Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 28 September 2019. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening.
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Aramco’s Repairs Could Take Months Longer Than Company Anticipates, Contractors Say – WSJ – The Saudi Arabian Oil Co. is in emergency talks with equipment makers and service providers, offering to pay premium rates for parts and repair work as it attempts a speedy recovery from missile attacks on its largest oil-processing facilities, Saudi officials and oil contractors said. It may take many months – rather than the maximum 10 weeks company executives have promised – to restore operations to full working order, they said.
Saudi switches crude grades, delays oil supplies to buyers in Asia (Reuters) – State oil giant Saudi Aramco has switched crude grades and pushed back crude and oil products deliveries to customers by days after the attacks on its supply hub severely reduced its light oil production and led to output cuts at its refineries. Crude oil loading delays were widespread as most buyers have received Aramco’s request to push back shipments in October by 7-10 days, several sources with knowledge of the matter said, giving the producer more time to maintain exports by adjusting supplies from inventories and its refineries. At least three supertankers that loaded crude in Saudi Arabia this week for China and India had their crude grades switched from light to heavy oil while more buyers in Asia have been asked to delay shipments and switch grades in September and October, according to sources with knowledge of the matter and data from Refinitiv and Kpler. Unipec, the trading arm of Asia’s largest refiner Sinopec , will lift Arab Heavy crude instead of Arab Light and Arab Extra Light onboard Very Large Crude Carriers (VLCCs) Caribbean Glory and Xin Lian Yang this month. Sinopec declined to comment. VLCC Kalamos will also load Arab Heavy instead of mostly Arab Extra Light for Indian Oil Corp. IOC does not comment on commercial matters. The sources declined to be named as they were not authorised to speak to media. Saudi Aramco is drawing down Arab Heavy crude from its inventories to replace oil grades, said an oil analyst who also declined to be named. “Saudi always destocks oil in July and August. So the current inventory level would be around 170 million to 175 million barrels,” the analyst said. “This could last 25 days in theory. In practice, it may be even less.”
China has enough oil inventories to last about 80 days: NEA (Reuters) – China has around 80 days of oil in storage, including those in its strategic petroleum reserve (SPR), oil storage at oil firms and commercial stocks, a National Energy Administration (NEA) official said on Friday. China, the world’s biggest importer of crude oil, will complete building the second phase of its strategic oil storages in 2020, Li Fulong, NEA’s head of development and planning, told a news conference. Li said China had enough oil to last about 80 days, slightly less than the 90 days recommended by International Energy Agency for its members. Beijing has not joined the IEA. Based on January-August import levels, 80 days’ worth of oil imports by China would equate to about 788 million barrels, according to Reuters calculations. China rarely releases oil inventory information. It last gave an update on its emergency oil stockpile in December 2017. NEA director Zhang Jianhua told the same news conference that recent attacks on oil facilities in top exporter Saudi Arabia would not impact China’s oil supply. “It is not that we depend on one certain country or region. Looking at the current situation, even if Saudi Arabia is attacked, it will not affect China’s crude oil supply,” Zhang said, adding China could “import large amounts of oil and gas” from the United States if there was no trade war.
“Suspiciously Well Placed”: First Images Of Crippling Damage To Giant Khurais Oil Field Revealed – Much of the attention concerning the crippling damage to Saudi Aramco facilities struck in last week’s aerial attack ultimately blamed on “Iranian sponsorship” by US and Saudi officials has focused on Abqaiq processing plant, but on Friday the first on the ground images from the kingdom’s giant Khurais oil field – the country’s second largest – have been revealed, showing scorched infrastructure, ruptured pipelines, and “a mess of oil melted to asphalt, twisted and charred metal grates” according to an on site Bloomberg report. And yet Aramco has remained insistent that the field will return to pre-attack output levels this month, after the company reported losing half its daily output in the aftermath of the early Saturday attacks, impacting a whopping 5% of total global supply. Per Bloomberg, Khurais has a capacity of 1.45 million barrels a day, processing all oil on site; however the attack took out four 300-foot towers essential to the production process. Like at the Abqaiq processing plant nearer the coast, the strikes – whether by drones or ballistic missiles (debris showed by the Saudi Defense Ministry this week featured both) – appeared remarkably precise. The Saudis have counted a total of twenty-five drones and missiles used in the twin attacks, after statements by Yemen’s Houthi rebels claimed ten drones were used. Bloomberg reports of the recovery progress at Khurais: The Khurais field and processing plant resumed 30% of production within 24 hours of the strike and will produce 1.2 million barrels a day by the end of September, Fahad Al Abdulkareem, general manager for Aramco’s southern area oil operations, said at a briefing on Friday. Workers are at the site 24 hours a day to speed the repairs, according to the company. The precision nature of the strikes, which Washington has claimed can only point to Iranian involvement given the level of sophistication needed to conduct such an operation, is even more evident at the Abqaiq facility. Given the sheer distance the drones would have to travel, whether from Yemen or possibly Iran, combined with 18 precision strikes on the 70-year old but state of the art Abqaiq facility, a number of analysts are questioning whether the operation had inside the kingdom help.
Clear Risk of Slower Saudi Output Restart – There is clear risk of a slower restart of Saudi Arabian oil production despite the optimistic guidance by Saudi Aramco. That’s according to Rystad Energy Chief Oil Market Analyst Bjornar Tonhaugen, who made the statement in a post published on Rystad’s website on Wednesday. “In our view, there is a clear risk of a slower resumption towards full capacity,” Tonhaugen stated. “Repairs to the damaged spheroids and stabilization towers involve, to our understanding, access to expertise and spare parts which would take time to procure,” he added. Unless repairs happen much quicker than Rystad expects, the company estimates that the Abqaiq processing facility will only reach 90 percent capacity by mid-November, Tonhaugen revealed. “The outage would then be reduced to 0.5 million barrels per day (MMbpd) for the month of November at 5.2 MMbpd production. For now, we expect production to remain slightly below full capacity for December,” the Rystad representative continued. Saudi Aramco President and CEO Amin Nasser announced Tuesday that the company’s production capacity would be fully restored by the end of September.
Is Aramco Lying About Its Damaged Oil Infrastructure? -Repairs at the Khurais field and the Abqaiq processing facility may take several months rather than the ten weeks tops that Aramco had initially estimated, the Wall Street Journal reports, citing foreign contractors working with the Saudi state giant. Aramco, the contractors told the WSJ, is in urgent talks with equipment manufacturers and service providers and is willing to pay premium rates for faster delivery and installation. Still, the repairs work could last months because the equipment has to yet be manufactured, delivered and installed, and this could take as long as a year, the WSJ’s Summer Said noted, quoting Saudi officials.The report suggests initial expectations by Aramco may have been overoptimistic. As a result, we could see another spike in prices soon: the attacks on Khurais and Abqaiq took off a combined 5.7 million bpd from global oil markets.Last week, Energy Minister Abdulaziz bin Salman tried to reassure traders as hetold media more than half of the lost production had been restored. By the end of September, bin Salman said, Saudi Arabia would have 11 million bpd in production capacity and by the end of November, it would have 12 million bpd.Yet, according to the Wall Street Journal’s sources, this is not likely to be the case as the equipment that will replace the one destroyed by the attacks would have to be made to measure, and this takes time.Bloomberg estimated earlier this month that Saudi Arabia has about 50 million barrels of oil in storage at home plus another 80 million barrels stored abroad. This will be enough to keep its exports going at regular rates, but some expect a supply gap to open up late next month. Uncertainty is growing as a result of conflicting reports: first media reported Saudi Arabia had asked Iraq for light crude to insulate itself from a supply gap, and then Riyadh said it had never done that. Now, the official position continues to be that repairs will take a few weeks, with the WSJ report suggesting that this might not be the case.
Risk of Further Saudi Attacks High – The risk of further high-impact attacks against Saudi energy infrastructure is high. That’s according to Torbjorn Soltvedt, principal MENA analyst at Verisk Maplecroft, who made the statement in an analysis piece sent to Rigzone on Thursday. “For Saudi Arabia, the bottom line is that the risk of further serious attacks will persist even if the situation does not escalate,” Soltvedt said in the report. “Only a significant reduction in regional tensions or a neutralization of Iran’s asymmetrical capabilities can meaningfully reduce the threat level. Unfortunately, prospects for either are poor,” he added. The recent attack highlighted a vulnerability at the heart of Saudi Arabia’s oil infrastructure that cannot be easily remedied, according to Soltvedt, who added that the cost of inaction and poor conditions for diplomacy leave a militarized response as the most likely next step. “The severity of the 15 September attack and the problems associated with inaction make it likely that Saudi Arabia will lean towards some form of military response, most likely in coordination with the United States,” Soltvedt stated. “The cautious approach taken over the last few months means that Saudi Arabia now faces the challenge of changing course rapidly and jumping several rungs on the escalation ladder,” he added. Soltvedt went on to say that the Saudi political leadership will want to avoid a full-blown war with Iran “at all cost”. Saudi Aramco revealed over the weekend that emergency crews contained fires at the company’s plants in Abqaiq and Khurais, “as a result of terrorist attacks with projectiles”. The company confirmed that these attacks resulted in a production suspension of 5.7 million barrels of crude oil per day. Saudi Aramco President and CEO Amin Nasser announced Tuesday that the company’s production capacity would be fully restored by the end of September. According to Rystad Energy Chief Oil Market Analyst Bjornar Tonhaugen, however, there is clear risk of a slower restart of Saudi Arabian oil production despite the optimistic guidance by Saudi Aramco.
