Oil, Gas, And Fracking News Reads: 13October 2019 – Part 2

Written by rjs, MarketWatch 666

Here are some more selected news articles about the oil and gas industry from the week ended 12 October 2019. Go here for Part 1.

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

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We’re Just Starting to Learn How Fracking Harms Wildlife – In January 2015 North Dakota experienced one of the worst environmental disasters in its history: A pipeline burst, spilling nearly 3 million gallons of briny, saltwater waste from nearby oil-drilling operations into two creek beds. The wastewater, which flowed all the way to the Missouri River, contained chloride concentrations high enough to kill any wildlife that encountered it.It wasn’t the first such disaster in the state. In 2006 a spill of close to 1 million gallons of fracking wastewater into the Yellowstone River resulted in a mass die-off of fish and plants. Cleanup of that spill was still ongoing at the time of the 2015 spill, nearly a decade later. Spills like these highlight the dangers that come with unconventional fossil-fuel extraction techniques that go after hard-to-reach pockets of oil and gas using practices like horizontal drilling and high-volume hydraulic fracturing (otherwise known as fracking). But events like these massive spills are just the tip of the iceberg. Other risks to wildlife can be more contained, subtle or hidden. But those consequences are very real for a vast suite of animals including mussels, birds, fish, caribou and even fleas, and they’re as varied as the species themselves. In some places wildlife pays the price when habitat is destroyed. Elsewhere the damage occurs when water is sucked away or polluted. Still other species can’t take the traffic, noise and dust that accompany extraction operations.All this damage makes sense when you think about fracking’s outsized footprint. It starts with the land cleared for the well pad, followed by sucking large volumes of water (between 1.5 and 16 million gallons per well) out of rivers, streams or groundwater.Then there’s the sand that’s mined for use during the fracturing of underground rock to release natural gas or oil. There are also new pipelines, compressor stations and other related infrastructure that need to be constructed. And there’s the truck traffic that surges during operations, or the disposal of fracking wastewater, either in streams or underground. “Studies show that there are multiple pathways to wildlife being harmed,” said ecologist Sandra Steingraber, a distinguished scholar in residence at Ithaca College who has worked for a decade compiling research on thehealth effects of fracking. “Biodiversity is a determinant of public health – without these wild animals doing ecosystem services for us, we can’t survive.”

Oil spill reported in McKenzie County — The North Dakota Department of Environmental Quality has reported a produced water and oil spill in McKenzie County. A leak in a tank resulted in about 400 barrels of produced water, which is a by-product of oil and gas development, and about 200 barrels of oil to be released. The tank is located on a well pad about 11 miles Northeast of Grassy Butte and is operated by White Rock Oil & Gas. Most of the spill was contained to the well pad, but an unknown amount of the spill did leave the pad, impacting Badlands terrain. The cause of the leak is unknown at this time. Personnel from the NDDEQ are inspecting the site and will continue to monitor the investigation and remediation.

As the Bakken booms, North Dakota eyes plastics – As pump jacks pull more and more oil out of shale rock buried deep below the western part of the state, an increasing amount of natural gas travels up through the wells with few obvious destinations in North Dakota. Oil producers burn off some of the gas at well sites because the state has maxed out its processing plants and pipelines that carry the rest of it to market, often out of state. While the bulk of North Dakota gas is methane, it’s also rich in hydrocarbons like ethane, propane and butane, which are known as “natural gas liquids” because they can take on a liquid form under certain pressures and temperatures. “If you look at the other shale plays, the Bakken is at the top of the pack,” North Dakota Pipeline Authority Director Justin Kringstad told the state’s Industrial Commission last week. The Bakken might be richer in natural gas liquids than gas produced in places such as the mid-Atlantic and the Gulf Coast, but North Dakota lacks something that those areas do have: a petrochemical industry that uses substances such as ethane to make products like plastics or fertilizers. The potential to do the same in North Dakota has a lot of people involved in energy here talking. “What you hear from the companies when you start poking around is there’s somewhere between five and 10 companies that are actively looking for projects over the next five to 10 years worldwide,” Lt. Gov. Brent Sanford said. North Dakota faces competition from places like Texas, where a company could leverage an old, defunct industrial site and tap into existing infrastructure, he said. Then there’s the Utica and Marcellus shale plays in Pennsylvania, Ohio and West Virginia that produce vast quantities of natural gas. Alberta, Canada, is home to the petrochemical industry as well, and state officials have not only made trips there this year but are in talks with “a few” companies about setting up shop in North Dakota, Sanford said. He declined to name the companies, citing nondisclosure agreements.

Trump Admin to Open 725000 Acres of California to Oil & Gas Drilling – Democracy Now! – In the United States, the Trump administration moved Friday to open more than 720,000 acres of California land to oil and gas drilling. Environmentalists have vowed to sue to block what would be the first federal fossil fuel lease sales since 2013. Clare Lakewood, senior attorney at the Center for Biological Diversity, said, “Turning over these spectacular wild places to dirty drilling and fracking will sicken Californians, harm endangered species, and fuel climate chaos.”

US government opens California land to oil, gas drilling – The federal government has opened 725,000 acres in Central California to oil and gas drilling on land that has been off-limits since 2013. The Bureau of Land Management issued its final decision Friday to allow oil and gas leases on plots that are mostly in the Central Valley, but also include parts of the Central Coast. The plan announced in May is part of a Trump administration goal to make the U.S. energy independent that has been criticized as a giveaway to industry. Environmentalists who successfully blocked the Obama administration from opening the land to drilling criticized the new development. The Center for Biological Diversity called the effort reckless and says it will continue to fight the government. The BLM says additional approval will be required for before any drilling.

Trump opening California public land to fracking, gas leases. Is it ‘reckless’? – The Trump administration has finalized its plans to open hundreds of thousands of acres of federal land in Central California to oil and gas leasing, paving the way for more fracking to soon begin in the state. The Bureau of Land Management (BLM) approved the oil and gas exploration plan “based on the administration’s goal of strengthening energy independence and the BLM support of an all-of-the-above energy plan that includes oil and gas underlying America’s public lands,” it said in its record of decision released Friday. The agency received more than 400 objections of its proposed leasing plan over a 30-day protest period, according to its final report. BLM officials ruled that none of them was valid. According to the decision, oil and gas drilling can move forward on more than 700,000 acres of public land and mineral estate in Alameda, Contra Costa, Fresno, Merced, Monterey, San Benito, San Joaquin, San Mateo, Santa Clara, Santa Cruz and Stanislaus Counties. The agency’s plan could result in up to 37 new oil and gas wells drilling on new land leases over the next 20 years, primarily in Fresno, Monterey and San Benito counties. BLM estimates that the oil and gas industry directly supports 3,000 jobs and $623 million in tax revenue within those counties. BLM, which is a division of the Department of Interior, is also considering a proposal to conduct new oil and gas development on 1.6 million acres of public land in Southern California. The planning area, which covers Fresno, Kern, Kings, Madera, San Luis Obispo, Santa Barbara, Tulare and Ventura counties, includes about 400,000 acres of public land and 1.2 million acres of federal mineral estate, according to the report. BLM has not yet finalized that proposal. While California remains one of the largest oil producing states in the nation, production has steadily declined over the last three decades. Clare Lakewood, a senior attorney at the environmental group Center for Biological Diversity, called the decision on the Central California leasing proposal “reckless.” “Turning over these spectacular wild places to dirty drilling and fracking will sicken Californians, harm endangered species and fuel climate chaos. We’ll fight tooth and nail to make sure it doesn’t happen,” Lakewood said in a statement from the group. The Center for Biological Diversity was behind the lawsuit that effectively halted BLM oil and gas leasing in California since 2013. A U.S. District Court ruled that BLM failed to consider the environmental impacts of fracking when evaluating drilling leases, forcing the federal government to restart the planning process.

Will California’s Brand As The Denizen Of Green Energy Be Tarnished By Allowing New Drilling In Its Coastal Areas? The Trump administration has decided once again to butt heads with the state of California. The issue now is not over vehicle fuel standards but rather, it is about drilling off-shore in public areas. The measure would give oil and gas producers access to 725,500 acres from central to northern California. The move is consistent with the president’s positions on increasing domestic oil and gas supplies. But it makes a stronger political statement than it does a practical one: while companies can apply for leases to drill, they must still overcome legal and regulatory hurdles. In other words, environmental groups will contest this in court even before any entity may try and get a permit to drill. And all that risks is topped by the fact that drilling is unproven in those waters. Moreover, “In California, we’re already well on our way to energy independence and we’re doing it in the smart way. This is 2019, not 1920. We don’t need to jeopardize our health or our environment to develop the energy sources we need,” California’s Attorney General Xavier Becerra said. Specifically, the Department of Interior’s Bureau of Land Management said on Friday that up to 37 new oil and gas leases will be developed over 20 years in the contested region. The move would end a six-year moratorium that began in 2013 when a federal judge ruled that the fossil fuel companies had not given adequate attention to the environmental impact from hydraulic fracturing. In May 2019, though, the bureau completed its examination and concluded that any future drilling would be both safe and wildlife-friendly. It emphasized that its decision does not authorize any production – just the ability to apply for leases. The bureau also said that 3,000 jobs and $620 million in tax revenue could be generated from allowing drilling off the coast of central California.

Northwest fight creates ‘big fear’ in U.S. oil industry — Oil companies and several states are pressing federal officials to overturn a Washington state law aimed at improving the safety of crude shipped by rail, saying it could create chaos in the nation’s transportation system and affect other industries. But environmentalists say the law is critical for preventing fires and deadly explosions.

Elizabeth Warren’s Fracking Proposal Has Shale Investors Weighing E&P Risk – The prospect of Elizabeth Warren becoming the 2020 Democratic presidential nominee, or the 46th president of the U.S., has energy investors worrying about risks to hydraulic fracturing. “What happens if Elizabeth Warren becomes president and bans fraccing?” was the most common question Sanford C. Bernstein received during recent marketing, analysts led by Bob Brackett said in note Tuesday. They don’t currently have a good answer. Concern on Wall Street has been rising along with Warren’s poll numbers, with sectors such as financials, health care and industrials as well as energy identified among those at risk from her policy proposals. In early September, Warren tweeted that she would ban fracking “everywhere” if she becomes president: The former part of Warren’s plan would have a modest longer-term impact given the “mature state” of areas such as onshore Alaska or the federal Gulf of Mexico, according to Bernstein. However, a fracking ban would offer “much more immediate consequences,” and be “incredibly bullish for both global oil prices and U.S. natural gas prices.” Federal leasing changes could have the most impact on shale drillers such as EOG Resources Inc. and Devon Energy Corp., Brackett said. Kosmos Energy, Hess Corp., Apache Corp. and ConocoPhillips may have little to worry about from a fracking ban, however. Still, any impact from a Warren win may be short-lived. “We have a government with checks and balances,” Brackett noted, pointing to processes which have caused executive orders to be moderated. He also highlighted the ability of E&Ps to re-allocate capital to mitigate effects. And, as RBC Capital Markets wrote earlier this week, most of the sectors seen to be at high risk “are already deeply undervalued versus the broader market.”

Capital Flight Is Killing The US Shale Boom – The growth in U.S. shale production is grinding to a halt as low prices put drillers in a financial vice.The slowdown has been unfolding for much of 2019, but the latest slide in oil prices is another blow to cash-strapped companies. Share prices for many E&Ps are down sharply. For instance, Devon Energy’s stock is down 20 percent since mid-September; EOG Resources is off by 17 percent and Pioneer Natural Resources is down by more than 13 percent. Many other companies have seen similar declines.Rig counts have fallen by 20 percent since last year, drilling is down, hotel rates are down, and employment is in decline. “If you can’t wring out any costs savings then you’ve got to buy less stuff if you want to get your costs down, and that’s the phase we’re entering into,” Jesse Thompson, senior business economist at the Houston branch of the Federal Reserve Bank of Dallas, told Bloomberg.As Bloomberg noted, annualized employment grew only 0.7 percent through August, compared to 11.4 percent for the same period in 2018. The unemployment rate has ticked up from 2 to 2.3 percent. The number of fracking crews has fallen to its lowest level in 30 months.For embattled shale drillers, there is another imminent hurdle that they must clear. For the first time since 2016, Permian shale drillers could see their access to borrowing slashed. Lenders periodically reassess the borrowing base that they offer to oil and gas producers, a so-called “credit redetermination” period. According to a survey of financial institutions as well as oil and gas firms by law firm Haynes and Boone, the industry is set to see “a decrease in credit availability for producers and a strong interest in alternative sources of capital.”In other words, lenders are turning o ff the spigots.

