Saudi Arabia is set to see $65 billion in capital flee the country this year, or about 8.4 percent of GDP. The figure is down from the $80 billion that was withdrawn last year, but is still significant. Analysts attribute the political risk of the whims of the Saudi monarchy, and the “dimming of optimism surrounding Crown Prince Mohammed bin Salman’s Vision 2030 economic plan,” Bloomberg writes.

Oil nods up on U.S. sanctions against Iran, but America’s trade dispute with China weighs — Oil prices were mixed on Tuesday, with U.S. fuel markets seen to be tightening while the Sino-U.S. trade dispute dragged on international crude contracts.U.S. West Texas Intermediate (WTI) crude futures for September delivery were up 27 cents, or 0.4 percent, at 0306 GMT, at $66.70 per barrel. The contract expires on Tuesday.The more active October futures were up 7 cents, or 0.1 percent, to $65.49 a barrel.Traders said U.S. markets were lifted by a tightening outlook for fuel markets in the coming months.Inventories in the United States for refined products such as diesel and heating oil for this time of year are at their lowest in four years.This is occurring just ahead of the peak demand period for these fuels, with diesel needed for tractors to harvest crops and the arrival of colder weather during the Northern Hemisphere autumn raising consumption of heating oil.Outside the United States, Brent crude oil futures were somewhat weaker, trading at $72.18 per barrel, down 3 cents from their last close.This followed the United States offering on Monday 11 million barrels of crude from its Strategic Petroleum Reserve (SPR) for delivery from Oct. 1 to Nov. 30.The released oil could offset expected supply shortfalls from U.S. sanctions against Iran, which will target its oil industry from November.Because of the sanctions, French bank BNP Paribas said it expected oil production from the Organization of the Petroleum Exporting Countries (OPEC), of which Iran is a member, to fall from an average of 32.1 million barrels per day (bpd) in 2018 to 31.7 million bpd in 2019.Still, traders said overall market sentiment was cautious because of concerns over the demand outlook amid the trade dispute between the United States and China. A Chinese trade delegation is due in Washington this week to resolve the dispute, but U.S. President Donald Trump told Reuters in an interview on Monday he does not expect much progress, and that resolving the trade dispute with China will “take time.”

Oil Prices Mixed On News Of Strategic Reserve Release: Oil prices were mixed on Tuesday after the U.S. Department of Energy said it would offer 11 million barrels of crude for sale from the nation’s Strategic Petroleum Reserve ahead of financial sanctions against Iran, beginning in November. The delivery period for the proposed sale of sour crudes will be from Oct. 1 through Nov. 30 as renewed U.S. sanctions against Iran take full effect in early November. Traders also remained concerned about the demand outlook amid ongoing trade dispute between the United States and China. Ahead of crucial talks in Washington, U.S. President Donald Trump on Monday said in an interview that he doesn’t expect much progress in the talks for ending the dispute with China. Benchmark Brent oil was up 7 cents at $72.28 per barrel while U.S. West Texas Intermediate (WTI) crude futures for October delivery were down 3 cents at $65.39 a barrel.

Early SPR Release Could ‘At Least Optically’ Help Trump Achieve Goal — The U.S. sale of 11 million barrels of oil from its emergency stockpile will likely do little to offset the impact of sanctions on Iran. That timing of the sale — with the barrels set to hit the market in October and November — may reflect the White House’s concern over tight supplies amid the renewal of U.S. sanctions, according to analysts at ClearView Energy Partners LLC. The Trump administration has asked allies to halt all imports of Iranian oil by Nov. 4, stoking global supply fears. Yet an 11-million-barrel sale over two months likely won’t do much to offset the impact of sanctions, which the administration estimates will remove 700,000 to 1 million barrels a day of Iranian crude from the global market by early November. Analysts have also speculated about whether President Donald Trump will announce an emergency release from the Strategic Petroleum Reserve to lower U.S. pump prices in the run-up to November’s mid-term elections. The release will “at least optically” help Trump appear to achieve his goal of lowering gasoline costs, according to Michael Tran, commodity strategist at RBC Capital Markets LLC. “The truth is that retail gasoline prices always trend lower during the fall shoulder season, which also coincides with when domestic refiners head into seasonal maintenance,” he wrote in a note. The October sale of sour, high-sulfur crude, which was announced on Monday, is part of a regular draw-down schedule to raise money for government programs. The Energy Department will draw crude from three sites that are part of the Strategic Petroleum Reserve: Bryan Mound and Big Hill in Texas, and West Hackberry in Louisiana. Any further action by the president, who can release as much as 30 million barrels in an emergency, is unlikely before the Nov. 4 deadline, ClearView said. Trump has proposed the sale of half of the stockpile — which currently totals 660 million barrels — to cut the budget deficit. Congress has so far authorized the sale of around 240 million barrels between 2017 and 2027.

