Oil, Gas, And Fracking News Reads 04November, 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 04 November 2018. Go here for Part 1.

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

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Red Sea Project to Create 30,000 Jobs – Saudi Aramco and SABIC will develop an integrated industrial complex to convert crude oil to chemicals (COTC) at Yanbu, located on Saudi Arabia’s west coast, the companies said Thursday in a joint statement. On Nov. 26, 2017, Saudi Aramco reported that it signed a memorandum of understanding with SABIC to develop a fully integrated COTC complex in the Kingdom. The facility reportedly will be capable of processing 400,000 barrels per day of crude oil and producing approximately 9 million tons of chemicals and base oils annually using an economically viable and unprecedented configuration. Earlier this year, Saudi Aramco and SABIC selected Wood and KBR to perform the project management and front end engineering work for the complex. In Thursday’s statement, the developers noted that the contractors are finalizing their selection of leading technologies to complement their technologies. According to Saudi Aramco and SABIC, the joint project bolsters the alliance between the top two Saudi global entities and supports the Kingdom’s goal of creating a world-leading downstream sector in country. Additionally, the developers maintain the complex will generate an estimated 30,000 direct and indirect jobs and contribute 1.5 percent to Saudi Arabia’s gross domestic product by 2030. “This venture will contribute to the realization of one of the major aspirations of Saudi Vision 2030, namely achieving economic prosperity by boosting our investment capacity, diversifying the economy and creating jobs for Saudi nationals,” SABIC Vice Chairman and CEO Yousef Abdullah Al-Benyan stated in the companies’ Nov. 26 announcement. “Once completed, this project will not only be the largest crude oil to chemicals complex in the world, it will also set a new competitive threshold thanks to the project’s mass scale and the benefits derived from our joint collaboration.” In the same announcement, Saudi Aramco President and CEO Amin H. Nasser pointed out that COTC will help the national oil company to expand its downstream portfolio and reduce its focus on the transportation sector.

OPEC Should Boost Crude Production at Next Meeting, the IEA Says – OPEC must decide to boost oil output at its next meeting to “comfort” a tightening market, said the head of the International Energy Agency. “Global oil markets are going through a very sensitive period — global economic growth as well,” IEA Executive Director Fatih Birol said in an interview in London Thursday. “If the oil producers care about the health of the growth of the global economy, which I believe they do, they should take the steps to further comfort the market.” Without an increase in output from the Organization of Petroleum Exporting Countries, Birol reiterated his warning the global economy will enter “a red zone” because momentum is already slowing amid trade disputes. The world still needs more oil to compensate for losses from Iran and Venezuela, he said. While the oil market is well supplied right now “the next few months might be difficult if the producers don’t increase production or give the signal for it.” Birol’s warning came in contrast to a statement from ministers from Saudi Arabia, Russia and other producers. They gave the clearest sign yet that they could return to cutting production, highlighting the need to prepare “options” for how much oil the group should produce next year to prevent the market slipping back into imbalance. Saudi Arabia’s Energy Minister Khalid Al-Falih said in an interview with state-owned television Al Arabiya that he is concerned about rising oil inventories and will monitor output levels in producing countries including Iran, Venezuela, Libya and Nigeria.In its latest oil market report the IEA cut forecasts for oil demand growth this year and next because of increasing threats to global economic growth. However it also warned that dwindling spare production capacity will keep prices high.Swiss bank UBS Group AG said in a recent report that it sees global oil demand growth slowing to 1.2 million barrels a day in 2019, from 1.5 million barrels a day this year and last year. Supply-side risks will remain in focus until mid-2019, potentially pushing spare capacity to a 10-year low, it said. After surging almost 7 percent in September, Brent crude futures are almost back to where they started due to high U.S. inventories, rising shale output and a stock market rout.

Trump’s sanctions on Iran tested by oil-thirsty China, India (Reuters) – Shortly after U.S. President Donald Trump announced in May he would reimpose sanctions on Iran, the State Department began telling countries around the world the clock was ticking for them to cut oil purchases from the Islamic Republic to zero. The strategy is meant to cripple Iran’s oil-dependent economy and force Tehran to quash not only its nuclear ambitions, but this time, its ballistic missile program and its influence in Syria. With just days to go before renewed sanctions take effect Nov. 5, the reality is setting in: three of Iran’s top five customers – India, China, and Turkey – are resisting Washington’s call to end purchases outright, arguing there are not sufficient supplies worldwide to replace them, according to sources familiar with the matter. That pressure, along with worries of a damaging oil price spike, is putting the Trump administration’s hard line to the test and raising the possibility of bilateral deals to allow some buying to continue, according to the sources. The tension has split the administration into two camps, one led by National Security Adviser John Bolton, who wants the toughest possible approach, and another by State Department officials keen to balance sanctions against preventing an oil price spike that could damage the U.S. and its allies, according to a source briefed by administration officials on the matter. The global price of oil peaked just below $87 a barrel earlier this month, before easing back to their current level around $77 a barrel on Monday. Because of the concern over oil prices, the source said, the administration is considering limited waivers for some Iranian customers until Russia and Saudi Arabia add additional supply next year, while limiting what Tehran can do with the proceeds in the meantime. Revenues from sales could be escrowed for use by Tehran exclusively for humanitarian purposes, the source, who asked not to be named, said – a mechanism more stringent than a similar one imposed on Iran oil purchases during the last round of sanctions under U.S. President Barack Obama. “If you’re the administration, you’d like to ensure you don’t have a spike in the price. So, you are better off from mid-2019 onwards to aggressively enforce the barrels side of reducing to zero and in the interim aggressively enforcing the revenue side,” the source said.

Trump Admin May Stun Iran Oil Waiver Seekers — The oil market could be in for a surprise when U.S. sanctions on Iranian crude exports are implemented in 10 days, according to Hedgeye Risk Management LLC. Traders who expect the U.S. to hand out waivers allowing certain nations to continue buying oil from the Islamic Republic, “are making a huge miscalculation,” Joe McMonigle, head of energy policy at Hedgeye, said in a note. “We see more than a 50 percent chance of an early enforcement of Iran sanctions to send a message and incentivize others to get Iran imports to zero,” McMonigle said. “We think this will come as a shock to oil markets.” Oil prices this month have tumbled from their highest levels in almost four years, in part on speculation that waivers could blunt the impact of sanctions. Hedgeye sees that reversing, with the loss of at least 1 million barrels-a-day of Iranian exports boosting Brent crude by $5 a barrel. The international benchmark could even hit $90 a barrel for the first time since 2014, before settling back to around $85, McMonigle said.

Iran is still selling a lot of oil just days before Trump’s sanctions deadline – The Trump administration has cut down Iran’s oil exports more quickly than many expected, but just days before a White House deadline, it is still a long way from achieving its stated goal of zeroing out Iranian oil sales.Iran’s oil exports have fallen by about a third in the five months through September. They tumbled by about 800,000 barrels per day since President Donald Trump announced in May that he wasabandoning a nuclear accord with Iran and restoring wide-ranging sanctions on its economy.Still, Iran was selling roughly 1.7 million to 1.9 million bpd of crude oil and condensate, a super light form of oil, in September, according to estimates by investment banks, tanker-tracking firms and the International Energy Agency.That’s down from a 2018 peak of 2.7 million bpd in June, according to ClipperData. In the first six months of the year, Iran was averaging 2.4 million bpd in shipments, S&P Global Platts Analytics estimates.Some of Iran’s biggest customers, including China and India, are expected to keep buying its barrels. The Trump administration has also indicated it will allow some countries to continue importing limited quantities of Iranian oil, but officials haven’t disclosed which nations will receive waivers. Along with China and India, countries like Turkey, Italy, Spain, Greece and Japan have kept purchasing Iran’s crude. But analysts widely expect the losses to balloon to between 1 million and 1.5 million bpd by the end of the year. “Iranian crude and condensate exports look set to finish October around a similar level to September, although we expect volumes to drop off next month as sanctions kick in and buyers dissipate,” said Matt Smith, director of commodity research at ClipperData, a firm that tracks tanker traffic. Petro-Logistics, another tanker-tracking firm, says Iran probably lost more than 100,000 barrels per day in October.

EU Struggles To Create Iran Oil Trade Payment Vehicle – Although the European Union (EU) has vowed to create a special purpose vehicle to continue trade with Iran after the U.S. sanctions on Tehran’s oil return next week, the bloc is struggling with the set-up of such vehicle because no EU member is willing to host it for fear of angering the United States, the Financial Times reported on Sunday, citing EU diplomats.The EU said last month that the foreign ministers of China, France, Germany, Russia, and the UK – the countries still in the Iran nuclear deal – met with Iran’s foreign minister and decided to create a special purpose vehicle for dealings with Iran. After the meeting, Federica Mogherini, the High Representative of the EU for Foreign Affairs and Security Policy, said that with the planned vehicle:“In practical terms this will mean that EU Member States will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue trade with Iran, in accordance with European Union law, and could be opened to other partners in the world.”But the EU has met several hurdles in the work to setting up a payment mechanism with Iran, including the fact that no EU nation is eager to host the special purpose vehicle.“No EU government wants to cross the US by having the SPV,” one official told FT after meetings within European Commission.The United States will be “aggressive and unwavering” in enforcing the sanctions on Iran and won’t let those sanctions be evaded by the European Union or anyone else, U.S. national security advisor John Bolton said after the EU announced it would be working to create such vehicle.U.S. Secretary of State Mike Pompeo also criticized the EU plan for continuing transactions with Iran, describing it as “one of the most counterproductive measures imaginable for regional global peace and security.”The EU-Iran payment mechanism should be legally in place by November 4, when the U.S. sanctions on Iran return, three EU diplomats told Reuters last week, but added that the mechanism won’t be operational until early in 2019.

Sunday Midnight Will Mark Dividing Line in Oil World — Midnight on Sunday will mark a dividing line in the world of oil. Beyond that point, anyone unloading a tanker from Iran risks the full wrath of the U.S. government. The Middle East’s third-biggest oil producer has already seen many buyers flee, with sales tumbling 37 percent since President Donald Trump announced that he’d reimpose sanctions. Once those restrictions formally kick in on Nov. 5, the overall supply disruption could become the biggest since Libya erupted in civil war at the start of the decade. There are signs the impact will be mitigated, as some buyers win partial exemptions while other producers — particularly Saudi Arabia — pump more to fill the gap. Still, there are doubts about their capacity to do so and the global nature of the oil market means nobody is fully insulated. Even U.S. drivers, whose engines haven’t seen a drop of Iranian crude for decades, have felt pain at the pump. U.S. oil futures climbed to a four-year high near $77 a barrel last month on growing concerns there could be a shortage as sanctions bite deeper. While those fears have eased along with prices in recent weeks, significant risks remain. “Iran’s oil exports are falling rapidly, and perhaps more and more in the weeks to come,” Fatih Birol, executive director at the International Energy Agency, said in a Bloomberg television interview. The Trump administration has sent mixed signals, swerving between saying it’ll send Iranian oil exports to “zero” and dangling waivers that could allow some to keep buying. A senior administration official said this week that the U.S. has agreed to let eight countries — including Japan, India and South Korea — keep buying Iranian oil, but only temporarily. While analysts don’t expect a complete halt, there’s a growing consensus that Trump’s tough stance means crude exports will plunge further than during a previous round of sanctions under Barack Obama’s administration in 2012. Back then they were sliced in half to 1 million barrels a day, according to the IEA, which advises industrialized countries on energy policy. This time, 1.1 million barrels a day have already been cut from Iran’s shipments — a combination of crude and a light oil called condensate that was spared from curbs in 2012, according to data compiled by Bloomberg. The corresponding drop in production has been smaller as some of that output went into storage. That takes total exports to about 1.76 million barrels a day in October — more than is pumped from the North Sea.

Russia says US sanctions ‘illegal’, will help Iran trade oil — Russian Energy Minister Alexander Novak has said Moscow will support Iran to counter US oil sanctions.Washington on Friday restored sanctions on Tehran, which had previously been lifted under the 2015 nuclear deal. The measures are due to come into effect on Monday.In an interview with the British Financial Times newspaper, Novak said that Russia is looking to continue trading Iranian crude oil beyond the Monday cut-off.”We believe we should look for mechanisms that would allow us to continue developing cooperation with our partners, with Iran,” Novak told the FT. Under a 2014 oil-for-goods deal, Moscow sells Iranian oil to third parties while Tehran uses the revenues from those sales to pay for Russian goods and services.The Russian energy ministry told the FT that the trade would continue next week, while Novak said that Moscow considered the US sanctions to be “illegal”. “We already live in the condition of sanctions,” he said. “We do not recognise the sanctions introduced unilaterally without the United Nations, we consider those methods illegal per se.”