Will the Fracking Revolution Peak Before Ever Making Money? – This week, the Wall Street Journal highlighted that the U.S. oil and gas shale industry, already struggling financially, is now facing “core operational issues.” That should be a truly frightening prospect for investors in American fracking operations, but one which DeSmog has long been warning of. This one line from the Journal sums up the problems: “Unlike several years ago, when shale production fell due to a global price collapse, the slowdown this year is driven partly by core operational issues, including wells producing less than expected after being drilled too close to one another, and sweet spots running out sooner than anticipated.” As we have reported at DeSmog over the last year and a half, the shale oil and gas industry, which has driven the recent boom in American oil and gas production, has been on a more than decade-long money-losing streak, with estimated losses of approximately a quarter trillion dollars. Those losses have continued in 2019. This failure to generate profits led to the Financial Times recently reporting that shale investors are having a “crisis of faith” and turning away from U.S. oil and gas investments. That’s been bad news for frackers because the entire so-called “shale revolution” was fueled by massive borrowing, and these companies are increasingly declaring bankruptcy, unable to pay back what they borrowed because they haven’t been turning a profit. Scott Forbes, a vice president with leading energy industry research firm Wood Mackenzie, also has noted the structural problems in the finances of the fracking industry, referring to the current business model as “unsustainable.” When DeSmog first began reporting on the failed finances of the fracking industry, publications like the Wall Street Journal were writing about the optimistic financial future for shale companies. A year and a half later, that optimism has died. But all of these dynamics played out before the industry ran up against “core operational issues.” Over the last 10 years, the fracking industry has made impressive gains with technological improvements that have resulted in lower costs and higher performing wells. But despite these improvements, shale companies have failed to be profitable, and two years ago, industry analysts at Wood MacKenzie were warning about the limits of technology in overcoming geology. More recently, the industry’s attempts to extract more oil and gas out of the shale – dubbed Fracking 2.0 by the Wall Street Journal – have flopped. Even the longest drilled wells have not made money, indicating a limit to optimal well length. Likewise, attempts to drill many wells in the same area – so-called cube development – haven’t been the financial savior the industry needs either.

TD raises fracking concerns in Port of Cork’s deal with US firm for LNG imports – The Port of Cork says there is “a lot of groundwork to complete” when it comes to finalising a deal to import gas through Cork harbour. In 2017, the port signed a memorandum of understanding with US company Next Decade and its partners to explore a joint development opportunity for a new Floating Storage Regasification Unit (FSRU) and associated liquefied natural gas (LNG) import terminal infrastructure in Ireland. The LNG would be sourced from Next Decade’s proposed Rio Grande LNG export facility at the Port of Brownsville in South Texas. Announcing the deal in 2017, the Port of Cork said it would provide “a source of competitively-priced energy to Ireland and its partners”. Last week, the Government was accused of hypocrisy as it backed proposals for a Kerry-based Liquefied Natural Gas (LNG) import terminal that would, if approved, facilitate the import of fracked gas from the United States. It came just a short time after the country introduced a domestic ban on gas fracking. Cork North-Central TD, Mick Barry, has raised further concerns about existing agreements, specifically raising the matter of the Port of Cork’s deal with Next Decade. The Solidarity TD said: “People in Cork have a particular interest in this issue. The privatised Port of Cork has signed a Memorandum of Understanding with a US company to explore the question of importation of LNG from the US to Cork.

Equinor starts production at giant Johan Sverdrup oilfield (Reuters) – Oil and gas firm Equinor has started production at its giant Johan Sverdrup oilfield in the North Sea, the largest offshore development in Norway since the 1980s, the Norwegian company said on Saturday. The Phase 1 development of the 2.7 billion barrels of oil equivalents field is expected to reach plateau production of 440,000 barrels of oil equivalents per day (boepd) during the summer of 2020, the company added in a statement. Sverdrup is expected to reach its full output of 660,000 boepd when its Phase 2 development is put on stream at the end of 2022. “At peak, this field will account for around one third of all oil production in Norway and deliver very valuable barrels with record low emissions,” said Eldar Sætre, president and chief executive of Equinor. Equinor has previously said it expected cash flow from operations of around $50 a barrel in 2020, based on a real oil price of $70 a barrel, partly as a result of the phasing of tax payments in the ramp-up phase. Equinor’s Chief Financial Officer Lars Christian Bacher told Reuters in September that Sverdrup, with expected operating costs below $2 a barrel, was “probably the best oilfield development in the world”.

Pipelines From Russia Cross Political Lines – The New York Times – President Trump said “it really makes Germany a hostage to Russia.” Senator Ted Cruz, Republican of Texas, said it would encourage Russian “military adventurism.” Radoslaw Sikorski, the former Polish defense minister, compared it to the infamous 1939 Molotov-Ribbentrop Pact that allied the Nazis with Stalin’s Soviet Union.That seems like a lot of heavy breathing for a pair of natural gas pipelines known as Nord Stream 2, which follow the route and would double the capacity of an existing pair of pipelines, Nord Stream, which started working in 2011 and are running at full capacity.The pipelines run from Russia directly under the Baltic Sea to Germany, bypassing Poland and Ukraine and denying those countries some transit fees. Gazprom, which is majority owned by the Russian government, owns 51 percent of Nord Stream 1 and all of Nord Stream 2 AG, which is developing and will operate the new pipelines.Critics, including those from the United States, which would like to sell Europe more liquefied natural gas, say they are not simply concerned that Germany will become too dependent on Russian gas as it weans itself from nuclear power and coal. They also fear that Russia’s larger intention is to starve Ukraine of an important chunk of income. Russia is waging a kind of war in the eastern part of Ukraine after annexing Crimea in 2014.So the play of politics and geopolitics is as much a part of the Nord Stream story as any argument made about economics, climate change or the diversity of European energy supplies. “Nord Stream is politically sensitive because it fractures Europe strategically between the interests of Germany and the interests of everyone else,” said Kristine Berzina, a senior fellow at the German Marshall Fund in Brussels. “That creates a lot of mistrust and tensions with Poland and Ukraine.”While Mr. Trump and Mr. Cruz have threatened to impose economic sanctions on companies involved in building Nord Stream 2, the project is likely to be completed close to schedule early next year. More than 2,000 kilometers (about 1,240 miles) out of a total of about 2,400 kilometers of pipe have already been laid, according to Sebastian Sass, who represents Nord Stream 2 AG, the pipeline company, to the European Union.

India’s Reliance to resume Venezuela oil loadings after four-month pause – (Reuters) – Indian refiner Reliance Industries Ltd (RELI.NS) is scheduled to resume loading Venezuelan crude in October after a four-month pause, according to sources and internal documents from PDVSA seen by Reuters, a move that could help Venezuela’s state-run company drain its large oil inventories. The United States in January imposed the toughest sanctions yet on Venezuela’s oil industry, depriving the OPEC member of the main destination for its crude exports. In August, Washington added to the sanctions pressure by threatening non-U.S. companies with punitive action if they “materially assist” Venezuelan President Nicolas Maduro’s government. The measures have scared away several of PDVSA’s largest customers and tanker operators, causing a fast accumulation of unsold crude that forced the Venezuelan company last month to reduce output. A Reliance representative said on Wednesday it has been supplying Venezuela with fuels permitted under U.S. sanctions, including diesel, and thus it “is able to recommence crude sourcing” in exchange for the refined products. “These are actions compliant to U.S. sanctions as crude sourcing against supply of permitted products is allowed,” the representative said in a email to Reuters.

Petrobras removes 133 tonnes of oil from Brazils beaches (Reuters) – State-run oil company Petroleo Brasileiro has collected 133 tonnes of oil along Brazil’s northeastern shoreline, Chief Executive Roberto Castello Branco said on Tuesday, in an unexplained mystery he said was worrying. Speaking with lawmakers, he said the company had not identified any of its own oil in its analyses. He also said that, in order to maintain stable production, Petrobras, as the company is known, needed new reserves of 1 billion barrels per year, at a cost of $3 billion.

Petrobras says Brazilian beaches polluted by Venezuelan oil – Xinhua | English.news.cn: (Xinhua) — Brazil’s state-controlled oil and gas giant Petrobras has concluded that the oil polluting over 100 beaches in Brazil’s northeastern coast originates from Venezuela, said local media on Tuesday. After a one-month analysis of samples from the oil, Petrobras found that the oil is not of any type produced, transported or sold in Brazil, but a blend of Venezuelan oil. Petrobras CEO Roberto Castello Branco called the oil spill “something extraordinary,” ruling out a tanker cleaning operation as the possible cause due to the amount of crude collected. Brazilian President Jair Bolsonaro said on Monday that there is a country “in the government’s radar” as the probable origin of the oil, but did not specify the name of the country. Earlier on Tuesday, he reaffirmed his stance but still did not name Venezuela or any other country as the source. Within a month, 140 beaches in northeastern Brazil were affected by an oil spill. Brazilian authorities have collected over 100 tons of oil from the beaches, and investigated ships recently passing Brazil’s northeastern coast.

Colombia Trasandino pipeline damaged in bombing (Reuters) – Colombia’s Trasandino pipeline was damaged in a bomb attack, state-run oil company Ecopetrol (ECO.CN) said on Saturday, spilling crude into a nearby river. The attack took place in Orito municipality in Putumayo province, the company said in a statement. The pipeline was not functioning at the time of the attack, which affected the Guamues River, Ecopetrol said. It is the nineteenth attack this year on the Trasandino. Although Ecopetrol did not name the group responsible for the attack, the leftist National Liberation Army (ELN) rebels, considered a terrorist organization by the United States and the European Union, regularly bomb oil infrastructure.

Oil pipeline attacked in Colombia, Guamues River contaminated — An attack on the Transandino pipeline in Colombia has caused an oil spill that is contaminating the Guamues River, Colombia’s oil giant Ecopetrol has announced. According to the company, the attack was carried out at around 1:39 pm local time (18:39 GMT) on Saturday, in the municipality of Orito, in Colombia’s Department of Putumayo. “The attack caused a rupture of the pipeline and oil spill in the sector, which affected the Guamues River,” Ecopetrol said in a statement, released on Twitter. The company has notified the local Risk and Disaster Management authorities and is taking emergency measures to prevent a further contamination of the environment. Ecopetrol did not say who was behind the attack. According to the company, the Transandino pipeline has come under 19 attacks this year.

Ecuador’s Petroamazonas suspends operations at three oilfields amid protests (Reuters) – Ecuadorean state-run oil company Petroamazonas EP suspended operations at three oil fields in the Amazon region on Monday, the country’s energy ministry said, as protests against austerity measures convulse the country. Taken together, the suspensions could reduce crude output by 59,450 barrels per day (bpd) if not lifted, the ministry said in a statement posted on Twitter. It added that the suspension took place after the fields were “taken” by “individuals not affiliated with the operation,” without providing any details. “At the moment no staff have been retained, as those responsible for each field are maintaining conversations with the people in a peaceful manner,” the statement read. A removal of fuel subsidies by market-friendly President Lenin Moreno has sparked the Andean country’s worst unrest in years, with 477 people arrested in five days of protests and thousands of indigenous demonstrators marching toward the capital Quito from the countryside. At the Sacha field, Petroamazonas shut wells because it was unable to transport crude, which the ministry said would result in a loss of 45,600 bpd. The company also shut wells at several locations in the Auca field in Orellana province, and closed down a power generation facility at the Libertador field.

Oil Thieves Cause Fire On Nigerian Oil Block – A fire has broken out on an oil lease in the southeastern state of Imo in Nigeria, during what preliminary investigation believes to be illegal bunkering activity by thieves, Nigerian media reported on Friday. The Nigerian Petroleum Development Company Limited (NPDC), the upstream unit of the Nigerian National Petroleum Corporation (NNPC), has reported a fire at its Oil Mining Lease (OML) 20 in the state of IMO, NNPC said on Friday, as carried by the news outlet This Day. According to the preliminary investigation, illegal oil theft has caused a spark that ignited the fire in the oil block, Mansur Sambo, the Managing Director of NPDC, said in statement. The fire has been put out, NPDC said. Neither NNPC nor NPDC disclosed how much oil has been leaked or stolen and whether there have been shut-ins of oil production on the oil lease as a result of this incident. Earlier this week, NNPC raised the alarm that oil pipeline vandalism in Nigeria is soaring, with the number of incidents of breached pipelines surging by 115 percent in July compared to June. Pipeline vandalism, as well as pipeline sabotages by militants in Nigeria’s oil-rich Niger Delta area, has plagued Nigeria’s oil production and exports for years. Over the past year and a half, militant activity has subsided, allowing Nigeria to boost its crude oil production, and also making Africa’s largest oil producer a full-fledged participant in the production cuts of the OPEC+ coalition. But since it became part of the pact in January 2019, Nigeria has been one of the largest overproducers and non-compliant OPEC members in the deal.

S.Sudan warns of more oil spills after pipeline rupture – South Sudan’s petroleum ministry warned Monday of more oil spills from poorly maintained facilities, after a pipeline leaked 2,000 barrels of oil in the north of the country.Activists have long warned of the consequences to residents and the environment fromoil spills in the area, where facilities have been battered by war and some lay dormant for years until a peace deal was signed in 2018.Petroleum Minister Awou Daniel Chuang told journalists that 2,000 barrels of oil had leaked two weeks ago from a pipeline in the Unity Oil Fields, managed by a consortium of Chinese, Malaysian, Indian and local oil companies.He said the leak had been contained and “what is left for us now to clean is the soil in that area.””Of course we know that the production has been down for the last five years and the pipeline was empty and probably was filled with water (that) can expedite the process of corrosion within the pipeline,” said Chuang.”That is why we will all suspect that ruptures will happen from time to time…” he added.The area in question is remote and the extent of the spill difficult to verify.While the minister mentioned only an area of 400 square metres was impacted, local officials told AFP a river used by residents of three counties has been heavily polluted.”It affected all three counties of greater Rubkona that is Gwit East Rubkona, Budang County, and Bentiu and the oil has polluted the main river,” said regional lawmaker Gabriel Tap.Gatiek Both, the commissioner of Budang county, confirmed steps have been taken to control the leak leakage but said the impact was devastating.”This spill is badly affecting the area. Trees and the grass are dying and fish and some animals because it is rainy here, the water washes the oil into water sources where there are fish and animals.”

