Oil, Gas, And Fracking News Reads 30December, 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 30 December 2018. Go here for Part 1.

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

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Fracking could fuel Top End water infrastructure expansion, NT Government says — The fracking industry could one day be pivotal in water infrastructure expansion in the Northern Territory, with the NT Government saying it has a “keen eye” on future developments. Acting NT Natural Resources Minister Lauren Moss said future private investment “in initiatives that capture, store and transport water resources would be welcomed” by the NT Government. “Industries such as those involved in onshore gas and mining are always looking at water use as a driver of innovation, and this is something we have a keen eye on,” Ms Moss said. The Minister’s comments follow a Curious Darwin investigation earlier in December that asked: Why can’t the Top End pipe some of its abundant water south to assist drought-stricken states? More than 2,300 of you wanted to know the answer which was, in short, that such a project would be too expensive for any government to ever fully fund. Although nearly two metres of rain falls each year in Darwin, the region currently does not have the infrastructure in place to capture enough of it to be piped out – a project which experts from CSIRO and Power and Water Corporation have estimated would cost billions, if not trillions, of taxpayer dollars.

China’s LNG imports jump to record high in November -Chinese liquefied natural gas (LNG) imports soared by 48.5 percent in November 2018, compared to the same month last year, as China continues to have parts of the country switch to natural gas from coal for heating. China’s LNG imports last month reached 5.99 million tons, beating the previous record of 5.18 million tons from January 2018 in the previous heating season, according to data from China’s General Administration of Customs, as carried byReuters. LNG imports into China in the first eleven months of this year jumped by 43.6 percent compared to January-November 2017, to 47.52 million tons and on course to easily beat the full-year LNG import record of 38.13 million tons from 2017, according to the customs data. This winter season, Chinese authorities are determined to avoid another severe natural gas supply shortage. And they are handling supplies much better than past winter – domestic natural gas production is rising, state energy giants are boosting gas pipeline infrastructure and connectivity, and the coal-to-gas switch is more measured and moderate, taking into account expectations of demand.Chinese natural gas imports are soaring, but procurement for this winter’s demand started early to avoid a last-minute rush and a repeat of the 2017-2018 winter.This year, weather is also in favor of Chinese authorities. Milder weather a month into the heating season through mid-December has led to expectations that China won’t see another supply crunch between December and February.Over the past week, LNG prices for February delivery in Asia rose slightlycompared to the previous week, due to lower shipping rates as more LNG ships have become available and thanks to a slight drop in winter t emperatures in some parts of Asia. According to traders who spoke to Reuters, Asian demand as a whole remains subdued, and price rises would be short-lived. A sustainable increase in Asian LNG prices would come if the weather in Asia turns cold for at least three weeks.

Chinese Refiners Aren’t Buying U.S. Crude — Chinese refiners are not buying more U.S. oil despite the three-month truce agreed by Presidents Trump and Xi last month, Reuters reports, citing cargo loading plans of Chinese downstream operators. According the Reuters, Chinese demand for U.S. crude has been dampened by political uncertainty around the trade war and, more directly, by relatively high costs of transportation. This means that despite the truce and future positive developments in bilateral talks on trade, U.S. oil will have yet to become a major element of China’s imported crude oil mix. One Chinese analyst told Reuters that price was the top consideration of buyers and the price of U.S. oil simply wasn’t competitive.“Chinese companies have little incentive to buy U.S. crude due to the wide availability of crude supplies today from Iran and Russia,” Seng Yick Tee from consultancy SIA Energy said. Yet trade tensions are not helping, either. With the constant threat of more tariffs, refiners are reluctant to change their buying habits.“Even though the trade tension between China and the U.S. had been defused recently, the executives from the national oil companies hesitate to procure U.S. crude unless they are told to do so.” U.S. crude oil exports hit a high of 23.95 million barrels in October 2017, data from the Energy Information Administration shows, but have since then declined, reaching 2.17 million barrels in September this year before Chinese refiners completely stopped buying U.S. crude in October.

U.S. Shale’s Blows Leave Middle East Oil Producers Staggering – The U.S. oil industry is delivering a one-two punch to Middle East producers already reeling from a collapse in prices. A tussle is playing out in the market for so-called light oils, which have a lower sulfur content and are less dense than heavier varieties. When processed, these grades typically yield a higher amount of fuels like gasoline and naphtha. And now, American supplies are weighing on prices for such crudes as well as fuels made from them. Light oil pumped in U.S. shale fields is increasingly making its way to Asia, undercutting sales by the likes of Saudi Arabia. Additionally, America is exporting a record amount of refined fuel, contributing to a global glut in gasoline and naphtha. That’s hurting some of the biggest members of the Organization of Petroleum Exporting Countries as they prepare to curb crude output in a bid to stabilize the market. Middle East producers — still the dominant suppliers to Asia — are being forced to tackle American crude competition by lowering their oil pricing to defend their market share. The refiners, meanwhile, are contending with booming U.S. fuel shipments dragging down their returns from making processed products. “It is no surprise that Middle Eastern producers are having to cut light crude prices,” said Virendra Chauhan, an analyst at industry consultant Energy Aspects Ltd. Over the course of 2018, the key sources of global oil-output growth have included light crude from U.S. shale fields and Saudi Arabia, he said. While Middle East producers such as Saudi Arabia and Abu Dhabi are reducing the pricing for their lighter crudes, American exports to Asian nations such as India and South Korea are surging. Even a temporary halt by China due to its trade war with the U.S. hasn’t significantly dented overall flows this year.

Producer cuts are set to boost the oil market in 2019, data firm projects – An oversupply of oil will continue to pressure prices into the first quarter of 2019, but producer cuts will eventually boost crude price as the year progresses, according to Argus Media, an energy information provider.That is, supply and demand should rebalance by the second quarter of next year, said Azlin Ahmad, editor for crude oil at Argus. Since climbing to four-year highs in early October, the price of crude futures have crashed by more than a third. The latest wave of heavy selling comes at a time when the energy market as well as the global economy is gripped by a flurry of bearish factors.Brent oil futures, the international benchmark were trading around $53.60 per barrel on Monday, representing an almost 20 percent decline in 2018.But prices are likely to pick up next year as supply cuts by the Organization of the Petroleum Exporting Countries. The cuts are scheduled to take effect in January.OPEC and allied non-OPEC oil producers including Russia agreed at the start of December to curb output by 1.2 million barrels a day. That’s equivalent to more than 1 percent of global demand, in a bid to drain tanks and boost prices.The 15-member organization said it would reduce its output by 800,000 barrels a day, while Russia and the allied non-OPEC producers will contribute a 400,000 barrels daily reduction.Argus forecasts Brent crude to trade around $65 per barrel in the first quarter, rising to $68 in the second quarter and reaching the low $70s in the third quarter. Prices will breach $80 a barrel in the fourth quarter of 2019, Ahmad projected. Average Brent oil prices will be below $70s in the whole of 2019, according to Argus’ forecast.

Oil eases on oversupply concerns ahead of holiday – Oil fell on Monday, in line with another decline across global stock markets, which came under pressure from concern about a U.S. government shutdown and a worsening world economy. The price of oil has already fallen by about 40 percent from October highs to its lowest since the third quarter of 2017, as investors have grown increasingly wary of the impact to global growth, and crude demand, from an escalating trade dispute between the United States and China. The U.S. Senate has been unable to break an impasse over U.S. President Donald Trump’s demand for more funds for a wall on the border with Mexico, and a senior official said the shutdown could continue until Jan. 3. Investors have flocked to perceived safe-haven assets such as gold and government debt, at the expense of crude oil and stocks. Brent crude futures were down 37 cents at $53.45 a barrel by 9:39 a.m. ET (1439 GMT). U.S. crude futures lost 72 cents, or 1.6 percent, to $44.87, falling below $45 for the first time since July 2017. Brent fell 11 percent last week and hit its lowest since September 2017, while U.S. futures slid to their lowest since July 2017. “Today is going to be a market of very thin liquidity and we don’t have strong convictions in such market conditions. Brent has managed to break 55.00 $/bbl at the end of last week, the short-term momentum is negative,”

This Key Indicator Spells Trouble For Oil Investors – The price ratio between crude oil and natural gas has changed dramatically in the past few weeks, as crude prices have crashed at a time when natural gas prices hit multi-year highs. The ratio between the two prices could have consequences for a variety of natural gas and petrochemical projects, potentially leading to delays or cancellations. Oil typically trades at a premium relative to natural gas, but at the end of November, the price ratio of Brent crude to Henry Hub gas fell to its lowest level since 2009. “The relative price of oil and gas affects the economics of various infrastructure investments across the energy industry, and the recent falloff might act as a fly in the ointment to development plans in the short term and could lead to delays,” Barclays said in a report.The reasons for the plunge in oil prices have been discussed at length in this column and elsewhere – demand looks shaky, U.S. supply is soaring and oil traders are skeptical about the ability and willingness of OPEC+ to balance the market.Meanwhile, natural gas has gone in the opposite direction over the past two months or so. Low inventories, high demand and seasonal factors have dramatically tightened the market for natural gas in the United States. Prices hit $4.70/MMBtu in November, up 60 percent since September.In other words, Brent has lost more than half of its price premium to Henry Hub in the last few months. There could be fallout for proposed LNG projects because of this development. The fall of global crude prices has also dragged down global LNG prices (LNG prices are still influenced by crude benchmarks). So, we have falling LNG prices around the world, but rising natural gas prices in the United States. The business case for exporting LNG from the U.S. has always been about taking advantage of a cheap feedstock, and selling it abroad at a higher price. With costs for the feedstock rising, and the landing price falling, the economics of building new LNG projects in the U.S. have taking a hit. January NYMEX gas prices are trading $4/MMBtu below Asian contract LNG prices, a differential that was as high as $9/MMBtu this past summer. The window for profits on shipping LNG from the U.S. to Asia has not entirely closed, but the business case looks a lot less compelling.

