Written by rjs, MarketWatch 666
Here are some more selected news articles for the week ending 26 December 2020. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening or Tueday morning.
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Scientist Dominic DiGiulio’s Work Illuminated How Fracking Affects People and Environment – – People in communities across the nation have found themselves the participants in a fracking experiment. The practice is controversial because of its potential impacts to public health and the environment, specifically, it can poison drinking water. After years of research, scientist Dominic DiGiulio made this link. He found that people’s groundwater can become contaminated under certain conditions. The pits that store fracking chemicals are one example. Such was the case in Pavillion, Wyoming, a community of roughly 230 people.Back in 2008, residents began complaining their water had a foul taste and smell. So the EPA came in to investigate. Led by DiGiulio, the team’s preliminary findings released three years later suggested fracking was to blame.But officials in Wyoming dismissed the findings as a political move.DiGiulio rejects that claim to this day.DiGiulio: When I worked with EPA, there was no desire with myself and my coworkers to ban fracking. That was never the goal. We were simply conducting an investigation on the impact on groundwater resources and people’s wells. So there was never any kind of goal to have any kind of political objective. Ours was simply a technical objective to better understand the impact of hydraulic fracturing on public health and the environment. But politics still found the scientists, and due to political pressure, EPA backed out of the study. DiGiulio, for his part, knew his work wasn’t done. DiGuilo retired from EPA in 2014 and went on to lead his own study. It was a massive effort with DiGiulio parsing decades of records. DiGiulio: I took about 18 months to actually go through the data once more. So it was a very time intensive process. I mean, there was a lot of data there. It was definitely lots of digging and going back to the beginning, back to the 1960s, and actually looking at every single record, all the well completion records, all the records on cement bond locks for well integrity, all the water well records. We basically did a very comprehensive review of the records out there just to get a much better understanding of what the problems were. DiGiulio’s research made the connection that he had started to draw back in 2011 with EPA, only this time, the investigation made his findings clearer. DiGiulio: Hydraulic fracturing started at the Pavillion field back in the 1960s and so the flowback that came from hydraulic fracturing was disposed in pits. So it was basically Diesel fuel-based fracking fluids that went into the pits, petroleum based fluids. So hydraulic fracturing, the actual process itself, didn’t impact domestic water wells but flowback from hydraulic fracturing was disposed into unlined pits which then contaminated groundwater. The saga in Pavillion, Wyoming, is ongoing. Residents reportedly still can’t drink their water and complain of health problems. DiGiulio says contained within this controversy are lessons for people living in the Mountain West.
Comin’ to America, Part 5 – Imports Remain Key to Rockies and West Coast Refiners’ Crude Slates – PADDs 4 and 5 – the Rockies and the West Coast regions, respectively – are each outliers in the U.S. refining sector. Refineries in the Rockies, for example, are generally far smaller than those in other PADDs and, due to pipeline flows, source their crude oil from either Western Canada, the Bakken, or in-region production, including the Niobrara and Utah’s Uinta Basin. West Coast refineries, in turn, have no crude oil pipeline links with U.S. points to the east, and depend on a mix of imported crude from Canada, Latin America, and the Middle East, as well as domestic oil from California, Alaska, and rail receipts. Today, we conclude a series on region-by-region crude oil imports and refinery crude slates with a look at PADDs 4 and 5. As we said in Part 1, the Shale Revolution, combined with the development of the oil sands and other hydrocarbon resources in Western Canada, led to a dramatic decline in U.S. oil imports from OPEC countries in particular and, to a lesser extent, from non-OPEC countries (other than Canada) – and a big increase in imports from Canada. In 2005, the U.S. imported an average of 4.8 MMb/d from OPEC, 1.6 MMb/d from Canada, and 3.7 MMb/d from other non-OPEC countries, including 1.6 MMb/d from Mexico, according to the Energy Information Administration (EIA). This situation is far different in 2020. In the first nine months of this year, imports from OPEC averaged about 930 Mb/d, while imports from Canada averaged 3.6 MMb/d, and imports from other non-OPEC countries averaged 1.5 MMb/d – Mexico’s slice of that averaged about 690 Mb/d. Part 2 focused on PADD 1 – the East Coast – which not only produces very little crude oil but has almost no oil pipelines. That means that nearly all of the oil refined in PADD 1 – domestic or imported – needs to be delivered by railroad tank cars or ships. We noted that East Coast refinery demand for oil averaged around 1.1 MMb/d for most of the past decade, but has plummeted by half (to less than 600 Mb/d) this year. PADD 1’s sources of oil supply shifted almost 100% imports in 2010-12 to a mix of imports and railed-in Bakken crude in 2013-15, then back to a preponderance of imports in the latter years of the decade. In Part 3, we looked at the Midwest. PADD 2 refineries for decades depended on a mix of domestic crude and imports from overseas, but since 2010 the region has nearly tripled its imports of Canadian crude – most of it the heavy-sour variety – and invested billions of dollars in cokers and other equipment so they can process that low-API, high-sulfur oil into valuable products like gasoline, low-sulfur diesel, and jet fuel.PADD 3 – the Gulf Coast – was front-and-center in Part 4. The region accounts for more than half of the U.S. refining capacity, and has undergone perhaps the biggest shift in crude-oil sourcing: 15 years ago, it was importing an average of more than 6 MMb/d, but in recent months has been receiving as little as 1.2 MMb/d from abroad. The 80% decline in Gulf Coast oil imports since the mid-2000s was made possible in part by big changes in the crude slates at refineries in Texas, Louisiana, and other PADD 3 states, mostly involving the swapping out of light-sweet crude from overseas with favorably priced light-sweet crude from the Permian and other U.S. shale plays.
BNSF train carrying North Dakota oil derails, starts on fire in Washington state – A Burlington Northern Santa Fe train carrying crude oil from North Dakota’s Bakken oil fields derailed and caught fire late Tuesday morning, Dec. 22, in a small town in the far northwest part of the state. BNSF Railway spokesperson Courtney Wallace said in a statement that three of the 10 cars that derailed started on fire in Custer, a town of 370 residents just 25 miles south of the Canadian border, about 11:40 a.m. The train, which originated in North Dakota, was near Interstate 5 about 100 miles north of Seattle, and the Whatcom County Sheriff’s Department said they had to evacuate a three-quarter mile radius around the derailment. The train was headed for the nearby town of Ferndale, Wallace said, which is near the Puget Sound. Late in the afternoon, the sheriff’s office said in a Facebook post that the fire was under control. However, they said an evacuation order and local road closures were still in place. The sheriff urged town residents to continue to avoid the area, although the interstate was reopened about two hours after the fire started. A photo posted by the sheriff’s department showed a huge cloud of black smoke rising into the air and residential homes nearby. Wallace said no injuries were reported to crew members onboard the train. She said the cause of the derailment is under investigation, with BNSF coordinating with authorities. The sheriff’s department told the nearby Bellingham (Wash.) Herald that they were unsure if there was any damage to nearby structures or buildings. The number of people evacuated also wasn’t available. The department and Wallace said the train was carrying the crude oil from North Dakota. The derailment and fire follows a decision last May in which the U.S. Pipeline and Hazardous Materials Safety Administration sided with North Dakota and Montana against a Washington state law requiring oil unloaded from trains have a vapor pressure under 9 pounds per square inch. The limit would fall below North Dakota’s cap of 13.7 pounds per square inch, which the state argued was an industry standard. North Dakota Attorney General Wayne Stenehjem said in a statement that he was “pleased” with the PHMSA decision, according to an article by the Bismarck Tribune.