OPEC crude output plunges on Saudi attacks, sanctions — OPEC’s crude production in September registered its steepest month-on-month fall in almost 17 years, according to an S&P Global Platts survey. Attacks on Saudi Arabia’s Abqaiq processing facility and Khurais field caused its crude output to plummet to 8.45 million b/d in September, which, combined with the effects of US sanctions on Iran and Venezuela, caused OPEC production to tumble to 28.45 million b/d, according to the survey. That is a 1.48 million b/d fall from August, the largest month-on-month shrinkage for the producer group since a Venezuelan strike in December 2002 caused much of state-owned oil company PDVSA’s operations to grind to a halt. The September figure, which measures production at the wellhead, is also OPEC’s lowest since May 2009, which came five months after the organization agreed at an extraordinary meeting to implement its deepest output cuts to shore up cratering oil prices due to the global financial crisis. OPEC is almost three years into its latest commitment to cut production — forged with Russia and nine other non-OPEC allies. Though Saudi Arabia, as the group’s de-facto leader, has in most months voluntarily slashed its output more than it pledged to, the attacks on September 14 caused the biggest involuntary outage in its history and brought its production down to its lowest since January 2011, according to Platts survey archives. As a result, compliance among the 11 OPEC members with quotas under the 1.2 million b/d OPEC/non-OPEC production cut accord, which runs through March 2020, surged to 308%. Saudi officials have sought to reassure the market in recent days its production has now been restored to pre-attack levels of around 9.9 million b/d, but the initial aftermath took some 5.7 million b/d of output capacity offline, forcing the kingdom to draw on its considerable oil inventories to keep customers supplied. With the repairs at the Abqaiq crude processing facility — the world’s largest — expected to take months, Saudi Arabia has already begun to inform customers that some cargoes of Arab Light and Arab Extra Light may be substituted with lower value grades of Arab Medium and Arab Heavy. The kingdom has blamed the attacks on Iran, which has denied involvement. Iran has threatened crude flows through the Persian Gulf in retaliation for harsh US sanctions — backed by Saudi Arabia — that have crippled its oil exports.

OPEC Oil Production Drops After Attacks On Saudi Installations – The OPEC oil cartel saw its crude production fall in September, mostly due to production falling in Saudi Arabia following attacks on its oil infrastructure, according to its monthly oil report released on Thursday.The Organization for the Petroleum Exporting Countries said its production fell to an average of 28.49 million barrels per day (mbd) in September, a drop of nearly 1.32 mbd, according to secondary sources. Production by Saudi Arabia, the cartel’s biggest producer and the world’s top exporter, fell by 1.28 mbd to just over 8.56 mbd.September 14 attacks on Saudi state-owned Aramco facilities in Abqaiq and Khurais initially halved the kingdom’s crude output and sent global energy markets into a tailspin. Abqaiq is the world’s largest oil processing facility and Khurais is a major oil field.The attacks were claimed by Yemen’s Huthi rebels. Saudi leads a military coalition against the Iran-backed Huthis, which have carried out dozens of cross-border drone and missile attacks on Saudi targets, including oil facilities.Washington has concluded that the strikes were launched from Iranian soil and that cruise missiles were used. Tehran denies its involvement.OPEC also once again trimmed its forecast for the growth in global oil demand, to 0.98 mbd from 1.02 mbd, although that was due to downward revisions to demand in the first half of the year.Also revised lower was demand for petrol and diesel in the United States. The cartel held its forecast for demand growth next year steady at 1.08 mbd.

OPEC Monthly Oil Market Report October 2019 — The OPEC Monthly Oil Market Report (MOMR) for October released Thursday provides OPEC’s outlook for crude oil market developments for the coming year with key developments impacting oil market trends in world oil demand and supply. MOMR Highlights:

• In 2019 world oil demand growth revised down marginally by 0.04 mb/d to 0.98 mb/d
• In 2020 world oil demand is forecast to grow by 1.08 mb/d, in line with last month’s projections.
• Non-OECD countries are projected to be the largest contributor to world oil demand growth
• Total world oil demand isanticipated to average 99.8 mb/d in 2019 and 100.88 mb/d in 2020.
• Non-OPEC oil supply growth forecast for 2019 revised down by 0.16 mb/d from the previous assessment to a level of 1.82 mb/d. This is due to downward revisions mainly in the US, as well as in Norway and the UK
• US oil supply growth has now been revised down to 1.67 mb/d y-o-y.
• 2020 non-OPEC supply forecast remains subject to many uncertainties including oil price levels, capital spending, infrastructure constraints, as well as drilling and completion activities, particularly in the US.
• In September, OPEC crude oil production decreased by 1,318 tb/d to average 28.49 mb/d, according to secondary sources.
• Demand for OPEC crude in 2019 was revised up by 0.1 mb/d from the previous report to stand at 30.7 mb/d, which is 0.9 mb/d lower than the 2018 level.
• Demand for OPEC crude in 2020 was also revised up by 0.2 mb/d from the previous report to stand at 29.6 mb/d, which is around 1.2 mb/d lower than the 2019 level

OPEC’s Largest ‘Overproducer’ Just Got Its Production Quota Raised Nigeria may face an easier task to finally fall in line with its share of the OPEC+ production cuts after OPEC has recently raised the African producer’s oil output ceiling. OPEC has raised the quota for Nigeria to 1.774 million bpd, three OPEC delegates familiar with the matter told Reuters.Until now, Nigeria’s cap as part of the deal was 1.685 million bpd.According to one of OPEC’s sources, the higher quota given to Nigeria is due to the fact that the cartel had not factored in the newly launched production from the Egina ultra deepwater field which Total started up at the beginning of the year, expecting to pump 200,000 bpd at peak output.Nigeria has argued that production from Egina is not part of the OPEC+ cuts. Africa’s largest oil producer was formally included in the OPEC+ production cuts and compliance tracking this January, after being exempt from those cuts in the previous two years because of militant violence that frequently crippled its oil production and exports. But since it became part of the deal, Nigeria has been one of the largest overproducers and non-compliant OPEC members in the deal. Nigerian overproduction has offset some of the cuts of its fellow OPEC members at a time when the oil market continues to be oversupplied with rising U.S. production and faltering oil demand growth.. Iraq and Nigeria – the two rogue members of OPEC that haven’t been complying with their share of the production cuts in recent months – pledged in September to fall within their respective caps while the cartel and its allies are trying to rebalance the oil market. Nigeria has promised to reduce its oil production by 57,000 bpd. Nigeria is ready to make the sacrifice and cut its oil production deeper if OPEC and allies decide in December that it is necessary to deepen the cuts, Nigerian Minister of State for Petroleum Resources, Timipre Sylva, told Bloomberg in an interview last week, vowing that Nigeria would fully comply with its share of the cuts from October.

Saudi Aramco says full oil production capacity will return by end of November – Saudi Arabia’s full oil production capacity will be recovered by the end of November, Saudi Aramco CEO Amin Nasser told CNBC on Wednesday. “By September we will be, in terms of production capacity, at 11.3 (million barrels per day), by end of November we will be at 12 million barrels per day (bdp), which is our maximum sustained capacity,” Nasser told CNBC’s Steve Sedgwick during the Oil & Money Conference in London. Saudi Arabia is the world’s largest exporter of oil. The OPEC kingpin has been pumping significantly below that 12 million bpd level as part of a coordinated agreement OPEC and non-OPEC producers to lower output and keep a floor under falling oil prices. Aramco’s revenues were not reduced in the wake of the attacks, Nasser noted, and put its October production figure at 9.9 million bpd. The CEO of the world’s largest oil company expressed his concern over an “absence of international resolve” against the perpetrators of September 14 drone and missile attacks on Aramco facilities that forced the company to shut down half of its production and sent crude prices up nearly 20%. “An absence of international resolve to take concrete action may embolden the attackers and indeed put the world’s energy security at greater risk,” Nasser said. The attacks had “no impact” on the planned public listing of the state oil giant, the CEO added, saying that if anything, they strengthened the company’s position with regard to the offering. The Saudi Aramco initial public offering (IPO), which has seen multiple delays since it was first suggested in 2016, would be the world’s largest. “We are ready whenever the shareholders decide it is the time to list,” Nasser said. Aramco is expected to file its IPO prospectus by the end of this month, according to reports.

China’s CNPC pulls out from $4.8 bil Iranian gas project – China’s CNPC has pulled out from Iran’s $4.8 billion South Pars gas project, Iran’s oil minister said on Sunday, after France’s Total abandoned the deal last year amid looming US sanctions on Tehran. Iran’s Petropars will now develop the Phase 11 of the gas project, which was signed in 2017. CNPC was supposed to take Total’s 50.1% stake in the project on top of its initial 30% share. “The phase 11 of South Pars gas field has been decided. Petropars alone will continue development of this phase,” Bijan Zanganeh was quoted as saying by the ministry’s Shana news service. “Yes, it has stepped aside,” Zanganeh said when asked if the Chinese company had pulled out of the project. Total left the project last year as the US re-imposed sanctions on Iran after Washington pulled out from a nuclear deal with Tehran. The project is aimed initially at meeting domestic gas demand, with potential for exports in later years. Production capacity is forecast at around 2 Bcf/d of gas, coming on stream in 2021. When fully operating, the scheme is also expected to deliver around 70,000 b/d of condensate. Zanganeh said that the Iranian contractor will install the first jacket in phase 11 by March in addition to a platform with gas extraction capacity of 500 MMcf/d. When asked why Iran had not abandoned the CNPC deal after Total’s pull-out, Zanganeh said: “We wanted to attract foreign investment for this phase. In addition, the pressure boosting platform was important for us and Petropars was due to learn the job alongside these companies.” Iran shares the giant offshore South Pars gas field with Qatar, where it is called the North Field.

Iranian oil exports hinge on US-China trade talks This week, should high-stakes negotiations between Beijing and the Trump administration fail to produce a breakthrough on trade, blacklisted Iran could stand to benefit from the decoupling.“The degree to which they [the Chinese] are willing to openly defy the US sanctions is a function of larger US-China trade issues,” said James Dorsey, a senior fellow at the S Rajaratnam School of International Studies and Middle East Center in Singapore. “The more the US and China move towards ‘decoupling’ – or less interdependence, greater self-reliance and ultimately, perhaps, separate economic worlds – the easier it gets to defy the sanctions.” The Trump administration broke with the Beijing-backed Iran nuclear accord in May of last year, granting six months notice before sanctions on Tehran’s petroleum sector would be reimposed for a goal of “zero” exports.Eight governments, including China – long Tehran’s chief oil customer, were granted temporary waivers to import Iranian oil. Those expired in May.Since then, Beijing has worked to circumvent the sanctions, first publicly via the state-owned Bank of Kunlun. Kunlun announced it would halt those transactions in December, but Iranian petroleum continues to reach Chinese ports. Iran’s supreme leader, Ayatollah Ali Khamenei, long expressed his lack of trust in the West, even as he begrudgingly accepted the brokering of the Joint Comprehensive Plan of Action in 2015.But last year, as major European companies like Total ran for the exits before the snap-back of US sanctions, Khamenei issued a stern directive.“The supreme leader directed the diplomats, the armed forces – all the branches of the Islamic Republic of Iran – that you must go and make our best relations with the East,” said Hesam Razavi, former senior international editor at Iran’s Tasnim news agency. Of all the eastern powers, from Moscow to Delhi, it is Beijing that is most critical to Iran’s ability to move its oil.

COSCO Dalian’s ships shut off tracers after U.S. sanctions announced (Reuters) – About one-third of the oil tankers owned by COSCO Shipping Tanker (Dalian) have shut off their ship-tracking transponders since the United States imposed sanctions on the company for allegedly shipping Iranian crude, shipping data showed. From Sept. 30 to Oct. 7, a total of 14 COSCO Dalian ships, six of which carry some oil, stopped sending location data from their automatic identification system (AIS), ship tracking data on Refinitiv Eikon showed. The U.S. imposed the sanctions on Sept. 25. The International Maritime Organization (IMO) requires AIS transceivers be fitted to commercial and passenger vessels for safety and transparency purposes. The devices can be turned off manually by a ship’s crew for legitimate reasons such as avoiding detection in piracy or high-risk zones. However, the transponders are often shut off to conceal a ship’s location when illicit activities occur. “It is becoming a cat-and-mouse game, with the U.S. ratcheting up the sanctions while the Iranians (and their Chinese or other buyers) find novel ways to circumvent these” including frequent ownership changes, complex corporate structures and shutting off the AIS transponders, said Bruno Vickers, the senior director for Asia at political risk group GPW in Singapore. “Turning off transponders is a tried and tested tactic that the Iranians have used before, creating a fleet of ghost ships that cannot be tracked. It’s not ideal for ship safety and undoubtedly there will be increased U.S. surveillance of suspect cargoes,” he said.

OPEC leaves 2020 oil-demand forecast unchanged, cuts 2019 view – The Organization of the Petroleum Exporting Countries in its monthly report on Thursday forecast world oil demand to grow by 980,000 barrels a day in 2019, down 4,000 barrels a day from its September estimate. OPEC, however, left its outlook for 2020 demand growth unchanged at 1.08 million barrels a day. OPEC sees total world oil demand averaging 99.8 million barrels a day in 2018 and 100.88 million barrels a day in 2020. OPEC, meanwhile, revised down its forecast for non-OPEC oil supply growth by 160,000 barrels day to 1.82 million barrels a day, mainly reflecting downward revisions for the U.S., as well as Norway and the U.K. For 2020, non-OPEC oil supply growth was revised down by 5,000 barrels a day to 2.2 million barrels a day year-over-year due to downward revisions for Kazakhstan and Russia.