Trump will reportedly allow India and South Korea to keep buying sanctioned Iranian oil – The United States is poised to grant waivers to India and South Korea that will allow the countries to continue buying oil from Iran, despite the renewal of U.S. sanctions next week, according to news reports. The Trump administration gave oil buyers 180 days to wind down purchases of Iranian crude in May, when President Donald Trump announced he was abandoning a nuclear accord with Iran and restoring sanctions on its economy. The administration told importers to completely cut off purchases by Nov. 4, but it is widely expected to allow some countries to continue reducing purchases beyond that date.On Thursday, The Economic Times reported that the administration will allow India to purchase 1.25 million tons of Iranian oil each month through March. A source told the English-language Indian newspaper that India and Washington have “broadly agreed on a waiver” and that “India will cut import by a third.”India, the second-largest purchaser of Iranian oil, imported about 22 million tons from Iran in the 2017-2018 period, according to the paper.High crude prices and a deteriorating Indian rupee have caused oil price inflation in the country and sparked protests over fuel costs. While Brent crude is trading at about $75, India is essentially paying double that after inflation, Fatih Birol, executive director of the International Energy Agency, told CNBC this week.The payment mechanism remains uncertain, but India is expected to continue paying for Iranian oil in euros and rupees, sources said. Iran would use rupees to pay for rice, drugs and other items, while the balance of revenues would be held in escrow until sanctions are lifted, The Economic Times reported.Bloomberg News later reported that South Korea, in addition to India, has agreed to the outlines for a waiverwith the United States. Bloomberg also reported that funds from Indian imports would go into an escrow account. Several other oil importing nations are also seeking waivers.Japan’s top spokesperson for the government on Thursday said the nation had yet to receive a waiver, Reuters reported. China, Iran’s biggest oil customer, has also sought a waiver, and its biggest refiners have reportedly halted imports in November until Beijing gets clarity from Washington. U.S. sanctions have cut Iran’s exports by roughly a third, with shipments shrinking to roughly 1.7 million to 1.9 million barrels per day by the end of September, according to estimates from several sources.

US Approves Waivers On Iranian Oil Imports As Supply Panic Fades – With oil prices already extending the drop from their highs as the trader “panic attack” identified by celebrated energy analyst Art Berman abates, and approaching a bear market from recent highs, a Friday morning report from Bloomberg will likely ensure that prices continue to move lower.According to an anonymous “senior administration official”, the US will soon approve waivers for eight countries, including Japan, India and South Korea, that will allow them to continue buying Iranian crude oil even after sanctions are reimposed on Monday. China is also believed to be in talks to secure a waiver, while the other four countries weren’t identified. The waivers are part of a bargain for continued import cuts, which the administration hopes will lead to lower oil prices. Secretary of State Mike Pompeo is expected to announce the exemptions on Friday.Speculation that waivers could be forthcoming had been brewing for some time, and has been one of the factors driving oil prices lower in recent weeks. Pompeo has acknowledged that waivers were being considered for countries who insist that they depend on Iranian supplies, while adding that “it is our expectation that the purchases of Iranian crude oil will go to zero from every country or sanctions will be imposed.” Assuming the US does follow through with the waivers, it’s expected that they would be temporary, and the US would expect that the recipients would continue to wean themselves off Iranian crude. The administration will also reportedly ask that these countries reduce their trade in non-energy goods. It’s believed that Turkey, another major importer of Iranian crude, may be one of the four working on an exemption, according to Turkish Energy Minister Fatih Donmez told reporters in Ankara on Friday. Iran was Ankara’s biggest source of oil last year, accounting for more than 25% of Turkey’s daily average imports of around 830,000 barrels.

Oil Trades Below $68 — Oil traded below $68 a barrel as traders assessed mixed supply signals from producers. Futures in New York dropped as much as 0.5 percent after falling 2.2 percent last week. Russia suggested on Saturday the country may keep its output at the current level above the Soviet-era record or raise production further, and warned of a potential supply shortage. That’s just days after the Organization of Petroleum Exporting Countries and its allies signaled they could cut output in 2019. Oil has slumped about 12 percent from a four-year high earlier this month as a rout in global equity markets raised concerns about economic growth and energy demand at a time of growing U.S. crude inventories. With renewed American sanctions on Iran going into full effect in just a week, traders are looking for signs whether OPEC and its partners are able — and willing — to increase production to fill any potential supply gap. “I expect investors will take a wait-and-see stance this week before the return of sanctions on Iran and U.S. midterm elections,” Makiko Tsugata, a senior analyst at Mizuho Securities Co., said by phone from Tokyo. Despite a potential decline in Iranian exports, “if both Saudi Arabia and Russia boost output and U.S. production continues to rise, we could have a supply glut.” West Texas Intermediate for December delivery declined as much as 32 cents to $67.27 a barrel on the New York Mercantile Exchange and traded at $67.36 a barrel at 3:38 p.m. in Tokyo. The contract rose 26 cents to $67.59 on Friday. Total volume traded was about 14 percent below the 100-day average. Brent for December settlement fell 29 cents to $77.33 a barrel on the London-based ICE Futures Europe exchange. The contract climbed 73 cents to $77.62 on Friday. The global benchmark crude traded at a $9.99 premium to WTI. Russian Energy Minister Alexander Novak told reporters in Istanbul he sees no grounds for reducing output and that there are risks of a deficit in oil markets. The nation’s oil production in September rose by almost 150,000 barrels a day to 11.356 million, a post-Soviet high, from a month earlier. The country suggested its output rose further in October. Similarly, Saudi Arabia said last week the kingdom can further increase its production to ease supply shortfalls even as it has already boosted output to 10.7 million barrels a day, near an all-time high. Energy Minister Khalid Al-Falih said OPEC and its allies are in “produce as much as you can mode” to meet demand and replace any shortages.

Hedge funds cut bullish bets on oil to lowest for over a year- Kemp (Reuters) – Hedge fund managers continued to liquidate former bullish positions in oil last week and for the first time in more than a year clear signs of fresh short-selling emerged. Rising oil production from Saudi Arabia, the United Arab Emirates, Kuwait and Russia has eased concerns about the availability of supplies once U.S. sanctions on Iran are re-imposed in November. At the same time, intensifying fears about a possible global economic slowdown have hit oil prices and equity markets hard over the last three weeks. The bullish wave of hedge fund position-building in oil and refined products that started in July 2017 and crested in January 2018 has now largely broken. Portfolio managers’ combined positions in crude and refined products climbed from a low of 310 million barrels at the end of June 2017 to almost 1.5 billion barrels in late January but have since fallen back to just over half that level. Fund managers have not yet turned bearish on the outlook for oil prices; U.S. sanctions on Iran are deterring all but the most aggressive sellers. But the hedge fund community is no longer significantly bullish, with most managers opting to realise their profits after a year-long rally and await further developments. Hedge funds and other money managers cut their combined net long position in the six most important petroleum futures and options contracts by 111 million barrels in the week to Oct. 23. Portfolio managers have cut their combined net long position by the equivalent of 298 million barrels over the last four weeks to just 801 million barrels, the lowest level for more than a year. Bullish long positions were cut to just 965 million barrels, the lowest level for 65 weeks, according to position records published by regulators and exchanges. The ratio of long to short positions sank to less than 6:1, down from a recent peak of more than 12:1 at the end of September (https://tmsnrt.rs/2CMzx3Y ).

Oil dips as Russia signals output will stay high (Reuters) – Oil prices edged lower on Monday, with futures on track for the worst monthly performance since mid-2016, after Russia signaled that output will remain high and as concern over the global economy fueled worries about demand for crude. Brent crude LCOc1 futures fell 28 cents to settle at $77.34 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 55 cents to settle at $67.04 a barrel. Global benchmark Brent was on track to drop about 6.6 percent for the month. U.S. crude was on course to fall about 8.5 percent. Both were set for the steepest monthly decline since July 2016. Even with U.S. sanctions on Iranian exports due to come into force on Nov. 4, oil prices have fallen about $10 a barrel since four-year highs reached in early October. Russian Energy Minister Alexander Novak said on Saturday there was no reason for Russia to freeze or cut its oil production levels, noting that there were risks that global oil markets could be facing a deficit. The Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia and non-OPEC member Russia, agreed in June to lift oil supplies, but OPEC then signaled last week that it may have to reimpose output cuts as global inventories rise. “When the Russians start talking about keeping the production levels high and even the possibility that they need to increase it because of a possible tightness in supply, that brought on some selling pressure,” said Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut. Industrial commodities such as crude and copper have also been rattled by hefty losses in global equities due to concern over corporate earnings, and fears over the impact to economic growth from escalating trade tensions, as well as a stronger dollar. The U.S. dollar index .DXY also rose, supported by robust U.S. consumer spending data. [USD/] A stronger dollar makes greenback-denominated commodities more expensive for holders of other currencies.

Crude Oil Falls on Glut Fears – The two key crude oil benchmarks settled lower Monday amid fears of a potential supply glut. A barrel of West Texas Intermediate (WTI) crude oil for December delivery lost 55 cents Monday to settle at $67.04. The light crude benchmark traded within a range from $66.67 to $67.95. The December Brent futures price posted a more gradual decline, falling 28 cents to settle at $77.34 a barrel. As Bloomberg reported earlier Monday, traders contemplated an uncertain crude supply outlook as implementation of U.S. economic sanctions on Iran approaches. The Bloomberg article notes that Russia has suggested it may not cut its oil production to stave off a “potential supply shortage.” Moreover, it states that Saudi Arabia has indicated it could hike its output further. The article quotes a Saudi official as saying that the Kingdom and other OPEC members are in a “‘produce as much as you can mode.’” Reformulated gasoline (RBOB) often follows the pattern of crude oil, but that was not the case Monday. November RBOB posted a modest increase, ending the day a penny higher to settle at $1.82 a gallon. The settlement price for November Henry Hub natural gas was flat Monday at $3.185. During the early week session, the front-month contract bottomed out at $3.10 and peaked at just under $3.20.

Oil Holds Losses — Oil held losses near $67 a barrel on speculation that an escalating trade dispute between the U.S. and China will dampen global growth at a time when American crude inventories are growing. Futures in New York were little changed, after a 0.8 percent decline on Monday. The U.S. is said to prepare another round of tariffs on all remaining Chinese imports if talks between the presidents of the two countries fail to ease trade friction. Meanwhile, American crude stockpiles are forecast to have risen for a sixth straight week. Crude has retreated more than 8 percent this month, the worst monthly decline since July 2016. While ongoing trade tensions between the world’s two largest economies stoke concerns over global energy demand, traders continue to watch how much Iranian supply will be taken out of the market when U.S. sanctions hit early next month. Meanwhile, OPEC is likely to keep output policy steady when it meets in December, Nigeria’s oil minister said. “The negative outlook on global growth, which had been spurred by the U.S.-China trade war and economic crisis in emerging markets, is bleeding into the oil market,” Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone. “However, depending on what happens with Iran later this week, oil could go both ways, so the market seems to be taking a cautious stance near $67 a barrel.” West Texas Intermediate for December delivery was up 10 cents at $67.14 a barrel on the New York Mercantile Exchange at 7:28 a.m. in London. The contract dropped 55 cents to $67.04 on Monday. Total volume traded was in line with the 100-day average. Brent for December settlement, which expires Wednesday, traded at $77.15 a barrel on the London-based ICE Futures Europe exchange, down 19 cents. The contract lost 0.4 percent to $77.34 on Monday. The global benchmark crude traded at a $9.99 premium to WTI. In case a planned meeting between presidents Donald Trump and Xi Jinping yields no progress on the sidelines of a Group 20 summit in Buenos Aires next month, U.S. officials are preparing a new list which would apply to the Chinese products that aren’t already covered by previous rounds of tariffs.

Oil Awaits Direction As Iran Sanctions Loom – Oil started out the week seeing some volatility and choppy trading, awaiting more signs of a clear direction. With just days to go before U.S. sanctions on Iran go into effect, it appears that India, China and Turkey are still resisting demands from Washington to eliminate purchases. Reuters reports that there is tension within the Trump administration over how hard to press these countries, with one camp, led by national security adviser John Bolton, pushing for zero tolerance, and others more in favor of offering some waivers. Several top importers are still set to buy some Iranian oil in November. “We have told this to the United States, as well as during Brian Hook’s visit,” a source from the Indian government told Reuters, referring to the U.S.’ special envoy. “We cannot end oil imports from Iran at a time when alternatives are costly.” Crude oil posted steep losses over the past two weeks, the result of growing concerns about the health of the global economy. Other commodities, including copper, have also seen volatility. “It is often said that when stock markets sneeze, commodities catch a cold. This adage was on full display last week as a global rout on equity gauges dragged the energy complex lower,” PVM Oil Associates strategist Stephen Brennock said to Reuters. With Iran sanctions set to take effect in a few days, the market is awaiting further clarity. Saudi Arabia and Russia have vowed to cover any supply shortfall, but Iran’s oil exports likely won’t go to zero. “I expect investors will take a wait-and-see stance this week before the return of sanctions on Iran and U.S. midterm elections,” Makiko Tsugata, a senior analyst at Mizuho Securities Co., told Bloomberg. Even though Iran is set to lose a significant portion of its exports, “if both Saudi Arabia and Russia boost output and U.S. production continues to rise, we could have a supply glut.”

Oil prices down more than 1 pct on rising supply, trade war(Reuters) – Oil prices dropped more than 1 percent on Tuesday on signs of rising supply and concern that global economic growth and demand for fuel will fall victim to the U.S.-China trade war. Brent crude futures fell $1.43, or 1.9 percent, to settle at $75.91 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 86 cents to settle at $66.18 a barrel, a 1.3 percent drop. Earlier in the session, Brent reached a session low of $75.09 a barrel, the lowest since Aug. 24. WTI slumped to $65.33 a barrel, the weakest since Aug. 17. Prices were little changed in post-settlement trade after industry group the American Petroleum Institute reported U.S. crude inventories rose 5.7 million barrels last week, more than analysts’ forecast for a 4.1 million-barrel build. Investors will look to official government data on U.S. inventories due to be released Wednesday. Both crude benchmarks have fallen about $10 a barrel from four-year highs reached in the first week of October and were on track to post their worst monthly performance since July 2016. Oil has been caught in the global financial market slump this month, with equities under pressure from the trade fight between the world’s two largest economies. The United States has imposed tariffs on $250 billion worth of Chinese goods, and China has responded with retaliatory duties on $110 billion worth of U.S. goods. U.S. President Donald Trump said on Monday he thinks there will be “a great deal” with China on trade but warned that he has billions of dollars worth of new tariffs ready to go if a deal is not possible. Trump said he would like to make a deal now but that China was not ready. He did not elaborate. “One discussion that is developing is that (trade tensions) are hurting demand for crude oil. There’s probably an element of truth to that,” said Bob Yawger, director of futures at Mizuho in New York. The International Energy Agency (IEA) said high oil prices were hurting consumers and could dent fuel demand at a time of slowing global economic activity. Oil production from Russia, the United States and Saudi Arabia reached 33 million barrels per day (bpd) for the first time in September, Refinitiv Eikon data showed.

