Written by rjs, MarketWatch 666
Here are some more selected news articles for the week ending 28 November 2020. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening or Tueday morning.
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China set to eclipse America as world’s biggest oil refiner – Earlier this month, Royal Dutch Shell Plc pulled the plug on its Convent refinery in Louisiana. Unlike many oil refineries shut in recent years, Convent was far from obsolete: it’s fairly big by U.S. standards and sophisticated enough to turn a wide range of crude oils into high-value fuels. Yet Shell, the world’s third-biggest oil major, wanted to radically reduce refining capacity and couldn’t find a buyer. As Convent’s 700 workers found out they were out of a job, their counterparts on the other side of Pacific were firing up a new unit at Rongsheng Petrochemical’s giant Zhejiang complex in northeast China. It’s just one of at least four projects underway in the country, totaling 1.2 million barrels a day of crude-processing capacity, equivalent to the U.K.’s entire fleet. The Covid crisis has hastened a seismic shift in the global refining industry as demand for plastics and fuels grows in China and the rest of Asia, where economies are quickly rebounding from the pandemic. In contrast, refineries in the U.S and Europe are grappling with a deeper economic crisis while the transition away from fossil fuels dims the long-term outlook for oil demand. America has been top of the refining pack since the start of the oil age in the mid-nineteenth century, but China will dethrone the U.S. as early as next year, according to the International Energy Agency. In 1967, the year Convent opened, the U.S. had 35 times the refining capacity of China. The rise of China’s refining industry, combined with several large new plants in India and the Middle East, is reverberating through the global energy system. Oil exporters are selling more crude to Asia and less to long-standing customers in North America and Europe. And as they add capacity, China’s refiners are becoming a growing force in international markets for gasoline, diesel and other fuels. That’s even putting pressure on older plants in other parts of Asia: Shell also announced this month that they will halve capacity at their Singapore refinery. There are parallels with China’s growing dominance of the global steel industry in the early part of this century, when China built a clutch of massive, modern mills. Designed to meet burgeoning domestic demand, they also made China a force in the export market, squeezing higher-cost producers in Europe, North America and other parts of Asia and forcing the closure of older, inefficient plants.
Modi says India set to double oil refining capacity in 5 years, earlier than expected – India plans to nearly double its oil refining capacity in the next five years, Prime Minister Narendra Modi said on Saturday, offering a much more aggressive timeline than previously despite the coronavirus pandemic blighting the economy.The country’s energy minister was quoted in June as saying India’s oil refining capacity could jump to 450-500 million tonnes in 10 years from the current level of about 250 million tonnes. But addressing a petroleum university’s convocation, Modi said “work is being done to nearly double the country’s oil refining capacity in the next five years”. The convocation was also addressed virtually by billionaire Mukesh Ambani, whoseReliance Industries Ltd operates the world’s biggest oil refinery in Modi’s home state of Gujarat. Modi said India was also aiming to raise the share of natural gas in its energy-consumption mix by up to four times. The cleaner-burning fuel currently accounts for about 6% of the energy consumed in the country. India would achieve its targets of increasing renewable energy capacity to 175 gigawatts by 2022 and 450 gigawatts by 2030 ahead of schedule, Modi added. The country had renewable energy capacity of about 75 gigawatts at the end of 2018.
Renewed Lockdowns Threaten More Refinery Closures In Europe More refineries in Europe are at risk of permanent closures, with fuel demand on the continent falling again as major economies re-imposed lockdowns to fight the spike in coronavirus cases. Gasoline demand in Europe is expected to be between 15 and 20 percent lower in November and December compared to the same months of 2019, Argus reported, citing market participants. The new lockdowns, partial lockdowns, and curfews in the biggest economies in Europe, including the UK, Germany, France, Italy, and Spain, are dragging down oil demand again while a double-dip recession in the Eurozone and wider Europe now looks almost inevitable. Refiners have struggled since the spring with the crash in fuel demand, and many of them are restructuring operations, including closing down permanently crude oil processing capacity. Petroineos, a joint venture of Ineos and PetroChina, said earlier this month it plans to permanently close some units at the 210,000-bpd Grangemouth refinery, the only refinery in Scotland, which will cut the facility’s refining capacity to 150,000 bpd.Neste of Finland said in September that it was exploring the shutdown of its refinery operations in Naantali and transforming the Porvoo refinery operations to co-processing renewable and circular raw materials. “The forthcoming operating and maintenance investments in the Naantali refinery are not viable nor sustainable in a situation where there is large over-capacity for oil refining globally,” Neste’s President and CEO Peter Vanacker said in September. Refiners in the United States are also idling refinery capacity and cutting jobs to cope with the losses from the demand crash. Refiners around the world have been announcing permanent closures of refinery capacity this year, but significant overcapacity still remains, the International Energy Agency (IEA) said in its monthly Oil Market Report last week. Permanent shutdowns of refinery capacity have reached 1.7 million bpd. But more than 20 million bpd crude oil distillation capacity now sits idle, the Paris-based agency said, noting that “there remains significant structural overcapacity.”
EU database raises more questions about Japanese Owner Of Mauritius Oil Spill Ship – The Indian Ocean island of Mauritius continues to face an unprecedented ecological, human health and economic impact from the devastating oil spill in August. At the center of the controversy lies the Wakashio bulk carrier, the cause of the disaster. Now, an important EU Ship Transparency Database, called EQUASIS (Electronic Quality Shipping Information), administered by the European Maritime Safety Authority in Lisbon, Portugal, is raising more questions about the Japanese owner of the Wakashio. With demands growing for a full international inquiry into how the bulk carrier – one of the largest ships in the ocean – came to crash into a network of internationally protected nature reserves along Mauritius’ coral reefs, questions are starting to be asked about the business operations of the vessel owner itself, Japan-based Nagashiki Shipping Co Ltd (reportedly known as Changfeng Steamship company in Japan). This is particularly relevant as Mauritius prepares its multi-billion dollar legal case for damages from the vessel’s insurers. There is a growing mismatch between statements made by the company’s representatives, what is listed on the company’s website and what international shipping databases are showing. Addressing Secretive Shell Companies and ‘Flags of Convenience’ in global shipping One of the biggest reasons for this opaqueness is the widespread use of secret offshore shell companies by the global shipping industry. 70% of global shipping are registered with the six major ‘Flags of Convenience’ countries (Panama, Liberia, Malta, Marshall Islands, Singapore, Hong Kong) whose registration system makes it easy to hide shipping assets and limit how much multi-billion dollar shipping companies have to pay out in the event of an environmental catastrophe as was seen with Mauritius. Although Nagashiki Shipping is based in Japan and presents itself as a Japanese Shipping Company with a long maritime history in Japan, not one of its vessels are registered in Japan. They are all registered in ‘Flags of Convenience’ nations, such as Panama, the Marshall Islands and Liberia. In previous meetings over the past decade, the G20 has taken on free trade, climate change and tax transparency. Global shipping lies at the nexus of all three, and has been left without sufficiently strong and independent international oversight. With 80% of world trade passing through the economies of the G20, and major changes needed to wean the industry off fossil fuels in the next decade, this may be the right window to intervene, especially with a new U.S. Presidential team coming into office. The failure of the UN Shipping Regulator, the IMO, to take action last week on shipping emissions and Arctic pollution once more reminded the world that public trust has been completely eroded with the UN-affiliated shipping institution. Rather than being multilateral institution representing safety of seafarers, coastal communities, tax authorities and the planet, the IMO is now largely regarded as a trade body primarily focused on the interests of the global shipping industry.