Saudi Arabia confounds with September output figure – Saudi Arabia has told the Opec Secretariat that its crude production fell by 660,000 b/d last month to 9.13mn b/d, underlining its swift recovery from the 14 September drone and missile attacks on key oil infrastructure. The average estimate from secondary sources, including Argus, pegged Saudi output at 8.56mn b/d in September. Argus’ estimate was 8.4mn b/d. The divergence between Saudi Arabia’s self-reported figure and secondary sources is unusually wide in Opec’s latest Monthly Oil Market Report (MOMR). Opec’s previous 12 MOMRs have shown a much closer correlation, with the average secondary sources’ estimates of Saudi production ranging from 99.1pc to 100.3pc of the official figure. For September, the secondary sources were at 93.8pc of the Saudi direct communication. State-owned Saudi Aramco chief executive Amin Nasser admitted yesterday that the pace of the output recovery “surprised many” and that “optimum flexibility and fail-safe redundancy built in… proved essential”. The mid-September air strikes on the Abqaiq processing plant and the 1.45mn b/d Khurais field briefly shut in 5.7mn b/d of production. Saudi Arabia said its crude production capacity has reached 11.3mn b/d and that it is on track to hit pre-attack levels of 12mn b/d by the end of November. “Considering the progress so far we might even beat that target”, Nasser said. Beyond the Saudi production number, Opec’s latest MOMR has little in the way of surprise revisions, although there is a notable 160,000 b/d cut in the forecast for non-Opec supply growth for this year, to 1.82mn b/d. This is driven by a downward revision in the US. “A further slowdown in US oil production is likely as shale producers, under pressure from their investors, continue to cut spending, in particular for exploration and production and seem to be pacing their drilling plans for the rest of the year,” the MOMR said. Opec revised lower its forecast for non-Opec supply growth for next year, by 50,000 b/d from the previous report to 2.2mn b/d. It pared back its projection for global oil demand growth this year by 40,000 b/d from last month’s MOMR to 980,000 b/d, and kept its 2020 growth forecast unchanged at 1.08mn b/d. This would take average total demand above 100mn b/d. Opec now forecasts demand for its crude at 30.7mn b/d this year, around 100,000 b/d higher than last month’s MOMR. It revised up its forecast for call-on-Opec crude next year, by 200,000 b/d to 29.6mn b/d. Argus’ estimated total Opec production at an average of 29.9mn b/d in the first nine months of this year.

Nigeria lands higher oil output target in OPEC+ cut deal – (Reuters) – OPEC has granted Nigeria a higher oil output target under an OPEC-led deal to limit oil supply in a move unannounced by the group, following efforts by Africa’s largest exporter to tweak the agreement to accommodate its expanding oil industry. The country’s allocation was increased to 1.774 million barrels per day (bpd) from 1.685 million bpd at the last OPEC meeting in July, three OPEC delegates with knowledge of the matter said. “It’s happened,” one of the delegates said. “I’ve not heard of any other changes to the agreement.” The quota increase will mean Nigeria will see an improvement in its compliance with the supply cut accord, but it is still pumping more crude than the new target according to OPEC’s own figures and industry surveys. Nigeria’s petroleum ministry and OPEC did not immediately reply to a Reuters request for comment. Abuja has had a dismal record in delivering its share of the cut, overshooting by 400% in August according to the International Energy Agency. OPEC put Nigerian production at 1.866 million bpd in August – far above the new quota.

Hedge funds sell more oil as economic outlook worsens: Kemp (Reuters) – Hedge funds sold petroleum futures and options for the second week running as the post-attack bounce in oil prices evaporated and attention shifted to the deteriorating condition of the global economy. Hedge funds and other money managers sold the equivalent of 96 million barrels in the six most important futures and options contracts linked to oil prices in the week to Oct. 1, the largest reduction in nearly four months. Fund managers have sold a total of 111 million barrels in the two most recent weeks, reversing purchases of 144 million barrels in the two weeks before that, a period that included the attack on Saudi oil installations. If the attacks on oil processing facilities had a relatively modest and fleeting impact on oil prices and positions, it was entirely unwound in just a fortnight (https://tmsnrt.rs/2VlK8dx) . In the most recent week, portfolio managers sold NYMEX and ICE WTI (-64 million barrels), Brent (-17 million), U.S. gasoline (-6 million), U.S. heating oil (-5 million) and European gasoil (-4 million). Fund selling in NYMEX and ICE WTI was the highest in any one-week for more than two years, as managers abandoned expectations of a sustained post-attack spike in prices. After the sales, funds held a net long position across all six contracts amounting to 532 million barrels, essentially back to their position at the end of August and the start of September. If relatively passive structural long positions in crude are stripped out, the fund community’s dynamic net long position was just 41 million barrels, not much different from 8 million at the beginning of September. Concerns about the prospects for oil consumption are dominating the market rather than fears about output disruptions. Traders are becoming more pessimistic about the prospects for an early truce in the trade conflict between China and the United States – with mounting fears continued skirmishing will push both economies into recession. Political tensions look set to remain high throughout the remainder of 2019 and 2020 as the United States enters a bitter impeachment investigation and then a presidential election campaign. At the same time, global motor manufacturers are reporting weakening production and sales, depressing both global economic growth and oil consumption.

Bullish Oil Bets Hit 8-Month Low— As temperatures cool, so does enthusiasm for oil. With the end of the summer-driving period taking away a key factor supporting demand, hedge fund bets on a crude price rally in New York and London have plunged to the lowest in eight months, data released Friday show. Meanwhile, U.S. gasoline consumption is at its lowest since March. “We are heading into a seasonally weak demand period,” said Rob Haworth, who helps oversee $151 billion at U.S. Bank Wealth Management in Seattle. “The biggest driver is gasoline consumption.” The prospect of less crude being processed into fuel in the coming months comes amid mounting concern that global growth is slowing down, with the U.S. and China locked in a tit-for-tat trade war. West Texas Intermediate futures in New York and Brent crude in London have slumped more than 15% since an attack on Saudi premises sent prices surging in mid-September. The combined net-bullish position on both benchmarks, or the difference between wagers on a rally and bets on their rout, shrank 17% to 388,710 futures and options in the week ended Oct. 1, according to data from the U.S. Commodity Futures Trading Commission and ICE Futures Europe. That’s the least bullish since February. Further price declines may put Saudi Arabia and Russia in the tough position of weighing further production cuts that would compromise their market share. “Can they afford to cut more?” Haworth said. “That will be determined by prices.”

Oil prices up more than 1% as US-China trade talks loom, supply issues mount — Oil prices rose around $1 on Monday, buoyed by hopes of progress in U.S.-China trade talks and supported by challenges to supply facing major exporters. Brent crude rose 91 cents or 1.5% to $59.25 a barrel, while U.S. West Texas Intermediate (WTI) crude was at $53.73, up 92 cents or 1.7%. Both futures contracts ended last week with a more than 5% decline after dismal manufacturing data from the United States and China, with the trade row between the world’s top economies undermining global economic prospects. U.S. and Chinese officials meet in Washington on Oct. 10-11 in a fresh effort to work out a deal, which U.S. President Donald Trump said his administration had a “very good chance” of achieving. On the supply side, deadly anti-government unrest has gripped Iraq, the second-largest producer among the Organization of the Petroleum Exporting Countries. Iraq’s oil exports of 3.43 million barrels per day (bpd) from Basra terminals could be disrupted if instability lasts for weeks, Ayham Kamel, Eurasia Group’s practice head for Middle East and North Africa, said in a note. “Any oil production disruption would occur at a time when Saudi Arabia has lost a significant part of its energy system redundancies (spare capacity),” he said. The major Buzzard oil field in the British North Sea was also shut for pipe repair work, China’s CNOOC said on Friday, while Shell maintains force majeure remains on exports of Bonny Light crude in Nigeria. Still, Total’s giant Johan Sverdrup offshore oil field started up in the North Sea this month with a goal of achieving 440,000 bpd at peak production. Libya’s National Oil Corporation (NOC) said on Sunday it would close the Faregh oil field at Zueitina port for scheduled maintenance from Monday until Oct. 14. But analysts said the resumption in Saudi Arabian production after Sept. 14 attacks could undermine a price rally.

EIA cuts global oil demand expectations, lowers oil-price forecasts – The U.S. Energy Information Administration on Tuesday cut its growth expectations for global oil demand and lowered 2020 price forecasts on West Texas Intermediate and Brent crude oil prices. In its monthly energy outlook report, the government agency said it revised its expected global oil demand growth to 840,000 barrels per day this year, about 50,000 barrels per day lower than the September forecast. For 2020, it cut the oil demand growth estimate to 1.3 million barrels per day, down 100,000 barrels from the previous view. The EIA also forecast an average WTI price of $54.43 a barrel for 2020, down 3.7% from the forecast issued in September. For Brent, it cut its forecast by 3.3% to $59.93 for next year. U.S. domestic crude output, meanwhile, is forecast at 13.17 million barrels a day next year, down 0.5% from the previous view. November WTI crudeCLX19, -0.55% was down 63 cents, or 1.2%, at $52.12 a barrel. December Brentuk:lcoz19 lost 54 cents, or 0.9%, to $57.81.

Trade Talks Loom Over Oil – U.S.-China trade talks resume on October 10, a high stakes negotiation that leaves the global economy in the balance. Bloomberg reported that China is likely going to attempt to narrow the talks, removing any proposal of reforms to industrial policy and intellectual property. With the Trump administration on the backfoot due to a weakening economy and a mushrooming impeachment investigation, Beijing may believe it has the upper hand. That does not bode well for a trade breakthrough. Turning back on a longstanding partnership with Kurdish allies, President Trump said that Turkey was free to launch an invasion to sweep aside Kurdish fighters in Northern Syria. The move sparked a bipartisan rebuke, denouncing Trump for abandoning allies. CNCP has exited a $5 billion natural gas project in Iran due to pressure from U.S. sanctions. Iran had hoped that CNPC would take over from Total, which withdrew in the face of sanctions last year. The departure of CNPC is another blow to the Iranian economy. Secretary of Energy Rick Perry reportedly attempted to install two U.S. executives onto the board of Ukraine’s Naftogaz, sweeping him into the center of the impeachment inquiry in the United States. He has denied any involvement.. Saudi Arabia and Iran are tentativelyopening a diplomatic avenue to de-escalate tension, dramatically reducing the odds of a hot war. The New York Times reports that the Trump administration’s refusal to attack Iran led to the thaw, as Riyadh came to the conclusion that it cannot count on Washington. “The anti-Iran alliance is not just faltering, it’s crumbling,” Martin Indyk, a distinguished fellow at Council on Foreign Relations and a former senior diplomat, said Thursday on Twitter. “MBZ has struck his deal with Iran; MBS is not far behind.” While oil futures over the next few years remain subdued, a new report says that the market could tighten up significantly in the 2020s, cutting against a narrative of peak demand and oversupply. “[W]e are increasingly confident that failure of demand growth to crater, much less peak, constitutes the next big ‘surprise’ in the oil market,” Rapidan Energy said in a note. Spare capacity is “too low to cap prices, much less mitigate geopolitical risk.” The consultancy is skeptical of the mass adoption of EVs and says demand will continue to rise.

Oil falls slightly on concerns over US-China talks, weak demand signals – Oil prices fell slightly on Tuesday as Washington’s blacklisting of more Chinese companies dampened hopes for a trade deal between the two countries, although unrest in Iraq and Ecuador lent some support to crude prices. Both Brent crude and U.S. West Texas Intermediate crude had risen by more than 1% earlier in the day. Brent was down 45 cents, or 0.8%, at $57.90 a barrel and WTI was down 12 cents, or 0.2%, at $52.63. Investors are treading cautiously before U.S.-China trade talks in Washington on Thursday. Prospects for progress dimmed after U.S. President Donald Trump said a quick trade deal was unlikely. Washington is also moving ahead with discussions over possible restrictions on capital flows into China, with a focus on investments by U.S. government pension funds, Bloomberg reported. “The (energy) complex will be forced to focus more succinctly on global oil demand deterioration as it negotiates through the monthly series of Agency reports the rest of this week,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. “We are not ruling out a quick upward price reversal.” Oil prices were also pressured by weak economic data after U.S. producer prices fell unexpectedly in September, weighed down by lower costs of goods and services, which could give the Federal Reserve room to cut interest rates again this month. The U.S. Energy Information Administration (EIA) on Tuesday cut its 2020 world oil demand growth forecast by 100,000 barrels per day (bpd) to 1.30 million. International Monetary Fund Managing Director Kristalina Georgieva on Tuesday warned of a risk of complacency among countries. Without action to resolve trade conflicts and support growth, global economic deceleration could turn into “a more massive slowdown,” she said. “The market’s focus remains on trade tensions and oil demand concerns, ignoring the elevated geopolitical tensions in the Middle East and lower OPEC production in September,” said UBS oil analyst Giovanni Staunovo. “Growing recession risks have capped the upside of oil prices.”.