Oil plunges 6 pct as economic slowdown fears grip market -(Reuters) – Oil prices plunged more than 6 percent to the lowest level in more than a year on Monday, pulling back sharply late in the session as fears of an economic slowdown rattled the market. U.S. crude futures and global benchmark Brent hit their lowest levels since 2017 during the session, putting both benchmarks on track for losses of about 40 percent in the fourth quarter. “What’s happening in the stock market is raising fears that the economy is grinding to a halt and thereby will basically kill any future oil demand,” . “They’re pricing in a slowdown in the economy if not a recession with this drop.” The fourth-quarter price decline is likely to cause producers to throttle back on their output, he said. U.S. crude futures have hit the lowest level since June 22, 2017, as jitters have grown about the impact of the escalating U.S.-China trade dispute on global growth and crude demand. Brent crude is at its lowest level since Aug. 17, 2017. Markets across asset classes have come under pressure as the U.S. government shutdown that began just after midnight on Saturday intensified growth concerns. Investors have flocked to safe-haven assets such as gold and government debt at the expense of crude oil and stocks. A gauge of stocks worldwide hurtled toward an eighth straight decline on Monday as investors ignored the U.S. Treasury secretary’s actions to reinforce confidence in the economy and U.S. President Donald Trump criticized the Federal Reserve as “the only problem our economy has.” The U.S. Senate has been unable to break an impasse over Trump’s demand for more funds for a wall on the border with Mexico, and a senior official said the shutdown could continue until Jan. 3. U.S. crude futures settled at $42.53 a barrel, down $3.06, or 6.7 percent. Brent crude futures settled down $3.35, or 6.2 percent, at $50.47 a barrel. The market settled early ahead of the Christmas holiday. Prices extended losses in post-settlement trade. Brent fell 11 percent last week and hit its lowest level since September 2017, while U.S. futures slid to their lowest level since July 2017, bringing the decline in the two contracts to more than 35 percent for the quarter.

Plunging oil prices show the market is worried about a recession in 2019, says analyst – The continuing collapse in oil prices signals that investors are worried about a 2019 recession, according to Helima Croft, global head of commodity strategy at RBC Capital Markets. Oil prices have now plunged by about 40 percent from their 52-week highs at the start of October. Last week alone, U.S. West Texas Intermediate crude tumbled 11 percent, posting its worst weekly performance in nearly three years. On Monday, WTI fell below $45 a barrel for the first time since July 2017.”I think what we’re seeing in oil is a big, big concern for 2019 about a recession. I think that is really weighing heavily on this market,” Croft told CNBC’s “Closing Bell” on Friday.Croft’s commentary reflects an emerging view on Wall Street that slowing economic growth and weaker-than-anticipated demand are pushing the oil market deeper into bear market territory.The rout has continued despite a pledge earlier this month by OPEC, Russia and several other oil producers to remove 1.2 million barrels per day from the market beginning in January.Surging oil production from the United States, Saudi Arabia and Russia is one factor behind the selling. But Croft says the depth of the pullback indicates that expectations for slower economic growth and darkening demand forecasts are what’s truly driving the rout. “I think it’s a broad-based fear about where is demand going to be for oil next year, concerns about Chinese demand in particular,” Croft said. To be sure, Croft is not necessarily forecasting a recession, and there are few clear signs that a period of economic contraction is on the horizon. Still, surveys indicate that executives are growing more worried about the prospect. Nearly half of chief financial officers see a chance that a recession will hit by the end of 2019, according to a CNBC survey. Meanwhile, U.S.-Chinese trade tensions are causing finance executives to lose faith in China’s economic growth, a Deloitte survey shows.

OPEC in a ‘Whatever It Takes’ Moment to Prop Up Oil Prices – OPEC hasn’t even started implementing its new six-month agreement to cut output, and already members responsible for most of the reductions have pledged to extend or even deepen it. Officials from Iraq, Kuwait and the United Arab Emirates agreed with Saudi Arabia’s expectation that the group, along with Russia and other oil producers, will extend the agreement for another six months. The U.A.E.’s energy minister, while stressing that the 1.2-million barrel-a-day cut will clear an inventory buildup in the first half, hinted additional curbs could be discussed. “The planned cuts have been carefully studied, but if it doesn’t work, we always have the option to hold an extraordinary OPEC meeting and we have done so in the past,” Suhail Al Mazrouei, who is also OPEC president, said in Kuwait. “If we are required to extend for another six months, we will, if it requires more, we always discuss and come up with the right balance.” Last week, oil capped its biggest weekly decline since 2016 on concerns that weakening economic growth and surging U.S. supply will lead to a surplus next year, overwhelming OPEC’s efforts to stabilize the market. The slide continued even after the Organization of Petroleum Exporting Countries and its partners surprised traders with the size of the supply reduction announced on Dec. 7.At a press briefing in Kuwait, Iraqi, the U.A.E. and Algerian energy ministers took turns repeating the message that OPEC will deliver its 800,000 barrels per day cut and continue their cooperation with other producers to balance supply and demand. Iraq’s oil minister Thamir Ghadhban said his country’s new membership into the OPEC+ monitoring committee “indicates that we are serious about meeting our commitments that will exceed what we’ve complied with in the past.” OPEC cuts may end up being deeper than agreed because of planned maintenance and production snags in some member countries, Al Mazrouei said. Conflict, sanctions and aging oil fields have been factors that dragged on output in Libya, Nigeria, Iran and Venezuela in recent years.

OPEC+ Deal Not Enough To Save The Oil Market – If the goal of the OPEC+ cuts was to boost oil prices, then the deal is clearly failing. OPEC+ is scrambling to figure out a way to rescue oil prices from another deep downturn. WTI is now down into the mid-$40s and Brent into the mid-$50s, both a 15-month low. U.S. shale continues to soar, even if shale producers themselves are now facing financial trouble with prices so low. Oil traders are clearly skeptical that OPEC+ is either willing or capable of balancing the oil market.OPEC+ thought they secured a strong deal in Vienna in early December, but more needs to be done, it seems. OPEC’s Secretary-General Mohammad Barkindo wrote a letter to the cartel’s members, arguing that they need to increase the cuts. Initially, the OPEC+ coalition suggested that producers should lower output by 2.5 percent, but Barkindo said that the cuts need to be more like 3 percent in order to reach the overall 1.2 million-barrel-per-day reduction.More importantly, the group needs to detail how much each country should be producing. “In the interests of openness and transparency, and to support market sentiment and confidence, it is vital to make these production adjustments publicly available,” Barkindo told members in the letter, according to Reuters. By specifying exactly how much each country will reduce, the thinking seems to be, it will go a long way to assuaging market anxiety about the group’s seriousness. Still, the plunge in oil prices this month is evidence that traders are not convinced.

What is Driving the Oil Price Down? –“What is really driving this price movement down is the fact that the market believes that the market’s oversupplied and this is really the main factor coming into the end of the year when global markets are down and everybody’s feeling a bit bearish about growth more broadly and that’s affecting the price,” Rhind said in the interview. “There are a lot of people very bearish about global growth for next year and in terms of the fund manager positioning in the oil market we’ve seen that positioning come off towards the end of the year … I think that could be just a function of people looking to close up books and investment mandates for the end of the year,” he added. Rhind told CNBC that he thinks there is more risk skewed to the upside in terms of oil in 2019. “I think that OPEC will act and will look to take production off the market and that has historically helped the price of oil,” Rhind said in the video interview. “I think also China will be a big factor next year. I think China will look to go in the opposite direction of the G7 countries and look to ease and put more liquidity into the market next year and that should support oil and other commodities,” he added. Earlier this week, Wood Mackenzie’s Chairman and Chief Analyst Simon Flowers stated in his latest The Edge column that “the sharp retreat in price may turn out to be a good thing, injecting a healthy dose of reality to the industry at just the right time”. In the column, Flowers said Brent over $80 per barrel “always seemed too good to last, defying the fundamentals”. The WoodMac analyst also confirmed in the column that WoodMac expects Brent to average $66 per barrel in 2019. “That’s a tad down on 2018 though still a price that allows companies to generate free cash flow and continue to strengthen finances,” Flowers stated in The Edge.