Train cars carrying crude oil derail and burn north of Seattle – Seven train cars carrying crude oil derailed Tuesday and five caught fire, sending a large black plume of smoke into the sky north of Seattle close to the Canadian border, authorities said. The derailment in the downtown Custer area closed nearby streets and spurred evacuation orders during a large fire response, Whatcom County officials said on Twitter. Interstate 5 was temporarily closed in the area in both directions. Later Tuesday, the Whatcom County Sheriff’s Office tweeted that the fires were under control and the evacuation order had been lifted but roadblocks would remain in place. Fires at the site remained active, the Sheriff’s Office added, and residents were asked to stay inside once they returned home. “Everyone’s in danger at a scene like this, but fortunately there were no injuries,” Sheriff Bill Elfo said at a news conference. Home to five oil refineries, Washington state sees millions of gallons of crude oil move by rail through the state each week, coming from North Dakota and Alberta, Canada, according to the state Department of Ecology. The seven cars derailed at about 11:46 a.m. Tuesday, BNSF Railway spokesperson Courtney Wallace said at the news conference. She said two people were on board the 108-car train headed from North Dakota to the Ferndale Refinery, owned by Phillips 66. “BNSF is working with local authorities to assess and mitigate the situation,” the railway said on Twitter. “The cause of the incident is under investigation.” The state Department of Ecology said a command center had been set up at the scene with the railway and federal Environmental Protection Agency officials. Matt Krogh, director of U.S. Oil & Gas Campaigns for the environmental group Stand.earth, is based in Bellingham near the derailment and told The Associated Press he could see the smoke. He said the incident was another example of how transporting crude oil by train – especially in large numbers of tankers – is “very, very dangerous.” He cited the 2013 fiery derailment of a train carrying crude in Lac Megantic, Quebec, which killed 47 people, and a 2016 derailment in Mosier, Oregon, along the Columbia River that caused people to evacuate. Krogh said crude oil is volatile and there are often track maintenance concerns. Among other things, Krogh and his group would like to see a reduction in the number of tank cars allowed per shipment. “I think we got lucky today,” he said, referring to the derailment in Custer. Democratic U.S. Rep. Rick Larsen, D-Wash., said in a statement Tuesday he was concerned about the derailment. Larsen is a senior member of the House Transportation and Infrastructure Committee. “I worked closely with the Obama administration to create strong rules to make the transport of oil by rail safer,” Larsen said. “Clearly there may be more work to do.” Custer, a small town of several hundred people, is about 100 miles (161 kilometers) north of Seattle.
Oil train derailed near site of earlier terrorist attempt, officials say (AP) – Federal and local authorities were investigating a fiery oil car train derailment north of Seattle near where two people were arrested last month and accused of attempting a terrorist attack on train tracks to disrupt plans for a natural gas pipeline. Seven train cars carrying crude oil derailed and five caught fire Tuesday, sending a large plume of black smoke into the sky close to the Canadian border. There were no injuries in the derailment about 100 miles (161 kilometers) north of Seattle Officials were asked about recent attempts to sabotage oil trains, but they said the investigation was just beginning. “We’ve not been able to get close enough to the site to make an evaluation,” Officials with the National Transportation Safety Board along with the FBI and other federal, state and local agencies were on the scene. During a news conference Wednesday, officials spoke about their disaster planning they had done to prepare for incidents similar to what occurred with the train derailment. They also spoke about how the impact of the derailment to the surrounding environment could have been worse. “As far as crude oil derailments and fires, this could not have occurred in a better location with regard to minimizing environmental impact,” said David Byers, who manages disaster response for the Washington Department of Ecology. Last month federal authorities in Seattle charged two people with a terrorist attack on train tracks, saying they placed “shunts” on Burlington Northern Santa Fe tracks. “Shunts” consist of a wire strung across the tracks, mimicking the electrical signal of a train. The devices can cause trains to automatically brake and can disable railroad crossing guards. Authorities said the pair were opposed to the construction of a natural gas pipeline across British Columbia when they interfered with the operation of a railroad in Washington state. The FBI’s Joint Terrorism Task Force has said there have been dozens of such cases involving BNSF tracks since January, with a message claiming responsibility posted on an anarchist website early this year. In one, shunts were placed in three locations in northwest Washington on Oct. 11, prompting emergency brakes to engage on a train that was hauling hazardous materials and flammable gas. The braking caused a bar connecting the train’s cars to fail; the cars became separated and could have derailed, authorities said.
BP Divests Stake in Alaska Pipeline -Harvest Alaska has acquired BP Pipelines Inc.’s midstream ownership interests, parent company Harvest Midstream reported late last week.The deal, which received approval from the Regulatory Commission of Alaska on Dec. 14, immediately gives Harvest ownership of BP’s approximately 49-percent interest in the Trans-Alaska Pipeline System (TAPS) and 49 percent of Alyeska Service Co. and other Alaska midstream interests, Harvest Midstream noted in a written statement. The parent firm added that Alyeska will continue to operate TAPS as it has for decades.”The completion of this acquisition is a critical milestone for Harvest,” remarked Harvest Midstream CEO Jason Rebrook. “TAPS is an icon of American ingenuity and has a proven track record of safe and responsible operations with strong relationships in the communities it touches. We are committed to positively building upon this great legacy and we look forward to partnering with Alyeska, other TAPS owners and the State of Alaska for years to come.” The 800-mile (1,287-kilometer) TAPS transports North Slope oil from the Prudhoe Bay oilfield to the Valdez Marine Terminal, boasting a capacity of approximately 1.1 million barrels per day, Harvest Midstream stated.