Watch- Viral Video Of Water On Fire Reveals A Natural Gas Leak In China – Residents in a natural gas-producing northeastern Chinese province have made a video of tap water being set on fire with a lighter – a video that went viral – prompting an investigation by local authorities and a shutdown of the water supply to part of a city because natural gas had leaked into the groundwater. Videos of tap water in the city of Panjin, in China’s Liaoning province, surfaced on Chinese social media and became so popular that the story was picked up by the People’s Daily, a Chinese state-affiliated media outlet. According to People’s Daily’s tweet: “The odd scene is caused by natural gas infiltration due to temporary underground water supply system error, which is now shut down. Normal supply has resumed.” The local government has said that further investigation would be conducted into the cause of the incident, People’s Daily reported. However, according to media reports in China, carried by Newsweek, flammable tap water is not a new phenomenon in the district of the city of Panjin where the latest video was recorded. Residents in Dawa district have said that they had seen instances of burning tap water since at least 2018. Other residents say that their tap water has always been more “oily”. A report from the CCTV outlet said that residents had first noticed the flammable tap water “three to four years” ago. Chinese authorities said that after a “comprehensive investigation of the tap water sources in the whole district, no such problems have been found in other areas.” The Liaoning province has natural gas reserves, and last year in November, a unit of China National Petroleum Corporation (CNPC) – Liaohe Oilfield – started construction of an $8.5-billion gas storage project in the city of Panjin, which would be the biggest underground natural gas storage center in northeast China.
Khor Fakkan Municipality contains oil spill on beach – A lightweight oil spill on Khor Fakkan’s Al Lulayyah Beach has been successfully contained and cleaned up by a team from the Khor Fakkan Municipality, in coordination with concerned environmental authorities in the emirate. The spill was noticed at the beach on Sunday evening. Upon notification from the coastal guards, the Khor Fakkan Municipality department immediately dispatched an emergency team to tackle the spill. This the third time the municipality has noticed oil slicks on the seashore. The phenomena is increasing and strict measures and tough penalties need to be taken against the violators, said an official from the Khor Fakkan Municipality department. The official cautioned residents from going near the beaches to protect themselves from any harmful effects.
Yemens Ansarullah allows UN team to inspect decaying oil tanker (Tasnim) – The Houthi Ansaruallh movement has allowed an international inspection team to board the decaying FSO Safer oil tanker moored off Yemen’s Red Sea coast, the UN said. – World news – UN spokesman Stephane Dujarric said the Houthis on Saturday sent an official letter to the UN confirming their approval for experts to access the stranded vessel to carry out vital maintenance checks. The 45-year-old ship has been anchored about 60 km north of Hudaydah since the start of the Saudi-led war on Yemen five years ago and is loaded with more than 1 million barrels of crude oil. Officials have warned that the rotting tanker posed “grave risks” to the environment and maritime navigation if left unattended any longer. “The objective of the UN-led expert mission is to assess the vessel and undertake initial light maintenance as well as to formulate recommendations on what further action is required to neutralize the risk of an oil spill,” Dujarric added. During a press briefing in New York, he said that the UN Office for Project Services (UNOPS) would handle picking members of the mission and equipment required for assessing and repairing damage to the Safer. “I think if everything comes together, we would expect the mission staff and the equipment to arrive on site by late January or early February.”
OPEC seeks $12.6tn investments to revamp global oil industry – The Organisation of Petroleum Exporting Countries (OPEC) has disclosed that the global oil industry will require about $12.6 trillion investments in the downstream, midstream as well as upstream to sustain its innovative and production efficiency in the next 25 years. Secretary General of the organisation, Dr Sanusi Barkindo, who spoke at the Crescent Ideas Forum on ‘‘The Outlook on Energy’’ videoconference, also predicted a rash of closure of refineries globally in the next few years as regions develop new capacities. He stated that OPEC’s World Oil Outlook showed that upstream capital expenditure could fall by more than 30 per cent in 2020 alone, but maintained that crude oil will continue to be relevant in the next two decades and a half. Barkindo argued that the oil industry cannot move forward without adequate capital to sustain its historic leadership, stating that it would need financial firepower to grow out of the coronavirus-induced crisis, to sustain technological development and human resources, and to help provide a stable, economic and secure energy supply. “For OPEC and its member countries, stable and timely investment is essential if we are to successfully achieve our cherished goals of economic diversification and development, and importantly, to help diverse our own energy mix. “In fact, OPEC’s World Oil Outlook shows that upstream capital expenditure could fall by more than 30 per cent in 2020, exceeding the annual dramatic declines seen in the industry downturn of 2015 and 2016. “Looking ahead, our projections for the oil industry show that investment of around $12.6 trillion will be needed in the upstream, midstream and downstream between now and 2045. “To get there, it is very important that the policy discussions on energy and investment remain inclusive and supportive of a diverse portfolio of energy options,” he said. According to him: “Turning to the downstream, we anticipate a wave of refinery closures as new capacity comes online in the Middle East and Africa, as well as the Asia-Pacific, with crude distillation capacity expected to increase by 15.6 million b/d until 2045″. The OPEC boss stated that despite the challenges that exist today, OPEC was committed to investments that strengthen the oil industry’s resilience and capacity to meet the world’s demand needs over the long term.
OPEC to decide the fate of oil markets in 2021 – OPEC officials will meet this week on Wednesday, Thursday, and Friday to iron out details ahead of the meeting on November 30 and December 1 that will determine the fate of OPEC’s oil producers for 2021. OPEC sources told Reuters on Monday. Wednesday and Thursday will see OPEC’s economic commission board gather together, and Friday will bring together non-OPEC technical experts. The topic of discussion? In part, the level of production cuts that will be in effect come January 1, 2021. As it stands right now, the current level of production cuts are set to ease as of January 1. But most industry analysts and experts agree that oil demand – which has failed to fully recover from its pandemic levels – does not support OPEC lessening its production cut mandates in January. “The OPEC+ ministers will probably agree to extend current production for the first quarter of 2021,” one OPEC delegate told Reuters. What OPEC is hoping for is that a vaccine will boost economic activity and therefore oil demand. But precious little was said about a vaccine in their MOMR this month. OPEC is currently cutting 7.7 million barrels per day, with plans to decrease those cuts to just 5.7 million bpd in January. Even if a vaccine is approved for emergency use this month, it is unlikely to have any meaningful effect on oil demand until the second half of 2021. OPEC member Libya has stated that it does not intend to be part of the OPEC production cuts until such a time when its oil production has stabilized at 1.7 million bpd. It is currently producing about 1.25 million bpd. This could be a sticking point in the upcoming meetings, along with non-compliant Iraq.
OPEC+ leaning towards oil cut extension, despite rally (Reuters) – OPEC and allies including Russia are leaning towards delaying next year’s planned increase in oil output to support the market during the second wave of COVID-19 and rising Libyan output, despite a rise in prices, three sources close to OPEC+ said. OPEC+ was due to raise output by 2 million barrels per day (bpd) in January – about 2% of global consumption – as it moves to ease this year’s record supply cuts. With demand weakening, OPEC+ has been considering delaying the increase. Russia is likely to agree on a rollover of current output for the first quarter if needed, a source familiar with the issue said, and would prefer to decide later on extending for the second quarter. “It looks like the extension is needed,” the source said, citing “possible price drops and demand uncertainties” amid the second wave of the virus. Oil has rallied in the past week, rising to its highest since March near $49 a barrel on hopes that coronavirus vaccines will lead to higher demand. This hasn’t changed OPEC+ thinking around the extension, delegates said. “This increase in prices is about sentiment, but we need to extend to have solid market fundamentals to support the prices,” said one. “So far, the best choice is the three-month extension.” Still, enthusiasm for extended cuts is not universal, delegates and analysts say. A potential complication is the United Arab Emirates’ wish for a higher OPEC+ quota, Goldman Sachs said this week. Nigeria also wants a higher quota, and Iraq has talked about being exempt from 2021 reductions. But Goldman said it did not expect such a push from the UAE to derail the extension, and Iraq has said it will support any unanimous OPEC+ decision. Christyan Malek, managing director and head of oil & gas research at J.P. Morgan, said he expected OPEC+ to delay the increase by up to six months despite the price rally, with Saudi Arabia possibly offering deeper voluntary cuts until March. “Inventories are not coming down as quickly as expected. And lockdowns are moving east to west, with more lockdowns expected in the U.S.,” he said. Malek said the departure of Donald Trump as U.S. President, who was seen by some in OPEC as a friend after he helped bring Russian President Vladimir Putin into the OPEC+ output cut in April, would actually boost the producer alliance. “Without Trump, OPEC+ is getting stronger rather than weaker,” he said. “Putin is using OPEC+ to get closer to Saudi Arabia, as the departure of Trump creates a bit of a vacuum in U.S.-Saudi relations.”
