Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 29 February 2020. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening.
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Major California refinery explosion, fire temporarily shuts down 405 Freeway – A major refinery fire in Carson, California, temporarily shut down the 405 Freeway in both directions late Tuesday night. The thick smoke and flames could be seen from miles away as the plumes of smoke were hundreds of feet into the air. The fire started after an explosion around 11 p.m. local time in a cooling tower at the Maraton refinery, according to the Los Angels County Fire Department. Authorities said Marathon personnel are “keeping flames in check” while they work to depressurize the system. Flames shut down the freeway for less than an hour before officials reopened the interstate. No injuries have been reported. Fire and refinery officials said on-site monitors had not reported any harmful products in the air “emanating” from the facility as a result of the fire. The Marathon refinery, according to ABC Los Angeles station KABC, is believed to be the largest refinery on the West coast. It processes around 360,000 barrels per day, the station reported.
Crews battle large fire at Los Angeles-area refinery after explosion – It was not immediately clear what caused the fire in the city of Carson. Local residents reported hearing an explosion and seeing a fireball. An explosion and a large fire erupted at a Los Angeles-area refinery late Tuesday. The blaze at a Marathon refinery in the city of Carson happened about 11 p.m. Tuesday. The Los Angeles County Fire Department tweeted that an explosion preceded a fire in the cooling tower, and that Marathon fire crews were keeping the flames in check while the system was being depressurized. No injuries were reported by the county fire department, which was assisting. Carson is a city in southern Los Angeles County, south of Compton. Resident Pricilla Reyes told NBC Los Angeles in a phone interview that her niece came running over to ask whether she heard an explosion and that they saw the fire from their home, which is about four blocks from the refinery. “I heard about four or five explosions, really loud,” said Reyes. “You could see the flames and the smoke from our house,” she said. Reyes said she shut the windows of her home in case the smoke was harmful. Michael Molina told NBC Los Angeles he saw sparks and then “a big fireball in the air.” “I heard a couple more thumps, and I could see like a big ball of smoke,” Molina said. Molina, a truck driver who works in the area, said the force of the blast shook his truck. The city of Carson did not immediately respond to a request for comment late Tuesday. The Los Angeles Sheriff’s Department Carson station tweeted crews had secured a perimeter around the facility but did not anticipate needing to evacuate residents. The fire department was monitoring air quality. Marathon Petroleum’s Los Angeles refinery is the largest on the West Coast with a crude oil capacity of 363,000 barrels per day, according to its website.
Investigation into cause of explosion at California oil refinery – – Investigators are looking into what sparked a tremendous explosion and fire at the largest fuel refinery on the West Coast. The blast there was felt miles away and a huge ball of fire could be seen at the center of the facility. “There were several explosions, up to potentially three explosions, that preceded the fire itself,” according to LA County Fire Department inspector Sean Ferguson. The boom could be heard at least 25 miles away. One of the busiest freeways in the nation – the 405 – shutdown overnight when more than three dozen LA County firefighters raced to extinguish the blaze. It happened at the Marathon Petroleum Refinery, south of LA. What burned was not crude oil. Fire officials told CBS News the incident was a massive propane explosion. The cause still under investigation and the bulk of the refinery, back up and running. This refinery produces more than 360,000 barrels of oil a day and there are no signs that will be impacted. Fire officials told CBS News there were no injuries, and there does not appear to be a threat to the public. They continue to monitor air quality, making sure there are no toxic hazards to surrounding neighborhoods.
Vessel sinks, spills oil in Anacortes – A vessel sunk and spilled oil in Anacortes Thursday The state Department of Ecology said they responded to the spill in Skyline Marina in Anacortes along with personnel from the US Coast Guard.They deployed a boom around the 44-foot vessel, using absorbents to recover oil and diesel, and a dive team closed off fuel vents and other openings to stop any more from spilling out.The department lifted the vessel Friday afternoon and were working to remove all fuel in the water.
Express Yourself, Part 3 – What REX Pipeline’s Contract Changes Mean for Gas Flows, Prices –After a major decontracting and partial recontracting last fall, Tallgrass Energy’s Rockies Express Pipeline headed into 2020 with 839 MMcf/d in firm, long-haul commitments for natural gas moving east out of the Rockies for delivery into the Midwest. That volume is down from 1.3-1.8 MMcf/d in firm commitments previously. The contracted volume is also much lower than the peak – and even the average – historical gas flows on the route to the Midwest markets in recent years. At the same time, Tallgrass’s Cheyenne Connector pipeline and Cheyenne Hub Enhancement projects are expected to bring as much as 800 MMcf/d of new firm gas supply from the Denver-Julesburg (D-J) Basin to the REX mainline at Cheyenne Hub. What will these changes mean for Rockies’ eastbound flows and prices? Today, we wrap up our series on REX’s recontracting with an assessment of how the recent contract changes could affect REX gas flows.
Oneok announces expansions of new natural gas liquids pipeline, processing plant – Oneok plans to expand its new natural gas liquids pipeline that runs from the Bakken to Kansas, and it also intends to add onto a new processing facility. The company’s Elk Creek Pipeline started operating in December. It can transport up to 240,000 barrels per day of natural gas liquids, such as ethane, propane and butane that are removed from the raw gas that comes up in wells alongside oil. Under certain temperatures and pressures, those components exist in liquid form. Now Oneok seeks to add 10 pump stations along the line in Montana, Wyoming, Colorado and Kansas to boost its capacity to 400,000 barrels per day. The company, which announced the expansion this week, estimates the upgrades will cost $305 million. Oneok plans to start transporting more natural gas liquids via the pipeline in early 2021 and ramp up to the line’s full capacity by the third quarter of the year. “That expansion will be necessary in order to keep pace with growth,” said Justin Kringstad, director of the North Dakota Pipeline Authority. North Dakota processes just over 600,000 barrels per day of natural gas liquids, and that figure is expected to increase in the years ahead, he said. The Elk Creek Pipeline begins in Richland County in eastern Montana and runs for 900 miles to Kansas. It does not cross through North Dakota, although it carries natural gas liquids from the state that it receives via other pipelines. Once those liquids arrive at their end destination, the various components are further separated so they can be used to manufacture plastics or to make cooking fuel, to name a few applications.
Brine, oil spill in North Dakota mostly recovered — An estimated 26,000 gallons of produced water and 1,900 gallons of oil spilled Thursday, Feb. 20, at a saltwater disposal well in Mountrail County, N.D., according to a news release from the state Department of Environmental Quality.Produced water is a mixture of saltwater, oil and sometimes, drilling fluids, that is created during oil and gas production.Saltwater disposal company Goodnight Midstream reported that a tank leak caused the spill, which occurred about eight miles northeast of New Town. Nearly all of the spilled brine and oil was recovered on-site when the spill was reported to the state on Friday, according to the release, and cleanup continues. Department officials will continue inspecting the site and monitoring remediation efforts.
Valve leak spills treated produced water in NW North Dakota (AP) – The North Dakota Oil and Gas Division reports a valve leak has spilled 105,000 gallons of treated produced water in northwestern North Dakota.The release was reported Monday at Justin SWD 1 saltwater disposal well, about five miles (eight kilometers) southwest of Tioga.Bosque Disposal System, LLC reported Tuesday that 2,500 barrels of treated produced water was released due to a valve/piping connection leak. The product was contained on-site and at the time of reporting all of the spill had been recovered.A state inspector has been to the location and will monitor any additional cleanup required. The produced water was mixed with hydrochloric acid which was neutralized with sodium bicarbonate as part of the cleanup. Hydrochloric acid is a commonly used acid in oil and gas production.
Canada: police clear rail blockade by Indigenous anti-pipeline activists – Police in Canada have removed Indigenous activists from a railway line in Ontario, where a two-week protest against a contentious natural gas pipeline has blocked train traffic and fueled a growing political crisis for prime minister Justin Trudeau. Ten members of the Tyendinaga Mohawk nation were arrested on Monday when officers moved in to lift the blockade which had been erected in support of the Wet’suwet’en First Nation in British Columbia who are fighting a 416-mile pipeline through their traditional territory. Ontario provincial police had warned the activists that they had until midnight Sunday to leave the area, or face arrest and charges. Wet’suwet’en activists opposing the C$6.6bn (US$4.98bn) Coastal GasLink pipeline were forced to leave a remote camp which had been blocking construction on 10 February. But secondary protests sprang up across the country as demonstrators blocked railways, government buildings and ports. Canadian National, which owns the rail line, won an injunction to clear the blockade near the city of Belleville, Ontario, in early February. But police, wary of violent standoffs in the 1990s with Indigenous groups, had so far been unwilling to forcefully remove the demonstrators. Shortly after sunrise on Monday morning, however, dozens of officers descended on the blockade. Police barred media from the operation, but the confrontation was broadcast on a Facebook live broadcast. Tyendinaga Mohawk activists heckled a phalanx of police officers, telling them they were standing on Indigenous land and had no authority. ADD Officers warned that people standing near the rail line were in violation of the injunction and faced imminent arrest. Moments later, dozens of officers tackled a number of protestors, forcing them to the ground and cuffing their hands with zip-ties. “Stay back,” police shouted to the remaining demonstrators. The two sides remained in a tense standoff until members of the Tyendinaga Mohawk nation received orders from community leaders to back away. The blockade of rail lines through Tyendinaga Mohawk territory has crippled much of Canada’s freight and commuter rail traffic, and the string of protests have been blamed for 1,400 layoffs at Canada’s main rail companies, propane shortages in eastern Canada and economic hardship for farmers. The protests have piled pressure on Trudeau, who came to power promising reconciliation with Canada’s First Nations, but has supported the country’s fossil fuels industry.
Domestic Terror?- Canadian Environmentalist Protesters Attempt To Derail Train — Shocking video out of Ontario, Canada shows left-wing environmentalist protesters attempt to derail and then set fire to a train. Members of the Mohawk First Nation, who are engaging in rail blockades in an effort to stop the construction of a pipeline, were filmed standing in front of a train before pelting it with rocks and then laying thick tree branches on the tracks. Another video shows firefighters attending to a car that was engulfed in flames and placed on the railway tracks. A car was engulfed in flames on Wednesday on the railway tracks at Shannonville Road in Tyendinaga, Ont. Firefighters arrived on scene to extinguish the fire and it is currently unknown if protesters set the fire. It’s time to call a spade a spade. As violence spreads on the tracks, and professional protestors attempt to light trains on fire, a PM must act, or resign. “It is extremely concerning to see people endangering their own lives and the lives of others by trying to interfere with the trains,” remarked Prime Minister Justin Trudeau. According to Quebec Premier Francois Legault, some of the demonstrators have also been seen carrying AK-47s. While some of the protesters have been arrested while manning the blockades, no charges have been brought.
Teck drops C$20.6 billion oil sands Frontier project, to take writedown (Reuters) – Canadian miner Teck Resources Ltd has withdrawn an application to build its C$20.6 billion ($15.7 billion) Frontier oil sands mine in Alberta, days before the federal government was to decide on whether to approve a project opposed by environmentalists and indigenous groups. Teck said on Sunday it would write down the C$1.13 billion ($852.12 million) carrying value of the project. The news was first reported by the Globe and Mail newspaper. The company released a letter by Teck Chief Executive Don Lindsay to Canada’s environment minister, stating Teck was “disappointed to have arrived at this point”. The fate of the mine, which was first proposed in 2011, was expected to be decided next week in what had become a test of Canada’s commitment to reduce greenhouse gas emissions and repair relations with the country’s indigenous people. At full capacity, the mine would have produced 260,000 barrels of crude oil per day, making it one of the largest in Alberta’s carbon-intensive oil sands. “The growing debate around this issue has placed Frontier and our company squarely at the nexus of much broader issues that need to be resolved,” Lindsay wrote in his letter. “In that context, it is now evident that there is no constructive path forward for the project.” On Friday, the Canadian miner floated a potential exit from the oil sands and warned of the possible C$1.13 billion hit should Prime Minister Justin Trudeau’s government reject the Frontier bitumen mine.The decision was a complicated one for Trudeau who made a 2019 election pledge to put Canada on the path to reach net zero greenhouse gas emissions by 2050. But unhappiness with the government’s energy and pipeline policy cost Trudeau’s Liberals all their seats in Alberta, where the project was considered essential for employment and growth. “The withdrawal of Teck’s Frontier Mine application is more devastating news for the Canadian economy, especially for Albertans and indigenous people,” Alberta Premier Jason Kenney tweeted on Sunday.