Oil prices increase amid decline in US crude inventories – Brent crude oil hit a two-week high above $74 a barrel on Wednesday after an industry report showed a drop in U.S. crude inventories ahead of official government data. The American Petroleum Institute reported U.S. crude stocks fell last week by 5.2 million barrels, more than three times the drop analysts expected. The government’s official figures are due at 10:30 a.m. ET (1430 GMT).”The API inventory data published after the close of trading yesterday are lending buoyancy to prices,” Commerzbank analyst Carsten Fritsch said.”Thus the official inventory data this afternoon are also likely to show a more marked inventory reduction.”Brent crude, the international benchmark, rose $1.22, or 1.7 percent, to $73.85 a barrel by 8:19 a.m. ET (1219 GMT). U.S. crudegained $1.14, or 1.7 percent, to $66.98.Oil also found support from a weak dollar, which has slipped this week in response to U.S. President Donald Trump’s comment that he was “not thrilled” by the Federal Reserve’s interest rate increases.A weaker dollar makes oil less expensive for buyers using other currencies.The prospect of a drop in oil exports from Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries, in response to new U.S. sanctions is also supporting the market.European oil companies have started to cut back on Iranian purchases, although Chinese buyers are shifting their cargoes to Iranian-owned vessels to keep supplies flowing.”The Iran issue continues to occupy traders’ minds,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader. OPEC has started to boost supplies following a deal with Russia and other allies in June, although producers have been cautious so far. Saudi Arabia told OPEC it cut supply in July, rather than increasing output as expected. Signs of tighter supply countered concern about slowing oil demand stemming partly from the trade dispute between the United States and China, the world’s two largest economies. U.S. and Chinese officials were set to resume talks on Wednesday, but Trump has predicted there will be no real progress.

WTI Dips’n’Rips As Algos Panic Over Inventory Report – WTI has soared since last night’s API-reported surprisingly-large crude draw (Oct above $67), but is falling back after DOE reported bigger than expected inventory builds at Cushing and in Gasoline and Distillates (despite a crude draw). Bloomberg Intelligence Energy Analyst Fernando Valle notes that peak summer driving season may be shrinking in the rear-view mirror, but U.S. refineries are running like it’s the Fourth of July as the availability of cheap crude and wide margins encourages them to keep pumping out petroleum products. Export markets will have to absorb that output to keep margins wide. Gasoline looks particularly vulnerable, with the upcoming switch to winter grades likely to force a sell-off.“The API inventory data published after close of trading yesterday are lending buoyancy to prices this morning,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “Thus the official inventory data this afternoon are also likely to show a more marked inventory reduction.” DOE:

• Crude -5.84mm (-2mm exp)
• Cushing +772k (+900k exp), Genscape +519k
• Gasoline +1.20mm (-1.05mm exp)
• Distillates +1.849mm (+1.5mm exp)

Having flip-flopped between draws and builds for the last six weeks, crude inventories were expected to draw this week and did moire than expected and more than AP reported. However, Cushing stocks increased for the second week in a row and distillates and gasoline saw bigger than expected inventory builds.

Crude Oil Prices Settle at 2-Week Highs on Falling U.S. Crude Supplies – WTI crude oil prices settled sharply higher Wednesday as traders cheered a government inventory report showing U.S. crude supplies fell by more-than-expected last week. On the New York Mercantile Exchange crude futures for October delivery rose 3.1% to settle at $67.86 a barrel, while on London’s Intercontinental Exchange, Brent rose 2.85% to trade at $74.70 barrel. Inventories of U.S. crude fell by 5.836 million barrels for the week ended Aug. 17, well above expectations for a draw of 1.497 million barrels, according to data from the Energy Information Administration (EIA). The large draw in crude supplies emerged as imports fell by about 1.059 million barrels a day (bpd), while exports fell by 2.58 million bpd, data from EIA showed. Gasoline inventories rose by 1.200 million barrels, confounding expectations for a draw of 0.488 million barrels, while supplies of distillate — the class of fuels that includes diesel and heating oil — rose by 1.849 million barrels, against expectations for a build of 1.463 million barrels. The build in products came as refinery activity was unchanged at 98.1% of their capacity last week compared with the prior week, with inputs averaging about 17.89 million barrels per day during, down 89,000 barrels from the prior week, the EIA said. U.S. oil production rose for the second-straight week to match record highs of 11.0 million bpd. Rising U.S. output did little to dent oil prices as investors continued to expect that global supplies will come under pressure when sanctions on Iran, targeting the country’s energy exports, go into effect in early November. Some have said that the loss of Iranian crude from global market could be as much as 1 million barrels a day.

US oil continues move upward as domestic inventories fall — Oil prices steadied on Thursday as an escalating trade dispute between the United States and China offset news of a decline in U.S. commercial crude inventories. Benchmark Brent crude oil was down 4 cents a barrel at $74.74 by 8:22 a.m. ET (1222 GMT). U.S. light crude was 6 cents higher at $67.92. Both contracts rose by more than $2 a barrel in the previous session after the government reported a bigger-than-anticipated drop in crude stockpiles. “The bullish afterglow of yesterday’s drop in U.S. oil stocks is fading as concerns over the U.S.-China trade spat return to the fore,” . “Fears are rife that economic headwinds stemming from an escalation in their trade war will ultimately hurt global oil demand.” The trade dispute between the United States and China deepened on Thursday with the imposition of 25 percent tariffs on $16 billion worth of each other’s goods. The world’s two largest economies have now imposed tariffs on a combined $100 billion of products since early July, with more in the pipeline, adding to risks to global economic growth. Washington is holding hearings this week on a proposed list of another $200 billion worth of Chinese imports to face duties, to which China is almost certain to respond. “These (overall) measures are expected to shave up to 0.3-0.5 percentage points from China’s real GDP growth in 2019,” said rating agency Moody’s Investor Service. “For the U.S. … trade restrictions will trim off about one quarter of a percentage point from real GDP growth to 2.3 percent in 2019.” Oil demand is closely linked to economic activity and the trade dispute has already led analysts to trim their forecasts for future energy consumption. But while the outlook for oil demand growth may be moderating, some markets are tight. U.S. commercial crude oil inventories fell by 5.8 million barrels in the week to Aug. 17 to 408.36 million barrels, the Energy Information Administration (EIA) said in its weekly report. That was nearly four times the drop forecast by analysts in a Reuters survey.

