Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 15 February 2020. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening.
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Senate panel rejects Heinert plan on S.D. utility projects that haven’t been started – An attempt failed Tuesday that would have required South Dakota regulators to reconsider a permit if a utility project hadn’t been built in 10 years. Senate Democratic leader Troy Heinert of Mission brought SB 126 primarily because of the Keystone XL oil pipeline that is still in the preliminary stages.The state Public Utilities Commission granted a permit for the South Dakota segment of the XL project in February 2010 and determined the permit remained valid in January 2016.Construction on the South Dakota part could start later this year.TC Energy received initial approval in January from the state Water Management Board to draw from the Cheyenne, Bad and White rivers in western South Dakota.The water board meets February 26 to consider proposed findings of fact and conclusions of law. Heinert is a member of the Rosebud Sioux Tribe, one of several tribal governments, organizations and individuals who opposed granting the water permits. Many of them also opposed the utilities commission’s 2016 certification finding the pipeline permit was still good. The company, previously known as TransCanada, has one crude-oil pipeline running through eastern South Dakota. Keystone XL would go through more than 300 miles of South Dakota public and private properties in Harding, Butte, Perkins, Meade, Pennington, Haakon, Jones, Lyman and Tripp counties. The route skirts around several current Indian reservations. Indian tribes had received all land in Dakota Territory starting at the east bank of the Missouri River in the 1800s. But they were later put onto separate, smaller reservations, so that homesteaders could compete for open property.
South Dakota tribes speak against ‘riot-boosting’ penalties (AP) – Native American groups opposed to the Keystone XL oil pipeline told South Dakota lawmakers Wednesday that Gov. Kristi Noem’s plan to restore criminal penalties for urging riots would result in peaceful protesters being silenced. The Republican governor proposed updates to the so-called “riot-boosting” laws after a judge struck down efforts last year to allow the state and counties to prosecute disruptive demonstrations against the pipeline. Several Indian tribes in the state opposed the bill, putting a strain on the governor’s relationship with the tribes. The new proposal sailed through a House committee on Wednesday, as Native American groups testified, prayed and protested at the Capitol. The bill would update definitions of rioting and “incitement to riot” that are on the books and allow government entities to seek civil fines against people who “urge, instigate, incite, or direct” groups of three or more to using force or violence. The state agreed not to enforce parts of those laws in October as part of a settlement with the American Civil Liberties Union. The Republican governor argues that the proposed laws are designed to protect people’s rights to protest peacefully and even includes language to make that clear. She has said the civil penalties would keep taxpayers from having to pay for damage caused by riots. Lester Thompson, the chairman of the Crow Creek Sioux Tribe, said the First Amendment already protects a person’s to protest. He said the law would put protesters in a defensive position, vulnerable to laws that do not make it clear what constitutes violence during a riot. “It could be me raising my fist,” said Derrick Marks, a committee member of the Yankton Sioux Tribe. “Is that considered riot boosting? Is that considered violence?”
Bill that would add liquefied propane to ‘Dig Safe’ law advances – Portland Press Herald – A legislative committee Thursday gave its support to a bill that would include liquefied propane gas in Maine’s Dig Safe law, according to a news release. Every member of the Energy, Utilities and Technology Committee present voted in favor of the measure submitted by state Rep. Seth Berry, D-Bowdoinham, who serves as the House chairperson of the committee. He submitted the bill in response to the deadly explosion in Farmington on Sept. 16, 2019, at LEAP Inc.’s building. During a work session, an emergency preamble was added to the bill that will allow the legislation to go into effect immediately, if signed into law, according to the release. The explosion killed a Farmington firefighter, injured six others and critically injured LEAP Inc.’s maintenance supervisor who was in the building. The Office of the State Fire Marshal released its findings Jan. 24, revealing the explosion ignited days after an underground propane line was severed when one of four bollards was being drilled into the ground near the building, according to a release. Investigators concluded the propane leaked from the severed line and led to the explosion that leveled the building and damaged surrounding homes. The source of ignition that sparked the explosion could not be determined. Dig Safe laws prohibit digging around certain underground utility lines. In Maine, liquefied propane lines are not on the prohibited list, according to the release.
New Report Details Impacts of Oil and Gas Development on Public Lands The American Petroleum Institute has rolled out a multibillion-dollar public relations campaign stating that oil and gas can help to solve climate change. The association is claiming that expanding the use of fossil fuelscan lower climate emissions that are trapping heat on our planet.If that sounds fishy, it’s because it is.The campaign, which includes online ads, airport displays and billboards, credits oil and gas for the recent dip of 2.1 percent in the U.S. climate emissions. It also pushes the false narrative that fossil fuels – especiallynatural gas – are the energy sources of the future. Our new report, The Climate Report 2020: Greenhouse Gas Emissions from Public Lands, shows that couldn’t be farther from the truth. Our experts found that on public lands alone, oil and gas development is set to generate a massive amount of climate emissions. Federal lands leased to the industry in the last three years could produce as much as 5.9 billion metric tonnes of greenhouse gases. That’s more than half the emissions that China – the world’s largest emitter – releases per year.You won’t see that number in the industry’s advertisements.The problem is that oil and gas are far from being clean energy sources. Even the most efficient natural gas plant still emits about half of the carbon dioxide emitted by a coal plant. That’s still high considering the world needs to slash carbon emissions to avoid the worst effects of the climate crisis, according to the United NationsFederal lands leased in the last three years could generate half of China’s annual climate emissions.That’s not all. The extraction of natural gas also releases methane, widely known as a climate change accelerant. The gas is released in smaller quantities than carbon dioxide, but it’s 87 times more powerful in trapping heat in the Earth’s atmosphere.It’s clear that by investing in oil and natural gas instead of coal, we’re just replacing one emissions problem with another.It’s also clear that oil and gas companies are not interested in solving climate change. For instance, methane leaks could be easily cut with cost-effective solutions. But the industry has done the opposite, spending heavily to block the passage of any regulations.
Sanders, Ocasio-Cortez bill would outlaw fracking by 2025 – A bill introduced last week by Sen. Bernie Sanders (I-Vt.) that Rep. Alexandria Ocasio-Cortez (D-N.Y.) helped craft would ban fracking nationwide by 2025, according to its newly unveiled text. The legislation would immediately prevent federal agencies from issuing federal permits for expanded fracking, new fracking, new pipelines, new natural gas or oil export terminals and other gas and oil infrastructure. A House version of the legislation is being spearheaded by Reps. Ocasio-Cortez and Darren Soto (D-Fla.). By Feb. 1, 2021, permits would be revoked for wells where fracking takes place and that are within 2,500 feet of a home, school or other “inhabited structure.” The wells would be required to stop operations. Fracking for oil and natural gas would become illegal “on all onshore and offshore land in the United States” by Jan. 1, 2025. The legislation follows up on Sanders’s campaign promise of a fracking ban if he’s elected to the White House. It was introduced the week before Monday’s Iowa caucus, which kicks off the 2020 presidential nominating contest. “Fracking is a danger to our water supply. It’s a danger to the air we breathe, it has resulted in more earthquakes, and it’s highly explosive. To top it all off, it’s contributing to climate change,” Sanders said in a statement. “If we are serious about clean air and drinking water, if we are serious about combating climate change, the only safe and sane way to move forward is to ban fracking nationwide,” he added. In a statement, Ocasio-Cortez said fracking is a contributor to “our climate emergency.” “The science is clear: fracking is a leading contributor to our climate emergency. It is destroying our land. It is destroying our water and it is wreaking havoc on our communities’ health,” Ocasio-Cortez said in the statement. The legislation is backed by environmentalists but has been slammed by industry groups. “Sen. Sanders’ fracking ban bill is desperately needed if we’re going to stop the climate crisis,” said Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute, in a statement. “This is the big, bold action that’s required so future generations can have a livable planet.”
Note to EIA: Major shale operator sending cash elsewhere – John Hess, CEO of Hess Corporation, a large U.S.-based independent oil producer, recently told a Houston audience where he’s putting the company’s money these days: Offshore drilling. That should strike those who know of Hess Corporation’s heavy involvement in the Bakken shale play (in North Dakota) as a bit strange. Hess says the company will “use cash flow from the Bakken to invest in longer-term offshore investments.” Hess told his audience that “key U.S. shale fields are starting to plateau, calling shale ‘important but not the next Saudi Arabia.'” Setting aside whether Hess is actually getting investable cash from the Bakken, the constant refrain from the U.S. oil industry has been precisely that shale plays ARE the next Saudi Arabia. Someone should send a note to the U.S. Energy Information Administration (EIA) that maybe it’s not all going to work out. If Hess is right about a peak in U.S. shale oil production soon, that peak will come about a decade earlier than the peak forecast by the EIA. None of this will come as a surprise to geologist David Hughes whose most recent update on U.S. shale oil and natural gas production suggests that not only will Hess be proven generally correct, but that production will fall much farther than the EIA believes in the coming decades. Hughes continues to rate EIA estimates of ultimate recovery from America’s shale oil and natural gas fields as “extremely optimistic, and highly unlikely to be realized.”U.S. shale oil production has been a major driver in the growth of world oil supplies. Last year the United States accounted for 98 percent of global growth in oil production. Since 2008 the number is 73 percent. It’s not hard to imagine that a slowdown in U.S. oil production growth or worse yet a decline in overall U.S. production would mean trouble for the entire world.With 81 percent of global oil production now in decline, even a plateau in U.S. production would likely result in a worldwide decline. The world is simply not prepared for such an event – in part, because agencies such as the EIA are either unable or unwilling to grasp the plain facts and present them to policymakers and the public. When the real trouble arrives in the oil markets, the EIA and other forecasters will likely just shift their analysis and cite some “impossible to predict” factors that will have led to the stunning reversal of fortune. But those factors are in evidence right now, if only the EIA and others have eyes to see them.