Vitol sees oil prices falling as demand growth falters (Reuters) – Oil prices will likely fall next year as demand is curbed by trade wars and weakness in emerging market economies, the world’s biggest oil trader Vitol predicted on Tuesday. Chief executive Russell Hardy told the Reuters Commodities Summit that Vitol had revised down its forecast for oil demand growth next year to 1.3 million barrels per day (bpd) from 1.5 million previously. It also cut this year’s forecast to 1.3 million from 1.7 million. “We have never been hyper-bullish. We have always had an expectation that high prices would dent demand,” Hardy said in his first in-depth interview since becoming CEO in March. “Crude markets are not that tight in the immediate term … and a fair price of oil going into next year is probably closer to the $70 or $65 per barrel mark than the $85-$90 area that some people are talking about.” Oil prices jumped above $85 per barrel earlier this month on fears of a steep decline in Iranian supply as U.S. sanctions on Tehran come into force on Nov. 4. Hardy said he saw Iranian oil exports declining, but not as sharply as previously feared – probably sticking above 1 million bpd because China, India and Turkey were likely to continue buying crude from Tehran. Combined with softer demand, this should help keep the oil market in balance for the first half of next year, provided Saudi Arabia pumped near record-high volumes and the world avoided another major supply disruption, Hardy said. “There’s not much room for things to go wrong in any supply sense, because there is pretty much no spare capacity at the moment,” he said. A potential worsening of the macro-economic environment represents a risk to the downside. If demand worsened further, it could add downward pressure on prices because it would come just as the United States adds more oil to the market in the second half of 2019.

Why Oil Prices Could Still Go Lower – Art Berman – Crude markets had a panic attack in August and September that sent prices soaring. Sanity is now returning. Prices have fallen but are likely to move even lower over the next few months. The panic attack was caused largely by Trump’s August 7 announcement that sanctions would be re-imposed on Iran. Anxiety about the effect on oil supply and prices was reasonable but the reaction was hysterical.From August 15 to October 1, Brent December futures spreads increased $3.01 (175 percent) from $1.72 to $4.73. Brent prices increased $15.53 (22 percent) from $70.76 to $86.29 (Figure 1). Figure 1. Brent Dec spreads collapsed from $4.73 to $1.52 since Oct 1 & are now less than when price rally began after announcement to re-impose Iran sanctions in mid-August. Front-month Brent down from $86.29 to $76.17 but still higher than $70.76 Aug 15 price. Source: Barchart and Labyrinth Consulting Services, Inc.Then spreads and prices collapsed. By October 24, spreads had fallen from $4.73 to $1.52, less than when the price rally began. Front-month Brent price decreased from $86.29 to $76.17. Prices and spreads recovered slightly on October 24 closing at $76.89 and $1.76, respectively. It seems unlikely that the correction is over. The timing depends on how long it takes for markets to fully recover from what Vitol’s Ian Taylor calls the supply fear factor. After 6 weeks of fear, markets must adjust to the reality that the “oil market is adequately supplied for now.” Clearly markets are concerned about more than just Iran. Falling or uncertain output from the problem children Venezuela, Libya and Nigeria, and take-away constraints from the Permian basin are critical. Iran, however, is different because it is a completely artificial supply crisis. It was a choice made by Donald Trump and his advisors. Markets are used to the uncertainty of its problem children but not to the apparent certainty of an executive decision. The reaction was consistent with the cause – certain and linear. It was also wrong.World liquids production has, in fact, increased 2.91 mmb/d so far in 2018. Much of that increase came from producers other than U.S. & OPEC (Figure 2).

WTI Pops Despite Sixth Weekly Crude Build In A Row – Demand concerns and contagion from equity carnage continue to weigh on WTI (overwhelming fears about supply disruptions in Iran and Venezuela) as it tested a $65 handle again today.API reported a bigger than expected 5.69mm crude build, the sixth weekly rise in inventories in a row, as Gasoline and Distillates drewdown.API

• Crude +5.69mm (+3.2mm exp)
• Cushing +1.44mm (+2.1mm exp)
• Gasoline -3.5mm
• Distillates -3.1mm

6 weeks of Crude builds in a row (and 6 weeks of Cushing builds and Distillate draws)… The original 14.4mm build associate with Cushing was a typo from the provider. WTI tested back into the $65 handle once again today, but some are suggesting that is weakness to buy…

Oil Prices Inch Higher Despite Crude Build – The American Petroleum Institute (API) reported yet another crude oil inventory build this week, this time of 5.69 million barrels for the week ending October 26. The build was the fourth in as many weeks as reported by the API. The report was largely in line with analyst expectations that this week would see another substantial build in crude oil inventories of 4.110 million barrels.The string of builds weighed heavily on prices, which were already depressed after IEA warned on Tuesday that the longer trend of higher oil prices would start to dent demand in key oil consuming markets such as India and Indonesia.According to API data, the six-week running tally of crude oil inventory gains equals 27 million barrels.The API reported a draw in gasoline inventories as well for week ending October 26 in the amount of 3.5 million barrels. Analysts had predicted a draw of 2.137 million barrels for the eek. Oil prices were down in afternoon trading prior to the release of the API data on inventories as traders feared additional inventory increases. At 1:58 pm EDT, WTI was trading down 0.88% (-$0.59) at $66.45 – nearly flat week on week. The Brent crude benchmark was trading down 1.51% (-$1.17) at $76.20, also flat on the week.

Crude oil is doing something it hasn’t done in years – Energy expert John Kilduff sees an unusual phenomenon affecting crude oil and beaten-down stocks.According to the Again Capital founding partner, oil and stocks have embarked on the closest trading relationship since early 2016 and during the financial crisis sell-off.”This has been the highest correlation that I’ve seen in quite some time,” he said Tuesday on CNBC’s “Futures Now.”His latest thoughts came with U.S. benchmark West Texas Intermediate crude on track for its worst month in more than two years. WTI closed at $66.40 a barrel on Tuesday, while Brent crude settled at $76.23.”A lot of folks like to trade crude oil and other commodities to get away from the correlations you have in the stock market,” said Kilduff, a CNBC contributor. “But over the past 20 days, you can see where stocks peak out in early October. Crude oil peaked out in early October.”He suggests that fears of a global economic slowdown could be behind the rare move.”It’s a real risk off, and the same things that are bedeviling the equity market are bedeviling the crude market,” he said.However, Kilduff isn’t implying the trend spells more downside ahead. There’s a bullish factor hanging over the oil market: Iran.On Sunday, sanctions against Iran exports are scheduled to go back into effect. And, it’s unclear how they’ll impact oil prices.”We’ll know in a relatively short amount of time whether the sanctions on Iran are really going to bite or not. I think they are to a degree,” he said.

Oil prices rise for first time in three days, but trade war drags – Oil turned positive on Wednesday after government data showed U.S. fuel stockpiles dropped, offsetting a rise in the nation’s crude inventories.U.S. sanctions on Iran set to go into full effect next week and a bounce in stock markets from recent losses also underpinned crude futures.Still, crude futures are more than $10 below four-year highs reached on Oct. 3 and on track for their worst monthly performance since July 2016.U.S. light crude was 17 cents higher at $66.435 a barrel by 11:28 a.m. ET (1528 GMT). It hit a two-month low of $65.33 a barrel on Tuesday.Benchmark Brent crude oil was still down 4 cents at $75.87, reversing some of its earlier losses.. The contract fell 1.8 percent on Tuesday, at one point touching its lowest since Aug. 24 at $75.09.U.S. commercial crude stockpiles rose by 3.2 million barrels, the U.S. Energy Information Administration reported, compared with expectations for an increase of 4.1 million barrels in a Reuters survey. The rise was driven by an increase at the Cushing, Oklahoma delivery hub, where inventories jumped by 1.9 million barrels, EIA said.Meanwhile, gasoline held in storage fell by 3.2 million barrels and distillate fuel inventories – including diesel and heating fuel – dropped by 4.1 million barrels.Global oil supply is rising with the top three producers, Russia, Saudi Arabia and the United States, pumping 33 million barrels per day (bpd) in September, Refinitiv data show, an increase of 10 million bpd since the start of the decade. Hedge funds are still overwhelmingly long oil and may have to liquidate positions if prices keep falling, accelerating a market sell-off, analysts say.

WTI Pops Back Above $66 On Big Product Drawdowns – Following API’s bigger than expected crude build, WTI’s ‘odd’ jump has been erased, trading back below $66 as DOE data prints. Crude inventories rose for the sixth week in a row (as did Cushing stocks) but WTI popped back above $66 on the heels of big drawdowns in Gasoline and Distillates.Bloomberg Intelligence Senior Energy Analyst Vince Piazza notes that “market sentiment seems to have come around to the view that U.S.-China trade tensions will weigh on global economic growth, suppressing demand for oil.”Last week’s DOE report showed an increase in refinery utilization, which “could have been indicative of the end of turnaround season. If we have that occur again this week, it will probably confirm that,” says Thomas Finlon, director of Energy Analytics Group. DOE:

• Crude +3.22mm (+3.2mm exp)
• Cushing (+2.1mm exp)
• Gasoline -3.16mm (-2.25mm exp)
• Distillates -4.05mm – biggest draw since Oct 2017

6th weekly rise in Crude and Cushing stocks and 6th weekly decline in Distillate inventories… US Crude Production jumped notably on the week, back to record highs, rebounding after hurricane interruptions…

Oil prices fall on signs of rising global supply (Reuters) – Oil prices fell on Wednesday and posted the worst monthly performance since mid-2016 on evidence of rising global crude supply, but losses were limited by signs of strong U.S. demand for fuel. The Brent crude December futures contract, which expired Wednesday, fell 44 cents to settle at $75.47 a barrel. The more-active January contract LCOF9 fell 91 cents to settle at $75.04 a barrel. West Texas Intermediate (WTI) crude CLc1 futures fell 87 cents to settle at $65.31 a barrel. Both benchmarks were more than $10 a barrel below the four-year highs reached on Oct. 3. They both posted their worst monthly performance since July 2016, with Brent falling 8.8 percent for the month and WTI dropping 10.9 percent. Investor sentiment across risky asset classes, such as equities and energy, turned negative during the month as U.S.-China trade tensions sparked demand worries. Weighing on market sentiment on Wednesday were signs of rising global output. U.S. crude oil production surged by 416,000 barrels per day (bpd) to a record 11.346 million bpd in August, the U.S. Energy Information Administration said. The United States and other top producers Russia and Saudi Arabia pumped 33 million barrels per day in September, Refinitiv data showed, an increase of 10 million bpd since the start of the decade. Russian oil output has reached 11.41 million bpd in October, a level unseen since the collapse of the Soviet Union in 1991, an industry source told Reuters. The increases in production comes just ahead of new U.S. sanctions on Iran, set to come into force Nov. 4, that are expected to cut supply. “There’s this perception that there’s enough oil in the market right now to get through the Iranian sanctions,” said Phil Flynn, analyst at Price Futures Group in Chicago. Washington has made it clear to Tehran’s customers that it expects them to stop buying any Iranian crude oil from that date. However, on Wednesday U.S. national security adviser John Bolton said that while the United States wants to apply maximum pressure on Iran with sanctions on its crude exports, it does not want to harm countries that are friends and allies that depend on the oil. Imports of Iranian crude by major buyers in Asia hit a 32-month low in September as China, South Korea and Japan sharply cut their purchases ahead of the sanctions, government and ship-tracking data showed.

Crude Oil Extends Downward Trend — Crude oil continued its downward momentum Wednesday that began at the beginning of this week. The December futures price for a barrel of West Texas Intermediate (WTI) crude oil fell by 87 cents Wednesday to settle at $65.31. The intraday range for the benchmark was a high of $67 even and a low of $65.01. For the Brent, the global benchmark declined 44 cents to settle at $75.47 a barrel. “The daily charts for December WTI and January Brent crude oil show the market holding above major support levels,” said Jerry Rafferty, president and CEO of Rockville Center, N.Y.-based Rafferty Commodities Group, Inc. Despite recent bearish price movements, Rafferty still sees a potential upside. “While the crude markets have declined further than we had expected, as long as December WTI holds above 6495 and January Brent holds above the 7515 to 7476 areas, we remain bullish,” said Rafferty. “We still believe that buying around these levels provides favorable risk/reward. A close below these levels would cause us to change our outlook.” November reformulated gasoline (RBOB) also declined during midweek trading, losing nearly four cents to settle at $1.77. The December Henry Hub natural gas futures price picked up seven cents to end the day at $3.26. Rafferty observed that gas prices have been in a holding pattern lately. “Since breaking out above the previous resistance at the 3100 area four weeks ago, December natural gas has met resistance at the 3350 to 3400 area,” Rafferty said. “The market is now trading within a sideways consolidation pattern defined by the 3100 area at the bottom and the 3350 to 3400 areas on the top.”