WTI Clears $68 on Iran Sanctions Outlook | Rigzone — The WTI crude oil futures contract for September surged to $68.10 a barrel Thursday amid ongoing expectations that the United States will impose economic sanctions on Iran.“Today’s upward movement in crude is based on the continued belief – some would say hope – that Iran sanctions will take some oil off the market, even with the (U.S.) Strategic Petroleum Reserve release announced yesterday,” said Bruce Bullock, director of the Maguire Energy Institute with Southern Methodist University’s Cox School of Business. “That’s been the predominant theme in the rally since late last week.”Despite crossing the $68 mark, the WTI ended the day at $67.35 – still a 92-cent gain from Monday. The October Brent benchmark rose 42 cents to settle at $72.63 a barrel.Also ending the day higher was the September Henry Hub natural gas price, which gained nearly four cents to settle at $2.98. Tuesday’s trading may have set in motion a transition for natural gas, observed Bullock.“We saw a nice bump in natural gas prices today but whether or not it continues is debatable,” Bullock explained. “At some point, the natural gas market will change its focus from summer usage and demand to winter storage and we should see a rally as storage numbers are low compared to the last few years. Time will tell if that started today or if it will start later in the summer.”The price of a gallon of reformulated gasoline settled at just under $2.02

Crude Oil Prices Settle Marginally Lower on Trade Worries – WTI crude oil prices settled marginally lower Thursday as traders weighed falling U.S. crude supplies against an escalating U.S.-China trade war that some fear could stifle global growth and reduce oil demand. On the New York Mercantile Exchange crude futures for October delivery fell 3 cents to settle at $67.83 a barrel, while on London’s Intercontinental Exchange, Brent fell 0.07% to trade at $74.73 barrel. The United States imposed 25% tariffs on an additional $16 billion of Chinese goods just after midnight ET Thursday, prompting China to respond with in-kind measures against U.S. goods. That renewed fears of a full-blown U.S. and China trade war, which could not only dent global growth but likely lead to a slowdown in oil demand. The IEA recently warned “trade tensions might escalate and lead to slower economic growth, and in turn lower oil demand.” This could dent oil prices, the IEA said, as it would alleviate the pressure on already low spare oil capacity amid expectations that U.S. sanctions on Iran will pressure global oil supplies. President Donald Trump pulled the United States out of the Iran nuclear agreement in May, allowing sanctions against Iran to snap back into place. Analysts have estimated that as much as one million barrels of crude a day could be wiped out from the global market. Crude oil prices are on track to snap a three-week losing streak after rising 3% Wednesday on the back a government data showing a larger-than-expected fall in U.S. crude supplies last week. Inventories of U.S. crude fell by 5.836 million barrels for the week ended Aug. 17, well above expectations for a draw of 1.497 million barrels, according to data from the EIA. The large draw in crude supplies emerged as imports fell by about 1.059 million barrels a day (bpd), while exports fell by 2.58 million bpd, data from EIA showed.

Oil prices rise on Iran sanctions; trade row mutes activity — Oil prices rose on Friday, putting futures on pace to snap several weeks of declines, supported by signs that U.S. sanctions on Iran are already reducing global crude supply. Benchmark Brent crude oil was up $1.25, or 1.7 percent, at $75.98 a barrel by 9:41 a.m. ET (1341 GMT). Brent was on track for a gain of nearly 6 percent this week, following three consecutive weekly losses. U.S. West Texas Intermediate crude rose $1.18, or 1.7 percent, to $69.01, heading for a gain of more than 4.5 percent this week. WTI has fallen for seven straight weeks.”Both crude markers are on track to end a steady run of weekly declines. This is largely due to a tightening fundamental outlook on the back of looming Iranian supply shortages,” said Stephen Brennock analyst at London brokerage PVM Oil Associates.The U.S. government re-imposed sanctions on Iran this month after withdrawing from a 2015 international nuclear deal, which Washington saw as inadequate for curbing Tehran’s activities in the Middle East and denying it the means to make an atomic bomb. Tehran says it has no ambitions to make such a bomb.Iran is the third-biggest producer in the Organization of the Petroleum Exporting Countries, supplying around 2.5 million barrels per day (bpd) of crude and condensate to markets this year, equivalent to around 2.5 percent of global consumption.”Third-party reports indicate that Iranian tanker loadings are already down by around 700,000 bpd in the first half of August relative to July, which if it holds will exceed most expectations,” U.S. investment bank Jefferies said on Friday. “We expect that by Q4 the market will be dealing with either undersupply, dwindling spare capacity – or both,” it added.

