Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 10 October 2020. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening.
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EPA gives Oklahoma authority over many tribal environmental issues The Environmental Protection Agency (EPA) is turning its oversight of a number of environmental issues on tribal lands over to the state of Oklahoma. Oklahoma requested the authority in July using a little-known provision of a 2005 law carved out especially for the state. In a seven-page letter to Gov. Kevin Stitt (R), EPA Administrator Andrew Wheeler lists a number of Clean Air Act, Clean Water Act and Safe Drinking Water Act authorities that will now be overseen by Oklahoma. The move will give the state more oversight over environmental issues for Oklahoma’s 38 federally recognized tribes, something the Cherokee Nation called a “knee-jerk reaction to curtail tribal jurisdiction [that] is not productive.” Stitt’s request is the first use of the Oklahoma-only provision in a 2005 transportation bill sponsored by Sen. James Inhofe (R-Okla.) that allows Oklahoma to oversee environmental issues “in the areas of the state that are in Indian country, without any further demonstration of authority by the state.” “EPA’s letter grants Oklahoma’s request to administer the State’s EPA-approved environmental regulatory programs in certain areas of Indian country. EPA’s letter resolves ambiguity and essentially preserves the regulatory status quo in Oklahoma,” EPA spokesman James Hewitt said in a statement, adding that existing exemptions would still stand and that the agency would implement federal environmental programs. “Additionally, if any tribe wants to apply for regulatory oversight of these environmental programs, then they can apply through EPA’s Treatment as a State process,” he added. The Oct. 1 letter was first reported by The Young Turks, a left-wing news outlet, on Monday. The move raised alarm with those who see the potential for a loss of tribal sovereignty as well as for the state to greenlight polluting projects on tribal lands over objections from Natives. “It’s disappointing the Cherokee Nation’s request that EPA consult individually with affected Oklahoma tribes was ignored,” Cherokee Nation Principal Chief Chuck Hoskin Jr. said in a statement to The Hill. “Unfortunately, the governor’s decision to invoke a 2005 federal law ignores the longstanding relationships between state agencies and the Cherokee Nation. All Oklahomans benefit when the Tribes and state work together in the spirit of mutual respect and this knee-jerk reaction to curtail tribal jurisdiction is not productive,” he added.
Court strikes down Obama-era rule targeting methane leaks from public lands drilling -A federal court on Thursday struck down an Obama-era regulation targeting methane leaks from drilling on public lands, arguing that it went beyond the scope of the Bureau of Land Management (BLM), which promulgated the rule. The 2016 rule required oil and gas companies to cut a practice called flaring, in which natural gas is burned, by half, inspect their sites for leaks and replace old equipment that released too much methane. The court argued that although the rule’s stated purpose was to reduce waste, it was essentially used to regulate air quality, which is not the job of the BLM. “Although the stated purpose of the Rule is waste prevention, significant aspects of the Rule evidence its primary purpose being driven by an effort to regulate air emissions, particularly greenhouse gases,” wrote judge Scott Skavdahl, an Obama appointee. Skavdahl particularly noted that the rule’s cost-benefit analysis only showed the rule to be beneficial “if the ancillary benefits to global climate change are factored in.” “Without these ‘indirect’ benefits, the costs of the Rule likely more than double the benefits every year,” he wrote. The Trump administration had issued a rollback of the Obama-era rule, but that too was recently struck down in court. The Obama administration billed its rule as an update to “30-year old regulations governing venting, flaring, and leaks of natural gas,” saying it “will help curb waste of public resources, [and] reduce harmful methane emissions.” Since both of the recent rules were struck down, those decades-old rules appear to now govern methane leaks. The Interior Department celebrated the ruling, signaling that it’s unlikely to appeal the decision. Interior spokesperson Nicholas Goodwin, in a statement, called the 2016 rule “illegal, another job-crushing regulation targeted at small businesses and more government overreach.” “Today’s decision is a win for the American people, the rule of law and our country’s economic future,” he added. Methane is a major greenhouse gas, significantly more potent than carbon dioxide, and it’s also the primary component of natural gas. The Obama administration projected that its rule would cut methane emissions from public lands by 35 percent. The new ruling came as a result of a lawsuit filed by the Independent Petroleum Association of America and Western Energy Alliance, two oil and gas groups.
INTERIOR: Trump admin: Pendley took ‘no relevant acts’ as BLM chief — Tuesday, October 6, 2020 — The fallout from a federal judge’s ruling last month that William Perry Pendley illegally performed the duties of Bureau of Land Management director for more than a year has taken another notable turn.The Trump administration, in a supplemental brief it filed late yesterday with the U.S. District Court for the District of Montana, argues Pendley performed “no relevant acts” while “exercising the authority of director” that should now be thrown out as a result of the judge’s order.That argument differs from the Interior Department’s vigorous defense over the past year of Pendley and his authority to perform the duties of BLM acting director.The filing offers valuable insight into how Interior plans to challenge last month’s ruling by Chief Judge Brian Morris that Pendley’s 424-day tenure leading BLM violated federal laws (Greenwire, Sept. 25). Interior has vowed to fight the ruling with the 9th U.S. Circuit Court of Appeals.As part of Morris’ order, which was sparked by a lawsuit from Montana Gov. Steve Bullock (D), the judge directed the state and the Interior Department to file briefs addressing specific actions that Pendley may have taken that could be tossed out as a result of the ruling. Interior’s brief suggests it plans to follow the same legal argument – already rejected by Morris in his order – that Pendley took no actions that could have inflicted a “particular injury” to Bullock or the state. Thus, Montana and its governor had no legal standing to file the lawsuit in the first place. In its own supplemental brief, also filed late yesterday, Montana asked Morris to throw out three amended land use plans that it argues are invalid. The request targeting only three Montana-specific BLM actions under Pendley is significant, as legal experts, congressional Democrats and environmental advocacy groups have asserted that all BLM actions since July 2019 – when Interior Secretary David Bernhardt added “exercising the authority of director” to Pendley’s title – should be ruled invalid.
Pendley says court decision ousting him from BLM has had ‘no impact’ – One of the Bureau of Land Management’s (BLM) highest ranking officials said his ouster ordered by a federal judge last month “has no impact, no impact whatsoever” on his role within the department. A Montana-based U.S. District Court judge ruled last month that William Perry Pendley “served unlawfully … for 424 days,” giving the Department of the Interior 10 days to justify why it shouldn’t throw out many of the decisions Pendley has made during his tenure. In an interview with the Powell (Wyo.) Tribune, Pendley said the court ruling has changed little for him as he stays at the department by virtue of his official title as one of the department’s two deputy directors. “I’m still here, I’m still running the bureau,” Pendley told the outlet. “I have always been, from day one.” Pendley, who had served as the de-facto head of BLM for over a year, was only nominated to the position this summer, but the nomination was withdrawn shortly thereafter. Pendley has a long history of opposing federal ownership of public lands, and the entire Democratic caucus planned to oppose him – putting the spotlight on vulnerable Republicans up for reelection. Last month several Democrats took to the House floor, demanding he be removed from the department due to views they see as being in conflict with the BLM mission along while expressing concern over comments Pendley has made about the Black Lives Matter movement and Native Americans.
Interior secretary discusses Chaco drilling, outdoor recreation plans – U.S. Secretary of the Interior David Bernhardt said he will not be delaying a land-use plan that opponents say will lead to thousands of new oil and gas wells being drilled in the Greater Chaco region. The comment period ended on Sept. 25 after Bernhardt extended it from its original May deadline. Opponents say the conditions with the COVID-19 pandemic that led Bernhardt to extending the comment period once before have not changed and that the plan should be placed on hold until there can be in-person meetings once again But during his visit to Farmington on Oct. 5, Bernhardt said the Bureau of Land Management and the Bureau of Indian Affairs will go forward with the Farmington Field Office Mancos-Gallup Resource Management Plan Amendment. Bernhardt said the resource management plan amendment has been in the works since 2014. “We need to move forward and get this plan done,” he said. He said staff members will be reviewing the comments received and weighing the various alternatives outlined in the draft environmental impact statement. Generally, Bernhardt said the end decision for such plans is not identical to the proposed preferred alternative in the draft documents. Various entities, including the Navajo Nation, have asked to have the plan placed on hold until after the pandemic conditions have passed. In a comment submitted during the comment period, Gov. Michelle Lujan Grisham echoed those requests to delay adoption of the resource management plan amendment. She requested that an ethnographic study be completed before the plan is finalized. Congress has allocated $1 million for such an ethnographic study, which has not been completed. Bernhardt said while the study will be useful and important, there are laws in place like the National Historic Preservation Act that protect cultural sites.
House Of Pain – Once Again, Bakken Crude Oil Producers Were Hit Especially Hard By Sagging Prices –Tough times in the crude oil sector generally affect all participants to some degree, but the impacts can vary widely by production basin. We saw that back in 2014-16, when the crash in oil prices battered the Eagle Ford, Bakken, and Niobrara but left the Permian unscathed – production there actually kept rising. Fast-forward to 2020, with its COVID-induced demand destruction, anemic prices, and uncertain-at-best recovery, and again the Bakken really took it on the chin. Production in the basin plummeted by 28% in one month – from April to May – and while Bakken output rebounded this summer, the rig count has been hovering at its lowest level in memory and another, albeit slower production decline may be imminent. Today, we discuss the challenges facing exploration and production companies in western North Dakota.