Natural gas pipeline proposal fractures Oregon community | PBS NewsHour Weekend (audio & transcript) A protracted battle in Oregon over a proposal to build a 229-mile natural gas pipeline and processing terminal in the southern part of the state is pitting those hungry for economic development against those wary of the project’s environmental risks. But as NewsHour Weekend’s Christopher Booker reports, that fight is drawing closer to a conclusion. Read the Full Transcript: Since 2004, there has been a protracted battle underway in Oregon. It’s a fight over a liquid natural gas export terminal, and the pipeline that would deliver the gas. Landowners and community members are wary of what they say is a risky proposition. But, as PBS NewsHour Weekend’s Christopher Booker reports, it’s a 15-year conflict that is finally inching closer to a conclusion.
Exxon Downplays Climate Risk to Oil and Gas in New Report – Climate change is not a crisis, according to ExxonMobil’s latest climate risk report to shareholders and the public. Despite ongoing record-setting global temperatures, wildfires, and other impacts, the oil and gas giant contends that growing climate instability does not rule out continued production of fossil fuels. The firm released its annual “Energy and Carbon Summary” on January 28, in the midst of a two-week slide that saw Exxon’s stock price hit its lowest point in a decade. Like previous editions of the report, Exxon’s latest future-looking assessment outlines its plans for continuing to produce oil and gas while downplaying the risks of changing climate and energy regulations to its holdings. “Over the coming decades, oil and natural gas will continue to play a critical role in meeting the world’s energy demand,” the report states. But the firm’s stance that continued oil and gas production is a low-enough-risk proposition is misguided, said Andrew Grant, senior oil and gas analyst at Carbon Tracker, a London-based think tank that analyzes the impact of the energy transition on capital markets and fossil fuel firms. “In thinking about value risks, the danger isn’t just what if [Exxon] can’t develop new assets because they’re obviously uneconomic,” Grant said, “but also what if they do develop assets thinking that they will be economic but that subsequently turns out not to be the case.” The firm is not acknowledging that its oil and gas reserves could become such “stranded assets” over the next several decades, he said, and drop billions in value amidst a likely global transition to cleaner energy sources. “Ultimately, what Exxon is guilty of is being too certain about an increasingly uncertain future,” . “And it is betting billions of dollars in shareholder capital on its ability to be right.”
Hundreds rally in Metro Vancouver and Victoria in solidarity with Wet’suwet’en – Hours after police arrested dozens of protesters for blockading port entrances in Vancouver and Delta, B.C., marches were held in Vancouver and Victoria in support of the Wet’suwet’en First Nation and its fight against a pipeline. In Victoria, protesters blocked the Johnson Street and Bay Street bridges during afternoon rush hour while, in Vancouver, police warned drivers to expect delays as demonstrators blocked intersections and marched through the downtown core. In recent days, small-scale protests have emerged across Canada in solidarity with the Wet’suwet’en hereditary leaders’ opposition to the construction of a gas pipeline through their traditional territory in northern B.C. Over the weekend, the RCMP arrested 21 people blocking Coastal GasLink workers from accessing the site. On Monday morning, Vancouver police arrested 43 demonstrators at the Port of Vancouver as they enforced an injunction against those blocking access to the site. Dozens of officers arrived at the intersection of Hastings and Clark streets around 5:30 a.m. PT Monday, and the injunction was read several times over a loudspeaker. Police then removed barricades blocking access to the port, reopening the ramp to vehicles.Shortly after 6 a.m., about a dozen protesters remained around a fire burning in the roadway. Officers reminded people they would be arrested if they stayed in the road. By 8 a.m., the police had cleared all demonstrators from the intersection and put the fire out. At midmorning, police had removed all barricades, and traffic reopened. All of those arrested in Vancouver have been released on the condition they abide by the injunction, according to police. Whess Harman, a multidisciplinary artist from the Carrier Wei’at Nation, said non-Indigenous volunteers had remained in the roadway as a strategy to prevent Indigenous youth protesters from being arrested. Demonstrators had blocked two other port entrances in Vancouver, and the Delta port, where local police arrested 14 protesters early Monday morning. Delta police said an ambulance was called for one person “out of an abundance of caution.” Protesters had first blockaded the port on Feb. 8. Meanwhile, protesters in New Hazelton, west of Smithers, B.C., continue to block railways, significantly affecting CN Rail service.
CN shuts eastern Canadian rail network – Canadian National (CN) said today it has begun to shut down its eastern Canadian rail network following delays caused by protests against a pipeline that have spread across three provinces.More than 400 trains have already been cancelled this week. The situation has worsened since CN said on 11 February that blockades in Belleville, Ontario, had forced it to curtail some deliveries. The protests are unrelated to CN. First Nations groups and others have used blockades to protest a Coastal GasLink pipeline under construction in British Columbia.”A progressive shutdown of our eastern Canadian operations is the responsible approach to take for the safety of our employees and the protestors,” CN chief executive Jean-Jacques Ruest said today. The closure ends all transcontinental train movements, including some that are hauling propane, coal, crude, potash and pellets.CN is taking steps to ensure it is well set up for recovery, “which will come when the illegal blockades end completely,” Ruest said.CN sought and obtained court orders to end the blockades. The blockades have ended in Manitoba and an end is imminent in British Columbia, the railroad said. But the orders of an Ontario court have yet to be enforced and continue to be ignored, CN said. The shutdown puts up to 6,000 workers at CN and other rail companies out of work, Teamsters Canada said.
Documentary on Alberta train derailment uncovers evidence of criminal negligence by CP Rail – A recently aired documentary that reveals corporate criminal negligence may have been responsible for a fatal train accident last year has prompted calls for an independent criminal investigation into CP Rail, Canada’s second largest railway. The 22-minute documentary, “Runaway Train,” was the product of a seven-month-long investigation undertaken by the CBC investigative program the Fifth Estate. Train 301 was travelling west to Vancouver when it derailed near the Alberta/British Columbia border at around 1 a.m. on February 4, 2019, killing the three crew members on board: conductor Dylan Paradis, locomotive engineer Andrew Dockrell and conductor trainee Daniel Waldenberger-Bulmer. (See: “Canada: Train derailment kills three, exposes terrible working conditions”) Shortly after the accident, the federal government’s Transportation Safety Board (TSB), released its preliminary findings. It determined that the 112 loaded grain cars had been parked in – 28C weather on a steep grade with emergency air brakes applied, but no handbrakes. The train had been parked for almost three hours when the replacement crew arrived. Soon after their arrival, the air brakes failed and the train “began to move on its own,” accelerating beyond the authorized maximum track-speed of 15 mph to a speed in excess of 51 mph, until it derailed into the mountainside. The timeliness of CBC’s exposure was underscored by a train derailment that occurred in Saskatchewan last Thursday. At around 6 a.m., a CP Rail freight train derailed near Guernsey, for the second time in as many months, forcing the evacuation of 80 people after oil tanker cars caught fire. Federal Transport Minister Mark Garneau subsequently announced a 40-kilometer-per-hour speed cap for all trains carrying dangerous goods for 30 days. The CBC documentary includes footage describing a “string of critical failures” on the part of the railway company, including in maintenance, inspections, and braking practices, and the “compelling case for criminal negligence.”
The Race For Arctic Oil Is Heating Up – Despite climate concerns and environmentalist backlash against exploration for oil and gas in pristine sensitive regions of the Arctic, companies continue to explore for hydrocarbon resources in the Arctic Circle, in Russia and Norway in particular. The largest Russian energy companies are looking to explore more Arctic oil and gas resources on and offshore Russia, while Norwegian and other Western oil firms are digging exploration wells in Norway’s Barents Sea. Those companies lead the development efforts to tap more Arctic oil and gas resources as legacy oil and gas fields both offshore Norway and onshore Russia mature. Russia’s biggest energy firms Gazprom, Rosneft, Novatek, and Lukoil, and Norway’s oil and gas giant Equinor, as well as Aker BP and ConocoPhillips, are the top oil and gas producers in the Artic region, data and analytics company GlobalData said in a new report. Gazprom is the undisputed leader in Arctic oil and gas production, followed, at a long distance, by two other Russian firms, Rosneft and Novatek, GlobalData’s estimates show. Russian firms are ramping up exploration in Russia’s Arctic, while Equinor and other Western companies drill exploration wells in Norway’s Barents Sea, hoping for a significant discovery that could add to the Johan Castberg oilfield – a massive discovery which was made in 2011, but which hasn’t been replicated in the Barents Sea so far. Yet, both Russia and Norway face specific challenges in getting the most out of their respective Arctic oil and gas resources.In Russia, the government has made Arctic oil and gas development a key priority and offers tax breaks for firms exploring in the area.Energy giants Gazprom and Rosneft dominate the exploration and development efforts in Russia’s Arctic. Offshore, Gazprom’s Prirazlomnoye field is currently the only producing Russian oil and gas project on the Arctic Shelf. But even with tax breaks, Russia may find it hard to develop its offshore Arctic resources, due to the U.S. sanctions banning collaboration on Russian deepwater, Arctic offshore, or shale projects with Gazprom, Gazprom Neft, Lukoil, Surgutneftegas, and Rosneft. These are the largest energy firms in Russia and they don’t have access to capital at western banks to develop such projects. Although Russian firms downplay the effects of the U.S. sanctions on their development plans, and although domestic companies are focused on developing in-house technology solutions to replace foreign-sourced tech, analysts believe that 100-percent local content technology in challenging projects would likely take years to implement.