Shell Marks Another $4.5 Billion in Oil, Gas Assets Up for Write-Down in 4Q — Royal Dutch Shell plc expects to write down between $3.5 billion to $4.5 billion during the fourth quarter because of impairments, asset restructuring and onerous contracts. It would be the third time this year the Anglo-Dutch supermajor has written down assets. In a fourth quarter update, Shell said it expects to take a partial impairment on the Appomattox asset in the U.S. Gulf of Mexico (GOM) because of sub-surface updates. The project, located about 80 miles south of New Orleans, began production in May 2019. It was the first commercial discovery to ramp up in the Norphlet formation. It also expects charges on oil products related to the previously announced transformation of the refinery portfolio, as well as on onerous contracts in the Integrated Gas (IG) segment. Shell expects IG production to be between 900,000 and 940,000 boe/d in 4Q2020, which is above its previous forecast and higher than output of 820,000-860,000 boe/d in the third quarter. However, the company said the impact to earnings is likely to be “limited” because of its production sharing contracts.Liquefaction volumes are expected to be between 8.0-8.6 million tons, while trading and optimization results are expected to be “below average” in the quarter, according to Shell. Around 80% of the company’s term LNG sales this year have been linked to oil prices, with a price lag of up to six months, management said. Shell is one of the world’s largest LNG traders. The exploration and production giant said “significant margining outflows” have impacted cash flow from operations in the final three months of the year, and the full quarter impact is subject to commodity price changes and forward curves through Dec. 31. Shell in October slashed its workforce by up to 9,000 people, a reduction seen by management as simplifying the organizational structure and helping to deliver “sustainable” annual cost savings of $2-2.5 billion by 2022. Tudor, Pickering, Holt & Co. (TPH) analysts said Shell’s 4Q update pointed to generally weaker results across segments versus their model, with marketing guidance, upstream volumes and higher guided underlying operating expenditures quarter/quarter “key moving pieces.” The TPH team said Shell missed their projections in the upstream and IG segment, but downstream and chemicals operational results fared better versus estimates. Shell in 2Q2020 recorded one-time quarterly impairments totaling $16.4 billion because of withering energy demand and low prices, with charges for QCLNG and Prelude floating LNG in the Browse Basin. It followed that with another nearly $1 billion write-down in October, focused again on Prelude.
Work Suspended on Transmountain Pipeline Following Accidents in Alberta, BC – Work was suspended Friday until Jan. 4, 2021 on the Trans Mountain Pipeline expansion project as a result of construction contractor accidents. Pipeline president Ian Anderson said, “Trans Mountain is proactively taking the step to temporarily stand down construction to review, reset and refocus our efforts, and those of our contractors and their workers.” The work suspension follows accidents at both ends of the 1,150-kilometer (690-mile) oil conduit across Alberta and British Columbia: an October fatality near the Edmonton inlet and a serious injury this week at the outlet in the Burnaby suburb of Vancouver. Construction is about 20% complete on the project that would nearly triple the pipeline’s capacity to 890,000 b/d as an export route for Canada’s top natural gas users, Alberta thermal oil sands plants. “Next year, 2021, will see peak construction for the project, with thousands of people working in hundreds of sites,” said the work suspension announcement. “It is during this time when one of the greatest risks to the project becomes worker safety.” Along with pipeline company and construction contractor reviews, investigations are underway by the Canada Energy Regulator (CER) and workplace safety authorities in Alberta and B.C. Detailed route approval proceedings continue before the CER. The cases include review of a detour that Trans Mountain agreed to build around the Coldwater native tribe, which says the original route endangered the water supply of its southern B.C. reservation.
Mexico Natural Gas Prices Hit 21-Month High in November – Natural gas prices in Mexico reached a 21-month high in November, averaging $3.45/MMBtu, according to the latest IPGN monthly natural gas price index published by Comision Reguladora de Energ’a (CRE). CRE compiles the index based on day-ahead spot prices reported anonymously by marketers. CRE used 298 transactions reported by 28 marketers for a total volume of 6.48 Bcf/d to calculate the latest index, up from 238 deals from 24 companies for 6.15 Bcf/d in the similar period last year. Due to Mexico’s growing dependence on pipeline gas imports from the United States, Mexico gas prices are closely tied to prices at liquid trading locations in the United States, namely Henry Hub, Houston Ship Channel and Waha. U.S. prices were boosted in November by surging exports of liquefied natural gas (LNG), which hit a record monthly high after plunging to their lowest levels in more than two years over the summer amid the Covid-19 pandemic, according to the U.S. Energy Information Administration (EIA). A cold start to the winter in Asia combined with fewer pandemic-related restrictions has driven spot LNG prices to their highest level in over two years, researchers said. In its latest Short-Term Energy Outlook, EIA also forecast monthly average spot prices of $3.01/MMBtu for full-year 2021, up from a forecast average of $2.07/MMBtu for 2020. The bullish outlook is driven by higher heating demand, rising LNG exports and domestic production declines.
Private Sector Upstream Industry in Mexico Said Committed to Developing Nation’s Oil and Gas Private firms operating in the Mexican upstream oil and gas sector have maintained their commitment to the country despite the impacts of coronavirus and have even upped exploratory activity this year. This is according to a panel of experts who spoke during a virtual event last week organized by the #WeTweetEnergy group, an online community of Mexico energy experts. “Despite the pandemic, this year the effect of coronavirus in Mexico hasn’t been felt as it has been felt on the global level. On the contrary, we’ve seen positive results,” said Selene Gonzfllez, external affairs officer for trade group Asociacion Mexicana de Empresas de Hidrocarburos (Amexhi). The year/year increase in private sector upstream investment in the first nine months of this year was $290 million, Gonzfllez said. Even as the Mexican government has suspended exploration and production (E&P) bid rounds, more than 100 contracts from rounds held during the previous administration continue to advance. While there is no sign of new rounds, Gonzfllez said there is over $40 billion committed from private firms in the upstream. Private sector oil production is also expected to close 2020 at 57,000 b/d, up 20% from full-year output in 2019. Energy consultant and former commissioner at upstream regulator Comision Reguladora de Hidrocarburos (CNH) Gaspar Franco said that part of the reason for the continuation of activity is that most private operators are still in the exploration stage. In Mexico, when the pandemic caused the shutdown of much of the economy back in April, E&P was deemed an essential activity and work continued basically as usual for many firms. “Now it looks like it is strategic for companies to continue exploration,” he said, adding that despite coronavirus and the deep unpredictability of prices, “no one is going to leave, but there will be adjustments in plans.”