Almost 100 oil barrels removed from ghost ship; Council now closing down the wreck – NINETY-FIVE oil barrels were airlifted by helicopter from the MV Alta ghost ship today in an operation co-ordinated by Cork County Council before the cargo ship was “closed down”. Among the 95 barrels were 62 full containers and another 33 which were empty. The removed containers were taken to a designated drop-off point where they were transferred to a vehicle and removed by an environmental agent. As a further precaution, Cork County Council has left oil-absorbent pads and booms at some locations onboard the ship where there could be residual seepage from pipe systems which have been drained. The waste oil will be disposed of by a licensed contractor and will be recycled for use in bituminous road-making materials. The MV Alta was shipwrecked on Ballycotton rocks during Storm Dennis after spending a year and a half wandering the seas unmanned. The cargo ship has a complex and mysterious past that begun on a voyage from Greece to Haiti in 2018. Ten crew members were rescued by the US coast guard, whisked off the boat ahead of a looming hurricane, and a tug vessel was reportedly contracted to tow the MV Alta to Guyana, but it is not thought to have made it to port. Six months before washing up in Cork, the ghost ship was spotted off the coast of West Africa. Cork County Council said it was now closing down the wreck with the removal of the pilot ladder and any other access points, rendering the ship inaccessible. “The wreck is now essentially empty, having had no cargo, and with any significant documentation and equipment removed,” said a spokesperson. “Cork County Council continues to ask members of the public to stay away from the wreck location as it is located on a dangerous and inaccessible stretch of coastline, is in an unstable condition and on private property.”
PDVSA shifts oil cargoes to different Rosneft unit, U.S. threatens action – (Reuters) – State-run PDVSA has shifted several oil cargoes from Rosneft Trading SA, which was hit by U.S. sanctions last week, to another affiliate of the Russian oil giant, internal documents from the Venezuelan company showed, prompting the U.S. special envoy to warn that more firms could be penalized if they “play games.” According to PDVSA’s trade reports seen by Reuters, four cargoes carrying some 6.7 million barrels of Venezuelan oil which had previously been allocated to Rosneft Trading for February loading were changed in recent days to another unit of the Russian firm, TNK Trading. Two of the cargo changes occurred in the first week of February. The other two came after the U.S. sanctions date, the data shows. Rosneft absorbed TNK Trading International after it completed the purchase of TNK BP in 2013. TNK Trading and Rosneft Trading share an address in Geneva, according to online company registry Moneyhouse. PDVSA and Rosneft did not respond to questions about the changes. Reuters could not determine whether the move was in response to U.S. sanctions. U.S. Special Representative for Venezuela Elliott Abrams told Reuters on Monday that he was aware of the cargoes shifted to TNK Trading. “I’d only say that if they play games like that with OFAC, all that will happen is additional companies will get sanctioned,” he said, referring to companies trying to work around the sanctions from the Office of Foreign Assets Control. In an escalation of its “maximum pressure” strategy designed to oust Venezuelan President Nicolas Maduro, Washington imposed sanctions last week on Rosneft Trading SA – PDVSA’s main business partner – and its boss, Didier Casimiro. U.S. officials accused Rosneft Trading, which last year became the largest intermediary for Venezuelan oil, of propping up PDVSA following the imposition of U.S. sanctions on the state firm at the beginning of last year and engaging in “tricks” to hide the country of origin of some cargoes.
Russia’s Rosneft Still Quietly Exporting Venezuelan Oil Via Sanctions-Free Affiliate – Last week’s announced US sanctions on an arm of Russia’s Rosneft for helping Venezuelan leader Nicolas Maduro circumvent US punitive measures by propping up Venezuela’s oil sector already appear to be failing.Specifically, the Feb.18 sanctions targeted Rosneft Trading SA, a unit of Russia’s state-owned oil giant Rosneft, as well as company’s executive Di dier Casimiro as part of Trump’s heightened pressure campaign on Venezuelan oil, but in fresh reporting Monday Bloomberg finds, “Now, another company affiliated with Moscow-based oil giant Rosneft PJSC that isn’t sanctioned – and thus can trade freely – is ramping up shipments from Venezuela.”A subsidiary company acquired by Rosneft in 2017 called TNK Trading is greatly increasing its shipments of Venezuelan crude while Rosneft Trading SA hasn’t shipped since January 29, according to data examined by Bloomberg. In the month up to Rosneft Trading being sanctioned, it accounted for up to half of the country’s 850,000+ barrels a day in exports. By all appearances TNK is now busy picking up the slack. Bloomberg details further:TNK Trading International SA is scheduled to load 14.3 million barrels of Venezuelan crude in the first two months of 2020, compared with 5 million in all of 2019, according to shipping reports compiled by Bloomberg. That may offset any lost oil revenue for the Maduro administration, underscoring the difficulty of shutting Venezuela’s access to the global market.This allegation of Russia’s continued assistance to Maduro for sanctions-evading comes after last week a senior Trump administration official accused Rosneft of “actively evading sanctions – engaging in ruses, engaging in deception.”But Rosneft’s position has been that US sanctions are illegal and that its own operations in Venezuela are commercial in nature, not political. Over the past months the company’s cooperation with state-run PDVSA has been an “open secret”.
US LNG leaned on Europe in 2019, but it might not be able to in 2020 – Exporters of U.S. LNG in 2019 relied increasingly on Europe to absorb a flood of new natural gas supply, but there is growing skepticism among market observers that the European market can continue to provide the same level of relief this year. If Europe cannot, one of the few bright spots for the U.S. gas market could dim. Experts are warning that exporters may have to curtail LNG production. LNG prices have collapsed as rising supplies, especially in the U.S., met weaker-than-expected demand in a mild winter. On top of that, the coronavirus outbreak has crippled industrial demand for gas in China, which is supposed to be the world’s fastest-growing importer of LNG. Recent figures from the U.S. Department of Energy underscored the dependence of U.S.-based exporters on European markets last year. In 2019, the combined Europe and Central Asia region, which includes Turkey, took about 40% of LNG cargoes exported from the U.S., while about 30% of cargoes went to the East Asia and Pacific region, which includes major end-users like Japan and South Korea, according to an analysis of monthly DOE export figures released Feb. 18. The top destinations in Europe for U.S. cargoes were the U.K., Spain and France. Many of the purchases were concentrated in the second half of 2019, as prices weakened and trade tensions between the U.S. and China continued. In the fourth quarter of 2019, about 53% of U.S. cargoes went to Europe, while the East Asia and Pacific region accounted for about 32%. The U.K. received about 95.9 Bcf worth of U.S. LNG during the fourth quarter, which was the majority of the approximately 120.6 Bcf that the U.K. imported from the U.S. in all of 2019.
Eni Sees Oil Peak Just 6 Years Away– Eni SpA predicted its oil and gas output will top out within six years as it announced a more ambitious climate plan, following the lead of peers in pledging to offset emissions from the fuels it makes and sells. The Italian energy giant sees output reaching a plateau in 2025 and targets an 80% cut in net emissions by 2050, it said Friday. That commitment illustrates the mounting pressure on oil companies to act on climate change — not only from environmental activists but a growing proportion of major investors too. “We have designed a strategy that combines economic sustainability with environmental sustainability,” Chief Executive Officer Claudio Descalzi said in a statement. “This will allow Eni to be a leader in the market supplying decarbonized energy products.” Eni’s plan expands on a previous goal to reach net-zero emissions from its own exploration and production operations by 2030. The new strategy refers to so-called scope 1, 2 and 3 emissions, covering “the entire life-cycle of the energy products sold and a 55% reduction in emission intensity compared to 2018,” according to the Rome-based company. The raft of recent climate pledges by Europe’s major oil companies marks a big step for an industry that produces the bulk of the world’s planet-warming gases. Earlier this month, BP Plc stunned investors with a promise to eliminate emissions from its operations by 2050. It also vowed to halve the carbon intensity of the fuel it sells but doesn’t produce itself. That followed moves by Royal Dutch Shell Plc and Repsol SA to adopt new emission targets. The industry’s plans are likely to necessitate an expansion of renewables and better technology to capture and store carbon, as well as a retreat from the most polluting fossil fuels.
Control of offshore gas and oil provokes conflicts in eastern Mediterranean – The dispatch of Turkish troops to Libya, the bitter dispute between France and Italy over military policy at December’s NATO summit in London, and the formation of a French-Greek military alliance against Turkey indicate the extent to which oil and gas have become the source of ever widening conflicts. While it was popularly understood that the US/UK-led invasion of Iraq was a war for oil, this is less well understood in the case of Libya, which contains the largest deposits of oil in Africa and in 2010 was one of the 10 largest oil producers in the world. The struggle for Libya and its oil has now, moreover, become embroiled in the escalating conflict over the newly discovered gas fields in the Levantine Basin. A new “scramble for Africa” is being tied into a new “scramble” for the eastern Mediterranean, as Turkey, Greece, Israel, Egypt, Cyprus, Lebanon and the European powers compete over gas exploration, production licenses and pipelines. According to a US Geological Survey report published in 2010, the Levantine Basin, which straddles the maritime borders of Cyprus, Egypt, Israel, Palestine, Lebanon and Syria, contains an estimated 1.7 billion barrels of oil and 122 trillion cubic feet (tcf) of gas. It estimates that eventually there will be enough gas to meet regional and European power demand for decades. In 2009 and 2010, Israel discovered gas reserves of 11 trillion cubic feet in the Tamar field, and 22 tcf in the Leviathan field, ensuring sufficient capacity for both its domestic needs and exports, although some of these fields lie in waters claimed by Lebanon and Gaza. In 2011, Cyprus discovered an estimated 8 tcf of gas reserves in the Aphrodite field. With Turkey claiming ownership of the natural resources around Cyprus, divided between Turkish and Greek zones since the 1974 war, this heightened tensions in the region, leading to violent ship collisions and even the suspension of drilling in 2016. By far the largest field in the region is Egypt’s Zohr field, discovered in 2015, with an estimated 30 tcf. Located north of the Suez Canal, it is owned jointly by Italy’s Eni (50 percent), Russia’s Rosneft (30 percent), the Anglo-American BP (10 percent) and Egypt’s Mubadala Petroleum (10 percent). Last week, Egypt signed a $43 million oil and gas exploration deal with the German company Wintershall DEA to explore oil and gas in the East Damanhour Bloc in the Nile Delta.
Crew Kidnapped from Oil Tanker – Reporting indicates that the Alpine Penelope crude oil tanker has been attacked while in transit towards Lagos, resulting in the kidnap of nine personnel, Dryad Global has revealed on its website. The identities of the kidnapped crew remain unknown, although Dryad highlighted that the vessel is known to have a crew of 24 personnel, consisting of Georgians, Filipino and Ukrainian nationals. Dryad, which outlined that the “source confidence level” of the incident is “high”, said the fate of the crew remains unclear at this stage. This is the seventh incident to occur in the waters off Cotonou since January 19, according to Dryad. Of those, five have resulted in illegal boardings offshore, two of which resulted in kidnappings of crew, Dryad pointed out. “Within 2019 the waters off Lome and Cotonou witnessed an increase in both volume and severity of maritime crime incidents,” Dryad said in a company statement posted on its website. “Dryad advise that all vessels transiting the area be subject to thorough transit risk assessment prior to entry into the area and implement full mitigation measures,” Dryad added. Dryad describes itself as an expert in maritime risk and global security. According to the company’s website, there have been 544 attacks on commercial shipping in the last two years.