Russia is ‘fearful’ of US competition in the European gas market, official says – Europe can buy its natural gas wherever it wants, including Russia, but there should be more competition among suppliers, a top U.S. energy official told CNBC, adding that Russia was “fearful” of a rise in energy exports from America. “We expect that a lot of countries will continue to buy gas from Russia,” Frank Fannon, the U.S. assistant secretary of state for energy resources, told CNBC Tuesday. “That’s fine, that’s great, so long as it’s based on a competitive model – is there transparency in pricing, is there even a market, you can’t possibly have a market if you have one supplier – that’s not a market, there’s no competition.” The U.S., EU and Russia are engaged in an awkward triangle when it comes to gas with Russia and the EU integrated closely in terms of gas supplies, and the U.S. trying to gain more access to the EU market for its own liquefied natural gas (LNG) exports, or what the U.S. Department of Energy has called “freedom gas.” Being Europe’s closest energy giant and neighbor, Russia has naturally become the largest gas supplier to the continent over the years and it has consolidated this position most recently with gas pipeline projects designed to increase its exports to the continent. One gas pipeline, Nord Stream 2, has proved so controversial to the U.S. that the Trump administration announced in December that it would slap sanctions on any firms involved in finishing (it is near completion) the pipeline. The pipeline runs from Russia to Germany, via the Baltic Sea floor and through the territories of several other countries. It is owned and will be operated by Russian energy giant Gazprom, which said in January that it would finish the pipeline alone due to sanctions; it is expected to be operation in early 2021. The U.S. has argued that the pipeline makes Europe less secure and more dependent on Russia for its energy needs but the EU and Russia have deplored the sanctions with the former saying it should be able to determine its own energy policy. Germany’s Chancellor Angela Merkel said that she is “opposed to extraterritorial sanctions” against the project and Russia said it could complete the pipeline alone. It also said that U.S. sanctions were protectionist and just aimed at increasing its own U.S. LNG sales to Europe, a huge potential market for the U.S.
EU Plans to Measure True Climate Impacts of LNG Imports From US Fracked Gas — With growing evidence that the climate impacts of natural gas are comparable to coal, the European Commission is planning to study ways to reduce methane emissions across the life cycle of natural gas production and consumption, with potential implications for fracked gas producers in the U.S. “Work has started on the methane emissions linked to the energy sector, including oil and gas production and transport, but also coal mines and we are planning on presenting the strategic plan still this year,” said an unnamed official working with European Union (EU) energy commissioner Kadri Simson, as reported by Euractiv.The EU obtains natural gas from many sources, both in gas form via pipeline and as liquefied natural gas LNG. One area of this EU study will be methane emissions over the life cycle of LNG imports from US fracked natural gas.The U.S.is awash in natural gas from fracked shale basins, which has caused prices to plummet – creating big losses for natural gas producers in America – and the nation has been rapidlyramping up exports of LNG to deal with this excess. Despite the big price drops and glut of natural gas – both in the U.S. and globally – that cast doubt on the economic viability of U.S. LNG exports, the Trump administration just approved permits for four new LNG export facilities in Texas alone. U.S.Secretary of Energy Dan Brouillette commented on the new approvals, specifically mentioning the goal of exporting more U.S.LNG to Europe.The Trump administration recognizes the importance and increasing role U.S.natural gas has in the global energy landscape,” said Secretary Brouillette. “The export capacity of these four projects alone is enough LNG to supply over half of Europe’s LNG import demand.”Europe is currently a top destination for U.S.LNG exports, with Spain and France receiving the most out of European countries in 2019. Bloomberg recently analyzed the climate impact of US LNG production production facilities and reported that “an analysis shows the plants’ potential carbon dioxide emissions rival those of coal.” Nevertheless, the oil and gas industry is putting serious ad dollars into positioning natural gas as a climate solution. As renewables have become more cost-competitive, the industry has shifted its language away from selling natural gas as a bridge fuel to renewables and toward gas as a “foundation fuel.” With the EU looking to quantify the full climate impact of US LNG, the biggest unanswered question is just how much methane is being vented and leaked during natural gas production, most of which involves fracking and horizontal drilling. What is known is that the level of gas flaring and venting has skyrocketed to the point that even oil company CEOs are admitting it’s a big problem.
Coronavirus affecting Woodside’s ability to sign gas deals – According to Reuters, Woodside Petroleum Ltd has announced that the coronavirus outbreak is affecting its ability to sign gas deals and sell stakes in a key growth project, reporting a 25% decrease in annual underlying profit.The fall in profit was reportedly in line with expectations because of both weaker output from Pluto LNG and lower oil and gas prices. However, Woodside claims the coronavirus outbreak is not only affecting prices, but also impacting broader sentiment.Speaking to Reuters, the head of Woodside, Peter Coleman, claimed the company will use this year to focus on its Scarborough project, and will put efforts to secure an agreement for the long-delayed Browse project to supply gas to the North West Shelf LNG plant on hold.According to Reuters, Scarborough and Browse are crucial to driving the company’s planned 6% growth per year in output through 2028. Woodside is now planning to make a final investment decision (FID) on Browse late next year. This is at least six months later than previously expected.Coleman commented: “We’ve pushed it really hard. We’ve just said it’s time for us to all just step back for a while.”He also noted that talks to reach gas agreements and sell part of its 75% stake in Scarborough to help it fund the project have been negatively affected by both low gas prices and travel restrictions caused by the coronavirus outbreak. Coleman said: “The longer the coronavirus goes on people will form the view that distressed assets may come on the market.”
North West Shelf LNG project to return to full production imminently — According to Reuters, output from Australia’s largest LNG plant – the North West Shelf project – is set to return to full production in the next few days. This follows the announcement that a cyclone last weekend had affected the facility.Woodside Chief Executive Peter Coleman said that the cyclone was the worst to ever hit the facility in its 30 years of operation. Fortunately, Coleman added that there was only minor damage to the facility. Coleman also told analysts that the company had not seen any impact to its LNG shipments caused by the coronavirus outbreak.
Coronavirus epidemic diverts LNG tankers – According to the latest Reuters report, four LNG tankers en route to North Asia have been diverted due to the Coronavirus outbreak in China.The Coronavirus epidemic has affected 60 000 people worldwide and has had a significant effect on energy markets and demand, particularly in China.In light of the circumstances, China’s top LNG buyer, China National Offshore Oil Corp’s (CNOOC), among others, has declared force majeure to suspend supply contracts with at least three LNG exporters.As a result of this action, Asian LNG demand has taken a notable hit, with prices falling below US$3 per million Btu (a record low). Reduced demand brought about by a mild winter has also been a contributing factor.Shipping companies are now scrambling to divert cargoes bound for Asia to more profitable destinations. For example, according to Reuters, three of four LNG tankers loaded in Qatar and Oman have been diverted from their original eastwards course. Two will reportedly now deliver their shipments to South Hook terminal, UK, while the other is returning to the Gulf of Oman. In addition to cargoes being diverted, several carriers have been flagged as floating storage. According to a Reuters source, there are 15 vessels currently flagged as floating; two in the Middle East, two in western Australia and 11 scattered across Asia. The source expressed that this number of floated LNG cargoes was unusual for this time of year.
Qatar re-routing cargoes to China after coronavirus -According to Reuters, Qatari energy companies are actively engaged in accommodating both rescheduling and re-routing requests on some deliveries of Qatari oil and gas cargoes to China after the coronavirus outbreak. In a statement, the chief executive of state energy company Qatar Petroleum, Saad al-Kaabi, said the company supports “its counterpart Chinese energy companies to meet any needs that can support China’s efforts to deal with the coronavirus and its impact.“All concerned Qatari energy companies are already working closely with their Chinese partners to assist in identifying and assessing potential support areas, and… are actively engaged in accommodating certain rescheduling or re-routing requests for deliveries of Qatari energy products.”
Gazprom hopes China will buy US LNG, not Europe -According to the latest Reuters report, after the signing of a trade deal between Washington and Beijing, Gazprom is hopeful that China will purchase the majority of US-produced LNG cargoes, not Europe.Speaking at a recent investor meeting, the head of Gazprom’s exporting arm, Elena Burmistrova, noted that weak European gas pricing might curb the company’s LNG supplies to the region, due to low prices and increased rivalry.As US gas producers look to expand their markets and continue their steady growth, LNG exports are proving to be a profitable avenue through which to offload large quantities of shale gas. This activity is a direct threat to Gazprom’s dominance in Europe.According to Reuters, China has recently restarted talks with US LNG exporters to purchase greater quantities of LNG, following the signing of a Phase 1 accord between the two countries. This move is very favourable for Gazprom, since the arrival of new US LNG cargoes in Europe has had a negative impact on gas prices in the region. However, the company is reportedly closely monitoring the situation, in light of China’s recent suspension of some LNG purchases due to weaker demand caused by the ongoing coronavirus epidemic.