US oil, gas rig count slips 3 on week to 323, ending two weeks of sizable gains: Enverus – The US oil and gas rig count slipped by three to 323 on the week, rig data provider Enverus said Oct. 8, ending two consecutive weeks of sizable gains as activity slowed early in the final quarter of the year. The small weekly decline broke a five-week tranche of rig additions that had boosted the domestic fleet more than 15% and accounted for the bulk of increases since the July trough of 279. For the week ended Sept. 30, the rig count jumped 18, on top of 15 the previous week. The most recent week’s decline, and then some, came from rigs chasing oil. These fell by six to 228, while gas-weighted rigs were up three to 95, Enverus said. “We don’t expect significant rig growth every week,” analyst Matt Andre, of S&P Global Platts Analytics, said. “Prices are still modest and don’t really call for operators to add double-digit rigs every week.” Over the long term, US rig fleet increases “will most likely be slow and steady, compared to how fast [they retreated] in Q2,” Andre said. Domestic basins in the past week represented a checkerboard of mostly stable activity with rig movements mostly in gassy basins. The Haynesville Shale in Northwest Louisiana/East Texas rose two rigs to 38, while the Marcellus Shale largely sited in Pennsylvania fell two, leaving 25. The Eagle Ford Shale in South Texas rose one to 18 on the week, while the DJ Basin in Colorado fell by one to four. The Permian Basin of West Texas/New Mexico was stable at 139, as were the SCOOP/STACK play in Oklahoma, Bakken Shale of North Dakota/Montana, and Utica Shale mostly in Ohio, respectively at 12, 11 and seven rigs. Starting in early March 2020, the domestic rig count, along with oil prices, began to plummet as the coronavirus pandemic accelerated. The US rig count, which stood at 838 the first week of March, fell more than 65% over the next four months before ticking back up. For the week ended Oct. 7, WTI averaged $39.13/b, down 94 cents, while WTI Midland averaged $39.17/b, down $1.05 and Bakken Composite, $35.91/b, down 93 cents. Natural gas prices for that same period averaged $1.73/MMBtu at Henry Hub, down 7 cents, and 93 cents/MMBtu at Dominion South, down 22 cents.
Producers Pay Dearly for Aviation Hedge Collapse— The cost for oil producers to lock in the price at which they sell their crude has soared because of the collapse in the aviation industry. It emerged this week that Mexico may be trying to organize its annual oil-price hedge, the biggest sovereign program of its kind in the world. As well as Mexico, producers everywhere from Oklahoma to the North Sea will try to guarantee the future price for their barrels, often through options trades that pay out if the oil market collapses. However, their efforts have been rendered far costlier in the past few months because airlines are not making the opposite side of the trade by insuring themselves against high prices. With international flights still way down on where they were before Covid-19 struck, the airlines have all but abandoned the options market, meaning the cost of the contracts for oil producers has spiraled. “It’s becoming extremely difficult for big producers to hedge without the large airline flows around,” said Thibaut Remoundos, founder of Commodities Trading Corp. in London, which advises oil producers on their hedging strategies. “Some don’t have a choice and have to spend premium to buy puts, which are expensive.” In normal times, producers like Mexico will buy bearish put options, whose volatility would normally be a fraction higher than an equivalent bullish call option. When air travel ground to a halt in the depths of the virus outbreak, that relationship — known as the skew — exploded. In other words, puts to insure against a price crash soared relative to comparable calls. The relationship shows no sign of returning to normal. In the esoteric world of the oil options market, consumers, notably airlines, tend to manage their fuel bills by purchasing call options to cap what is normally their single biggest cost. They will also sell puts to cheapen that transaction. But with air travel so restrained, far fewer are selling the put options that producers want to buy, ramping up the cost of producer deals. The premium for puts showed up clearly on Thursday. A set of contracts for 2021 that would lock in $40 a barrel for a producer traded at a cost of $4.10 a barrel. On average last year, when oil was higher and volatility was lower an equivalent option would have been between $1.25 and $1.50 cheaper, Remoundos said. While the issue is one that affects all oil producers, the Mexican hedge — if it’s happening as many traders suspect — would be the starkest example. In previous years, the country paid $1 billion to lock in the value of its crude sales.
Chevron overtakes Exxon Mobil as America’s largest oil company – Chevron Corp. overtook Exxon Mobil Corp. as the largest oil company in America by market value, the first time the Texas-based giant has been dethroned since it began as Standard Oil more than a century ago. California-based Chevron had a market capitalization of $142 billion at the close of U.S. trading on Wednesday, compared with Exxon’s $141.6 billion. The entire oil and gas sector is suffering from the plunge in energy prices this year caused by Covid-19. But Chevron has emerged with the strongest balance sheet among its Big Oil peers — it was able to complete its $5 billion acquisition of Noble Energy Inc. last week. Exxon, by contrast, is struggling to generate enough cash to pay for capital expenditures, leaving it reliant on debt and putting pressure on its $15 billion-a-year dividend. Chevron had been closing in on its long-time rival for more than a year, even before the pandemic crushed oil demand. Chief Executive Officer Mike Wirth has focused on Chevron’s shale operations, cutting costs and keeping a tight rein on new projects. Exxon pursued a series of expensive projects that promised growth after years of stagnating production, but which became a drag on its cash flow when the pandemic hit. The American giants’ biggest European rivals, BP Plc and Royal Dutch Shell Plc, face problems of their own — their shares slumped after cutting their prized dividends earlier this year. Some analysts believe Exxon may be next in line to cut its payout. The U.S. company will be unable to fund its dividend without drawing down cash or selling assets before 2025, analysts at Goldman Sachs Group Inc. said in a note Tuesday.
Banks’ Arctic Financing Retreat Rattles Oil Industry – WSJ – Defenders of the oil-and-gas industry in Washington are fighting back against big banks who want to stop financing new Arctic-drilling projects, fearing it could be a harbinger of an unbankable future for fossil-fuel companies. Five of the six largest U.S. banks – Citigroup Inc., Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo – have pledged over the past year to end funding for new drilling and exploration projects in the Arctic. Alaska Sen. Dan Sullivan and a group of fellow Republican lawmakers, mostly from energy-producing states, have been lobbying the Trump administration to examine whether the federal government can prevent the banks from cutting off financing, or punish them for doing so. Mr. Sullivan said banks are unfairly discriminating against oil-and-gas producers in Alaska, and that lenders ought to examine loans on a client-by-client basis instead of denying financing to an entire category of customers. “That these banks would discriminate against one of the most important sectors of the U.S. economy is absurd,” Mr. Sullivan said in an interview. “I thought it was important to push back.” The American Petroleum Institute, one of industry’s most influential lobbying groups, has said it is working with the Trump administration on the issue, which it called a “bad precedent.” API, Mr. Sullivan and others have also suggested the White House should examine whether it could cut off the banks’ access to funding under coronavirus relief packages. Representatives of the banks declined to comment. White House spokesman Judd Deere said Mr. Trump “has strong concerns if roadblocks are being thrown up to specifically harm the oil-and-gas industry.”
Trump administration faulted over breaks for oil companies (AP) – A U.S. government watchdog agency faulted the Trump administration Tuesday for its handling of a COVID-19 relief effort that awarded energy companies breaks on payments for oil and gas extracted from public lands in more than 500 cases. The Government Accountability Office, a nonpartisan arm of Congress, said haphazard rules for the program left the administration unable to say how much relief was given or if it would ultimately benefit taxpayers, as was intended. The Bureau of Land Management gave breaks on royalty payments from companies in at least five Western states because of workforce problems or other issues after the pandemic shut down much of the economy and helped drive a collapse in oil prices. The Trump administration also gave breaks to companies that extract oil in the Gulf of Mexico, but it has released scant details of that effort. Offering royalty relief to companies had been done before the pandemic and is intended to boost the profitability of oil and gas wells so they can still be profitable. The idea is to protect against companies being forced to shut down uneconomical wells permanently, meaning they would never again generate government revenue. But it’s unknown if that’s what happened after the Trump administration approved at least 581 relief requests during its scrambled early response to the pandemic. Most of the approvals were in Wyoming, with cases also approved in Utah, Colorado and by a bureau office that covers Montana, North Dakota and South Dakota. GAO natural resources branch director Frank Rusco described the program as “poorly designed and executed” during testimony on the report Tuesday before the House Natural Resources Committee. The bureau did not know if the relief granted achieved the intended goal of conserving oil and gas for future recovery, nor it the government was getting a fair return for letting companies use public resources, Rusco said.
Trump administration dinged by government watchdog for pandemic relief for oil companies – The Washington Post – The Trump administration mismanaged its efforts to provide relief to oil and gas producers during the height of the coronavirus pandemic, failing to ensure aid went to those that needed it, according to a new congressional report.The U.S. Government Accountability Office, a nonpartisan watchdog office of Congress, said the government flouted its own goals when giving struggling producers a break this spring on payments to the government for oil and gas pumped from federal lands. That royalty relief was supposed to go to wells that would have otherwise shut down because of the sharp decline in oil prices. The idea was to make sure that normally profitable wells were not plugged permanently because of the health crisis. But the GAO, in a report released Tuesday, said the Trump administration failed to properly take the economic viability of wells into account when deciding which wells got relief – and probably ended up offering aid to oil producers that did not need it, shortchanging taxpayers in the process. “This is exactly the time the government should be spending money,” said Frank Rusco, the watchdog agency’s director of natural resources and environment. “But we’re about good government. And if you do it, do it in a smart way.”When oil prices plummeted this spring, the Trump administration offered a 60-day reprieve on royalty payments in more than 500 cases in Western states. The Bureau of Land Management, which oversees drilling on federally controlled lands, reduced rates from the agency’s usual minimum of 12.5 percent to an average of less than 1 percent between March 24 and June 11.