OPEC hasn’t run out of ideas, Saudi energy minister insists as oil prices slump – OPEC and its allied oil-producing nations are still working well together and still have options to try to rebalance global crude markets, Saudi Energy Minister Prince Abdulaziz bin Salman said Tuesday. “We do communicate with each other, we use every opportunity to talk with each other,” he said, speaking to reporters at the ICCUS conference in the Saudi capital of Riyadh. “We did not run out of ideas, we haven’t lost our phones and there are always good ways of communicating through conference calls and technology is very helpful.” His comments came amid speculation that there is tension in the alliance, known as OPEC+, over whether to cut oil production further. Prices continue to be weighed on by ample supply and falling demand and, lately, fears surrounding the coronavirus and its impact on the global economy. Prince Abdulaziz insisted that the producer countries in the alliance communicate and he was “confident of our partnership,” adding that every producer was a “responsible” one. OPEC and its non-OPEC allies, led by Russia, will meet in Vienna on March 5-6 but there is uncertainty over whether the entire group will agree to cut their collective oil output further with rumors that Russia is still undecided. As it stands, the alliance has reduced its total oil output by 1.7 million barrels a day in a bid to stabilize oil prices. The technical committee of OPEC+ met earlier in February to debate a possible oil output cut but the meeting ended with no solid recommendation.
Oil prices skid on demand concerns as virus spreads globally – Oil prices tumbled 4% on Monday, as the rapid spread of a coronavirus in several countries outside China left investors concerned about a hit to demand.Global shares also extended losses as worries about the impact of the new virus grew, with the number of infections jumping in Iran, Italy and South Korea.Brent crude was down $2.42, or 4.1%, to $56.09 a barrel. U.S. crude futuresfell by $2.12, or 4%, to $51.26.”Oil prices will remain vulnerable here as energy traders were not pricing in the coronavirus becoming a pandemic,” said Edward Moya, senior market analyst at OANDA.”While some parts of China are seeing improving statistics with the coronavirus, financial markets will remain on edge until we start seeing the situation improve in Iran, Italy, South Korea and Japan.”South Korea’s fourth-largest city, Daegu, grew increasingly isolated as the number of infections there rose rapidly, with some airlines suspending flights to the city until March 9 and March 28, respectively. The country reported its seventh death after raising its infectious disease alert to its highest level.Italy reported a third death from the flu-like virus and 150 infections.Iran said it had confirmed 61 cases and 12 deaths, with most of the infections in the Shi’ite Muslim holy city of Qom. Afghanistan, Iraq, Kuwait, Saudi Arabia and Turkey imposed travel and immigration curbs on the Islamic Republic.”We should not underestimate the economic disruption as a super spreader could trigger a massive drop in business activity around the globe of proportions the world has never dealt with before,” Stephen Innes, chief market strategist at AxiCorp, said in a note on Monday.Oil prices received some support after local health officials in China said on Monday that four provinces had lowered their virus emergency response measures.Chinese President Xi Jinping said on Sunday the world’s largest energy consumer will adjust policy to help cushion the blow to the economy from the virus outbreak.Goldman Sachs said commodity prices could fall sharply before Chinese stimulus efforts later this year helps the sector achieve its 12-month return forecast of about 10%.”The promise of stimulus has made commodity markets act like equity markets, building up risks of a sharp correction,” the bank said in a note
Oil falls 5%, sliding into bear market territory as coronavirus sparks demand fears – Oil slid more than 4% on Monday, falling into bear market territory as the number of coronavirus cases outside of China surged, worrying investors that a subsequent slowdown in the global economy could dent the demand for crude.U.S. West Texas Intermediate crude slid 5%, or $2.68, to $50.70 per barrel, while International benchmark Brent crude fell $3.06, or 5.2%, to trade at $55.44 per barrel. Raymond James cut its oil outlook on Monday as the number of coronavirus cases continues to rise. “There is no escaping the fact that China – the world’s largest oil importer – will have meaningfully weaker near-term oil demand than we had envisioned as the year began,” analyst Pavel Molchanov wrote in a note to clients. Molchanov said demand in the first quarter will be reduced by an average of 1.5 million barrels per day. He said that a warmer-than-normal winter across the Northern Hemisphere is also hitting demand.Total confirmed cases of the coronavirus now stands at more than 79,400, while the death toll is more than 2,621. On Monday Italian news agency ANSA said that a seventh person has died in the country, with the number of confirmed cases exceeding 220.Citi was among the other firms cutting its oil outlook as cases of the coronavirus accelerate.”The oil market is confronting new signs of weakness, largely from the coronavirus and its impacts on refinery demand for crude oil and from Russia’s refusal to agree to an emergency OPEC+ meeting to curb oil production,” the firm said in a note to clients.Citi said that it now believes inventories could grow to 2 million barrels per day in February alone, which will put “even more sustained pressure on prices.” A week ago, the firm’s forecast stood at a potential build of over one million barrels per day for the quarter.The firm also raised its first quarter build projection from 112 million barrels to 145 million barrels, and lifted its second quarter forecast from 53 million barrels to 94 million barrels. “However, our draws for 3Q are lower vs. last week’s estimates,” the firm added.Molchanov added that since the virus and weather issues are transitory, “the global oil market will need sustainably higher prices in order to avoid a major undersupply in 2021 and beyond.”
Oil Ends Sharply Lower On Virus Jitters – Crude oil prices plunged sharply on Monday amid rising concerns about the outlook for energy demand due to the rapidly spreading coronavirus outside China. According to reports, the number of new cases of coronavirus infection is rising in South Korea, Iran, Afghanistan and Italy. A report from Reuters, quoted Saudi Aramco CEO Amin Nasser as saying the coronavirus impact will be “short term”. This probably pulled oil prices from the day’s lows. West Texas Intermediate Crude oil futures for April ended down $1.95, or about 3.7%, at $51.43 a barrel, after falling to a low of $50.45 in the session. Brent Crude futures declined $2.20, or about 3.8%, to $56.30 a barrel. On Friday, WTI Crude oil futures for April ended down $0.50, or about 0.9%, at $53.38 a barrel. South Korea has raised its coronavirus alert to the “highest level” for the first time in a decade, following a rapid spike in cases over the weekend. Reports say the total number of cases so far in South Korea has risen to 763. Italy became Europe’s epicenter for coronavirus cases over the weekend. Iran has confirmed an uptick in infections. Italian bank Intesa Sanpaolo has reportedly decided to close 4 branches in the country as the government imposed strict quarantine restrictions in two northern “hotspot” regions close to Milan and Venice. Iran has confirmed 43 cases and eight deaths, with most of the infections in the Shi’ite Muslim holy city of Qom. Saudi Arabia, Kuwait, Iraq, Turkey and Afghanistan imposed travel and immigration restrictions on the Islamic Republic. The virus has now killed 2,592 people in China, which has reported 77,150 cases. The rapid spread of the deadly virus in several countries outside China left investors concerned about a hit to demand. Meanwhile, the World Health Organization said it is worried about the growing number of cases without any clear link to China.
Oil falls more than 1% as virus fears outweigh supply cuts — Oil slipped towards $56 a barrel on Tuesday, falling for a third day, as concerns about the spread of the coronavirus and its impact on oil demand outweighed OPEC output cuts and Libyan supply losses.Crude fell almost 4% on Monday, with other commodities also reporting losses while U.S. and European equities suffered their steepest declines since mid-2016 on concern the coronavirus outbreak could turn into a pandemic.Brent crude fell 61 cents, or 1.2%, to $55.64 a barrel. U.S. West Texas Intermediate crude slipped 74 cents, or 1.4%, to $50.69.”Oil prices are naturally feeling the full wrath of the coronavirus spread,” said Craig Erlam, analyst at brokerage OANDA, who added the $54 level for Brent was looking “vulnerable”.South Korea aims to test more than 200,000 members of a church at the centre of a surge in coronavirus cases. The virus is also spreading in Europe and the Middle East.Concern about the demand impact from the virus has pushed Brent down by almost $10 a barrel this year despite the shutdown of most of Libya’s output and a supply pact between the Organization of the Petroleum Exporting Countries (OPEC) and allies.Prices received further support as lawmakers based in areas of eastern Libya on Monday said that they would not participate for now in peace talks.However, oil could come under more pressure from the latest U.S. supply reports.Crude inventories are expected to rise for a fifth week running. The first of this week’s two supply reports, from the American Petroleum Institute (API), is due at 2130 GMT.Potential support for prices could also come from OPEC and allies including Russia, which are considering whether to curb output further. However, scepticism is growing about the chance of further action.”Doubts are emerging about the willingness of OPEC+ to extend and expand the necessary production cuts,” said Commerzbank analyst Eugen Weinberg. The producers are due to meet in Vienna over March 5-6 to decide policy.Saudi Arabia’s energy minister on Tuesday said OPEC+ should not be complacent about the coronavirus. But Russia, key to any deal, has yet to announce its position on further curbs.
Oil Futures Settle At 2-week Low – Crude oil prices declined sharply on Tuesday, extending recent losses, amid concerns about the outlook for energy demand due to the impact of the coronavirus outbreak on global growth. West Texas Intermediate Crude oil futures for April ended down $1.53, or about 3%, at $49.90 a barrel, the lowest settlement in about two weeks. Brent crude futures declined $1.48 to $54.86 a barrel. On Monday, WTI crude oil futures for April ended down $1.95, or 3.7%, at $51.43 a barrel. According to reports, the number of new virus cases in China outside Hubei continued to drop. Countries around the world have stepped up efforts to prevent a pandemic of the flu-like virus, with the U.S. pledging $2.5 billion to fight the disease. South Korea said it aims to test more than 200,000 members of a church at the center of a surge in coronavirus cases. On Monday, the World Health Organization insisted it was premature to declare the deadly outbreak of a novel coronavirus a pandemic even though it had the potential to reach that level. According to a report from Reuters, Saudi Aramco expects the coronavirus impact on oil demand to be short-lived. Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman said that OPEC+ should not be complacent about the coronavirus. Traders were also looking ahead to the weekly inventory reports from the American Petroleum Institute (API) and Energy Information Administration (EIA). While the API’s report is due later today, the EIA is scheduled to come out with its inventory data Wednesday morning.
Everybody Wants To Rule The World, Part 3 – Coronavirus, the Crude Price Slide and OPEC Production Cuts –Oil-production restraint by OPEC and 10 cooperating countries grows more challenging with time, and just when market projections began to hint at relief for the OPEC-Plus group, the spread of the new coronavirus in China and beyond became a sudden and possibly serious impediment to global economic growth and oil demand. Yesterday’s slide in crude oil prices amid newly heightened concern about the potential pandemic’s effects will only add to the challenges that OPEC-Plus countries will face in managing crude supply. So far, the OPEC-Plus group has achieved unprecedented compliance with its production ceilings, which it implemented in January 2017 and has adapted a few times since in response to market pressure. That effort has kept the crude price above the ruinous levels of 2015, memories of which have encouraged quota discipline. But the threat of a major, coronavirus-related slowdown in global oil demand could seriously undermine OPEC-Plus’s efforts, which already had been hurt by dissent within its ranks. Today, we continue our series with a look at Monday’s price drop, the latest supply and demand forecasts and a discussion of the obstacles that might affect OPEC-Plus going forward.