China likely to shun US LNG despite multi-billion trade deal -An ongoing two-year long trade war between the US and China that has impacted the exports of both countries seemed to be closer to a resolution in January, when the two rivals sealed a deal that left the Asian nation committed to buy a total of US$26.2 billion in energy products this year.Amid a crisis caused by the coronavirus epidemic, China recently decided to halve the additional tariffs it imposed on US$75 billion worth of US goods from September 2019. However, this reduction has not affected the 25% tariff imposed on US LNG, and Rystad Energy does not consider any such imports commercially viable. With not a single US cargo sent to a Chinese terminal since 2Q19, Rystad Energy estimates that LNG imports will restart only once the tariffs are lifted or if political support is offered by the Chinese government.Rystad Energy expects a reduction or even a complete removal of tariffs on imports of US LNG. Nevertheless, the company’s calculations show that volumes will most likely remain relatively low, due to both the cost-competitiveness of other global supplies and to the coronavirus epidemic’s effect on Chinese LNG demand.To calculate the volumes, Rystad Energy identified three scenarios, the most conservative of which (low case) is thought to be the most likely outcome:
- Low case: LNG imports in 2020 are kept at the 2018 level of around 2.5 million t, valued at US$1 billion.
- Middle case: In 2017, before the trade war started, LNG represented 8% of all US energy product sales to China. Applying the same percentage would see China import 5.27 million t of US LNG for a total value of US$2.2 billion in 2020.
- High case: The trade agreement did not specify any amounts of particular energy products such as crude oil, LNG, refined products and coal. As a result, LNG and especially crude oil, which will get a 2.5% tariff cut from February, could account for a larger proportion of Chinese energy purchases to meet the agreed target. LNG imports could potentially reach 8.4 million t, worth US$3.5 billion in 2020.
In the longer term, new LNG projects need to have long term contracts to secure financing for development, and the imports-reliant Chinese market will continue to be among the biggest sponsors for new developments – although probably very limited in the US, said Xi Nan, Vice President for Gas and Power Markets at Rystad Energy. “The cost of supply for new US projects is not as competitive as in Qatar, Mozambique and Australia, which gives Chinese buyers more commercial incentives to sign new contracts with non-US suppliers,” she said.
Structurally cheaper LNG should displace coal from Japan, and broader Asia: Russell – (Reuters) – The collapse in the spot price of liquefied natural gas (LNG) in Asia is a short-term phenomenon that may well end up having a longer-term impact, especially on thermal coal. The spot price dropped to $2.95 per million British thermal units (mmBtu) for the week ended Feb. 7, the lowest price in records stretching back to 2010. It has lost 57% of its value since the pre-winter peak of $6.80 per mmBtu in mid-October, and is down 74% from the peak price in 2018 and 86% from the all-time high from February 2014. The reasons for the slumping price are well understood, with both demand and supply factors playing a role. On the demand side, growth in China has slowed from its breakneck pace as the world’s second-biggest buyer of LNG works to build the infrastructure needed for more coal-to-gas switching in both residential heating and industry. LNG demand in Japan, the world’s top buyer of the super-chilled fuel, has also been sluggish amid a warmer than usual winter and the restart of some of its nuclear fleet, idled after the 2011 Fukushima disaster. On the supply side, the commissioning of several new projects in Australia, which has overtaken Qatar as the top LNG exporter, as well as in the United States, has led to an abundance of cargoes. While it’s unlikely that spot LNG prices will stay at the current depressed levels indefinitely, the trend toward structurally lower prices appears sustainable. There is still no shortage of LNG projects being built, with 17 million tonnes of capacity due to be commissioned this year alone, and considerably more likely in the next five years, as projects from Russia to East Africa start to come on line. This supply surge is likely to have two impacts on prices. Firstly it will ensure that spot prices remain under downward pressure, and secondly, it will likely accelerate the shift away from long-term, oil-linked contracts to shorter-term, more flexibly priced deals. This change in the way LNG is priced should give pause for considerable thought to any would-be developers of thermal coal power projects based on imported fuel in Asia, especially Japan.
PetroChina to cut February crude runs by 320,000-bpd due to virus: company official – (Reuters) – PetroChina, China’s second-biggest state refiner, plans to reduce its crude throughput by 320,000 barrels per day (bpd) this month versus its original plan as the Wuhan virus hits fuel demand, a company official told Reuters on Monday. PetroChina’s planned February cut is equivalent to about 10% of the refiner’s average production rate of around 3.32 million bpd. This would bring total production scalebacks by state refiners, include Sinopec Corp and China National Offshore Oil Company, to around 940,000 bpd for this month. The cuts from PetroChina are likely to be deepened to 377,000 bpd in March, said the senior company official with direct knowledge of the matter. He declined to be named as he’s not authorized to speak to the press. Reuters reported last week that Sinopec Corp, Asia’s largest refiner, is cutting its throughput this month by 600,000 bpd, or 12% of its average crude runs, its deepest reduction in over a decade. Independent Chinese refiners in Shandong, meanwhile, have slashed output to below half their capacity. “The production cuts are mostly on refineries in northeast and north China, where demand is hit harder than in the western parts of the country,” said the PetroChina official. PetroChina started the production cuts at the beginning of the month, but deepened them on Monday, the official said. PetroChina did not immediately respond to a request for comment. PetroChina is talking with its key long-term suppliers such as Saudi Arabia, Kuwait and the United Arab Emirates about possibly deferring cargo loadings or trimming loading volumes, the official said, without giving further details.
China’s Hengli Petrochemical cuts refinery operations to 90%: spokesman – (Reuters) – China’s private chemical giant and refiner Hengli Petrochemical has cut to 90% from this week its crude oil processing rate at a northeastern plant, down from 109%, as a spreading coronavirus hits demand, a spokesman said on Tuesday. The cuts at the 400,000-barrel-per-day refinery and petrochemical complex in Dalian will be equivalent to 17%, or 76,000 bpd, Reuters’ calculations show. Hengli also shut in a 3.2-million-tonne-per-year reforming unit, one of three it operates, because of a mix of technical and market problems. “We’ve been planning to shut down the unit for maintenance to fix some technical issues,” the spokesman told Reuters. “And now it seems the right time, as we are also worried about falling demand for both refined fuel and petrochemicals because of the epidemic.” As Hengli typically pre-markets fuel for more than two months, its refined fuel sales so far have been smooth, another company source said. In face of weakening demand for petrochemical products, Hengli also cut back operations at a newly started plant making purified terephthalic acid, or PTA, to half its capacity, from 80% earlier, the spokesman said. The facility has an annual capacity of 2.5 million tonnes of PTA, a chemical used to make polyester fiber.
The coronavirus is a ‘black swan’ for oil and energy markets, says Ned Davis Research – The outbreak of the coronavirus is a “true black swan” for the oil and energy market, and as crude prices continue to move lower the worst may not be over yet, Ned David Research said in a note to clients Monday. Analyst Warren Pies noted that the outbreak has reduced Chinese demand for oil by 2 million to 3 million barrels per day, which means “the oil market is looking down the barrel at no demand growth for the calendar year, and outright demand contraction is now on the table.” At the end of January the firm downgraded its outlook on oil from bullish to neutral, and Pies said that his best guess is that “crude oil and energy equities will see more weakness before this is over.” That said, he was quick to note that attempting to draw comparisons between the 2003 SARS outbreak, or attempting to forecast the spread of the disease are “fools errands,” arguing that investors should instead should rely on “objective indicators.” On Monday U.S. West Texas Intermediate crude fell to its lowest level in 13 months as traders continue to worry that a global economic slowdown caused by the coronavirus will weigh on demand. Both WTI and international benchmark Brent crude are coming off a fifth straight week of losses, and both are currently trading in bear market territory. Pies noted that in prior times of broad weakness in the energy sector refiners were sometimes a pocket of strength. But this time around that might not be true since this is a demand-driven decline, rather than the supply-driven declines of recent years.
Hedge funds sell oil as coronavirus stokes recession fear: Kemp (Reuters) – Hedge funds were heavy sellers of petroleum last week for the third time in four weeks, amid mounting anxiety about the impact of a coronavirus outbreak on oil consumption in China. Hedge funds and other money managers sold the equivalent of 131 million barrels in the six most important futures and options contracts in the week ending Feb. 4. Portfolio managers have sold a total of 367 million barrels since Jan. 7, reversing a large amount of the 533 million barrels bought during the previous 13 weeks (https://tmsnrt.rs/2UEBRTK). Fears about a coronavirus-driven downturn in oil consumption have replaced earlier expectations about a cyclical recovery in oil demand growth. Selling has been concentrated in crude and the middle distillates used heavily in manufacturing and transportation, including aviation and shipping, the sectors most exposed to China’s economy and the coronavirus. Hedge funds were heavy sellers last week of NYMEX and ICE WTI (-56 million barrels), Brent (-50 million), European gasoil (-18 million) and U.S. heating oil (-8 million). In response to the coronavirus, PetroChina has said that it will cut crude processing at its refineries by 320,000 barrels per day in February, around 10% of its average production rate, with even deeper cuts to come in March. China’s state-owned refiners have now signalled production cuts totalling more than 900,000 bpd this month (“PetroChina to cut February crude runs by 320,000 bpd due to virus”, Reuters, Feb. 10). By contrast, fund managers made no net change in their position in U.S. gasoline last week, which is more focused on the United States and private motorists. The economic and oil market impact of the virus outbreak is similar to a severe recession centered on China, which is currently extremely deep but of uncertain duration, and where the full impact on other countries is unclear. The coronavirus-recession in China is driven by the success of primary infection control in Hubei province; the probability of secondary outbreaks in the rest of China and worldwide; and decisions by governments, businesses and individuals about the optimal trade-off between the need for infection control and the need to keep normal commercial activities operating. If the virus can be successfully contained while business activity is normalised, the coronavirus-induced recession could be very short, albeit severe, and localised mostly in China, though with impacts on the country’s supply chain. However, if there are uncontained secondary outbreaks across the rest of China forcing an extended suspension of normal business activity, the recession could be much longer, with an inevitable worldwide effect. And if the virus cannot be contained within China, governments and businesses will face an even more uncomfortable choice about how to manage the trade-off between risks to human health and the need to maintain semi-normal operations.