Oil eases on concerns over U.S.-China talks, weak demand signals (Reuters) – Oil prices slid on Tuesday as Washington’s blacklisting of more Chinese companies dampened hopes for a trade deal between the two countries, although unrest in Iraq and Ecuador lent some support to crude prices. Early in the session, both Brent crude LCOc1 and West Texas Intermediate (WTI) CLc1 rose more than 1%. But at settlement, Brent was down 11 cents, or 0.2% at $58.24 a barrel while WTI CLc1 fell 12 cents, or 0.2%, at $52.63. Prices extended losses slightly in post-settlement trade after American Petroleum Institute data showed U.S. crude inventories rose by 4.1 million barrels in the week ended Oct. 4, far surpassing the 1.4 million barrels analysts had forecast. Investors were cautious ahead of U.S.-China trade talks in Washington on Thursday. U.S. President Donald Trump said a quick trade deal was unlikely. Washington is moving ahead with discussions over possible restrictions on capital flows into China, with a focus on investments by U.S. government pension funds, Bloomberg reported. The U.S. Energy Information Administration (EIA) cut its 2020 world oil demand growth forecast by 100,000 barrels per day (bpd) to 1.30 million. The oil market “will be forced to focus more succinctly on global oil demand deterioration as it negotiates through the monthly series of agency reports the rest of this week,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. Oil prices were also pressured by an unexpected decline in U.S. producer prices in September, which could give the Federal Reserve room to cut interest rates again this month.

Oil prices extend slide to 3rd straight day, US-China trade doubts grow – Oil prices slipped for a third consecutive session on Wednesday as the prospect of the United States and China striking a trade deal in talks this week dimmed, raising uncertainties for global economic growth and oil demand. U.S. industry data showing a bigger-than-expected rise in stockpiles at the world’s top oil producer also depressed prices: Brent crude futures fell 27 cents, or 0.5%, to $57.97 a barrel by 0148 GMT, while U.S. West Texas Intermediate crude was at $52.38, down 25 cents or 0.5%. Negotiators from the world’s top two economies will meet in Washington on Thursday and Friday in the latest effort to hammer out a deal aimed at ending a long-running trade dispute that has slowed global economic growth. But tensions between the pair rose this week after the United States imposed visa restrictions on Chinese officials for the detention or abuse of Muslim minorities, while a row escalated over comments by a leading U.S. National Basketball Association official in support of protests in Hong Kong. The issues have set markets on a risk-aversion course, said Howie Lee, an economist with Singapore’s OCBC bank, even though the global oil market remains in a supply deficit which should in theory support prices at above $60 a barrel. “The market is just over-bearish at the moment, too focused on the demand side of the equation,” Lee said. That has even overshadowed the threat of losing at least a third of Ecuador’s oil supply amid anti-government protests in the member of the Organization of the Petroleum Exporting Countries that have seriously affected oil output. Ecuadorean state-run firm Petroamazonas estimates it could lose some 188,000 barrels per day (bpd), or more than a third of its crude production, due to unrest at its facilities. In the United States, meanwhile, crude stockpiles rose by 4.1 million barrels in the week ended Oct. 4 to 422 million, data from industry group the American Petroleum Institute showed on Tuesday. Analysts had expected an increase of 1.4 million barrels, a Reuters poll showed.

WTI Holds Overnight Gains After Record Crude Production, Big Product Draws –Oil prices extending gains from API’s reported big product draws overnight and hopes of progress in US-China talks: Market will also be looking out for impact of higher global freight rates on U.S. crude exports because of U.S. sanctions on Cosco, says Bob Yawger, director of the futures division at Mizuho Securities USA. “The tanker shortage has increased tanker rates by 100% in many cases, and hence prices out U.S. exports” But for now, all eyes (and algos) will be on inventory data. API

• Crude +4.13mm (+1.7mm exp)
• Cushing +1.24mm
• Gasoline -5.94mm
• Distillates -3.98mm

DOE:

• Crude +2.93mm (+1.7mm exp, +1.4mm whisper)
• Cushing +941k
• Gasoline -1.213mm (-900k exp)
• Distillates -3.943mm – biggest draw since March 2019

As refinery maintenance season starts, product inventories should remain subdued and distillates saw a notable inventory draw (the biggest since March) as the crude build came in lower than API reported (4th crude build in a row)… In fact, while crude inventories rose, almost all others fell.

Syria Fears Send Oil Prices Higher – Turkey’s military invasion into northeastern Syria has moved crude prices higher after this week’s trading failed to move WTI below the $52 per barrel mark. With a further Middle Eastern imbroglio looming, the list of geopolitical risks continues to increase – Iran’s occasional overtures towards the United States have been falling on deaf ears, while Venezuela seems to have no chance of sanctions being removed while Maduro is in place. Following a somewhat unexpected flareup, the global heavy sour shortage might witness a further aggravation as Ecuador struggles to placate its rioting populace, triggered by President Moreno’s move to end fuel subsidies – the situation is so bad that Moreno has already moved his administration out of the capital (Quito remains overruns by riots) into Guayaquil. Some 0.2mbpd of heavy sour will be gone from the global markets if Ecuador cannot regain control of its Petroamazonas oil subsidiary. Wednesday afternoon saw global benchmark Brent trading at $58.5-58.8 per barrel, whilst US benchmark was assessed around $53-53.2 per barrel. Chinese crude imports have dropped month-on-month to 9.92mbpd, down from 9.97mbpd in August 2019, on the back of an overall (much larger) Asian crude imports decrease. Aggregate Asian crude imports have suffered more from the Saudi production outage, reaching a 6-month low of 24.04mbpd in September, down 1.09mbpd month-on-month.

U.S. oil settles with a loss as Fed minutes raise economic worries, crude supplies rise a 4th week – U.S. oil futures settled slightly lower Wednesday, giving up earlier gains, as minutes from the Federal Reserve’s September meeting raised worries about the economy and government data revealed a fourth straight rise in domestic crude supplies.Prices had moved higher earlier in the trading session on the back of optimism over U.S.-China trade negotiations, and as the U.S. government also reported a fall in petroleum-product stocks.A news report said Beijing was open to a limited trade deal, but analysts noted that sentiment around the negotiations, with high-level talks set to resume in Washington on Thursday, has tended to swing sharply between optimism and negativity.West Texas Intermediate crude for November delivery on the New York Mercantile Exchange fell by 4 cents, or 0.08%, to settle at $52.59 a barrel on the New York Mercantile Exchange after trading as high as $53.74 during the session. December Brent crude BRNZ19, +2.03% added 8 cents, or 0.1%, to end at $58.32 a barrel on ICE Futures Europe. Prices for the U.S. benchmark turned lower right around the release of the minutes from the Federal Open Market Committee’s September meeting. The minutes showed that Fed officials were more worried about the U.S. economy. There was even talk about possible recession, with several Fed officials noting that the probability of a recession “had increased notably in recent months.” The minutes “reflected rising concern for global growth and suggested that geopolitical threats, uncertainties in business outlook and sustained weak investments could damp[en] income and consumption,”Manish Raj, chief financial officer at Velandera Energy Partners, told MarketWatch. “Concern for slowing consumption weighed in on already weak market sentiments in light of [the] EIA reported crude inventory build-up.” The Energy Information Administration reported that U.S. crude supplies climbed for a fourth week in a row, by 2.9 million barrels for the week ended Oct. 4. They were forecast to increase by 2.4 million barrels, according to analysts polled by S&P Global Platts. The American Petroleum Institute on Tuesday reported a rise of 4.1 million barrels, according to sources. “A drop in refining activity to the lowest level since mid-February has yielded a build to oil inventories, despite lowly net imports,” said Matt Smith, director of commodity research at ClipperData. “We are in the depths of fall maintenance, but both strong exports and weak imports have helped limit the build.”

Oil prices drop as hopes for US-China trade progress wilt – Oil prices fell on Thursday on concerns of lower fuel demand as talks this week between the United States and China, the world’s two largest oil users, are not expected to help end the trade war between them, adding to anxieties about the global economy. China, the world’s biggest oil importer, has lowered their expectations for talks on Thursday and Friday to end the 15-month-old trade dispute with the United States. U.S. President Donald Trump is set to raise the tariff rate on about $250 billion of Chinese goods to 30% from 25% on Oct. 15 if some signs of progress are not seen. The trade dispute between the world’s two largest economies has disrupted global supply chains and slowed the growth of both countries, limiting the growth of their fuel consumption. Global benchmark Brent crude futures fell 11 cents, or 0.2%, to $58.21 a barrel by 0354 GMT, while U.S. West Texas Intermediate (WTI) futures were down 11 cents, or 0.2%, at $52.48 per barrel. “Should U.S.-China trade negotiations take a turn for the worst, market pessimism will impose sharp negative pressures on oil prices, said Benjamin Lu, commodities analyst at Phillip Futures in Singapore. Prices were also weighed down by a report of rising stockpiles in the United States, which is also currently the world’s biggest oil producer. U.S. crude stocks rose 2.9 million barrels in the week to Oct. 4, the Energy Information Administration (EIA) said on Wednesday, more than double analysts’ expectations of an increase of 1.4 million barrels. Additionally, the Organization of the Petroleum Exporting Countries (OPEC) quietly adjusted its production pact to allow Nigeria to raise its output, adding more supply. OPEC granted Nigeria raised the quota to 1.774 million barrels per day (bpd) from 1.685 million bpd, three OPEC delegates with knowledge of the matter said. OPEC member Venezuela will also increase its exports despite U.S. economic sanctions that have curtailed shipments from the country. .

Oil prices steady as latest U.S.-China trade talks loom – (Reuters) – Oil prices rose on Thursday, buoyed by comments by the head of OPEC that the organization could take action to balance oil markets and will decide in December on supply for next year. Secretary-General Mohammad Barkindo did not specify whether the Organization of the Petroleum Exporting Countries would extend a pact to rein in production to stabilize prices, but the comments appeared to inspire hope in the market. “Barkindo was sending a signal that OPEC was serious about supporting prices,” said Phil Flynn, an analyst at Price Futures Group. “Between this and a possible China trade deal, the momentum has shifted.” Global benchmark Brent crude futures settled up 78 cents or 1.3% at $59.10 a barrel. In post-settlement trade, Brent extended gains to rise $1 on the day to $59.32 a barrel. U.S. West Texas Intermediate (WTI) futures were up 96 cents, or 1.8%, at $53.55 a barrel. A December meeting between OPEC plus allies including Russia would take “decisions that will set us on the path of heightened and sustained stability for 2020,” Barkindo said. “Barkindo’s comment reminds markets that if oil prices do not fall off a cliff over demand concerns, we could … see OPEC+ extend their production cuts throughout the majority of 2020,” said Edward Moya, senior market analyst at OANDA in New York. Separately, Saudi Arabia told OPEC its monthly oil output fell by 660,000 bpd in September after major attacks on its energy facilities, while OPEC lowered its 2020 forecast for non-OPEC supply growth.

Oil rises on hopes for deeper OPEC output cuts, US-China trade talks – Oil prices climbed early on Friday, building on gains in the previous session, after producer club OPEC hinted at making deeper cuts in supply while optimism was revived over talks between the United States and China to end their trade war. International benchmark Brent crude futures were at $59.26 a barrel by 0251 GMT, up 16 cents, or 0.3%, from their previous settlement. Brent settled up 1.3% at $59.10 a barrel on Thursday. U.S. West Texas Intermediate (WTI) crude futures rose 16 cents, also up 0.3%, from their last close to $53.71 per barrel. In the previous session, WTI settled 1.8% higher at $53.55 a barrel. On Thursday Mohammad Barkindo, Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), said all options were on the table, including a deeper supply cut to balance oil markets. A decision would be taken at a December meeting between the OPEC and its partners, he said. OPEC lowered its 2019 global oil demand growth forecast to 0.98 million barrels per day (bpd), while leaving its 2020 demand growth estimate unchanged at 1.08 million bpd, according to OPEC’s monthly report. Beyond OPEC, trade talks between the United States and China also remained on the market’s radar as the world’s top two economies seek to resolve a more-than-a-year-long trade row that has slowed global economic growth and curbed fuel consumption. “Oil bought into the upbeat tone from the bilateral talks as well, for better or for worse, and was also boosted by fighting talk on prices by the OPEC secretary-general,” said Jeffrey Halley, a senior market analyst at OANDA in Singapore. Top U.S. and Chinese negotiators wrapped up the first of two days of scheduled trade talks on Thursday, with business groups expressing optimism that the two sides might be able to ease tensions and delay a U.S. tariff hike set for next week. “The United States is the largest global consumer of oil while China, the biggest driver of year-on-year oil demand growth,” said Stephen Innes, Asia Pacific market strategist at AxiTrader. “The most significant sentiment driver hinges on the outcome of the trade talks which, if (they) end on a positive note, could go along way to begin to repair the economic damage done … these economic powerhouses would need more oil,

Iran oil tanker hit by two missiles off Saudi coast: Iranian state media (Reuters) – An Iranian-owned oil tanker was struck by two missiles off the Saudi port of Jeddah on Friday, Iranian state television reported, quoting the National Iranian Oil Company (NIOC) which owns the vessel. The tanker was set ablaze and suffered heavy damage and was leaking crude about 60 miles (96 km) from Jeddah, according to Iranian media. The alleged attack is the latest incident involving oil tankers in the Red Sea and Gulf region, and is likely to ratchet up tensions between Iran and Saudi Arabia. The U.S. Navy’s Fifth Fleet, which operates in the region, said it was aware of media reports about the tanker, but did not have any further information at this time.