WTI Back Above $50 After Smaller Than Expected Crude Build – Oil prices roundtripped overnight after running back above $50 following the smaller-than-expected API-reported crude build, sliding back lower overnight, and ramping back to $50.00 ahead of the official government data thanks to promises from OPEC+ that they will meet, despite the virus concerns:“The OPEC secretariat is in contact with the authorities in the city of Vienna on the recent reported cases of infections in Austria,” Secretary-General Mohammad Barkindo says while returning from meeting in Riyadh.“While we continue in earnest with the preparations for the meetings of the extraordinary conference next week, we are continuing to monitor developments closely” ‘There will be blood’ comes to mind. Additionally, Bloomberg Intelligence Senior Energy Analyst Vince Piazza says E&Ps have professed heightened capital discipline in 2020, which should slow oil-production growth in the U.S and help tighten balances. But global demand remains a broader concern, with the fears of the coronavirus spreading even as oil exports from the U.S recovered recently. DOE:
- Crude +452k (+2.8mm exp)
- Cushing +906k
- Gasoline -2.691mm (-1.9mm exp)
- Distillates -2.115mm (-900k exp)
The official crude inventory data showed an even smaller build than API (and notably less than expected)
Oil little changed as pandemic fears deepen, but smaller than expected inventory build caps losses – Crude prices slid for a fourth day on Wednesday as Asia and oil producing countries in the Middle East reported hundreds of new coronavirus cases and the United States warned of an inevitable pandemic.Brent crude fell 48 cents, or 0.8%, to trade at $54.49 per barrel, while U.S. West Texas Intermediate crude fell 15 cents, or 0.3%, to $49.75 per barrel.The U.S. Energy Information Administration said Wednesday that inventories for the week ending Feb. 21 increased by 500,000 barrels. According to FactSet, analysts had been expecting a build of 1.8 million barrels.Pandemic fears intensified as authorities around the world battled to prevent the spread of coronavirus, which has now been found in about 30 countries. World stocks tumbled for the fifth straight day on Wednesday, while safe-haven gold rose back towards seven-year highs and U.S. bond yields held near record lows after governments and health authorities warned of a possible coronavirus pandemic.Goldman Sachs reduced its 2020 oil demand growth forecast to 600,000 barrels per day (bpd) from 1.2 million bpd, and lowered its Brent forecast to $60 a barrel from $63.”We see oil prices improving through the year assuming demand begins to normalize in 2020,” it said, referring to the second half of 2020.Earlier, oil prices rose on short-covering and amid hopes for deeper output cut by the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, a group known as OPEC+.Saudi Arabia’s energy minister said on Tuesday he was confident that OPEC and its partners, known as OPEC+, would respond responsibly to the spread of the coronavirus.
Oil prices drop to lowest in more than a year as coronavirus spreads –Oil prices fell to their lowest in more than a year on Wednesday after hundreds of new coronavirus cases reported in Europe and the Middle East stoked fears that energy demand would decline, and on concerns that the virus could spread across the United States. Brent crude settled at $53.43 a barrel, shedding $1.52, or 2.77%, while U.S. West Texas Intermediate (WTI) crude settled at $48.73 a barrel, down $1.17, or 2.34%. Earlier in the session, both benchmarks hit their lowest since January 2019, with Brent sinking to $53.03 a barrel and WTI dipping to $48.30. Oil followed equities lower after reports that 83 people were being monitored in New York for possible coronavirus exposure. “Every time a headline comes out, especially one regarding new cases in the U.S. such as New York, that comes in and forces additional selling and pushes normal fundamental input to the sidelines,” said Jim Ritterbusch, president of Ritterbusch and Associates. First cases of the virus were confirmed in countries including Greece, Georgia and Brazil, while authorities enacted more travel restrictions and quarantines across multiple continents. The U.S. heating oil crack reached its lowest since 2017, reflecting reduced diesel demand due to the virus spread. Prices briefly turned positive after the U.S. government reported a drop in gasoline inventories last week. Crude stocks grew by 452,000 barrels to 443.3 million barrels, the Energy Information Administration said, which was less than the 2-million-barrel rise analysts had expected. Goldman Sachs cut its 2020 oil demand growth forecast to 600,000 barrels per day (bpd) from 1.2 million bpd, and lowered its Brent forecast to $60 a barrel from $63.
Oil falls for fifth day as coronavirus spreads outside of China – Oil prices fell for a fifth day on Thursday to their lowest since January 2019 as a growing number of new coronavirus cases outside of China fuelled fears of a pandemic which could slow the global economy and lower crude demand. Brent crude was down $1.47, or 2.8%, at $51.96 per barrel. West Texas Intermediate futures fell $1.35, or 2.7%, to trade at $47.38 per barrel. In the five trading sessions through Thursday, Brent has dropped 10.6%, while WTI has declined 10.4%, their biggest five-day percentage losses since August 2019. On Wednesday, for the first time ever, the number of new coronavirus infections outside China, the source of the outbreak, exceeded the number of new Chinese cases. The spread to large economies including South Korea, Japan and Italy has caused concerns that fuel demand growth will be limited. On Wednesday, consultants Facts Global Energy forecast oil demand growth will only 60,000 barrels per day in 2020, or “practically zero”, because of the widening outbreak. U.S. President Donald Trump assured Americans on Wednesday evening that the risk from coronavirus remained “very low”. However, Asian share markets fell on Thursday morning, as investors fear the coronavirus spread will disrupt the global economy as quarantines and other measures taken to halt its advance slow trade and industry.
US to Sell 12 Million Barrels of Oil as Virus Hits Demand— The U.S. will sell up to 12 million barrels of oil from its emergency government stockpile just as global crude demand takes a hit from the spreading coronavirus. The crude would be delivered to U.S. Gulf Coast pipelines in April and May, adding incremental barrels to an already oversupplied market at a time when oil demand is expected to slump. The International Energy Agency and the Organization of Petroleum Exporting Countries both expect fuel consumption to contract in the second quarter. OPEC and allied producers will gather in Vienna next week to discuss ways to stabilize oil prices, which have tumbled as supplies swell. The Energy Department sale announced Friday is part of a regular drawdown schedule intended to raise $450 million for government programs in fiscal year 2020. That goal may prove difficult as oil prices have plunged more than 20% this year on the back of the coronavirus contagion. The U.S. benchmark on Thursday settled at the lowest level in more than a year. Up to 6 million barrels will be sold from agency’s Bryan Mound site in Texas, with 6 million more coming from its Big Hill, Texas, and West Hackberry, Louisiana, sites. Earlier this month, the Trump administration proposed selling 15 million barrels of oil from the emergency stockpile as part of its fiscal 2021 budget plan and has previously proposed reducing it by half. The oil reserve, set up after the Arab oil embargo in the 1970s, has also been tapped in response to emergencies, such as Hurricane Katrina.
Coronavirus and the O&G industry The coronavirus outbreak seems to be moving towards containment in China, but the epidemic is gaining steam worldwide and it could be a matter of time before it becomes a pandemic. Although the fatality rate of the virus is smaller than the flu, its unknown nature is driving uncertainty and fear in markets across the globe. And the oil and gas industry isn’t immune to this.Whether Covid-19 has and will continue to slash crude oil and gas demand, or whether sentiment is pushing commodities prices to historic lows, you need to be in the know. Here’s our latest coverage:
- Upstream’s biggest coronavirus fear is prices, not project delays. The greatest impact of the outbreak is expected on oil prices, and consequently, companies’ cash flow and dividends. So far, the threat from potential project delays is “a mere scratch on the surface of global supply,” said Wood Mackenzie.
- Crude falls for 5th day on demand concerns. Crude oil prices fell for a fifth straight trading day last Thursday, to their lowest point in 13 months, as a growing number of new coronavirus cases outside China fueled fears of a pandemic, which could slow the global economy and lower crude demand. Brent crude was down $1.47, or 2.8%, at $51.96 per barrel, while WTI fell $1.35, or 2.7%, to trade at $47.38/Bbl.
- Coronavirus outside China obstructs oil market recovery. Signs of worsening outbreaks in South Korea, Italy and Iran are getting in the way of recovery. “These are not small demand markets and, together with China, nearly one in five global demand barrels is located in countries facing public health emergencies,” said IHS Markit.
- Chevron’s London employees continue working from home. The oil major asked staff in its Canary Wharf offices to work remotely to reduce exposure to the virus, after one employee showed flu-like symptoms. Italy’s Saipem has also minimized staff in offices and operations, particularly in northern Italy, where the virus is growing.
- Coronavirus will meaningfully impact oil demand growth. Dallas Fed economists believe the coronavirus presents a serious risk to demand growth globally, as China consumes 14% of total global oil demand. As a consequence, U.S. crude oil output growth is expected to decline to roughly 0.4 Mmbpd in 2020. This is also heavily influenced by dramatic pressure for capital discipline.
- Consumers unlikely to feel benefit of lower oil prices: IEA. Covid-19 is set to affect 435,000 Bpd of crude demand in the first quarter, compared to the same period last year, the IEA forecast. This will be the first quarterly contraction in more than a decade. For 2020, the loss is estimated at 365,000 Bpd, dropping demand growth to 825,000 Bpd – the lowest level since 2011.
- Chinese oil demand to fall by 200,000 Bpd in H1: Opec. The estimated loss will result in a 400,000 Bpd retraction in demand globally, the group said.
- Global LNG markets’ struggles intensify with coronavirus. The outbreak couldn’t have happened at a worse time for the global LNG market, amid weak demand due to a mild winter and a supply glut. Spot prices are at historically low levels of roughly $3.15/MmBtu, while long-term contract prices are around $8.33/MmBtu.
- Coronavirus slashes global oil demand growth: Rystad. The estimate is a plunge of 25%, to 820,000 Bpd, due to the virus and its travel-related restrictions. In a worst case scenario, Rystad forecast growth could be slashed to 650,000 Bpd in 2020.
Oil prices could remain weak even if OPEC cuts, S&P Global Platts says – Even if OPEC cuts production by 600,000 barrels a day, oil prices could remain weak until April, according to a senior analyst at S&P Global Platts. That’s because inventories are rising amid lower oil demand due to the coronavirus outbreak, Kang Wu, Asia’s head of analytics, told CNBC’s “Capital Connection” on Thursday. Oil prices have been under pressure because of the virus that shuttered Chinese businesses for weeks and forced flight cancellations around the world. As the economic impact of the coronavirus unfolded, the Organization of the Petroleum Exporting Countries slashed its global oil demand outlook. For China, where the outbreak began, OPEC revised its demand forecast down by 0.2 million barrels a day for the first half of the year. International benchmark Brent crude futures were at $52.81 a barrel, down 1.16% on Thursday afternoon in Asia, while U.S. crude futures fell 1.33% to $48.08 a barrel. OPEC’s Joint Technical Committee met over three days in early February and reportedly recommended a cut of 600,000 barrels a day, according to Reuters. That’s what S&P Global Platts expects at the March 5 and 6 OPEC meeting, Wu said.