Iran’s Worst Nightmare Is Coming True – In what must seem like a nightmare scenario for Iran, not only is another U.S. president leveling sanctions against its economy, and particularly that economy’s lifeblood, its oil sector, but the current U.S. president has admittedly made it his mission to drive Tehran to its knees over what he sees as non-compliance over the 2015 nuclear accord between western powers and Tehran. As recently as the start of this month, the oil markets narrative was that perhaps President Donald Trump had pushed a bit too hard by reimposing sanctions against Iran. Oil markets, for their part, were jittery while both global oil benchmark Brent and U.S. Benchmark West Texas Intermediate (WTI) futures hit four-year highs largely on supply concerns. Some predicted that $100 per barrel oil by the end of the year was imminent, while Tehran maintained a defiant tone, stating that neither Saudi Arabia nor OPEC would be able to pump enough oil to compensate for the loss of Iranian barrels, estimated between 500,000 bpd and 1 million bpd.Now, what a different just a few weeks can make. Oil prices are now trending downward, falling for a third consecutive week as global stock markets tumbled and oil markets focused on a weaker demand outlook for crude going forward. Brent crude fell 2.7 percent last week and is down 10.5 percent from its October 3 high of $86.74. WTI ended the week down some 2.2 percent and has now dropped around 12 percent from its recent high of on October 3. Moreover, in a sign of things to come, hedge-fund and money managers are trimming their bets that crude oil prices will rise.Oil market headwinds, perhaps even storm clouds are brewing over a slowdown in economic growth due to trade war tensions between Washington and Beijing, and a stronger dollar weighing on emerging market economies, with those countries seeing an exodus of currency for higher yielding, safer havens like the US Dollar and Japanese Yen. A stronger dollar also increases the price for oil import dependent countries, with India, the Philippines, Indonesia and others particularly vulnerable. “We’ve seen oil prices sell off here throughout the correction we’ve had in the broad market. The concern in the sell-off is clearly global growth, and that’s immediately reflected in oil prices.” How all of this plays out remains to be seen, but with a general downturn in economic growth and a slowdown in oil growth demand going forward, the loss of Iranian barrels now looks easily manageable – a scenario sure to cause consternation for Tehran.

Oil prices fall as economic outlook deteriorates: Kemp – (Reuters) – Global economic momentum is decelerating, according to a broad range of financial and real-economy indicators, which is weighing on worldwide equity markets and oil prices. The depth and duration of the slowdown is impossible to gauge at this point, whether it turns out to be simply a mild and short-lived “soft patch”, a longer but still positive “growth recession” with output falling relative to trend, or an “outright recession” with activity falling in absolute terms. Recent declines in equity markets and softness in freight indicators may turn out to be a false alarm or a pause within an extended cycle rather than mark a cyclical turning point. Most commentary about the economic cycle is still influenced by the last deep and wrenching recession which accompanied the global financial crisis in 2008/09. But severe recessions have not been common since the end of the Second World War and most downturns have proved milder, which therefore seems a more likely prediction for the next cyclical slowdown. In the United States, post-1945 recessions have tended to be short, lasting less than a year in most instances, and in some cases have seen business activity level off rather than decline (https://tmsnrt.rs/2CQDDYT ). If the economy is nearing a cyclical peak, however, the next stage in the cyclical sequence is likely to involve some combination of:

• Fiscal expansion
• Financial easing
• Lower trade tensions
• Lower oil prices

Further tax cuts or an increase in government spending, possibly on highways and other infrastructure, would be one way to ameliorate the slowdown and get the economy growing again. The U.S. federal government is already on course to run an annual budget deficit of more than $1 trillion by the end of the decade but the prospect of even higher deficits is unlikely to forestall demands for fiscal stimulus. If the expansion slows or tips into recession, the Federal Reserve will also come under pressure to cancel planned interest rate increases and rescind some of the rises that have already happened.

Oil Set for Biggest Monthly Slide Since 2016— Oil’s set for its biggest monthly drop since 2016 as the specter of a slowdown in the global economy haunts the market while U.S. inventories grow and producers relay mixed signals. Futures in New York are poised for an 8.8 percent drop in October, following two months of gains. A global equity rout and an escalating U.S.-China trade war are weighing on the outlook for growth and energy demand, dragging down prices that only weeks earlier surged to a four-year high. Concerns of a supply squeeze due to impending American sanctions on Iran eased after some other OPEC nations pledged to pump more. Still, while Saudi Arabia’s Energy Minister said the Organization and Petroleum Exporting Countries is in a “produce as much as you can mode,” an OPEC committee said it could cut supplies next year, spurring uncertainty in the market. In the U.S., inventories are forecast to climb for a sixth consecutive week. After breaching $76 a barrel earlier this month for the first time since 2014, New York’s West Texas Intermediate has lost over 10 percent. “In the oil market, concerns continue to exist over the ongoing U.S.-China trade spat as well as the risk aversion sentiment that’s caused by a plunge in global shares,” Kim Kwangrae, a commodities analyst at Samsung Futures Inc., said by phone. “Prices couldn’t remain above $75 a barrel this month on rising U.S. inventories and strong indication from Saudi Arabia to ramp up production.” WTI for December delivery traded at $66.78 a barrel on the New York Mercantile Exchange, up 60 cents, at 8:43 a.m. in London. The contract had declined more than 2 percent in the past two sessions. Total volume traded was about 12 percent below the 100-day average. Brent for December settlement, which expires Wednesday, added 81 cents to $76.72 a barrel on the London-based ICE Futures Europe exchange. Prices are on course for a 7.3 percent drop this month, the biggest monthly loss since July 2016. The global benchmark crude traded at a $9.91 premium to WTI.

Oil Extends Losses Near $65 — Oil extended losses near $65 a barrel after the worst month in more than two years on lingering concern over a supply glut and a stronger dollar. Futures in New York fell as much as 0.9 percent, after falling 1.3 percent on Wednesday. U.S. crude inventories rose for a sixth straight week, according to government data. Russia is said to raise oil and condensate production to a record high in October just as the U.S. signaled some countries may continue importing Iranian crude after sanctions take effect. A rally in the greenback this week has also diminished the appeal of commodities priced in dollars. Oil slumped about 11 percent last month, the most since July 2016, as a global equity rout and trade tensions between the U.S. and China stoked concerns over economic growth and energy demand. Still, Organization of Petroleum Exporting Countries and its allies including Russia are sending mixed signals on whether they will ramp up output to fill any shortfalls as the return of U.S. sanctions next week are set to squeeze the Persian Gulf state’s exports. “While the gain in U.S. crude inventories was in line with the market expectation, it’s still a sixth consecutive week of increase on the back of rising American production,” Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., said by phone from Tokyo. “Even if it’s temporary, concerns over a supply glut are weighing on prices as Saudi Arabia, Russia and the U.S. all increase production.” West Texas Intermediate for December delivery fell as much as 58 cents to $64.73 a barrel on the New York Mercantile Exchange, and was at $65.03 at 3:47 p.m. in Tokyo. The contract declined 3.4 percent in the past three sessions. Total volume traded was about 0.8 percent below the 100-day average. Brent for January settlement slipped 33 cents to $74.71 a barrel on the London-based ICE Futures Europe exchange. The December contract fell 44 cents to $75.47 before expiring on Wednesday. The global benchmark crude traded at a $9.52 premium to WTI for the same month. The U.S. sanctions enter into full force Nov. 5, with the aim of limiting Iranian supply. Several countries “may not be able to go all the way to zero” right away on purchases of Iranian oil, said White House National Security Adviser John Bolton. The U.S. wants to put maximum pressure on Iran, but doesn’t “want to hurt friends and allies,” he said.

Oil Prices Plunge As Storm Clouds Gather Over Global Economy – Oil declined more than 3% on Thursday, and extended those losses Friday, with ICE West Texas Intermediate (WTI) Light Sweet Crude Oil Futures probing lows not seen since April, due to weakening global demand at a time when the output from the Organization of the Petroleum Exporting Countries (OPEC), Russia, and the U.S. is rising. Record crude production from the U.S. and Russia, along with a surge from OPEC, has once more created oversupplied conditions. Russian, U.S. & Saudi crude oil production (data via Reuters Eikon Graphics) Oil prices started declining in early October on fears that global economic momentum was waning as the U.S-China trade war escalates, and a slowdown in emerging market economic data (primarily in Asia) was becoming more evident. WTI has plunged 17% since its 76-handle probe in early October. Analysts told Reuters they anticipate more selling in coming sessions, noting that oil did not bounce on Thursday on weakness in the dollar, nor did it positively correlate with the rebound in equity markets. Besides global growth momentum waning, another reason for downward pressure in oil could be that Washington just granted several waivers on sanctions on Tehran, allowing countries like South Korea, Japan, and India to continue to import Iranian crude (in other words, more supply). John Kemp, Reuters Senior Market Analyst of Commodities and Energy, believes oil prices are falling as a broad range of financial and real-economy indicators show the global economy is slowing.”The depth and duration of the slowdown is impossible to gauge at this point, whether it turns out to be simply a mild and short-lived “soft patch”, a longer but still positive “growth recession” with output falling relative to trend, or an “outright recession” with activity falling in absolute terms.Recent declines in equity markets and softness in freight indicators may turn out to be a false alarm or a pause within an extended cycle rather than mark a cyclical turning point.Most commentary about the economic cycle is still influenced by the last deep and wrenching recession which accompanied the global financial crisis in 2008/09. But severe recessions have not been common since the end of the Second World War and most downturns have proved milder, which therefore seems a more likely prediction for the next cyclical slowdown. Kemp provides historical charts on the business cycle:

Oil under pressure from rising output, but Iran sanctions loom – Oil prices dipped on Friday after a week of heavy falls as markets braced for the imposition next week of U.S. sanctions on Iran, which Washington hopes will halt exports of Iranian oil. Brent crude oil was down 22 cents a barrel at $72.67 by 9:44 a.m. ET (1344 GMT). The contract has fallen 6 percent this week and 16 percent since the beginning of October, when it reached its highest since 2014. U.S. light crude was 31 cents lower at $63.38, down 17.5 percent since hitting four-year highs a month ago.Investors are concerned about the prospects for oil supply when new U.S. sanctions are implemented against Iran on Monday.Washington has said it aims eventually to stop all Iranian oil exports but has granted several countries waivers on sanctions, allowing them to continue imports for a while.The U.S. government has agreed to let eight countries, including South Korea and Japan, as well as India, keep buying Iranian oil after it reimposes the sanctions, Bloomberg reported on Friday, citing a U.S. official.”Oil prices look to remain under pressure, as fears of global oversupply have returned with a vengeance,” said Ashley Kelty, oil and gas research analyst at Cantor Fitzgerald Europe.A list of all countries getting U.S. waivers allowing them to import Iranian oil is expected to be released officially on Monday, industry sources say.Despite these efforts, waivers are likely to be only temporary. Goldman Sachs said it expected Iran’s crude oil exports to fall to 1.15 million barrels per day by the end of the year, down from around 2.5 million bpd in mid-2018.

Soaring U.S. Oil Production Forces Prices Down – Oil prices continued to slide on Friday afternoon, despite a small decline in the U.S./Canadian rig count. Iran sanctions are just days away but the market has come around to the idea that Iranian oil exports won’t be going to zero, despite months of promises from the Trump administration. New reports suggest waivers are in the offing. “Oil prices look to remain under pressure, as fears of global oversupply have returned with a vengeance,” Ashley Kelty, oil and gas research analyst at Cantor Fitzgerald Europe, told Reuters. The U.S. has granted exemptions to eight importers of Iranian oil just days before sanctions on Iran take effect. The countries will be allowed to continue to import oil without fear of retribution from the U.S. as long as they continue to make reductions in those purchases, according to Bloomberg. Four of the countries include Iran’s top buyers – China, India, South Korea and Japan. The other four were not identified in the Bloomberg report, but the decision is expected to be announced on Monday.. The EIA said the U.S. produced more than 11.3 mb/d in August, a massive jump of over 400,000 bpd from a month earlier. The new record high also made the U.S. the largest oil producer in the world. Record output, combined with higher production from OPEC, has dealt sharp losses to crude oil prices amid mounting fears of oversupply. President Trump spoke with Xi Jingping by phone on Thursday, and Trump tweeted that the discussion went well. His economic adviser Larry Kudlow said that there was a “thaw” in relations. The two leaders are expected to meet later this month at the G20 summit in Argentina, and the conversation by phone this week raises the odds of a breakthrough on trade. U.S. diplomats have reportedly stepped in to try to resolve disputes in the Middle East to increase oil flows. According to the Wall Street Journal, the U.S. is trying to broker a deal between Saudi Arabia and Kuwait over the Neutral Zone oil fields, which have 500,000 bpd of capacity but have been offline for years. The U.S. is also trying to help Iraq export more oil through Kurdistan, which would add another 300,000 bpd or so to global supplies. Washington is trying to ease these burdens at a time when it is seeking to shut in Iranian production.

Oil Set for Worst Week Since February – Oil’s set for the biggest weekly loss since February as fears over a supply disruption eased as the U.S. was said to agree on giving waivers to eight nations to continue importing Iranian crude after it reimposes sanctions on the OPEC producer. Futures in New York are on course for a 6 percent weekly decline. While America’s goal remains to choke off revenue to Iran’s economy, exemptions are being granted to countries including Japan, India and South Korea so as not to drive up oil prices, said a senior administration official. Crude earlier pared a weekly drop on signs of a possible trade agreement between the U.S. and China. Oil is approaching a bear market with prices falling more than 16 percent from a four-year high in October as a rout in global equity markets and U.S.-China trade tensions stoked concerns over economic growth. Investors are keeping an eye on the level of global supplies as the Organization of Petroleum Exporting Countries have boosted output to the highest level in October to replace potential shortfalls from Iran at a time when U.S. inventories and production are also growing. “In theory, we could have been in a bullish market because of sanctions against Iran. But rising production from Saudi Arabia and others, coupled with a global equity rout and concerns over economic outlook, is weighing on prices,” Jun Inoue, a senior economist at Mizuho Research Institute Ltd., said by phone from Tokyo. “As South Korea and India reportedly agreed with the U.S. on waivers, the Iran factor is weakening.” West Texas Intermediate for December delivery lost 25 cents to $63.44 a barrel on the New York Mercantile Exchange at 7:51 a.m. in London. The contract fell $1.62 to $63.69 on Thursday. Total volume traded was 30 percent above the 100-day average. Brent for January settlement fell 18 cents, or 0.3 percent, to $72.71 a barrel on the London-based ICE Futures Europe exchange. The contract is down 6.4 percent this week for a fourth consecutive week. The global benchmark crude traded at $9.14 premium to WTI for the same month.