Bullishness Is Back In The Oil Market – Oil prices are on track to close out the week with strong gains, after several weeks of declines. The EIA data showing a steep decline in crude stocks helped push prices up on Wednesday and return a sense of bullishness to the market. “Both crude markers are on track to end a steady run of weekly declines. This is largely due to a tightening fundamental outlook on the back of looming Iranian supply shortages,” U.S. sanctions on Iran’s oil take effect in November, but already countries around the world have been slashing purchases, which are affecting Iran’s exports. “Third-party reports indicate that Iranian tanker loadings are already down by around 700,000 bpd in the first half of August relative to July, which if it holds will exceed most expectations,” investment bank Jefferies said on Friday. “We expect that by Q4 the market will be dealing with either undersupply, dwindling spare capacity – or both.” Lower level trade talks between the U.S. and China ended on Thursday with no major breakthrough. Meanwhile, the $16 billion in tariffs, from both sides, went into effect this week. China’s slate of tariffs targeted U.S. energy products, including butane, propane, naptha, jet fuel and coal, among other items. But because China has declined to include crude oil on the list of tariffs, for now at least, state-owned Unipec may resume buying U.S. crude in October, according to Reuters. The cost of handling and disposing of “produced” water that comes out of an oil well is rising in the Permian, just another in a long line of stretched services. Companies typically truck the water away for disposal, but more recently have been building pipelines, according to the Wall Street Journal. In some parts of the Permian wells produce ten times as much water as they do oil and gas, according to WoodMac. Costs are rising, and water management can add as much as $6 per barrel to the cost of producing a barrel of oil. As a result, water costs alone could shave off 400,000 bpd of supply from the Permian by 2025.

Oil Prices Rise As Rig Count Slips — Baker Hughes reported a 13-rig decrease to the number of active oil and gas rigs in the United States on Friday. Oil and gas rigs fell to 1,044, according to the report, with the number of active oil rigs falling by 9 ad the number of gas rigs falling by 4.The oil and gas rig count is now 104 up from this time last year.At 09:58 a.m. EDT on Friday, WTI Crude was up 1.74 percent at $69.01, while Brent Crude traded up 1.73 percent at $76.39, on signs that Iran’s oil exports have started to drop off, although overall market sentiment was cautious as the U.S.-China trade dispute drags on. Both benchmarks were up significantly from this time last week.Earlier on Friday, an International Business Times/Newsweek poll suggested oil prices would rise on anticipated supply disruptions from Iran, although respondents felt that the slowing oil demand growth, combined with a weaker dollar, would curtail price increases. Canada’s oil and gas rigs for the week rose by 17, bringing its total oil and gas rig count to 229, which is 12 more than this time last year, with a 12-rig gain for oil and a 5-rig gain for gas for the week. The price of Western Canada Select (WCS) was trading down on Friday, trading at $36.58 as of 11:50 am, just a hair higher than this time last week. EIA estimates for US production were up 100,000 barrels per day for the week ending August 17, averaging 11 million bpd. again, after dipping down to 10.8 million bpd as of August 03. By 1:18pm EDT, WTI and Brent were trading up. WTI was trading up 1.72% (+$1.17) at $69.00. Brent crude was trading up 1.69% (+$1.27) at $76.36 per barrel.

Crude Oil Prices Settle Higher to Snap 7-Week Losing Streak – WTI crude oil prices settled higher Friday, as signs of falling Iranian output and tightening domestic output lifted sentiment.On the New York Mercantile Exchange crude futures for October delivery gained 1.3% to settle at $68.72 a barrel, while on London’s Intercontinental Exchange, Brent rose 1.34% to trade at $75.74 a barrel.Oilfield services firm Baker Hughes reported on Friday that the number of U.S. oil drilling rigs in operation fell by 9 to 860.The drop in rig counts, pointing to signs of tighter output, comes against data, released earlier this week, showing U.S. output rose for second-straight week to 11.0 million barrels a day.”The data is likely seen to be as slightly positive for WTI oil prices as the oil rig count trend was down considerably after being flat the week before, which may signal that activity levels are finally slowing into the fourth quarter of the year,” National Alliance said.The upbeat day for oil prices comes even as a meeting between the U.S.-China failed to deliver any material progress. China’s economy has been pressured by tariffs, stoking fears that the world’s biggest oil consumer appetite for oil may start to wane, which would stifle oil prices.Also helping sentiment on oil were signs of falling Iranian crude output ahead of U.S. sanctions on the Islamic Republic’s crude exports, expected to take effect in November.Jefferies, citing third-party reports, said Iranian tanker loadings are already down by around 700,000 barrels a day in the first half of August from the prior month.Analysts have said the loss of Iranian crude from the market could rise to as much as 1 million barrels per day.The first weekly rise in for U.S. oil prices in eight weeks was also supported by a 3% gain on Wednesday after domestic supplies fell more than expected. Inventories of U.S. crude fell by 5.836 million barrels for the week ended Aug. 17, confounding expectations for a drawof 1.497 million barrels, according to data, released Wednesday, from the Energy Information Administration (EIA).