OPEC+ Meetings Now on Critical Path – The upcoming OPEC+ meetings on March 5 and 6 are now on the critical path.That’s according to a new research note from Jefferies, which reveals that the company now believes OPEC+ needs to make “much steeper” cuts than the 600,000 barrel per day recommendation from their technical committee to support prices.“At least a one million barrel per day cut for 2Q strikes us as necessary to merely moderate inventory builds, and we confess to underestimating demand destruction over the last several weeks,” Jefferies stated in the note.Jefferies said the two-week backwardation pattern in the Brent forward curve that had given it some encouragement “completely collapsed” this week.“Flat prices have fallen sharply and the return to contango is a signal that the market is preparing for a longer duration of coronavirus demand destruction,” Jefferies stated in the note.Jefferies’ current Brent crude oil price estimate for 2020 is $59 per barrel. The company estimates that Brent will average $58 per barrel over the first two quarters of the year and $60 per barrel over the final two quarters.On Thursday, Rystad Energy revealed that it had cut its 2020 Brent crude oil price forecast from nearly $60 per barrel to around $56 per barrel. In addition to the cut, the company warned that another negative revision “might be around the corner” due to increasing downside risk.Earlier this month, the U.S. Energy Information Administration (EIA) also cut its Brent oil price forecast for 2020. The EIA’s Brent spot average forecast for this year is now $61.25 per barrel. Its previous forecast stood at $64.83 per barrel. Fitch Solutions Macro Research (FSMR) also revised down its Brent oil price forecast for 2020 in February. FSMR now sees Brent averaging $62 per barrel this year, which marks a $3 drop compared to its previous forecast in January.
Worst Oil Week Since 2011 Puts Pressure on OPEC+— Oil was on course for its biggest weekly loss since 2011 as the fast-spreading coronavirus roiled global markets, intensifying speculation that OPEC and its allies will strike a deal to support prices. Futures in New York fell a sixth day after fears over the outbreak sent shares on Wall Street down by the most in almost a decade. With crude prices down more than 14% this week, there are signs that OPEC and its allies could be nearing agreement on action to stem the rout before meeting in Vienna next week. The group’s top official said the cartel and its allies are displaying a “renewed commitment” to reach an accord as the virus puts the world economy on course for its worst performance since 2009. Saudi Arabia has been pushing for deeper production cuts over the last few weeks, but Russia has so far taken a more cautious stance. One silver lining for markets is that prices are now at a level that may be uneconomic for U.S. shale producers. “Whatever production cuts that might be forthcoming next week are too little too late, given how oil prices have declined so rapidly,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore. “If OPEC+ cuts by 1 million barrels, that can shore up prices a little, but anything less is going to disappoint.” West Texas Intermediate futures for April delivery fell 3% to $45.68 a barrel on the New York Mercantile Exchange as of 7:30 a.m. in London. They closed down 3.4% on Thursday and have lost 14.4% so far this week, the most since May 2011. Brent for April settlement dropped 2.7% to $50.75 a barrel on the ICE Futures Europe exchange after falling 2.3% on Thursday. It’s down more than 13% for the week. The global crude benchmark traded at a $5.07 premium to WTI. The OPEC+ talks are scheduled for March 5-6 after Russia, whose budget is more resilient to lower oil prices, rebuffed pressure from Saudi Arabia for an earlier emergency meeting to deal with the outbreak. Combined OPEC output, not including Russia and other allied producers, is already at the lowest level since 2009.
U.S. oil futures suffer largest weekly percentage loss in over a decade – – Oil futures finished sharply lower on Friday, with U.S. benchmark prices down over 16% for the week, the largest weekly decline in more than 11 years, with the spread of the COVID-19 epidemic around the world expected to significantly dent demand for crude. The oil market looks like it’s pricing in “demand grinding to a halt,” Phil Flynn, senior market analyst at The Price Futures Group, told MarketWatch. “It’s the wild west in crude at this point, and we are at the mercy of the market sentiment.” West Texas Intermediate crude for April delivery dropped $2.33 on Friday, or about 5%, to settle at $44.76 a barrel on the New York Mercantile Exchange. The U.S. benchmark saw a weekly fall of over 16%, the largest weekly decline since the period ended Dec. 19, 2008, according to Dow Jones Market Data. For the month, the front-month contract ended over 13% lower. Global benchmark April Brent crude fell $1.66 on Friday, or 3.2%, to settle at $50.52 a barrel on the contract’s expiration day, with prices ending nearly 14% lower for the week, for the largest week loss since the period ended Jan. 15, 2016. It registered a monthly decline of just over 13%. The April WTI and Brent crude contracts marked their lowest settlements since December 2018. May Brent crude, which is now the front month, dropped $2.06, or 4%, to $49.67 a barrel – the lowest most-active contract price since July 2017. Analysts said the tumble puts increased pressure on the Organization of the Petroleum Exporting Countries and their allies as they prepare to meet next week to discuss the possibility of additional production cuts in a bid to balance supply and demand. Read: Coronavirus and Russia pose the biggest challenges for OPEC+ efforts to lift oil prices “Any remaining bullish optimism likely rests on the prospect of further OPEC+ action at next week’s meeting,” said Robbie Fraser, senior commodity analyst at Schneider Electric. The oil producers will meet in Vienna on March 5-6. “Russia has offered more supportive comments of late, while Saudi Arabia has already stated their backing for steeper cuts to combat lost demand” due to COVID-19, said Fraser. Saudi Arabia has also reportedly slashed exports to China by 500,000 barrels a day, “though that figure represents only a small portion of total demand loss.” “Moving forward, OPEC+ action appears likely, but the reality may be more muted. As usual, actual supply cuts will likely depend heavily on Saudi Arabia, where cuts already far exceed official quotas,” he added. New reports on Friday said that key OPEC members were looking favorably on a larger-than-previously-expected output cut. “OPEC and its allies may move ahead with deeper production cuts when they meet next week” said Lukman Otunuga, senior research analyst at FXTM. “This move would cushion oil’s downside losses.” “However, the path of least resistance for oil will point south, as long as demand is missing from the equation,” he told MarketWatch.
Oil Sinks in Worst Week Since 2008 – — Oil had it worst week since the financial crisis as panic over the coronavirus pandemic battered global markets.Futures in New York fell 16% this week, marking the biggest weekly drop since December 2008. The viral outbreak showed no signs of relenting, with the World Health Organization raising global risk to “very high” from “high.” The collapse of financial markets prompted U.S. Federal Reserve Chairman Jerome Powell to assure investors that the central bank is prepared to cut interest rates to mitigate the virus’ threat to economic activity. “A month ago the concern was only China,” . “This meltdown is a fear of a global pandemic. The risk is we will see the same disruptions we saw in Asia, from travel restrictions to quarantines, materialize all over the world.” Oil prices have tumbled almost 27% this year on concerns the coronavirus outbreak will dent crude demand. OPEC and its allies have signaled the coalition could reach an agreement to stem the rout before meeting in Vienna next week. Saudi Arabia is reportedly pushing for collective OPEC+ production cuts of an additional 1 million barrels a day, of which it would bear the brunt.However, Riyadh’s proposal may not be enough to balance the oil market, according to a coronavirus-scenario analysis by Bloomberg Intelligence analysts Salih Yilmaz and Rob Barnett. The alliance’s overall compliance with production cuts has not been enough to support oil prices. The re-emergence of Libyan barrels also remains a risk. “We may be too far deep for any OPEC cuts to have a meaningful impact,” “If the virus keeps spreading, that is just going to keep hurting demand and cause another wave of panic selling. A production cut could give it a bounce, but these lows will persist for the foreseeable future without a vaccine.”West Texas Intermediate futures for April delivery fell $2.33, or 5%, to settle at $44.76 a barrel on the New York Mercantile Exchange.Brent for April settlement, which expired Friday, lost $1.66, or 3.2%, to end the session at $50.52 a barrel on the ICE Futures Europe exchange. The more active May contract fell 4% to $49.67.Brent’s so-called red spread — the difference between December contracts in consecutive years — sank deeper into bearish contango, settling at lowest level since 2018. Oil market drivers:
- Gasoline futures fell 1.1% to settle at $1.3955.
- The U.S. will sell up to 12 million barrels of oil from its emergency government stockpile just as global crude demand takes a hit from the spreading coronavirus.
- The volume of crude that will be shipped to China from West Africa next month is set to drop by at least ten million barrels as the demand destruction caused by the coronavirus hits home.
- The Trump administration is ready to unleash the full impact of sanctions on Chevron Corp.’s operations in Venezuela as the U.S. seeks to further squeeze the Maduro regime.
Iran’s Hardliners Win Landslide Victory In Low Turn-Out Parliamentary Elections – Early results from Friday’s nationwide Iran parliamentary elections show a landslide for conservative and hawkish anti-West candidates, with forecasts showing them taking more than two-thirds of the seats. Iranian state TV announced Sunday that hardliners won a landslide all 30 seats in Tehran, AP reports. Much of this conservative group is led by old guard supporters of ex-president Mahmoud Ahmadinejad, in a victory seen as a major blow to ‘reformist’ President Hassan Rouhani and his supporters. US state-funded Radio Farda identifies “that least 15 former cabinet ministers and provincial governors close to former ultraconservative Mahmoud Ahmadinejad’s have also won in the elections” – among them Habibollah Dahmardeh, Ebrahim Azizi, Abdolreza Mesri, Hamid Reza Hajibabai, and Ali Nikzad.And The Guardian notes of the early results that “The reformists, the largest grouping in the outgoing parliament, have been decisively beaten, with predictions showing them taking only 17 seats in the 290-strong parliament. The principalists – or conservatives – were on course to take around 200 seats, including all 30 seats in the capital, Tehran, previously a stronghold of the reformers.” This after Iran’s election watchdog, dubbed the Guardian Council, admitted to disqualifying thousands of candidates just days before the vote. The State Department has said this translated to over 7,000 candidates that were denied a place in Friday’s parliamentary elections, for which the Trump administration leveled sanctions against key Iranian individuals on the Guardian Council. Iran’s Supreme Leader Ayatollah Khamenei still lambasted a “conspiracy” of external US and Israeli attempts at interference in the elections, but still praised the election as a “shining” victory affirming “the people’s religious and revolutionary beliefs.”
Iranian hardliners win all parliamentary seats in Tehran: report – Iranian hardliners won all of the parliamentary seats in Tehran, as the country experienced the lowest voter turnout since the Islamic Revolution four decades ago, state TV said, according to The Associated Press. Iran’s interior ministry said Sunday the voter turnout reached 42.57 percent, The Associated Press reported, noting it could be a sign of dissatisfaction with the government and the economy as U.S. sanctions continue. Comparatively, the turnout in 2016 was almost 62 percent and has consistently been above 50 percent since the Islamic Revolution. More than 7,000 potential candidates were disqualified from their races, most of whom were reformists and moderates. Ninety of those disqualified were sitting members of Iran’s parliament, which has 290 seats. Iranian officials had encouraged voters to turn out to stand up against the U.S. sanctions. The coronavirus also could have impacted voter turnout as the country reported its first cases and deaths two days before the election, the AP noted. Iran has reported eight deaths and 43 infections across five cities, including the capital. Voters showed up at the polls with facemasks. In Tehran, 25.4 percent of eligible voters showed, which Interior Minister Abdolreza Rahmani Fazli said, “we believe that the number of votes and the turnout is absolutely acceptable,” according to the AP. Iranian President Hassan Rouhani criticized the high number of disqualifications and alleged enemy “propaganda” attempted to scare voters away from the polls by exaggerating the extent of the coronavirus, the AP reported.
U.S. Military Raises Injury Toll In Iran Missile Attack In Iraq – The Pentagon has raised to 110 the number of U.S. service members who suffered traumatic brain injuries during an Iranian missile attack on an air base in Iraq last month. The total figure announced on February 21 is one higher than the toll announced on February 10. It represented the sixth time the U.S. military has raised the total of those suffering injuries in the attack that took place on the night of January 7-8. President Donald Trump initially said that no Americans were harmed in the attack on the Ain al-Asad Air Base, which came amid tensions between Washington and Tehran. Iran said the missile attack on Ain al-Asad and another air base hosting U.S. troops in Iraq was revenge for the killing of Iranian Major General Qasem Soleimani, the leader of Iran’s elite Quds Force, in a U.S. drone strike near Baghdad’s airport on January 3. The Pentagon said all of the wounded in the base attack were diagnosed with mild traumatic brain injury and that 77 of them have already returned to duty. It added that 35 others have been transported to Germany for further evaluation, 25 of whom have been sent on to the United States.