Crude Oil Crashes to 13-Month Low Amid Devastating Supply Shock – Crude prices nosedived on Monday, as the rapidly spreading coronavirus dampened the demand outlook for oil’s biggest consumer market.Russia and Saudi Arabia are reportedly at odds over how to adjust supplies in the wake of the negative demand shock. The West Texas Intermediate (WTI) benchmark for U.S. crude prices fell nearly 2% to $49.42 a barrel on the New York Mercantile Exchange, its lowest in around 13 months. The futures contract is coming off its fifth straight weekly decline. Brent crude, the international futures benchmark, declined 2% to $49.42 a barrel on London’s ICE futures exchange.Commodity prices are also being pressured by a resurgent U.S. dollar. The dollar index (DXY), a broad measure of the greenback’s performance, peaked at 98.88 on Monday, the highest since October. DXY has gained in six straight sessions.China’s failure to contain the coronavirus outbreak has contributed to oil’s steep drop in recent weeks. Already in a bear market, oil prices could slide another 10% from current levels as the world’s second-largest economy grinds to a halt.That’s because Chinese demand for crude has plunged by around 20% in the wake of the coronavirus epidemic. It’s said that up to 400 million people across the country are under some kind of quarantine. This includes major economic centers like Shenzhen and Shanghai.Before the outbreak, China was the world’s largest energy consumer.The epidemic has already caused Chinese inflation to soar as businesses and supply chains faced disruption. The January consumer price index soared 5.4% annually, its highest in eight years.With demand plunging, energy producers are struggling to come up with an effective response to keep prices from crashing even further.Saudi Arabia and its Gulf Arab allies are reportedly seeking production cuts to the tune of 600,000 barrels per day. According to the New York Times, Russia has yet to endorse the recommendations. As the de facto head of the Organization of Petroleum Exporting Countries (OPEC), Saudi Arabia wields enough power to push for compliance among its Gulf Arab neighbors. Russia, on the other hand, is an external partner that hasn’t always seen eye-to-eye on the need for deep and prolonged production cuts. Russia and OPEC members are expected to meet later this week to discuss potential market-balancing measures. According to Bloomberg, the oil market is experiencing the biggest demand shock since the global financial crisis of 2008 to 2009.
Oil Sinks as Traders Exploit Russian Bear Impact on OPEC – The Russian silence is costing oil bulls dearly. Crude prices fell for a third-straight day on Moscow’s hesitation to greenlight a 600,000-barrels-per-day output cut proposed by an OPEC technical committee to counter the coronavirus crisis. Brent, the London-traded benchmark for crude oil, settled down $1.20, or 2.2%, at $53.27 per barrel. New York-traded West Texas Intermediate, U.S. crude benchmark, closed down 75 cents, or 1.5%, at $49.57. Since hitting nine-month highs in the first week of January, crude prices have closed down each of the past five weeks. Brent and WTI are now down about 20% each on the year, falling into bear-market territory. Russian Energy Minister Alexander Novak said on Friday his administration needed more time to decide whether to join additional oil output cuts proposed by the OPEC technical committee because it had reasons to believe U.S. crude production growth could slow while global demand appeared solid. Some analysts think Moscow is basically skeptical that even the 600,000 bpd of cuts proposed by OPEC would be enough to assuage and boost the market. If the cuts weren’t, then all the Russians would have done is lose more market share without getting corresponding price returns. “Russia wants to take some time before accepting anything, and it might also be that the 600,000 of additional cut is not convincing, even to Russia,” The Russian indecision came as top buyer China’s demand for oil was estimated to be falling by hundreds of thousands of barrels daily from the viral pandemic that had virtually crippled whole parts of its economy from travel to automobile assembly, among others. “The run cuts in China due to the coronavirus are coming at the same time that European and U.S. refineries go on maintenance turnarounds, and the pressure is starting to show in physical crude oil,” Jakob added. The OPEC technical committee meeting, which ended on Friday without a production cut deal was precursor to a more important two-day gathering scheduled March 5-6 among oil and energy ministers of OPEC+, a larger group comprising the 13-member OPEC and its 10 allies, which include Russia. Amena Bakr, deputy bureau chief in Dubai for markets advisory service Energy Intelligence, said in a tweet on Friday there was speculation that the March gathering could be brought forward to as early as Feb. 14-15. But if that meeting too passes without a deal, then Brent could seriously be at risk of breaking its $50 support level while WTI could fall to $45 or below, say traders. “Unless we see a substantive enough cut from OPEC, the forward curve in crude will move further into contango, encouraging storage in oil and even more price weakness ahead,” said Tariq Zahir, managing member at the oil-focused Tyche Capital Advisors in New York.
Crude Oil Crashes to 13-Month Low Amid Devastating Supply Shock – Crude prices nosedived on Monday, as the rapidly spreading coronavirus dampened the demand outlook for oil’s biggest consumer market.Russia and Saudi Arabia are reportedly at odds over how to adjust supplies in the wake of the negative demand shock. The West Texas Intermediate (WTI) benchmark for U.S. crude prices fell nearly 2% to $49.42 a barrel on the New York Mercantile Exchange, its lowest in around 13 months. The futures contract is coming off its fifth straight weekly decline. Brent crude, the international futures benchmark, declined 2% to $49.42 a barrel on London’s ICE futures exchange.Commodity prices are also being pressured by a resurgent U.S. dollar. The dollar index (DXY), a broad measure of the greenback’s performance, peaked at 98.88 on Monday, the highest since October. DXY has gained in six straight sessions.China’s failure to contain the coronavirus outbreak has contributed to oil’s steep drop in recent weeks. Already in a bear market, oil prices could slide another 10% from current levels as the world’s second-largest economy grinds to a halt.That’s because Chinese demand for crude has plunged by around 20% in the wake of the coronavirus epidemic. It’s said that up to 400 million people across the country are under some kind of quarantine. This includes major economic centers like Shenzhen and Shanghai.Before the outbreak, China was the world’s largest energy consumer.The epidemic has already caused Chinese inflation to soar as businesses and supply chains faced disruption. The January consumer price index soared 5.4% annually, its highest in eight years.With demand plunging, energy producers are struggling to come up with an effective response to keep prices from crashing even further.Saudi Arabia and its Gulf Arab allies are reportedly seeking production cuts to the tune of 600,000 barrels per day. According to the New York Times, Russia has yet to endorse the recommendations. As the de facto head of the Organization of Petroleum Exporting Countries (OPEC), Saudi Arabia wields enough power to push for compliance among its Gulf Arab neighbors. Russia, on the other hand, is an external partner that hasn’t always seen eye-to-eye on the need for deep and prolonged production cuts. Russia and OPEC members are expected to meet later this week to discuss potential market-balancing measures. According to Bloomberg, the oil market is experiencing the biggest demand shock since the global financial crisis of 2008 to 2009.
Oil drops 1.5% to 13-month low as weak Chinese demand weighs – Oil prices fell to their lowest level since January 2019 on Monday on weaker Chinese demand in the wake of the coronavirus outbreak and as traders waited to see if Russia would join other producers in seeking further output cuts. Oil has dropped more than 20% from a peak in January after the spreading virus hit demand in the world’s largest oil importer and fueled concerns of excess supplies. Brent crude slipped $1.14, or 2%, to $53.33 per barrel, while U.S. West Texas Intermediate fell 75 cents, or 1.5%, to settle at $49.57 per barrel, its lowest settle since Jan. 7, 2019. That keeps both Brent and WTI in oversold territory for 13 days and 14 days, respectively, their longest bearish streaks since Nov. 2018. The premium of the Brent front-month over the same WTI contract, meanwhile, fell to its lowest since August 2019 in intraday trade. “The concern remains that the wider markets have yet to reflect the full impact of the disruption,” said Saxo Bank commodity strategist Ole Hansen. “With China being the world’s most dominant consumer of raw materials, the impact continues to be felt strongly across key commodities and the world is facing the biggest demand shock since the 2009 global financial crisis.” Beijing has orchestrated support for its companies and financial markets in the past week and investors are hoping for more stimulus to lift the world’s second-biggest economy. Worries over supply were not alleviated on Friday when Russia said it needed more time to decide on a recommendation from a technical committee that has advised the Organization of the Petroleum Exporting Countries (OPEC) and its allies to cut production by a further 600,000 barrels per day (bpd). The group, known as OPEC+, has been implementing cuts of 1.2 million bpd since January 2019. Algeria’s Oil Minister Mohamed Arkab said on Sunday the committee had advised further output cuts until the end of the second quarter. Russia’s Energy Minister Alexander Novak said Moscow needed more time to assess the situation, adding that U.S. crude production growth would slow and global demand was still solid.