Oil prices could go much higher if there is a military escalation after Saudi attack The growth of the U.S. as both oil producer and exporter is helping cap a spike in crude prices following attacks on Saudi Arabian oil facilities, but the price could go sharply higher, depending on the duration of the disruption and whether it escalates into a military conflict. The weekend attack on Saudi Aramco’s Abqaiq processing facility and another plant knocked 5.7 million barrels of Saudi production off line and underscores a new realization of vulnerability in world oil production. That is 5% of global oil output and about half of Saudi’s production, but Saudi Arabia has sufficient supplies to maintain its current export level for about a month. Oil prices initially spiked nearly 20% in trading Sunday evening but were up just about 14.5% in U.S. trading Monday, the biggest one-day move since February 2016. Brent was trading at $68.45 per barrel in late trading. “What the market is pricing is geopolitical risk premium and tail risk. Something like this has never happened before. There have been attempts, but those were foiled,” said Amarpreet Singh, Barclays energy analyst. “Something like this to Saudi supply has absolutely never happened, even during the Gulf War.” Houthi rebels, aligned with Iran, claimed responsibility for the attack, but Secretary of State Mike Pompeo said Iran was responsible. Saudi Arabia’s foreign ministry said an investigation into the incident shows Iranian weapons were used in the attack. President Donald Trump presided over a national security meeting at the White House Monday morning on the topic of Iran, NBC News reported from sources. Trump told reporters Monday afternoon that he was in no rush to respond to the attacks on Saudi oil facilities. He also said “it was a very big attack” that could be met with a much larger attack. Trump said Pompeo is going to Saudi Arabia, and the U.S. has been in touch with European countries including France, which is still a party to the nuclear agreement with Iran.
Saudi oil disruption could hit China hardest – Saudi Arabia claims its oil production infrastructure, 60% of which was knocked off-stream in a pre-dawn drone attacks on September 14, will be running at full throttle again by month’s end, an assessment few energy industry analysts view as feasible. While the Middle East waits to see how the US and Saudi Arabia ultimately respond to the attacks blamed on Iran, the impact on Asia’s oil markets is coming into clearer view, with China looking the most vulnerable to any prolonged disruption to Saudi supplies. Saudi Arabia is the world’s largest oil exporter, the de facto leader of the Organization of Petroleum Exporting Countries (OPEC) cartel and the world’s third largest crude oil producer after the US and Russia. The Asia-Pacific, home to some of the world’s largest net oil-importing nations, is increasingly dependent on Saudi oil to fuel their fast-growing economies. Last year, China imported 459.3 million tons (mt) of crude oil, a 10.1% year on year rise worth a record-breaking US$239.2 billion. That represented a 20.2% share of total global consumption, according to China’s National Bureau of Statistics (NBS). In 2018, the US imported 247.8 mt of crude oil, while India was the third largest crude oil importer at 226.6 mt, followed by Asian industrial heavyweights South Korea (151.3 mt), and Japan (149.3 mt), according to industry data. But the attacks have put China’s reliance on Saudi Arabian crude oil exports into particularly sharp relief. In 2018, Saudi Arabia was China’s second largest oil supplier, providing 12.4% of its imports at a value of around $30 billion.
Europe gasoline exports to Mideast surge after Saudi attacks – (Reuters) – Gasoline exports from Europe to the Middle East and Asia are set to surge this week after recent attacks on Saudi Arabia’s oil facilities crippled output at the kingdom’s refineries. Over 400,000 tonnes of gasoline and gasoline blending components have been booked in the past week for loading between Sept. 21 and Sept 26 out of northwest Europe with Mideast Gulf delivery options, shipping data shows. The flow is the equivalent of around 500,000 barrels per day. It is unclear where the cargoes will end up, but traders said that Saudi Arabia’s state-run oil company Aramco is seeking to buy large volumes of refined oil products. Europe’s exports of gasoline and blending components to Saudi Arabia averaged 60,000 bpd in the first five months of the year, according to data analytics firm Vortexa. “A flurry of gasoline bookings that emerged this week for Europe to Middle East voyages could see more European gasoline make its way to Saudi Arabia,” Vortexa said in a note. Traders said the rise in shipping bookings was related to a sharp increase in demand following attacks on Saudi Arabia’s oil infrastructure on Sept. 14, which knocked out around 1 million bpd of Saudi Arabia’s refining capacity.
Saudi Arabia to restore full oil output by next week: source – (Reuters) – Saudi Arabia has restored more than 75% of crude output lost after attacks on its facilities and will return to full volumes by early next week, a source briefed on the latest developments told Reuters on Monday. Saudi oil production from its Khurais plant is now at more than 1.3 million barrels per day, while current production from its Abqaiq plant is at about 3 million bpd, the source said. The Sept. 14 attacks on the two giant plants caused raging fires and damage that halved the crude output of the world’s top oil exporter, by shutting down 5.7 million barrels per day of production.Saudi Energy Minister Prince Abdulaziz bin Salman and the chief executive of state oil company Aramco, Amin Nasser, have said output will be fully back online by the end of September.The attacks sent oil prices up 20 percent although they came off after the kingdom pledged to bring back output swiftly. On Monday, prices stabilized at $64 per barrel, paring earlier gains, following comments by the source.The kingdom has managed to maintain supplies to customers to the levels they were at prior to the attacks by drawing from its huge oil inventories and offering other crude grades from other fields, Saudi officials said.Saudi said it would ensure full oil supply commitments to its customers. The kingdom ships more than 7 million bpd to global destinations every day, and for years has served as the supplier of last resort to markets.No casualties were reported at the sites even though thousands of workers and contractors work and live in the area.The Wall Street Journal reported on Monday repairs at the plants could take months longer than anticipated.Thousands of employees and contractors have been pulled from other projects to work around the clock in bringing production back. Aramco is shipping equipment from the United States and Europe to rebuild the damaged facilities, Aramco officials told reporters on Friday.
Saudi attacks leave hedge funds unmoved despite battle of the bots (Reuters) – Hedge fund managers remain cautious about the outlook for oil prices despite a short-term surge following the recent attacks on Saudi Arabia’s oil installations. Amid record trading volumes, oil prices posted a record one-day rise on Sept. 16, the first trading day after the attacks. However, most of this was probably attributable to short-term computerised market-making programmes (“bots”) taking intra-day positions rather than fund managers shifting their strategic view. Prior to the attacks, hedge fund managers had increased their bullish positioning in petroleum significantly as hopes rose for a trade truce between China and the United States. But the attacks themselves have not added much to this economy-driven relief rally with the oil price rise flushing out some of the weaker bearish shorts but doing little to encourage the creation of new bullish long positions (https://tmsnrt.rs/2moI4Uz). Hedge funds increased their net long position in petroleum futures and options by just 23 million barrels in the week to Sept. 17, an unexceptional amount and down from an increase of 122 million barrels the previous week. Across the six most important petroleum futures and options contracts, portfolio managers reduced short positions by 17 million barrels but added just 5 million barrels of new long positions. Funds were net sellers of ICE Brent (-9 million barrels) but buyers of NYMEX and ICE WTI (+11 million barrels), U.S. gasoline (+8 million), U.S. diesel (+5 million) and European gasoil (+8 million). For each of the five contracts with net buying, short covering was a more important factor than establishing fresh long positions in contributing to the increase in net length. In Brent, the contract with the most direct exposure to any loss of production caused by the attacks on Saudi Arabia, fund managers actually sold 9 million barrels of previous long positions. For oil bears who remained downbeat about the economic outlook, the surge in prices proved painful, forcing some to close out positions which accelerated the price spike. Most oil bulls, however, saw the price surge as temporary and no reason to increase long positions, while a small minority found a reason to realise profits on positions already accumulated before the attacks.