Who “Got” Iraqi Oil? -Not the US. Dick Cheney collaborated with US major oil companies in a plot to at least take over operating the oil production in Iraq, OPEC’s second largest producer and exporter, if not get to own the oil itself outright (which has not happened as oil in the ground was and remains owned by the Iraqi government, which is the way it is in pretty much all OPEC members). Of all people, Juan Cole and many other progressives agreed that the war was all about controlling Iraq’s oil. So the US overthrew Saddam Hussein, but then what followed was civil war and discombobulation, and oil production was seriously disrupted for a long time, with those US oil companies not getting any business for a long time. Of course, Donald Trump has repeatedly argued that the worst thing about the Iraq war was that “we did not get thee oil.” Of course, the only reason he has left any troops in northeastern Syria is that somwbody told him there is oil there and he should leave troops there to keep terrorists from getting at the oil. So there we have US troops occupying some of these wells, although there is basically no way they will ever be operated by US companies, much less owned by them. Trump is deluded if he thinks “we have got” that oil.So what about now? According to the Iraqi Oil Ministry, there are 23 foreign corporations operating in the Iraqi oil sector. Four of these are Chinese, three are Russian, and one is American: Exxon Mobil. Last year Exxon Mobil reduced its workforce in Iraq due to security issues.But now Russian interests are increasing their presence. Yesterday Simon Watkins reported that the Russian Oil Ministry has announced that several Russian oil companies are planning to spend US$20 billion in Iraq. That this is happening reflects a shift in attitudes in Iraq as well. Watkins reports that the Iraqi leadership is upset by two things coming out of the US. One is Trump’s sudden abandonment of the Kurds in northeastern Syria. The other, of course is Trump’s attack without justification that killed both Iran’s General Soleimani as well as Iraqi General al-Muhandis.
Syria Stands As A Mega-Embarrassment For America – For a long time, America has tried to ignore and distance itself from its role in making Syria the disaster it is today. Syria stands as a mega-embarrassment that shines a spotlight on America’s failed foreign policy. To say President Obama blew it is an understatement. His inexperience took us down a rabbit hole with each turn revealing more ugliness than the one before. Both Obama and Trump pledged to reduce America’s role in Afghanistan and Iraq but it has proven easier said than done, it has also had massive far-reaching ramifications. By reassuring and almost encouraging the people of Syria to rise up and overthrow their brutal leader Obama started a series of events that has taken countless lives and destroyed millions of others. Three of the most damaging developments flowing from this are the development of ISIS, the flow of millions of refugees into Europe, and the bombing and destruction of cities and innocent civilians.Continued violence in the region over the last decade has spurred the destabilizing mass migration of millions of people from the area.Many people do not realize the formation of ISIS is rooted in this mess and flowed out of America’s meddling. A failed attempt to build an army to fight Syrian President Bashar al-Assad backfired. A report published by Reuters claimed that 200 men were trained and that over 1200 were to be added in a plan to prepare to free Syria from the rule of President Bashar but General Ibrahim al-Douri. who had been on the US most-wanted list since the second Gulf War took over control. This left the group with a problematic leader and a huge war chest at his disposal. Most of the money had come from US allies, including Kuwait, Qatar, and Saudi Arabia, all are Sunni-based countries that originally supported ISIS. For years, day after day, week after week, month after month, the American people have busied themselves with ignoring the Pandora’s box of misery Obama opened and unleashed is his arrogance. Please don’t take this as an Obama bashing, he didn’t do it alone. The same old group of clowns that have infected American foreign policy for years weighed in and helped bring us to where we are today. America simply can’t mind its own business.
Idlib Is the New Face of Conflict. The World Needs to Catch Up – The scenes and stories from Idlib province in Syria should be shocking – but it seems from the lack of reaction by western governments that we have been numbed. Children freezing to death in -11 degree temperatures after being bombed by their own government should never be normalized. But in fact the type of conflict we are seeing in Idlib is the new face of conflict. Diplomats and humanitarians need to catch up.The assault on Idlib is not just another turn in the Syrian conflict. It is intended to be one of the last. And the statistics show that it is the most brutal at least as measured by the flight of victims. 900,000 people have fled since December, over 100,000 in the past seven days alone, and over 300,000 still risk joining them. This is the largest civilian displacement since the conflict started nine long years ago. Among those forced to flee are 30 local IRC staff who, despite being displaced themselves, have continued their work helping others in the areas in which they’ve relocated.There is a current UN Inquiry into the attacks on health facilities and other civilian infrastructure. But it is limited to a mere seven incidents and it remains unclear if the findings will be made public and if the report will name perpetrators. So, it is not providing a credible deterrent to the current escalation of violence, or the ongoing attacks on civilians and the facilities they depend on for their survival. In the past few weeks alone, the IRC and the organizations it works with have had to suspend operations in a number of health facilities and relocate an entire fleet of ambulances. Faced with ongoing and deliberate targeting of aid workers, medical staff and their facilities, it is legitimate to fear that there will be no doctors and nurses left to help spare life and limb on the ground.The catastrophe in Idlib is a symptom of the utter failure of diplomacy and abandonment by the international community of Syrian civilians. But it also foreshadows an even darker trend towards an Age of Impunity – an era characterized by the total disregard for the rule of law and an equally grave deficit of international diplomacy, which allows the suffering of civilians to continue unabated. These changes create greater risks for civilians and aid workers and increase the likelihood that we’ll be dealing with the repercussions for a generation. The danger is that Syria becomes not just a disaster, but a precedent for a new normal of brutal, divisive, contagious conflict – a testament to a global shift in the waging of war in four key ways.
Watch: Turkish-Backed Jihadists Attempt To Down Russian Jet Over Idlib With MANPADS – A new video released on Friday showed the Turkish military and their allied militants attempting to hit a Russian aircraft with an anti-aircraft missile in the Idlib Governorate yesterday. In the short video, the Turkish forces and their allies militants can be seen on the roof of a building, where they later attempted to shoot down the Russian aircraft in the skies of the Idlib Governorate. As shown in the video, however, the anti-aircraft missile fails to hit the Russian aircraft that had just flown over their positions in what is presumably the eastern countryside of Idlib. The Russian jet is seen deploying counter-measures seconds after the surface-to-air missile is fired. Prior to the release of this video, another film was released on Thursday that showed the militant forces in the Idlib Governorate trying to shoot down a Russian Su-24 aircraft that had just got done bombing their positions. Below is the video that was released on Friday of the attempted downing of the Russian aircraft:
Putin Keen To Cool Turkish Hawk Down – Pepe Escobar – Idlib is Erdogan’s last stand, but the fighting goes way beyond Syria – it’s shaping as another NATO-Russia proxy war That pesky “Assad regime” simply won’t go away. The new Western narrative on Syria is that the regime is about to “massacre” over 900,000 people fleeing the not really de-escalated zones across the countryside in Idlib and Aleppo provinces. Context, as always, is absent. The fleeing masses – essentially conservative Sunnis – had been living in these areas under the yoke of myriad incarnations of al-Qaeda in Syria. Either they supported them, did their best to basically survive, or now know for sure the offensive by the Syrian Arab Army (SAA) is for real, and all jihadi holes, protected or not by human shields, will be bombed. The most relevant story, once again, is what Sultan Erdogan wants. Ankara and Moscow – partners in the Astana Process that theoretically would pave the way for peace in Syria – are at a crossroads. There were lengthy talks earlier this week, and a crucial phone call between Erdogan and Putin on Friday night. The stalemate prevails – they appear to have only agreed to “intensify contacts”. Ankara officially “does not accept the [de-escalation] map” put forward by Moscow. Russian Foreign Minister Sergey Lavrov stresses it’s the same map: there have been no additional demands. But Erdogan is, impulsively, threatening a remix of “Euphrates Shield” or a “Spring of Peace”, as in invading Idlib “at any moment”. Moscow, nearly exasperated, is one inch away from reading him the riot act. Idlib is Ankara’s last stand in terms of having anything to negotiate with when it comes to the peace process in Syria. Erdogan and his advisers, realistically, should know the north and western sides of Aleppo are back under Damascus’ control for good. The Turkish military are mostly in the countryside east of the Idlib city and in a town called Atarib. The real fighting on the ground in Idlib is not conducted by Turkish soldiers – but over 80% by the militia nebulae of jihadis and proto-jihadis that the West loves to describe as “rebels”; Hayat Tahrir al-Sham (HTS, aka al-Qaeda in Syria), the Turkistan Islamic Party and other smaller outfits. Ankara’s spin is that those “rebel” units will be dissolved once there is a political settlement. But that is nonsense. The Turkish government expects people to believe that one day these tens of thousands of “rebels” are weaponized, and the next they will drop everything, go back home and open a kebab stall.
More Turkish Troop Deaths In Idlib Bring Russia & Turkey To Breaking Point – After on Monday there were new unconfirmed reports of several Turkish Army soldiers killed or wounded in a Russian air strike on a Turkish convoy, already tense relations between Moscow and Ankara are at a breaking point. “Several soldiers from the Turkish Army were reportedly killed or wounded this afternoon following the joint airstrikes launched by the Syrian and Russian air forces in the Idlib Governorate,” Beirut-based Al Masdar News reports. “According to pro-opposition media, as many as ten Turkish soldiers were killed or wounded as a result of the joint Russian-Syrian airstrikes near the town of Kansafra.”And British-Syrian journalist Danny Makki, who reports from inside Syria lists “10 Turkish casualties between killed and wounded in the Russian airstrikes today sources suggest, 4 armoured vehicles also purportedly destroyed.” However, there’s yet to be official confirmation out of Turkey of these new alleged casualties. Ankara did previously confirm at least one soldier killed in fighting on Sunday.Turkey’s Defense Ministry has in total acknowledged 16 of its soldiers killed amid the renewed Syrian-Russian offensive to take back Idlib, which began early December. These increasingly direct clashes between Syrian-Russian allied forces and Turkish national troops have led to renewed urgent talks announced Monday between Russian and Turkish officials. Russian FM Sergey Lavrov announced Monday that “Another series of consultations is now being prepared and we hope it will help us reach an agreement on how to ensure that this really becomes a de-escalation zone and terrorists don’t boss around there.” The Kremlin is further trying to downplay what Turkish officials are describing as a “crisis” – also given President Erdogan has lately vowed to not allow Idlib to be taken by pro-Assad forces. “Russian-Turkish relations should not be depicted as in crisis even after an escalation in political tensions over Syria’s last rebel-held enclave of Idlib, Presidential Spokesman Dmitry Peskov said on Sunday,” according to TASS news agency.
President Erdogan’s options narrow as Russia presses Syrian crisis to Turkey’s doorstep – (Reuters) – With nearly one million displaced Syrians massing near the Turkish border in the face of a Syrian government military offensive, President Tayyip Erdogan’s options are narrowing. He feels blindsided by Russia’s push into Syria’s Idlib region and the risk of full-blown conflict is growing, but Turkey’s Erdogan remains hopeful a deal with Moscow may offer a way out of the crisis, according to Turkish government officials and other sources. Erdogan has repeatedly warned that Turkey, which backs rebels in Syria’s northwest province, would push Syrian President Bashar al-Assad’s troops away from territory taken in the recent months if they didn’t pull back by the end of February. But as Saturday’s deadline has drawn closer, the Russia-backed Syrian offensive has continued to gain ground and a third round of talks between Ankara and Moscow this week were not expected to quickly break the deadlock. Turkish government and Syrian opposition military officials, diplomats and analysts said while a full-scale Turkish-backed military operation is still a possibility, depending on how hard Russia bargains, Erdogan is more likely at this late stage to agree a deal with Moscow that has him withdraw some of Turkey’s military presence in exchange for a role in deciding Syria’s future. They added that Erdogan has been taken aback by what Turkey views as Russian President Vladimir Putin’s uncompromising stance in the field and in discussions.