The Jet Fuel Crack Killing Oil Won’t Last – Just when investors were beginning to come to terms with weak oil demand amidst a synchronized global economic slowdown, a deadly viral outbreak in the world’s most populous nation has put paid hopes for a quick recovery and placed the oil market in danger of a complete meltdown. Asian jet fuel refining margins have now seen their biggest monthly fall in over 10 years. Global demand for jet fuel is expected to take a big hit after a series of carriers suspended flights to China amid the marauding coronavirus that has so far claimed 362 lives and infected another 17,300 people across the globe.Key international airlines that have cancelled or reduced flights to China include British Airways, Lufthansa, American Airlines, United Airlines, Austrian Airlines and Swiss International Air Lines. Jet crack spreads — a metric that measures the differential between an oil product and the crude from which it is derived — have already narrowed against Brent crude amid expectations of lower demand.Things could get a lot worse if more airlines follow suit. China’s foreign ministry has slammed the United States for setting a “very bad example” after Washington temporarily banned foreign nationals who have traveled to China within the past two weeks entry into the country. Australia, Japan, Italy, Russia, Pakistan and Singapore have announced similar restrictions. Cracks, or refining margins, are trouncing oil right now. In January alone, the jet fuel crack for JETSGCKMc1 (the benchmark Singapore refining margin) plunged 34%–a rate that hasn’t been witnessed since the spring of 2009, according to Refinitive Eikon data cited by Reuters. As we explained in a previous article, crack spreads can be used to gauge demand with narrowing spreads a harbinger for weak demand. China is a major demand hub for jet fuel, with the IEA pegging Chinese jet/kerosene demand at 858,000 b/d in 2019, or 10.7% of global jet fuel demand of 8.01 million b/d. One jet fuel trader has told S&P Platts that further flight cuts could prove to be a game changer in an already depressed market with S&P Platts estimating that a single flight to China carries around 80-90 metric tonnes of jet fuel.The China situation has turned the oil outlook strongly bearish, with the European jet market already weighed down by weak demand due to seasonality. Platts Analytics has forecast a catastrophic drop in oil demand of 2.6 million b/d in February and 2 million b/d in March, in its worst-case scenario against global oil demand of 100.83 million b/d. A best-case sees demand dropping by 900,000 b/d in February and 650,000 b/d in March. The viral outbreak could wreak even more havoc by slowing down the world’s second biggest economy. IHS Markit estimates that the epidemic could lead to a 1.1-percentage-point reduction in Chinese economic growth from its baseline forecast of 5.8 percent growth this year. IHS Markit has based its estimates on a benchmark crafted during the SARS outbreak in 2003.
Oil rebounds amid broad market recovery; investors still wary – Oil prices rose more than 1% on Tuesday in sympathy with a rally in equity markets but investors remained jittery over the Wuhan virus that has now killed over 1,000 in China. Brent crude rose 70 cents, or 1.3%, to $53.97 a barrel by 0428 GMT, retreating from an intraday high of $54.13. U.S. West Texas Intermediate was up 61 cents, or about 1.2%, at $50.18 a barrel. “A broad positive sentiment across Asia markets seems to have boosted crude oil prices,” Margaret Yang, market analyst of CMC Markets, told Reuters. “The rebound is mild and might be short-lived as China’s energy demand is likely to remain soft in the near term due to virus impact. OPEC+ and Russia will need to come out with a cohesive output cut plan to shore up oil prices,” she said. The number of coronavirus deaths in mainland China have now reached 1,016, its National Health Commission said, and the number of cases has topped 42,600. The virus has also spread to two dozen other countries, with the head of the World Health Organization (WHO) cautioning on Monday that the cases outside of China could be “the spark that becomes a bigger fire”. Traders remain concerned that China’s oil demand could take a further hit if the coronavirus cannot be contained. Chinese state refiners have already said they will cut as much as 940,000 barrels per day (bpd) from their crude runs in February due to the virus. “China’s refiners are processing 15% less crude and that could get a lot worse if the virus doesn’t peak this month,” Edward Moya, senior market analyst at OANDA, told Reuters. “OPEC+ appears to be stuck in a wait-and-see mode … Russia can live with $40 oil (and) thus might not be so eager to play ball with the other OPEC+ members in delivering another 600,000 bpd in production cuts,” Moya said. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a grouping known as OPEC+ and including Russia, proposed the additional cuts last week, but Russia said on Friday it needed more time to decide whether to join in any further output reductions. The coronavirus outbreak could trim China’s full-year economic growth rate by as much as 1 percentage point in 2020, said the Chinese government think tank National Institute for Finance and Development.
Oil Bounces Back from One-Year Low— Oil bounced back from a one-year low in New York but the emergence of a glut since the coronavirus outbreak loomed over the market as traders looked to store excess crude on tankers. The world’s largest oil traders are seeking to hoard crude on vessels at sea as the industry tries to deal with the oversupply that’s developed as the outbreak wreaked havoc on Asia’s largest economy. Chinese energy importers are struggling to cope with swelling stockpiles, with one declaring force majeure, as travel bans and quarantines weigh on fuel demand. The growing glut and dithering by OPEC and its allies over how to respond have pushed the oil market into a structure known as contango, where near-term prices trade at a discount to future contracts. And, while oil rebounded somewhat on Tuesday amid a broader move up in financial markets, the contango for U.S. crude stayed near widest in four months. “Crude remains under pressure from worries over demand destruction from the coronavirus,” said Vandana Hari, founder of Vanda Insights. “Prices are likely to continue drifting lower in tandem with the progression of the epidemic.” West Texas Intermediate crude for March rose 1% to $50.07 a barrel on the New York Mercantile Exchange as of 7:28 a.m. in Singapore. It fell 1.5% on Monday to close at $49.57, the lowest in 13 months. Brent crude for April climbed 1% to $53.81 a barrel on the London-based ICE Futures Europe exchange after dropping 2.2% in the previous session. The global benchmark crude traded at a $3.55 premium to WTI for the same month. Vitol SA, Royal Dutch Shell Plc and Litasco SA are among firms asking about hiring supertankers for storage purposes as a sharp drop in Chinese demand due to the coronavirus prompts requests for cargo deferments, according to people familiar with the matter, shipbrokers and oil traders. The Organization of Petroleum Exporting Countries and it allies are unlikely to hold an extraordinary meeting this month to discuss the impact of the virus on oil markets, leaving the possibility of further production cuts up in the air, according to Azerbaijan’s energy minister. However, his Kazakhstan counterpart said Tuesday a meeting may be held around the end of February.
OPEC slashes oil demand outlook for 2020 as coronavirus outbreak stifles China – OPEC has dramatically lowered its forecast for oil demand growth this year, citing China’s coronavirus outbreak as the “major factor” behind its decision. In a closely-watched monthly report published Wednesday, the Middle East-dominated producer group downwardly revised its outlook for global oil demand growth to 0.99 million barrels per day (bpd) in 2020. That’s down by 0.23 million bpd from the previous month’s estimate. The amended forecast is likely to reinforce the case for OPEC and allied non-OPEC producers, including Russia, to impose additional output cuts sooner rather than later. “The impact of the Coronavirus outbreak on China’s economy has added to the uncertainties surrounding global economic growth in 2020, and by extension global oil demand growth in 2020,” OPEC said in the report. “Clearly, the ongoing developments in China require continuous monitoring and assessment to gauge the implications on the oil market in 2020.” International benchmark Brent crude traded at $55.06 at midday London time on Wednesday, up nearly 2%, while U.S. West Texas Intermediate (WTI) stood at $50.69, around 1.5% higher. Both crude benchmarks have each fallen around 20% since climbing to a peak in early January, dragged lower by concern over demand in China during the coronavirus outbreak. WHO says outbreak ‘holds a very grave threat’ for world The group, which consists of some of the world’s most powerful oil-producing nations, said the fast-spreading flu-like virus had necessitated a further downward revision to China’s oil demand forecast. Chinese oil demand was revised down by 0.2 million bpd in the first half of the year, when compared to OPEC’s previous month’s assessment. This has resulted in the producer group downwardly revising its global oil demand growth forecast to 0.4 million bpd through the first half of 2020 – hence a downward revision of 0.2 million bpd for the whole year.
Oil jumps more than 3% at high as Street eyes deeper production cuts, new coronavirus cases slow Oil jumped more than 3% on Wednesday as traders eyed deeper production cuts from OPEC, and as China reported the lowest number of new coronavirus cases since the end of January, easing concerns about a drop-off in demand for oil. “The market is keeping a close watch on the possible move by Russia and its oil companies to get on-board with the proposal to deepen the OPEC+ production cuts,” Again Capital’s John Kilduff said to CNBC. “The companies seem to be willing to extend the time frame of the deal, but not deepen. Any cooperation is a positive, however.” On Wednesday U.S. West Texas Intermediate crude gained 2.6%, or $1.30, to trade at $51.24 per barrel, while international benchmark Brent crude rallied 3.1%, or $1.69, to trade at $55.70 per barrel. Earlier in the session WTI traded as high as $51.73 per barrel. In a closely-watched monthly report published Wednesday, OPEC cut its forecast for oil demand growth this year, saying the coronavirus outbreak was the primary reason. The cartel said it now expects 2020 daily oil demand growth to be 990,000 barrels per day (bpd), which is 230,000 bpd below prior forecasts. This, in turn, could encourage OPEC and its allies, known as OPEC+, to implement additional production cuts. “The impact of the Coronavirus outbreak on China’s economy has added to the uncertainties surrounding global economic growth in 2020, and by extension global oil demand growth in 2020,” OPEC said in the report. An OPEC+ technical committee last week recommended expanding production cuts to put a floor under falling oil prices, although there was some resistance from Russia. RBC’s global head of commodity strategy Helima Croft said that oil’s move higher is “signs that we are getting close to Russia signing off on the OPEC+ deeper cut.” Prices also got a boost as China announced a slowdown in the number of new coronavirus cases. On Tuesday night China’s National Health Commission said there were 2,015 confirmed new cases of the coronavirus on the mainland and 97 additional deaths, bringing the total numbers to 44,653 confirmed cases and 1,113 deaths. Some of oil’s gains were pared, however, after the U.S. Energy Information Administration reported a larger-than-expected inventory build for the week ending Feb. 7. Stockpiles rose by 7.5 million barrels, ahead of the 3.2 million barrel build analysts had been expecting, according to estimates from FactSet.