Tax Break or No, Mexico’s Pemex Likely to Require More Government Support, Fitch Says – Mexican state oil company Petroleos Mexicanos (Pemex) would require more government support over the coming years if it wants to increase capital expenditures (capex) without taking on more debt, even if proposed tax breaks for the firm are passed by legislators, according to Fitch Ratings. Pemex rigs Senator Armando Guadiana, a member of President Andres Manuel Lopez Obrador’s Morena coalition, has introduced a bill that would see heavily indebted Pemex’s profit-sharing duty reduced to 35% from the current effective rate of 58%. The current rate is scheduled to decrease to 54% in 2021, which would remain the effective rate if Guadiana’s bill fails to pass, said the Fitch analyst team led by Lucas Aristizabal. “Fitch’s base case for the company already incorporates the assumption that Mexico would cover the expected negative free cash flow [FCF] projected for the next few years,” analysts said. They estimated that the proposed tax break would reduce Pemex’s negative FCF by about $3 billion/year on average going forward. If the bill does not pass, Fitch expects Pemex’s negative FCF to be about $15.8 billion on average over the next few years. The proposed legislation also aims to increase Pemex’s tax deductions and remove profit-sharing duties from production used for self-consumption, the Fitch team said. Learn More – LNG Insight The bill, if passed, would allow Pemex to deduct the highest of either 15.5% or $9.80/bbl for most of its oil production, up from 12.5% or $6.10 currently. Pemex’s 2019 average pre-royalties lifting costs of about $10.30 ($14.10 including production taxes in 2019) “are higher than the currently allowed tax deductions, and the proposed amendment would bring the allowed tax deductions closer to the company’s production costs,” Fitch analysts said.
UK to End Support for Natural Gas Export, Other Foreign Fossil Fuel Projects– The UK would end government-funded financial support for overseas oil, natural gas and coal projects under a plan announced this month by Prime Minister Boris Johnson as the country continues to jockey for position in the global fight against climate change. The policy would end taxpayer support for export finance, aid funding and trade promotion of foreign fossil fuel projects. Over the last four years, the government said it has supported 21 billion pounds, or about $28 billion, worth of UK oil and gas exports through trade promotion and export finance. The government has launched a review of the policy with the industry and other stakeholders. The goal is to implement the policy by the start of the United Nations Climate Change Conference in November 2021, which will be held in Glasgow, Scotland. Johnson said the UK Export Finance (UKEF) department, the country’s export credit agency, would continue to consider applications for support in the oil and gas sector as the policy review continues. The UKEF helps UK companies by providing insurance to exporters and guarantees to banks to share the risks of providing export finance. For example, export credit agencies have become increasingly important providers of funding for natural gas liquefaction projects across the world as they have grown in size over the years. Johnson’s announcement, made at the Climate Ambition Summit earlier this month, came just weeks after he laid out a plan to cut the UK’s emissions by at least 68% by 2030 compared to 1990 levels. The prime minister also unveiled last month his “Ten Point Plan” for a so-called green industrial revolution, which aims to support alternative energy and accelerate emissions reductions. Leading groups such as the Organization for Economic Cooperation and Development and the International Energy Agency have called for an end or reduction to government funding for fossil fuel projects.
LNG Could Drive $11 Billion of Australian Natural Gas Project FIDs in 2021, Says Wood Mackenzie -As the pandemic eases and the global economy recovers, $11 billion of Australian natural gas projects could be sanctioned as soon as next year, according to a report released this month by consultancy Wood Mackenzie. The country has helped drive growth in global liquefied natural gas (LNG) supplies in recent years and exports are expected to drive the next wave of Australian final investment decisions (FID) next year. “After doing everything possible to tighten belts this year, Australian operators will open their wallets and start spending,” said Wood Mackenzie senior analyst Daniel Toleman. “The backlog of FIDs will begin to clear as a fresh round of projects are sanctioned. But for this to occur, there has to be continuing improvement in the macro-environment and prices trending up.” The first project expected to be sanctioned next year is Mitsui E&P Australia’s Waitsia natural gas field. The project would export LNG from the North West Shelf with production starting in late 2023. Next, Santos Ltd. is expected to sanction the Barossa gas field in the Northern Territory late in 2Q2021. Barossa would backfill the Darwin LNG terminal when the Bayu-Undan field stops production. [Want to know how global LNG demand impacts North American fundamentals? To find out, subscribe to LNG Insight.] Woodside Petroleum Ltd. is also expected to give the Scarbrough natural gas field the greenlight. The field would feed a second expansion train at the Pluto LNG terminal in Western Australia. Request Information about NGI’s Price Index Data “Woodside will sanction the project without contracting any additional LNG, taking on exposure to the spot LNG price,” Toleman said. “This is a bold strategy which allows them to take advantage of strengthening near-term market fundamentals.” Wood Mackenzie also expects Australian Industrial Energy to sanction the Port Kembla natural gas import terminal to supply the East Coast market. FID is expected in 1Q2021, the firm said. LNG imports will become the marginal cost of supply in the country, the firm said, adding that domestic prices would rise as they move towards global LNG prices, including the cost of regasification. “This is positive news for upstream players with uncontracted gas.” Last year marked a record increase in global LNG production, driven primarily by new liquefaction trains and supply ramp-ups in Australia, Russia and the United States, according to the International Group of Liquefied Natural Gas Importers (GIIGNL). The group said LNG production grew by 13% year/year in 2019 to 354.7 million tons (Mt). Australia was the second largest LNG producer in the world with 75.39 Mt of production, behind Qatar, which had 77.80 Mt, according to GIIGNL. The United States was the third largest LNG producer with 33.75 Mt.
Norway supreme court verdict opens Arctic to more oil drilling (Reuters) – Norway’s supreme court upheld government plans for Arctic oil exploration on Tuesday, dismissing a lawsuit by campaigners who said they violated people’s right to a healthy environment. While most of Norway’s oil output flows from south of the Arctic, the government believes the greatest untapped potential lies in the Barents Sea off Europe’s northernmost coast. Tuesday’s verdict upheld rulings by two lower courts, rejecting arguments by Greenpeace and the Nature and Youth group that a 2015-2016 oil licensing round giving awards to Equinor and others had breached Norway’s constitution. While the case was specifically about ten exploration licenses awarded four years ago, the campaigners had hoped that their appeal would set a precedent limiting the oil industry’s Arctic expansion. Norway is western Europe’s largest oil and gas producer, with a daily output of around 4 million barrels of oil equivalent. “The supreme court is rejecting the appeal,” Chief Justice Toril Marie Oeie said as she announced the verdict, which saw 11 of the 15 judge panel rule in favour of the government, while 4 said the environmental groups should have won. “This means today’s youth lacks fundamental legal protection from environmental damage jeopardising our future… This is shocking and we are furious,” the Nature and Youth group said on Twitter in response to the ruling. The plaintiffs said pumping more oil would lead to increased climate-warming carbon dioxide emissions and ultimately violate Norway’s constitution as well as its commitments under the Paris climate agreement and the European Convention on Human Rights. The majority concluded, however, that parliament and the government had broad authority to award new oil acreage. “A broad majority in parliament has repeatedly rejected proposals to end Norwegian oil extraction,” the judges said. The Ministry of Energy and Petroleum has announced plans for another round of Arctic licensing awards, setting an application deadline for early next year.