Dozens of Turkish soldiers killed in strike in Idlib in Syria – Dozens of Turkish soldiers have been killed in an airstrike in Syria’s Idlib province, in a dramatic escalation in the battle for control of the country’s last opposition stronghold. Turkish officials said at least 33 of its military personnel were killed in the attack on Thursday night. Military sources among moderate and jihadist rebel factions fighting in the north-western province bordering Turkey said the deaths followed a precision strike on a two-storey building in the village of Balioun. A Turkish convoy, part of reinforcements sent to the area to aid rebel groups earlier this month, was subjected to heavy shelling on Thursday morning. The soldiers had taken cover in Balioun, basing themselves in the local council building. Rahmi Dogan, the local governor of the south-eastern Turkish province of Hatay on the border with Idlib, said ambulances streamed from a Syrian border crossing to a hospital in the nearby town of Reyhanli on Thursday night. Turkish officials have blamed the Syrian regime for the attack, but several sources in Idlib and unverified footage of the nighttime strike suggested it had been carried out by the Russian air force, which has helped Damascus conduct a ferocious three-month-old offensive on Idlib. After the attack the United Nations called for urgent action in north-west Syria, warning that “the risk of greater escalation grows by the hour.” Nearly a million civilians have been displaced in Idlib near the Turkish border since December as Russia-backed Syrian government forces seized territory from Turkey-backed Syrian rebels, marking the worst humanitarian crisis of the country’s nine-year war.
Turkish Army Is Targeting Russian Planes In Idlib With Shoulder-Fired Missiles- Report -We reported previously that an increasing number of advanced shoulder fired “Man-portable air-defense systems” or MANPADS are showing up in Idlib, alarmingly in the hands of al-Qaeda linked factions such as US terror designated Hayat Tahrir al-Sham.But now the Kremlin is charging Turkey’s military with orchestrating the campaign to shoot down Russian aircraft over the war-torn northwest Syrian province. Reuters now reports that “Russian state television said on Thursday Turkish military specialists in Syria’s Idlib region were using shoulder-fired missiles to try to shoot down Russian and Syrian military aircraft.” The report aired Thursday the Rossiya 24 channel:“Their own and Russian planes are saving the lives of Syrian troops in a literal sense,” said the Rossiya 24 report. “Syrian and Russian planes are stopping the rebels again and again. But the sky above Idlib is also dangerous. The rebels and Turkish specialists are actively using portable air defense systems.”Recent footage out of Idlib showed Russian aircraft deploying countermeasures to escape an incoming shoulder-fired rocket.The following video was published to social media and was widely circulated last week:Turkish soldiers firing a MANPADS against a Russian jet over Idlib in Syria yesterday, the missile missed the jet #Syria #Turkey #Russia pic.twitter.com/Ek3WvGgkW5 – CNW (@ConflictsW) February 21, 2020 Jihadists on the ground fighting a major Syrian-Russian air and land offensive have over the past month downed at least two Syrian helicopters and possibly other aircraft.
Turkey says it will let refugees into Europe after troops killed in Syria – (Reuters) – Refugees in Turkey headed towards European frontiers on Friday after an official declared that borders had been thrown open, a response to the escalating war in Syria where 33 Turkish soldiers were killed by Russian-backed Syrian government troops. European officials rushed to respond to Turkey’s direct threat to reverse an agreement that halted the migration crisis of 2015-2016, when more than a million people arrived by sea in Greece and crossed the Balkans on foot. Moscow and Ankara traded blame over the strike in northwest Syria, the deadliest attack suffered by the Turkish army in nearly 30 years. Turkish financial markets plunged over the prospect of the country being pulled far more deeply into a new escalation of the nine-year-old war across the border in Syria. “We have decided, effectively immediately, not to stop Syrian refugees from reaching Europe by land or sea,” a senior Turkish official told Reuters on condition of anonymity. “All refugees, including Syrians, are now welcome to cross into the European Union,” the official said, adding that police and border guards had been stood down. Within hours, a column of dozens of migrants was heading on foot towards the European frontier in the early morning light. A man carried a small child in his arms. Others rode in taxis.
Greece Sends 50 Naval Vessels & Commandos To Block Refugee Wave Out Of Turkey – Greece sealed its key land Kastanies border crossing with Turkey Friday after Ankara declared it’s allowing refugees to flee Idlib and on to Europe for at least 72 hours, in response to Syrian-Russian airstrikes killing 33 Turkish troops Thursday.Germany’s Bild newspaper reported Friday that Greece is taking further emergency measures to prevent Erdogan from effectively “opening the gates” on new waves of refugee and migrant hordes seeking entry to the EU, noting the country “completely closed off its borders with Turkey: not just for refugees, but for EVERYONE.”The newspaper said 50 naval ships, likely most of them small patrol vessels, have been deployed by the Hellenic Navy to ensure those coming out of Turkey don’t get through. Citing a top Greek government official, Bild reported further this will include air support.”According to BILD information, the government sent 50 warships to the Greek islands to protect the EU’s external borders,” the German tabloid said. “Ten helicopters are also supposed to secure the transitions to Turkey on land.”Greece’s Ekathimerini newspaper said military commandos were being sent to key crossings following an emergency meeting of key government officials Friday to deal with the crisis:Patrols along the land and river border in northeastern Evros have been bolstered since Friday morning, when the first large groups of migrants began to arrive following an announcement on Thursday night by a Turkish government official saying that Ankara would no longer try to prevent Syrians fleeing war in their country from attempting the crossing to the European Union. The army has also dispatched two commando units to help the Hellenic Police guards at the border, and particularly to patrol the more dangerous sections of the Evros River.Turkish TVs broadcast footages showing migrants are boarding boats off Turkish coast, departing to Greek islands pic.twitter.com/YLMEM1lCMk
Third election in a year deepens Israel’s political crisis – In a criminal move caught on video, an Israeli military bulldozer scooped up and moved the body of a young Palestinian demonstrating near Gaza’s fence with Israel on Sunday. To compound the crime, troops fired on Palestinians trying to retrieve his body, wounding two. Twenty-seven-year-old Mohammed Ali al-Naim, a member of Islamic Jihad, had been shot by Israeli forces who lyingly claimed he was laying a bomb near the fence. This war crime, one of countless such criminal acts, and the image of al-Naim’s corpse hanging from the teeth of the bulldozer, caused outrage among the Palestinian citizens of Gaza who have suffered a 13-year-long blockade at the hands of Israel and latterly Egypt and the Palestinian Authority of President Mahmoud Abbas.Israel followed this up with dozens of air strikes throughout the besieged entity as tensions escalated and Palestinian group retaliated by firing rockets into Israel. The army said it was closing roads, schools and a train line near the Gaza Strip.Fighter jets simultaneously launched air strikes on Islamic Jihad positions – Israel views the group as an Iranian proxy – near the Syrian capital Damascus, killing two of its fighters and four pro-Iranian fighters.This stepped-up aggression, launched by Prime Minister Benjamin Netanyahu in a desperate bid to boost his position as “Mr. Security,” takes place in the run up to the election on March 2, the third in less than a year. The result is the deepening paralysis of a government that has almost ceased to function amid the stench of a corrupt and decaying political system that is careening towards fascism and militarism.Like their counterparts all over the world Israeli voters have no substantive choice, despite an array of political parties, as Israel’s democracy has withered under the twin pressures of the decades-long military suppression of the Palestinian people and rising social inequality, among the highest in the world. This latest ballot follows two inconclusive elections in April and September, when neither caretaker Prime Minister Benjamin Netanyahu nor Blue and White Party leader Benny Gantz, a former Israel Defense Forces (IDF) chief of staff, were able to secure a coalition that could command a majority in the 120-seat Knesset. The first bloc is led by Netanyahu’s right-wing Likud Party and his coalition of religious and fascistic parties. The second bloc, the supposedly “centrist” Blue and White party named after the colours of Israel’s flag, is led by Gantz.
Israel Takes Out Islamic Jihad Militants In Damascus & Gaza In Rare Simultaneous Air Strikes -Damascus once again was rocked by Israeli airstrikes Sunday night, with Syria saying its anti-air defenses were active in confronting a wave of “enemy rockets” from the direction of the Israeli-occupied Golan Heights. In a rare acknowledgement of the attack, Israel confirmed in was behind it, and linked it to rocket fire from the Palestinian territory, Gaza. The Israeli army said in a statement that it targeted Islamic Jihad leaders living in Damascus. “In the Adeliyah region, outside of Damascus, an Islamic Jihad compound was struck, used as a hub of Islamic Jihad’s activity in Syria,” the statement said. “Israeli military planes targeted Islamic Jihad targets in Gaza” it said further. Palestinian Islamic Jihad confirmed that two of its members were killed in Damascus Sunday night, in a relatively brief attack which war monitors say killed a total of six people. The other four were alleged to be members of a pro-Iranian militia. But Syrian state-run SANA said the country’s air defenses were effective, noting they “caused the missiles to deviate from their path, destroying most of the remainder before reaching their goals, and the results of the aggression are still being examined.” Like with prior attacks over the past two years, Israeli jets were said to have fired from outside of Syrian airspace – most of the time from over neighboring Lebanon. Historically, wanted or exiled leaders of Palestinian militant and “resistance” groups have had headquarters in Damascus.
Netanyahu Threatens All-Out War After 90 Rockets Fired From Gaza – Monday witnessed significant escalation over Gaza as Palestinian Islamic Jihad sought to avenge the deaths of three commanders killed in Israeli air strikes on Gaza and Damascus the day before. Israeli media counted some 90 total rockets fired at Israel from the Gaza Strip throughout the day since the attacks began Sunday night, with the IDF claiming its Iron Dome defense system had intercepted the vast majority which came near populated areas. Prime Minister Benjamin Netanyahu had earlier threatened to initiate broader war if the rocket fire didn’t cease. Despite an Islamic Jihad spokesman announcing a unilateral cease-fire by the early evening, the rocket fire was reported as continuing later into the night Monday. “We are now hitting with planes, tanks, and helicopters,” Netanyahu said while inspecting an Iron Dome unit in the south. “I’m talking about a war,” Netanyahu, who is entering a final week of campaigning before Israeli national elections, had further told Israel’s Army Radio station. “I only go to war as a last option, but we have prepared something you can’t even imagine.” He also appeared to threaten to kill the heads of Hamas and Islamic Jihad if the rockets continued, saying: “We will continue to strike until the calm returns. If there isn’t quiet, you’ll be next.”
Sanders: Israel run by ‘reactionary racist’ in Netanyahu – Sen. Bernie Sanders (I-Vt.) called Israeli Prime Minister Benjamin Netanyahu a “reactionary racist” while defending his support for Israel at Tuesday night’s Democratic debate. “I’m very proud of being Jewish. I actually lived in Israel for some months. But what I happen to believe is that right now, sadly, tragically, in Israel, through Bibi Netanyahu, you have a reactionary racist who is now running that country,” Sanders said at the debate in Charleston, S.C., just days ahead of the state’s Democratic primary. Sanders’s comments came the same week that he said he wouldn’t be attending the annual American Israel Public Affairs Committee (AIPAC) conference, accusing the pro-Israel lobbying group of providing a platform to “leaders who express bigotry.” “The Israeli people have the right to live in peace and security,” Sanders tweeted Sunday. “So do the Palestinian people. I remain concerned about the platform AIPAC provides for leaders who express bigotry and oppose basic Palestinian rights.” AIPAC shot back that Sanders “has never attended our conference and that is evident from his outrageous comment.” “By engaging in such an odious attack on this mainstream, bipartisan American political event, Senator Sanders is insulting his very own colleagues and the millions of Americans who stand with Israel,” AIPAC said in its statement. AIPAC, founded in 1963 with a mission of promoting the U.S.-Israeli relationship, has long been seen as a power player in Washington politics. The organization garners bipartisan support, but tensions with progressive Democrats have increased in recent years. AIPAC announced earlier Tuesday that former New York City Mayor Michael Bloomberg, who is also running for the Democratic nomination and was on the debate stage Tuesday night, will speak at this year’s conference.