Oil prices struggle amid economic despond- Kemp (Reuters) – Oil prices are sinking again as concerns about the health of the global economy and petroleum consumption replace fears about the vulnerability of Saudi Arabia’s infrastructure as the main focus for traders. Recent economic data has painted a mixed picture about whether the global economy is flatlining or pulling out of the slowdown that hit during the second half of 2018 and the first half of this year. But the broadest indicators of business activity and investor sentiment continue to suggest an economy growing well below trend. Investors are positioning themselves defensively in case growth slows further. Global manufacturers reported that new export orders fell in August for the 12th month running and the decline is accelerating. (https://tmsnrt.rs/2l9Yksy) The JPMorgan purchasing managers’ sub-index for new export orders last month fell to its lowest since the mid-cycle slowdown in 2012 and before that the recession of 2009. World trade volumes fell during the second quarter compared with the same period last year at the fastest rate since the post-crisis recession, according to the Netherlands Bureau for Economic Policy Analysis. Oil consumption among the top 18 consuming countries, each using more than 1 million barrels per day, rose by just 0.9% in the second quarter compared with the same period in 2018. Oil consumption by the top consumers was growing well below the trend rate of 1.5% per year that prevailed between 1998 and 2018, data from the Joint Organisations Data Initiative showed. In the United States, new orders for non-defence capital goods excluding aircraft, a proxy for business investment, were up less than 0.5% in the May-July period versus a year earlier. Business investment spending was growing at the slowest rate since the mid-cycle slowdown or mini-recession of 2015/16 and well below the average rate over the last 20 years.
Oil Prices Rise as Reports Suggest Saudi Needs More Time to Recover – Oil prices rose on Monday in Asia following reports that full recovery of Saudi Arabia’s oil fields hit by the drone attack may take many months. U.S. Crude Oil WTI Futures gained 1.0% to $58.69 by 11:30 PM ET (03:30 GMT). International Brent Oil Futures also rose 1.0% to $64.95. The Wall Street Journal reported that complete recovery from the attack earlier this month, which knocked out half the nation’s out output, will take more than the 10 weeks Saudi previously promised. Citing an unnamed Saudi official, the report said the kingdom is “still in a frantic search for spare parts.” The situation is not “as rosy as you might think,” the official said. Meanwhile, state oil company Saudi Aramco reassured the market on Friday that it will have 11 million bpd of capacity back online by November, well above its current actual output level. Aramco also named UBS Group, Deutsche as bookrunners for its initial public offering (IPO), Reuters reported citing sources familiar with the matter. Reuters added that the company planned meetings with analysts this week ahead of its expected IPO in late November.
Oil ends higher as Middle East tensions outweigh pressure from Saudi output recovery -Crude-oil futures ended higher on Monday, finding support from growing tensions in the Middle East even as Saudi Arabia has reportedly restored much of the output lost to attacks over a week ago that damaged its oil facilities.Late last week, the U.S. said that it would deploy more troops to Saudi Arabia following the Sept. 14 attacks on oil facilities. Also last week, President Donald Trump tweeted that he had ordered the U.S. Treasury to “substantially increase” sanctions on Iran.Tensions in the Middle East are “at risk of rising once more, and that should keep prices lively throughout this week,” “Geopolitical instability to a historically volatile region would risk additional shocks higher to the value of oil.” West Texas Intermediate crude for November delivery CLX19, -0.54% on the New York Mercantile Exchange rose 55 cents, or 1%, to settle at $58.64 a barrel, while November Brent crude BRNX19, -0.71%, the global benchmark, climbed by 49 cents, or 0.8%, to $64.77 a barrel on ICE Futures Europe. Oil prices found earlier support from news that the Saudis restored around 75% of the crude production lost in the attacks on its oil facilities, Reuters reported, citing a source briefed on the latest developments. The damage had initially disrupted 5.7 million barrels a day of Saudi oil production, or about 5% of world output. Early Monday, however, a report by The Wall Street Journal that said it may take the Saudi Arabian Oil Co., popularly known as Aramco, several months to fully restore operations. Prince Abdulaziz bin Salman, the Saudi energy minister, had said last week that his country would resume normal production of 9.8 million barrels by the end of this month, though some Aramco officials pointed to a 10-week timeline for full recovery.The market has been “getting mixed messages about how fast Saudi’s oil production can recover from last weekend’s attack,” said Phil Flynn, senior market analyst at Price Futures Group.“We are also getting mixed messages on the state of the global economy with weak manufacturing data coming out of Europe,” he said. Data Monday showed that manufacturing sentiment in the eurozone, the purchasing managers index, fell to an 83-month low of 45.6 in September, from 47 in the prior month. Economists polled by FactSet expected a 47.3 reading, with any reading below 50 indicating worsening conditions.
Oil drops to lowest since Aramco attacks after Trump scolds China (Reuters) – Oil prices plunged more than 2% on Tuesday to their lowest since the Sept. 14 attacks on Saudi Arabia’s key oil facilities, after U.S. President Donald Trump rekindled fears the U.S.-China trade conflict that has crimped energy demand is far from over. In a United Nations address, Trump accused China of unfair trade practices, including “massive” market barriers, currency manipulation and intellectual property theft, a few days after officials from the world’s two largest oil-consuming economies held inconclusive trade talks in Washington. “Hopefully we can reach an agreement that will be beneficial for both countries,” Trump said. “As I have made very clear, I will not accept a bad deal.” Brent crude futures LCOc1, the international standard, settled $1.67, or 2.6%, lower at $63.10 a barrel, while West Texas Intermediate futures CLc1 ended at $57.29 a barrel, down $1.35, or 2.3%. Trump “ratcheted up the U.S.-China trade war again,” said John Kilduff, a partner at Again Capital LLC in New York. “It wasn’t a constructive tone in trying to get that resolved, and we know how sensitive oil prices are to the back and forth.” The U.S. president’s address left the oil market with the grim impression that “it’s not a deal that’s going to get done quickly,” which could continue to hamper global oil demand growth, said Robert Yawger, director of energy futures at Mizuho in New York. U.S. stocks fell, with the S&P 500 and the Nasdaq poised for the biggest declines in a month, as calls for impeachment of Trump gained momentum, while weak consumer confidence data added to worries over the prolonged Sino-U.S. trade war. [.N] .DJI A private sector report showed U.S. consumer confidence fell by the most in nine months in September.
Oil falls 2.2% after Trump ratchets up US-China trade war -Oil prices fell 2% on Tuesday as U.S. President Donald Trump fanned market fears that Sino-American trade tensions are far from settled amid ongoing negotiations, a grim sign for oil demand growth. Trump sharply criticized what he called China’s unfair trade practices in a speech at the United Nations General Assembly, saying he would not accept a “bad deal” between the United States and China. “He ratcheted up the U.S.-China trade war again,” said John Kilduff, a partner at Again Capital LLC in New York. “It wasn’t a constructive tone in trying to get that resolved, and we know how sensitive oil prices are to the back and forth.” Brent crude futures fell $1.35, or 2%, to $63.42 a barrel. U.S. West Texas Intermediate futures were down $1.12, or 1.9%, at $57.52 a barrel. “Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping technology transfers and the theft of intellectual property and also trade secrets on a grand scale,” Trump said. U.S. stocks fell, as well, reversing earlier gains following Trump’s comments and a private sector report showing U.S. consumer confidence fell by the most in nine months in September. 1/8.N 3/8 <.DJI> Sluggish economic data in leading European economies and Japan also weighed on crude prices, analysts said. “We continue to see a constant revision downward for 2019 oil demand,” with many forecasters predicting demand to grow around 1 million barrels per day (bpd) or less
Oil prices fall after an unexpected rise in inventories – Oil prices fell for a second day on worries that fuel demand could fall after U.S. President Donald Trump doused recent optimism over China-U.S. trade talks, at a time of rising U.S. crude oil stockpiles. Brent crude futures were down $1.72 to $61.38 a barrel on Wednesday, erasing all gains made after an attack on Saudi oil facilities sent the benchmark up around 20% last week. U.S. West Texas Intermediate crude dropped to $55.71 a barrel, down $1.58. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.4 million barrels from the previous week, according to the Energy Information Administration. “Focus will return to faltering oil demand concerns as there is unlikely to be any quick resolution to U.S.-China trade differences to positively shift economic expectations,” global oil strategist at BNP Paribas Harry Tchilinguirian told the Reuters Global Oil Forum. “Barring a repeat attack on Saudi infra-structure, oil will weaken further.” Trump criticised China’s trade practices at the United Nations General Assembly on Tuesday and said he would not accept a “bad deal” in U.S.-China trade negotiations. China is the world’s largest oil importer and second-largest crude user. The United States is the largest consumer of oil. Trump also said he saw a path to peace with Iran even as he denounced Iran for “bloodlust”, cooling other risk premiums built into oil prices. Others, like OCBC economist Howie Lee, saw more potential upside, pointing to the possibility that buyers of Saudi crude could be made to look for supplies in the spot market and push prices higher again if Saudi stocks run out.