Oil market passes cyclical peak: John Kemp (Reuters) – The recovery in oil prices since the downturn of 2014/15 looks a lot like the upward adjustments that followed the slumps of 2008/09 and 1997/98, which could provide clues about what happens next.The oil market is strongly cyclical, and although no two cycles are the same, they often show similar characteristics (“Cyclical behaviour of oil prices“, Reuters, June 4, 2018).Spot prices and calendar spreads exhibit cyclical movements that correlate closely with the market, alternating between periods of under- and over-supply (https://tmsnrt.rs/2CXAFBR).Brent’s six-month calendar spread seems to have reached a major cyclical peak in April 2018, up from a post-slump trough in January 2015, before trending downwards.Spot prices may have reached a similar peak in early October 2018. Although it is too early to be certain, most hedge funds and other money managers have liquidated a large share of their bullish positions in recent weeks.In the recent recovery, Brent calendar spreads rose for 39 months from trough to the first major peak, which is roughly comparable with recoveries in 1998-2000 (21 months) and 2009-2011 (33 months).Spot prices have risen for 33 months from trough to their peak in October, which is also broadly comparable with recoveries in 1998-2000 (22 months) and 2008-2011 (28 months). Oil prices, spreads and the reactions of producers and consumers suggest the market has passed the first major cyclical peak after the slump of 2014/15.

OPEC oil output rises to highest since 2016 despite Iran: Reuters survey (Reuters) – OPEC has boosted oil production in October to the highest since 2016, a Reuters survey found, as higher output led by the United Arab Emirates and Libya more than offset a cut in Iranian shipments due to U.S. sanctions. The 15-member Organization of the Petroleum Exporting Countries has pumped 33.31 million barrels per day this month, the survey on Wednesday found, up 390,000 bpd from September and the highest by OPEC as a group since December 2016. OPEC agreed in June to pump more oil after pressure from U.S. President Donald Trump to curb rising prices and make up for an expected shortfall in Iranian exports. Oil LCOc1 hit a four-year high of $86.74 a barrel on Oct. 3 but has since eased to $76 as concerns over tight supplies faded. “Oil producers appear to be successfully offsetting the supply outages from Iran and Venezuela,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt. The June pact involved OPEC, Russia and other non-members returning to 100 percent compliance with output cuts that began in January 2017, after months of underproduction in Venezuela, Angola and elsewhere had pushed adherence above 160 percent. In October, the 12 OPEC members bound by the supply-limiting agreement lowered compliance to 107 percent as production rose, from a revised 122 percent in September, the survey found. This is the closest OPEC has moved to 100 percent compliance since the June agreement. UAE, LIBYA The biggest increase has come this month from the UAE. Output in October rose by 200,000 bpd to 3.25 million bpd, the survey found, and could in theory rise further as the UAE says its oil-production capacity will reach 3.5 million bpd by the year-end. The second-largest came from Libya where production averaged 1.22 million bpd, the survey found, a rise of 170,000 bpd. Libyan output remains volatile due to unrest, raising questions about the stability of current OPEC production. Saudi Arabia, after opening the taps in June and then scaling back its plans to pump more, supplied 10.65 million bpd in October, more than in June and close to a record high, the survey found. The kingdom, OPEC’s top producer, has indicated it is concerned about potential oversupply, raising the prospect that its next production adjustment could be to rein in output. OPEC’s second-largest producer, Iraq, also raised output in October.

Khashoggi BOMBSHELL: Britain ‘KNEW of kidnap plot and BEGGED Saudi Arabia to abort plans’ Intercepts by GCHQ of internal communications by the kingdom’s General Intelligence Directorate revealed orders by a “member of the royal circle” to abduct the troublesome journalist and take him back to Saudi Arabia. The orders, intelligence sources say, did not emanate directly from de facto ruler Crown Prince Mohammad bin Salman, and it is not known if he was aware of them. Though they commanded that Khashoggi should be abducted and taken back to Riyadh, they “left the door open” for other actions should the journalist prove to be troublesome, sources said. Last week Saudi Arabia’s Attorney General confirmed that the murder had been premeditated – in contrast to initial official explanations that Khashoggi had been killed after a fight broke out. “The suspects in the incident had committed their act with a premeditated intention,” he said. “The Public Prosecution continues its investigations with the accused in the light of what it has received and the results of its investigations to reach facts and complete the course of justice.” Those suspects are within a 15-strong hit squad sent to Turkey, and include serving members of GID. Speaking last night the intelligence source told the Sunday Express: “We were initially made aware that something was going in the first week of September, around three weeks before Mr Khashoggi walked into the consulate on October 2, though it took more time for other details to emerge. “These details included primary orders to capture Mr Khashoggi and bring him back to Saudi Arabia for questioning. However, the door seemed to be left open for alternative remedies to what was seen as a big problem.

Saudi Arabia won’t extradite suspects in Khashoggi killing to Turkey – The suspects in the killing of Saudi journalist Jamal Khashoggi will be prosecuted in Saudi Arabia, the Saudi foreign minister said Saturday. His comments come after Turkey said it wanted to extradite 18 Saudi nationals that authorities say were involved in the murder. However, according to the BBC, speaking at a security conference in Bahrain, Adel al-Jubeir said: “On the issue of extradition, the individuals are Saudi nationals. They’re detained in Saudi Arabia, and the investigation is in Saudi Arabia, and they will be prosecuted in Saudi Arabia.” Speaking at the same conference on a different panel, U.S. Defense Secretary Jim Mattis said the killing of Khashoggi undermined Middle Eastern stability and that Washington would take additional measures against those responsible, Reuters reported. Saudi Arabia initially denied all knowledge of the journalist’s fate, but the Saudi public prosecutor now describes it as a premeditated murder. However, Riyadh denies the ruling royal family was involved and blames “rogue agents.” Al-Jubeir, along with Bahrain’s Foreign Minister Shiekh Khalid bin Ahmed Al Khalifa, told the conference that the Gulf states are playing a critical role in ensuring stability in the region against Iran, Reuters also reported. “We are now dealing with two visions in the Middle East. One is a (Saudi) vision of light … One is a (Iranian) vision of darkness which seeks to spread sectarianism throughout the region,” al-Jubeir said.

Canada upholds $15 billion Saudi arms deal after Khashoggi murder – In the nearly four weeks since the Saudi regime had journalist Jamal Khashoggi murdered, Canada’s Liberal government has gone out of its way to avoid criticizing Riyadh, while insisting Canada must fulfill a $15 billion arms deal with the kingdom – a linchpin of US imperialism’s domination of the oil-rich Middle East. Turkish President Recep Tayyip Erdogan has avoided publicly accusing Crown Prince Mohammed Bin Salman, the kingdom’s effective ruler, of ordering Khashoggi’s murder. But Turkish authorities have systematically leaked information contradicting Riyadh’s claims, including video of the arrival in Turkey of a 15-man Saudi assassination squad. Everything points to the Saudi journalist having been tortured and beheaded inside the consulate, then his dismembered body being smuggled out of the premises. With public outrage over Khashoggi’s gruesome murder mounting, Prime Minster Justin Trudeau and his Liberal government have spent the past two weeks twisting and turning in the face of mounting criticism from sections of the media and opposition over its insistence that Canada must fulfill its $15 billion contract to supply Riyadh with 740 LAVs (Light Armored Vehicles), manufactured at a General Dynamics plant in London, Ontario. For the first week, Trudeau and Foreign Minister Chrystia Freeland claimed, as they have in the past, that Canada’s international reputation would be damaged if it failed to “honour” the contract, while emphasizing that it was the Harper Conservative government that entered into the deal – Canada’s largest ever arms contract – with Riyadh in 2014. However, Prime Minister Justin Trudeau has now come forward with a second argument. Cancelling the contract, he insists, would result in massive financial penalties. Initially, Trudeau spoke of a billion dollars, but by Thursday he was claiming Canadian taxpayers would be on the hook for “billions of dollars.” According to Trudeau, the deal is subject to stringent confidentiality clauses such that the government cannot make the financial penalties section, or any other part of it, public. In other words, the government must be taken at its word.

Trudeau won’t stop $12bn of arms sales to Saudi after Khashoggi’s death because money always wins over murder – Almost 5,000 miles from the city in which his corpse was secretly buried – in one piece or in bits – by his Saudi killers, Jamal Khashoggi’s murder now rattles the scruples and the purse-strings of yet another country. For Canada, land of the free and liberal conscience – especially under Justin Trudeau – is suddenly confronted by the fruits of the bright young prime minister’s Conservative predecessors and a simple question of conscience for cash: should Trudeau tear up a 2014 military deal with Saudi Arabia worth $12bn? When Ottawa decided to sell its spanking new light armoured vehicles (LAVs) to the Saudi kingdom, the Saudis already had a well-earned reputation for chopping off heads and supporting raving and well-armed Islamists. But Mohammed bin Salman had not yet ascended the crown princedom of this pious state. The Saudis had not yet invaded Yemen, chopped off the heads of its Shia leaders, imprisoned its own princes, kidnapped the Lebanese prime minister and dismembered Khashoggi.So the Conservative Canadian government of Stephen Harper had no scruples about flogging off its LAVs – as these little armoured monsters are called – to Riyadh, specifically for the “transport and protection” of government officials.Now you can hardly accuse Trudeau of being a supporter of the Saudi regime. Back in August, Mohammed bin Salman’s lads ordered the expulsion of the Canadian ambassador to Riyadh and closed down trade agreements with Canada after Trudeau’s foreign minister had complained about the arrest of women’s rights campaigners in the kingdom. The Canadians had made “false statements”, claimed the Saudis – whose own reputation for false statements would soon achieve proportions worthy of a Hollywood horror epic. Trudeau was in the Saudi doghouse as well as Washington’s because, only two months earlier,Trump had called him “dishonest and weak”.

Turkey Says Saudis Strangled Khashoggi Immediately On Entering Consulate, Dismembered Body – Hours after the Washington Post published an anonymously sourced story claiming that Saudi Arabia is still refusing to cooperate with Turkish investigators looking into the murder of insider-turned-dissident Jamal Khashoggi, Istanbul’s head prosecutor has delivered a statement revealing more incriminating details about the circumstances surrounding the journalist’s murder at the hands of a 15-man “hit squad” inside the Kingdom’s Istanbul consulate. In a revelation that supports the theory, advanced by a steady stream of leaks to Western and Turkish media from the prosecutor’s office, that Khashoggi’s murder was a premeditated act ordered by senior intelligence officials and possibly Crown Prince Mohammad bin Salman himself, Istanbul’s head prosecutor said Wednesday that Khashoggi was strangled to death as soon as he entered the consulate in a murder that was likely pre-planned. His body was then “cut into pieces” and presumably smuggled it out of the consulate.From the statement: Turkey asked for the extradition of the suspects arrested in Saudi Arabia and the whereabouts of Khashoggi’s body. No response from the Saudi side. Finally, adds that the talks with the top Saudi prosecutor were not productive. pic.twitter.com/DUyDvtJPK9 Notably, the statement from the Turkish prosecutor comes shortly after his Saudi counterpart, Saud al-Mojeb, left the country after a meeting between the two. The Saudis have largely stonewalled the inquiry into Khashoggi’s disappearance and killing. After denying any involvement, the kingdom admitted earlier this month that Khashoggi was, in fact, murdered inside the embassy, something the kingdom has officially said was the result of a “botched interrogation,” the Saudis pledged “full cooperation” with their Turkish counterparts. But that promise was apparently less-than-sincere. The Saudis have rebuffed demands expressed by prosecutors and President Erdogan himself that the kingdom disclose where Khashoggi’s body was buried, or the name of the “local cooperator” whom the Saudis claim the killers worked with to dispose of Khashoggi’s remains. Turkey has also requested the extradition of the 18 Saudi nationals who were arrested by the kingdom in connection with the murder. But while the international pressure has inspired Germany to suspend arms exports to Saudi Arabia, and US lawmakers have continued to push for some kind of punitive action despite President Trump’s obvious reluctance, the fallout from the scandal has been relatively muted. And as the international outrage subsides, many epect MbS will ultimately use this as one more excuse to consolidate power in Riyadh. Though the Turks still have an ace up their sleeve: The rumored audio recording of Khashoggi’s murder which has been widely cited in the press, but never released to the public. And while the Turks reportedly played it for CIA Director Gina Haspel, their plans for the record remain unclear.