Explosion sets ablaze Iranian oil tanker off the coast of Saudi Arabia, Iranian state media says – An explosion damaged an Iranian oil tanker traveling through the Red Sea near Saudi Arabia on Friday, Iranian media reported. There was no immediate word from Saudi Arabia on the reported blast. State television said the explosion damaged two storerooms aboard the unnamed oil tanker and caused an oil leak into the Red Sea. It did not elaborate. The state-run IRNA news agency and others relied on an online news report for their stories, while the semi-official ISNA news agency quoted an anonymous source with direct knowledge of the incident. All reports said the reported explosion happened off the coast of Jiddah on the Red Sea. Lt. Pete Pagano, a spokesman for the U.S. Navy’s 5th Fleet overseeing the Mideast, said authorities there were “aware of reports of this incident,” but declined to comment further. The reported explosion comes after the U.S. has alleged that in past months Iran attacked oil tankers near the Strait of Hormuz, at the mouth of the Persian Gulf, something denied by Tehran. The explosion could push tensions between Iran and the U.S. even higher, more than a year after President Donald Trump unilaterally withdrew America from the nuclear deal and imposed sanctions now crushing Iran’s economy. The mysterious attacks on oil tankers near the Strait of Hormuz, Iran shooting down a U.S. military surveillance drone and other incidents across the wider Middle East followed Trump’s decision.

Oil rises 2% after reports of Iranian tanker attack – (Reuters) – Oil prices rose more than 2% on Friday after Iranian media said a state-owned oil tanker was attacked in the Red Sea near Saudi Arabia, while optimism surrounding the U.S.-China trade war lifted sentiment. Brent crude futures LCOc1 gained $1.41, or 2.4%, to settle at $60.51 a barrel. West Texas Intermediate (WTI) crude CLc1 futures rose $1.15, or 2.2%, to settle at $54.70 a barrel. The gains were tempered by the International Energy Agency’s forecast for weakened demand in 2020. Still, Brent and WTI were headed for their first weekly increases in three weeks. Brent rose 3.7% for the week, while WTI gained 3.6%. The Iranian Suezmax crude tanker was struck in the Red Sea off Saudi Arabia’s coast on Friday, Iranian media said, with various reports differing on the level of damage caused. The National Iranian Tanker Company (NITC) said the ship was damaged but stable and denied reports it had been set ablaze. “We estimate that the tanker event is worth about $1/bbl of risk premium that could easily be erased within a couple of sessions if no blame is assessed and no follow up incidents develop,” Jim Ritterbusch, president of oil trading advisory firm Ritterbusch and Associates, said in a note. Iranian oil exports are under U.S. sanctions that have diminished Iran’s impact on the global supply picture. Tensions in the Middle East have escalated in the wake of attacks on tankers and U.S. drones in the Strait of Hormuz, a key shipping artery for the global oil trade. The United States is sending more troops – potentially thousands – to Saudi Arabia in the wake of the attacks on Saudi Aramco facilities. It did not specify how those troops would be used. Both benchmarks recorded their biggest daily rise since Sept. 16, the first trading day after attacks on Saudi installations knocked out more than half of the kingdom’s crude output and temporarily pushed oil prices up by about 20%.

Oil up nearly 4% for week on reported progress in U.S.-China trade talks, rise in Middle East tensions – Oil prices climbed Friday to tally a weekly gain of nearly 4%, as reported progress in U.S.-China trade negotiations eased worries about energy demand, and news of an explosion on an Iranian tanker fed tensions in the Middle East, raising the potential for crude-output disruptions in the region.West Texas Intermediate crude for November delivery climbed $1.15, or 2.2%, to settle at $54.70 a barrel on the New York Mercantile Exchange – a two-week high – with the front-month contract ending 3.6% higher for the week.The global benchmark, December Brent crude added $1.41, or 2.4%, to $60.51 a barrel on ICE Futures Europe, for a weekly gain of 3.7%. Both benchmarks had posted losses in each of the previous two weeks in a row.The U.S. and China reached a tentative, partial agreement on Friday that may lead to a truce in the trade war, according to a Bloomberg News report, citing people familiar with the matter. Under the pact, China would agree to some agricultural concessions, while the U.S. would provide some tariff relief, the report said. The news provided an added boost to U.S. stocks, feeding risk-on sentiment that further fueled a rise in oil prices.Prices had already been moving higher on news of an explosion on an Iranian tanker, which sustained damages after being hit by missiles that were launched from the Saudi Arabian port of Jeddah, according to the state-run IRNA news agency, citing Iran’s National Iranian Tanker Co. The stricken vessel was identified as the Sabity, according to those reports. Reports of the Iran tanker blast come amid allegations that the country has been behind attacks in recent months on oil tankers close to the Strait of Hormuz, a well-known oil choke point. Officials in the U.S and Saudi Arabia believe Iran was behind a missile attack on Saudi oil facilities last month, though Tehran has denied involvement in any attacks.

Coalition airstrikes on Yemen decrease after Saudi positive signal at Houthi truce offer –(Xinhua) — Airstrikes by the Saudi-led coalition against Iran-allied Houthi rebels in Yemen have largely declined over the past three days, according to official reports from both sides on Sunday, just two weeks after the rebels offered a truce to the kingdom to end war. The number of coalition airstrikes have declined from an average of 40 each day in the previous weeks to nearly six during the past three days, the reports showed. There were no reports of casualties during the past three days. On Friday, Saudi Defense Minister Khalid bin Salman said on Twitter that “the truce that announced from Yemen is viewed positively by the kingdom, and that what the kingdom seeks.” The Houthis two weeks ago offered a truce initiative to Saudi Arabia, saying they were halting missiles and drone attacks against Saudi Arabia as a gesture of “good will” towards what the Houthis called “a comprehensive halt of war.” The offer came a week after the Sept. 14 missile-and-drone attack on the Saudi-owned largest oil producer Aramco that knocked out half of Saudi oil outputs. Riyadh blamed Iran for standing behind the attack, which Tehran denied. Saudi Arabia has been leading an Arab military coalition against Iran-allied Houthis in Yemen for more than four years in support of the exiled internationally-recognized government of Yemeni President Abd-Rabbu Mansour Hadi.

US To Send ‘Thousands’ More Troops To Saudi Arabia – Reuters reports, citing defense or administration sources, that the US is set to send thousands of additional troops to Saudi Arabia in the wake of last month’s Aramco attacks. “The United States is planning to send a large number of additional forces to Saudi Arabia following the Sept. 14 attack on its oil facilities, which Washington and Riyadh have blamed on Iran,” according to a breaking Reuters report. Though the Pentagon has yet to officially confirm the report with comment, Reuters noted the “sources did not specify exactly how many troops would be deployed but said it was expected to be in the thousands. And Bloomberg reports this could be as many as 1,800 new personnel, pending an official Pentagon statement:Defense Secretary Mark Esper is expected to announce a new deployment of U.S. forces to the Middle East as tensions rise over Turkey’s military operations in northern Syria and an explosion on an Iranian oil tanker. As many as 1,800 military personnel, including two air squadrons, are expected to be deployed to the region, including to Saudi Arabia, according to a defense official.Since last month the Pentagon has already deployed up to 3,000 troops to the kingdom in coordination with King Salman and crown prince MbS for “regional stability” and to counter Iran. Ironically this comes as Trump has promised to “slowly” get “out of the Middle East”. One journalist and MidEast analyst aptly questioned, “Is this to prop up the House of Saud internally, or warn off Iran?”

The Saudi Crown Prince’s Final Option – Since the emergence of MBS as a main power player in the Kingdom, the crown prince has been under fire from his ultra-conservative religious opponents inside Saudi Arabia. More recently, more liberal voices such as former minister of energy Khalid Al Falih have been criticizing some of the Crown Prince’s policies. MBS has responded emphatically to this dissent, first with the Ritz Project and then with the removal of Khalid Al Falih and several other major power players. The strategy currently being implemented is designed to support the long-awaited Aramco IPO, an event that MBS sees as solidifying his power in the Oil Kingdom. The consolidation of MBS’ power all seemed to be going to plan until the recent drone attacks on Abqaiq. The severity of these attacks seems not to be fully understood by media and analysts as most are still taking the word of Aramco and the Saudi minister of energy as gospel when it comes to the impact. To call the updates coming out of Saudi Arabia optimistic is an understatement, an attack of that size cannot be undone in a matter of days. And even if the damage done to Abqaiq is technically restored, and Saudi oil is flowing at the same rates as before, the world has changed. We now know that with a small amount of low intensity advanced weapon systems, the heart of the global oil sector can be significantly disrupted. Saudi Arabia’s pivotal position as the main stabilizer of the oil markets has been at best dented or, at worst, destroyed. No repair shop will be able to bring back the unquestioned confidence in Saudi Arabia as the eternal swing producer upon which the security of energy supply can depend. With less than 30 drones and cruise missiles, Saudi’s spare production capacity was removed from the market. And, contrary to what many analysts believe, it is yet to come back online The Iran-Saudi conflict has entered a new phase, with the real threat of a full-scale conflict. The situations in Iraq and Libya will also suffer from the instability created by this stand of. And despite this instability, Saudi Arabia’s important ally, the United States, has refused to be fully drawn into the conflict. The link between Trump and MBS appears to be weakening as the geopolitical pressure cranks up. Washington appears will to bark but not to bite when it comes to Iran’s actions against Saudi Arabia. U.S. analysts and policy makers don’t seem to understand that this stance not only weakens US influence in the region, but directly opens the doors for opposition to MBS inside of the Kingdom. A possible Aramco IPO presentation at FII2019, followed by a 1% listing at the Saudi Tadawul, would put MBS firmly back in the spotlight and weaken any opposition. With the current stalemate in the region, more than 4000 investment funds, sovereign wealth funds and corporations will be sitting in the conference halls of the Ritz, willing to hand over the much needed cash and multibillion projects to solidify MBS’ position. Open support for MBS will be in place very soon, with Russian president Vladimir Putin expected to head to Riyadh very soon. In stark contrast to the waning Trump-MBS friendship, Putin is openly a big supporter of the crown prince’s strategy and dreams. Russian sovereign wealth fund RDIF and others are flocking to Riyadh’s hotels as further evidence of Russian support. Moscow appears set to capitalize on Washington’s weak response to the recent attacks in Saudi Arabia, and MBS will be eager to take advantage. A closer Saudi-Russian relationship may end up helping to restrain Iran, as the Islamic Republic is heavily dependent on Moscow’s support.

Nearly 100 Protesters Dead as Calls Grow for Iraqi Government to Resign – As the death toll nears 100 people killed and with thousands injured in a week of intense demonstrations, the Iraqi government on Saturday announced the lifting of a curfew in Baghdad as calls came for it to resign.In the worst violence seen since the declared defeat of the Islamic State group in March, security forces fired live ammunition into crowds of people protesting across Iraq against corruption, unemployment and a lack of services. According to the government-backed Iraqi Human Rights Commission, at least 93 people have been killed so far, while nearly 4,000 people have been injured. Reuters reported police snipers shooting at protesters on Friday, escalating the death toll. Security sources have also accused gunmen of hiding among the demonstrators, while a number of police officers have been killed. Demonstrations have taken place in numerous regions across the country in the past week, including Baghdad, Basra, Nasiriya and Mosul. Concrete barriers have been erected in the capital Baghdad in areas where police clashed with protesters, a significant move in a period when many of the previous concrete barriers erected to prevent IS car bombings were being removed.The Iraqi government has also imposed a blackout by blocking internet access across the country. Prime Minister Adel Abdul Mahdi was set to convene an emergency meeting on Saturday to discuss the protesters’ demands. However, former prime minister Haider al-Abadi on Friday became the latest to join a chorus of voices calling on the government to resign. Abadi, whose own political career was torpedoed by his response to similar protests in Basra last year, also called for the “formation of a criminal court of corruption” and warned that the reforms demanded by protesters needed to be swiftly implemented. Influential Shia cleric Muqtada al-Sadr has also called for the resignation of the government, and called on his Sairoun parliamentary group, the largest group in the parliament, to suspend its activities. On Friday, the National Axis alliance, the largest Sunni parliamentary bloc, also announced the suspension of its parliamentary activities in response to the protests.

Death toll in Iraq protests tops 105 – Scattered protests continued on Sunday as a tense calm settled over much of Baghdad following five days of mass demonstrations that left at least 105 dead and more than 6,100 wounded as of early Sunday. These are the figures released by Iraq’s Interior Ministry, and the real number of casualties is no doubt far higher. A combination of police, soldiers, counter-terrorism operatives and militiamen have unleashed live ammunition, rubber bullets, tear gas and water cannon against unarmed demonstrators, in their great majority young unemployed workers and university graduates. As the protests grew larger, snipers were deployed on rooftops in the Iraqi capital to pick off demonstrators. Protesters arrested by security forces have been beaten and humiliated, while at least in one case, a young activist couple was shot to death by a masked death squad. By late Sunday night, another eight protesters were reportedly gunned down in eastern Baghdad’s impoverished Sadr City district, where Shia guerrillas battled US troops more than a decade ago. The intensity of the last five days of state violence is a direct manifestation of the crisis and instability of the regime headed by Abdul Mahdi, which has sought to rule by means of a sectarian appeal to Iraq’s Shia majority, while attempting to balance between Washington and Tehran. This government sits atop a social powder keg. Iraqi society has been ravaged by three decades of US wars, economic blockades and occupation, whose net effect has been the decimation of what was once the most advanced social infrastructure – including public education and healthcare as well as popular living standards – in the Middle East. What has replaced the authoritarian Ba’athist regime overthrown by the 2003 US invasion, with its leader Saddam Hussein put to death, was not the “democracy” promised by Washington, but a kleptocracy run by a collection of sectarian-based parties which came to power on the backs of American tanks. Abdul Mahdi is representative of this ruling clique, named finance minister in the first puppet government installed by the US occupation after a political career that saw him evolve from Ba’athism to the Stalinist Iraqi Communist Party, to the Islamic Supreme Council of Iraq (ISCI), a pro-Iranian exile militia, and finally Washington’s stooge. The mass uprising has centered in Baghdad and the heartland of the majority Shia population in southern Iraq, and its fury has been directed at both the government and the Shia sectarian parties.