Russia admits to worlds largest Arctic oil spill – Some 21,000 tons of oil poured into the surrounding ground and waterways after a diesel oil tank belonging to a subsidiary of Russian metals giant Nornickel collapsed on May 29. Kirill Kukhmar / TASS Russian authorities said the fuel spill at an Arctic power station earlier in 2020 was the largest in world history, a top emergencies official said Thursday. Some 21,000 tons of oil poured into the surrounding ground and waterways near the city of Norilsk after a diesel oil tank belonging to a subsidiary of Russian metals giant Nornickel collapsed on May 29. “Such an amount of liquid diesel fuel has never been spilled in the history of mankind,” the state-run RIA Novosti news agency quoted Deputy Emergency Minister Alexander Chupriyan as telling reporters. “We already trapped [the fuel] in the Arctic zone,” he said.A team of Nornickel-funded scientists, meanwhile, struck a more optimistic tone with their discovery of the five polluted rivers’ self-cleaning abilities, according to their final report cited by the state-run TASS news agency Wednesday.”The microflora in the studied waters has adapted to oil products and is able to participate in their decomposition,” said members of the so-called Great Norilsk Expedition organized by the Siberian Branch of the Russian Academy of Sciences in August.Nornickel is currently contesting a $2 billion damages claim with Russia’s state environmental watchdog. A different Nornickel-commissioned report said last month that the oil spill was “inevitable” due to design flaws, management failures and rising temperatures in the region.
Russia’s crude oil exports drop 10% in January-October — Due to lower demand and the OPEC+ deal, Russia’s crude oil exports declined by 10.4 percent in volume year over year in January to October, data from the Russian federal customs, cited by local cargo analytics outlet SeaNews, showed. The value of Russia’s crude oil exports plunged by more than 40 percent in the same period due to the lower oil prices compared to the average price of oil in the first ten months of 2019. The value of Russian crude oil exports plummeted by 40.6 percent between January and October 2020, and stood at US$60.326 billion, according to data from the Russian federal customs service. In October 2020 alone, the amount of Russian crude oil exports fell by 25.3 percent compared to October 2019, and dropped 0.9 percent compared to September 2020. The value of Russian crude exports plunged by 51.9 percent annually in October, in which the exports were worth US$5.13 billion. For most of January through October 2020, Russia was part of the OPEC+ agreement to curtail supply, except in March and early April, when Russia and Saudi Arabia disagreed on how to manage oil supply to the market when demand was crashing due to the pandemic. The current production cuts began in May 2020 and are much deeper than in the previous deal. After nearly a week of debates early this month, the OPEC+ group decided it would ease the current cuts by 500,000 barrels per day (bpd) from January, so the OPEC+ production cuts would stand at 7.2 million bpd, instead of 7.7 million bpd. Ministers of the OPEC+ pact will be meeting monthly to assess the situation on the market and decide on production policy for the following month. The next ministerial meeting is slated for January 4. Despite renewed fears about oil demand due to the new coronavirus strain, the leader of the non-OPEC group in the OPEC+ pact, Russia, is reportedly still in favor of another 500,000 bpd increase in the alliance’s oil production from February.
Iran welcomes Russian investment in oil sector- Zanganeh – Iranian Oil Minister Bijan Namdar Zanganeh said his country welcomes the Russian companies’ investment making in its oil sector, Shana reported. The minister made the remarks after his meeting with the Russia Deputy Prime Minister Alexander Novak and Energy Minister Nikolai Shulginov in Moscow at Monday night. Saying that the expansion of bilateral relations has been one of the major subject discussed during his meeting with the Russian side, the minister reiterated, “We have a good cooperation with the Russian companies, and this cooperation is going to be increased in the fields of oil and gas and related equipment.” “We recognize Russia as a strategic partner, and this partnership is not something that can be changed in a warm or cold atmosphere in the international arena,” Zanganeh said, adding, “If the Russian companies want to work in Iran, they must become partner with Iranian companies and make the most use of Iranian capacities through negotiation with their Iranian counterparts to achieve the desired results.” The Iranian oil minister continued: “Iran’s ambassador to Russia and his colleagues at the embassy were supposed to follow the agreements. If it were not for the coronavirus pandemic, they could have done it very simply, but in the current situation, we can establish communication by observing the health protocols.”
Oil prices fall amid worries over new coronavirus strain Oil prices slid in early trade on Monday as a fast-spreading new coronavirus strain in the United Kingdom raised concerns that tighter restrictions there and in other European countries could stall a recovery in the global economy and its need for fuel. Brent crude dropped 97 cents, or 1.9%, to $51.29 a barrel by 0103 GMT after rising 1.5% and touching its highest since March last Friday. U.S. West Texas Intermediate (WTI) crude was down 83 cents, or 1.7%, to $48.27 a barrel after also climbing 1.5% on Friday to its highest level since February. Monday’s declines came after oil prices marked seven straight weeks of gains last week as investors focused on the rollout of Covid-19 vaccines. “A new variant of the coronavirus in Britain and tighter travel restrictions in Europe sparked fears over slower economic recovery, prompting investors to unwind long positions,” said Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co. “The oil market has been on a bull trend in the past month or so, ignoring negative factors, amid an optimism that a widening vaccine rollout would revive global growth, but investors’ rosy expectations for 2021 have suddenly vanished,” Saito said. British Prime Minister Boris Johnson will chair an emergency response meeting on Monday to discuss international travel, in particular the flow of freight in and out of Britain as Covid-19 cases surged by a record number for one day. The headache comes as Johnson also seeks to hammer out a final accord on Brexit. The variant, which officials say is up to 70% more transmissible than the original, also prompted concerns about a wider spread, forcing several European countries to begin closing their doors to travelers from the United Kingdom. The negative sentiment also overshadowed a weekend deal among U.S. congressional leaders for a $900 billion coronavirus aid package. Adding to pressure, the oil and gas rig count, an early indicator of future output, rose by eight to 346 in the week to Dec. 18, the highest since May, Baker Hughes said on Friday, as producers keep returning to the wellpad with crude prices trading above $45 a barrel since late November.