Nigeria seeks better deal on OPEC quota –THE Federal Government is seeking more crude oil production quota from the Organisation of Petroleum Exporting Countries (OPEC). Nigeria’s huge population and physical development deficits should be considered by the oil cartel when sharing production cuts, President Muhammadu Buhari, said on Thursday.Buhari made the appeal on Thursday at the State House, Abuja, while hosting the Secretary-General of the African Petroleum Producers’ Organisation (APPO), Dr. Omar Farouk.In a statement issued by his Senior Special Assistant on Media and Publicity, Mallam Garba Shehu, Buhari observed that Nigeria needs all the resources she can gather from all sources, considering the weight of the responsibility of the nation with “200 million people, with severe deficit in infrastructure.”He welcomed APPO’s to site the headquarters of the African Energy Investment Corporation in Abuja, pledging Nigeria’s full support in ensuring the successful take-off of the organisation. Buhari also assured that Nigeria will pay her share of the subscription accordingly.The President, who was hailed for the vision of setting up the APPO and the ratification of its charter by Nigeria back in 1985 as Military Head of State, said the peculiarities of the challenges facing African oil producers required them to come together under the association to share experiences and solve their problems collectively, adding that the growing clamour for a reduction in the use of fossil fuels notwithstanding, countries like Nigeria needed to produce more oil to feed the petro-chemical industry and create jobs.The Minister of State for Petroleum Resources, Timipre Sylva told the President that the proposed APPO Energy Investment Corporation to be sited in Abuja will start with $1 billion from the AFRO-EXIM Bank, adding that it is expected to bring employment and other benefits to Nigeria. The APPO Secretary-General, who was accompanied by Dr. Adedapo Odulaji, the OPEC Governor in Nigeria, conveyed the appreciation of both the Congolese President and the Prime Minister for the President’s support in the relocation of the headquarters of the association to its chosen location, Brazzaville, the Congolese capital. He expressed hope that members of the 16-member organisation will surmount the challenges posed by COVID-19 and the receding fossil fuel use as a result of the climate change treaties signed by member states and other nations.
Libya Oil Comeback Has Legs — Libya’s oil industry, trampled by civil war and chaos, is roaring back. Crude output has surged to nearly 1.25 million barrels a day from almost a dead start in September, thanks to a tentative peace between rival military forces. The OPEC member is already pumping about three-fourths as much as it did before the 2011 uprising that toppled strongman Moammar Al Qaddafi and triggered the country’s political and economic collapse. The speed of the recovery took oil markets by surprise. It’s also causing anxiety for the Organization of Petroleum Exporting Countries and allies such as Russia as they restrict global output to prop up crude prices. Libya is exempt from the cuts and currently supplies more oil than several of its OPEC peers. The so-called OPEC+ alliance is sure to weigh the impact of Libyan oil when it meets next week to assess its strategy as the coronavirus ravages fuel demand in much of the world. The big unknown about Libya’s production — for traders, analysts and oil minsters alike — is whether it can be sustained or even increased to pre-conflict levels of around 1.6 million barrels a day. The boost in output over the past two months may have been the easy part. To produce still more crude, the country will need buckets of cash to fix and upgrade its energy infrastructure. That in turn will require a lasting peace and political settlement. “Libya will likely struggle to produce above 1.3 million barrels a day,” said Mohammad Darwazah, an analyst at consultant Medley Global Advisors. “There is not much upside from these levels in the absence of investment.” Libyan officials have hinted that they won’t discuss a potential OPEC quota for the country until it’s pumping at least 1.7 million barrels daily. OPEC typically gives any member suffering from conflict several years to recover before trying to cap its output. Although Libya holds Africa’s largest crude reserves, years of strife and lost production have impoverished the government and state-run National Oil Corp. The NOC must repair damage to its oil fields, pumping stations and other facilities, many of which have been idle for years. The lack of routine nuts-and-bolts servicing has left pipelines corroding and storage tanks collapsing. Remedial work at wells alone could cost more than $100 million, NOC Chairman Mustafa Sanalla told Bloomberg in June. Sanalla said last month that the country targets pumping 1.6 million barrels a day by the end of 2021. The company has ambitions of eventually supplying more than 2 million barrels daily, an NOC official said to Bloomberg on Thursday, asking not to be identified because the matter isn’t public. To achieve that, the NOC will need more money from oil exports as well as investment from foreign energy partners who pulled out amid the fighting.
Why Iraq Isn’t Producing 10 Million Barrels Per Day Yet – Despite its huge oil resources, Iraq’s practical readiness to hit its 7 million barrels per day (bpf) oil production target (by 2025) came into question again last week, with statements from the developers of two of its major fields – BP in Rumaila, and Japan Petroleum Exploration (Japex) in Gharraf – that achieving higher output from their respective developments is not as straightforward as it might appear. Although Iraq could be producing at least 9 million bpd with ease by now – even 12 million bpd – if it were not for the investment and corollary infrastructure constraints that have resulted from the endemic corruption across the country, its ability to attain the 7 million bpd target looks also looks far from certain in the current circumstances. In the case of Rumaila – which lies around 30 kilometres north of Iraq’s southern border with Kuwait and which, together with Kirkuk, has produced around 80 per cent of Iraq’s cumulative oil production to date – BP is currently in talks with Iraq’s oil ministry over plans to push production up to 2.1 million bpd from the current 1.4 million bpd. With an estimated 17 billion barrels in proven reserves, the current output of 1.4 million bpd is nowhere near its optimum production level, and Rumaila is a prime example of a field for which even a relatively small investment could yield significant increases in crude oil output. However, according to a comment last week from BP’s country head, Zaid Elyaseri: “There is an ongoing discussion with the ministry of oil and the Basra Oil Co. on how to proceed [it has asked all international oil companies (IOCs) to cut their capex by 30 per cent this year], given the low oil price environment and the reduction in the activity set that the ministry has requested all IOCs to do this year as a result of low oil prices,…There is a discussion on the timing and all other details….[and] We are working to increase production gradually.” The original plan was for BP to add 100,000 bpd every year up to a total of 2.3-2.4 million bpd of production by the original target date of 2020, a figure which remains entirely achievable within a relatively short space of time in oil development terms. “The main reason that it hasn’t gone according to the original plan was that Rumaila has been one of the fields that the government has looked to when it needs to reduce overall country production,” Richard Bronze, cross-energy analyst for Energy Aspects, in London, told OilPrice.com. “This has happened with the OPEC/NOPEC deal and before that with the difficulties in paying IOCs under the technical service contract [TSC] payment structure,” he added. “As a result, BP has been unwilling to make the extra investments needed in order to meet these incremental output increases, as it did not know whether it would be allowed to pump at these levels on a sustained basis,”
Russia and Saudi Arabia Power Risks OPEC+ Break-Up | Chatham House – The pushback from the UAE over historic supply cuts brought in to offset the fallout from the pandemic comes at a delicate moment for OPEC, threatening the brittle coalition and an already weakened oil market. The news of COVID-19 vaccines alongside the highest oil price since September has lifted sentiments to a more bullish level – and with it, a growing resentment that the OPEC+ policy is driven primarily by ‘bullying’ from Saudi Arabia and Russia, with little consideration of other producing countries. With the OPEC summit imminent, there are clear signs the UAE, Kuwait, and Iraq are all digging in their heels in a reluctance to rollover production cuts which have created winners and losers – with Saudi Arabia and Russia on top and the trio in the latter category. Should the UAE assert its national economic interest and breach the production limit – or more seriously, quit the producers’ alliance – it would have a major impact upon markets and quite radically affect the relationship with Saudi Arabia for some time to come.It is commonplace to put out such messages ahead of summits, but it is striking that at the ADIPEC virtual conference Saudi Arabia energy minster Abdulaziz bin Salman (AbS) chose to say that the OPEC+ group may ‘tweak’ production cuts agreed in April and extend them beyond the December deadline for at least a further three months. He then reiterated this at OPEC’s Joint Ministerial Monitoring Committee (JMMC) and implied markets should not simply expect an extension of production cuts at 7.7mbd past December, but to factor in additional cuts too. Even with news of a COVID-19 vaccine giving some cause for optimism and the potential to change calculations, these are unlikely to materialize quickly so the minister’s signal does ring true. But it is not going to go down well with the neighbours. Saudi Arabia and Russia are certainly coming out on top, mostly due to baselines and quotas, and US shale producers are also benefitting from the current policy. Riyadh’s OPEC+ reference production number, which its quota is based on, is now 370kbd higher – at 11mbd – than it was in October 2018 so it can easily claim compliance and even proclaim underproduction. Since starting the price war, Saudi Arabia has once again cemented its position as market leader and price setter, enabling it to become de-facto OPEC leader, and also make decisions on behalf of the other members which is becoming a sore point as Riyadh and Moscow, not OPEC, are setting policy and benefitting, while others carry the cost.