Oil jumps more than 2% as slowdown in new China coronavirus cases eases fuel demand concerns – Oil prices climbed more than 2% on Wednesday as China reported its lowest daily number of new coronavirus cases since late January, stoking investor hopes that fuel demand in the world’s second-largest oil consumer may begin to recover from the epidemic. Brent crude was up $1.48, or 2.7%, at $55.47 per barrel. U.S. West Texas Intermediate rose $1.11, or 2.2%, to $51.05 per barrel. According to data through Tuesday, the growth rate of new coronavirus cases in China has slowed to the lowest since Jan. 30. Still, international experts remained cautious over forecasting when the outbreak might reach a peak. Travel restrictions to and from China and quarantines have cut fuel usage. The two biggest Chinese refiners have said they will reduce their processing by about 940,000 barrels per day (bpd) as a result of the consumption drop, or about 7% of their 2019 processing runs. “As the growth rate of new cases has decreased … that has improved the (market) sentiment,” said Kim Kwang-rae, commodities analyst at Samsung Futures in Seoul. The demand concerns from the outbreak pushed Brent and WTI to their lowest in 13 months on Monday. Both benchmarks are down more than 20% from highs reached in January. The U.S. Energy Information Administration (EIA) on Tuesday cut its global oil demand growth forecast for this year by 310,000 bpd as the virus outbreak crimps oil consumption in China. Demand worries flipped the oil market into a contango last week, a market structure where prices for near-term contracts are lower than those for later contracts, indicating ample supplies. Contango spread in Brent is unchanged at 15 cents per barrel from a week earlier, while the WTI contango is at 24 cents a barrel, from 17 cents last week. The Organization of Petroleum Exporting Countries (OPEC) and its allies including Russia, known as OPEC+, recommended a further cut of 600,000 bpd last week to stem the oil price fall. However, Russia has been hesitant to commit to the additional cut, while Saudi Arabia wanted global major oil producers to agree a quick oil supply cut. U.S. crude inventories rose by 6 million barrels in the week to Feb. 7 to 438.9 million barrels, beating analysts’ expectations for an increase of 3 million barrels, data from industry group the American Petroleum Institute showed.
Global oil demand set to see first quarterly decline in over 10 years, IEA says – Global oil demand is now expected to see its first quarterly contraction in over a decade, according to the International Energy Agency (IEA), as the new coronavirus and widespread shutdown of China’s economy hits demand for crude.Demand is now expected to fall by 435,000 barrels a day (b/d) in the first quarter of 2020, down from the same period a year ago, and marking the first quarterly contraction in more than 10 years, the IEA said in its monthly oil market report Thursday.The expected decline in demand prompted the agency to cut its 2020 growth forecast by 365,000 b/d to 825,000 barrels a day, the lowest since 2011. Lower-than-expected consumption in the OECD countries trimmed 2019 growth to 885,000 b/d, it also said. The forecast downgrade comes as the coronavirus, which has infected over 59,000 worldwide and killed over 1,300 people, continues to weigh on global market sentiment and China’s economic activity with factories and businesses closing and travel restricted both to and from China and within the country.The outbreak has also affected business elsewhere with economic forums and business conferences cancelled, the latest being the Mobile World Congress that was set to take place in Barcelona this month. The World Health Organization has said the outbreak “holds a very great threat for the world” and the International Monetary Fund’s Managing Director Kristalina Georgieva told CNBC Wednesday the new strain of coronavirus was “clearly more impactful” on the world economy than the 2002-2003 SARS epidemic. The negative impact on oil demand hit oil prices hard as the virus took hold in January with a barrel of Brent crude falling by around $10 to fetch below $55 a barrel. But prices have risen this week on expectations that major producers OPEC and non-OPEC producers, led by Russia, could cut global oil output further to counteract the slump in demand (a slump that had already been around before the coronavirus due to the trade war between the U.S. and China). On Thursday, benchmark Brent crude was trading at $55.73 per barrel, whileU.S. West Texas Intermediate (WTI) was trading at $51.21 per barrel. The consequences of the new coronavirus, known now as “Covid-19,” will be “significant” for global oil demand, oil prices and producers, the IEA said Thursday.
Trading Giants Seek Oil Storage at Sea as Virus Creates Glut (Bloomberg) — Three of the world’s largest oil traders are seeking to store crude on tankers at sea as the industry tries to deal with a glut that’s emerged since the outbreak of the coronavirus in China. Vitol SA, Royal Dutch Shell Plc and Litasco SA are among firms asking about hiring supertankers for storage purposes as a sharp drop in Chinese demand due to the coronavirus prompts requests for cargo deferments, according to people familiar with the matter, shipbrokers and oil traders. Two oil tanker owners said last week that there was rising demand to store, without identifying the companies making the requests. While the emergence of floating storage will come as little shock to an oil market whose main source of demand growth — China — has been hit hard by the virus outbreak, it shows the scale of the buying weakness in the Asian country. Storing doesn’t look profitable on paper and keeping barrels at sea would normally be more expensive than land-based options. For Shell and Vitol, the requests are simply to find ships to store barrels for a several weeks or months. Traders sometimes ask for regular cargo charters to include storage options. Officials from all three companies declined to comment. It’s not clear if any of the companies has booked a vessel yet, and traders will sometimes ask for prices to calculate the viability of a trade. Chinese refiners have cut the amount of crude they’re turning into fuels by about 15% — a reduction of about 2 million barrels a day — as the deadly outbreak hinders the movement of people and hits demand for travel. The fall in processing has prompted re-offers for grades such as Brazil’s Lula, as well as West African crudes as buyers try to back out of purchases. Costs of chartering a very-large crude carrier with capacity of 2 million barrels were $30,000-$33,000 a day, said two shipbrokers. While the 1-month contango structure of about 30 cents per barrel would be insufficient to offset the total cost of chartering the supertanker, it does partly cover the expenses.
Oil jumps 1% on hopes of deeper OPEC+ production cuts – Oil prices moved higher on Thursday as investors focused on the possibility of deeper supply cuts from the world’s biggest producers, whilst largely shrugging off reports which cut demand forecasts after the coronavirus outbreak in China, the biggest oil importer.Brent crude rose 86 cents, or 1.5%, to $56.65 per barrel. U.S. West Texas Intermediate rose 58 cents, or 1.2%, to $51.77 per barrel.Oil demand in China, the world’s second-largest crude consumer, has plunged because of travel restrictions to and from the country and quarantines within it.Hubei province, the epicentre of the outbreak, said on Thursday the number of new confirmed cases there jumped by 14,840 to 48,206 on Feb. 12 and that deaths climbed by a daily record of 242 to 1,310, reflecting changes to the diagnostic methodology.Oil refiner China National Chemical Corp said on Thursday it would close a 100,000 barrel per day (bpd) plant and cut processing at two others amid falling fuel demand.The International Energy Agency (IEA) expects oil demand in the first quarter to fall for the first time in 10 years before picking up from the second quarter. The agency cut its full-year global growth forecast to 825,000 bpd.”(It’s) worth noting that these forecasters are for now assuming a V-shape recovery in oil demand, with the bulk of the impairment concentrated in Q1, 2020,” BNP Paribas analyst Harry Tchilinguirian told the Reuters Global Oil Forum. On the supply side, the Organization of Petroleum Exporting Countries (OPEC) lowered its 2020 demand forecast for its crude by 200,000 bpd, prompting expectations the producer group and its allies, known as OPEC+, could agree further output cuts when they next meet, possibly as early as this month.Brent and WTI have fallen more than 20% from their January peak because of the disease outbreak.Lower fuel demand expectations because of the virus have also shifted the market structure for both Brent and WTI into a contango – where prompt prices are lower than those for later dates.The six-months spread of Brent futures contracts is at about minus 32 cents.Reflecting a well-supplied market, U.S. crude inventories in the week to Feb. 7 increased by a more than expected 7.5 million barrels, the Energy Information Administration said on Wednesday.Meanwhile, a report by consultancy Wood Mackenzie about Nigeria said cost increases and uncertainty could lead to a 35% decline in oil output there over 10 years.
Oil jumps 1%, on course for weekly gain – Oil prices rose on Friday and were on track for their first weekly gain since early January as investors bet the economic impact of the coronavirus would be short-lived and hoped for further Chinese central bank stimulus to tackle any slowdown.Brent crude was up 92 cents or 1.7% at $57.27 per barrel. It has risen 4.4% since last Friday, its first weekly increase in six weeks.U.S. West Texas Intermediate gained 64 cents or 1.2% to trade at $52.07 a barrel, up 3.2% for the week.”It would seem in our view that the oil price is on a more positive footing in the past couple of days, with improved sentiment reflected in Asian equity prices holding up,” said BNP Paribas analyst Harry Tchilinguirian.More than 1,350 people have died from the coronavirus in China, which has disrupted the world’s second largest economy and shaken energy markets. Brent has fallen 15% since the beginning of the year.However, market sentiment improved as factories in China started to reopen and the government eased its monetary policy.The World Health Organization also reassured traders by saying the big jump in China’s reported cases reflected a decision by authorities to reclassify a backlog of suspected cases, and did not necessarily indicate a wider epidemic.Some officials and analysts were still hopeful that the demand impact would remain limited to China.”Our baseline thesis remains that oil demand destruction remains largely a China story and has yet to spill over to impact global demand,” said Helima Croft, head of commodity strategy at Citadel Magnus.U.S. Energy Secretary Dan Brouillette told Reuters the coronavirus epidemic in China had had a marginal impact on energy markets and was unlikely to dramatically affect oil prices even if Chinese demand fell by 500,000 barrels per day.The International Energy Agency (IEA) said that first-quarter oil demand was set to fall versus a year earlier for the first time since the financial crisis in 2009 because of the coronavirus outbreak.