Did The Saudi Hit Squad Dissolve Jamal Khashoggi’s Body In Acid- – Friday will mark one month since Jamal Khashoggi waltzed into the Saudi consulate in Istanbul, planning to pick up paperwork that would allow him to legally marry his Turkish girlfriend, and was never heard from or seen again. And despite repeated demands from Turkish authorities that the Saudi government reveal the location of Khashoggi’s remains, or at least identify the “local collaborator” who is said to have disposed of the body, the kingdom has repeatedly refused. The Saudi prosecutor’s inexplicable refusal to help with the recovery of Khashoggi’s remains has apparently led the Turks to conclude that one of the particularly gruesome rumors about the circumstances of Khashoggi’s demise just might have been true. That is, after he was strangled and dismembered inside the consulate, Khashoggi’s remains were dissolved in a vat of acid, then dumped either in a well on the property of the consul general, or somewhere on the consulate grounds, according to Washington Post. Initially, Turkish investigators focused their search for Khashoggi’s body on two wooded areas outside of Istanbul, partly inspired by surveillance footage that Turkish authorities said showed Saudi diplomatic vehicles apparently scouting Belgrad Forest the night before the journalist was killed. Last week, investigators suspended the search, focusing instead on the consulate’s grounds and the consul general’s residence. The search focused in particular on a well on consular property, where The Turks believe the assailants may have disposed of Khashoggi’s dissolved remains. According to WaPo, biological evidence uncovered during the search of the consul’s residence suggests that Khashoggi’s remains were disposed of near where he was dismembered. A senior Turkish official said in an interview that Turkish authorities are pursuing a theory that Khashoggi’s dismembered body was destroyed in acid on the grounds of the Saudi Consulate or at the nearby residence of the Saudi consul general. Biological evidence discovered in the consulate garden supports the theory that Khashoggi’s body was disposed of close to where he was killed and dismembered, the official said. “Khashoggi’s body was not in need of burying,” said the official, who spoke on the condition of anonymity to discuss a sensitive investigation.

MbS: The New Saddam of Arabia? – As Mohammad bin Salman (MbS) has terrorized his opponents at home and abroad, fear has spread within the Saudi kingdom. Has he become the new Saddam of Arabia? As Iraq’s Saddam Hussein did in the 1980s, MbS is cementing his power domestically and regionally through fear and economic largesse under the guise of fighting Iran, Islamic radicalism, and terrorism.Much like the tyrant of Baghdad did in Iraq, MbS has crushed his domestic and regional opponents. Both of them have enlisted the support of foreign powers, especially the United States and Britain, to buttress their hold on power in their territories and expand their reach internationally. They both spoke the language of “reform,” which appeals to Western audiences, and both demonized Iran as a promoter of regional instability and a source of evil internationally.They both used chemical weapons against their opponents – Saddam against his Kurdish citizens and against Iran during the Iran-Iraq war; MbS against civilians in Yemen. Saddam threatened and later invaded his neighbor Kuwait. MbS has waged a vicious campaign against his neighbor and fellow Gulf Cooperation Council member Qatar and threatened to invade it.Saddam and MbS also cynically donned the mantle of Sunni Islam in their hypocritical claims against the so-called Shia Crescent and its main proponent Iran. Saddam’s “Republic of Fear” seems to be slowly morphing into a “Kingdom of Fear” under MbS.In his “city-busting” campaign during the Iran-Iraq war, Saddam committed horrible atrocities against civilians in Iranian cities in the 1980s. Thirty years later, MbS is committing equally horrible crimes against innocent civilians in Yemen. The famine and starvation that MbS’s war has wrought on Yemeni children is arguably more calamitous than what Saddam did in Iran. Sadly, both Saddam and MbS have relied on American military, intelligence, and political support in the execution of their bloody wars.Saddam killed thousands of people and arrested and executed hundreds of his opponents, including journalists, academics, and peaceful dissidents. MbS has used the same playbook. The “premeditated murder” of Jamal Khashoggi – a Saudi citizen, a U.S. permanent resident, and a Washington Post journalist – starkly illustrates MbS’s campaign against his critics.

Recep Tayyip Erdogan: Saudi Arabia still has many questions to answer about Jamal Khashoggi’s killing – Recep Tayyip Erdogan is the president of Turkey. The story is all too familiar: Jamal Khashoggi, a Saudi journalist and a family man, entered Saudi Arabia’s Consulate in Istanbul on Oct. 2 for marriage formalities. No one – not even his fiancee, who was waiting outside the compound – has ever seen him again.Over the course of the past month, Turkey has moved heaven and earth to shed light on all aspects of this case. As a result of our efforts, the world has learned that Khashoggi was killed in cold blood by a death squad, and it has been established that his murder was premeditated.Yet there are other, no less significant questions whose answers will contribute to our understanding of this deplorable act. Where is Khashoggi’s body? Who is the “local collaborator” to whom Saudi officials claimed to have handed over Khashoggi’s remains? Who gave the order to kill this kind soul? Unfortunately, the Saudi authorities have refused to answer those questions.We know the perpetrators are among the 18 suspects detained in Saudi Arabia. We also know those individuals came to carry out their orders: Kill Khashoggi and leave. Finally, we know the order to kill Khashoggi came from the highest levels of the Saudi government. Some seem to hope this “problem” will go away in time. But we will keep asking those questions, which are crucial to the criminal investigation in Turkey, but also to Khashoggi’s family and loved ones. A month after his killing, we still do not know where his body is. At the very least, he deserves a proper burial in line with Islamic customs. We owe it to his family and friends, including his former colleagues at The Post, to give them an opportunity to say their goodbyes and pay their respects to this honorable man. To ensure that the world will keep asking the same questions, we have shared the evidence with our friends and allies, including the United States.

In WaPo Op-Ed, Erdogan Says “We Know The Order To Kill Khashoggi Came From Highest Level Of Saudi Government” – With the Jamal Khashoggi grotesque murder by some 18 Saudi agents fading from the public’s attention, Turkish President Recep Tayyip Erdogan took the opportunity to remind the world that he now has the upper hand in the Middle Eastern balance of power, and said that the order to kill the U.S.-based journalist and Saudi dissident came from the “highest levels” of the Saudi government. “We know that the perpetrators are among the 18 suspects detained in Saudi Arabia,” Erdogan wrote in a Washington Post op-ed published Friday afternoon. “We also know that those individuals came to carry out their orders: Kill Khashoggi and leave. Finally, we know that the order to kill Khashoggi came from the highest levels of the Saudi government.” Some seem to hope this “problem” will go away in time. But we will keep asking those questions, which are crucial to the criminal investigation in Turkey, but also to Khashoggi’s family and loved ones. A month after his killing, we still do not know where his body is. At the very least, he deserves a proper burial in line with Islamic customs. We owe it to his family and friends, including his former colleagues at The Post, to give them an opportunity to say their goodbyes and pay their respects to this honorable man. To ensure that the world will keep asking the same questions, we have shared the evidence with our friends and allies, including the United States. “As responsible members of the international community, we must reveal the identities of the puppetmasters behind Khashoggi’s killing and discover those in whom Saudi officials – still trying to cover up the murder – have placed their trust,” he concluded.

Saudi-Led Coalition Sends Over 10,000 Troops to Yemen’s Hodeidah – The Saudi-led military coalition in Yemen has sent more than 10,000 troops towards a strategic rebel-held port city ahead of a new assault, Yemeni government officials said on Tuesday.The pro-government coalition deployed the reinforcements to the Red Sea coast ahead of a new offensive on Hodeidah that will be launched “within days”, a military official told the AFP news agency.He said they would also “secure areas liberated” from the Houthi rebels, and that forces from Sudan, part of the coalition, had moved in to “secure” areas around the city.Houthi rebels have for the past 10 days been stationing fighters on rooftops of buildings in Hodeidah city, government military officials told AFP.The adjacent port is the entry point for three-quarters of imports to the impoverished country, which is teetering on the edge of famine.Saudi Arabia and its allies intervened in Yemen in 2015 to support President Abd Rabbuh Mansour Hadi’s government after the Houthis ousted it and took swathes of territory including the capital Sanaa. The coalition has used air power to push the rebels back from much of Yemen, but the Houthis have held onto Hodeidah and Sanaa.

True Yemen Death Toll Five Times Higher Than Previous Estimate, Researchers Say – At least 56,000 people have been killed in armed violence in Yemen since January 2016, according to data collected by an independent research group, a tally that is more than five times higher than previously reported. The new figure encompasses the deaths of both combatants and civilians in Yemen between January 2016 and 20 October 2018, explained Andrea Carboni, a research analyst at the Armed Conflict Location & Event Data Project (ACLED). It does not take into account the Yemenis who have died as a result of the humanitarian crisis engulfing the country and its related problems, such as diseases and malnutrition. “The fatality numbers refer to the number of people that were killed as a direct consequence of armed violence,” Carboni told Middle East Eye on Monday. That violence includes air strikes and artillery fire from Saudi-led coalition forces currently fighting in Yemen, as well as armed clashes between various factions fighting inside the country, such as the Houthis. Middle East Eye could not independently verify the 56,000 number.The Saudi-led coalition has been accused of committing war crimes in Yemen, such as the deliberate bombing of hospitals, buses and other civilian infrastructure. The Houthis have also been accused of taking hostages and arbitarily detaining and torturing opponents – all potential war crimes.However, as Yemen has become increasingly closed off to outside observers and journalists amid the devastating conflict, reliable information on the number of deaths has been hard to come by. The number was also an underestimate when it was released, Carboni said, since it was based on deaths that were reported at medical facilities in the country. “Most of the people, the casualties, do not get to medical centres. That number was actually missing a lot of the violence and the casualties that are related to it,” he said. Based on an estimate of around 2,000 fatalities every month in Yemen, total deaths between the start of the conflict in 2015 to the end of this year is expected to sit between 70,000 and 80,000, Carboni said.“These are estimates based on the methodology we’ve applied elsewhere. They are likely also to be an underestimate themselves,” he said. He added that three-quarters of all civilian deaths in Yemen are attributable to the Saudi-led coalition.

Saudis Pound Yemen After US Officials Demand ‘Immediate Ceasefire’ – Earlier this week, Defense Secretary James Mattis called for an immediate ceasefire in Yemen. In the course of this, he demanded an end to fighting, and an immediate halt to all airstrikes against populated areas.Friday in Yemen was much like any other, with Saudi warplanes pounding areas in and around the northern cities of Hodeidah and Sanaa. Heavy airstrikes were reported particularly around Sanaa Airport, which is definitely a civilian-populated area.Sanaa was mostly hit with airstrikes, while locals reported heavy clashes around Hodeidah, a vital port city that Saudi forces have been massing around all week. In no case is there any indication that a ceasefire is starting. Saudi and UAE officials have yet to comment on the US call for a ceasefire and peace talks at all. The only response at all from their camp was from Yemeni officials backed by the Saudis, who embraced the idea of peace talks, but similarly showed no signs of stopping fighting in the meantime.

Leaked U.N. Memo Reveals Saudis Demanded Western Propaganda For $1bn Pledged To Aid Agency — We wonder if the Saudis had never been caught in Jamal Khashoggi’s gruesome murder, would such essential stories and leaks now happening such as the below Guardian report ever see the light of day? On Tuesday The Guardian published select contents of a leaked internal United Nations document detailing a “pay to play” scheme orchestrated by Saudi Arabia. According to the leaked document, the Saudis demanded that aid groups and humanitarian agencies operating in Yemen provide favorable publicity for Saudi Arabia in return for Riyadh providing close to a billion dollars to fund their efforts. The document identifies $930m given to the aid groups, even as the Saudi-led coalition bombed the very people the donations were supposed to help. The Guardian report calls the extent of Saudi demands “highly unusual” as part of the requirement for groups to receive aid included floating favorable stories and coverage of “the Saudi humanitarian effort in Yemen” to newspapers like the New York Times and the Guardian – publications specifically named in the internal memo. Thus the nearly $1bn was essentially hush money for the sake of propaganda meant to shield the kingdom from scrutiny over its Yemen actions.

Crown prince Mohammed bin Salman is ‘chief of the tribe’ in a cowed House of Saud – For just over two years, until June 2017, Mohammed bin Nayef was crown prince of Saudi Arabia, the designated heir to the throne. A grandson of the kingdom’s founder, with long experience at high levels of government, he was the first of his generation to reach the direct line of succession. Today, bin Nayef, 59, is rarely seen outside his palace in Jiddah, on Saudi Arabia’s Red Sea coast. Usurped by an ambitious cousin barely half his age who took over his title and froze his once-hefty bank accounts, he reportedly passes his days under heavy guard. The ouster was not completely surprising, since his cousin was the favored son of bin Nayef’s uncle Salman, the current king. But the speed and apparent ruthlessness with which it was done – a late-night summons that left the crown prince with little choice – were shocking to many in the extended royal family, in which decisions had traditionally been made by consensus after extensive consultation. Now well more than a year into the job, the new crown prince, Mohammed bin Salman, enjoys nearly absolute power in the kingdom, directly controlling foreign and domestic policy, the security forces, and the economy. In doing so, Mohammed has replaced “cautious” royal leadership with “impulsive interventionist politics,” as one Western intelligence agency predicted in late 2015, warning that his rapid ascent would lead to trouble at home and abroad. The prescience of that three-year-old analysis, by Germany’s Federal Intelligence Service, appears borne out by events as Mohammed’s command has grown – an endless and seemingly futile war in Yemen, stubborn disputes and peremptory behavior toward neighbors and allies, and crackdowns on even the mildest forms of internal dissent.

Saudi Arabia’s ruling family – annotated family tree (Reuters)

EXCLUSIVE: Saudi dissident prince flies home to tackle MBS succession– Prince Ahmad bin Abdulaziz, the younger brother of King Salman, has returned to Saudi Arabia after a prolonged absence in London, to mount a challenge to Crown Prince Mohammed bin Salman or find someone who can. The septuagenarian prince, an open critic of bin Salman (MBS), has travelled with security guarantees given by US and UK officials. “He and others in the family have realised that MBS has become toxic,” a Saudi source close to Prince Ahmad told Middle East Eye. “The prince wants to play a role to make these changes, which means either he himself will play a major role in any new arrangement or to help to choose an alternative to MBS.” The source said that the prince returned “after discussion with US and UK officials”, who assured him they would not let him be harmed and encouraged him to play the role of usurper. Apart from those western guarantees, Ahmad is also protected by his rank. Last November, bin Salman conducted a sweeping purge of dissident royals, yet was not able to touch any sons of King Abdulaziz, the founder of the modern Saudi state, who are regarded as too senior a target for him. The 33-year-old heir to the Saudi throne’s dominance in the kingdom has come under intense scrutiny following the murder of journalist Jamal Khashoggi on 2 October, leading to speculation that he could be replaced. MEE understands that while Prince Ahmad was in London he held meetings with other members of the Saudi royal family who are currently living outside the kingdom. Prince Ahmad also consulted figures inside the kingdom who have similar concerns and have encouraged him to usurp his nephew.