Why Is Iraq Blowing Up Now? – Yes, Iraq. It has not made front page headlines with so much else going on, but over the last several days there has been an escalating series of protests against corruption in various parts of Iraq and culminating yesterday in Baghdad with one being met by soldiers firing openly upon the demonstarters with the result being about 104 dead and 6,100 wounded. The government of Adel Abdul al Mahdi appears in danger of facing a no confidence motion and falling as it has lost the support of fellow Shia leader al-Sadr, who has a large faction of supporters in the parliament and how apparently is supporting the demonstraters. Corruption has become an increasingly widespread problem around the world, so much so that we increasingly take it for granted and remain unimpressed by it. And we are tired of hearing about Iraq, a nation we made a mess of, are now mostly not much bothered with, and especially since it appears that ISIS has been largely defeated. Indeed, opposition to the deep government corruption there laid low while the war against ISIS was on. But now with its defeat, many want something done about it. The way to realize the scale of it is Iraqi oil production has finally seriously recovered from all these wars and is now up to about 4.5 million barrels per day. That makes it fourth in the world with a bit less than half of that the top three have: US, Russia, and Saudi Arabia. Of course, the US still consumes more than it produces. Other major producers, including many nations producing much less than Iraq, have large state funds accumulated from their oil export earnngs, and much of which is being used to fund many useful things in their respective nations. No such fund exists in Iraq and billions of dollars worth of earnings have simply disappeared. Nobody knows where it has gone to and is going to. The scale of this is truly immense; and when one stops to think about it, it becomes clear why there is such anger in Iraq now. The nation has suffered decades of repression and war and destruction. Peace has finally more or less arrived, and all this money is flowing in. But none of it seems to be being used to fix up all the messes. This is likely to get worse before it gets better.

Death Toll In Iraq Soars As Pro-Iran Gunmen Start ‘Shooting Protesters’ – Iraqi paramilitary groups close to Iran are suspected of joining attacks on protesters in Baghdad and other cities, leading to heavy loss of life among demonstrators. Some 107 people have been killed and over 6,000 wounded in the last six days, though hospital doctors say the government is understating the true number of fatalities.“The pro-Iranian militia have each taken a sector of Baghdad and are responsible for its security,” a source, who does not want his name published, told The Independent. He said that snipers belonging to these groups had fired live rounds at protesters, often aiming for the head or heart. Eyewitnesses say that Iraqi soldiers are also firing directly into crowds of the protesters, who are demanding the fall of the government, jobs and an end to corruption.The gunmen shooting protesters come from pro-Iranian factions of the Hashd al-Shaabi or Popular Mobilization Units, an 85,000-strong strong body that came into being to stop the Isis advance on Baghdad after the fall of Mosul in 2014. It is a coalition of about 30 groups, many of them predating Isis, which is paid for by the Iraqi government and nominally under its control, but with widely varying political loyalties. They includes powerful units, such as Ketaeb Hezbollah, which say opening that their first loyalty is to the Iranian leadership.The demonstrations in Baghdad and in much of Shia southern Iraq are largely spontaneous, but where there are local leaders they have sometimes been singled out for killing.Haider Karim Al-Saidi, a leading organiser of the protests, was shot dead by a sniper near Al-Mudhafar Square late on Sunday night. Earlier, witnesses had reported that they had seen snipers taking up positions on roof tops overlooking the square. Footage shows how snipers, allegedly belonging to Iran-backed militias, were targeting peaceful protesters in Baghdad in cold blood. Who holds these militias accountable for this heinous crime? #Iraq pic.twitter.com/nNobrvXoz7

US Troops Will Withdraw From Northeast Syria to Avoid Imminent Turkish Invasion – – In a surprise announcement late Sunday night, the White House Press Secretary released a statement that said, “Today, President Donald J. Trump spoke with President Recep Tayyip Erdogan of Turkey by telephone. Turkey will soon be moving forward with its long-planned operation in Northern Syria. The United States Armed Forces will not support or be involved in that operation, and the United States forces, having defeated the ISIS territorial “Caliphate,” will no longer be in the immediate area.”The statement does not make it clear if U.S. troops will fully withdraw from Syria or if they will just relocate. The statement also says, “Turkey will now be responsible for all ISIS fighters in the area captured over the past two years.” The U.S.-backed Syrian Democratic Forces (SDF) said on Saturday that it would “not hesitate to turn any unprovoked attack by Turkey into an all-out war” to defend the region of northeast Syria that it controls. The SDF responded to a threat by Turkish President Reccep Tayyip Erdogan, who said on Saturday that Turkey will soon launch an “air and ground military operation” in northeastern Syria and warned it could happen “as soon as today or tomorrow.” The SDF is led by the Syrian Kurdish Militia YPG, who the Turkish government considers to be a terrorist organization. In August, Turkey and the U.S. agreed to create a safe zone in Kurdish controlled Syria along the Turkish border to settle some two million Syrian refugees. Part of the deal was to clear the area of all the Kurdish fighters, which Erdogan complains the U.S. military has failed to do. Erdogan and President Trump also agreed to meet in Washington next month to discuss the issues with the safe zone in northeastern Syria. Washington has always hoped to avoid a military confrontation between Turkey and the YPG. The shortsighted policy of arming and backing an enemy of Turkey so close to their border was bound to have dangerous consequences.

Analysis: President Trump hands over northern Syria to Turkey – President Trump’s announcement to withdraw all U.S. forces from northern Syria came as a bombshell for the Syrian Democratic Forces who sacrificed many of their ranks on the bloody battlefields of northeast Syria, to defeat fanatical ISIS combatants prepared to fight to the last man and woman.The top Kurdish commander of U.S.-backed SDF forces, Mazlum Kobone, said himself that more than 11,000 of his soldiers were killed in the war against ISIS. The U.S. supplied essential aerial bombardments and logistical advice but it was the local fighters on the ground who bore the brunt of the bloodshed. The latest White House statement never once mentioned the contribution of those SDF combatants – the vast majority made up of Syrian-Kurdish YPG fighters — and took sole U.S. credit for defeating the ISIS territorial “Caliphate.” Now it appears the Trump administration is abandoning those Kurdish allies altogether, in favor of the Kurds’ nemesis, the Turkish government. Turkey has been fighting separatist Kurds across the border inside its own territory for decades, and in recent years has incurred several times into Syria to fight against Syrian Kurds. For Donald Trump to hand the fate of Syria’s Kurds over to their sworn enemy Turkey not only represents a major disservice to the people who did more to defeat ISIS in Syria than anyone else, but it also sends an ominous message to any group who would ever consider allying themselves to the United States in the future. The Kurds are not likely to roll over and accept this without a fight. Perhaps anticipating the White House move, YPG spokesman Mustafa Bali said just two days ago the SDF, “is committed to the security mechanism framework and has been taking necessary steps to preserve stability in the region. However we will not hesitate to turn any unprovoked attack by Turkey into an all-out war on the entire border to DEFEND ourselves and our people.”

Washington green lights Turkish attack on Kurdish forces in Syria – On Sunday night, in a major shift in US war policy, the White House gave a green light for a Turkish invasion of northern Syria. In doing so, it has abandoned to their fate Kurdish nationalist militias that have fought since 2015 as Washington’s main proxy force in the NATO war in Syria, and which the Turkish government denounces as terrorists to be bloodily suppressed. After Trump called Turkish President Recep Tayyip Erdoğan, the White House issued a statement at 11 p.m. Sunday declaring: “Turkey will soon be moving forward with its long-planned operation into Northern Syria. The United States Armed Forces will not support or be involved in the operation, and United States forces, having defeated the ISIS territorial ‘Caliphate,’ will no longer be in the immediate area.” Yesterday, as US troops withdrew from positions along the Turkish-Syrian border, Erdoğan said the Turkish attack could begin any time. “We made a decision,” he declared. “We said, ‘one night we could come suddenly.’ We continue with our determination… It is absolutely out of the question for us to further tolerate the threats from these terrorist groups.” Turkish armored vehicles patrol as they conduct a joint ground patrol with American forces in the so-called “safe zone” on the Syrian side of the border with Turkey, near the town of Tal Abyad, northeastern Syria, Friday, Oct.4, 2019. With US approval, the Turkish government is preparing a bloodbath against Kurdish forces in Syria. Washington and Ankara have agreed that Turkish troops are to control a zone in northern Syria 30 kilometers deep, along 480 km of the Turkish-Syrian border (19 miles by 300 miles). Ankara plans to forcibly resettle in this zone 1 to 2 million of the 3.6 million Syrian refugees who fled to Turkey during the eight-year NATO proxy war in Syria, and has threatened to pursue its offensive outside this zone if necessary. US troops are reportedly withdrawing from a 100 km stretch of the border from Tal Abyad to Ras al-Ain to allow Turkish troops to attack through this gap. However, the BBC reported that in light of Ankara’s threats of a broader invasion, “British and American special forces have for months been making preparations for a partial or full withdrawal from the area if the situation escalates.”

Erdogan’s Syria Invasion Begins: Turkish Jets Filmed Bombing Kurdish Targets – Erdogan’s promised Turkish military operation in northeast Syria has begun, as confirmed by regional media and video footage. On Monday night Turkish fighter jets commenced bombing the Semelka Border Crossing in far northeast Syria on the border with Iraq. Both Hezbollah-affiliated al-Mayadeen television channel and Israeli media are also reporting Turkish jets have attacked Kurdish targets in northern Syria. This as the US claimed to have effectively shut down Northern Syria airspace to Turkey, and while Russian jets have reportedly been observed patrolling southern Syria, presumably to ensure the Turkish incursion comes nowhere near Syrian Army positions. The Semelka crossing since 2016 acted as a key SDF supply point between Kurdistan Regional Government in Iraq and the Kurdish-led Autonomous Administration of North and East Syria. Turkey’s Anadolu Agency also reports Turkish officers have been expelled from the Joint Air Operations Center which was the heart of coordinated anti-ISIL activities among the allies, meaning US surveillance and reconnaissance data are no longer shared with Ankara. In northeast Syria a rapid US withdrawal from border observation posts at Tel Abyad and Ras al Ain has reportedly already occurred, paving the way for the imminent Turkish incursion. Citing Pentagon spokeswoman Carla Gleason, Anadolu noted, however: She stopped short of saying that the air space has been shut down to Turkey, but noted “if you’re not on the air tasking order, it’s really hard to coordinate flights in that area.” We might note that when it comes to the Kurds, Erdogan has never suffered qualms about having to “coordinate” his actions with allies. It appears Trump’s dire Twitter warning to “obliterate” Ankara’s economy, directed both at the Turks and at US hawks who accuse the president throwing Kurdish partner forces to the wolves, was ineffective, given by all indicators a Turkish aerial campaign has commenced.

10,000 ISIS Unleashed: Syrian Kurds Warn Of Mass Prison Break If Turkey Invades – Syria’s US-backed Kurdish militias are warning that over 10,000 jihadists, among these thousands of ISIS terrorists, could go free as a result Turkey’s ‘imminent’ invasion of northeast Syria. The numbers of ISIS terrorists unleashed in the wake of the Turkish military incursion could be the biggest since the height of the Islamic State caliphate’s existence, per Syrian Kurdish official statements reported by Fox News:Aside from the existential threat to the Kurdish fighters posed by Turkey, Syrian Kurdish forces are also warning that ISIS sleeper cells are actively plotting to free about 12,000 militants currently detained by the Kurds and may take advantage of the Turkey-triggered turmoil to aid their plans.Those in custody include about 2,500 foreign fighters from Europe and elsewhere whose native countries have been reluctant to take them back – and about 10,000 other captured fighters from Syria and Iraq.One major but relatively underreported fact is that over at least the past two years makeshift Kurdish/SDF prisons have held many of the region’s most dangerous terrorists with the Pentagon’s help. Kurdish forces have blamed Turkey for unleashing ISIS jihadists on northern Syria in the first place. Despite a US statement late Sunday saying that Turkey will now take custody of the thousands of militants after Washington announced it “will not support or be involved in the [Turkish] operation” and “will no longer be in the immediate area,” a rapid US withdrawal from border bases such as at Tel Abyad and Ras al Ain in northeast Syria (which has already happened at both locations), leaves the fate of ISIS prisoners in the area in question.