Why is the Biden-Harris campaign fine with fracking? – – For 90 minutes on Oct. 7, the US vice-presidential contenders sparred on stage about whether Democratic candidate Joe Biden would “ban fracking,” a charge lobbed as political dynamite across the aisle. Kamala Harris, Biden’s vice presidential nominee, refused it in no uncertain terms. “The American people know that Joe Biden will not ban fracking,” said Harris. “That is a fact. That is a fact.” The political debate over what the US should do about fracking, the oil extraction technique that has transformed the country into an oil exporter, is explosive. The Biden climate plan has been called themost ambitious ever for a major party’s campaign. Yet every time the Biden-Harris ticket has the opportunity to come out fully against fracking, they have refused. The reason why is simple. Biden’s campaign isn’t calling for a ban because it tempts political suicide in swing states like Pennsylvania and Ohio where fossil fuels still rule. And the political risk isn’t even necessary: Government leaders may not have to ban fracking, because the economics will likely do it for them. Fracking has created a petroleum boom, opening up fields from North Dakota to Texas. More than half a million jobs in key states including Ohio, Pennsylvania, Colorado have been created by the industry (if even many of those are gone amid the pandemic). Yet it’s also unleashed a climate problem. By venting huge amounts of methane into the atmosphere, and generating vast amounts of contaminated groundwater (some of which may pose a health risk), oil fracking wells are seen as a major barrier to a stable climate, despite its role in displacing even dirtier coal. From 2016 to 2018, US oil and gas emissions rose 13%. For some on the left of the Democratic party, including Bernie Sanders and Elizabeth Warren, a fracking ban is an essential step toward meeting the country’s climate commitments. Biden, like other moderates, prefers tighter regulation of its health and environmental risks. That resistance to an outright ban may come from the ghosts of campaigns past. In March of 2016, Hilary Clinton told an Ohio town hall that her policy to bring clean renewable energy and economic opportunity was “going to put a lot of coal miners and coal companies out of business.” She came to regret those words (“the point I had wanted to make was the exact opposite of how it came out,” she wrote), but it was too late. The words were used to bludgeon Clinton’s election chances in must-win blue states in coal country.Clearly, Biden and Harris will not make the same mistake.
Two oil spills in east-central Alberta – The Alberta Energy Regulator says 150,000 litres of crude oil have leaked from a pipeline near Hardisty southeast of Edmonton. It says the spill has been contained and has not affected wildlife or water bodies. The regulator says Calgary-based AlphaBow Energy reported the breach on Wednesday. It says the cause of the spill will be investigated.
Cleanup is underway after a 126-barrel oil spill — Energy Canada says it has been notified and will monitor the situation after the oil spill in southern Alberta on Friday. CER said the crude oil release occurred at a pumping station on the Enbridge Express pipeline, about 270 kilometers northeast of Calgary, near Youngstown. Initial reports show that 20,000 liters of oil (or about 126 barrels) were released on company property, and an estimated 75 liters (or half a barrel) spilled into a nearby farmer’s field. The agency said in a statement that there were no livestock at the time. The total volume of the spill is still under investigation. Cleaning is in progress. Inbridge said in a statement the line was initially closed but had resumed work Friday evening after it was deemed safe to do so. “There are no immediate safety concerns and we are cooperating fully with regulators in our response,” said Inbridge. No bodies of water or wildlife have been reported affected, and the Calgary-based company said all off-site oil has been recovered. The agency said it deployed an inspection officer to monitor the company’s response. CER said: “The top priority of CER standards is to protect people and the environment. Enbridge will be held accountable to ensure that the site is cleaned and that their response meets CER’s stringent safety and environment standards. The express pipeline, which went into operation in 1997, ships up to 280,000 barrels per day from Hardesty to Casper, Wyoming.
Pemex Issues $1.5-Bln Bond To Refinance Massive Debt Mexico’s state oil company Pemex has issued a $1.5-billion bond to raise funds necessary to refinance existing debt, Reuters reported, quoting a source in the know that remained unnamed.According to the report, this is the first time the Mexican giant has raised new debt after it lost its investment-grade rating from Moody’s. Fitch has a BBB- rating on Pemex, which is still in investment-grade.Regardless of credit ratings, however, Pemex has become the most indebted energy company in the world and that’s despite efforts by the Lopez Obrador to strengthen the company, including through tax relief and a reversal of liberalization measures taken by the previous government.Yet, according to the Reuters source, the new Pemex bond was substantially oversubscribed: the 6.875-percent coupon incentivized investors to bid a total $10 billion for the bond.In addition to its swollen debt pile, which has reached some $100 billion, Pemex has also been fighting a steady production decline that most recently forced it to revise down its output projections for 2021. Last month, the country’s finance ministry said it expected Pemex to produce 1.857 million bpd on average next year down from a previous forecast for 2.027 million bpd.The projected output for this year may also need to be revised down. The daily average is seen at 1.83 million bpd, but with natural depletion and lack of new exploration at sufficient levels, it may be difficult to achieve despite government support. It was actually the government that may have contributed to the decline: all contracts with foreign oil field operators have been put under review for possible evidence of corruption and no new tenders for exploration blocks have been planned for the duration of this review. Between January and July, Pemex produced an average of 1.692 million bpd of crude oil, much below its forecast for the year.
US deploys missile destroyer off coast of Venezuela – In an escalation of the US “maximum pressure” campaign against Venezuela, the US Southern Command (SOUTHCOM) has deployed a guided-missile destroyer, the USS William P. Lawrence, barely 15 nautical miles off the Caribbean coastline of the South American nation. Venezuelan Foreign Minister Jorge Arreaza issued a statement denouncing the deployment as an “erratic and infantile provocation” on the part of Washington, while ridiculing US claims that it is part of a US operation against drug trafficking. In addition to drug interdiction pretext, the Pentagon justified the deployment of the advanced warship as a “freedom of navigation” operation designed to challenge what it termed Venezuela’s “excessive maritime claims in international waters.” The provocative deployment of the US warship follows by barely two weeks joint exercises conducted by the US and Colombian militaries in a threatening show of force against Venezuela. The exercises were timed to coincide with a four-day Latin American tour by US Secretary of State Mike Pompeo, who visited every country bordering Venezuela, promoting regime change in Caracas and railing against China’s influence in the region. The US naval provocations are particularly threatening under conditions in which Venezuela is receiving desperately needed gasoline supplies aboard tankers sent from Iran, which is also the target of a “maximum pressure” sanctions campaign and continuous military provocations aimed at achieving regime change in Tehran. The Faxon, the third in a group of three Iranian tankers carrying fuel, is expected to arrive at a Venezuelan refinery port over the weekend. Together with two Iranian ships that have already reached the country, the Forest and Fortune, the total cargo amounts to 800,000 barrels of gasoline. While Venezuela has the largest known petroleum reserves, its production has fallen precipitously under the impact of US sanctions, falling global oil prices and a lack of investment and maintenance of the country’s state-owned energy firm, PDVSA. It is also dependent on the import of condensate, a natural gas needed to turn Venezuela’s crude oil into gasoline. Its two functioning refineries are producing just 55,000 barrels per day, roughly 50 percent of the country’s requirements, meaning that the Iranian imports will not go that far. Nonetheless, Washington is determined to cut off the gasoline imports. Last month, Washington claimed to have intercepted four ships carrying Iranian gasoline to Venezuela. None of the vessels were Iranian-flagged or owned, and the UAE, Oman and UK-based owners of the cargo shipped on Greek-owned tankers are suing the US government, insisting that the fuel was bound for Trinidad and destined for sale to Colombia and Peru.
An escalating labor strike could soon wipe out almost 25% of Norway’s oil and gas production – A strike by workers in the Norwegian oil sector could soon wipe out nearly one-quarter of the country’s petroleum output, Norway’s Oil and Gas Association warned on Thursday, with the intensifying dispute helping oil prices to build on recent gains. International benchmark Brent crude futures traded at $43.09 a barrel on Thursday afternoon, up more than 2.6%, while U.S. West Texas Intermediate futures stood at $41.01 a barrel, around 2.7% higher. The dispute between Lederne union and the Norwegian Oil and Gas Association began when talks collapsed on Sept. 30, prompting production outages from Oct. 5. Lederne is pushing for the organization to match the pay and conditions at onshore remote-control rooms with those of offshore workers. The striking union told CNBC that this request would not impose an additional cost on companies. “Lederne fear that this is the start of a deterioration of our members’ accumulated pay and working conditions, and therefore see no other option than to use the right to strike when negotiations and mediation do not succeed,” the union said via email. At present, 169 Lederne members are on strike on four platforms: Johan Sverdrup, Gudrun, and Gina Krog (all operated by Norway’s state-controlled energy giant Equinor), and Gjoa (operated by Neptune Energy). From midnight on Oct. 10, Lederne said an additional 93 members on the following platforms would also go on strike: Kristin, Oseberg Sor, Oseberg Ost (all operated by Equinor), and the Ekofisk Bravo/Kilo installation (run by U.S. producer ConocoPhillips). An oil drilling platform sits on board the world’s largest construction vessel, the Pioneering Spirit, in the Bomla fjord near Leirvik, ahead of its transportation to the Johan Sverdrup oil field, Norway, on “The demands from Lederne suggest that we either expand the scope of the shelf agreement or establish a new agreement for the members they have onshore,” a spokesperson for Norway’s Oil and Gas Association told CNBC via email. “Both alternatives are far beyond the regulatory provisions of the collective agreement. Norwegian Oil and Gas cannot accept either an extension or a new agreement,” they added. The association said the financial offer it had made had been accepted by the two largest unions, Industri Energi and Safe, which together represent 85% of the employees covered by the shelf agreements. Nonetheless, it said, “the demands from Lederne were otherwise significantly higher than what was agreed in the lead sector settlement.” Six offshore oil and gas fields shut down on Monday as a result of the strike action, Norway’s Oil and Gas Association said, cutting output by 8% or 330,000 barrels of oil equivalent per day. “Strike is a lawful action,” Norway’s Ministry of Labor and Social Affairs told CNBC on Thursday in an emailed statement. “The responsibility for reaching a solution in this situation lies first and foremost with the social partners,” the Ministry said, adding it would “monitor the situation in the same fashion as with any other labor conflict.”