Summit in Istanbul as ramifications of the Khashoggi debacle roll on – Pepe Escobar – The Russia-Turkey-Germany-France summit in Istanbul today (October 27) is an extraordinary affair. The Kremlin has been deploying a wily strategy, downplaying the summit as just “comparing notes”, and not a breakthrough.Yet Istanbul is a de facto breakthrough in itself – on superimposed layers. It signals the top two EU powers acquiescing that Russia is in control of Syria’s future. It confers extra legitimacy to the Astana format (Russia, Turkey, Iran) on Syria, as well as adding new meaning to the efficacy of a quad. The nominal Quad (US, Japan, India and Australia) is essentially a mechanism of Chinese containment already showing signs of derailment. In contrast, there’s a Eurasian Quad that will be discussing not only the geopolitical chessboard in wider southwest Asia but also the supreme trans-Atlantic dilemma: how to deal with Washington’s sanction obsession.Istanbul, of course, won’t “solve” the tragedy in Syria. President Putin is carefully maneuvering around President Erdogan’s neo-Ottoman ambitions while the EU pair is not exactly in a strong negotiating position.Putin has already appeased Saudi Arabia, and that’s no mean feat. No more funding and weaponizing of any forms of Salafi-jihadism in Syria. The Arab League – with no Saudi objections – is even embarking on normalizing relations with Damascus.Riyadh is now part of the Russian Direct Investment Fund (RDIF), which will in fact be “renamed as the Russian-Chinese-Saudi Fund”, as revealed by its director, Kirill Dmitriev, at the Future Investment Initiative, or “Davos in the Desert”. The fund was originally set up in 2012 by RDIF and China Investment Corporation (CIS) to turbo-charge bilateral economic cooperation between Moscow and Beijing. Davos in the Desert, by the way, yielded a bombshell that was virtually ignored by the 24/7 news-cycle dementia. Prime Minister Imran Khan, fresh from receiving a much-needed Saudi cash injection to his nation’s economy, revealed that Pakistan is mediating a resolution for the tragedy in Yemen between Saudi Arabia and Iran.

Four-nation Syria summit calls for lasting Idlib ceasefire – The leaders of Turkey, Russia, France and Germany on Saturday called for a political solution to Syria’s devastating seven-year civil war and a lasting ceasefire in the last major rebel-held bastion of Idlib. A joint statement adopted at the end of a major summit in Istanbul said the countries were committed to working “together in order to create conditions for peace and stability in Syria”. It also “stressed the importance of a lasting ceasefire” in Idlib, while hailing “progress” following a deal last month between Syrian-regime supporter Russia and rebel-backer Turkey to create a buffer zone around the northwestern province. Turkish President Recep Tayyip Erdogan spoke for several hours with Russia’s Vladimir Putin, France’s Emmanuel Macron and German Chancellor Angela Merkel about the Syrian conflict, in which more than 360,000 people have been killed since 2011. Their statement, read by Erdogan, called for a committee to be established to draft Syria’s post-war constitution before the end of the year, “paving the way for free and fair elections” in the war-torn country. It also said there was “the need to ensure humanitarian organisations’ rapid, safe and unhindered access throughout Syria and immediate humanitarian assistance to reach all people in need”. The talks came after a week of escalating violence in Idlib culminated in Syrian regime artillery fire killing seven civilians on Friday, the highest death toll there since the fragile ceasefire began last month.

Germany And France Just Broke The US Boycott Of Syria – There weren’t exactly any breakthroughs at the four-way summit involving France, Germany, Russia, and host Turkey in Istanbul on Saturday, but the event itself was a significant victory for one side in terms of optics. Says Syria expert Joshua Landis: “The real importance of France and Germany going to Turkey to meet Putin and Erdogan is that they are effectively hiving off from the US by joining the Astana process.” Ultimately, according Professor Landis: They are breaking the boycott of Syria, while preserving the “need for elections” talking point.Alas, as the photo op of summit participants suggests, the United States has indeed effectively been cut out of the Russia and UN-brokered Astana process to bring Syria’s war to a close – which has both set the terms for the current shaky Idlib ceasefire agreement, and brought Turkey and Russia into an orbit of cooperation to seek long-term peace and stability. Notably Germany’s Merkel and France’s Macron now see the Russia-Turkey deal on Idlib as the only workable track that could stave off another mass refugee and jihadi influx into Europe, already reeling from a years-long migrant crisis. And President Putin, sitting beside his European counterparts, still affirmed that Russia is in the driver’s seat since its 2015 intervention in the war at the request of Damascus. Putin vowed during the summit: “Should radicals… launch armed provocations from the Idlib zone, Russia reserves the right to give active assistance to the Syrian government in liquidating this source of terrorist threat.”

Syria Sitrep – ISIS Defeats U.S. Proxy Force – Again – The U.S. backed proxy force in east Syria again lost positions to the Islamic State. The map shows the positions of ISIS (grey), the US. proxy force SDF (yellow) and the Syrian army (red) at the border with Iraq on October 19. bigger Here are the positions as of today. bigger The U.S. proxy force lost the towns Susah, Hawi al-Susah, Safafinah, Mozan, Shajlah and Baghuz Fawqani and ISIS is back at the Iraqi border. The Iraqi forces were alarmed and sealed the border on their side. The immediate cause of the loss was another sandstorm which ISIS used to counterattack. A similar counterattack during a sandstorm happened two weeks ago. That makes this U.S. spokesman’s statement laughable: “The sandstorm allowed an ISIS counterattack, which was surprising given the conditions, but now the air is clear and the Coalition will continue to increase air and fire support to assist our partners,” Col. Ryan said … Sandstorms disable air and artillery support. That is why ISIS, which lacks an airforce, has for years used each and every sandstorm to attack. That is not surprising at all, but one of its signature forms of fighting. Sandstorms mean that one can expect an ISIS attack. That one has to double one’s guard and be ready to defend one’s position. The U.S. special forces who are supposed to lead their proxies seem to have neglected that. ISIS jihadis attacked during the sandstorm in their usual manner. A suicide bomber blew up the first position at the frontline and more than 100 fighters stormed through and rolled up their enemie’s lines. Since Friday some 60 to 80 SDF were killed, more were wounded and at least 20 were taken prisoners. Others simply fled in panic and ISIS could recapture several villages without a fight. ISIS claims that all the captured fighters were Arabs, not Kurds.

NATO Is At War With NATO In Northern Syria – Not for the first time the Turkish army has attacked U.S.-backed forces in northeastern Syria on Sunday in yet another absurd contradiction of American policy in the region. It highlights the awkward fact that in northern Syria for over the past year one NATO country (Turkey) is at war with another NATO country’s proxy force, namely the Pentagon armed and trained Kurdish-led Syrian Democratic Forces (SDF, of which the YPG is a core part).The new flair up of tensions comes as President Turkey’s President Recep Tayyip Erdogan again vowed to eliminate “terrorists and separatists” from near its border. Speaking at the four-way Syria summit involving Russia, Germany, and France in Istanbul over the weekend, Erdogan said, “We will continue eliminating threats against our national security at its root in the Euphrates’ east as we have done so in its west.”Notably the Saturday summit with two major European/NATO powers did not include the United States. Syrian Kurdish groups, for their part, have accused Turkey of committing ethnic cleansing on Syrian soil in a bid to essentially annex territory while conducting a campaign of ‘Turkification’ – a charge for which there’s ample evidence. As a new AFP report finds in the northwest Syrian town of Azaz: “From Turkish-language classes for Syrian children to the state-owned Turk Telekom company erecting its first cell towers on Syrian soil, Ankara’s role in the rebel-held region around Azaz has been expanding.”And on Sunday amidst a continuing slow onslaught of pro-Turkish forces, the Associated Press reported: The Turkish army shelled on Sunday positions held by the U.S.-backed Kurdish fighters in northeastern Syria, east of the Euphrates River, in a new spike in tension along the borders.The report further noted the timing of Turkey’s shelling US-backed fighters east of the Euphrates, coming just after Erdogan, Putin, Macron, and Merkel met in order to talk Syria, and among other things shore up the shaky ceasefire over Idlib brokered between Turkey and Russia.

Russia Ready To Shoot Down U.S. Spy Plane Behind Attacks On Airbase, Says Defense Official – A Russian defense official has doubled down on prior claims that the United States was behind a prior massive drone attack against Khmeimim Air Base near Latakia (alternately Hmeimim), which has further come under sporadic waves of attack by small armed drones which have appeared increasingly sophisticated. Vladimir Shamanov, head of the lower parliamentary house’s defense committee and a former airborne troops commander, warned, according to a translation of his Tuesday statement by Russian Market:In case of another U.S. drone attack on Russian Military Base in Syria, Russia is ready to shoot-down that plane. The threat was made against an American spy plane possibly being in the area near Syria to coordinate any future attack. Last week the Kremlin said, based on new intelligence provided by the Russian defense ministry, that a major attack on Khmeimim last January was coordinated by a US P-8 Poseidon surveillance plane.

Russia, India And Iran To Cooperate On New Trade Route Alternative To Suez Canal – After their leaders pledged to strengthen bilateral trade and military cooperation at a bilateral summit last month, Russia and India announced earlier this week that they had sealed a long-discussed $6 billion arms deal despite threats of economic sanctions from Washington. And in the latest indication of the increasingly close relationship between the two countries, Iran, Russia and Iran announced on Thursday that they would meet next month to work out the details of a massive project to open up a new sea-land transport corridor that would that would be a cheaper and shorter alternative to shipping oil and other goods through the Suez Canal. According to RT, the North-South Transport Corridor (INSTC), the name for the new transit route, will connect India to Russia and Europe via a combination of sea routes and an overland passage through Iran, according to Iranian state-owned news outlet Press TV. The 7,200-kilometers long corridor will reduce the time and costs of shipping by up to 40%. Transport time between Mumbai and Moscow will fall to 20 days. The annual capacity of the transport artery is expected to reach 30 million tons.Indian logistics companies presently need to route shipments through China, Europe or Iran to access Central Asian markets. Already, routing shipments through Iran is the least time-consuming option. But the INSTC will have the ancillary benefit of allowing Indian companies to forge a new trade route to Afghanistan without having to travel through Pakistan, as tensions over Kashmir are once again on the rise. The passage corridor through the Persian Gulf will mean billions of dollars in trade for Afghanistan, cutting its dependence on foreign logistics.

Bahrain says ‘Arab NATO’ to be formed by next year — Bahrain’s Foreign Minister Khalid bin Ahmed Al Khalifa has said a planned Gulf security alliance, expected to include Egypt, will be formed by next year.At a security summit in capital Manama on Saturday, Khalifa said the Middle East Strategic Alliance (MESA), an initiative pushed by US President Donald Trump to confront Iran, will help the Gulf remain “a pillar of stability”.”It (MESA) is an alliance for security and prosperity for the region and will be open to those who accept its principles,” he said, adding that the alliance would also cooperate on economic issues.Relations between Saudi Arabia, which is the lynchpin of the US-backed regional bloc, and its Western allies are strained following the murder of journalist Jamal Khashoggi. Doubts over MESA have also been raised over a protracted dispute between Qatar and four Arab states who launched a blockade against Doha in 2017.Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut off travel and trade ties with Qatar in June 2017, accusing it of backing Iran and supporting “terrorism”. Qatar denies the charges and says the boycott impinges on its sovereignty.

Taliban Stronger Than at Any Time Since Afghanistan War Began in 2001 – With Afghan security forces suffering record casualties, and their already tenuous control slipping all the time, things are looking dire in Afghanistan. But from the Taliban perspective, all these same stats add up to things looking pretty good. The Taliban is getting stronger all the time, and now controls more of Afghanistan than at any time since the 2001 US invasion. That control is extending in all regions of the country, with them contesting substantial portions of even vital provinces, or controlling them outright. That’s true even in the capital city of Kabul. According to the most recent SIGAR estimate, 12% of Kabul is under direct Taliban control, with another 32% of the city considered at the very least “contested.” All of this adds up to a Taliban able to contest virtually any part of Afghanistan they choose, able to make a serious run at seizing almost any city in the country, at least temporarily, and can carry out so many simultaneous offensives that the Afghan military can’t react to them all. Afghan officials are determined to not publish death tolls for their forces as they face major pushes from the Taliban. They do, however, admit that the casualties are higher than in any previous comparable period. The record casualties were a bit more closely defied by Defense Secretary James Mattis, who said over 1,000 Afghan security forces suffered casualties in August and September. This was done to praise them for continuing to fight. But they’re fighting and losing. The record casualties are not coming as part of some costly offensive by the Afghan government, but rather amid mounting losses. Afghan government control in the country is shrinking apace, and shows now sign of slowing, despite the eternal optimism of the Pentagon. One of the most immediate concerns with the casualties is that the Afghan government’s official troop figures have always been inflated. In reality, much of the army exists only on paper, and as very real troops suffer casualties, the remaining percentage of the military that is wholly imaginary only grows.