Oil prices rise on back of COVID vaccine news – Oil prices rose more than 1% on Monday, extending last week’s gains as traders eyed a recovery in demand due to successful coronavirus vaccine trials. Sentiment was also bolstered by expectations that the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, a group known as OPEC+, might extend a deal to restrain output. Brent crude rose 92 cents, or 2%, to $45.89 a barrel, while West Texas Intermediate crude gained 53 cents, or 1.3%, to $42.97 a barrel. Both benchmarks jumped 5% last week. The contango structure in the market, where the prices of front-month delivery contracts are lower than those for delivery six months later, narrowed to 32 U.S. cents, its smallest since mid June, indicating that concerns about a glut were receding. Outlook for demand has improved with news indicating progress towards developing COVID-19 vaccines. A U.S. official said first inoculations in the United States could start a day or two after regulatory approval was secured. British drugmaker AstraZeneca said on Monday its vaccine, developed along with the University of Oxford, could be around 90% effective under one dosing regimen. PVM analyst Stephen Brennock said the news was detaching sentiment from “gloomy fundamentals.” “Investors are ignoring near-term headwinds, chief among which are surging global COVID infections, and instead looking ahead to next summer,” he said. On the supply side, OPEC+, which meets on Nov. 30 and Dec. 1. It will look at options to extend their deal on output cuts by at least three months from January. Smaller Russian oil companies are still planning to pump more crude this year, a group representing the producers said. Yemen’s Iran-aligned Houthi group on Monday said it fired a missile that struck a Saudi Aramco site in the western city of Jeddah. There was no immediate Saudi confirmation of the claim. Aramco’s main oil facilities in are in the east.
WTI Settles Above $43 a Barrel — Global oil prices hit the highest level since March as hopes for a vaccine rollout within weeks brightened the outlook for fuel consumption. Brent crude futures rose 2.5% in London, following a broader market rally after AstraZeneca Plc became the latest company to report a vaccine that protects most people. Vaccinations will “hopefully” start by Dec. 12, Moncef Slaoui, head of the U.S. government’s Operation Warp Speed program, said on CNN. Strong manufacturing out of the U.S. and Germany also buoyed crude. The prospect of a treatment is starting to reshape the oil futures curve, with some near-term prices rebounding more than later-dated ones, a bullish structure known as backwardation that signals investors expect supply and demand to return to balance. That happened with some so-called timespreads for West Texas Intermediate on Friday, and on Monday Brent’s two nearest contracts flipped to backwardation for the first time since this summer. “The compression of the timespreads along the futures curve has come with the strong gains in the prompt price, fueled by Covid-19 vaccine optimism,” said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA. The strength at the front of the curve “reflects the tightening of supply availability driven by OPEC+ voluntary supply cuts and strong demand for crude from Asia.” The surge in crude prices has accompanied a slew of positive updates from pharmaceutical companies on their progress toward a Covid-19 vaccine. The broad market euphoria amid vaccine developments has led Brent crude futures to notch a nearly 23% gain so far this month, even as U.S. hospitalizations of Covid-19 patients rises to the most since early April. Renewed virus lockdowns in Europe have pushed the region’s economy into another contraction. Meanwhile, Saudi Arabia confirmed that Houthi rebels in Yemen targeted one of its oil facilities in northern Jeddah province. The early Monday attack caused a fire at an oil tank inside a fuel-distribution center, the kingdom’s energy ministry said. “The overall ‘risk-on’ sentiment is being driven by more positive vaccine news this weekend, and oil prices in particular are being propelled higher by aggressive ‘short’ covering, especially in the ICE Brent contract,” said Ryan Fitzmaurice, commodities strategist at Rabobank. On top of further short covering, “the oil market will be focused on the OPEC+ meeting which is set for next week and which will likely begin to garner a great deal of attention as the week goes on.” West Texas Intermediate for January delivery climbed 64 cents to settle at $43.06 a barrel, its highest since Aug. 26. Brent for January settlement gained $1.10 to $46.06 a barrel.
Oil closes at highest level since March on vaccine trials, Biden transition (Reuters) – Oil rose about 4% on Tuesday to touch highs not seen since March as a third promising coronavirus vaccine raised hope for fuel- demand recovery and U.S. President-elect Joe Biden began his transition to the White House. Brent crude settled at $47.86 a barrel, gaining $1.80, or 3.9%. U.S. West Texas Intermediate crude settled at $44.91 a barrel, rising $1.85 or 4.3%. Both benchmarks ended at their highest close since March 5. AstraZeneca on Monday said its COVID-19 vaccine was 70% effective in trials and could be up to 90% effective, giving the fight against the pandemic another potential vaccine after positive results from Pfizer-BioNTech and Moderna. However, the vaccine will not be readily available for several months, meaning people will likely restrict travel and other activities through next year to try to slow the spread of the disease. “The petroleum complex is the vaccine trade,” said John Kilduff, partner at Again Capital in New York. “Until we can see the other side of the pandemic, the market is going to be mired in slack demand that is going to keep the overhang extensive.” The coronavirus pandemic, coupled with the collapse of an OPEC-led output pact, sent prices crashing in March. After the collapse of that output pact led to a brief Saudi Arabia-Russia price war, the Organization of the Petroleum Exporting Countries and allies agreed a new deal on record production cuts to support prices. The group known as OPEC+ is expected to roll over those cuts into 2021 after meeting Nov. 30 to Dec. 1, following technical talks this week. In addition, the administration of President Donald Trump, a Republican, gave the Democratic president-elect access to resources that will enable him to take over in January after delaying for weeks despite Trump’s loss in the Nov. 3 election. Biden’s early selection of top advisers helped buoy crude futures and equities, which oil often follows. Oil prices pared gains slightly in post-settlement trade after the American Petroleum Institute, an industry group, reported U.S. crude inventories rose by 3.8 million barrels in the week to Nov. 20 to about 490 million barrels, compared with analysts’ expectations in a Reuters poll for a build of 127,000 barrels.