Indo-French satellites to trace illegal spillage of oil – The constellation of maritime surveillance satellites for the Indian Ocean Region, to be jointly launched by India and France, will be able to trace illegal spillage of oil by ships, a senior French space agency CENS official said on Sunday. In August last year, CNES and ISRO committed to developing and building a constellation of satellites carrying telecommunications and radar and optical remote-sensing instruments, constituting the first space-based system in the world capable of tracking ships continuously. The monitoring centre will be based in India, the official added. “With a revisit capability (of the satellites), this makes possible to task acquisitions several times a day. It will also be able to detect oil slicks and trace their origin,” the official said. The main purpose of this is to trace illegal spillage of oil by ships. The Indian Ocean Region has several Sea Lanes of Communication (SLOC) and used by many ships every day. The satellites will be operated jointly by France and India to monitor ships in the Indian Ocean. The system will also cover a wide belt around the globe, benefiting a broad range of French economic interests, the official said. Parts of the satellites will be built in both the countries and launched from India, he added. CNES and the Indian Space Research Organisation (ISRO) are also operating a number of climate-monitoring satellites together. ‘Trishna’, a highly precise thermal infrared observer, will also be part of the fleet of Indo-French satellites. After a successful design phase led by a joint team of ISRO-CNES, the satellite is now set to enter its development phases in the coming months, the official said. France and India are also collaborating on the Gaganyaan, India’s first manned space mission. France will also be part of ISRO’s mission to Venus, the official added.
Blaze-hit oil tanker on way to UAE for repairs – The Indian Oil Corporation Limited (IOCL) will have to wait longer to get its consignment of three lakh metric tonnes of crude oil from the blaze-hit Panamanian oil tanker MT New Diamond as the vessel is being towed to Fujairah port in the United Arab Emirates for repairs. The Indian Coast Guard said the vessel, chartered by the IOCL, is being towed with the help of salvors under its watchful eyes as a precautionary measure to prevent any untoward incident, particularly the spill of oil. A fire had erupted in the tanker following a major explosion in its engine room on September 3. The 20-year-old vessel was carrying Kuwaiti crude oil from Mina al Ahmadi to Paradip in Odisha.An Indian Coast Guard spokesman told Express that its pollution control vessels Samudra Pavak and Samudra Praheri with integral helicopter and ICGS Shaunak with pollution-response gears will be escorting the MT New Diamond. “ICG ships will provide preventive pollution response cover in case of any oil leakage contingency during the passage of the vessel to Fujairah,” the spokesman said. It is learnt that the coast guard is taking precaution so that Indian shores are safe in case of any oil spill. The vessel is being taken to Fujairah, a deep-water port, as its liquid cargo can’t be pumped out in the open sea. The decision taken by the ship owners and salvors, said coast guard sources. This comes after Union ministers Dharmendra Pradhan and S Jaishankar last month reviewed the condition of the vessel and discussed ways to expedite arrangements for the discharge of crude from the vessel. The IOCL has its biggest refinery with 3,00,000 barrels per day capacity at Paradip. With a combined refining capacity of almost 5 million barrels per day, India is the world’s fourth largest refining centre after the US, China and Russia.
The Mauritius Oil Spill Cannot Be Cleaned Up, but Damages Must Be Paid – On the 25th of July the Japanese bulk carrier MV Wakashio – chartered by Mitsui OSK and owned by Nagashiki Shipping – struck a beautiful and irreplaceable coral reef on Mauritius’ southeast coast. The ship was sailing dangerously close to the reef, and ran aground. Twelve days later, the ship began leaking heavy fuel oil, devastating one of the most beautiful places in the world and ruining the livelihoods of coastal communities. Over the past five weeks in Mauritius, we have witnessed long stretches of ocean, unique mangroves and pristine lagoons become quickly coated with oil. We have watched the people of Mauritius rushing to the beach, risking themselves as they attempt to remove the oil from every rock and grain of sand, desperately trying to recapture their homeland’s beauty submerged by toxic waves, being brought relentlessly by the tide to the shore. Thousands of species around the pristine lagoons of Blue Bay, Pointe d’Esny and Mahebourg are at risk of suffocating or drowning in a sea of pollution, with dire consequences for Mauritius’ tourism, and people’s food security and health. Furthermore, some of the most toxic components of the oil spill can build up as hidden contaminants in marine organisms, through which they can enter into the food-chain. Oil residues accumulate in sediments, especially on shores. The impacts of this oil spill – like any other oil spill – will be felt years after the surface oil has been removed. The people of Mauritius are going to have to live with this devastating reality for decades. There is no question that Mitsui OSK and Nagashiki Shipping are jointly the cause of the devastating pollution in Mauritian waters. After the first 12 days of their silence, Mitsui OSK and Nagashiki Shipping apologized for this disaster. For that apology to mean anything, it must be backed up with action. This would require fully applying the “polluter pays” principle, which means the companies pay for all current and future damages. While steps by the Japanese government to help the government of Mauritius cope with the toxic impacts of the oil spill are welcome, Japanese taxpayers should not be liable for the actions of the Japanese companies, which were reckless enough to allow one of its largest vessels to travel so close to coral reefs and run aground. Ultimately, those who are responsible for the pollution must pay for the damage that their pollution has caused. Mitsui OSK and Nagashiki Shipping seem to be avoiding their responsibilities. The “polluter pays” principle would require funding, among other things, a fully public independent investigation into the causes and consequences of the oil spill, and a commitment to stop using this shipping route.This needs to account for the livelihoods of those dependent on fishing and tourism, the coral reefs, mangroves, wetlands and the entire, vulnerable ecosystem.
UN warns of decaying tanker that threatens oil spill and port closure – A decaying oil tanker carrying 1.1 million barrels of oil off Yemen risks causing a major oil spill, the closure of a key port and disruption to a busy trade route, if immediate action is not taken. The United Nations (UN) has called for inspections and repairs of the tanker, which previously served as a floating export terminal. The FSO Safer is located near the port of Hodeidah, a key entry point for humanitarian aid in Yemen, a country embroiled in a six-year civil war between the Iran-backed Houthi group and a Saudi Arabia-backed coalition supporting government forces. Built in 1974, the ship has served as a floating export terminal and storage unit since arriving in Yemen in the late 1980s. In 2015, when the conflict in Yemen intensified and Houthi rebels took control of the nearby coastline, it was abandoned by its owner, a state-run oil company. For the past five years, the ship has been slowly corroding. Time may have already run out to avoid environmental disaster. In late September, the Saudi ambassador to the UN, Abdallah Al-Mouallimi, wrote in a letter to the global organisation that an “oil spot” had been seen 50km west of the vessel, reports Reuters. Al-Mouallimi reportedly wrote that the tanker “has reached a critical state of degradation, and that the situation is a serious threat to all Red Sea countries, particularly Yemen and Saudi Arabia”, adding “this dangerous situation must not be left unaddressed”. The UN has been waiting for authorisation from the Houthi group to send experts to the Safer tanker to conduct a technical assessment and make any initial possible repairs. The Houthi group has rejected requests to inspect the tanker, raising concerns that the rebels may use it as leverage in negotiations. In an August statement, UN secretary general Antonio Guterres said that a potential oil slick in the Red Sea would not only “severely harm Red Sea ecosystems relied on by 30 million people across the region”, but would also force the nearby port to close for months and “cut off millions of people from access to food and other essential commodities”. The scale of any leak from the tanker could prove disastrous. The UN has warned that a spill from the vessel could be four times worse than the 38,500-tonne Exxon Valdez spill off Alaska in 1989.
Oil spill detected next to FSO Safer United Nations inspectors were once again barred from boarding the decaying floating storage tanker Safer yesterday by Houthi militia as images emerge of a leak around the 44-year-old ship moored in the waters of war-torn Yemen. The FSO Safer, stranded for the past five years to the north of Yemen’s port city of Hodeidah, contains 157,000 tonnes of light crude oil, four times as much as the amount of oil that gushed into the sea off Alaska from the Exxon Valdez tanker 31 years ago. In May, seawater leaked into the abandoned FSO’s engine room, which was eventually patched by a team of divers. Research by TankerTrackers using satellite imagery from Planet Labs shows that an oil spill occurred a fortnight ago from the ageing ship. “From what we’ve been able to gather, the spill went pretty far and wide in the immediate area, but is no longer spilling,” TankerTrackers tweeted on October 3, adding: “The vessel is still floating in place, but time is quickly running out for this ship.” Saudi Arabia’s UN Ambassador Abdallah Al-Mouallimi warned last month that experts had discovered 50 km west of the Safer that a pipeline attached to the vessel had likely separated from the stabilizers holding it to the bottom and it was now floating on the surface of the sea. The 1976-built ship was owned by the Yemeni government but was seized by the Houthis in 2015. It has been stationed in Yemeni waters for the past 33 years. Writing for Splash last month, Carlos Luxul, the author of The Ocean Dove, noted of the FSO: “Years of neglect have taken their toll. There are no reliable estimates of the present thickness of the Safer’s hull, but it is not unreasonable to assume that it is down to its last few millimetres in certain places, masked by the presence of a generous coating of marine encrustation.”