US oil prices rebound after tumbling to lowest since June 2017 on economy fears – Oil prices rose on Wednesday on perceptions that a price slide to 2017 lows prompted by economic worries had been overdone amid an OPEC-led effort to tighten supply. Crude has been caught up in wider financial market weakness as the U.S. government shutdown, higher U.S. interest rates and the U.S.-China trade dispute unnerved investors and exacerbated worries over global growth. Brent crude oil futures, the global benchmark, was up 95 cents, or 1.9 percent, at $51.42 at 9:32 a.m. ET (1432 GMT). It earlier fell to $49.93, the lowest since July 2017, and posted a 6.2 percent slide in the previous session. U.S. West Texas Intermediate crude futures was up $1.26, or 3 percent, at $43.79. WTI fell 6.7 percent to settle at its lowest level in a year and a half on Monday. “I think there is a little bit of over-extension to the downside linked to global market fears,” said Olivier Jakob, analyst at Petromatrix. “It’s all about equities.” “OPEC has shown it wants a higher prices and is working towards that goal.” Still, the head of Russian oil company Rosneft, Igor Sechin, predicted an oil price of $50-$53 in 2019, a long way south of the four-year high of $86 for Brent crude reached earlier this year. Sechin, an ally of Russian President Vladimir Putin and a critic of OPEC, said the price slump was mostly linked to the U.S. rate hike announced last week.

Oil bounces after steep slide, but growth fears still weigh s – Oil surged on Wednesday, erasing some of the steep losses that have taken crude benchmarks to lows not seen in 1-1/2 years on perceptions the price slide has gone too far, too fast. Both US and Brent crude were more than 6% higher on Wednesday, but it was unclear if the move would see any follow-through when trading desks are more fully staffed after the beginning of the new year. Crude has been caught up in wider market weakness as the US government shutdown, higher US interest rates and the US-China trade dispute unnerved investors and exacerbated worries over global growth. “The market is still really concerned about demand,” said Bernadette Johnson, vice president in market intelligence at DrillingInfo in Denver. The sell-off “doesn’t signal strength of confidence in demand, but we still went too far too quick. We still believe $45 is too low.” US crude was up $2.86 a barrel, or 6.7%, to $45.38 a barrel as of 12:31 pm EST (1731 GMT). Brent crude, the global benchmark, rose $3.12, or 6.2%, to $53.59 a barrel. It earlier fell to $49.93, lowest since July 2017, after a 6.2% slide on Monday. Recent selling “has felt less fundamentally driven and more a function of the overall market meltdown as increased equity volatility and growing macro concerns have weighed on a number of asset classes,” Funds have incurred heavy losses in oil markets this year, with the average commodity trading adviser fund, or CTA, down by 7.1% on the year through mid-December, according to Credit Suisse data. Funds took big bets on oil’s rally, only to see the commodity drop by more than 40% since the October highs.

Oil surges 8 percent, erasing Christmas Eve losses – Oil surged on Wednesday, posting its strongest daily gain in more than two years in a partial rebound from steep losses that pushed crude benchmarks to lows not seen since 2017.Both U.S. and Brent crude rose about 8 percent, their largest one-day increase since Nov. 30, 2016, when OPEC signed a landmark agreement to cut production. It was unclear whether follow-through buying would push prices higher again once trading desks are more fully staffed after the new year begins.The bounce on Wednesday amounted to a relief rally after Monday’s plunge, with the energy complex getting a boost from the surging equity market, said John Kilduff, founding partner at energy hedge fund Again Capital. The Dow Jones Industrial Average rose more than 1,000 points, posting its biggest-ever one-day point gainon the heels of the worst Christmas Eve on record.”There was all the tumult across the market like it was the end of the world,” Kilduff said. “The sun came up today.”U.S. West Texas Intermediate crude futures ended Wednesday’s session up $3.69, or 8.7 percent, at $46.22, rebounding from a 6.7 percent plunge on Monday. WTI traded more than 10 percent higher near $47 a barrel after the settle. Brent crude oil futures, the global benchmark, rose $4, or 7.9 percent, to $54.47. It earlier fell to $49.93, the lowest since July 2017, and posted a 6.2-percent slide in the previous session. Brent also extended gains after the settle to trade more than 9 percent higher above $55 a barrel.Crude has been caught up in wider market weakness as the U.S. government shutdown, higher U.S. interest rates and the U.S.-China trade dispute unnerved investors and exacerbated worries over global growth. “The market is still really concerned about demand,” said Bernadette Johnson, vice president in market intelligence at DrillingInfo in Denver. The sell-off “doesn’t signal strength of confidence in demand, but we still went too far too quick. We still believe $45 is too low.”

Oil prices fall after jump the day before; glut, economy worries weigh – Oil prices fell more than 1 percent on Thursday after rebounding 8 percent in the previous session, as worries over a glut in crude supply and concerns over a faltering global economy pressured prices even as a stock market surge offered support. Brent crude oil was down 70 cents, or 1.3 percent, at $53.77 a barrel by 0845 GMT. U.S. light crude oil was 50 cents lower at $45.72. Oil prices reached multi-year highs in early October but have fallen almost 40 percent since then and are now approaching their lowest levels for 18 months. Brent is heading for losses of almost 30 percent this year while the U.S. contract has dropped almost 25 percent. Three months ago it looked as if the global oil market would be under-supplied through the northern hemisphere winter as U.S. sanctions removed large volumes of Iranian crude. But other oil exporters have more than compensated for any shortfall, filling global inventories and depressing prices. The fuel glut has combined with faltering investor sentiment in other asset classes, producing a bear market for oil.

Oil prices slide as concerns about global economy, oversupply weigh (Reuters) – Oil prices fell on Thursday, retreating from an 8 percent rally in the previous session as the oil market focused on signs of faltering global economic growth and record production of crude. Brent crude LCOc1 futures dropped 4.24 percent, or $2.31, to settle at $52.16 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $1.61 to settle at $44.61 a barrel, down 3.48 percent. “The market is giving back some of its gains from yesterday that were brought along with the euphoria in the stock market,” said Andrew Lipow, president of Lipow Oil Associates in Houston. Prices surged on Wednesday, tracking a spike on Wall Street after President Donald Trump’s administration attempted to shore up investor confidence. U.S. stocks retreated for most of the session on Thursday, dragging oil prices, before roaring back to end in positive territory. [.N] Brent and WTI have lost more than a third of their value since the beginning of October and are heading for declines of more than 20 percent in 2018. Concerns about slowing global economic growth have dampened investor demand for riskier asset classes and pressured crude futures. Market participants are also worried about a glut of crude. U.S. crude stocks rose by 6.9 million barrels in the week ended Dec. 21 to 448.2 million, data from industry group the American Petroleum Institute showed on Thursday. Analysts had expected a decrease of 2.9 million barrels. Official U.S. government data will be released on Friday.

Oil Roller-Coaster Ride Hits Another Drop— Crude’s rollercoaster ride pressed on with oil taking a turn lower along with U.S. stocks. Futures in New York fell 3.5 percent on Thursday. The S&P 500 dropped as much as 2.8 percent, making its way toward a bear market. Traders have been on edge this week amid giant swings in both equities and oil. On Monday, the U.S. benchmark crude fell more than 7 percent before jumping more than 10 percent on Wednesday. “What’s going on with the overall economy and because GDP is so correlated with oil demand, that’s really what’s driving the bus lately,” said Stewart Glickman, an energy equity analyst at CFRA Research. “Are we driving into a recession or are things going to stabilize and be a somewhat steady state?” U.S. benchmark crude is on track for the largest quarterly decline since 2014 amid fears that the ongoing trade war between the U.S. and China will hit demand. At the same time, some investors doubt that the Organization of Petroleum Exporting Countries’ deal to limit output with its allies will help tighten supplies. Producers aim to publish a statement in January on the implementation of the agreement, Russia’s Energy Minister Alexander Novak said. West Texas Intermediate crude for February delivery dropped $1.61 to settle at $44.61 a barrel on the New York Mercantile Exchange. Total volume traded on Thursday was about 16 percent below the 100-day average. A measure of oil market volatility jumped to the highest level in more than a month. Brent for February settlement slid $2.31 to end the session at $52.16 a barrel on London’s ICE Futures Europe exchange. The global benchmark crude traded at a $7.55 premium to WTI. Meanwhile, U.S. crude inventories probably fell 3.25 million barrels last week, according to a Bloomberg survey of analysts. If Energy Information Administration data due Friday shows a similar move, it will be the fourth consecutive weekly decline in U.S. crude stockpiles.