WTI Extends Losses After Big Build In Crude, Cushing Stocks Soar Most Since Feb — WTI has accelerated its losses overnight following API’s surprise crude build and Saudi Arabia’s claims that it has now restored production at the Abqaiq and Khurais oil processing facilities to the levels they were operating at before recent attacks.“With the oil market reassured that no material disruption to Saudi supply to its customers has occurred following the drone attacks on the Abqaiq processing facility, the oil price pursues its retreat from last week’s highs,” said Harry Tchilinguirian, head of commodities strategy at BNP Paribas SA. Putting inventories back in the spotlight – although the impact of Storm Imelda is likely to make the numbers a little more noisy than normal…
API
- Crude +1.38mm (-600k exp)
- Cushing +2.3mm – first build in 13 weeks
- Gasoline +1.9mm
- Distillates -2.2mm
DOE
- Crude +2.41mm (-600k exp)
- Cushing +2.256mm – biggest build since Feb 2019
- Gasoline +519k
- Distillates -2.978mm
A bigger than expected crude build and major rise in stocks at Cushing dominated the inventory data in the last week (though Storm Imelda may confuse numbers)… US Crude Production rose back to record highs as the rig count continues to crater…
Oil falls 1.4% on surprise US crude build, Trump’s China trade comments Oil prices dropped about 2% on Wednesday, logging a second straight day of losses after U.S. crude inventories unexpectedly rose and on worries that demand could fall after U.S. President Donald Trump’s comments about trade talks with China. A rally in the dollar, which moves inversely with oil, also weighed on oil as a Democratic-led chamber was launching an official presidential impeachment inquiry. Brent crude futures shed 1.03%, to $62.45 a barrel, while U.S. West Texas Intermediate crude fell 1.4%, to $56.49 a barrel. “The complex is seeing significant downside pressure today off further reduction in risk appetite related to lack of progress on the U.S.-China trade front as well as the impeachment inquiry that appears poised to reduce appeal for risky assets,” “Adding to the mix was some bearish … data featured by a counter seasonal U.S. crude build.” U.S. crude inventories unexpectedly rose 2.4 million barrels last week, the Energy Information Administration said, instead of declining 249,000 barrels as analysts forecast. Trump said on Wednesday that a deal to end a nearly 15-month trade war with China could happen sooner than people think. Global markets had weakened on Tuesday after Trump criticized China’s trade practices at the United Nations General Assembly and said he would not accept a “bad deal” in U.S.-China trade negotiations. China is the world’s largest oil importer and is second-largest crude consumer after the United States. Trump also said he saw a path to peace with Iran, cooling other risk premiums built into oil prices, particularly after the Sept. 14 attack on Saudi Arabia’s oil facilities that halved its output. Both the kingdom and the United States have blamed Iran for the attack. “The geopolitical risk premium has all but vanished and bullish catalysts suddenly appear in short supply across the oil market,”
Oil slides as Saudi supply rebound weighs – Oil fell on Thursday for the third straight day as Saudi Arabia’s moves to restore output quickly after attacks on its oil installations promised yet more oil supply. Brent crude futures were down 72 cents, or 1.1%, at $61.67 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 79 cents, or 1.4 percent, to $55.70 a barrel. “There has been not much joy for oil bulls in recent days as either sluggish stock market performance, recovering Saudi oil production or unexpectedly disappointing U.S. inventory data hindered any attempt to push prices higher,” Tamas Varga of oil brokerage PVM said. Prices were weighed down by the faster-than-expected recovery of Saudi output after the drone and missile strikes on two of its oil-processing plants, as well as a surprise 2.4-million-barrel build in U.S. crude inventories last week. The world’s top oil exporter has restored its production capacity to 11.3 million barrels per day, sources briefed on Saudi Aramco’s operations told Reuters. But U.S. President Donald Trump on Wednesday signalled that a resolution to the trade dispute with China might be near, which could eventually boost fuel demand. A day after delivering a stinging rebuke to China over its trade policies, Trump said Beijing wanted to make a deal and it “could happen sooner than you think”. Trump and Japanese Prime Minister Shinzo Abe also signed a limited trade deal that would open Japanese markets to $7 billion of U.S. products annually. “The oil market has seemingly returned to business as usual,” said Norbert Ruecker, head of economics and next-generation research at Julius Baer. “Instead of the attack-related fallout including disruption and geopolitical risks, the soft economy and stagnant oil demand are back in focus.” Crude futures were pressured by sluggish economic data in leading European economies and Japan. A firmer dollar, which registered its sharpest daily gain in three months overnight and held steady in Asian trade, also weighed on oil as it makes dollar-traded fuel imports more costly for countries using other currencies.
Oil prices head for big weekly loss as supply fears wane – Oil prices fell on Friday and were heading for a weekly loss on a faster than expected recovery in Saudi output while slowing Chinese economic growth dampens the demand outlook. Brent fell 93 cents to $61.81 a barrel, while U.S. crude slipped by 65 cents to $55.76. Both were down almost 4% over the week, representing WTI’s biggest weekly loss in 10 weeks and Brent’s biggest in seven. Brent and WTI were also hit by a Wall Street Journal report citing unnamed sources saying that Saudi Arabia had agreed a partial ceasefire in Yemen, said analysts in the Reuters Global Oil Forum. Brent is just above its level before attacks on Saudi facilities on Sept 14, which initially halved the kingdom’s production. Sources told Reuters this week that Saudi Arabia had restored capacity to 11.3 million barrels per day. Saudi Aramco has yet to confirm it is fully back online. “The risk premium is deflating further,” said Saxo Bank’s Ole Hansen. The International Energy Agency (IEA) said on Friday that it might cut its estimates for global oil demand for 2019 and 2020 should the global economy weaken further. “If the global economy weakens, for which there are already some signs, we may lower oil demand expectations,” IEA Executive Director Fatih Birol told Reuters. In China, the world’s second-largest economy and biggest importer of crude oil, industrial companies reported a contraction in profits in August. A surprise 2.4 million-barrel build in U.S. crude inventories last week also weighed on prices. Key oil freight rates from the Middle East to Asia rocketed as much as 28% on Friday in the global oil shipping market, spooked by U.S. sanctions on units of China’s COSCO for alleged involvement in ferrying crude out of Iran. The COSCO vessels are equal to about 7.5% of the world’s fleet of supertankers, Refinitiv data showed.
Oil Slides As Middle East Tensions Fade — Oil is set to close out the week with the largest weekly loss in months. Crude fell on news that Saudi Arabia has declared a partial cease-fire in Yemen, raising hopes that several years of war could come to an end. It would also dial down tension with Iran. Saudi Aramco has promised to restore production at the Abqaiq and Khurais facilities by Monday, but oil traders are not so sure. “I would like to see real evidence that they are going to resume [production] in the coming weeks,” a Middle East oil company official, told S&P Global Platts. Middle East-based petroleum engineer Einstein Millan Arcia added: “I seriously doubt Saudi Aramco’s capability to recommission such facilities [by September 30] considering the depth of the damage and all the associated testing protocol needed prior to restart.” After some reports suggested that Saudi officials were considering delaying the IPO of Aramco, it now appears that the government is pressing forward and even accelerating the effort. The offering could come as soon as November.. Despite assurances that there would be little interruption in exports, a report from Petro-Logistics, reported on by Reuters, estimates that Saudi oil exports averaged 5.875 mb/d in the 10 days after the Abqaiq attack, down 1.494 mb/d from prior. Low oil prices and a slow but unfolding energy transition is cutting into the returns for the oil industry. ExxonMobil’s return on invested capital (ROIC) was 25 percent in 2011, but was less than 10 percent last year, according to the Wall Street Journal. Meanwhile, the ROIC for Vestas Wind Systems was negative 5 percent in 2011, but averaged 22 percent over the last five years.
Oil settles lower, loses nearly 4% for the week – Oil futures finished lower Friday, as news reports tied to Iran sanctions, a cease-fire between Saudi Arabia and Yemen, and the U.S. considering limits on investor portfolio flows into China pressured prices, contributing to a loss of nearly 4% for the week.Oil prices had been trading lower as The Wall Street Journal reported Friday that Saudi Arabia had moved to impose a partial cease-fire in war-torn Yemen, as Riyadh and Houthi militants try to bring an end to a four-year war that is become a flashpoint in a regional confrontation with Iran.“Soon after, prices dropped sharply again on claims by Iranian President [Hassan] Rouhani that the U.S. has offered to lift all sanctions if Iran is willing to resume negotiations,” said Balint Balazs, commodity analyst at Schneider Electric. Reuters reported that Rouhani said the U.S. sent a message to European leaders that it was willing to lift all sanctions, but that he rejected talks with Washington while the sanctions remained in plac. However, Brian Hook, the U.S. special representative for Iran, was quoted as calling Iran’s claims “baseless.” Trump also tweeted: “Iran wanted me to lift the sanctions imposed on them in order to meet. I said, of course, NO!” Prices for oil fell closer to session lows after Rouhani’s reported comments, then pared those losses after Trump’s denial.