Oil tumbles as new virus strain revives demand fears (Reuters) – Oil prices tumbled nearly 3% on Monday as a fast-spreading new coronavirus strain that has shut down much of Britain and led to tighter restrictions in Europe sparked worries about a slower recovery in fuel demand. Brent crude settled down $1.35, or 2.6%, at $50.91 a barrel, while U.S. West Texas Intermediate (WTI) crude for delivery in January ended the session $1.36, or 2.8%, lower at $47.74 ahead of expiry. The more active February WTI contract fell $1.27, or 2.6%, to settle at $47.97 a barrel. Both contracts had lost as much as $3 earlier in the session, their biggest daily drop in six months. The strength in the U.S. dollar also weighed on oil markets. A strong greenback makes dollar-denominated commodities like crude oil more expensive to holders of other currencies. “Reports of a new strain of the coronavirus have weighed on risk sentiment and oil. New mobility restrictions across Europe are also not helping as European oil demand will suffer,” Brent climbed above $50 last week for the first time since March, buoyed by optimism stemming from COVID-19 vaccines. But a new COVID-19 strain, said to be up to 70% more transmissible than the original, has renewed fears about the virus, which has killed about 1.7 million people worldwide. More countries closed their borders to Britain on Monday, causing travel chaos and raising the prospect of UK food shortages. “The new strain of the coronavirus in the UK has shown us that the vaccine optimism holding Brent above $50 per barrel could be deflated in a fleeting moment,” The new virus strain has already been detected in other countries, including Australia, the Netherlands and Italy. Russian Deputy Prime Minister Alexander Novak said the new strain had an impact on oil prices, adding that recovery of global oil markets was happening more slowly than previously expected and could take two to three years. “Travel restrictions over the next several weeks will complicate OPEC+ plans to gradually raise output,” said Edward Moya, senior market analyst at OANDA in New York. “The monthly meetings will be very tense and keep oil prices volatile until the virus spread is under control across both Europe and the U.S.” The negative sentiment largely overshadowed the rollout of a new vaccine in the United States, a deal among U.S. congressional leaders for a $900 billion coronavirus aid package and European regulatory approval on Monday for the use of the COVID-19 vaccine jointly developed by U.S. company Pfizer Inc and its German partner, BioNTech. The approval by Europe’s medicines regulator puts the region on course to start inoculations within a week.
Oil Rally Unravels On New COVID-19 Lockdowns -Oil sentiment turned negative as near-term problems with demand have finally moved to the front burner after weeks of increasingly bullish sentiment. Dozens of countries cut off travel to the UK over fears of a coronavirus mutation. Lockdowns have also grown tighter in multiple places in December. “The nightmare before Christmas scenario has set in, with a combination of the ‘mutant virus’ compounded by Brexit angst,” saidStephen Innes, chief market strategist at Axi. Goldman sees $65 oil. Despite the current challenges, Goldman is bullish on oil, expecting Brent to average $65 a barrel next year.Congress’ The $900 Covid-19 stimulus, combined with the omnibus spending bill, contained an array of energy-related provisions. The bill authorized $35 billion on a variety of renewable technologies over the next five years, and it extended tax credits. The U.S. Chamber of Commerce called it the most significant energy bill since 2007. The legislation also included a phase out of hydrofluorocarbons (HFCs), a highly potent greenhouse gas found in refrigerants. With little fanfare, the U.S. legislated the most significant action on climate change in years. . Despite renewed fears about oil demand due to the new coronavirus strain, the leader of the non-OPEC group in the OPEC+ pact, Russia, is still in favor of another 500,000 bpd increase in the alliance’s oil production from February. The long-distance Trans Mountain Expansion pipeline project, which would add a twin line to carry oil from Alberta to Canada’s Pacific Coast, has run into some trouble in recent weeks. Several safety mishaps, including the death of a worker, have forced the company to suspend work for the rest of the year.. Enbridge confirmed that a contractor working on Line 3 construction in Minnesota died in an accident on Friday. . Oil inventories at the Cushing hub declined to around 60 million barrels recently, heading towards normal levels.
Oil slides 2% as growing Covid case count weighs on demand projections – Oil dropped towards $50 a barrel on Tuesday, adding to losses from the previous session, as a mutant variant of the coronavirus in Britain revived concerns over demand recovery. Detection of the new variant prompted several countries to close their borders to Britain. The BBC cited France’s Europe Minister as saying that the two countries would announce a deal to restart freight by Wednesday. Brent crude fell 83 cents, or 1.63%, to $50.08 per barrel, while West Texas Intermediate (WTI) crude settled 95 cents, or 2%, lower at $47.02 per barrel. Both benchmarks slid nearly 3% on Monday, partly erasing recent gains driven by the rollout of COVID-19 vaccines, seen as key to allowing a return to normal life. The latest rally culminated in Brent hitting $52.48, its highest since March, on Friday. Prices have then come down amid concerns about the virus spreading. Some see potential for prices to fall further. “The holiday malaise has set in on oil,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “Now that we have stimulus done, and we still have concerns about the new strain of virus, people are heading to the sidelines,” he said. Oil gained support from U.S. Congress approval of a $892 billion coronavirus aid package after months of inaction. In focus will be the latest U.S. oil inventory reports, expected to show crude stocks fell by 3.3 million barrels. The American Petroleum Institute’s report is due at 2130 GMT. The Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, are set to boost output by 500,000 barrels per day in January. There is no sign yet of any wavering induced by the price drop. Russian Deputy Prime Minister Alexander Novak on Monday said the rise in output should not result in a glut.
Oil Down Again As Covid Mutation Extends Demand Worries – Ship & Bunker –Despite it not affecting the dissemination of the vaccines or their efficacy, a mutation of the Covid virus in Britain once again caused traders to worry about demand recovery and propel two key benchmarks downward for a second session on Tuesday, albeit less severely. Brent declined 83 cents, or 1.6 percent, at $50.08 per barrel, while West Texas Intermediate fell 95 cents, or 2 percent, to settle at $47.02. Stephen Innes, chief market strategist at Axi, said the oil market had been overbought and “The nightmare before Christmas scenario has set in, with a combination of the ‘mutant virus’ compounded by Brexit angst.” Innes was referring to doubts over whether UK prime minister Boris Johnson can secure a post-Brexit trade deal with the European Union. Reuters followed through with a particularly downbeat story suggesting that hope for the end of the pandemic has been oversold and that the current gasoline refining margin of $9.52 per barrel “is lower than all but two of the last 10 years for this time of year.” The news agency warned that the current price declines could spur hedge funds to unload positions and that June barrels trading nearly 80 cents per barrel higher than December barrels “suggests oversupply could return by the end of next year.” But despite the media hoopla over the Covid mutation (which scientists insist isn’t particularly remarkable and won’t obstruct the herd immunity that the vaccines will achieve by summer of 2021) and much made of other countries closing travel to Britain, good news on Tuesday came in the form of France’s Europe minister saying his country and the UK would announce a deal to restart freight by Wednesday. Also, the U.S. Congress passed the second-biggest economic rescue package in American history as part of a massive $2.3-trillion year-end spending bill, which may support oil prices somewhat until the vaccines produce their desired effect. Still, Tuesday demonstrated the hypersensitivity of the energy community during these Covid crazed times, and Pavel Molchanov, energy research analyst at Raymond James & Associates Inc., also suggested that policy makers have overreacted to the Covid mutation: “This sudden, panicked action by government around the world points to the risk of even more widespread lockdowns and travel restrictions well into the new year.”