Oil prices stabilize, but remain weak due to oversupply – Oil prices stabilized on Friday, recovering slightly from heavy losses this week, but remained close to the lowest levels in over a year as rising U.S. inventories and concern over global economic growth rattled markets. Brent crude oil was down 27 cents at $51.89 a barrel by 10:31 a.m. ET (1531 GMT), having earlier risen more than 3 percent. It had dropped 4.2 percent on Thursday. U.S. light crude was up 5 cents at $44.66, after rising 3.6 percent in early trade.Oil prices fell to their lowest in almost 18 months this week and are down more than 20 percent for the year, depressed by ample supplies that have filled fuel tanks worldwide.Stock markets in Europe and Asia rose on Friday after Wall Street ended a volatile session with big gains, but fears of further price swings and worries about U.S. politics kept investors cautious.”For the time being, the stock market and the oil market will echo each other,” said Ahn Yea-Ha, commodity analyst at Kiwoom Securities. “Global economic slowdown worries have been weighing on stock market movements, and oil prices are not free from those concerns.” Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said crude prices had been pressured by slowing economic growth “coupled with the expectation of strong U.S. production in the new year”.

WTI Extends Losses After Production Rebounds To Record – WTI has slid lower overnight following API’s surprise large crude build (and no equity pump) and was unable to hold gains after a bigger than expected gasoline build (and tiny crude draw) along with a production rebound to record highs.If U.S. crude output rises, it’s likely to see more inventory builds, according to Stewart Glickman, an energy equity analyst at CFRA Research. “The Permian has surprised to the upside over the last couple of months,” he says. DOE:

• Crude _46k (+3.4mm exp)
• Cushing +799k
• Gasoline +3.003mm (+1.0mm exp)
• Distillates +2k

Tiny crude draw (4th week in a row) but another Cushing build along with a rise in gasoline stocks took the edge off for the bulls.

Oil prices steady near year-and-a-half lows ahead of New Year (Reuters) – Oil prices steadied on Friday after a week of volatile trading ahead of the New Year holiday, supported by a rise in U.S. equity markets but pressured by worries about a global glut of crude. Brent crude LCOc1 futures rose 4 cents to settle at $52.20 a barrel, off the session high of $53.80 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 72 cents to settle at $45.33 a barrel, after earlier reaching $46.22 a barrel. Both benchmarks posted third straight weekly declines, with Brent losing about 3 percent and WTI nearly 0.4 percent. Crude prices were pushed higher by a rally in the U.S. equities market on Friday, markets participants said. Oil prices have tracked closely with Wall Street, and both asset classes saw volatile sessions throughout the week. Oil prices fell to their lowest in a year and a half earlier this week and are down more than 20 percent for 2018, depressed in part by rising supply. U.S. crude inventories were down by 46,000 barrels in the week to Dec. 21, the Energy Information Administration said, a smaller draw than the 2.9 million barrels analysts polled by Reuters had expected. Gasoline stocks rose by 3 million barrels, trouncing analysts’ expectations for a gain of 28,000 barrels. The crude draw “failed to spur much buying interest,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. “Nonetheless, we viewed the data as price supportive with the exception of the 3 million barrel gasoline supply build.” U.S. energy firms added two oil rigs in the week to Dec. 28, General Electric Co’s Baker Hughes energy services firm said on Friday. The data was seen as an indication of future production. The United States has emerged as the world’s biggest crude producer this year, pumping 11.6 million barrels per day (bpd), more than Saudi Arabia or Russia. Oil production has been at or near record highs in the three countries.

Oil Prices Set To Rebound In 2019 — Most major investment banks are forecasting a rebound in oil prices in 2019. Price forecasts vary widely, but most have both WTI and Brent above current spot prices. Bank of America Merrill Lync, for instance, sees WTI averaging $59 per barrel in 2019. Citi is at the bearish end with a $49 price target. For Brent, Barclays says the benchmark will average $72, and a half dozen other investment banks have price estimates within a few dollars of that price. After suffering steep losses at the start of the week, financial markets rallied strongly on Wednesday and into Thursday, regaining all the lost ground from Monday. Weak industrial data from China released this week still shows signs of a slowdown. King Salman reshuffled the Saudi cabinet on Thursday, swapping out top security personnel. But the maneuvers did not remove power from crown prince Mohammed bin Salman. The officials that were elevated are close to MbS.. After suggesting multiple times earlier this year that OPEC and its non-OPEC partners – led by Russia – would formalize a permanent governance architecture to coordinate their efforts, the group is now downplaying such a development. Russia’s energy minister Alexander Novak said that the increase in red tape, plus antitrust risks from the U.S. government, make the idea too risky. “There is a consensus that there will be no such organisation. That’s because it requires additional bureaucratic brouhaha in relation to financing, cartel, with the U.S. side,” Novak told reporters. Instead, Novak said they will continue to cooperate without institutionalizing the arrangement. “This won’t be an organisation, this is some mechanism of cooperation: to convene, to discuss, adopt some memorandums, joint resolutions,” Novak.

Iraqi politicians attack Trump’s visit to US troops as ‘blatant violation of sovereignty’ Iraqi politicians and military leaders have criticised Donald Trump’s visit to US troops in the country. Calling it a “blatant violation of Iraq’s sovereignty” Sabah al Saadi, the former head of Iraq’s integrity commission and leader of the powerful Islah parliamentary bloc, called for an emergency session of parliament. He described Mr Trump’s visit as “aggressive” before claiming the US president “should know his limits.” He said: “The US occupation of Iraq is over.”His comments came as it was revealed that a meeting between the Mr Trump and Iraq’s prime minister Adil Abdul-Mahdi had been cancelled.The US had informed Iraqi authorities of the visit prior to Mr Trump’s arrival, but Mr Abdul Mahdi’s office said in a statement that the pair had talked by telephone due to a “disagreement over how to conduct the meeting.”Iraqi politicians suggested that the two leaders had disagreed over where their planned meeting should take place. Mr Trump had asked to meet at the Ain al-Asad military base, an offer which Mr Abdul Mahdi declined.The Bina parliamentary bloc, Islah’s rival in parliament and led by Iran-backed militia leader Hadi al-Amiri, also objected to Mr Trump’s trip to Iraq.“Trump’s visit is a flagrant and clear violation of diplomatic norms and shows his disdain and hostility in his dealings with the Iraqi government,” Bina said in a statement. The bloc also said Mr Trump’s visit “places many question marks on the nature of the US military presence and its real objectives, and what these objectives could pose to the security of Iraq.”

Russia Blames Fed Interest Hike For Low Oil Prices — It seems that the Federal Reserve can’t get a break. For months, President Trump has been increasingly criticizing the Fed’s policy of incrementally increasing interest rates, a near-unprecedented move for an American president. After the most recent Fed move to hike interest rates by a quarter of a percentage point last week, Trump tweeted on Monday that the Fed was the “only problem our economy has.” Trump’s remarks sent the White House scrambling on damage control mode, trying to ensure both domestic and global markets that the president was not about to try to remove Fed chairman Jerome Powell from office. Stock markets plunged the next day as worries over U.S. leadership waned as well as other economic concerns. . Now, criticism over Fed policy is coming from an unlikely place – Russia. The head of Russian oil giant Rosneft, Igor Sechin, said yesterday the slump in global oil prices was mostly linked to a fresh interest rate hike announced by the U.S. Federal Reserve last week. “This factor is the main one, which has an impact on the price (of oil)…” He added that he saw oil prices at $50-53 per barrel next year.Not only is it noteworthy that the head of a foreign oil company would criticize the Federal Reserve, but it could open the floodgates for more criticism over Fed policy, second-guessing and angst over what should remain an institution undeterred by both domestic and international politics.Another takeaway from Sechin’s comments is what is likely growing concern among not only Russian oil production companies, but Moscow itself, over oil prices that have plunged around 40 percent since hitting multi-year highs in October. Prices remain in the doldrums over concerns about the global economy, ongoing trade tensions between Washington and Beijing, though there is a temporary freeze on increased tariffs until at least March 2, slowing oil demand growth in 2019 and record oil production, mostly coming from the U.S., Russia and Saudi Arabia – the world’s top three oil producers.

Russia dashes plans to make its oil market alliance with OPEC permanent — The marriage between Russia and OPEC is off. Russian Energy Minister Alexander Novak on Friday poured cold water on long-simmering plans to make Moscow’s alliance with OPEC and other oil producers permanent. The group of roughly two dozen producers has been managing global petroleum supply for the last two years in order to rebalance the market after a prolonged and punishing oil price downturn. The effort succeeded in shrinking global crude stockpiles and boosting prices to four-year highs – until the market suddenly crashed again in early October. The group has agreed to a fresh round of output cuts that begin on Jan. 1. For at least a year, OPEC Secretary General Mohammed Barkindo has discussed “institutionalizing” the arrangement. That would essentially form a supergroup of oil producers comprised of the 14-nation OPEC, Russia and nine other oil-exporting nations, which would be able to more quickly respond to problems in the market. Energy ministers had been talking up progress towards the permanent arrangement as recently as their meeting in Vienna, Austria earlier this month. But on Friday, Novak said the prospects for that plan now look dim, Reuters reported. He said it would create too much red tape and expose the non-OPEC members of the alliance to potential sanctions from the U.S. government. “There is a consensus that there will be no such organization. That’s because it requires additional bureaucratic brouhaha in relation to financing, cartel, with the U.S. side,” Novak told reporters, according to Reuters. The U.S. penalties in question are spelled out in legislation known as NOPEC, or the No Oil Producing and Exporting Cartels Act. The bill would authorize the Justice Department to sue groups like OPEC that are deemed cartels for price fixing and antitrust violations, stripping countries of sovereign immunity protections currently built into U.S. law. The legislation was first introduced in 2007 and was revived earlier this year in both chambers of Congress by bipartisan groups of lawmakers.