Turkey Set to Revise Black Sea Discovery Estimate— Turkey expects to raise its estimate for the amount of natural gas discovered in the Black Sea and plans to announce the new guidance as early as next week, according to people with direct knowledge of the matter. The government will outline a sizable revision to the initial discovery of 320 billion cubic meters of recoverable gas, unveiled in August, once exploratory drilling is completed this month, the people said, asking not to be named due to the sensitivity of the find. The energy discovery in the Black Sea is critical for Turkey’s current-account balance which is dragged down by the need to import nearly all of the 50 billion cubic meters of gas the country consumes annually. Drilling to a depth of around 4,500 meters (15,000 feet) at the Tuna-1 discovery would penetrate two additional formations that appear promising, a senior Turkish energy official said last month. A second drill ship is likely to be moved to the region next year. Ankara has dramatically expanded energy exploration in the Black Sea and contested waters of the eastern Mediterranean. It’s keen to find sizable energy reserves to ease its heavy reliance on imports from Iran, Iraq and Russia, and support one of the biggest economies in the Middle East. Shares of Turkish oil refiner Turkiye Petrol Rafinerileri AS, or Tupras, gained as much as 2% following the news, while petrochemical company Petkim Petrokimya Holding AS climbed as much as 4.5%. They were trading 1.7% higher and 3.8% higher as of 4:05 p.m., respectively. Shares of energy companies Aksa Enerji Uretim AS and Aygaz each rose 2.3%. But the searches have mired the government in territorial disputes with Greece and Cyprus in the Mediterranean.
How a Biden presidency may lead to increased supply in the oil market – A Biden presidency could bring 1 million barrels per day of Iranian oil back into the market, but lead to lower demand in the long run, an economist said this week. That’s because Democratic presidential candidate Joe Biden is likely to reestablish relations with Tehran if he is elected, but introduce environmental policies that limit U.S. oil and gas, said David Fyfe of Argus Media. “Arguably, a Biden presidency would move fairly rapidly toward some sort of rapprochement with Iran,” he told CNBC’s “Capital Connection” on Friday. “That of course could lead to maybe up to a million barrels a day of Iranian oil coming back onto the market,” he said. “It might not happen immediately, but you could see that happening within the sort of first six months of a Biden presidency.” By contrast, the Trump administration has put maximum pressure on Iran, which has seen heavy economic sanctions imposed on the Islamic Republic, including on its oil exports. Biden has been leading President Donald Trump in multiple polls, including one by NBC News, which shows that he is up more than 10 percentage points, 51.6% compared to 41%. On the flip side, the Democrat’s policies on climate change could tighten the market over the long run. “A Biden administration would try to get the U.S. back into the Paris Climate Accord,” Fyfe said. “Therefore, over the longer term, it might actually be relatively bearish in terms of restraining hydrocarbon demand in the U.S. going forward.” Biden last year announced a climate plan that would see $1.7 trillion invested into clean energy research and changes in infrastructure. He could also impose restrictions that would further slow the growth in U.S. shale oil and gas production, said Fyfe. Separately, he said Argus Media’s base case scenario is for a “steady recovery” in the oil market, assuming Covid-19 cases do not surge and lead to widespread lockdowns. Oil futures crashed when demand evaporated as the coronavirus crisis spread earlier this year and the market worried about an oversupply. If the virus situation doesn’t escalate, the oil market should continue to recover, Fyfe said. “Gradually, the 1.3 billion barrels of surplus oil that has accumulated in storage, that can be drawn down by the end of 2021, and that suggests that prices could recover to something closer to $50 to $55 by late 2021,” he said. “If we have a second spike in the virus and renewed shutdowns on a broad basis, then really, all bets are off and OPEC will be scrambling to try and stitch together a new deal on supply.”
OPEC cuts long-term forecast for oil demand growth, sees ‘continued disparity’ in climate policy– OPEC on Thursday said it had downwardly revised its forecast for global oil demand growth over the long term, given the industry faced “an existential threat” this year in the wake of the coronavirus pandemic and as climate policies continue to shape the future of energy. In its closely-watched annual World Oil Outlook, the Middle East-dominated group of oil producers outlined its medium to long-term expectations for the global economy, oil and energy demand, and related policy matters. It also extended its forecast period through to 2045, from 2040. OPEC said worldwide oil demand was expected to increase by nearly 10 million barrels per day (b/d) over the long term, rising to 109.3 million b/d in 2040, and to 109.1 million b/d in 2045. Global oil demand stood at 99.7 million b/d in 2019. It represents a downward revision of over 1 million b/d when compared to the 2040 levels projected in the group’s 2019 outlook, published last November. “The year 2020 will be remembered primarily for the omnipresence, as well as unprecedented scale and reach, of the Covid-19 pandemic. From an energy point of view, the lockdown-induced economic recession has resulted in the sharpest downturn in energy and oil demand in living memory,” OPEC said in the report. Looking ahead, OPEC said the “big question hanging over energy and oil markets” was to what extent there would be a longer-term impact on consumer behavior, and thus energy demand. OPEC said it believed oil would remain the largest contributor to the energy mix through to 2045, accounting for more than 27%, followed by gas (roughly 25%), and coal (nearly 20%). These respective energy sources were also the three largest contributors to the fuel share in 2019. The contribution from solar, wind and geothermal energy was expected to grow by 6.6% per year on average through to 2045, “significantly” faster than any other energy source. These renewable energy sources were expected to represent 8.7% of the fuel share in 2045, up from 2.1% in 2019.
OPEC isn’t worried about peak oil demand yet – OIL DEMAND WON’T PEAK UNTIL 2040, OPEC SAYS: For OPEC, the rumors of the death of oil demand are greatly exaggerated. In fact, OPEC’s research arm expects oil demand to partly recover next year, so long as the coronavirus pandemic is largely under control by then. It doesn’t expect global peak oil demand until 2040, after which OPEC expects demand to gradually decline, according to its latest World Oil Outlook released Thursday.”[O]il will continue to account for the largest share of the energy mix by 2045, providing a stable foundation for addressing global energy needs for years to come,” reads the OPEC report. That’s even with renewable energy and natural gas taking over a growing share of the energy mix. OPEC’s view offers a stark contrast to many in the energy industry who see peak oil as a much nearer possibility.Just last month, BP projected oil demand may never reach its pre-COVID-19 levels again, especially if the world begins to cut carbon emissions dramatically in line with the Paris climate agreement. Even in a business-as-usual scenario, BP said it expects global oil demand to flatten out and start declining in about 10 to 15 years. In the near-term, economic growth, especially in developing countries, and a demand “catch-up” in sectors such as aviation and road transportation will drive post-pandemic recovery for oil demand.Longer-term, OPEC expects the aviation sector’s demand for oil to increase dramatically. In addition, growth in the petrochemical sector will drive the most significant growth in overall oil demand.And more broadly, OPEC doesn’t expect oil demand growth to slow down in developing countries, such as India and China, as their economies and demand for energy grow rapidly.OPEC is also less bullish on electric vehicle adoption over the next few decades, a shift that could take a significant chunk out of overall oil demand if it accelerates. In its outlook, OPEC projects global share of electric vehicles would be more than 16% by 2045. By comparison, BP in its September outlook expects electric cars to account for between 80-85% of total global vehicles by 2050 under scenarios where the world cuts carbon dramatically and at least 35% in a business-as-usual scenario.
Barrel rises 5% over Trump health update, strike in Norway – (Reuters) – Oil prices rose 6% on Monday, driven by the announcement that US President Donald Trump will be discharged from the hospital on Monday, just days after the news. his contagion of coronavirus caused widespread alarm. Brent crude rose $ 2.02, or 5.14%, to $ 41.29 a barrel, while United States West Texas Intermediate (WTI) oil gained $ 2.17, or 5.86% , at $ 39.22 per barrel. “This moment of strength is unlikely to support the growing number of unknowns. After all, the oil market is trapped in an endless cycle of uncertainty,” Prices fell more than 4% on Friday after Trump’s diagnosis. However, the president made a surprise appearance Sunday in a caravan outside the hospital where he is being treated, which helped boost market confidence. Trump announced that he will leave the military hospital where he is being admitted at 2230 GMT on Monday after being treated for COVID-19, adding that he feels “really good.” [nL1N2GW194] Oil was also supported by a workers’ strike in Norway. Energy company Equinor closed four of its offshore oil and gas fields on Monday as its workers expanded their mobilization, a company spokesman told Reuters. The reduction in Norwegian production was mainly offset by increased pumping in Libya, analysts said. Libyan oil production has risen by about 20,000 barrels per day (bpd) since last week to 290,000 bpd as exports grow, a Libyan source in the sector told Reuters on condition of anonymity.
Oil jumps nearly 6% on stimulus hopes, Norway production shutdowns – Oil prices surged more than 5% on Monday after doctors said U.S. President Donald Trump could soon be discharged from the hospital where he is being treated for COVID-19, while six Norwegian offshore oil and gas fields were shut as more workers joined a strike. Brent crude rose $2.30, or 5.9%, to $41.57 a barrel. West Texas Intermediate crude gained $2.17, or 5.9%, to settle at $39.22 per barrel. “A lot of people thought last week’s selloff was overdone,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “There were a lot of assumptions.” On Friday, prices slumped more than 4% following Trump’s diagnosis. Trump’s medical condition remained unclear as he began a fourth day at the military hospital where he is being treated, but his doctors have said he could be discharged as soon as Monday, which improved market sentiment. Hopes for a U.S. stimulus package to counter the economic impacts of the pandemic also supported prices. White House Chief of Staff Mark Meadows said there was still potential to reach agreement with U.S. lawmakers on more economic relief during the coronavirus pandemic. Oil was also supported by an escalating workers’ strike in Norway over pay. Six Norwegian offshore oil and gas fields were shut. The strike will cut Norway’s total output capacity by just over 330,000 barrels of oil equivalent per day, or about 8% of total production, according to the Norwegian Oil and Gas Association (NOG). “This will not entail any serious tightening of supply on the market as concerns about demand and fears of a renewed oversupply predominate at present,” said Commerzbank analyst Carsten Fritsch. The reduction in Norwegian production was mainly balanced by rising output in Libya, analysts said. Libyan oil production has increased to 290,000 barrels per day, a source told Reuters on Monday, almost three times more than its output during a blockade that began in January and ended in September.