Oil prices drop amid curb on air travels -Oil prices drifted lower at the mid-week trading session in London. The plunge in crude oil prices is largely due to a surge in U.S. crude oil stockpiles and the travel restrictions put in place to limit a new mutant strain of the COVID-19 virus, putting pressure on already weak fuel demand. At the time of writing this report, Brent oil futures were down by 1.06% to $49.30 thereby dropping below the $50 mark. West Texas Intermediate futures lost over 1.5% to trade at $46.23. Tuesday’s data from the American Petroleum Institute printed a gain of 2.7 million barrels in U.S. crude oil supply for the week ending Dec. 18. The build was larger than the 3.25-million-barrel draw in forecasts prepared by energy experts and the previous week’s build of 1.973 million barrels. In a note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on recent market fundamentals prevailing in the oil market: “And rubbing salt in the oil market wounds today, oil prices lurched lower, after yet another inventory build that was very much bearish to a consensus to what was penciled in by analysts.Oil traded lower again overnight with worries over the new virus variant and restricted mobility in most of Europe as demand fear resurfaces travel restrictions. And to assume this could be an isolated UK event might be unwise.”The oil cartel is expected to ensure that its crude oil production capacity meets the prevailing energy demand. However, the present situation highlights oil bears having a grip on the black liquid hydrocarbon market, at least for the near term until the COVID-19 caseloads get subdued.
Oil jumps more than 2% after U.S. inventory draw – Oil prices rose more than 2% on Wednesday, boosted by draws in U.S. inventories of crude, gasoline and distillates that lifted investors’ hopes for some return in fuel demand. Brent crude futures gained $1.12, or 2.24%, to settle at $51.20 per barrel, while West Texas Intermediate (WTI) crude futures settled 2.34%, or $1.10, higher at $48.12 per barrel. U.S. crude inventories fell by 562,000 barrels in the week to Dec. 18 to 499.5 million barrels, the Energy Information Administration said on Wednesday. Gasoline stocks fell by a surprise 1.1 million barrels in the week to 237.8 million barrels, the EIA said, while distillate stockpiles fell by 2.3 million barrels in the week to 148.9 million barrels, more than expected. “Overall, what this report reflects is that we’re starting to see continued improvement in demand,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “It reflects that we’re seeing a market that’s getting more in balance.” A falling U.S. dollar also supported prices. A weak greenback makes dollar-denominated commodities such as crude oil cheaper to holders of other currencies. Investors also kept an eye on Nigeria, where supply disruptions helped lift prices. Exxon Mobil Corp issued a force majeure on the Qua Iboe crude oil export terminal last week after a fire hit the facility and injured two workers. A source told Reuters production is expected to resume in early January. The stream was expected to load about 180,000 barrels per day (bpd) in December and 150,000 bpd in January. Still, oil markets remain jittery about the future recovery of oil demand as a new, highly infectious variant of the novel coronavirus has hit Britain, prompting a slew of countries to shut their borders to the country. The number of Americans filing first-time claims for unemployment benefits unexpectedly fell last week, though remained elevated as more businesses faced restrictions and consumers hunkered down amid rising COVID-19 cases.
Oil jumps more than 2% after U.S. inventory draw – Oil prices rose more than 2% on Wednesday, boosted by draws in U.S. inventories of crude, gasoline and distillates that lifted investors’ hopes for some return in fuel demand. Brent crude futures gained $1.12, or 2.24%, to settle at $51.20 per barrel, while West Texas Intermediate (WTI) crude futures settled 2.34%, or $1.10, higher at $48.12 per barrel. U.S. crude inventories fell by 562,000 barrels in the week to Dec. 18 to 499.5 million barrels, the Energy Information Administration said on Wednesday. Gasoline stocks fell by a surprise 1.1 million barrels in the week to 237.8 million barrels, the EIA said, while distillate stockpiles fell by 2.3 million barrels in the week to 148.9 million barrels, more than expected. “Overall, what this report reflects is that we’re starting to see continued improvement in demand,” “It reflects that we’re seeing a market that’s getting more in balance.” A falling U.S. dollar also supported prices. A weak greenback makes dollar-denominated commodities such as crude oil cheaper to holders of other currencies. Investors also kept an eye on Nigeria, where supply disruptions helped lift prices. Exxon Mobil Corp issued a force majeure on the Qua Iboe crude oil export terminal last week after a fire hit the facility and injured two workers. A source told Reuters production is expected to resume in early January. The stream was expected to load about 180,000 barrels per day (bpd) in December and 150,000 bpd in January. Still, oil markets remain jittery about the future recovery of oil demand as a new, highly infectious variant of the novel coronavirus has hit Britain, prompting a slew of countries to shut their borders to the country. The number of Americans filing first-time claims for unemployment benefits unexpectedly fell last week, though remained elevated as more businesses faced restrictions and consumers hunkered down amid rising COVID-19 cases.
Oil moves higher on Brexit deal, U.S. inventory draw – Oil prices moved higher on Thursday as news that Britain and the European Union had signed a post-Brexit trade deal, as well as a draw in U.S. inventory sparked optimism. U.S West Texas Intermediate (WTI) crude gained 11 cents, or 0.23%, to trade at $48.23 per barrel, while Brent crude futures advanced 10 cents, or 0.2%, to $51.30 per barrel. Volumes were light on the last trading day before the Christmas holiday. Both contracts gained more than 2% on Wednesday. By clinching a Brexit trade deal, Britain avoids a chaotic departure from one of the world’s biggest trading blocs, a move many investors warned would have sparked further volatility in financial markets. “While the Brexit deal is supportive, the impact of COVID is the dominant driver in the oil market,” said Andrew Lipow, president of Lipow Oil Associates, in Houston, Texas. “Like everyone else the oil market is waiting for the wider distribution of vaccines to get the public back on the road and in the air.” U.S. stockpiles fell in the most recent week in what some hoped was a signal that demand would recover after a torrid year in which gasoline and jet fuel consumption plummeted as a result of the pandemic. U.S. crude inventories fell by 562,000 barrels in the week to Dec. 18, according to government data, while gasoline and distillate stockpiles also fell. However, new strains of the coronavirus, which appear to spread the disease more quickly, have hit the United Kingdom, Nigeria, and other countries. “Lingering worries over a new variant of the novel coronavirus capped gains,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities. At least four drugmakers expect their COVID-19 vaccines will be effective against the new fast-spreading variant of the virus that is raging in Britain, and are performing tests that should provide confirmation in a few weeks.