McKinsey Partner Imprisoned And Beaten By Saudi Arabia — Following a string of stories published this year about its work for autocratic regimes in Saudi Arabia (including work that helped the Saudi government crack down on dissidents living abroad), China and elsewhere, vaunted consulting firm McKinsey has endured a firestorm of criticism. But a story published Friday by the Wall Street Journal revealed that a former partner for the consulting firm has languished in a Saudi prison since Crown Prince Mohammad bin Salman’s now-infamous “anti-corruption purge” cash grab/political crackdown.But instead of rallying to its employees defense, McKinsey has apparently severed ties with Hani Khoja, the founder of Elixir Consulting, a local firm that McKinsey purchased, making Khoja a partner at the firm. Khoja’s physical abuse and detention underscores “the ethical quandaries multinational companies face working in Saudi Arabia,” WSJ said. And of course, news of the McKinsey partner’s detention on vague “corruption” charges, the justification for which remains murky (some of WSJ’s anonymous sources from within the kingdom said Khoja’s relationship with the kingdom’s economy minister is what lead to his arrest), could revive some of the international criticism about the kingdom’s abysmal human rights record just as the controversy over the killing of Jamal Khashoggi was beginning to subside.

In Surprise Cabinet Reshuffle, Saudi King Salman Establishes Space Agency, Demotes Foreign Minister – The diplomatic crisis ignited by the killing of Jamal Khashoggi has largely subsided, and Crown Prince Mohammad bin Salman’s grip on power is, if anything, even stronger than it was before (having faced down incipient challenges from one of his uncles). Which is why it’s somewhat surprising to see MbS’s ailing father, King Salman, order a limited cabinet reshuffle that moved around some of the key players in the scandal (including Adel al-Jubeir, who was one of the kingdom’s key liaisons with western media during its response to Khashoggi’s killing) and removed Prince Mohammed bin Nawaf al Saud as the Kingdom’s ambassador to the UK, according to Saudi State TV station Al-Arabiya. Amid the reshuffle, the king ordered the creation of a new political and security council (presumably to help protect his chosen successor’s flank) and – in a move that is reminiscent of a controversial decision made by President Trump this year – establishes a new Saudi space agency.

– Adel Al Jubeir relieved from position as Foreign Minister; named Minister of State for Foreign Affairs

– Ibrahim Alasssaf named as new Foreign Minister

– King also ordered formation of new political & security council pic.twitter.com/kA37Fw7C2z

As a result of the reshuffle, more liberals and progressives will move into positions of power, suggesting that it could be part of the Kingdom’s plan to move ahead with its ‘liberalizing’ reforms to try and rehabilitate MbS’s tarnished reputation as a reformer.

Saudi King Appoints Former Ritz-Carlton Detainee as Foreign Minister – King Salman of Saudi Arabia has appointed a new foreign minister as part of a major cabinet reshuffle, a royal decree has said. Ibrahim al-Assaf will replace Adel al-Jubeir, the foreign ministry said on Thursday citing the decree. Jubeir will be demoted to minister of state for foreign affairs, it added.Assaf, a former long-serving finance minister and a board member of national oil giant Saudi Aramco, was among several people detained as part of a “corruption crackdown” in November 2017.He was briefly detained in Riyadh’s Ritz-Carlton, alongside dozens of other prominent Saudi royals and businessmen. However Saudi authorities said an investigation found no evidence of wrongdoing and his name was cleared.Ali Shihabi, who heads Washington-based think tank The Arabia Foundation and is close to the Saudi government, downplayed Jubeir’s demotion on Twitter describing it as a way of “relieving him of the burden of day to day management of the Ministry”.“This change in the Foreign Ministry is more of a division of labor in a space that needs a lot of bandwidth than any demotion of Jubair [sic],” he wrote. The new Foreign Minister Ibrahim Al Assaf is a seasoned bureaucrat with decades of cabinet experience and membership in the National Security subcommitee of the cabinet. – Ali Shihabi (@aliShihabi) December 27, 2018 However, a Saudi source told Middle East Eye that Jubeir’s demotion rather than outright sacking has been regarded as an act of humiliation in the kingdom. According to MEE’s source, the government shake-up was at the behest of Saudi Arabia’s powerful crown prince, Mohammed bin Salman. The crown prince wanted Jubeir humiliated, the source said, as punishment for his perceived failure to adequately shield Mohammed bin Salman from the scandal of Jamal Khashoggi’s murder. Khashoggi, a prominent critic of the Saudi leadership and journalist, was murdered by Saudi agents in Istanbul on 2 October. The CIA has concluded that Mohammed bin Salman was responsible for ordering the operation.

Saudi Arabia Hires Child Soldiers From Darfur To Fight In Yemen: Report – Saudi Arabia has hired “tens of thousands” of soldiers from Darfur, including many children, part of an outsourced army that is fighting the war in Yemen, theNew York Times reports. The kingdom’s war effort in Yemen, headed by Crown Prince Mohammed bin Salman, has been described by Saudi Officials as at attempt to save Yemenis from Iran-backed aggressors. Officials at the United Nations, however, maintain that the conflict in Yemen has spiraled into the world’s most dire humanitarian crisis. A blockade carried out by Saudi Arabia and the United Arab Emirates has put up to 12 million people at risk of starvation and caused the death of 85,000 children, aid groups have reportedly said. According to The Times, up to 14,000 militiamen from Sudan have been fighting alongside Saudi-backed forces in Yemen “at any time for nearly four years.” Many of these militiamen are actually children. Nearly all of these Sudanese fighters appear to be from Darfur, where approximately 300,000 people died over a 12-year period in a fight over farmland and other disappearing resources, The Times reports.

Iranian Ship Fires Rockets Near US Aircraft Carrier In Persian Gulf – A US aircraft carrier sailed into the Persian Gulf on Friday amid Iranian threats to close the Strait of Hormuz, the only sea passage from the Gulf to the open ocean and strategic waterway linking Middle East crude producers to crucial world markets. Some 30 Iranian Revolutionary Guard vessels fired rockets in the waters patrolled by a US aircraft carrier strike group led by USS John C. Stennis on Friday, the AP reported. At one point, one small ship launched what looked like a “commercial-grade” drone to film the US vessels, said the AP report, adding that journalists on the Stennis were also filming the Iranian boats. “The Iranian craft drove in front of our ship and stopped, and tried to capture their own sort of picture of what was going on”, Capt. Randy Peck, the commanding officer of the Stennis, was cited by AP as saying. There were no immediate reports of the Stennis’ arrival in the Persian Gulf in Iranian media. The US Navy statement also noted that IRGC speedboats fired rockets that weren’t pointed at American vessels. The Stennis-led group was deployed on December 8, thus ending the longest period in two decades that a carrier group was absent from the region. The vessels took part in a joint naval exercise with the Essex Amphibious Ready Group (ARG) on 12 December in the Arabian Sea. Earlier on Friday, Mehr News Agency quoted Brigadier General Mohammad Pakpour, commander of IRG ground forces, as saying that the final stage of the “Great Prophet 12″ drills would kick off on Saturday and include “rapid reaction units, airborne units, demolition and combat units, mid-range missiles and the third marine division”. “We pose no threat to any country but if the enemies seek to implement their malicious intentions and attack us, we will be absolutely aggressive and attack the enemies with all might and we are practicing these tactics in these exercises”, Mehr News Agency cited Pakpour as saying.

Arab League set to readmit Syria eight years after expulsion – Gulf nations are moving to readmit Syria into the Arab League, eight years after Damascus was expelled from the regional bloc over its brutal repression of peaceful protests against President Bashar al-Assad. At some point in the next year it is likely Assad will be welcomed on to a stage to once again take his place among the Arab world’s leaders, sources say. Shoulder to shoulder with the Saudi crown prince, Mohammed bin Salman, and Egypt’s latest autocrat, General Abdel Fatah al-Sisi, the moment will mark the definitive death of the Arab spring, the hopes of the region’s popular revolutions crushed by the newest generation of Middle Eastern strongmen. Syria was thrown out of the Arab League in 2011 over its violent response to opposition dissent, a move that failed to stem the bloodshed that spiralled into civil war. Now though, a regional thaw is already under way. Earlier in December, the Sudanese president, Omar al-Bashir, became the first Arab League leader to visit Syria in eight years, a visit widely interpreted as a gesture of friendship on behalf of Saudi Arabia, which has shored up ties with Khartoum in recent years. Pro-government media outlets posted pictures of the two leaders shaking hands and grasping each other’s arms on a red carpet leading from the Russian jet that ferried Bashir to Damascus along with the hashtag “More are yet to come”. Diplomatic sources have told the Guardian there is a growing consensus among the league’s 22 members that Syria should be readmitted to the alliance of Arab nations, although the US is pressuring both Riyadh and Cairo to hold off on demanding a vote from members. The move comes despite Assad’s intimate ties to Iran, to whom the regime owes its survival. For Saudi Arabia and the UAE, re-embracing Syria is a new strategy aimed at pivoting Assad away from Tehran’s sphere of influence, fuelled by the promise of normalised trade relations and reconstruction money.