Oil prices gain on supply disruptions, Trump’s hospital exit – Oil prices gained on Tuesday amid supply disruptions in Norway, a new hurricane in the Gulf of Mexico, and U.S. President Donald Trump’s return to the White House after being treated for COVID-19 in hospital. Brent crude futures were up 82 cents, or 2%, at $42.11 per barrel. West Texas Intermediate crude futures were trading 82 cents higher, or 2%, at $40.06. An oil workers’ strike in Norway will cut the country’s total output capacity by just over 330,000 barrels of oil equivalent per day, or about 8% of total production, according to the Norwegian Oil and Gas Association. Around 60% of the total cuts were in natural gas, with crude oil and natural gas liquids making up the rest, according to Reuters calculations. “Besides Norway, there could also be production outages in the Gulf of Mexico this week, where another hurricane has developed,” Commerzbank said. Energy companies were evacuating offshore oil platforms as Hurricane Delta strengthened to category 2 and could become a major hurricane when it reaches the Gulf of Mexico on Thursday. Chevron has begun evacuating all personnel from its platforms in the region and is shutting-in the facilities, the company said. A rally in world stock markets after Trump’s return to the White House from hospital and expectations of a new U.S. stimulus package being agreed also boosted oil. Oil prices had fallen sharply when Trump went to hospital on Friday, as it created uncertainty for investors over what would happen in the United States as the country gears up for a presidential election on Nov. 3. Hopes for a bipartisan U.S. economic relief package grew as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke on Monday and prepared to talk again on Tuesday, in a concerted effort to reach a compromise on legislation.
Oil ends up on supply issues, nixed U.S. stimulus talks a bearish sign (Reuters) – Oil prices rose more than 2% on Tuesday, supported by expected supply disruptions from a hurricane approaching the Gulf of Mexico and an oil worker strike in Norway. The market slipped in post-settlement trading, however, after U.S. President Donald Trump said he was instructing his administration not to negotiate a stimulus package until after the Nov. 3 election. Brent crude futures settled at $42.65 a barrel, up $1.36 a barrel, or 3.29%. U.S. West Texas Intermediate (WTI) crude settled at $40.67 a barrel, rising $1.45, or 3.7%. In post-close trading, however, Brent fell to $42.19 while U.S. crude dropped to $40.13 a barrel. Oil prices eased further after the close following American Petroleum Institute data that showed U.S. crude stocks climbed 951,000 barrels last week compared with analysts’ expectations in a Reuters poll for a build of 294,000 barrels. Trump returned to the White House following three days in the hospital for treatment for COVID-19. U.S. House Speaker Nancy Pelosi and U.S. Treasury Secretary Steven Mnuchin had been in negotiations for an additional $1.5 trillion to $2 trillion in economic stimulus before Trump’s tweet. “It looked like something was going to materialize, and now it has been blown up so everything is selling off,” said John Kilduff, partner at Again Capital LLC in New York. “The petroleum complex needed that stimulus to help stoke demand once again, and we’re obviously not getting it.” Energy companies shut offshore oil platforms as Hurricane Delta strengthened to a Category 2 and was on track to reach the Gulf of Mexico on Thursday. It would be the 10th named storm to hit the United States this year, which would break a record dating back more a century. Royal Dutch Shell Plc RDSa.L said it was evacuating nonessential workers from all nine of its offshore Gulf of Mexico operations and preparing to shut production. Equinor ASA EQNR.OL and BHP Group Ltd BHP.AX also shut in production and evacuated workers. Norway’s petroleum output is down 8% due to an oil worker strike. A major labor union in the country is trying to resolve the dispute with oil companies, which have shut six offshore oil and gas fields.
Oil falls nearly 2% on oversupply concerns – Oil prices fell nearly 2% on Wednesday after U.S. President Donald Trump dashed hopes for another stimulus package to boost the coronavirus-hit economy and after U.S. crude inventories rose in the most recent week. Brent crude futures were down $1.15, or 2.7%, to $41.51 a barrel, while West Texas Intermediate (WTI) crude settled 72 cents, or 1.8% lower at $39.95 per barrel. White House Chief of Staff Mark Meadows on Wednesday said he was not optimistic that a comprehensive deal could be reached on further COVID-19 financial aid and that the Trump administration backed a more piecemeal approach. “Trump pulling out of relief negotiations generates a lot of uncertainty about the economy,” said Harry Tchilinguirian, head of commodities research at BNP Paribas. Oil prices were also hit by a slightly larger-than-expected build in U.S. crude inventories. Crude inventories rose by 501,000 barrels in the week to Oct. 2 to 492.9 million barrels, compared with analysts’ expectations in a Reuters poll for a 294,000-barrel rise. Both gasoline and distillate inventories fell. “The inability to coordinate another stimulus package is having a negative impact on demand sentiment, but the data shows that we perhaps have something to be encouraged about,” said Tony Headrick, energy market analyst at CHS Hedging. Energy companies secured offshore platforms and evacuated workers on Tuesday, some for the sixth time this year, as Hurricane Delta threatened U.S. oil output in the Gulf of Mexico. The storm has shut 29% of offshore oil production in the Gulf, which accounts for 17% of total U.S. crude output. In Norway, the Lederne labour union said on Tuesday that it will expand oil strike from Oct. 10 unless a wage deal can be reached. Six offshore oil and gas fields shut down on Monday because of the strike, cutting Norway’s output capacity by 8%.
Crude oil futures inch higher despite US crude build | S&P Global Platts– Crude oil futures ticked up during mid-morning trade in Asia Oct. 8, clawing back some of the overnight losses, as the impact of a build in US crude inventories was negated by the support offered to the market by draws in product inventories and escalating supply disruptions in Norway and the US Gulf of Mexico. At 11.23 am Singapore time (0323 GMT), ICE Brent December crude futures were up 13 cents/b (0.31%) from the Oct. 7 settle to $42.12/b, while the NYMEX November light sweet crude contract was up 5 cents/b (0.13%) at $40/b. Both international crude markets had dived 1.55% and 1.77% to settle at $41.99/b and $39.95/b respectively on Oct. 7, when the cancellation of US stimulus negotiations had rattled the market. The uptick came despite data from the US Energy Information Administration showing that, due to increased US production and a slowdown in exports, US commercial crude inventories jumped 500,000 barrels to 492.93 million barrels in the week ended Oct. 2. The impact of the crude inventory build was cushioned by indications of improved downstream demand, as the EIA data also showed that, in the same week, US distillate inventories fell 960,000 barrels to 171.8 million barrels and US gasoline inventories fell 1.44 million barrels to 226.75 million barrels, 0.4% lower than the five-year average gasoline inventory. Stephen Innes, chief market strategist at AXI, in an Oct. 8 note said: ” Prices received some support from a draw in product stocks in the DOE data, which offset small crude build.” In addition, escalating supply disruptions in Norway and the US Gulf has also buoyed oil prices. With 330,000 b/d of oil equivalent production already offline in Norway, the Lederne union in Norway said that it will extend its strike on Oct. 11 to include two platforms at the flagship Ekofisk field, two satellite fields that feed the Oseberg crude stream, and Kristin, a satellite of the Asgard crude stream, S&P Global Platts reported on Oct. 7. “Around 330,000 barrels a day have already been lost to the strike, and [the Lederne union’s latest move] is expected to add about 170,000 more,” Innes said. Meanwhile, in the US Gulf of Mexico, nearly 1.49 million b/d of crude production and 1,335 MMcf/d of natural gas production — 80.42% and 49.26% of total offshore output, respectively, — was offline, according to the US Bureau of Safety and Environmental Enforcement, as producers in the region braced for the Hurricane Delta.. Lastly, hopes of fiscal relief continued to lift market sentiment. US President Donald Trump, after shutting down discussions over a US stimulus package till after the elections, said he supported passing stand-alone relief provisions instead.
Oil jumps 3% to highest level in nearly five weeks on supply losses – Oil climbed on Thursday on support from output shutdowns ahead of a storm in the U.S. Gulf of Mexico and the prospect of more supply losses in Norway. Oil and gas workers have withdrawn from offshore U.S. Gulf production facilities as Hurricane Delta was forecast to intensify into a powerful, Category 3 storm. Nearly 1.5 million barrels of daily output was halted. Brent crude was up 86 cents, or 2%, to $42.85 barrel, after falling 1.6% on Wednesday. West Texas Intermediate (WTI) crude settled $1.24, or 3.1%, higher at $41.19 per barrel after falling 1.8% on Wednesday. “Hurricane Delta is a crude oil supply event, and with all of this Gulf of Mexico production offline, we will probably lose more than 5 million barrels of crude oil due to the storm,” said Andrew Lipow, President of Lipow Oil Associates in Houston, Texas. “However, the storm is having a limited impact on gasoline and diesel demand,” he added. Oil also gained support from the prospect of more production outages in the North Sea because of a workers’ strike. The major Johan Sverdrup field will have to shut unless the strike ends by Oct. 14. The production losses offset concerns about demand, rising coronavirus cases and rising U.S. crude inventories. Renewed optimism over some U.S. coronavirus relief aid also supported the market. After shutting down talks over a larger U.S. stimulus deal, President Donald Trump wrote on Twitter that Congress should pass funding for airlines, small businesses and stimulus checks for individuals, fuelling hopes for relief. The Organization of the Petroleum Exporting Countries faces a new challenge from rising output in Libya, an OPEC member exempted from cutting output. On Thursday, OPEC Secretary General Mohammad Barkindo said the worst was over for the oil market.