WTI Dips After Surprise Crude Build – Oil prices roared higher today (along with energy stocks) with WTI topping $45 for the first time since March on the heels of ongoing positivity around vaccine timelines and the Biden transition process (as well as hopes for stimulus and uber-easy money for as long as anyone can see). “The fact that we have more certainty on what hopefully is an orderly transition is putting some wind in the sails for crude,” “The biggest issue ahead is how willing they’ll be to cross the aisle and enable a stimulus package to happen. That’s going to be a primary driver” for prices. For now, all eyes are back on inventories as the Cushing hug is rapidly filling. API
- Crude +3.8mm (-300k exp)
- Cushing -1.4mm
- Gasoline +1.3mm
- Distillates -1.8mm
Crude stocks rose for the 3rd week in a row as distillates drew down once again… WTI traded just below $45 ahead of the API print and dipped after the bigger than expected build… “Demand has real potential to pick up rather quickly to the extent that these vaccines roll out,” said John Kilduff, a partner at Again Capital LLC. “If we can get a close above $45, it will be very positive, because we’ve been stuck in this range for months.”
Oil prices rally further on vaccine optimism despite inventory rise – Oil jumps to 8-month high on U.S. inventory drop, vaccine hopes – Oil prices climbed to the highest in more than eight months on Wednesday, after data showed a surprise drop in U.S. crude inventories last week, extending a rally driven by hopes that a COVID-19 vaccine will boost fuel demand. Brent crude was up 47 cents, or 1%, at $48.33 a barrel, having risen almost 4% in the previous session. West Texas Intermediate crude gained 80 cents, or 1.8%, to settle at $45.71 per barrel, after rising more than 4% on Tuesday. U.S. crude inventories fell by 754,000 barrels last week, data from the U.S. Energy Information Administration showed, compared with analysts’ expectations in a Reuters poll for a 127,000-barrel rise. Inventories at Cushing, Oklahoma, the delivery point for WTI, fell by 1.7 million barrels. “There was a decent drawdown at Cushing, so that’s supportive. It was probably the most bullish aspect of this report,” Still, price gains were capped due to lingering concerns over oil demand. U.S. weekly gasoline demand last week dropped by about 128,000 barrels per day (bpd) to 8.13 million bpd, the lowest since June 2020. AstraZeneca said on Monday its COVID-19 vaccine could be up to 90% effective, providing another weapon in the fight to control the pandemic. “Crude oil prices are trading at their highest levels since early March, supported by positive market sentiment as a result of vaccine news and strong oil demand in Asia,” . A weaker dollar also supported crude prices as a lower greenback makes oil less expensive for buyers holding other currencies. “The recent depreciation of the U.S. dollar has helped temper the impact of surging oil prices for some of the world’s largest consumers of energy,” said Stephen Brennock of broker PVM. Brent has moved into backwardation, a market structure in which oil for immediate delivery costs more than supply later. Backwardation encourages inventories to be drawn down and suggests lingering fears about a glut have receded. Brent futures for February delivery were trading about 13 cents above January contracts , the highest since July. “Positive vaccine news and swift deployment views are behind a significant part of this move in the curve, supported by increasingly firm beliefs by the market that OPEC+ will extend its current output targets for Q1 2021,”
Oil Prices Surge Amid Weaker Dollar and Surprise Draw — Oil closed at an eight-month high amid a weakening dollar and optimism surrounding a surprise decline in U.S. crude supplies and recent breakthroughs on a Covid-19 vaccine. Futures in New York advanced 1.8% on Wednesday after rallying the three previous sessions. An Energy Information Administration report showed U.S. crude stockpiles fell 754,000 barrels last week. At the same time, positive developments on a vaccine have spurred a swift reshaping of oil’s futures curve, with several key markers moving into a bullish backwardation structure in recent days. In addition, Chinese and Indian refiners issued a flurry of tenders seeking crude oil for loading in January, highlighting the strong demand coming from parts of Asia. Meanwhile, the Bloomberg Dollar Spot Index fell as much as 0.2%, boosting the appeal for commodities priced in the currency. “It has been a really good run. We haven’t seen a run like this since the spring after we went to negative prices,” said Peter McNally, global head for industrials, materials and energy at Third Bridge. “Sentiment certainly has changed pretty quickly. At any point, it all could take a breather, but lately it feels like supply and demand fundamentals are heading in the right direction.” While optimism over vaccines has helped lift the U.S. crude benchmark more than 25% so far this month, the swift rally poses yet another headache for OPEC+ ahead of next week’s meeting to evaluate the group’s output strategy. In the latest sign of growing rifts within the cartel, Iraq’s deputy leader said that OPEC should take members’ economic and political conditions into account when deciding production quotas rather than adopting a “one-size-fits-all” approach. West Texas Intermediate prices for 2021 were at their strongest level since March on Wednesday, while those for 2022 were at their highest since September. The higher forward prices are boosting the incentive for oil producers to lock in their supplies for the coming years. Prices have also been supported by renewed geopolitical tensions, with recent attacks on a fuel depot in the Saudi city of Jeddah and on an oil tanker in the Red Sea. West Texas Intermediate for January delivery rose 80 cents to settle at $45.71 a barrel. Brent for the same month advanced 75 cents to end the session at $48.61 a barrel. Both benchmarks are at the highest level since March 5. Aside from the headline crude draw, the EIA report showed a decline in inventories at the nation’s biggest storage hub in Cushing, Oklahoma and the 10th straight draw in distillate supplies. But there were some bearish data points: gasoline stockpiles rose over 2 million barrels and crude production ticked higher.
Oil extends gains on surprise U.S. inventory draw amid vaccine rally – U.S. oil rose for a fifth day on Thursday as a surprise drop in crude inventories extended a rally driven by hopes that vaccines would end the coronavirus pandemic and revive fuel demand. Brent was up by 20 cents, or 0.4%, at $48.81 a barrel, after rising around 1.6% in the previous session. West Texas Intermediate crude was up by 14 cents, or 0.3%, at $45.85, having gained 1.8% on Wednesday. Both benchmarks have risen about 9% this week, getting a boost after AstraZeneca said on Monday its Covid-19 vaccine could be up to 90% effective, adding to the potential armory to end the worst pandemic in a century. U.S. oil stockpiles fell 754,000 barrels last week, data showed, while analysts in a Reuters poll had predicted a 127,000-barrel rise. Stockpiles at the Cushing, Oklahoma delivery point for WTI, fell 1.7 million barrels. But gasoline demand for the week fell by 128,000 barrels per day (bpd) to 8.13 million bpd, the lowest since June. “With new U.S. virus cases still at very high levels, we think that it probably won’t be until next year – once vaccines can have a material impact – that demand recovers to more normal levels,” Capital Economics said in a note. U.S. President-elect Joe Biden has urged people to forgo big family gatherings, wear protective masks and maintain social distancing for the Thanksgiving holiday in the face of the surging coronavirus pandemic. But Americans are defying pleas from officials to stay home. The United States has recorded 2.3 million new infections in the past two weeks.