Turkey Bolsters Troop Levels in Syria, Threatens to Eliminate Syrian Kurds – Turkey on Saturday sent military reinforcements to northern Syria near an area controlled by Kurdish forces as Ankara threatens to carry out a fresh offensive to wipe them out, a war monitor said.The move comes after US President Donald Trump’s surprise announcement on Wednesday of the withdrawal of American troops stationed in northeastern Syria alongside Kurdish fighters, a long-time enemy of Turkey.Washington has for years supported the Kurdish-led Syrian Democratic Forces (SDF) in the fight against the Islamic State (IS) group in Syria, as part of an international anti-militant coalition dominated by the People’s Protection Units (YPG).But on Wednesday, Trump said he was ordering a withdrawal of about 2,000 US troops in Syria because IS had been defeated, an assessment disputed by many. America’s worst nightmare is to have reliable allies – like the Kurds who have fought so bravely against ISIS – abandoned and destroyed.https://t.co/PQjFTbGCAc – Lindsey Graham (@LindseyGrahamSC) December 21, 2018Turkey’s foreign minister said on Friday that while his country had delayed operations east of the Euphrates River, it did not mean the country had given up on them.“It doesn’t mean that we gave up on our determination to launch operations against the YPG in the future,” Mevlut Cavusoglu told Turkish state broadcaster TRT News, as cited by Hurriyet.He said postponing military operations in the region was a “logical” decision for preventing “friendly fire,” following the US decision to withdraw.

Turkish-Backed Fighters Preparing to Replace US Forces in Syria – Turkey-backed rebel fighters in Syria are gearing up for a major deployment into northeastern Syria, with an eye on replacing the US ground troops in the area. Turkey is planning to invade in the course of this replacement, and is coordinating with the US and the pullout and deployment. President Trump has said the withdrawal will be “slow,” and there has been no public timetable on troop movements. The rebels in question, however, are moving closer to the city of Manbij, which Turkey has indicated will be the first target. Turkish FM Mevlut Cavusoglu addressed the situation in comments to reporters on Tuesday, saying that while the timeline of deployment may be related to coordination with the US, Turkey remains “determined” to expel the Kurds from Syria’s northeast. Kurdish officials say that they are re-positioning their own forces in a plan to defend the area from invading Turkish and allied forces. The likelihood is that this will begin after the Manbij invasion, as few Kurds were believed to have remained in that city.

US troop withdrawal heralds the New Syria – Contrary to doomsday predictions about the fate of Syria after US President Donald Trump’s “total withdrawal” of American troops, what may happen is an overall easing of tensions in a more relaxed post-conflict Syrian order where even Israel may have much to feel comfortable about. With the Pentagon issuing the formal order on Syrian withdrawal, a big uncertainty has ended: Trump’s decision is getting implemented. Attention now turns downstream to the US troop withdrawal. After a phone conversation last Sunday with Turkish President Recep Tayyip Erdogan, the second within a week, to discuss the withdrawal plan, Trump said it would be a “slow, highly coordinated pullout.” A Turkish readout also confirmed this: “The two leaders agreed to ensure coordination between their countries’ military, diplomatic and other officials to avoid a power vacuum which could result following any abuse of the withdrawal and transition phase in Syria.” On Monday, Erdogan disclosed that a US military delegation would visit Turkey this week to discuss details. On the same day, Turkish Foreign Minister Mevlut Cavusoglu said in Ankara that he would be traveling to Russia to “evaluate the process” of US forces’ withdrawal. No power vacuum In effect, Turkey will have back-to-back discussions with the US and Russia, since the two great powers are hardly on talking terms. Meanwhile, Turkish forces have concentrated on the border with Syria and Cavusoglu said they “plan to enter areas east of the Euphrates River as soon as possible.” He added that Turkey was “working to make sure there is no vacuum after the United States pulls out of Syria, which terrorist groups will be eager to fill.” Indeed, things are not so straightforward – they never were in northern Syria. The Turkish forces will be overstretched if they occupy the entire swath of land to the east of the Euphrates that the US will be vacating, which amounts to roughly one-third of Syria. The Kurds and Arab tribes will not welcome Turkish occupation, while the residual ISIS groups may want to take advantage of any power vacuum left by the departing Americans. The Syrian government is also steadfast in its commitment to regain control of all its territory, especially the regions east of the Euphrates which contain Syria’s oilfields and water resources. Controlling the oilfields is vital for Damascus as they provide a major source of income.

US-led anti-ISIS coalition announces Syria strikes after Trump orders withdrawal — The U.S.-led military coalition fighting the Islamic State in Iraq and Syria (ISIS) announced Tuesday airstrikes and coordinated attacks against the terrorist group’s strongholds in Syria, days after President Trump ordered the withdrawal of U.S. troops from the country. The attacks were carried out last week, from Dec. 16 to 22, in the Middle Euphrates River Valley, according to the news release from Operation Inherent Resolve. The coordinated attacks destroyed ISIS logistics facilities and staging areas, which “severely degraded” the group and “removed several hundred” of its fighters from the battlefield, the release said. The airstrikes also targeted several ISIS financial centers and capabilities in Susah and As Shafah, which the release described as dealing a “significant blow” to the terrorist group’s ability to finance its activities. “ISIS presents a very real threat to the long-term stability in this region and our mission remains the same, the enduring defeat of ISIS,” the coalition’s deputy commander, U.K. Maj. Gen. Christopher Ghika, said in the release. The released added that “coalition partner forces continue to advance through the last remaining stronghold ISIS has in the region.” On Wednesday, Trump announced that he was ordering the withdrawal of the 2,000 U.S. troops fighting ISIS in Syria. In announcing the withdrawal, Trump first declared victory over the group. He has since said others, including Turkey, Russia, Iran and Syria, can deal with the remaining ISIS fighters in Syria. Trump’s decision to withdraw sparked the resignations of Defense Secretary James Mattis and special envoy to the anti-ISIS coalition, Brett McGurk..

Two new US bases in western Iraq – “The U.S. military has established two new bases along the Iraqi-Syrian border, the Turkish state-owned Anadolu Agency reported on Tuesday. Citing an Iraqi official, the Anadolu Agency said the U.S. military established the two bases in the western countryside of the Al-Anbar. “The U.S. Army has established two new military facilities in uninhabited parts of the province,” Farhan al-Duleimi, a member of Anbar’s provisional council, told Anadolu Agency. The first base, he said, had been set up in the northern Rumana subdistrict (in Anbar’s Al-Qaim district) near the Syrian border, roughly 360 kilometers west of provincial capital Ramadi. The second base, he added, had been set up east of the city of Al-Rutbah, roughly 310 kilometers west of Ramadi and less than 100 kilometers from the Syrian border. According to al-Duleimi, the twin bases are intended to help Iraqi forces “secure the country’s borders and prevent infiltrations by the Daesh terrorist group.” “Scores of U.S. soldiers are currently stationed at the two bases, along with drones and other equipment,” al-Duleimi said without elaborating.”

Who Was Secretly Behind America’s Invading And Occupying Syria? – The invasion and occupation of Syria by tens of thousands of jihadists who were recruited from around the world to overthrow Syria’s President Bashar al-Assad, was financed mainly by US taxpayers and by the world’s wealthiest family, the Sauds, who own Saudi Arabia and the world’s largest oil company, Aramco. America’s international oil companies and major think tanksand ‘charitable’ foundations were also supportive and providing propaganda for the operation, but the main financing for it came from America’s taxpayers, and from the Saud family and from the Government that they own. One of the best articles that the New York Times ever published was by Mark Mazzetti and Matt Apuzzo, on 23 January 2016, “US Relies Heavily on Saudi Money to Support Syrian Rebels”. They reported that,“the C.I.A. and its Saudi counterpart have maintained an unusual arrangement for the rebel-training mission, which the Americans have code-named Timber Sycamore. Under the deal, current and former administration officials said, the Saudis contribute both weapons and large sums of money, and the C.I.A takes the lead in training the rebels. …From the moment the C.I.A. operation was started, Saudi money supported it.” Furthermore, “The White House has embraced the covert financing from Saudi Arabia – and from Qatar, Jordan and Turkey.” But “American officials said Saudi Arabia was by far the largest contributor to the operation.” The invasion and occupation of Syria by jihadists from around the world was primarily a Saud operation, though it was managed mainly by the US Government. Prior to the failed US-backed coup-attempt on 15 July 2015 to replace Tayyip Erdogan as Turkey’s President, Turkey was part of the U.S-Saudi alliance to overthrow and replace Syria’s Government. But afterwards, Turkey increasingly switched against the US and Sauds, and toward instead supporting the target of the Sauds and of America’s aristocrats: Syria. And, so, Turkey has increasingly joined Syria’s alliance, which includes Iran and Russia. That’s one of the major geopolitical changes in recent decades.