Oil prices edge higher, but log first weekly fall in 2 months in Christmas Eve trade –Crude-oil futures settled slightly higher Thursday amid light-trading volumes in the last trading session before Christmas, with investors watching whether a U.S. fiscal package will be signed into law by President Trump. Commodity investors have fretted that a resurgence in the COVID-19 pandemic in the U.S. and Europe in particular will hurt demand for energy without sufficient aid from the government to stem the economic harm from restrictions on consumer and business activity. “We do need to get some kind of stimulus or if the government gets shutdown we could see losses” accelerate, Tariq Zahir, managing member at Tyche Capital Advisors, told MarketWatch, referencing the coronavirus aid package that is rolled into the funding bill for U.S. government that was passed by Congress on Monday but is being held up by President Trump. President Donald Trump has raised the possibility of a veto of a long-sought-after fiscal spending package, after he vetoed a $740.5 billion defense-policy bill on Wednesday and demanded last-minute changes (link) to coronavirus-relief legislation. The president is asking for the increase of direct payments to individuals to $2,000 from $600. However, Republicans in the House defied the president (link)and blocked a bill put forward by Democrats that would have increased those direct payments as part of the coronavirus financial-aid package.Also on Thursday, Britain and the European Union cemented an agreement (link) that would avoid the U.K. leaving the trade bloc without a pact, helping support higher oil prices. On Wednesday, oil markets took a slightly more bullish turn after the Energy Information Administration reported a fall of 562,000 barrels in U.S. crude inventories for the week ended Dec. 18, contrasting with an earlier report from the less closely followed American Petroleum Institute late Tuesday that showed that U.S. crude supplies rose by 2.7 million barrels for the week. Still, the decline in inventories was less than the average of 4.7 million barrels forecast by analysts polled by S&P Global Platts. Meanwhile, Baker Hughes on Wednesday, reporting two days early because of the Christmas holiday, showed that the number of active U.S. rigs drilling for oil rose by 1 to 264 this week, marking a fifth straight weekly rise in oil-rig counts. The total active U.S. rig count, which includes those drilling for natural gas, was also up by 2 to 348. West Texas Intermediate crude for February delivery closed 11 cents, or 0.2%, higher at $48.23 a barrel, after notching a 2.3% gain on Wednesday. February Brent crude finished up 9 cents, or 0.2%, to settle at $51.29 a barrel, after the contract rose 2.2% Wednesday on ICE Futures Europe. For the week, WTI lost 2.1%, while Brent recorded a weekly decline of 1.9%, . Both contracts marked their first weekly loss since the week ended Oct. 30, Dow Jones Market Data show. Natural gas for January delivery settled at $2.5180 per million British thermal units, down 9 cents, on Thursday, or 3.5%, also booking a weekly drop of 6.7%.
US Navy Sails Nuclear Submarine Through Straits of Hormuz – The US Navy nuclear-powered guided-missile submarine USS Georgia transited the Strait of Hormuz Monday accompanied by two additional American warships, the Navy said Monday in a rare public announcement of a nuclear submarine’s movements. “The nuclear-power Ohio-class guided-missile submarine USS Georgia (SSGN 729), along with the guided-missile cruisers USS Port Royal (CG 73) and USS Philippine Sea (CG 58), transited the Strait of Hormuz entering the Arabian Gulf, Dec. 21,” the Navy said in a statement using an alternative name for the Persian Gulf. The vessels’ entrance into the area comes amid heightened tensions with Iran, with Secretary of State Mike Pompeo blaming Iranian backed militias for a rocket attack on the US Embassy compound in Baghdad, on Sunday. Some US officials have expressed concern that Iran may use the anniversary of the killing of General Qasem Solemani to carry out a strike on the US. The US Navy rarely discusses the movement of its submarines, but Monday’s announcement also included details on the vessel’s capabilities, including its “ability to carry up to 154 Tomahawk land-attack cruise missiles.”
Israel’s government collapses, not with a bang but a whimper, triggering fourth election in 2 years – The Israeli government collapsed on Tuesday at midnight (17.00 EST) local time after the country’s parliament failed to meet a deadline for passage of the 2020 and 2021 budgets. Israel will now head to its fourth elections in two years, probably on March 23 next year. Prime Minister Benjamin Netanyahu and his erstwhile coalition partner, Blue and White leader Benny Gantz, sought to blame one another for the collapse of their seven-month-old government. “Blue and White withdrew from the agreements [to modify the original coalition agreement] and dragged us to unnecessary elections during the corona crisis,” said Netanyahu, who on Saturday evening became the first Israeli to receive the Covid-19 vaccine. “We do not want an election and we voted against it … but we are not afraid of elections — because we will win!” Gantz, referencing the corruption charges facing Netanyahu, said: “I regret that the Prime Minister is preoccupied with his trial and not the public interest, and is prepared to drag the entire country into a period of uncertainty, instead of ensuring economic stability and a rehabilitation of the economy.” After three inconclusive elections, and with the first wave of the coronavirus pandemic underway, Gantz agreed to join Netanyahu in April, in what was described as an “emergency” coalition government – even though he’d campaigned on a platform that ruled out sitting with the Prime Minister while he faced corruption charges. Under the deal, the prime ministership would have been rotated between the two party leaders: Netanyahu would serve first, and then give way to Gantz after 18 months. The only loophole in the complicated deal was if lawmakers failed to agree to a budget before Tuesday’s midnight deadline — a failure that has now come to pass. The fate of the government had appeared sealed after the Knesset failed in the early hours of Tuesday to pass a bill at first reading that would have extended the deadline for reaching a budget agreement. Opposition leader Yair Lapid — who campaigned with Gantz at the last election, but withdrew his party’s support when Gantz joined forces with Netanyahu — addressed the Israeli leader in the Knesset on Monday evening: “Mr. Prime Minister, who are you kidding? You don’t care about the mutation [of coronavirus]. You only care about the rotation [of the prime ministership].” Opinion polls suggest Netanyahu’s Likud party is again on track to win the most Knesset seats in the next election. With Blue and White hemorrhaging support, his biggest rivals would appear to come from other right-wing parties, which have been gaining ground on Israel’s longest serving leader.
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