Saudi Arabia reportedly calls off Aramco IPO and disbands advisers —Saudi Arabia has scrapped its plans to list shares of state-owned energy giant Aramco on stock exchanges, Reuters reports.However, the kingdom’s powerful crown prince still wants to take Aramco public at some point in the future, sources familiar with the process told CNBC’s David Faber. The IPO is now less urgent because oil prices have rebounded above $70 a barrel, relieving pressure on Saudi finances, the sources said.The initial public offering was poised to be the largest ever and was at the center of Crown Prince Mohammed bin Salman’s ambitious plan to overhaul the Saudi economy. The Saudis had hoped to attract a $2 trillion valuation for Aramco, the world’s largest oil company, though some outside analysts have pegged its value at half that amount.Doubt has been swirling around the IPO for months as the kingdom deferred making decisions on key parts of the stock market debut, including where to list shares overseas. Skepticism only grew deeper earlier this year when sources familiar with the process said Aramco would first list on its domestic exchange, the Tadawul, and put off an international listing. Now, the kingdom will no longer seek to publicly list shares at home or abroad and Saudi Aramco has dismissed advisers working on the deal, several sources told Reuters. One source said the decision to cancel the IPO had been made “some time ago.”

Saudi Arabia insists it is ‘committed’ to Aramco float despite reports – Saudi Arabia has denied reports that it cancelled its plans to sell shares in state oil giant Aramco. Reuters earlier reported that a group of financial advisers had abandoned a plan to sell 5% of the firm. The news agency quoted a source suggesting the decision was taken some time ago but was not being announced. Saudi Arabia’s energy minister said the government would proceed with the flotation – which has been billed as the largest ever. “The government remains committed to the IPO [initial public offering] of Saudi Aramco at a time of its own choosing when conditions are optimum,” Khalid al-Falih said in a statement. Mohammed bin Salman, Saudi Arabia’s Crown Prince, first proposed the share sale early in 2016 as part of his economic reform agenda, to bring Western regulation and scrutiny to the company, as well as raising cash to reduce the country’s large budget deficit. At the time he predicted the sale would value Aramco at around $2 trillion (£1.55 tn). The plan would see shares float on both the local stock market in Riyadh and one of the world’s leading international financial centres. Reuters earlier said it had spoken to four senior industry sources about the plans being scrapped. “The decision to call off the IPO was taken some time ago, but no-one can disclose this, so statements are gradually going that way – first delay then calling off,” Reuters quoted one as saying. The wire service said financial advisers who had been working on the listing were now focusing on the proposed acquisition of a “strategic stake” in local petrochemicals maker Saudi Basic Industries, according to two of its sources.

Saudi Arabia’s Problem Isn’t the Canada Fight, It’s Capital Flight – As Saudi Arabia raises the stakes in its dispute with Canada, the economic fallout could worsen an already serious issue for the kingdom: capital flight. Trade between the two countries is small, valued at roughly $4 billion, but the diplomatic dust-up has heightened the sense of risk in the Saudi investment climate, and is certain to scare even more capital away. According to research by JPMorgan, capital outflows of residents in Saudi Arabia are projected at $65 billion in 2018, or 8.4 percent of GDP. This is less than the $80 billion lost in 2017, but a sign of a continued bleed. Significantly, the projection was made before the contretemps with Canada. According to research by Standard Chartered, the first quarter of 2018 saw $14.4 billion in outward portfolio investment into foreign equities, the largest surge since 2008. There are concerns that the government is leaning on banks and asset managers to discourage outflows, a kind of informal capital-control regime. This flight signals the dimming of the optimism surrounding Crown Prince Mohammed bin Salman’s Vision 2030 economic plan. Many of the institutional reforms outlined in the plan – designed to diversify the Saudi economy, attract foreign investment and create jobs – are needed to liberalize the state-led, resource-dependent economy. Investors had hoped Riyadh would follow through on economic reforms, but have been disheartened by such high-profile actions as the arrest of prominent businessmen last year, and a recent campaign to silence critics, especiallywomen activists. These measures – add to them now the spat with Canada – indicate that the state favors regime stability and consolidation over the rule of law, and the creation of institutions and regulations that can check the state. Whatever the political compulsions behind these actions, they have done little to address the fundamental problem of the Saudi economy – that it is captive to, and reliant on, the state. For private-sector growth to take place, capital needs to feel safe, and investors need legal guarantees to protect them. But this has not happened. Instead, the business cycle continues to be fueled by government project-spending tied to oil revenues: Government deposits appear in local banks, then loans go out to favored private-sector contractors. It is striking that the capital flight is taking place despite a recent recovery in global oil prices. The Saudi current account will be supported by $224 billion in hydrocarbon exports in 2018, a massive jump from $170 billion last year. But this is apparently insufficient to reassure investors, who have noted the absence of a corresponding jump in foreign reserve assets. Nor has it escaped their attention that the new revenue stream is not cushioning the expansionary fiscal policy, which continues to run a deficit.

Rights groups warn Saudi female activist may face beheading — Rights groups are warning that a female Shiite activist detained in Saudi Arabia since December 2015 may be beheaded along with other activists. Amnesty International, Human Rights Watch and other groups have said that Israa al-Ghomgham and at least four other activists face execution for participating in 2011 Arab Spring protests in eastern Saudi Arabia’s Shiite heartland. Human Rights Watch says al-Ghomgham is the “first female activist to possibly face the death penalty for her human rights-related work, which sets a dangerous precedent for other women activists currently behind bars.” The U.S. State Department said Wednesday it was aware of al-Ghomgham’s case and remains “deeply concerned by the detention of activists in Saudi Arabia.” Saudi officials didn’t respond to a request for comment on Thursday amid the Eid al-Adha holiday.