Netanyahu Vows To Intensify Attacks In Syria After US Troop Withdrawal – Speaking at the fifth Israel-Greece-Cyprus summit held in the southern city of Beersheba on Thursday, Israeli Prime Minister Benjamin Netanyahu pledged to intensify military action in Syria after the White House’s unexpected order for all US troops to pullout out of the country – an effort that’s expected to be complete within months. “We will continue to act in Syria to prevent Iran’s efforts to militarily entrench itself against us. We are not reducing our efforts, we will increase our efforts. I know that we do so with the full support and backing of the US,” Netanyahu said. The prime minister further revealed he was personally warned in advance that the American pullout was imminent during during phone conversations with President Trump on Monday and US Secretary of State Mike Pompeo on Tuesday.Netanyahu has long lobbied the White House to take more aggressive action inside Syria while also praising and pledging support for all past US bombings targeting Damascus and the Syrian Army. Israeli officials have for years touted claims of Iran “taking control” and becoming deeply “entrenched” in Syria – something a number of analysts have doubted given that Damascus’ secular Baathist political ideology doesn’t mesh with Iran’s hardline theocratic Shi’ism, beyond being close strategic allies confronting regional threats (namely the Sunni Gulf-NATO-Israeli axis). The prime minister also addressed ongoing IDF operations to destroy “attack tunnels” Hezbollah dug along the northern border, saying “These tunnels were built by Hezbollah with direct support and funding from Iran.” Continuing his well-known Iranian expansion theme, Netanyahu continued: “This is the Iranian web of aggression in the Middle East, which also terrorizes Europe and the entire world. Israel continues its operation against the terror tunnels and will do so until its completion. As we speak, we are employing means to neutralize these tunnels.” Netanyahu noted that his prior phone call with Trump this week focused on countering the Iran threat in the region.

Netanyahu’s coalition collapses; Israel heading to elections on April 9th – Prime Minister Benjamin Netanyahu and the parties in his coalition decided Monday to disperse the Knesset this week and initiate an early general election on April 9, 2019. Netanyahu boasted to his Likud faction that his coalition lasted four years and had key diplomatic, security and economic accomplishments. He said he could not initiate the election six weeks ago, when Avigdor Liberman resigned as Defense Minister and sparked a coalition crisis, because he wanted to first complete destroying tunnels on the Lebanese border in Operation Northern Shield. “With God’s help, we will win,” said Netanyahu, who vowed to form the same coalition after the election. Leaders of coalition and opposition parties met with Knesset Speaker Yuli Edelstein summoned the party heads to formalize the process of dispersing the Knesset and come to an agreed-upon election date. Edelstein expressed pride in many of the laws the Knesset passed over its four years, specifically mentioning the Jewish Nation-State Law, but said he was disappointed in many lawmakers’ conduct and “verbal violence.” He expressed hope that the next Knesset will engage in more civil discourse. Justice Minister Ayelet Shaked said her ministry will begin working on the bill to dissolve the Knesset, which is set to be brought to all three plenum votes on Wednesday. Following the announcement of an election, party leaders made statements declaring victory. Yesh Atid chairman Yair Lapid, Zionist Union leader Avi Gabbay, Yisrael Beytenu leader Avigdor Liberman all predicted that they would become prime minister in the election and the Joint List’s Ayman Odeh said Israeli Arabs will come out to vote in droves. Former prime minister Ehud Barak called it “the most important election since the assassination of Yitzhak Rabin.”

Israel’s Netanyahu calls early election amid corruption charges — Benyamin Netanyahu announced on Monday that he will dissolve Parliament and hold early elections on April 9, instead of November as required by law, precipitating a short election campaign by Israeli standards.It follows the decision of the State Prosecutor’s Office on December 19 to recommend charging him with bribery on two counts. This, along with similar recommendations by the Tax Authority prosecutors and the police, makes it almost inevitable that Attorney General Avichai Mandelblit, who as a friend of Netanyahu has long stalled on the issue, will press charges.The resignation of Defence Minister and Israel Beiteinu (Israel is Our Home) Party leader Avigdor Lieberman last month that left Netanyahu’s fractious Likud-led coalition with a one-seat majority made an early election all but certain.Lieberman had resigned in protest, amid furious denunciations by Netanyahu’s fascistic coalition partners of the most right-wing Prime Minister in Israel’s 70-year history for being too “soft” on Gaza, in the wake of Netanyahu’s agreement to a ceasefire there with Hamas, the bourgeois Islamist group that controls the impoverished Israeli-occupied Palestinian territory.While the polls have long given Netanyahu and his Likud party a clear lead over his rivals, Netanyahu sought to use what little time he had left to choose the date that would give him maximum advantage.Determined not to be outdone by his right-wing partners, Netanyahu sought to present himself as “Mr. Security,” dispatching the Israel Defense Forces (IDF) – amid a fanfare of publicity – to blow up some abandoned tunnels under Israel’s northern border built by Hezbollah, the militant Shi’ite group that has significant support in Lebanon, and whose existence had long been known.Earlier this month, he authorized a series of provocative military operations following a drive-by shooting of Israeli settlers on the Palestinian West Bank that led to the death of six Palestinians and the arrest of at least 100 more in protests that erupted over Israeli brutality in Nablus, Tulkarem, Ramallah, Hebron and al-Bireh. Netanyahu followed up this brutal crackdown with a pledge to his right-wing base to expand the settlements in the West Bank and East Jerusalem, which Israel annexed illegally after seizing it during the 1967 June war.

Facebook’s Secret Censorship Manual Exposed as Platform Takes Down Video About Israel Terrorizing Palestinians – After the New York Times on Thursday published an exposé of Facebook‘s global censorship rulebook, journalist Rania Khalek called out the social media giant for taking down a video in which she explains how, “on top of being occupied, colonized territory, Palestine is Israel’s personal laboratory for testing, refining, and showcasing methods and weapons of domination and control.” Tweeting out the Times report – and noting that while, according to the newspaper, “moderators were told to hunt down and remove rumors wrongly accusing an Israeli soldier of killing a Palestinian medic,” Israeli soldiers did fatally shoot an unarmed 21-year-old female paramedic earlier this year – she announced Friday morning that Facebook had “just removed” her video. Here is my video on how Israel uses Palestine as a weapons testing laboratory, which Facebook erased without explanation. https://t.co/kT6YvZpVPj – Rania Khalek (@RaniaKhalek) December 28, 2018 After she and other prominent reporters issued public complaints, Khalek announced a couple hours later that Facebook had restored the video. “Still this is a good reminder that at the moment these social media giants have the ability to disappear content as they please,” she said in a tweet. “It’s creepy and alarming and should be loudly opposed.” Among those who highlighted Facebook’s censorship of Khalek’s video on Friday were Ben Norton of The Real News Network – who called it an “excellent, informative video report” – and The Intercept‘s Glenn Greenwald, who pointed out that the platform has been silencing Palestinian and pro-Palestinian voices for more than a year.

EU slams Israeli settlement plans – The European Union on Thursday reiterated its opposition to Israel’s settlement activities in the occupied West Bank after Israeli authorities advanced plans for nearly 2,200 settlement homes there.”The European Union’s position on Israeli settlement construction and related activities is clear and remains unchanged: All settlement activity is illegal under international law and it undermines the viability of the two-state solution and the prospects for a lasting peace,” EU spokesperson for foreign affairs and security policy Maja Kocijancic said a statement.The approvals are the first of their kind since snap elections were called earlier this week.On Wednesday, a settlement watchdog, Peace Now, said the plans were at various stages in the approval process, with 1,159 housing units having received the final approvals before building permits can be issued, and 1,032 at an earlier stage. The settlements in the West Bank are considered illegal under international law as they are built on land that Palestinians see as part of their future independent state.

Israel Strikes Syria on Christmas in First Attack Since US Troops Ordered to Withdraw — On Christmas Day, Israel launched what Bloomberg described as its first airstrike in Syria since President Trump’s “shocking”announcement that he would withdraw all US troops from Syrian territory (to the disgust of US national security officials and every neo-con anywhere). The strike targeted an ammunition depot in the Damascus countryside believed to belong either to Iran’s Revolutionary Guard, or its Lebanon-based proxy Hezbollah. According to Syrian and Russian officials, the airstrike was launched from Lebanese territory. Air defenses intercepted most Israeli missiles, state-run Syrian Arab News Agency reported, citing an unidentified military official. However the U.K.-based Syrian observatory for human rights that monitors the war said three targets were hit, including weapons depots belonging to Iran or its Lebanese Hezbollah proxy, and that projectiles had fallen in the Israeli-occupied section of the Golan Heights. In response to the US’s decision to withdraw, Israeli Prime Minister Benjamin Netanyahu said the IDF would “increase efforts” against Tehran’s entrenchment in Syria as a result. Israel reportedly launched six f-16 fighters from Lebanese territory to carry out the strike. The Russian Ministry of Defense claimed that 14 of 16 missiles launched by Israel had been intercepted, and that the strike had occurred while civilian planes were landing at nearby Damascus airport, threatening innocent lives. Some projectiles also fell in the Israeli-occupied section of the Golan Heights. Israel has yet to acknowledge the strike.