Oil Rally Stalls Amid OPEC+ Tensions — Brent oil edged lower — but was on track for a fourth weekly gain — amid signs of division among OPEC+ members just days before a key policy meeting on whether to extend production curbs. Futures in London traded near $48 a barrel after falling 1.7% in the previous session. West Texas Intermediate dropped 2% from Wednesday, with prices not closing on Thursday due to the Thanksgiving holiday in the U.S. While most analysts surveyed by Bloomberg are forecasting OPEC+ will postpone a planned supply hike by three months to March at a meeting early next week, some see a chance of a shorter delay amid resistance from the United Arab Emirates and Iraq, which are eager to resume oil sales. OPEC’s president said the group must remain cautious, with internal data pointing to the risk of a new surplus early next year if output is hiked in January. That came after Iraq’s deputy leader criticized the cartel, saying the economic and political conditions of member countries should be considered before they are asked to withhold production. The recent rally gives leverage to members who want to pump more, Standard Chartered Plc said in a note. Crude is up around 6% this week as signs Covid-19 vaccines could soon be rolled out brighten the consumption outlook, even as a resurgent virus led to more lockdown measures, particularly in Europe. There was also fresh evidence the demand recovery in Asia is gaining traction. Chinese industrial profits rose at the fastest pace in almost nine years in October, while Indian economic growth data due Friday is forecast to show a sharp recovery last quarter. “At this stage it looks like we are looking at a pullback in an uptrend,” said Michael McCarthy, chief market strategist at CMC Markets. It’s “almost certain” there will be some form of OPEC+ agreement, but the meeting is possibly less influential than it might have been given the focus on demand, he said. Brent for January delivery declined 0.4% to $47.59 a barrel on the ICE Futures Europe exchange at 7:43 a.m. in London and is up 5.8% this week. WTI for the same month January delivery fell 2% from Wednesday to $44.80 on the New York Mercantile Exchange. Crude futures on the Shanghai International Energy Exchange rose 0.2% to 289.1 yuan per barrel and have risen around 11% this week. Brent is up 27% this month, with the global benchmark closing at overbought levels on Wednesday, a sign that a possible reversal had been on the cards. Several key oil timespreads have flipped to backwardation this week, a bullish signal where near-dated prices are more expensive than later-dated ones.
Oil prices post weekly gain ahead of OPEC+ meeting (Reuters) – Oil prices were mixed on Friday but posted a fourth straight week of gains ahead of an OPEC+ meeting early next week. Brent crude January futures rose 38 cents to settle at $48.18 a barrel, while the more active February contract gained 46 cents to $48.25. U.S. West Texas Intermediate (WTI) crude futures fell 18 cents to settle at $45.53 a barrel. Brent rose 7.2% over the week, while WTI gained 8% for the week. Encouraging news on potential COVID-19 vaccines from AstraZeneca and others have lifted the markets. However, questions have been raised over AstraZeneca’s “vaccine for the world,” with several scientists sounding caution over the trial results. “While a successful vaccine rollout should break the link between infection and mobility, even then global oil demand will likely only reach its pre-pandemic run rate by mid-2022,” JP Morgan said. The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia are leaning towards delaying next year’s planned increase in oil output, said three sources close to the OPEC+ group. OPEC+ was planning to raise output by 2 million barrels per day (bpd) in January – about 2% of global consumption – after record supply cuts this year. OPEC+ ministers are due to meet from Monday. “The market expects prices to see a limited increase if OPEC+ indeed does what is expected and changes its planned route, postponing a planned supply increase from January,” said Bjornar Tonhaugen, Rystad Energy’s head of oil markets A panel of OPEC+ will hold informal online talks on Sunday – a day later than scheduled, a source with the knowledge of the matter told Reuters. Rising Libyan output is also contributing to concerns about oversupply in the market. The OPEC member, which is exempt from the oil cuts, has added more than 1.1 million bpd of output since early September.
Oil prices end mixed Friday but both grades log sharp weekly gain –Crude-oil futures on Friday finished mixed ahead of an important OPEC meeting, after settling on Wednesday at the highest level since early March. U.S. financial markets were closed Thursday for the Thanksgiving holiday and energy markets settled early, at 1:30 p.m. Eastern Time, on Friday. West Texas Intermediate crude for January delivery was down 18 cents, or 0.8%, to end at $45.53 a barrel on the New York Mercantile Exchange, after a 1.8% gain on Wednesday. January Brent crude, the global benchmark, however, climbed 38 cents, or 0.8%, to settle at $48.18 a barrel on ICE Futures Europe, following a 1.6% gain for grade oil in the previous session. For the week, WTI gained 7.3% for its largest one-week gain since Oct. 9 and its fourth straight gain, while Brent picked up 7.2%, and also notched a fourth weekly rise in a row, according to Dow Jones Market Data.
OPEC+ Calls Last Minute Talks— Saudi Arabia and Russia summoned OPEC+ ministers who oversee their oil production cuts for last-minute talks on Saturday, as the cartel prepares for a decision on whether to delay January’s output increase. A clear majority of OPEC+ watchers expect the group to maintain their supply curbs at current levels for a few months longer due to lingering uncertainty about the strength of demand. However, the decision is by no means certain amid public complaints from Iraq and Nigeria, and private discord with the United Arab Emirates. The two leading members of Organization of Petroleum Exporting Countries and its allies, Russia’s Deputy Prime Minister Alexander Novak and Saudi Energy Minister Abdulaziz bin Salman, requested an informal video conference with their counterparts from the Joint Ministerial Monitoring Committee, which includes Algeria, Kazakhstan, Iraq, Nigeria and the UAE, according to a letter seen by Bloomberg. The unscheduled gathering comes just two days before a full OPEC ministerial meeting on Nov. 30, which will be followed by OPEC+ talks on Dec. 1. The JMMC met online as recently as Nov. 17, but that ended without any kind of recommendation about delaying the January supply increase. On Thursday, Algerian Energy Minister Abdelmadjid Attar — who this year holds OPEC’s rotating presidency — told Bloomberg News that the group must remain cautious because the recent surge in oil to $45 a barrel in New York this week could prove fragile. A separate meeting of a committee of OPEC technical experts considered data that pointed to the risk of a new oil surplus early next year if the cartel and its allies decide to go ahead with the production increase. The 23-nation OPEC+ coalition is scheduled to ease its 7.7 million barrels a day of production cuts by 1.9 million barrels a day from Jan. 1
Saudi Aramco’s Landmark IPO Is Costing The Kingdom Billions –The initial public offering (IPO) of Saudi Aramco that was heralded by Crown Prince Mohammed bin Salman (MbS) as being a showcase flotation for raising massive new capital for the Kingdom and anchoring a major expansion of its international equities market presence has proven only to put Aramco into a debt spiral and highlighted a myriad of problems in Saudi Arabia to international investors.Now, Aramco is digging itself further into serious debt through bond issuances simply to pay for the huge dividend payments promised by MbS that were absolutely required to persuade anyone to buy into the omni-toxic IPO. At this rate, the debt taken on by Aramco and other Saudi bond offerings to pay for the dividends will be far more than the amount of money raised in the IPO.As a direct result of MbS deciding to go ahead with yet another oil price war at the same time as the COVID-19 pandemic was gathering pace and destroying demand for oil, Aramco’s finances have suffered a massive hit. For the first half of this year, the company saw a 50 percent plunge in net profit and at the beginning of this month, it reported another massive drop in profits of 44.6 percent for the third quarter, falling to SAR44.21 billion (US$11.79 billion) from SAR79.84 billion in the same period last year.On the other side of the balance sheet, though, is the stark fact that because the company’s IPO was so toxic on so many levels that it was shunned by Western investors and had to be off-loaded to buyers who were either bullied or bribed into buying the stock Aramco is left having to pay massive guaranteed dividend payments for the foreseeable future to those shareholders. This huge guaranteed dividend payment of US$18.75 billion per quarter – US$75 billion for a full year – will have to be paid for through budget cuts over and above the US$15 billion in Aramco’s annual capital spending alluded to by Aramco’s chief executive officer, Amin Nasser, just after the first half profits figures were unveiled. This will take the total down from around US$40 billion to around US$25 billion. Further reports have stated that even this US$25 billion figure is set to be reduced by another US$5 billion, taking the total capital spending in this year from US$25 billion to US$20 billion. Whatever the cuts, it remains the case that the first two dividends together for the first two quarters of this year – US$37.5 billion – far outstripped Aramco’s total free cash flow of US$21.1 billion for the same period. The latest profits number for the third quarter, meanwhile, covers just 62.88 percent of the dividend payment, never mind any other expenses or investment for projects ongoing or planned that Aramco may have had in mind. To put this even more clearly: Aramco’s entire profit for the third quarter cannot even cover the dividend it owes for the same quarter, not even two-thirds of it!