Oil ends higher as hurricane cuts over 90% of Gulf crude output – Oil prices ended higher Thursday as Hurricane Delta forced the shut-in of more than 90% of the Gulf of Mexico’s crude output and the Saudis reportedly consider postponing OPEC plans to raise output. West Texas Intermediate crude for November delivery rose $1.24, or 3.1%, to settle at $41.19 a barrel on the New York Mercantile Exchange. December Brent crude, the global benchmark, added $1.35, or 3.2%, at $43.34 a barrel on ICE Futures Europe. A strike in Norway also threatened to reduce production in the North Sea according to MarketWatch. As of Wednesday, 91.53% of Gulf oil production and 61.82% of natural-gas output were shut in as the hurricane churned in the Gulf of Mexico, according to the U.S. Bureau of Safety and Environmental Enforcement. Meanwhile, Saudi Arabia is considering the postponement of plans for the Organization of the Petroleum Exporting Countries to raise oil production early next year to the end of the first quarter, The Wall Street Journal reported Thursday, citing comments from senior Saudi oil advisers. They cited the rise in COVID-19 cases in many parts of the world, as well as the expected return of Libyan crude oil to the world market for rethinking the plan, the report said. OPEC and its allies, collectively known as OPEC+, had agreed to cut overall oil output by 9.7 million barrels per day starting in May. The group tapered the cuts starting in August to 7.7 million barrels per day. “The Saudi reluctance to raise output should solidify an oil bottom,” Phil Flynn, senior market analyst at The Price Futures Group, told MarketWatch. With uncertainty surrounding a second wave of COVID-19 cases and the success that OPEC+ has had with output cuts, and with global supply tightening, “why change course?”
Oil prices slip over 1% after Norway oil worker strike ends (Reuters) – Oil prices slipped more than 1% on Friday after an oil worker strike in Norway ended, which should boost crude output even as Hurricane Delta forced U.S. energy firms to cut production. in an attempt to end the strike. Brent futures fell 49 cents, or 1.1%, to settle at $42.85 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 fell 59 cents, or 1.4%, to settle at $40.60. Despite Friday’s price slide, both benchmarks gained about 9% this week, their first increase in three weeks and the biggest weekly rise for Brent since June. Oil futures climbed earlier in the week due to concerns the strike in Norway and the hurricane headed for the U.S. Gulf Coast would cut crude output. Norwegian oil firms struck a wage bargain with labour union officials on Friday, ending a 10-day strike that had threatened to cut the country’s oil and gas output by close to 25% next week. “One of the bullish factors that had been supporting prices fell apart late in the day when it was announced that Norway would end their strike,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. Also weighing on prices were doubts voiced by Republicans in the U.S. Senate that a coronavirus economic stimulus deal could be reached before the Nov. 3 election. Earlier in the day, oil prices briefly turned positive after U.S. House Speaker Nancy Pelosi said she would resume talks on a possible $1.8 trillion COVID-19 stimulus package with Treasury Secretary Steven Mnuchin. Hurricane Delta, meanwhile, dealt the greatest blow to U.S. offshore Gulf of Mexico energy production in 15 years, halting most of the region’s oil and nearly two-thirds of natural gas output. Looking ahead, JP Morgan said that a worsening global oil demand outlook due to a potential rise in coronavirus cases this winter would likely prompt the Organization of the Petroleum Exporting Countries (OPEC) to reverse a planned easing of oil cuts in 2021, with Saudi Arabia offering deeper cuts below its current quota.
Oil Prices Up More Than 9% for the Week | Rigzone — Crude prices slid after oil workers in Norway called off a strike that had shut down about 8% of the country’s production. Futures in London and New York both fell over 1% on Friday. The settlement will restore production at six fields already shut down by the dispute and prevent an escalation to another six. It also averts the shutdown of Norway’s largest oil field, the 460,000 barrel-a-day Johan Sverdrup facility. Still, Brent futures posted the largest weekly gain since early June and U.S. benchmark crude futures also advanced this week on supply disruptions from Hurricane Delta and optimism on a U.S. stimulus deal. “If the strike lasted into next week or even beyond, that would mean a significant additional amount of platforms and fields that were impacted by the strike,” Gary Cunningham, a director at Tradition Energy. “Now that it’s resolved, not only are the incremental curtailments not going to happen, but now the original production is going to come back online.” Futures were boosted this week amid President Donald Trump’s departure from the hospital following treatment for Covid-19 and mounting enthusiasm over a U.S. virus aid package, which would help spur a demand recovery. The coronavirus pandemic has been forcing governments worldwide to rethink reopening plans: Spain’s government has declared a state of emergency for the Madrid region and in the U.S., Texas virus hospitalizations jumped to a four-week high. Meanwhile, Treasury Secretary Steven Mnuchin headed into talks with House Speaker Nancy Pelosi on Friday, carrying a White House offer of $1.8 trillion for economic stimulus, according to people familiar with the matter. The two spoke for about 30 minutes and Mnuchin’s proposal “attempted to address some of the concerns Democrats have,” Pelosi spokesman Drew Hammill said on Twitter. “This is a very positive development,” said John Kilduff, a partner at Again Capital LLC. “The petroleum complex needs a stimulus package as badly as any of the other asset classes, maybe even more so. To the extent that this gets the economy sort of stabilized, or maybe revived, that portends well for demand going forward.” Prices West Texas Intermediate for November delivery fell 59 cents to settle at $40.60 a barrel. The contract rose 9.6% this week. Brent for December settlement lost 49 cents to end the session at $42.85 a barrel. The benchmark posted a 9.1% weekly gain. Meanwhile, Hurricane Delta has weakened to a Category 2 storm with winds of 110 miles (177 kilometers) per hour. Energy companies have evacuated staff from offshore and onshore facilities. Currently, 1.7 million barrels a day of oil output in the Gulf of Mexico shut in.
UAE official says Turkey’s army in Qatar destabilises region (Reuters) – Turkey’s army in Qatar is an element of instability in the Gulf region, a senior official of the United Arab Emirates said on Saturday, adding that it contributes to negative polarization. “The Turkish military presence in the Arab Gulf is an emergency,” UAE minister of state for foreign affairs Anwar Gargash tweeted. “It reinforces polarization, and it does not take into account the sovereignty of states and the interests of the Gulf countries and its peoples.”r
Armenia, Azerbaijan bomb each other’s cities – A week after fighting erupted between Armenia and Azerbaijan, bloodshed escalated this weekend as both sides bombarded each other’s cities. A new eruption of the 1988-1994 war between the two former Soviet republics over control of the disputed Nagorno-Karabakh enclave, which initially broke out in the run-up to the Stalinist dissolution of the Soviet Union in 1991, threatens to escalate into an all-out regional war. The war threatens to drag in not only the two countries’ main regional backers – Russia, which supports Armenia, and Turkey, which backs Azerbaijan – but also to intensify divisions within NATO. Calls are growing in France, which is already fighting a proxy war against Turkish-backed forces in Libya and backing Greek maritime claims in the Mediterranean against Turkey, to intervene more aggressively in support of Armenia. Azeri barrages targeted several towns in Nagorno-Karabakh, which Armenian forces have held since 1994 and Azeri forces are trying to retake. Azeri forces also reported that they captured several villages there.Azeri President Ilham Aliyev tweeted: “Today the Azeri army liberated the village of Talish in the Terter region; the villages of Mehdili, Chakhyrly, Ashagi Maralyan, Shaibey and Guidzhag in the Jebrail region; and the village of Ashagi Abdurrahmanli in the Fizuli region. Karabakh is Azerbaijan.” On October 2, Armenian authorities reported that Azeri forces hit the road linking Armenia to Nagorno-Karabakh with an Israeli-made LORA missile. Yesterday, Armenian forces bombed Ganja, Azerbaijan’s second-largest city after Baku, saying the risk of civilian casualties would not deter them. The Azeri Defense Ministry reported that in Ganja, “As a result of enemy fire, civilians, civilian infrastructure, and ancient historical buildings were harmed.” Arayik Harutyunyan, the leader of Artsakh, the Armenian name for Nagorno-Karabakh, said he would respond to strikes on his capital, Stepanakert, by bombing Azeri cities. He declared: “The Azeri terrorist army is targeting civilians in Stepanakert, using Polonez and Smerch weapons systems. From now on, military targets in large Azeri cities are the target of the Defense Army of Artsakh. We are calling on the Azeri population to leave these cities to avoid inevitable losses.” The toll in civilian and military losses is rising rapidly. Officials reported 21 civilian deaths in Azerbaijan and 13 in Armenia this weekend, with the military situation on the ground remaining unclear. Armenian forces in Nagorno-Karabakh reported that 51 servicemen were killed on Saturday, while Azeri forces have declined to state their military losses.In a TV address Saturday, Armenian Prime Minister Nikol Pashinyan said: “As of now, we already have significant human losses, both military and civilian, large quantities of military equipment are no longer usable, but the adversary still has not been able to solve any of its strategic issues.”