Oil prices post weekly loss as supply fears wane (Reuters) – Oil prices fell on Friday and posted a weekly loss on a faster-than-expected recovery in Saudi output, while investors also worried about global crude demand amid slowing Chinese economic growth. During a volatile session, Brent crude LCOc1 futures fell 83 cents, or 1.3%, to settle at $61.91 a barrel, after dropping to a session low of $60.76 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 50 cents, or 0.9%, to settle at $55.91 a barrel. It hit a session low of $54.75 a barrel. Brent fell 3.7% for the week, its biggest weekly loss since early August. WTI lost 3.6%, its steepest loss since mid-July. Crude futures fell along with other higher-risk assets after news the U.S. government is considering the possibility of delisting Chinese companies from U.S. exchanges, a source briefed on the matter said on Friday. The move would be a radical escalation of trade tensions between the U.S. and China. Earlier in the session, futures fell after Iranian President Hassan Rouhani said the United States offered to remove all sanctions on Iran in exchange for talks. However, U.S. President Donald Trump then said he had refused the request by Tehran. “We’ve really been following headline to headline,” said Phil Flynn, an analyst with Price Futures Group in Chicago. Also weighing on prices, a Wall Street Journal report citing unnamed sources said Saudi Arabia had agreed a partial ceasefire in Yemen, said analysts in the Reuters Global Oil Forum.
The Reason Saudi Is Switching From Sweet Oil To Sour Oil To Meet Export Contracts — September 26, 2019 There has been at least one post on Saudi switching from sweet oil to sour oil to meet its export contracts, and folks on twitter noted that fairly early on. Japan was one of the first countries to be affected according to tweets. Today from a reader, a comment posted elsewhere:The Abqaiq refinery… https://en.wikipedia.org/wiki/Abqaiq The 250-hectare complex can process 7 million barrels of oil a day. The chief purpose of Abqaiq is to remove hydrogen sulfide from crude oil and reduce the vapor pressure, making the crude safe to be shipped in tankers. Abqaiq is the world’s largest facility for this stabilization. Hence, damage to that fits in with their switch from sweet to sour crude exports.
Saudi Arabia prepares to offer its first ever tourist visas two weeks after terror attacks DUBAI – Saudi Arabia will for the first time offer tourist visas to a range of nationalities as it pushes ahead with plans to make tourism a pillar of its economy. The announcement of the visa regime, scheduled for Friday and the details of which are forthcoming, comes just two weeks after terror attacks claimed by Yemen’s Houthi rebels shut down half of the kingdom’s oil production. “For the first time we are opening up the adventure, heritage, and history for people who will visit KSA as tourists,” Ahmad Al-Khateeb, chairman of the Saudi Commission for Tourism and National Heritage, told CNBC’s Hadley Gamble in an interview before the plan’s unveiling. The kingdom’s goals, as part of its Vision 2030 agenda, include increasing the economic contribution of tourism from a current 3% to 10% of GDP by 2030 and bringing international and domestic visits to 100 million annually by the same time. Currently Saudi Arabia’s foreign tourism market relies almost exclusively on religious pilgrims coming to the country for Hajj. The government expects those numbers to reach 30 million annually by 2030. While the plan is a milestone in the kingdom’s efforts toward diversifying its hydrocarbon-dependent economy, its announcement comes at a precarious time. Tensions between Saudi Arabia and its regional Shia archrival Iran have reached the boiling point, with Riyadh accusing Tehran of being behind the Sept. 14 drone and missile attack on some of its largest oil facilities, a charge Iran denies.
Beneath Contempt – Craig Murray — The ruling caste of Saudi Arabia present the most striking example in world history of the extreme combination of avarice and personal cowardice. They are gagging for a war with Iran so long as somebody else fights it for them. Due to a dispute over who ought to have been Caliph 1400 years ago they are absolutely champing at the bit for somebody to massacre the Shia in the Shia heartland, provided they don’t have to do the massacring. It is not that they object to blood on their pure white robes, they often get that when executing a bound prisoner or raping the housemaid. But the thought of their own blood being spilt is an abomination. Let some helpful young Israelis or Americans risk fighting the Iranians, while the Saudi rulers sniff their cocaine in their London penthouses.It is not that Saudi does not have its own military – bombing civilian Shia Houthis from a great height with no chance of retaliation is great sport. And there were some actual Saudis in some of the tanks sent in to massacre the unarmed democracy demonstrators of Bahrain. But the world’s greatest spender per capita on weapons systems has no intention that its own elite should do any fighting. No matter how relentlessly Israel, abetted by the United States, persists in the slow genocide of the Palestinian people, Saudi will always remain a firm US and Israeli ally, because the biggest coward always hides behind the biggest bully. From that position Saudi Arabia will use all its money and influence to promote military action against Iran – by others.The British government, having armed, supplied, trained and lent special forces to the enduring Saudi massacre of Houthi civilians in Yemen, is horrified and full of condemnation that the Houthis have the temerity to hit back at an oil facility. The attack by drones was a brilliant bit of assymetric warfare that shows money is not everything in war. For US Vice President Mike Pence, after meeeting Mohammed Bin “Chopper” Salman, to denounce this attack as “An act of war” is pretty otiose. There are many thousands of mutilated or orphaned Houthi children who could have told him there was a war on, had he bothered to talk to them rather than their oppressor. It is an act of massive folly for the West to get drawn in to the Sunni/Shia small wars that rage across the Middle East and risk blowing them into something much larger. We do not have a “side” in an Islamic sectarian divide which everybody should be seeking to heal, not to exacerbate. The demonisation and crippling by sanctions of Iran, with its profound and ancient culture and massive human capital and economic potential, is a major mistake.
Saudis Pound Yemen After Houthis’ Truce Offer – – Officially, Saudi Arabia expressed surprise and a little caution over Friday’s offer by Yemen’s Houthi movement of a joint truce. The weekend, however, left little doubt as to the Saudi answer to this overture.At least 27 Saudi airstrikes were reported against targets in northern Yemen in just the last 24 hours. The Houthis described the attacks as a “dangerous escalation,” and reiterated they’d meant to get everyone together for a peace process.Yemeni media reports the airstrikes as chiefly hitting farms, as well as telecommunications sites in Yemen’s far north, damaging communications and further crippling the very limited agriculture industry of Yemen, a nation that imports almost all of its food. The Houthi offer for a truce puts the Saudis in a difficult position, as recent Saudi actions are clearly informed by major Houthi drone attacks on Saudi oil sites, but the Saudis officially are blaming those attacks on Iran, meaning they’d just as soon not acknowledge that the Houthis, or the war, are a thing at all while trying to drum up support for moves against Iran.
Five civilians killed in air strikes by Saudi-led coalition in Yemen (Reuters) – Yemen’s Houthi movement said early on Monday that five civilians from one family were killed in air strikes by the Saudi-led coalition in Omran province in Yemen, according to the Houthi owned Al-Masirah TV. Yemen’s Iran-aligned Houthis said the Saudi-led coalition carried out air strikes on a mosque that the family went to when the strikes began. Two children from the same family are missing, with searches for them going on under the rubble of the targeted mosque, the TV report said. There was no immediate confirmation from Saudi Arabia.
US-made bomb used in deadly strike in Yemen: Amnesty – The international human rights group Amnesty International has denounced that a US-made precision-guided munition was used in a Saudi and Emirati-led air strike carried out on a residential home in Yemen’s southwestern city of Ta’izz. The air strike killed six civilians – including three children in Warzan village in the directorate of Khadir in late June this year. Among the six civilians killed in the attack were a 52-year-old woman. Amnesty International says it has investigated tens of sites affected by Saudi-led coalition’s airstrikes since the beginning of war on Yemen in March 2015. The international human rights group it has frequently discovered U.S. munitions amongst the rubble of civilian markets, homes and hospitals in the war-ravaged Yemen. According to Amnesty International, the munition used in the Warzan attack was a Paveway laser-guided bomb manufactured in the US by a company called Raytheon. The London-based organization has argued that arms-supplying states cannot bury their heads in the sand and pretend they do not know their weapons are used to carry out attacks against civilians or civilian objects. The United Nations Human Rights council estimates that the conflict in Yemen will have killed over 233,000 Yemenis by year end both as a result of the fighting and the humanitarian crisis.