Netanyahu meets with Saudi crown prince: reports – Israeli Prime Minister Benjamin Netanyahu met with Saudi Crown Prince Mohammed bin Salman Sunday night, according to multiple reports, in what would be the first known meeting between the two countries’ top leaders. Israeli media initially reported the covert meeting before Education Minister Yoav Galant confirmed it in a radio interview. “The fact that the meeting took place and was made public – even if it was in only a semiofficial way – is something of great importance,” Galant said in an interview with GLZ Radio, calling the meeting “something our ancestors dreamed about.” Saudi Arabia’s foreign minister, however, said no such meeting occurred. The meeting would be the latest sign of thawing relations between Israel and Gulf states, including the United Arab Emirates and Bahrain, largely brokered by the U.S. The moves have caused alarm among Palestinian activists, who say they undermine an agreement among Arab nations to boycott the country in solidarity. Saudi Arabia’s wealth, military position and religious significance within Islam would make it the most significant Middle Eastern nation yet to establish formal relations, but there is no sign yet of any such agreement, The New York Times noted. Reports in Israeli media said Netanyahu and the crown prince discussed Iran, among other topics. Further isolating Tehran, a mutual enemy, has been a point of agreement between Israel and several of the Arab countries with which it has established relations. The crown prince, Saudi Arabia’s de facto ruler, was initially hailed as a reformer due to his relaxation of some of the kingdom’s strict laws. However, the 2018 killing of dissident journalist Jamal Khashoggi in a Saudi consulate in Turkey largely derailed his international goodwill amid widespread reports it was done on the prince’s orders.While Saudi Arabia’s King Salman remains a supporter of the boycott of Israel, the crown prince reportedly prefers to move on from the Israeli-Palestinian conflict and considers an alliance against Iran a matter of more pressing importance, The Wall Street Journal reported..
US, Israel and Saudi Arabia meet amid mounting war threats against Iran – Both Israeli and Saudi officials have confirmed an unprecedented secret trip by Israeli Prime Minister Benjamin Netanyahu, accompanied by US Secretary of State Mike Pompeo and Yossi Cohen, the head of the Israeli spy agency Mossad, to Saudi Arabia on Sunday. Israel Army Radio first reported the trip and meeting between the US and Israeli officials and Crown Prince Mohammed bin Salman, which was confirmed by a senior Saudi official speaking to the Wall Street Journal. This marks the first publicly reported talks of this kind, though meetings between Israeli and Saudi military and intelligence officials are believed to have taken place with greater frequency in recent years.Saudi Foreign Minister Prince Faisal bin Farhan subsequently tweeted a denial of the report, saying, “No such meeting occurred. The only officials present were American and Saudi.” The denial reflects the controversial nature of the meeting within Saudi Arabia, where the ruling House of Saud has postured as the guardian of Islam and has formally insisted that “normalization” of ties between Riyadh and Tel Aviv are contingent on the implementation of a Middle East peace deal and the creation of an independent Palestinian state.The Sunni oil monarchies of the United Arab Emirates and Bahrain dispensed with such conditions, however, in signing onto a US-brokered deal in August to recognize Israel. The monarchy in Bahrain, which rules over an oppressed Shia majority population, depends upon Saudi Arabia for its survival and could not have entered the agreement without its approval. The meeting between Pompeo, Netanyahu and bin Salman in the Red Sea city of Neom, like the August deal, was aimed not at achieving Middle East peace, but rather solidifying an alliance between Washington, Israel and the Saudi monarchy, the linchpin of reaction and imperialist domination in the Middle East, in preparation for a war against Iran. This has been the main objective of Pompeo’s extraordinary 10-day foreign tour, conducted barely two months before inauguration day, and what, according to the election results, should be the swearing in of a new administration headed by Democrat Joe Biden. On the eve of his trip, he told a reporter asking whether he anticipated a “smooth transition” at the US State Department that there would indeed be “a smooth transition to a second Trump administration,” openly aligning US foreign policy with the post-election coup attempt being staged from the White House.
Houthi rebels claim attack on Saudi oil facility with cruise missile –Yemen’s Houthi rebels on Monday claimed they carried out a predawn cruise missile attack on a Saudi oil facility hours after the kingdom finished hosting a virtual Group of 20 (G-20) summit.Houthi military spokesman Yehia Sarie tweeted that the group fired a new Quds-2 cruise missile at a Saudi Aramco distribution station in Jeddah on the Red Sea coast. “The attack was very accurate where the ambulances, fire engines rushed to the target location,” Sarie wrote on Twitter. He added that the strike was in response to the Saudi-led coalition’s “ongoing blockade and aggression” in Yemen, and that foreign companies and residents in Saudi Arabia should “be away from vital facilities that are important” as “operations are continuing.”He posted a satellite image labeled as Aramco’s North Jeddah Bulk Plant, which can be found on Google Maps.Saudi state-run media did not immediately acknowledge any attack. A Saudi-led coalition has been fighting against Iran-backed Houthi rebels in Yemen since March 2015, when the coalition intervened to restore the Yemeni government ousted by Houthi forces.
British Military Sent On Secret Mission To Protect Saudi Oilfields – The United Kingdom has had troops deployed in Saudi Arabia to protect its oilfields from attacks since February this year, The News reported this week, a local newspaper in Portsmouth in the UK. A small team from the 16th Regiment Royal Artillery, which is based near Portsmouth, were sent to Saudi Arabia to man Giraffe radars, which can track aircraft and missiles up to 75 miles away. After the report, the UK Ministry of Defence confirmed that the mission was to protect oilfields in Saudi Arabia, the world’s largest oil exporter, from attacks, in the wake of the September 2019 attacks on critical Saudi oil infrastructure that affected half of Saudi Arabia’s oil production, or around 5 percent of global oil supply, for weeks. The Saudi oilfields that UK troops help to protect are “critical economic infrastructure,” the UK Ministry of Defence told The Independent. “Following the attacks on the Kingdom of Saudi Arabia’s oil production facilities on 14 September 2019, we have worked with the Saudi Ministry of Defence and wider international partners to consider how to strengthen the defense of its critical economic infrastructure from aerial threats,” a spokesperson for the Ministry of Defence told The Independent. Opposition parties in the UK criticized the government for not only providing assistance to Saudi Arabia but for also failing to adequately inform the public and Parliament of the mission. The report about UK troops helping to protect Saudi oilfields from attacks emerged just after the Houthi rebels in Yemen on Monday said they had fired a missile against a target in the Saudi city of Jeddah and had hit it. The target was a distribution center property of Saudi Arabia’s state oil company Aramco. Saudi Arabia confirmed on Monday, via its Saudi Press Agency, that there was an explosion at the petroleum products distribution terminal in Jeddah.
Yemen: More Damage To World Peace And Security Due To Trump Wrecking Everything As He Exits – Still denying his obvious loss, Donald Trump is trashing everything in sight. Very serious matters of foreign policy are part of this. One of these has been discussed in comments here previously, the removal from the Open Skies Treaty, which right now I am watching Rachel Maddow report that DOD is destroying the planes US used for this. Ack!!! But for this post I am noting another awful thing they are doing along a bunch of others. This involves Yemen, long one of the worst humanitarian disasters on the planet, horrible, but so in place for so long that most people pay no attention anymore because, bore, been there done that snore. But it continues to be a place of ongoing civilian deaths from bombs and economic deprivation. So, just to make things “better,” the Trump admin has decided to declare that the Houthi group who rule not only most of northern Yemen, but also its capitol, Sana’a, to be officially a “terrorist group.” The immediate result of this ruling is that all kinds of humanitarian aid that has been going to people in the parts of Yemen they live in will no longer receive it. This is morally awful and just plain stupid. So this is part of Trump frustrated in his anti-Iran policy. He exited the Iran nuclear treaty, leading to a massive increase in enriched uranium there. Ooops! He killed a top general from there to stop attacks on US forces in Iraq by Iranian militias. But those continue, with more political support in Iraq. Duh. The argument for this move on the Houthis is that they are backed by Iran, which they are. But that is a far secondary matter. The Houthis are Zaydi Shia in contrast with the 12-Iman Shia of Iran, not close at all. While Trump admin has long claimed Iran has armed them, most evidence has suggested not much. Most of the Houthi arms are leftover US arms. The other part of this is the Saudis, who have been waging war against the Houthis, with Trump deeply tied to the murderous Saudi Crown Prince, Mohammed bin Salman, who has been behind this awful war against the Houthis in Yemen, support that dates back to the Obama admin. This makes this a serious issue for the incoming Biden admin. I note that Congress has in recent years moved away from supporting this horrendous war in Yemen that has led to massive deaths among innocent civilians. Those votes that had support from many GOPs in Congress were turned down by Trump vetoes. So, I think it will not be that hard for Biden to finally end this corrupt relation between Trump and MbS to end US support for this war.