Yemen war: More than eight million on verge of starvation – Aljazeera video— The United Nations has described the conflict in Yemen as one of “the worst humanitarian disasters in modern times”. The civil war has left millions struggling to afford basic goods.It is estimated that 8.4 million Yemenis are on the verge of starvation, with many more eating just one small meal a day. Al Jazeera’s Alan Fisher reports from neighbouring Djibouti.

Houthis: Saudi-UAE air raids kill dozens, including 22 children — Yemen‘s Houthi rebels say air raids by the Saudi-UAE military alliance have killed dozens of civilians, most of them children, in a reported incident two weeks after a coalition air attack on a school bus killed 40 boys.According to the Houthi movement’s Al Massira TV, 22 children and four women died on Thursday as fighter jets targeted a camp for internally displaced people in Ad Durayhimi, which lies about 20km from the Red Sea city of Hodeidah.Backed by the United States, Saudi Arabia and the United Arab Emirates (UAE) have carried out attacks in Yemen since March 2015 as part of a military campaign to reinstate the internationally recognised government of President Abu-Rabbu Mansour Hadi. In 2014, Hadi and his forces were overrun by the Houthi rebels who currently control much of northern Yemen, including the capital, Sanaa. Yemeni government forces – backed by Saudi Arabia and the UAE – launched a major operation to retake Hodeidah and its strategic seaport from Houthi rebels in June.Hussein al-Bukhaiti, a Yemeni journalist in Sanaa, said the death toll in Thursday’s air raids stood at 31, citing a medical source.”The Saudi strikes at first targeted a village in the Ad Durayhimi area south of Hodeidah, killing five people and injuring another two,” he told Al Jazeera.Al-Bukhaiti said that 26 women and children had come under attack before boarding a bus in an attempt to flee, but a “second Saudi-UAE strike targeted that bus, killing everyone”.

UN condemnation after 22 children killed in Yemen strike – BBC A senior UN official has condemned another deadly Saudi-led coalition air strike in Yemen, which has killed at least 22 children and four women.The victims were fleeing fighting in the al-Durayhimi district, south of the port city of Hudaydah, when their vehicle was hit on Thursday.A separate air strike the same day killed four children, according to the UN’s humanitarian chief Mark Lowcock.It comes just weeks after a strike on a bus killed over 40 children.The Saudi-led coalition, which is backing Yemen’s government in a war with the Houthi rebels, has yet to comment on the latest deaths. However, it responded to the news of the deadly bus attack in the northern province of Saada earlier this month by saying that its actions were “legitimate”.It insists it never deliberately targets civilians, but human rights groups have accused it of bombing markets, schools, hospitals and residential areas. The first reports of the strike emerged in Houthi rebel media, which broadcast graphic footage of what it said were victims and aftermath of the strike late on Thursday.Mr Lowcock’s statement on Friday confirmed that the victims had been fleeing violence around the rebel-held port city Hudaydah. He renewed calls for an impartial and independent investigation into air strikes. A report by Human Rights Watch the same day accused the Saudi-led coalition of failing to hold “credible” investigations into such incidents. The reported attack was condemned by Unicef, Save the Children and other international organisations.

Iran says no OPEC member should be able to take over its share of oil exports –Iran told OPEC on Sunday that no member country should be allowed to take over another member’s share of oil exports, expressing Tehran’s concern about Saudi Arabia’s offer to pump more oil amid US sanctions on Iranian oil sales. In a meeting with OPEC Secretary-General Mohammad Barkindo, a senior Iranian diplomat urged him to keep the group out of politics, Reuters reported. “No country is allowed to take over the share of other members for production and exports of oil under any circumstance, and the OPEC Ministerial Conference has not issued any licence for such actions,” Iran’s oil ministry news agency SHANA quoted Kazem Gharibabadi, permanent envoy to Vienna-based international organisations, as saying. In May, US President Donald Trump pulled out of an international nuclear deal with Iran, OPEC’s third-biggest producer, and announced the sanctions. Washington is pushing allies to cut imports of Iranian oil to zero and will impose a new round of sanctions on Iranian oil sales in November. According to OPEC’s latest monthly report on 13 August, oil production in Iran was about 3.737 million barrels per day (bpd) in July, declining 56,300 bpd from 3.793 million bpd in June, based on secondary sources, Albawaba Business reported. Still, Bloomberg reported that OPEC’s output increased in July, averaging 32.32 million bpd, up by 41,000 bpd from June, in spite of sliding output in Iran, Libya and Saudi Arabia.Trump has called on OPEC to pump more oil to bring down prices. Energy ministers of Saudi Arabia, a US ally, and Russia said in May they were prepared to ease output cuts to calm consumer worries about supply. “Iran believes that OPEC should strongly support its members at this stage and stop the plots of countries trying to politicise this organisation,” Gharibabadi said.