How Yemen’s Houthis are bringing down a Goliath – Pepe Escobar – “It is clear to us that Iran bears responsibility for this attack. There is no other plausible explanation. We support ongoing investigations to establish further details.” The statement above was not written by Franz Kafka. In fact, it was written by a Kafka derivative: Brussels-based European bureaucracy. The Merkel-Macron-Johnson trio, representing Germany, France and the UK, seems to know what no “ongoing investigation” has unearthed: that Tehran was definitively responsible for the twin aerial strikes on Saudi oil installations. “There is no other plausible explanation” translates as the occultation of Yemen. Yemen only features as the pounding ground of a vicious Saudi war, de facto supported by Washington and London and conducted with US and UK weapons, which has generated a horrendous humanitarian crisis. So Iran is the culprit, no evidence provided, end of story, even if the “investigation continues.” Hassan Ali Al-Emad, Yemeni scholar and the son of a prominent tribal leader with ascendance over ten clans, begs to differ. “From a military perspective, nobody ever took our forces in Yemen seriously. Perhaps they started understanding it when our missiles hit Aramco.” Al-Emad said: “Yemeni people have been encircled by an embargo. Why are Yemeni airports still closed? Children are dying without treatment. In this current war, the first door [to be closed against enemies] was Damascus. The second door is Yemen.” Al-Emad considers that Hezbollah’s Secretary-General Sayed Nasrallah and the Houthis are involved in the same struggle. I talked and broke bread – and hummus – with Al-Emad, in Beirut, during the New Horizon conference among scholars from Lebanon, Iran, Italy, Canada, Russia and Germany. Although he says he cannot get into detail about military secrets, he confirmed: “Past Yemeni governments had missiles, but after 9/11 Yemen was banned from buying weapons from Russia. But we still had 400 missiles in warehouses in South Yemen. We used 200 Scuds – the rest is still there [laughs].” Al-Emad breaks down Houthi weaponry into three categories: the old missile stock; cannibalized missiles using different spare parts (“transformation made in Yemen”); and those with new technology that use reverse engineering. He stressed: “We accept help from everybody,” which suggests that not only Tehran and Hezbollah are pitching in.
The drone attacks in Saudi Arabia have changed the nature of global warfare – Patrick Cockburn – The devastating attack on Saudi oil facilities by drones and missiles not only transforms the balance of military power in the Middle East, but marks a change in the nature of warfare globally. On the morning of 14 September, 18 drones and seven cruise missiles – all cheap and unsophisticated compared to modern military aircraft – disabled half of Saudi Arabia’s crude oil production and raised the world price of oil by 20 per cent. This happened despite the Saudis spending $67.6bn (£54bn) on their defence budget last year, much of it on vastly expensive aircraft and air defence systems, which notably failed to stop the attack. The US defence budget stands at $750bn (£600.2bn), and its intelligence budget at $85bn (£68bn), but the US forces in the Gulf did not know what was happening until it was all over. Excuses advanced for this failure include the drones flying too low to be detected and unfairly coming from a direction different from the one that might have been expected. Such explanations sound pathetic when set against the proud boasts of the arms manufacturers and military commanders about the effectiveness of their weapons systems. Debate is ongoing about whether it was the Iranians or the Houthis who carried out the attack, the likely answer being a combination of the two, but perhaps with Iran orchestrating the operation and supplying the equipment. But over-focus on responsibility diverts attention from a much more important development: a middle ranking power like Iran, under sanctions and with limited resources and expertise, acting alone or through allies, has inflicted crippling damage on theoretically much better-armed Saudi Arabia which is supposedly defended by the US, the world’s greatest military super-power.If the US and Saudi Arabia are particularly hesitant to retaliate against Iran it is because they know now, contrary to what they might have believed a year ago, that a counter-attack will not be a cost-free exercise. What happened before can happen again: not for nothing has Iran been called a “drone superpower”. Oil production facilities and the desalination plants providing much of the fresh water in Saudi Arabia are conveniently concentrated targets for drones and small missiles. The trump card for the US, Nato powers and Israel has long been their overwhelming superiority inairpower over any likely enemy. Suddenly this calculus has been undermined because almost anybody can be a player on the cheap when it comes to airpower.
Saudi Arabia vows to respond to oil attacks with ‘necessary measures’ – Saudi Arabia says it will respond with “necessary measures” to attacks on two oil facilities as it reiterated the accusation that Iran was behind them. Minister of State for Foreign Affairs Adel al-Jubeir said the weapons used were Iranian and vowed to release the full findings of the investigation. Iran denies involvement in the attacks. Earlier, a senior Iranian military official said Iran was ready to destroy any aggressor after the US announced it was sending troops to Saudi Arabia. Iranian-backed Houthi rebels in Yemen have said they were responsible for the drone and missile strikes on 14 September that affected the global oil supply. Tensions between the US and Iran have escalated since US President Donald Trump abandoned a deal limiting Iran’s nuclear activities last year and reinstated sanctions. Speaking to reporters in Riyadh, Mr Jubeir said Saudi Arabia was in consultation with its allies and would take necessary and suitable measures after its investigation was complete, without giving details of possible actions. He repeated that the strikes targeting the Abqaiq oil facility and the Khurais oil field had come from the north and not from Yemen but did not give a specific location, and urged the international community to take a stand. “The kingdom calls upon the international community to assume its responsibility in condemning those that stand behind this act, and to take a firm and clear position against this reckless behaviour that threatens the global economy,” he said.
Iran says it will destroy any aggressor (Reuters) – Iran will pursue any aggressor, even if it carries out a limited attack, and seek to destroy it, the head of the elite Revolutionary Guards said on Saturday, after attacks on Saudi oil sites which Riyadh and U.S officials blamed on Tehran. “Be careful, a limited aggression will not remain limited. We will pursue any aggressor,” the head of the Guards, Major General Hossein Salami, said in remarks broadcast on state TV. “We are after punishment and we will continue until the full destruction of any aggressor.” U.S. President Donald Trump on Friday approved sending American troops to bolster Saudi Arabia’s air and missile defences after the Sept. 14 attacks. Iran denies involvement in the attack, which was claimed by Yemen’s Houthi movement, a group aligned with Iran and currently fighting a Saudi-led alliance in Yemen’s civil war.Trump’s move drew fire in Washington on Saturday from U.S. House of Representatives Speaker Nancy Pelosi, who called it his “latest outrageous attempt” to circumvent Congress. “These unacceptable actions are cause for alarm,” Pelosi said in a statement accusing Trump of turning “a blind eye” to Saudi violence against innocent Yemenis, human rights abuses and the murder of journalist Jamal Khashoggi. “The United States cannot enable more brutality and bloodshed,” she added. “Congress will do our job to uphold the Constitution, defend our national security and protect the American people.” Meanwhile, Amirali Hajizadeh, who heads the Revolutionary Guards’ aerospace branch, said any attacks on Iran would receive “a crushing response”, the official news agency IRNA reported.
Iran’s Ultimate Middle East Power Play – There was little doubt by late September 2019 that Iran’s clerical leadership was truly in command of the dynamic of the transformation of the Persian Gulf region. The crux of the Iranian regional strategy – including the Iran-sponsored rôle of the Houthi pre-dawned unmanned aerial vehicle strikes on Saudi Arabian oil facilities on September 14, 2019 – became increasingly clear as the shock of those strikes began to be absorbed.Tehran was playing a masterful game, delicately balancing between its publicized confrontation with the US in the Persian Gulf and its real quest for a regional power status. The Iran-proxy strike on Saudi Arabia and the ensuing threats to the US served both as a demonstration of the impotence of Saudi Arabia and its guardians, and as a diversion of attention away from the crucial and successful Iranian surge westward to the Mediterranean.The Iranian declaratory threats of escalation remained focused on the Persian Gulf and particularly on warning the US against intervention. The Houthi strike reiterated anew the inherent vulnerability of Saudi Arabia, as well as its inability and unwillingness to act unilaterally against Iran. Tehran has long insisted that the US is reluctant to act against Iran, and every passing day reinforces the veracity of the Iranian message. Hence, Tehran argues, all regional states and entities should take notice of the inherent power of Iran and Iran’s proxies, as well as of the absence of US protection. Iran urges these states and entities to use the Houthi strike as an excuse to bring the current crisis to an end under conditions favorable to Iran.
Iran accuses foreign forces of raising Gulf ‘insecurity’ – President Hassan Rouhani said at an annual military parade that Iran would put foward a peace plan to the United Nations President Hassan Rouhani on Sunday denounced the presence of foreign forces in the Gulf and said Iran will present a peace plan, after its arch-foe Washington ordered reinforcements to the tense region.”Foreign forces can cause problems and insecurity for our people and for our region,” Rouhani said before a military parade commemorating the Iran-Iraq war.Rouhani also said Iran would present a peace plan to the United Nations within days.”In this sensitive and important historical moment, we announce to our neighbours that we extend the hand of friendship and brotherhood to them,” he said.Rouhani and top military brass saluted as row after row of soldiers marched past them in tight formation, followed by an array of homegrown military hardware. Rouhani called on the foreign powers to “stay away” from the Gulf. “If they’re sincere, then they should not make our region the site of an arms race,” he said.