Massive Armada Of IRGC Boats Mobilize In Gulf Amid Rumors Israeli Strike Imminent – The naval forces of the Iranian Revolutionary Guard Corps (IRGC) on Thursday conducted large-scale exercises in the Strait of Hormuz at a moment Tehran believes Israel will launch a preemptive strike aimed at drawing Trump into ordering US military action in the region before he leaves office in January. According to state-run English language PressTV, “The event saw sailors, enlisted with the popular volunteer Basij force, taking to the waters aboard more than 1,000 light and semi-heavy-lift vessels.”Photos showed an impressive number of small but fast military boats that are typically used by the IRGC Navy (which is separate from the much larger national navy of the Islamic Republic) to harass and encircle larger ships, whether tankers or foreign warships. IRGC Admiral Ali Reza Tangsiri, who oversaw the maneuvers, called it a display of strength and a showcasing of Iran’s “maritime power” which provides security in the Arabian and Oman Seas. Crucially the ‘show of force’ comes amid widespread reports that Trump is mulling some of kind of preemptive action against either Iran or its regional allies, such as the powerful Shia militias in Iraq.Earlier this month The New York Times reported that Trump’s advisers talked him down from ordering a strike, which they argued would certainly spiral into a larger war. Included in the “strike options” were most likely plans to hit the Natanz enrichment facility, according to the report, which suffered sabotage and damage last summer in a likely Israeli covert operation but which is being repaired and rebuilt.Israel too is said to be preparing for such a scenario, with its armed forces said to be in a high state of readiness. Iran is apparently taking these reports very seriously.
Head Of Iran’s Nuclear Weapons Project Assassinated; Iran Armed Forces Chief Vows Revenge – Amid speculation that Israel is on war footing over a possible strike in Iran in the coming weeks, moments ago Iranian state media reported that the country’s top nuclear scientist Mohsen Fakhrizadeh was assassinated in Damavand, east of Tehran. He was reportedly accompanied by his bodyguard when they were attacked by a “suicide” attacker at the entrance of Absard town. According to Iran Front Page News, Fakhrizadeh was killed by shooting, but before the shootout, his car has been stopped with an explosion at Mostafa Khomeini Blvd. Several others are also reportedly killed in the incident, but haven’t been identified yet. Fakhrizadeh was a brigadier general in the Iranian Revolutionary Guards Corp (IRGC) and headed Iran’s nuclear weapons project.He was a professor of physics at the Imam Hussein University in Tehran and was former head of Iran’s Physics Research Center.While there has been no official confirmation of the death yet, and Iran Atomic Energy organization has denied the reports, saying that no incident involving nuclear scientists took place according to ISNA News Agency, Iran’s revolutionary guards commander wrote on Twitter that Iran will avenge the killing of scientists as it has in the past according to the Jerusalem Post. No one has yet claimed responsibility for the assassination, but the Israeli regime has a history of hiring hit men to assassinate nuclear scientists in Iran. In 2018, Prime Minister Benjamin Netanyahu said “remember that name” after he announced that the Mossad had obtained 100,000 files from Iran’s secret nuclear archives. The files retrieved by Mossad focused on the secret Iranian nuclear program that was developed from 1999 to 2003 called Project Amad, which was led by Fakhrizadeh. When Iran entered the 2015 nuclear deal, it denied that such a program existed. After the April 2018 killing of several nuclear scientists in Iran, a “protective shield of secrecy and security” had been thrown around Fakhrizadeh, in an effort to protect him against Israeli assassins.
Iran Accuses Israel Of Seeking To Provoke “Full-Blown War” With Brazen Assassination – Since news broke hours ago of the assassination of Iran’s top nuclear scientist, Mohsen Fakhrizadeh, on the streets in a city just east of Tehran, Iranian leaders have blamed an Israeli assassination plot.Iranian Foreign Minister Javad Zarif said there were “Serious indications of Israeli role” in killing of Fakhrizadeh, who subsequently died of his wounds in a hospital. What Iran has dubbed a terrorist attack reportedly involved a hail of machine gun fire and a suicide bomber explosion. And a top military adviser to Iran’s supreme leader and former IRGC general issued a similar allegation on Twitter. Hossein Dehghan wrote: “In the last days of their gambling ally’s political life, the Zionists seek to intensify and increase pressure on Iran to wage a full-blown war,” Dehghan wrote, appearing to refer to U.S. President Donald Trump. “We will descend like lightning on the killers of this oppressed martyr and we will make them regret their actions!”Terrorists murdered an eminent Iranian scientist today. This cowardice – with serious indications of Israeli role – shows desperate warmongering of perpetrators Iran calls on int’l community – and especially EU – to end their shameful double standards & condemn this act of state terror. – Javad Zarif (@JZarif) November 27, 2020 According to Iran Front Page News, Fakhrizadeh was killed by shooting, but before the shootout, his car has been stopped with an explosion at Mostafa Khomeini Blvd. Several others are also reportedly killed in the incident, but haven’t been identified yet. Tasnim reported further details as follows:At 2:30 PM Iran time, a Nissan commercial vehicle exploded near Fahrizadeh’s car. Immediately afterwards the assassins fired at Fahrizadeh & his bodyguard. Fahrizadeh was rushed by helicopter to the hospital where he died of his wounds.Fakhrizadeh was a brigadier general in the Iranian Revolutionary Guards Corp (IRGC) and headed Iran’s nuclear weapons project. He was a professor of physics at the Imam Hussein University in Tehran and was former head of Iran’s Physics Research Center.He was widely considered “father of Iran’s nuclear program” – but which the Islamic Republic has long insisted has remained for peaceful domestic energy purposes.
Watch- Moment German Commandos Intercept & Raid Turkish Ship Bound For Libya – The Turkish media published a video this week showing the interception and search of a Turkish cargo vessel by German forces which happened Sunday as part of the European Union’s “Irini” operation in the Mediterranean. According to reports, the Turkish merchant ship was bound for the Libyan coast before it was stopped by the German naval forces in the eastern Mediterranean. In the video shared by RT, the German forces can be seen approaching the vessel with its warship and helicopters, as they later entered the ship to search its contents.On Monday, the Turkish Foreign Ministry condemned Germany’s attempted inspection, calling it a violation of international law.According to Deutsche Welle:A diplomatic spat erupted between Turkey and Germany on Monday after Ankara accused German troops of carrying out a search of a freighter as part of the EU’s Irini mission to enforce the UN’s Libya arms embargo.The Turkish Foreign Ministry said it had summoned the envoys to Ankara of Germany, the EU and Italy to protest the “unauthorized” operation.“We protest this action, which was conducted without authority and with the use of force,” the ministry said. The German army confirmed that Turkey prevented German forces operating within a military mission of the European Union from inspecting a Turkish cargo ship “believed to be transporting weapons to Libya.”
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