A Saudi-Iran Oil War Could Break Up OPEC – When OPEC and Russia shook on increasing crude oil production by a million barrels daily to stop the oil price climb that had begun getting uncomfortable for consumers from Asia to the United States, there was no sign of what was to come just two months later: slowing demand in Asia, ample supply, and a brewing price war between Saudi Arabia and Iran.Saudi Arabia, Iran’s arch-rival in the Middle East, has been a passionate supporter of President Trump’s intention to pull out of the nuclear deal with Iran and reimpose sanctions. This support is not simply on ideological or religious grounds, it also has a purely economic motive: the less Iran crude there is for sale, the more consumers will buy from Saudi Arabia.Iran, however, is not giving up so easily. It has more to lose, after all, with the harshest sanctions yet coming into effect in the coming months. The first shots in this war were already fired: Saudi Arabia cut its selling price for oil shipped to all its clients except the United States, S&P Global Platts reports in a recent analysis of OPEC. Iran did the same and has indicated that it is prepared to do a lot more if any other producer threatens its market share. In fact, statements from senior government and military officials suggest that Iran is ready to go all the way to closing off the Strait of Hormuz. While analysts argue whether Iran’s threats have any teeth, oil demand news from Asia is giving OPEC another cause for worry. Slowing economic growth is dampening oil demand growth and both the Chinese yuan and the Indian rupee are falling against the dollar as a result of the economic developments in both Asia and the United States, whose economy is growing so fast that some are beginning to worry that it will soon run out of steam. So, OPEC’s internal fractures are deepening and likely to deepen further because Saudi Arabia and Iran are highly unlikely to put down their arms, even if it means cutting prices to uncomfortably low levels. Saudi Arabia could boost its production. According to Platts, it has the biggest portion of OPEC’s combined spare capacity. Iran is not really in a position to do so, what with exports already falling and expected to fall further as the November 4 start of the sanctions approaches. Yet Iran has made clear that it will not stop exporting oil and China, for one, has made clear it will not stop buying it.

Iran Again Threatens Strike On US, Israel After Bolton Warns “Maximum Pressure” Coming – In what now seems like a weekly occurrence, Iran on Wednesday warned its military wouldn’t hesitate to strike American and Israeli targets should it be attacked by the United States after previous words from the US national security advisor warning that “maximum pressure” will be brought to bear against Tehran. The words were issued during a public speech in Tehran by a senior cleric who works closely with Supreme Leader Ayatollah Ali Khamenei named Ahmad Khatami. He told a congregation during Eid praryers in Tehran, “The price of a war with Iran is very high for America.” Khatami said, “They know if they harm this country and this state in the slightest way the United States and its main ally in the region, the Zionist regime (Israel), would be targeted.” The fiery speech was in response to statements given earlier by US National Security Advisor John Bolton and Israeli Prime Minister Benjamin Netanyahu. On Wednesday while speaking at a press conference in Jerusalem where he was meeting with Israeli officials, Bolton said, “Every time that Iran has brought missiles or other threatening weapons into Syria in recent months Israel has struck those targets,” and added, “I think that’s a legitimate act of self-defense on the part of Israel.” Bolton seemed to boast about Israeli’s capability to act against Iran and its allies in Syria during a speech wherein he also warned Syrian President Bashar al-Assad that if he “uses chemical weapons we will respond very strongly and they really ought to think about this a long time.” Bolton was referencing the impending major Syrian and Russian military offensive against al-Qaeda held Idlib province in the country’s northwest. And during a joint press conference Monday wherein Bolton and Netanyahu stood side by side, the two blasted the Iran nuclear deal and those international signatories still clinging to it even after the US pulled out last May. “It’s a question of the highest importance for the U.S. that Iran never get a deliverable nuclear weapons capability,” Bolton said during Monday’s remarks, adding: “It’s why we’ve worked with our friends in Europe to convince them of the need to take stronger steps against the Iranian nuclear weapons and ballistic missile programs.” Monday’s statements slamming the Iran nuclear deal and calling for continued “maximum pressure” on Tehran…

Israel Urges U.S. to Recognize Claim to Golan Heights– Prime Minister Benjamin Netanyahu hoped on Thursday that the United States will recognition Israel’s claim to the Syrian Golan Heights, which it has been occupying for decades. Netanyahu made his remarks after US National Security Adviser John Bolton said the issue is not currently under consideration by Washington. Israel captured much of the Golan from Syria in a 1967 war and annexed it, in a move not endorsed internationally. In May, a senior Israeli official said that US recognition could be forthcoming within months. But in a Reuters interview during a visit to Israel this week, Bolton said “there’s no discussion of it, no decision within the US government”. Netanyahu was asked whether Israel, in light of Bolton’s remarks, had dropped expectations of US recognition of Israel’s Golan claim. He replied: “Would I give up on such a thing? No way.”

Israel closes north Gaza border crossing –The Defense Ministry confirmed Sunday morning that the Erez Crossing on the Gaza Strip’s northern border was closed in response to Friday’s violent border clashes. The decision was made by Defense Minister Avigdor Liberman after an assessment of the situation on Saturday evening. There was no mention of how long the closure would last. The move was first reported by Palestinian media sources in Gaza and the West Bank, who said that Israel told the Hamas terror group controlling the Gaza Strip that it would close the border crossing on Sunday morning. The border crossing, which acts as the only pedestrian crossing between the Gaza Strip and Israel, will still be open for medical emergencies requiring the transfer of Gazans to Israeli hospitals, according to Palestinian media reports.The majority of pedestrians who pass through the crossing are seeking medical treatment. On Friday thousands of Gazans demonstrated along the Israeli border near the Erez Crossing in weekly Hamas-backed “March of Return” demonstrations. Hamas leaders had urged the public to participate in Friday’s protests.