No need to panic about coronavirus impact on oil markets, US energy secretary says – The U.S. energy secretary does not believe the ultimate impact of China’s fast-spreading coronavirus is a cause for concern for markets. His comments come shortly after both OPEC and the International Energy Agency (IEA) dramatically lowered their oil demand growth forecasts this year as a result of the deadly flu-like virus. “I think we are going to pay close attention to what is happening with the virus itself. We are still analyzing, not only the actual virus to learn more about it, but also the response to it,” Dan Brouillette told CNBC’s Hadley Gamble in an exclusive interview on the sidelines of the Munich Security Conference on Friday. “So, we are looking to see if the Chinese government will be able to contain or at least help contain the spread of the virus. At this moment, while we are seeing some slight reductions in production as a result of the virus, we are not yet concerned about its ultimate impact.” International benchmark Brent crude traded at $56.40 Friday morning, up around 0.1%, while U.S. West Texas Intermediate (WTI) stood at $51.49, around 0.15% higher. Both crude benchmarks have fallen nearly 20% since climbing to a peak in early January, dragged lower by concern over demand in China during the coronavirus outbreak.
Oil rises over 1% on hopes demand will rebound from coronavirus effect – (Reuters) – Oil prices rose over 1% on Friday, posting their first weekly gain since early January as investors bet the economic impact of the coronavirus would be short-lived and hoped for further Chinese central bank stimulus to tackle any slowdown. Brent crude LCOc1 rose 98 cents, or 1.74%, to settle at $57.32 a barrel. It rose 5.23% since last Friday, its first weekly increase in six weeks. U.S. West Texas Intermediate (WTI) futures CLc1 gained 63 cents, or 1.23%, to settle at $52.05 a barrel. The weekly rise was 3.44%. “The massive liquidation process that drove prices sharply lower last month has likely been completed and is being replaced by accumulation as well as short-covering from speculators who have recently entered the market,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. Brent has fallen around 15% year to date in part due to worries the coronavirus outbreak would stunt the global economy. More than 1,380 people have died from the virus in China. However, market sentiment improved as factories in China started to reopen and the government eased monetary policy in the world’s second largest economy. The World Health Organization said the jump in China’s reported cases did not necessarily mean a wider epidemic but reflected a decision to reclassify a backlog of suspected cases. The International Energy Agency (IEA) said the outbreak should knock first-quarter oil demand down from a year earlier for the first time since the financial crisis in 2009. In response to the demand slump, the Organization of the Petroleum Exporting Countries and allied producers, known as OPEC+, are considering deepening production cuts.
Oil prices end higher to notch their first weekly climb in six weeks – Oil prices ended higher on Friday to notch their first weekly rise in six weeks, as a report of oil purchases by Chinese refiners helped to ease worries about a slowdown in oil demand from the spread of COVID-19. Bloomberg News reported a “buying spree” among China’s independent oil refiners. March WTI oilrose 63 cents, or 1.2%, to settle at $52.05 barrel on the New York Mercantile Exchange. For the week, prices rose 3.4%, according to FactSet data.
Oil snaps 5-week losing streak with best week of the year – Oil prices rose on Friday, on track for their first weekly gain since early January as investors bet the economic impact of the coronavirus would be short-lived and hoped for further Chinese central bank stimulus to tackle any slowdown. Brent crude was up 89 cents or 1.6% at $57.23 per barrel. It has risen 4.4% since last Friday, its first weekly increase in six weeks. U.S. West Texas Intermediate gained 63 cents or 1.2% to settle at $52.05 per barrel, up 3.3% for the week. “The massive liquidation process that drove prices sharply lower last month has likely been completed and is being replaced by accumulation as well as short-covering from speculators who have recently entered the market,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. Brent has fallen 15% since the beginning of the year in part due to worries the coronavirus outbreak would stunt the global economy. More than 1,380 people have died from the virus in China. However, market sentiment improved as factories in China started to reopen and the government eased monetary policy in the world’s second largest economy. The World Health Organization also noted the big jump in China’s reported cases did not necessarily mean a wider epidemic but reflected a decision to reclassify a backlog of suspected cases. “Our baseline thesis remains that oil demand destruction remains largely a China story and has yet to spill over to impact global demand,” said Helima Croft, head of commodity strategy at Citadel Magnus. The International Energy Agency (IEA) said first-quarter oil demand was set to fall versus a year earlier for the first time since the financial crisis in 2009 because of the outbreak. In response to the demand slump, the Organization of the Petroleum Exporting Countries and allied producers, a grouping known as OPEC+, are considering deepening production cuts.
US Navy Intercepts Advanced Iranian Weapons Bound For Yemen In Arabian Sea –On Thursday the US Navy announced it has seized a vessel in the Arabian Sea bound for Yemen that was transporting advanced weaponry to Shia Houthi rebels. Crucially, a CENTCOM statement described the weapons as “of Iranian design and manufacture” and included such advanced arms as Iranian Dehlavieh anti-tank missiles, as well as at least three surface-to-air missiles, drone parts, and weapon scopes.The defense department statement said the intercepted weapons were similar or identical to prior shipments seized in the area, bolstering the US charge that Tehran has long been using Yemen’s Houthis to wage a proxy war against the Yemeni government and the Saudis. “Many of these weapons systems are identical to the advanced weapons and weapon components seized” in the Arabian Sea in November 2019, the statement continued. “The weapons seized include 150 ‘Dehlavieh’ anti-tank guided missiles (ATGM), which are Iranian-manufactured copies of Russian Kornet ATGMs,””Other weapons components seized aboard the dhow were of Iranian design and manufacture and included three Iranian surface-to-air missiles, Iranian thermal imaging weapon scopes, and Iranian components for unmanned aerial and surface vessels” the statement described. “Those weapons were determined to be of Iranian origin and assessed to be destined for the Houthis in Yemen,” it said. CENTCOM began releasing news of the weapons intercept even as the operation was still said to be “ongoing” by the USS Normandy. The vessel boarded was described as a small to medium-sized vessel. Importantly, the major haul comes after the Sept.14 Saudi Aramco oil facility attacks, which briefly crippled Saudi oil production, which Washington had promptly blamed on Iran. That attack had involved drones and surface-to-air missiles as well.Yemen’s Houthis had claimed responsibility at the time, but the US blamed Iran for being directly behind the attack. But Washington has also long described the Houthis as taking direct orders from the Islamic Revolutionary Guard Corps – while some independent regional analysts have argued the Shia group is more independent than most in the West believe.
Tent Cities, Troop Surge & Tanks Pouring In- Reasons Why The ‘Final War’ For Idlib Has Begun – In the next weeks and months, Idlib is set to be front and center once again in world headlines. Not only have the Turkish and Syrian armies engaged in direct clashes since the weekend – with dozens of casualties on each side – ready for what increasingly looks like the final showdown over Idlib, but superpowers Russia and the US have again lined up on either side. Here are some indicators that dramatic escalation is on the immediate horizon. An impressive, perhaps unprecedented build-up of seemingly endless columns of Turkish armored vehicles and tanks were seen amassing on the border this week:
- 1) Turkey announced Thursday more soldiers are being deployed to Idlib after already previously amassing troops at the border. According to Turkey’s Daily Sabah: The Turkish military has dispatched more soldiers and stationed multiple rocket launchers on the Syrian border as it continues to reinforce units and equipment at Turkey’s observation posts in northwestern Idlib province.The rocket launchers were deployed in Hatay province, while commando squads headed to their units in armored vehicles.
- 2) Turkish tanks, armored columns, and elite commandos are pouring in as state powers are on a collision course: Turkish President Recep Tayyip Erdogan has put NATO’s second-largest army on a collision course with Russian-backed forces loyal to Syrian President Bashar al-Assad to try to prevent the fall of Idlib province, Syria’s last rebel stronghold.The Turkish military ordered hundreds of tanks and armored cars dispatched to Idlib and struck about 170 targets in Syria in retaliation for attacks by Syrian forces that killed at least 12 Turkish soldiers in the northwestern province this month. Russia demanded a halt to attacks on Russian forces and their allies in the northwestern province, who’ve been conducting a months-long advance on the opposition bastion. – Bloomberg
- 3) Erdogan is erecting new “refugee cities” along Turkish-occupied Syrian border territory, in line with his ‘solution’ for the refugee crisis at a moment he’s also threatened Europe with “opening the gates” if he doesn’t receive EU funding to alleviate the burden:
- 4) The United Nations is warning Idlib civilian displacement is now the worst over the nine-year total period of war in Syria. President Assad is being assisted by Russia in the fight to liberate all of Idlib province and insurgent holdout pockets of neighboring Aleppo from al-Qaeda faction Hayat Tahrir al-Sham. In the process pro-Assad forces are clashing with Turkish troops, which maintains ‘observation posts’ in and along Idlib provinces border areas. All of this has created a massive refugee outflow toward the Turkish border: A wave of displacement that has seen around 700,000 people flee a regime offensive in Syria’s Idlib region is the biggest of the nine-year-old conflict, the United Nations said Tuesday.”In just 10 weeks, since 1 December, some 690,000 people have been displaced from their homes in Idlib and surrounding areas,” a spokesman for the Office for the Coordination of Humanitarian Affairs said.
- 5) The United States said it will “stand with its NATO ally Turkey” after the Syrian and Turkish armies engage in direct clashes, and after Erdogan threatened to begin downing Syrian aircraft. This brings the world back to a major international proxy war centered on Idlib, as almost happened before (especially in 2018).
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