Iran President Warns of Persian Gulf Region ‘on the Edge of Collapse’ – Iran’s president warned world leaders Wednesday that security in the energy-rich Persian Gulf could collapse quickly with a “single blunder,” and he accused the United States of engaging in “merciless economic terrorism” against his country. On the same day as President Hassan Rouhani spoke, the U.S. ramped up oil-related sanctions on Iran, imposing penalties on six Chinese companies and their chief executives for continuing to transport Iranian crude. Rouhani said in his speech to the annual United Nations General Assembly that the U.S. was engaging in “international piracy” against his country by re-imposing economic sanctions after Washington withdrew from the 2015 nuclear deal with world powers. Iran “will never negotiate with an enemy that seeks to make Iran surrender with the weapon of poverty,” Rouhani said in his highly anticipated speech. “Stop the sanctions so as to open the way for the start of negotiations.” Iranian state television broadcast Rouhani’s speech live across the country of 80 million people, many of whom are struggling under the weight of crippling U.S. sanctions that have sent the Iranian economy into freefall and limited Tehran’s ability to sell its oil abroad. U.S. Secretary of State Mike Pompeo and the Treasury Department announced the latest sanctions, which freeze any assets the firms may have in U.S. jurisdictions and bar Americans from doing business with them, “We’re telling China and all nations, know that we will sanction every violation of sanctionable activity,” Pompeo said at an event for United Against Nuclear Iran, a lobby group opposed to the nuclear deal.
British tanker Stena Impero free to leave: Iran ambassador to UK (Reuters) – The detained British-flagged tanker Stena Impero is “free to leave,” Iran’s ambassador to the United Kingdom, Hamid Baeidinejad, said on Twitter on Monday. “The British-flagged tanker ‘Stena Impero’, pursuant to the completion of the judicial and legal process, is now free to leave,” he wrote. The seizure on July 19 of the ship, two weeks after Britain detained an Iranian tanker off Gibraltar, ratcheted up tensions in the region in the wake of attacks on other merchant vessels that Washington blamed on Tehran.Iran denied responsibility for those attacks, which took place along a vital international oil shipping route.An Iranian government spokesman said on Monday that all legal steps had been completed for the release of the detained tanker but that he did not know when the vessel would be released, Iranian media reported. “The legal work and administrative procedures for the release of the English tanker have been completed but I have no information on the time of the release,” said government spokesman Ali Rabiei, according to semi-official news agency ILNA.
17 killed in US airstrike in southern Libya -At least 17 people have been killed in a US airstrike in southern Libya in the third such air raid in the North African state in a little more than a week.The US Africa Command (AFRICOM) claims Daesh terrorists were targeted by the Thursday airstrike.These US airstrikes over the last eight days are the first in Libya in over a year.An earlier US air raid had killed 11 on Tuesday, and a September 19 attack killed eight. The US military says all those killed were affiliated with Daesh militants.The United States has been carrying out such airstrikes in several Muslim countries under the pretext of fighting militant groups.In a Friday statement, the AFRICOM said it did not believe that the recent attack left any civilian casualties, but reports on the ground indicate that civilians are usually the main victims of such attacks.Scores of Libyans protest against a new US airstrike on a desert area in the country’s southwestern town of UwaynatThe Libyan Government of National Accord, based in the northwest of the country, is currently fighting forces led by Khalifa Haftar, a strongman and US citizen who rose to prominence in the northeast of the country amid the civil war that followed the death of former Libyan leader Muammar Gaddafi. The recent US airstrikes, however, have been confined to the sparsely-populated southwest, away from the conflict between Haftar and the Government of National Accord.
‘US calls anyone it kills in Libya a suspected militant’ — (video) Political commentator Ian Williams says the deadly US drone strike in Libya could be another attack on civilians that Washington misrepresents as suspected militants.
Afghan forces kill up to 40 wedding guests during raid – An airstrike has killed a large number of civilians, with some reports saying as many as 40, as they celebrated a wedding in Afghanistan’s southern Helmand province, Afghan officials have said. The group were hit during commando raids by Afghan and foreign forces in Musa Qala district, that the Afghan defence ministry said targeted “foreign terrorists”. Details filtered out slowly because the area is under Taliban control, but Abdul Majid Akhundzada, a member of the Helmand provincial council, said that the majority of the dead from the 11pm airstrike were women and children. Many of the dead were in a car and minibus carrying wedding guests. In addition over a dozen wounded victims were taken to the provincial capital, Lashkar Gah. “Some 40 people were killed and 18 others were wounded and were brought to the hospital, all the victims were civilians,” he told Agence France-Presse. He described it as “joint airstrike operation by Afghan and foreign forces.” The latest deaths come after months of rising civilian casualties caused by Afghan forces and their international allies, as they intensified military efforts against the Taliban. In the first half of this year, the United Nations found that pro-government forces killed more civilians than the Taliban and other militant groups.
Air Force testing vegan napalm – The U.S. Air Force is testing an improved,vegan version of the classic Cold War throwback weapon napalm, according to Air Force officials. The new weapon is expected to be able to burn the enemies of the United States to death while assuaging serious moral and environmental concerns. “Napalm is just a mix of a gelling agent and a volatile petrochemical,” said Louie Fleischer, a supervisory technical support specialist with the 96th Test Wing. “Historically, we’ve used animal-based gels. But now that the Department of Defense systemically rejects the commodity status of animals, we are testing plant-based alternatives. They’re working out pretty well.” U.S. use of napalm has been limited since President Barack Obama signed the UN Convention on Certain Chemical Weapons in 2009, but former Obama administration officials predict that the Air Force’s new version will be used more often in the future. “Obama’s real concern about napalm was how it oppressed animals who had never voluntarily enlisted,” said Ben Rhodes, Obama’s former foreign policy vizier. “I think the country will have fewer qualms about napalm now that it’s plant-based.”
A Half-Decade Late, New York Post Admits is ISIS Run by NATO Member Turkey – It’s that time once again: over the weekend Turkish President Tayyip Erdogan for perhaps the twentieth time warned his army is making preparations to act on its southern border with Syria, saying it will take unilateral steps to create a “safe zone” amid accusations the US is dragging its feet implementing agreements to push Syrian Kurdish forces from the border. This as yet another ‘conspiracy theory’ gets belatedly confirmed as conspiracy fact by the mainstream. The New York Post asks “Why isn’t the media covering Turkish President Erdogan’s ties to ISIS?” – well, it’s at least been endlessly reported here and other places for about the past half decade. Better late than never, we suppose. The report details:The evidence of Erdogan’s direct, personal and institutional support for ISIS and related jihadi groups is so extensive, the wonder is why the American media is not paying more attention to it.The report doesn’t merely stop at saying NATO-member Turkey had an indirect or remote relationship with ISIS, but points out that Turkish intelligence service (MIT) while under the immediate oversight of Erdogan has been directly weaponizing and funding the terror group. Barely surveying the tip of the iceberg in terms of the total mountain of evidence to have emerged over the years, the NY Post asserts: It’s Erdogan’s commitment to global jihad, and specifically, to ISIS terrorists. Since 2012, the Turkish intelligence service, MIT, under Erdogan’s direction, has been providing resources and material assistance to ISIS, while Turkish Customs officials turned a blind eye to ISIS recruits flowing across Turkey’s borders into Syria and Iraq. Scores of ISIS fighters captured by pro-U.S. Kurdish forces in northern Syria showed Turkish exit stamps on their passports, and otherwise boasted of the direct assistance they had received from Turkish authorities. The report further cites a recently captured ISIS fighter, who told his Kurdish captors, “Turkish intelligence knows everything.”
Jordan, Egypt, Iraq Reject Any Annexation Plan in Palestine – King Abdullah, Egyptian President Abdel Fattah El Sisi, and Iraqi President Barham Saleh held a trilateral summit in New York on Sunday that focused on the importance of bolstering coordination among the three countries. The summit, attended by senior officials from the three countries, covered means to enhance economic, trade and investment cooperation to serve mutual interests and Arab causes, a Royal Court statement said. King Abdullah welcomed holding the next ministerial meeting among the three countries in Amman to follow up on progress in cooperation. The summit was held on the sidelines of The King’s visit to New York to attend the 74th Session of the General Assembly of the United Nations (UNGA). At the conclusion of the summit, the three countries issued a joint communiqué, which highlighted the topics discussed by the three leaders, including means to bolster cooperation and coordination, as well as regional challenges, according to the statement. The three leaders reaffirmed their support for a comprehensive political solution to the Palestinian cause that guarantees the rights of the Palestinian people, foremost of which is their right to an independent, viable Palestinian state with East Jerusalem as its capital, based on the two-state solution, international law and relevant UN resolutions, and the Arab Peace Initiative.