Armenian-Azerbaijan war turns Caucasus, Central Asia, Russia into a powder keg – The war between Armenia, whose population is Christian, and Azerbaijan, a predominantly Muslim country, in the South Caucasus has turned the entire region into a military and ethnic-religious powder keg. The war began on September 27, when Azerbaijan launched a major offensive, involving heavy artillery, tanks and warplanes, against the Armenian-controlled enclave of Nagorno-Karabakh. Both Baku and Yerevan have now bombed major cities, and civilian casualties are estimated to be in the hundreds. Military analyst Leonid Nersisyan told the Russian Nezavisimaya Gazetalast week that the scale of the fighting was unprecedented, and that the military losses incurred in a single day already went beyond what occurred during the war of 1992-1994. In an address to the nation on October 4, Azerbaijan’s president, Ilham Aliyev, declared that his country would not stop the offensive until Armenia formally agrees to withdraw its forces from Azerbaijani territory. He also demanded a public apology from Armenia. These conditions are generally deemed unacceptable to Armenia. On Monday, Iran announced a peace plan, offering itself as a mediator between the two warring sides. However, the Russian press reported that Baku and Turkey, which is heavily backing Azerbaijan, are preparing for a prolonged war that might eventually draw in both Russia and Iran. Russia has an important military base in Armenia, and the war threatens to cut off supply routes to this base. The war has major implications for Europe, Russia and the Middle East, as it directly intersects with the conflicts in the Middle East and Northern Africa that have been ignited by the intervention of US imperialism in the past decades. By virtue of its geographic position as a bridge between Europe, the Black Sea and the Middle East, the energy-rich Caucasus has long been a hotspot for geopolitical rivalries. Since the break-up of the USSR in 1991, the religious and ethnic tensions in the region, which had been exacerbated by decades under the rule of the Stalinist bureaucracy, have systematically been exploited, especially by the US and its allies, to further their interests.
Turkey backs Azeri offensive on Armenia as Russia, Iran warn of escalation -Azeri forces launched a large-scale offensive in the south of the Nagorno-Karabakh, nine days after fighting broke out again between Armenia and Azerbaijan over the disputed region. On Tuesday, Armenian Defense Ministry spokesperson Shushan Stepanyan cited reports from Artsakh, the Armenian authority in the Karabakh: “According to the Artsakh Defense Army, this afternoon the Azeri Armed Forces launched a large-scale attack in the southern direction of the line of contact between Artsakh and Azerbaijan, throwing reserve forces, large amounts of military equipment, including tanks and artillery [into battle]. The enemy ignores also the security of the territory of the Islamic Republic of Iran,” which Azeri and Armenian forces have both shelled.The Armenian Foreign Ministry also noted that the offensive began during Turkish Foreign Minister Mevlut CavuÅŸoÄŸlu’s visit to the Azeri capital, Baku, pledging support for the ethnic-Turkic Azeris against Armenia.In Baku, CavuÅŸoÄŸlu rejected cease-fire calls from France, Russia, Iran and other powers, demanding Armenia hand the Karabakh over to Azerbaijan: “Let’s have a cease-fire, OK, but what will happen after that? Will you be able to tell Armenia to immediately withdraw from Azerbaijan’s territory? Or are you able to draw up a solution for it to withdraw? No. We have supported efforts for a peaceful resolution, but Armenia has enjoyed the fruits of the occupation for 30 years.”Azeri President Ilham Aliyev met CavuÅŸoÄŸlu to thank him for Turkey’s support: “This support inspires us, gives us additional strength and at the same time plays an important role in ensuring stability and prosperity in the region.” There have also been multiple independent reports in European media, not denied by Turkish officials, that Syrian Islamist militias and Turkish private security firms are sending fighters to join Azeri troops against Armenia. On this basis, Armenian Prime Minister Nikol Pashinyan issued a pledge yesterday to continue fighting as part of the so-called “war on terror.”
Armenians Fight Back Against Azerbaijani Advance, Strike Key Oil Pipeline – Armenian forces launched a missile attack on the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, according to Azerbaijan. The country’s prosecutors said that Armenian forces had carried out the attack, which was prevented by the Azerbaijani military, on the pipeline in Yevlah at around 9 p.m. local time on October 6. The incident was described as a “terrorist act”.The BTC pipeline delivers Azeri light crude oil (mainly from the Azeri-Chirag-Guneshli field) through Georgia to Turkey’s Mediterranean port of Ceyhan for export via tankers. Another crucial Azerbaijani energy infrastructure object, which could become a potential target of Armenian attacks is the Trans-Anatolian Natural Gas Pipeline, which connects the giant Shah Deniz gas field with Europe through Georgia and Turkey. The Armenian side denounced the Azerbaijani report as fake news. Both Azerbaijan and Armenia regularly accuse each other of striking civilian and infrastructure objects on their sovereign territory and denounce the opponent’s claims as propaganda and fakes.Meanwhile, Azerbaijani Defense Minister Zakir Hasanov threatened Armenia with “using the weapons with great destructive power” to deliver strikes on “the military-strategic infrastructure” of Armenia if it employs its Iskander operational-tactical missile systems against Azerbaijani forces.However, it does not seem that the Armenian political leadership is ready to employ all the variety of its means and forces to fight back in the contested Nagorno-Karabakh region. Instead, the government of Nikol Pashinyan is now mostly focused on the diplomatic campaign in Western media in an attempt to convince the so-called international community to help it to keep control over Karabakh. Mr. Pashinyan, who just a few days ago was promising to inflict a military defeat on what he called the Azerbaijani-Turkish terror alliance even declared that Armenia is ready for mutual concessions. Nonetheless, Baku and Ankara do not seem to be ready for a new ceasefire and the resumption of negotiations at the present time.On the frontline in the contested Nagorno-Karabakh region itself, the main hot point is the district of Jabrayil. Using the worsening weather conditions (fog and thick clouds), which complicate the work of Azerbaijani combat drones, Armenian forces were able to stabilize the frontline and prevent further gains of the Azerbaijani military in this part of Karabakh. On October 7, Armenia even claimed that a large-scale Azerbaijani attack had been repelled in the area. The Defense Ministry claimed that over 60 dead and multiple equipment pieces were left by Azerbaijan on the battlefield. Meanwhile, Armenian forces and cities of the region are still subjected to intense artillery bombardment by the Azerbaijani military. Heavy destruction was inflicted on the city of Stepanakert. As soon as the weather improves, Azerbaijan with help from Turkey will likely resume active drone strikes and launch a new phase of the ground offensive along the contact line.
Armenia and Azerbaijan Reach Cease-Fire After Russia-Brokered Talks – WSJ – Armenia and Azerbaijan announced a cease-fire after nearly two weeks of intense fighting that has claimed hundreds of lives following Russia-brokered talks over thedisputed enclave of Nagorno-Karabakh.The foreign ministers of the two warring countries said in a statement early Saturday that the truce, which began at noon local time, is intended to provide space to exchange prisoners and recover the dead. The announcement followed more than 10 hours of negotiations in Moscow mediated by Russian Foreign Minister Sergei Lavrov, who said that specific details will be agreed on later as talks continue.Azerbaijan and Armenia “are starting substantive negotiations with the aim of achieving a peaceful settlement as soon as possible,” Mr. Lavrov said, adding that the talks would be mediated by Russia, the U.S. and France.Underscoring the precariousness of any truce in the volatile region, both sides accused each other of violating the cease-fire shortly after it took effect. Armenia said Azeri units launched an assault five minutes after 12 p.m. Azerbaijan, meanwhile, said that Armenian armed forces were firing on Azeri regions. Roughly the size of Delaware, the territory of Nagorno-Karabakh – a disputed enclave controlled by ethnic Armenians but internationally recognized as a part of Azerbaijan – has been a flashpoint between the two countries since the years following the collapse of the Soviet Union. The fighting flared up last month after nearly three decades of on-again, off-again skirmishes. A six-year war that ended in a 1994 cease-fire claimed some 30,000 lives.Both sides have blamed each other for triggering the current outbreak of hostilities on Sept. 27. Armenia said Friday that 376 of its soldiers had been killed in the fighting so far, while Azerbaijan hasn’t disclosed how many of its troops have been killed.Authorities in Nagorno-Karabakh said the conflict so far has cost at least 22 lives and injured more than 80 people. Azerbaijan said 31 Azeri civilians have been killed and 168 have been injured.
Armenia and Azerbaijan accuse each other of violating Nagorno-Karabakh ceasefire (Reuters) – Armenia and Azerbaijan accused each other of swiftly and seriously violating the terms of a ceasefire in Nagorno-Karabakh on Saturday, raising questions about how meaningful the truce, brokered by Russia, would turn out to be. The ceasefire, clinched after marathon talks in Moscow advocated by President Vladimir Putin, was meant to halt fighting to allow ethnic Armenian forces in Nagorno-Karabakh and Azeri forces to swap prisoners and war dead. The Moscow talks were the first diplomatic contact between the two since fighting over the mountainous enclave erupted on Sept. 27, killing hundreds of people. The enclave is internationally recognised as part of Azerbaijan, but is populated and governed by ethnic Armenians. Within minutes of the truce taking effect from midday, both sides accused each other of breaking it. The Armenian defence ministry accused Azerbaijan of shelling a settlement inside Armenia, while ethnic Armenian forces in Karabakh alleged that Azeri forces had launched a new offensive five minutes after the truce took hold. Azerbaijan said enemy forces in Karabakh were shelling Azeri territory. Both sides have consistently denied each others’ assertions in what has also become a war of words accompanying the fighting. Azeri President Ilham Aliyev told Russia’s RBC news outlet that the warring parties were now engaged in trying to find a political settlement, but suggested there would be further fighting ahead. “We’ll go to the very end and get what rightfully belongs to us,” he said. Azeri Foreign Minister Jeyhun Bayramov said the truce would last only for as long as it took for the Red Cross to arrange the exchange of the dead. Speaking at a briefing in Baku, he said Azerbaijan hoped and expected to take control of more territory in time.
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