Russia condemns ‘Israeli’ air strikes on Syria – Russia has branded as “provocative” an alleged Israeli air strike on Syria late on Tuesday. Reports from Syria said an arms depot in Qatifah, about 40km (25 miles) north-east of Damascus, was hit, injuring three soldiers. Israel has not commented, but after the reported strikes it said it had fired at a Syrian anti-aircraft missile. It did not report any damage or injuries. Israel has carried out dozens of strikes on Syria in recent years. It says it is acting to thwart advanced weapons transfers from Iran to the Lebanese pro-Iranian Hezbollah movement and the strengthening of Iran’s military presence in Syria. Israel considers Iran and Hezbollah to pose a particularly dangerous threat. The foreign ministry of Russia, a key Syrian ally, said it was “very concerned” by the alleged Israeli air strikes. “The provocative actions of the Israeli air force… directly threatened two airliners,” it said. The statement said the unidentified airliners “not from Russia, were preparing to land at the airports of Beirut and Damascus”. The Syrian military said the attacks were carried out from within Lebanese air space. Syrian state news agency, Sana, said most of the missiles were intercepted

Israel Preparing For Comprehensive War In Syria- Report – Russia’s Nezavisimaya Gazeta said that Israel is preparing for a comprehensive war on Syria following the US’ withdrawal from the country. The newspaper said that the decision of US President Donald Trump to withdraw American troops from Syria has left Israel forced to face the Iranian presence in Syria with its troops alone.The newspaper quoted Israel’s former defence minister Avigdor Lieberman as saying that:“the United States’ withdrawal from Syria greatly increases the likelihood of a large-scale conflict in the north, whether in Lebanon or Syria”.Lieberman added that “the Americans’ departure will raise the morale of Syrian President Bashar Al-Assad and his allies, Iran and Lebanese Hezbollah.”The Russian daily quoted Russian military expert Yuri Liamin as saying that “Iran cannot interpret this decision as a blank cheque”. “We must not forget that Turkey is now threatening to launch a new military operation against the Syrian Kurds. This operation may lead to real Turkish control over a significant part of northern Syria. Such development is unlikely to please the Syrian authorities and its Iranian ally,” he added.

Syrian government troops deployed to flashpoint city of Manbij –The Syrian government announced Friday that its troops had entered the northeastern city of Manbij in an apparent bid to forestall a Turkish invasion aimed at driving out the Syrian Kurdish YPG militia.The YPG, which has served as the Pentagon’s principal proxy ground force in controlling nearly a third of the Syrian territory near the Turkish border, is regarded by the government of President Recep Tayyip Erdogan as a branch of the Turkish Kurdish PKK, against which Turkey’s security forces have waged a bloody, decades-long counterinsurgency operation.Erdogan vowed earlier this month that the Turkish military would intervene to push the YPG back from the border. US President Donald Trump’s December 19 announcement that he was ordering the withdrawal of all 2,000-plus US troops from Syria and leaving the military campaign against the Islamic State of Iraq and Syria (ISIS) in Ankara’s hands appeared to open the door to a Turkish intervention and a broader scramble for control of northeastern Syria, which consists largely of sparsely populated desert, but also contains the country’s main oil and natural gas reserves.In a statement posted on Twitter, the YPG said that it had invited the Syrian government of President Bashar al-Assad “to send its armed forces to take over these positions and protect Manbij in the face of Turkish threats.” The tweet, which was sent in the morning, was subsequently deleted and then reposted later in the day, likely reflecting the tensions between the YPG and its US military patrons following Trump’s announcement.While the Syrian government issued a statement saying that its troops had entered Manbij, a city of approximately 100,000, and hoisted the national flag, the US military, which still has special operations units based near the city, as well as some local residents speaking to the Western media denied that the Syrian army was deployed in the city. Manbij fell to US and Turkish-backed “rebels” in 2012, including the Al Qaeda-linked Al Nusra Front, and was subsequently overrun by ISIS in 2014. In the summer of 2016 the so-called Syrian Democratic Forces, the YPG-dominated US ground proxy force, took control of the city.

Syria Sitrep – Army To Regain Northeastern Territory – Political Isolation Ends — The fallout from U.S. president Trump’s decision to retreat from Syria develops as expected. Trump had announced a rapid draw down of U.S. troops in Syria. Later he spoke of a controlled process that would allow Turkey to take over the U.S. occupied areas in northeast Syria. That plan, probably initiated by National Security Advisor John Bolton, is totally unrealistic. Such an wide ranging occupation, which would be resisted by many powerful forces, is not in Turkey’s interest. Nevertheless, the Turkish president Erdogan will use the threat of a Turkish invasion to press for a dismantling of the Kurdish YPG forces which the U.S. trained and equipped. This morning the Syrian Arab Army (red) announced that it entered Manbij, west of the Euphrates. It established itself on the contact line between the Turkish supported forces (green) and the U.S. supported Kurdish YPG (yellow). The Syrian flag was raised in Manbij city. The move comes after U.S. troops and their Kurdish proxy forces voluntarily retreated from the area. Manbij was threatened by the Turkish military and its Jihadi proxy forces. To prevent a Turkish onslaught, the local armed groups, who collaborated with the U.S. military, invited the Syrian army to take over. This pattern will repeat elsewhere. A Kurdish delegation is currently in Russia to negotiate a further take over of the U.S. occupied northeastern provinces of Hasaka and Qamishli by Syrian government forces. The Kurds still hope for some autonomy from the Syrian government that allows them to keep their armed forces. But neither Damascus, nor anyone else, will ever agree to that. There will only be one armed force in Syria, the Syrian Arab Army. It is possible though, that some Kurdish units will be integrated within it.

Is China Getting Too Close To Israel? –– Two multi-billion dollar Chinese seaports near critical Israeli sites are raising concerns over potential security issues and relations with Washington … China is constructing seaports at two sites where the US 6th Fleet deploys, in Haifa next to Israel’s main naval base and Ashdod near Tel Aviv, prompting concerns about China’s military potential in the Mediterranean Sea and Middle East. “The civilian [Chinese] port in Haifa abuts the exit route from the adjacent [Israeli] navy base, where the Israeli submarine fleet is stationed and which, according to foreign media reports, maintains a second-strike capability to launch nuclear missiles,” Israel’s Haaretz media reported. “No one in Israel thought about the strategic ramifications,” Haaretz said in September. The guided-missile destroyer USS Arleigh Burke visited Haifa on October 25 in support of the 6th Fleet which is headquartered in Naples, Italy.Shanghai International Port Group (SIPG) signed the Haifa contract in 2015, began construction in June, and is to operate the Bayport Terminal for 25 years starting from 2021.SIPG signed memorandums of understanding with U.S. ports in Seattle, Washington in 2006 and Georgia Ports Authority in 2004, plus Barcelona, Spain, in 2006.

US Navy Could Abandon Major Israeli Port After Chinese Firms Begin Operations – The US and Chinese navies may find themselves unlikely neighbors in the Mediterranean as Israel’s partnership with Beijing on constructing sea ports at two sites where the US 6th Fleet deploys is set to begin, which is raising eyebrows in Washington and could ultimately result in the Navy abandoning a key Israeli port altogether. The US Navy has acknowledged that its longstanding operations in Haifa may change once a Chinese firm takes over the civilian port in 2021, prompting Israel’s national security cabinet to revisit the arrangement, The Jerusalem Post has learned. Currently the Shanghai International Port Group (SIPG) is set to manage Israel’s largest port at Haifa as part of a contract to be inagurated in 2021, which will run for 25 years, and a separate Chinese firm was recently awarded a contract to construct a new port in the southern Israeli city of Ashdod, next to Israel’s main naval base near Tel Aviv. Both deals are what both Washington officials and some Israeli generals have expressed deep concerns about of late, with the latter multi-billion dollar contract having been awarded to China Harbor Engineering, one of China’s biggest government-owned enterprises.For example in September Israeli Brigadier General Shaul Horev, who had previously served as navy chief of staff and chairman of the Atomic Energy Commission, loudly questioned the move in Israeli press, saying “When China acquires ports it does so under the guise of maintaining a trade route from the Indian Ocean via the Suez Canal to Europe, such as the port of Piraeus in Greece. Does an economic horizon like this have a security impact?” And Israel Haaretz media recently reported of the growing controversy,

“The civilian [Chinese] port in Haifa abuts the exit route from the adjacent [Israeli] navy base, where the Israeli submarine fleet is stationed and which, according to foreign media reports, maintains a second-strike capability to launch nuclear missiles.”

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