Syrian Kurds Say ‘Partnership’ With Assad Or Russia Likely If Turkey Invades -As we predicted in the wake of the White House’s late Sunday announcement that “Turkey will soon be moving forward with its long-planned operation into Northern Syria” and that American troops will withdraw from the “immediate area” – this will ensure that the United States’ Kurdish proxies in Syria, now in Erdogan’s cross hairs, will quickly do a deal with “the devil we know” – that is, come under the protection of Assad and the Syrian Army. On Monday the commander of the US trained and armed Syrian Democratic Forces (SDF), Mazlum Abdi, indicated just that in a bombshell statement. “We are considering a partnership with Syrian President Bashar al-Assad, with the aim of fighting Turkish forces,” he said. “This is one of the options we have on the table,” the top SDF commander added. In the statement he further called on the American people to put pressure on President Donald Trump to stay the course in northeast Syria. No doubt this is sure to get the immediate attention of the top Pentagon brass, given current and former defense officials (in both the Obama and Trump administrations) have routinely said that among US goals in Syria is ensuring Syria’s Kurdish militias do not seek rapprochement with Damascus. In most places were the Kurdish YPG/SDF are dominant, they simply inherited control of territory which the Syrian Army had in 2013 and 2014 rapidly withdrew from amid an intense al-Qaeda/ISIS onslaught. Thus throughout the war in many local areas along the Euphrates Kurdish and pro-Assad forces have entered into pragmatic and tacit cooperation, despite being official “enemies” based on Kurdish-US partnership. Of the possible looming US troops withdrawal, or at least a withdraw from crucial border posts in the north, Abdi said in an interview with NBC News: “Frankly, this makes us disappointed. The decision harms Syrian trust in the United States and the credibility of the United States.”

Turkey opens ground assault on Syria’s Kurds; U.S. Republicans turn on Trump (Reuters) – Turkish troops and their Syrian rebel allies attacked Kurdish militia in northeast Syria on Wednesday, pounding them with air strikes and artillery before starting a cross-border ground operation that could transform an eight-year-old war. The assault began days after U.S. President Donald Trump pulled American troops out of the way, prompting denunciations from senior members of his own Republican Party who say he abandoned the Syrian Kurds, loyal allies of Washington. “The Turkish Armed Forces and the Syrian National Army have launched the land operation into the east of the Euphrates river as part of the Operation Peace Spring,” the Turkish defense ministry tweeted after nightfall, following a day of pounding the area from the air. Turkish media reported troops entering Syria at four points, two of them close to the Syrian town of Tel Abyad and two close to Ras al Ain further east. Turkey told the United Nations Security Council in a letter seen by Reuters that its military operation would be “proportionate, measured and responsible.” The 15-member body will meet on Thursday to discuss Syria at the request of the five European members, Britain, France, Germany, Belgium and Poland. Thousands of people fled Ras al Ain toward Hasaka province, held by the Kurdish-led Syrian Democratic Forces (SDF). The Turkish air strikes killed at least five civilians and three fighters from the SDF and wounded dozens of civilians, the SDF said. Reuters journalists at Akcakale on the Turkish side of the frontier watched as explosions struck Tel Abyad. After dark, the red flare of rockets could be seen fired across the border into Tel Abyad, and flames burned near the town. Explosions from Tel Abyad could be heard eight hours into the bombardment. A witness reached by telephone said civilians were fleeing en masse.

Thousands flee, hundreds reported dead in Turkish attack on U.S.-allied Kurds in Syria – The offensive against the Syrian Democratic Forces (SDF) led by Kurdish YPG militia, which began days after Trump pulled U.S. troops out of the way and following a phone call with Turkish President Tayyip Erdogan, opens one of the biggest new fronts in years in an eight-year-old civil war that has drawn in global powers. “We have one of three choices: Send in thousands of troops and win Militarily, hit Turkey very hard Financially and with Sanctions, or mediate a deal between Turkey and the Kurds!” Trump said in a Twitter post on Thursday. “I hope we can mediate,” Trump said when asked about the options by reporters at the White House. Without elaborating, Trump said the United States was “going to possibly do something very, very tough with respect to sanctions and other financial things” against Turkey. The SDF have been the main allies of U.S. forces on the ground in the battle against Islamic State since 2014. They have been holding thousands of captured IS fighters in prisons and tens of thousands of their relatives in detention. SDF forces were still in control of all prisons with Islamic State captives, a senior U.S. State Department official said in a briefing with reporters on Thursday.

Erdogan threatens to flood Europe with 3.6 million refugees as Syria offensive forces tens of thousands to flee – Turkey’s president has threatened to send millions of Syrian refugees to Europe in retaliation for stinging world criticism of his military operation in northern Syria that has left 17 civilians dead, including several children.Lashing out at the European Union and others that joined a global chorus of condemnation, President Recep Tayyip Erdogan warned he would “open the gates” if anyone called his offensive “an invasion”. Seventeen civilians and dozens of fighters on both sides, have been killed since Turkish troops and its Syrian rebel allies launched a cross-border incursion against Kurdish-led Syrian Democratic Forces (SDF) on Wednesday. Among the dead in Syria are three children, rights groups have reported. The Turkish authorities meanwhile said that that six people, including a nine-month-old baby had been killed on the Turkish side. Over 60,000 people have since fled their homes as Ankara’s military advanced, capturing nine Syrian villages and encircling two Kurdish-held towns. Under airstrikes and heavy artillery, panicked residents of the Syrian border towns told The Independent they had “nowhere to hide”.

US soldier in Syria: ‘I am ashamed for the first time in my career’ — A U.S. special forces member serving with the Kurdish-led Syrian Democratic Forces (SDF) in Syria said Turkey is inflicting atrocities as it invades northeastern Syria. “I am ashamed for the first time in my career,” the unidentified soldier, who has been involved in the training of indigenous forces on multiple continents, told Fox News Wednesday.“Turkey is not doing what it agreed to. It’s horrible,” the soldier added. “We met every single security agreement. The Kurds met every single agreement [with the Turks]. There was no threat to the Turks – none – from this side of the border.”Turkey launched an offensiveagainst Kurdish groups Wednesday in northern Syria after President Trump announced that U.S. troops would withdraw from the area in anticipation of the operation, removing the chief deterrent to Ankara’s offensive. Trump sparked a firestorm in Washington over the decision, saying he does not want to fight “endless wars.” “The Kurds fought with us, but were paid massive amounts of money and equipment to do so. They have been fighting Turkey for decades. I held off this fight for almost 3 years, but it is time for us to get out of these ridiculous Endless Wars, many of them tribal, and bring our soldiers home,” Trump tweeted on Monday. “WE WILL FIGHT WHERE IT IS TO OUR BENEFIT, AND ONLY FIGHT TO WIN.” Sen. Lindsey Graham (R-S.C.), a staunch Trump ally and defense hawk, fired back, saying the decision was a “disaster in the making” that “ensures [an] ISIS comeback” and “will be a stain on America’s honor for abandoning the Kurds.”

US Special Forces in Syria ‘Mistakenly’ Bombed by Turkey – In a surprise Treasury Department press briefing early Friday afternoon, Steven Mnuchin said the president has “authorized” new sanctions on NATO member Turkey over its ongoing assault on US-backed Syrian Kurdish groups in northern Syria, also as bipartisan legislation targeting Turkey has been introduced in both the House and Senate. Turkey has now given Trump every reason to unleash the newly authorized sanctions, as Newsweek reports that American special forces troops have come under Turkish fire.According to the breaking exclusive: “A contingent of U.S. Special Forces has been caught up in Turkish shelling against U.S.-backed Kurdish positions in northern Syria.” It was “apparently by mistake,” the report adds. The Newsweek report cites an “Iraqi Kurdish intelligence official and senior Pentagon official” to say that “Special Forces operating in the Mashtenour hill in the majority-Kurdish city of Kobani fell under artillery fire from Turkish forces” amid operations related to ‘Operation Peace Spring’.It will be interesting to see what Ankara’s defense will be – no doubt claiming the attack on Americans was ‘accidental’ and ‘inadvertent’ – given that, as Newsweek continues:The senior Pentagon official said that Turkish forces should be aware of U.S. positions “down to the grid.” While the official could not specify the exact number of personnel present, but indicated they were “small numbers below company level,” so somewhere between 15 and 100 troops.No US casualties were mentioned in initial reports, however, this will likely be enough to trigger Washington sanctions in 3, 2, 1… But in the meantime – Russia Responds- All Foreign Troops With Illegal Presence Should Leave Syria — Russia’s response to the White House’s late Sunday shock announcement saying “Turkey will soon be moving forward with its long-planned operation into Northern Syria” has been relatively muted. Though Trump reportedly told Erdogan the US won’t back the operation in a ‘last minute’ weekend phone call, it still appears a tacit US green light, considering American forces have now moved away from the Turkish border with northern Syria and are in a “wait and see” position. While a Kremlin spokesman said in reaction that all foreign military forces ‘with illegal presence’ should leave Syria, and that “Syria’s territorial integrity must be preserved,” a looming American exit from the theater no doubt has Russian officials breathing a sigh of relief in terms of their number one defined priority – preserving and defending the Assad government. Russia has proven it can deal with Erdogan’s expansionist policies, but not the United States’ presence in Syria. Over the past years going back to 2015 US and Russian forces have on multiple occasions been on the brink of directly clashing, igniting a possible WWIII scenario.

ISIS Jail Break Begins- Riots At Sprawling Al-Hol Prison Camp As Turkey Invades – There’s growing concern that over 10,000 jihadists, among these thousands of ISIS terrorists, could go free as a result of Turkey’s ongoing invasion of northeast Syria. This is especially the case at the sprawling al-Hol prison camp, administered and guarded by US-backed Syrian Democratic Forces (SDF), home to over 70,000 people – mostly families of known ISIS fighters. This as the White House seems to have washed its hands of the matter, leaving the question up to local and regional powers, especially Turkey. Al-Hol is considered ground zero for a potential resurgent ISIS, ready to explode as SDF security was already severely undermanned even months prior to this week’s Turkish Army attack, and now there’s large scale rioting breaking out, per SDF official reports and video footage. Months ago, the BBC reported of the refugee city in the desert: “Al-Hol is a nightmare, a camp that has grown from 11,000 people, to more than 70,000. It is swollen with the dark aftermath of the collapsed pseudo-caliphate. It is ready to burst.”It appears the remnant ISIS insurgents are taking advantage of the Turkish operation to regroup, and to gain freedom from the many makeshift detention centers across northeast Syria maintained by the SDF.Crucially, the SDF announced days ago that under Turkish attack they can no longer maintain appropriate level of security guarding their ISIS prisoners. And though American special forces personnel are still present at a number of bases in the region (after having fallen back from border observation posts amid the Turkish operation), it doesn’t appear the Pentagon has any sort of contingency plan.

Dramatic Video Shows ISIS Prison Break Under Turkish Artillery Fire In Syria — After President Trump days ago revealed the US military in northeast Syria had moved some of the “most dangerous” ISIS terrorists amid fears they could escape as Turkish forces invade US allied Kurdish areas, saying “We’re putting them in different locations where it’s secure,” a Syrian Democratic Forces (SDF) official has told reporters that at least 5 ISIS members have escaped after a mortar struck their prison. This comes after a separate earlier ‘riot’ and escape attempt incident filmed at al-Hol prison camp. CCTV footage released by Syrian Kurdish authorities appears to confirm this, at a moment Qamishli continues to be under severe bombardment through late Friday: The Independent (UK) reports of the incident in Qamishli city, which is now under attack by Turkey: Five Isis militants have broken out of a prison in northern Syria after Turkish shelling nearby, a spokesman in the Kurdish-led Syrian Democratic Forces (SDF) has said. The detainees escaped from a prison in Qamishli city, Marvan Qamishlo said.The official statement from the SDF’s Coordination and Military Ops Centers said that “5 ISIS detained militants fled Jirkin prison in Qamishli as a result of Turkish shelling.”Separate video released showed the moments Turkish artillery shells rained down on the prison:

Reports: Up to 35 Russian Mercenaries Killed in Libya As many as 35 Russian mercenaries are reported to have been killed in Libya while they were fighting for Khalifa Haftar, the military general most associated with the rule of the late leader Muammar Gaddafi, who launched an offensive earlier this year on the Libyan capital of Tripoli, home to the country’s internationally-recognized government, according to a Russian media. The mercenaries are thought to work for the Wagner Group, a military contractor run by Yevgeny Prigozhin, a businessman nicknamed Putin’s Chef because he holds lucrative Kremlin catering contracts. Asked by VOA about the reports of the fatalities in an airstrike on the outskirts of Tripoli, where Haftar’s forces have been bogged down for months, Maria Zakharova, the Russian foreign ministry spokeswoman, said she had “no detailed information” and suggested directing questions to Russia’s defense ministry. The spokeswoman later dismissed any notion the mercenaries are Kremlin-linked, saying there’s little Russia can legally do to prevent “private Russian citizens from acting as bodyguards overseas.”

New Clashes Erupt in Libya; Fighting Reported in South Tripoli – – Launched in April, Khalifa Hafter’s bid to take over Libya, and the capital of Tripoli, looks to be breaking out again, with his forces attacking fighters from the UN-backed unity government over the past couple of days.The Hafter forces opened fire on the unity force fighters in southern Tripoli, and heavy fighting is reported in parts of the city. The unity government’s office is claiming to have retaken parts of the city lost in the early push.Details are scant, but the unity government is accusing the UAE of having gotten involved, and that they captured and destroyed a UAE-provided armored vehicle from Hafter forces. The UAE is one of several nations that is seen as backing Hafter’s takeover of Libya, with many believing that the takeover by a military dictator would stabilize the country. This faction is led by Egypt’s military junta, which seems to want to replicate its own coup there.

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