Arab parties throw support behind Gantz as they seek to block Netanyahu – In a historic move, an alliance of Arab Israeli parties recommended a prime ministerial candidate to President Reuven Rivlin for the first time in almost three decades, saying in consultations Sunday that it would support a bid by former army chief of staff Benny Gantz to replace Benjamin Netanyahu. The process of selecting Israel’s next prime minister has entered its second stage, with eyes firmly on the country’s largely ceremonial president as he looks for a way out of a deadlocked election result to avert a third vote. Arab parties traditionally refrain from recommending a candidate during consultations as an ideological protest of Israel’s ongoing military occupation of the Palestinians. The last time an Arab party backed a candidate during consultations was in 1992, when Yitzhak Rabin became prime minister. Rabin later signed the historic Oslo accords with Palestinian leader Yasser Arafat. “We will recommend Benny Gantz as prime minister,” Joint List leader Ayman Odeh said during a meeting with Rivlin on Sunday. “We want to return to be legitimate political actors and bring an end to the Netanyahu government.” Rivlin held consultations with representatives of four of the nine political blocs that make up Israel’s parliament, the Knesset. He is scheduled to meet with the rest of the factions Monday and then decide whether Netanyahu or Gantz will get the first chance to form the next government. Also breaking with precedent was Avigdor Liberman, the hawkish former defense minister. He has been loyal in the past to Netanyahu but said he could not support the long-serving leader this time because Netanyahu has aligned himself closely with religious and right-wing parties. Liberman said he wouldn’t recommend Gantz, either, after he was supported by the Joint List.
Netanyahu Tapped By Israel’s President To Form Government After Deadlocked Election – It looks like he’s held on after last week’s deadlocked election, prior rumors of his political death notwithstanding. Longtime Prime Minister Benjamin Netanyahu has been tapped by Israeli President Reuven Rivlin on Wednesday to form a new government.The longest serving prime minister in Israel’s history has now been given 42 days to form the country’s next government; and if he fails, the opportunity will fall to his rival – Blue and White Party centrist Benny Ganz. Rivlin said that Israel doesn’t want more elections, something which could theoretically happen for a third time in only a year should neither Netanyahu nor Ganz be successful. Facing three different allegations of corruption, Netanyahu is fighting for more than just his political future – but serious potential criminal charges which can go away only if he remains in the prime minister’s seat.The president tapped the Likud leader after talks with Gantz to form a broad unity government broke down in the wake of the inconclusive election, and after both failed to agree on a power-sharing pact.Netanyahu will have to cobble together 61 seats in order to form a majority government, even as he faces a pretrial hearing next week related to the attorney general’s bribery and fraud allegations.
Israel bans entry for most players on Gaza soccer team – – Israel has denied travel permits to most players on a Gazan soccer team which had hoped to cross through Israel and into the West Bank to play a local championship final against a rival Palestinian club.Khadamat Rafah is set to play Balata FC in the West Bank on Wednesday. But without the hard-to-obtain Israeli travel permits, the game is unlikely to take place as scheduled.“We think that this is clear evidence that this Israeli occupation is cruel but from our side we keep raising it at all the levels of FIFA. We insist that this is our right and we’ll continue exerting every effort to allow this team to do this match,” the head of the Palestinian Football Association, Jibril Rajoub, told The Associated Press. The soccer team’s predicament highlights the daily difficulties Gazans face under an Israeli-Egyptian blockade, imposed after the Islamic militant group Hamas seized control of the territory in 2007. Citing security grounds, Israel has greatly restricted movement of Gazans and requires travelers such as students and medical patients to obtain permits to leave. Critics say these are increasingly harder to come by and are withheld arbitrarily. Israel disputes this and says it grants tens of thousands of permits for Gazans with no militant ties. Under the Palestinian Football Association’s terms, the winners of the Gaza league play the West Bank champions in a two-leg final, one in the Gaza Strip and one in the West Bank. The Gaza game took place earlier this year and this week’s game, which had already been delayed for two months over access to permits, was to take place near the West Bank city of Nablus. The winner of the final game goes on to compete in the Asian Champions League.
Clashes in Egypt’s Suez on second day of protests against el-Sisi – Security forces in Egypt have clashed with hundreds of protesters in the port city of Suez, according to media reports, firing tear gas and live rounds to disperse crowds calling for President Abdel Fattah el-Sisi to quit. The unrest on Saturday came a day after thousands of people took to the streets in several Egyptian cities in a rare show of dissentagainst el-Sisi, who has overseen a broad crackdown on dissent including the jailing of thousands of dissidents and the effective banning of protests. A protester in Suez told the AFP news agency about 200 people headed to the city’s central area for a second night in a row, where they were met by security forces and armoured vehicles. “They [security force] fired tear gas, rubber and live bullets and there were injuries”, the man who declined to be named told the AFP. Another resident, who also preferred to remain anonymous, said the tear gas was so thick it had reached her apartment block a few kilometres away. “My nose started burning up. The smell was seeping through the balcony. I also saw some youth run and hide in our street”, the woman said. Protests were also reported in Giza, the capital Cairo’s twin city, and in the northern town of Mahalla. Al Jazeera is banned from reporting inside Egypt. Meanwhile, a heavy security presence was maintained in Cairo’s Tahrir Square, the epicentre of Egypt’s 2011 revolution that toppled longtime leader Hosni Mubarak. Egypt’s stock exchange also suspended trading for 30 minutes on Sunday after the EGX 100 index fell by 5 percent.
‘Leave, Sisi!’: All you need to know about the protests in Egypt -Thousands of protesters have taken to the streets across several cities in Egypt, in a rare show of dissent against President Abdel Fattah el-Sisi. Gathering in Cairo’s Tahrir Square late on Friday, the demonstrators chanted slogans such as “the people demand the fall of the regime” and “leave Sisi”, echoing the chants that rang out in the same place more than eight years ago and which brought down longtime leader Hosni Mubarak. In Alexandria, hundreds marched to the waterfront, chanting “rise up, fear not, Sisi must go”, while in the port city of Damietta, protesters tore down a large poster of the president, a former general who has presided over a broad crackdown, jailing thousands of dissidents and banning protests. The protests came as el-Sisi headed to the United States to attend the United Nations General Assembly (UNGA). Protests were reported in at least eight cities, with the largest crowds gathering in Cairo, Alexandria and Suez. Videos and photos of the protests were shared on social media with the hashtag #Tahrir_Square, which was trending worldwide on Friday. Unauthorised protests are not allowed in Egypt and police cracked down swiftly, firing tear gas at protesters in Cairo’s Tahrir Square. At least four people were arrested in the capital, while a journalist was arrested in the city of Mahalla, according to the Egyptian Commission for Rights and Freedoms. The AFP news agency, citing a security source, said at least 74 people were arrested. No casualties were reported. Al Jazeera is banned from reporting from inside Egypt.
Protests in Egypt shake al-Sisi’s bloody military dictatorship –The recent events in Egypt bring back memories of the revolutionary uprisings that brought down the long-standing imperialist-backed Egyptian dictator, Hosni Mubarak, in 2011. Numerous demonstrations reportedly took place throughout Egypt last weekend. This time, they are directed against General Abdel Fatah al-Sisi, who seized power in 2013 and has brutally subjugated the country ever since. Chants of “Irhal, Irhal” [Leave, Leave], “The people want the overthrow of the regime” or “Say it! Don’t be afraid! Sisi must go” echoed through numerous Egyptian cities over the weekend. The protests began in the capital, Cairo, where on Friday evening several hundred demonstrators gathered on Meidan al-Tahrir, the central square of the Egyptian Revolution. They quickly spread to other regions, far from the capital. Thousands of mostly young demonstrators took to the streets in the coastal cities of Alexandria and Damietta, in Mansoura and in Suez, the metropolis at the entry of the Suez Canal. So far, there have been no reports of the strikes or factory occupations that spread like wildfire eight years ago. But there were also protests in important industrial cities such as Mahalla al-Kubra, the centre of the Egyptian textile industry in the Nile delta. The regime reacted nervously and brutally. In Cairo, heavily armed security forces dispersed the demonstrators on Saturday morning, and armoured vehicles sealed off Tahrir Square. In other cities, too, protests were broken up by force. According to the limited reports that are available, there were over two hundred arrests. Videos on social media showed emergency forces hunting down peaceful demonstrators and attacking them with tear gas and rubber bullets. In Suez, where demonstrators gathered again in the central Arbaeen Square during the night of Saturday to Sunday despite massive police violence, the security forces even used live ammunition. “They (security forces) fired tear gas, rubber and live bullets and there were injuries,” a man who took part in the demonstration and did not want to be identified told AFP. Another resident reported that the tear gas was so thick that it had reached her apartment a few kilometres from the city centre: “My nose started burning up. The smell was seeping through the balcony. I also saw some youth run and hide in our street.” The immediate trigger for the protests was a series of videos published by Egyptian actor and contractor Mohamed Ali, who lives in Spain, on his Facebook account. In them he accuses Sisi of embezzling public money for personal purposes and of building expensive palaces for his family, while the mass of the population lives in bitter poverty. It is time for the Egyptian population to rise up, he said, as it is “numerically stronger than the army and police.”
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