U.S. halts offensive military operations in Afghanistan as part of Taliban deal – – The United States has ceased offensive military operations in Afghanistan against the Taliban in accordance with an agreement to reduce violenceahead of a possible peace deal, the top U.S. military commander here announced Saturday.Gen. Austin “Scott” Miller told reporters in Kabul that “our operations are defensive at this point. We stopped our offensive operations as part of our obligations, but we remain committed to defend our forces.”The week-long reduction in violence is a precondition to a U.S.-Taliban peace deal that both parties have said they plan to sign at the end of the month.U.S. and Afghan officials have cautioned that the deal is fragile, as there are many armed groups in Afghanistan who don’t see peace as being in their interest. But U.S. officials said monitoring mechanisms in place will be able to identify whether attacks are the work of “spoilers.” Just hours after the agreement went into effect, local security forces reported a number of clashes between government and Taliban forces. But Miller and senior Afghan officials said the violence does not necessarily constitute a breach of the agreement.Afghanistan claims the Islamic State was ‘obliterated.’ But fighters could regroup.Standing beside the Afghan acting minister of interior and acting minister of defense, Miller described the reduction in violence as a “trial period” during which U.S. and Afghan government forces reserve the right to defend themselves if attacked.“This is a conditional effort. It’s a trial period,” he said. “We are all looking at this to see that all sides are able to meet their obligations.”If it holds, the United States and the Taliban have said they will sign a peace deal in the coming days.
No Financing And No Demand- Chinese Refiners Run Into Trouble -International banks are suspending credit lines for some independent oil refiners worried about the growing risk of defaults across industries because of the coronavirus epidemic, Reuters reports, citing industry sources. According to the sources, at least three private refiners, or teapots, have had credit lines to the tune of $600 million suspended by banks including French Natixis, Dutch ING, and Singapore DBS Group Holdings.“All our applications for new open-account credits are frozen … these clean credits are pivotal as we buy 6 to 8 million barrels of oil each month,” one source told Reuters.Refiners, both private and state, have already reduced their run rates in response to the slump in fuel demand resulting from the outbreak, and now they have deepened these cuts, Bloomberg reported last week.The average as of last Thursday was about 10 million bpd, down by 25 percent on the same time last year, when the average run rates were at a record high of close to 13 million bpd. Analysts expect the low run rates to continue at least until the end of this month, but if it spills into March, some refiners – notably independent refiners – will start experiencing a lack of storage space, too, after earlier this month they took advantage of low prices to stock up on crude.Now, on top of that, the teapots that have accounted for a large portion of China’s increased thirst for oil that was instrumental in oil price recovery after the crisis, are having financing trouble.“We were told by our banks that so long as the open-account credits are for oil heading to Shandong, it will be very hard chance winning approvals,” another Reuters source said.The three refiners refused credit line extensions have combined oil import quotas of about 240,000 bpd, R euters reports. If more banks become wary of defaults among refiners, this could hit imports over a longer term.
Shipping lines face troubled waters as oil tankers, container carriers and cruise lines stop calling on China for fear of catching the coronavirus –Port calls to China are becoming less frequent, as fear of catching the coronavirus and a slowdown in the Chinese economy have deterred cruise liners, container ships, oil tankers and bulk carriers alike from stopping at the country’s harbours.Commercial vessels have stopped arriving, with port calls falling by an estimated 30 per cent in February, and container throughput estimated to decline by between 20 and 30 per cent, according to Clarksons – a shipping research company. The coronavirus outbreak, which has sickened more than 75,000 around the world and killed more than 2,400, is adding to the woes of an industry that is already suffering from the US-China trade war. As many as 600 of the 3,700 passengers on the cruise ship Diamond Princess – moored in Yokohama outside Tokyo – contracted the virus while in close proximity to one another, which further deterred vessels from calling on mainland China, where more than 99 per cent of confirmed afflictions and deaths are. As China’s labour force returns to work in phases after an extended Lunar New Year holiday imposed by the government in an effort to contain the epidemic, shipyards are slowly ramping up construction.Still, vessel owners expect delivery to be delayed. Nine of the 19 Chinese shipyards surveyed by Clarksons put their yards on complete suspension on February 14, with none at full production.“We foresee the delay to be between one to two months, depending on the capability and resilience of different shipyards,” said Zhou Jian-Feng, managing director of Wah Kwong Maritime Transport Holdings, which has two ships under construction at Chinese shipyards, and has several other projects underway.
China’s top container ports unclog backlog as virus curbs ease – (Reuters) – China’s top container ports are loosening the backlog of cargoes on their docks as workers return to their jobs after coronavirus travel curbs that kept them away and jammed up global supply chains have been eased. The flu-like epidemic, which originated in the city of Wuhan, an inland logistics hub in Hubei province, has killed more that 2,700 and infected over 78,000 in China alone, and caused massive port congestion due to labor shortages caused by city lockdowns across the country. China is the largest container cargo handler – processing around 30% of global traffic or around 715,000 containers a day in 2019 – and the virus clampdown impacted supply chains of everything from sneakers and machine parts to technology components and food items. Executives from U.S. poultry processor Sanderson Farms Inc (SAFM.O) said on an earnings call on Thursday that operations at China’s ports were slowly getting back to normal and most of its shipments have been delivered. The company has shipped or received orders from Chinese buyers for about 18 million pounds of chicken products since Beijing lifted a ban on imports of U.S. poultry late last year. The average wait time for container vessels at Zhoushan (601018.SS) in southern China – the third-largest container port in the world by annual handling capacity – spiked to more than 60 hours in the week of Feb. 11-17, when travel curbs on workers returning from the prolonged Lunar New Year holiday forced ports to operate with skeleton staffing.
Oil Trader Collapse Sparks Alarm Over China’s Private Refiners– The collapse of an oil trader linked to one of China’s independent refiners is ratcheting up concern over the financial stability of a sector that accounts for about a quarter of the nation’s crude processing capacity. Hontop Energy, which purchases oil on behalf of private refiner Shandong Tianhong Chemical Co., went into receivership in February, according to documents filed with Singapore’s accounting regulator. Its demise brings focus onto the financial health of many of China’s private refiners, known as teapots, which have built up massive debt loads to modernize infrastructure and procure crude on a global scale. Hontop’s fall is reverberating across the world of oil trading as many Western merchants and oil companies like Trafigura Group and BP Plc have built teams over the last five years that are dedicated to supplying teapots. And as the coronavirus epidemic threatens profit margins and coincides with a broader credit crunch in China, traders and bankers are increasingly wary about their exposure to the refiners. “Many of the teapots are already on a credit redflag list of banks in Singapore,” Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies said. “The virus has certainly tightened cash-flows and exacerbated banks’ concerns.” While traders don’t expect the financial problems of teapots to have much of an impact on China’s overall crude demand, they say it will likely result in widespread delays and isolated cases of distressed cargoes as buyers and sellers reassess relationships. Both Hontop and Shandong Tianhong are units of Chinese conglomerate China Wanda Group, which itself has been struggling to juggle its debt load. Repeated attempts to get comment from Hontop and Wanda were unsuccessful.
Coronavirus flight cancellations top 200,000, sending jet fuel prices to more than 2-year lows – Airlines have canceled more than 200,000 flights as the coronavirus continues to spread, prompting travel restrictions and a sharp drop in demand for trips to and within China. More than 76,700 people have been sickened by the virus, which has killed at least 2,249 people, health officials said. Close to 98% of the reported cases are in China but some officials are worried about a crop of new infections elsewhere, including Iran and South Korea. Airlines around the world, including the three U.S. carriers that serve China – Delta, United and American – have halted service to the mainland and Hong Kong because of the virus. In February alone, the number of flights that were scheduled to fly to, from and within China are down 80% from a year ago, according to aviation consulting firm Cirium. From Jan. 23 to Feb. 18, 99,254 scheduled flights didn’t fly, close to 90% of them domestic China trips, the firm added. That’s sending jet fuel prices, generally airlines’ second-biggest expense after labor, down sharply. While benchmark jet fuel prices in the U.S. and Singapore have recovered some ground from hitting the lowest levels since mid-2017, they’re each down 17% so far this year, according to data from S&P Global Platts. “Pent-up demand” may help firm up prices in the second half of the year but “2020 is compromised as far as jet [fuel] demand is concerned,” said S&P Global Platts energy analyst Claudio Galimberti. Normally, lower costs would be welcome news for airlines, but weaker demand is expected to hit revenue and profits this year. The Asia-Pacific air travel market has become more important since the SARS outbreak that began in 2002. The region accounted for 35% of global demand last year, up from 27% in 2002, the trade group said. China is expected to overtake the U.S. as the world’s largest air travel market by the middle of this decade. Air travel demand globally is set to fall for the first time since 2009 and cost airlines some $29 billion – mostly in the Asia-Pacific region – in revenue, the International Air Transport Association said Thursday.
3 Energy Sectors Most Threatened by the Coronavirus – At a time when the energy sector is weighed down by debt and reeling from low commodity prices, American energy producers are now bracing for the biggest demand shock to hit the markets in decades: the effects of the coronavirus outbreak in China and beyond. While the outbreak may not sweep the globe as swine flu did in 2009, the fear of a global epidemic managed to shave 975 points off the Dow Monday morning, and experts seem to agree that the economic effects of the fallout are likely to be more severe.Here are the three energy sectors that are likely to be hardest hit by the coronavirus epidemic, and why:
- #1 Oil, Grounded by Demand. Oil and natural gas prices have remained low for the past year and could remain that way with the biggest oil importer now grounded.China, the world’s top oil importer, bought 41.24 million tonnes of crude in 2019, equivalent to 10.04 million barrels per day (bpd). But just two months after the outbreak of the virus, Chinese oil demand is down sharply because of dwindling air travel, road transportation and manufacturing.China consumes 13 of every 100 barrels of oil that the world produces, and global oil companies are likely to feel the heat to some extent. Bloomberg has reported that Chinese oil demand hasdropped by about 3 million barrels a day, or ~20% of total consumption.The d rop marks the largest demand shock in the market since the global financial crisis that ended in 2009. It’s also the most sudden shock the market has suffered since the Sept. 11 attacks nearly two decades ago.
- #2 Natural Gas, Already A Wreck. Natural gas prices recently tumbled to historical lows and are down nearly 15% since the start of 2020 with excess supply and inventory build up pressuring prices. The coronavirus outbreak is not helping the situation, either. The global LNG leader Royal Dutch Shell has warned that the coronavirus outbreak is alreadyhurting LNG demand and forcing it to reroute supplies previously earmarked for mainland China.And the situation might not improve any time soon. Last year, RBC predicted that natural gasprices might take years to fully recover.
- #3 Battery and Energy Storage.Last week, Utility Dive – which covers news and trends in the utility industry – warned that the coronavirus epidemic “… is going to be a very big deal” with respect to Chinese manufacturing. Eight provinces in the country have already announced work stoppages as a result of the outbreak, which has negatively impacted multiple solar manufacturing campuses. This is highly significant considering that most of the world’s solar panels are made in China.China also happens to be home to most of the world’s lithium-ion battery manufacturing. Utility Dive has warned that the country’s battery storage production capacity could contract by 10% – or 26 GWh – compared to earlier forecasts.
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