Palestinians sort tons of mail withheld by Israel for 8 years – – Palestinian postal workers in the West Bank are sifting through eight years’ worth of undelivered mail held by Israel. In recent days the Palestinian postal staff in Jericho has been sorting through tons of undelivered mail in a room packed with letters, boxes and even a wheelchair. The Palestinians say Israel has withheld delivery of post shipments to the Palestinian territories through its national postal service since 2010. According to Palestinian postage official Ramadan Ghazawi, Israel did not honor a 2008 agreement with the Palestinians to send and receive mail directly through Jordan. Mail was indeed delivered through Jordan but was denied entry by Israel, causing a years-long backlog. “It was blocked because each time (Israel) used to give us a reason and an excuse. Once they said the terminal, the building that the post was supposed to arrive to is not ready and once (they said) to wait, they’re expecting a larger checking machine (security scanner),” he said. Israel says the sides came to an understanding about a year ago on postage delivery but that it has not yet resulted in a “direct transfer,” according to Cogat, the Israeli defense body responsible for Palestinian civilian affairs in the West Bank.

Basra water contamination sends hundreds to the hospital –Health authorities in the southern Iraqi city of Basra have closed down at least 100 unlicensed water desalination stations after an outbreak of diarrhea and other symptoms among local residents. Zaki Abdulsadda, head of the department of inspections at Basra health told reporters in a press conference that the province had experienced a serious case of water contamination in recent days leading to diarrhea and severe stomachache among people. “The province of Basra has suffered a number of cases of diarrhea due to water contamination and our inspections department has launched a campaign to combat this,” Abdulasadda said. At least 500 people have been hospitalized as a result of the water contamination. “As a result a number of desalination stations have been shut down that weren’t suitable to operate,” he added. “Apart from bad quality work they did not have any license to work either,” he maintained. Meanwhile, health officials advised local residents to strictly follow health instructions and boil their water before consumption. This news comes just weeks after people in Basra and other southern cities took to the streets to protest lack of clean drinking water and other public services.

Merkel and Putin talk Syria, Ukraine and Nord Stream 2 – but meeting ends with no agreements – German chancellor Angela Merkel and Russian president Vladimir Putin discussed the conflicts in Syriaand Ukraine as well as the controversial Nord Stream 2 gas pipeline during talks on Saturday. But the meeting, held just outside Berlin, ended with no agreements being signed off and no obvious progress made. Ties between the two countries have been strained since Russia’s annexation of the Crimea region of Ukraine in 2014 – and the summit had only been intended to “check the watches”, a Kremlin spokesperson said.High on the agenda had been Syria after Mr Putin had, hours before the pair met, urged Europe to help rebuild the war-torn country. “We need to strengthen the humanitarian effort,” he said. “By that, I mean above all, humanitarian aid to the Syrian people, and help the regions where refugees living abroad can return to.” Standing together ahead of the talks at the 18th-century Meseberg Palace, Ms Merkel said she and Mr Putin had already discussed the issue of constitutional reforms and possible elections when they last met in the Russian resort of Sochi in May. “Germany, but especially Russia, as a member of the UN security council, has a responsibility to find solutions,” she told reporters. The two leaders both said the Nord Stream 2 pipeline – which will supply Germany with vast amounts of Russian gas – would not be derailed by American ire over the project. US president Donald Trump has repeatedly said the deal makes Germany too reliant on Russian resources, and has appeared to insist Berlin should buy American instead. “That’s why it is necessary to take measures against possible non-competitive and illegal attacks from third countries in order to complete this project,” said Mr Putin’s spokesperson Dmitry Peskov, although without explaining what such measures might entail. Speaking on the same subject, Ms Merkel also underlined her expectation that the pipeline would not be used to squeeze the Ukrainian economy or lever political concessions. Nord Stream 2 will bypass the central European country by going directly under the Baltic sea, meaning Ukraine – which is the historical transit route for such gas – would lose out on millions of pounds worth of transit rents.

This Vital Oil And Gas Choke Point Could Be At Risk – Beijing is taking to task a Pentagon report, “Military and Security Developments Involving the People’s Republic of China 2018″ released last Thursday on China’s military activities. The annual report issued by the Pentagon and presented to Congress, highlights growing Chinese naval capability, all the while underscoring the narrowing gap between China’s maritime forces and he U.S. Navy as well as China’s increased naval activity in the Western Pacific Ocean. The report states that China’s People’s Liberation Army Navy (PLAN) has global ambitions far beyond the traditional perimeters of its land-based defense systems, a claim that Beijing has always cleverly downplayed. “The PLAN continues to develop into a global force, gradually extending its operational reach beyond East Asia and the Indo-Pacific into a sustained ability to operate at increasingly longer ranges,” the Pentagon report said, “The PLAN’s latest naval platforms enable combat operations beyond the reach of China’s land-based defenses.” “China’s aircraft carrier and planned follow-on carriers, once operational, will extend air defense coverage beyond the range of coastal and shipboard missile systems, and enable task group operations at increasingly longer ranges,” the report states. It adds that Chinese bombers are also likely training for “strikes” on U.S. targets. Experts agree, claiming that decades of increased investment in new technology by China’s military means it will soon have the capabilities to strike U.S. military installations in the Pacific by air.