Video Shows Iranian Boats Harassing U.S. Ship With CENTCOM Chief On Board — A hugely significant incident occurred in the Persian Gulf on Friday, first reported by CNN and now confirmed through official U.S. Navy statements. An American warship – the Wasp-class amphibious assault ship Essex – was approached by two armed Iranian fast boats at a moment that commander of U.S. Central Command, Gen. Joseph Votel, was on board. CNN reported, based on official military sources, that at one point the pair of Iranian boats crossed within 300 yards in front of the Essex; however a Navy statement did not deem the incident as intentionally hostile in spite of video footage revealing what clearly appears to be harassing maneuvers around the much larger U.S. vessel. U.S. Naval Forces Central Command told Marine Corps Times in a statement: “Today’s interaction with U.S. 5th Fleet forces and the IRGCN [Islamic Revolutionary Guard Corps Navy] was characterized as safe and professional” – meaning the US didn’t consider it to be an overt or intentional act of aggression. The statement continued: “The U.S. Navy continues to operate wherever international law allows.”As CENTCOM Chief Votel was on board, we can imagine that if for a moment the Navy interpreted the approach as hostile the USS Essex would have blown the Iranian fast boats out of the water. However, stunning video of the incident shows the armed Iranian military boats in an attempt to shadow and harass the Essex.

Iran’s Khamenei calls for fight against enemy ‘infiltration’: state TV (Reuters) – Iranian Supreme Leader Ayatollah Ali Khamenei called on Sunday for the stepping up of efforts to fight enemy “infiltration” in a speech to officials in charge of cyber defense, state television reported. “In the face of the enemy’s complex practices, our civil defense should … confront infiltration through scientific, accurate, and up-to-date … action,” Ayatollah Khamenei told civil defense officials, who are in charge of areas including cyber defense. The television report did not give details of the “infiltration” Khamenei was referring to. Iranian officials have long warned about Western cultural influences through entertainment, social media and the Internet as a threat against Islamic and revolutionary values. A decade ago, Iran’s nuclear program was hit by Stuxnet, a virus which was deployed by U.S. and Israeli intelligence agencies against a uranium enrichment facility. Gholamreza Jalali, head of Iran’s civil defense agency, said on Sunday that Iran had recently neutralized a new version of Stuxnet. “Recently we discovered a new generation of Stuxnet which consisted of several parts … and was trying to enter our systems,” Jalali was quoted as saying by the semi-official ISNA news agency at a news conference marking Iran’s civil defense day. He did not give further details.

By Way Of Deception – False Flag Terror Acts Press Europe To Sanction Iran – Israels secret service Mossad, with the CIA behind it, is framing Iran with alleged assassination plots in Europe. In September a terror attack killed some 30 people in Iran. Two entities, an Arab separatist movement as well as the Islamic State terror group ISIS, took responsibility. After an investigation Iran found that it was ISIS which was responsible. It took revenge against the identified culprits. Six weeks later Denmark claims, without providing evidence, that Iran tried to assassinate a leader of the Arab separatist movement over the incident. Iran denies any such attempt. The right wing Danish government uses the claim to urge other European countries to sanction Iran. It is unlikely that Iran would take action in Europe, which it urgently needs to reduce the damage of U.S. sanction, over an incident for which it already punished the Islamic State.The Danish claims are allegedly based on information provided by Mossad. That only increases the suspicion that the assassination plot is a false flag operation similar to a recent one in Belgium. More likely though is that the CIA is behind such false flag incidents.The details:On September 22 gunmen killed 29 and wounded more than 70 participants and onlookers of a veterans day parade in Ahvaz, Iran: “The terrorists disguised as Islamic Revolution Guards Corps (IRGC) and Basiji (volunteer) forces opened fire to the authority and people from behind the stand during the parade,” the governor of Khuzestan, Gholam-Reza Shariati, said, according to IRNA. U.S. State Department spokeswoman Heather Nauert said, “We stand with the Iranian people against the scourge of radical Islamic terrorism and express our sympathy to them at this terrible time”. The Islamic State as well as an Arab separatist movement claimed responsibility: After Yaqoob Al-Ahvaz claimed responsibility Iran accused Saudi Arabia of involvement in the attack:

Oman says time to accept Israel in region, offers help for peace (Reuters) – Oman described Israel as an accepted Middle East state on Saturday, a day after hosting a surprise visit by its prime minister that Washington said could help regional peace efforts. Oman is offering ideas to help Israel and the Palestinians to come together but is not acting as mediator, Yousuf bin Alawi bin Abdullah, the sultanate’s minister responsible for foreign affairs, told a security summit in Bahrain. “Israel is a state present in the region, and we all understand this,” bin Alawi said. “The world is also aware of this fact. Maybe it is time for Israel to be treated the same [as others states] and also bear the same obligations.” His comments followed a rare visit to Oman by Israeli Prime Minister Benjamin Netanyahu which came days after Palestinian President Mahmoud Abbas paid a three-day visit to the Gulf country. Both leaders met with Oman’s Sultan Qaboos. “We are not saying that the road is now easy and paved with flowers, but our priority is to put an end to the conflict and move to a new world,” bin Alawi told the summit. Oman is relying on the United States and efforts by President Donald Trump in working toward the “deal of the century” (Middle East peace), he added. Bahrain’s foreign minister Khalid bin Ahmed Al Khalifa voiced support for Oman over the sultanate’s role in trying to secure Israeli-Palestinian peace, while Saudi Arabia’s foreign minister Adel al-Jubeir said the kingdom believes the key to normalizing relations with Israel was the peace process. The three-day summit was attended by Saudi Arabia and Bahrain. U.S. Defense Secretary Jim Mattis, and his counterparts in Italy and Germany also participated, but Jordan’s King Abdullah canceled his appearance after a flood that hit the Dead Sea region killed 21 people.

Is Oman Helping Netanyahu Make Peace with Saudi Arabia and Iran? – Sultan Qaboos Al-Said seemingly took the world by surprise when he hosted Israeli Prime Minister Benjamin Netanyahu in Muscat last week. The British-educated Qaboos, who is also the Arab world’s longest serving monarch, has played an indispensible role since assuming power in 1970 to narrow differences between Washington and Teheran and between Israel and the Arab states.For instance, amid rumors of an imminent Israeli attack on Iran in 2011, Qaboos helped the Obama administration with facilitating a secret backchannel with Iran, which led to the Interim Agreement of 2013, the precursor of the Joint Comprehensive Plan of Action (JCPOA) of 2015.Although Netanyahu staunchly opposed the JCPOA and actively lobbied the Trump administration to scrap it altogether, his visit to Muscat was closely coordinated with the White House – and with the blessings of President Donald Trump’s son in-law Jared Kusher in particular – to help lend Arab support for a lasting peace between Israelis and Palestinians.By inviting Netanyahu, Oman demonstrated significant diplomatic bravery by seeking to accommodate two regional powers – Israel and Iran – that its fellow Gulf Arab states do not accept.The preparations for Netanyahu’s visit most likely began last February when Omani Foreign Minister Yusuf bin Alawi visited the Al-Aqsa Mosque in Jerusalem where he called for the need to establish a Palestinian state. But the timing of the Israeli leader’s talks in Muscat coincides with mounting international outrage over the murder of Saudi journalist Jamal Khashoggi at the Saudi consulate in Istanbul.From an Omani perspective, the Khashoggi affair, which is pitting Turkish President Recep Tayyip Erdogan against Saudi Arabia’s Crown Prince and de-facto ruler Mohammad bin Salman (MbS) in a high-stakes zero-sum game, is further contributing to instability in the volatile Middle East. Muscat believes that Israel is a stabilizing force in the Middle East, particularly now amid Saudi Turkish tensions, and thus seeks to strengthen regional stability by supporting the U.S.-led peace process by publicly engaging Netanyahu and Palestinian President Mahmoud Abbas.

Israel wants US mediation in gas dispute with Lebanon – Israel offered on Wednesday to accept US mediation in a dispute with Lebanon over a potentially lucrative block of gas resources in the Mediterranean. As tension rises over the issue, the senior US diplomat for the Middle East, David Satterfield, made a surprise visit to Lebanon this week for talks with senior government officials, and Secretary of State Rex Tillerson is expected to visit on Feb. 15. “We are willing to accept American mediation to resolve the issue diplomatically. There was international mediation on the matter in the past,” Israeli Energy Minister Yuval Steinitz said on Wednesday. “We were close to reaching a compromise in 2013, but the whole thing collapsed at the 11th hour.” There is also growing unease over Israeli plans to build a cement wall on its border with Lebanon. Construction work has already begun at the Ras Al-Naqoura border crossing. Talks took place at Ras Al-Naqoura on Wednesday between representatives of the Lebanese and Israeli armies, brokered by the UN Interim Force in Lebanon (UNIFIL). The two sides discussed the possibility of deciding on the maritime border between the two countries in the same way as the land border was established. “UNIFIL proposed this solution, and Lebanon welcomes it provided the international force undertakes this task,” Lebanese MP Mohammed Qabbani told Arab News. Lebanon’s Higher Defense Council said Israel’s behavior was a violation of UN Security Council Resolution 1701, and threatened border stability. “We grant the armed forces the political backing to act against any Israeli aggression on the border – on land and at sea,” it said. Resolution 1701 was passed after the Israeli war on Lebanon in 2006, and guarantees Lebanon’s territorial integrity and sovereignty. Israeli minister Steinitz said: “I do not need these explicit threats. Energy security and the protection of our energy installations – and to a great extent the gas rigs as well – are at the top of our list of priorities. “Let there be no doubt, the state of Israel is the strongest nation in the region, and we will defend our territorial waters and our gas rigs and fields. “I think both Israel and Lebanon are interested in a diplomatic solution. Lebanese officials are interested in exploiting gas and oil, and they have the right to do so. However, they should not make threats.”

Israeli Forces Launch 87 Overnight Airstrikes Against Gaza Strip – The Israeli army carried out scores of air strikes across the besieged Gaza Strip in the early hours of Saturday, in the highest-intensity offensive on the coastal Palestinian territory since the summer.The Israeli army launched at least 87 air strikes, Israeli news outlet Ynet reported, saying it was in response to some 34 rockets fired from the enclave into southern Israel.Islamic Jihad claimed responsibility for the rockets, saying in a statement that they were in retaliation for the Israeli army’s killing of five Palestinian protesters on Friday.“The resistance will not accept the equation imposed by the enemy on the basis of killing on their part and silence on our part,” the group said in a statement.Following the exchanges, Islamic Jihad’s media office announced on Saturday morning that it had accepted an Egypt-mediated ceasefire with Israel.Locals told Middle East Eye that one four-storey building in central Gaza City that was turned to rubble overnight had hosted charitable institutions and research centres. Gaza’s Ministry of Health, meanwhile, said that air strikes had targeted the perimeter of the Indonesian Hospital in Beit Lahiya in the northern Gaza Strip, causing material damages to the building.

Israel Strikes Gaza Hospital During Massive Response To ‘Islamic Jihad’ Rocket Attacks – Gazans reported explosions so massive they seemed to turn night into day overnight Friday as Israeli aircraft began pounding the Gaza Strip since the evening in response to Hamas reportedly firing some 30 rockets toward the Israeli city of Sderot.The Israeli Defense Forces (IDF) said it destroyed 80 Hamas targets in the operation, which had been somewhat expected since a week ago the began staging an unprecedented build-up of forces along the Israeli-Gaza border fence. Sporadic bombings continued through Saturday morning. A terrorist group operating in Gaza which often acts independently of Hamas called Islamic Jihad implicitly claimed responsibility for the rocket fire, issuing a statement saying it “can no longer stand idle before the continued killing of innocents and bloodshed by the Israeli occupation”. In the immediate aftermath of the most intense part of the overnight bombings there were no reports of casualties on either side, however, the air raid follows one of the deadliest days in weeks as on Friday 5 Palestinians were reportedly shot by Israeli snipers near the border fence. Throughout the night Friday Israeli media reported that multiple Israeli settlements in the south of the country had most of their residents staying in bomb shelters. But on the Gaza side it was chaos as frequent explosions rocked the strip and there were broad power outages. And notably Palestinian authorities have blamed the IDF for a direct strike on an Indonesian-sponsored hospital in the northern Gaza strip – which appears to be confirmed in images and video uploaded to social media.

Israel Crushes Resistance at Home and Abroad -The Jewish-Israeli left is in tatters.They make up just a tiny fraction of the Jewish population of the country, and their numbers have been steadily shrinking since the start of the millennium. No alliance of progressive parties can hold a candle to Israel’s hawkish governing coalitions. No liberal newspaper can pull the public away from the tabloids that back Prime Minister Benjamin Netanyahu and his rivals even further to the right. And no upstart activist group has been able to sway the hearts and minds of significant numbers of young Jews, brainwashed with ever-increasing doses of Zionist propaganda. Top Israeli lawmakers openly incite against leftist figures with frightening regularity, knowing that these attacks will only increase their own popularity among Israeli voters. Even without this egging on, Israeli society is increasingly purging its leftists from positions of influence, as all the Israelis who have lost their jobs in recent years after being outed for their left-leaning views can attest to. But to grasp the cost that Israeli Jews are forced to pay if they harshly criticize their own government’s racist policies, one need only consider a case reported on earlier this month, that of 58-year-old Guri Mintzer of Tel Aviv. Until recently, Mintzer was on top of the world as the CEO of a medical services firm he started from scratch over a quarter-century ago, today employing hundreds of workers – a so-called Israeli success story.But when right-wing activists learned that, in a private capacity, he supported Palestinian rights – even paying some of the legal costs of Palestinian activist Ahed Tamimi – they called to punish Mintzer by boycotting his firm.After a spate of attacks against him, the company’s employees and their property, Mintzer reluctantly sold the firm that was his life’s work. Under duress, he was reportedly forced to sell it off for a price less than its actual worth, by $10m – and possibly several times that figure.

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