Written by rjs, MarketWatch 666
Here are some more selected news articles for the week ending 09 January 2021. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening or Tueday morning.
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The ‘Revolutionary’ Fight Over California’s Hidden Oil and Gas Wells – At the corner of West Pico Blvd. and South Genesee Ave. in west Los Angeles sits a tan, six-story building. It’s nothing much to look at: It’s set back from the street by a manicured lawn, lined by a row of trees on each side. An American flag flies out front.At a quick glance, it appears no different from any other office building; it looks like it could be home to medical practitioners, accounting firms, or insurance agencies. But sit outside of it for long enough, and you won’t spot many white collar workers coming in or out. Nor would you catch glance of any workers through office windows. That’s because the windows on this building are fake. In fact, the whole building is a facade; its top is open and inside of it is an active oil well site operated by Freeport-McRoran that produces thousands of barrels of oil per year.The Packard Drill Site is one of a number of locations throughout the city where oil and gas wells sit immediately next door to homes and offices,hidden in plain sight from Angelenos. The city is home to an estimated 1,071 urban oil wells that operate in relative secrecy behind tall fences or other clandestine structures, though only a handful are concealed from public viewas elaborately as the Packard Drill Site. Just more than 70% of them sit mere feet from hospitals, daycare centers, schools, or homes. All told, an estimated 580,000 Los Angeles County residents live less than a quarter of a mile from a drill site. Many of these structures are difficult for the average person to recognize if they’re not looking, and Niki Wong, founding member of the Standing Together Against Neighborhood Drilling – Los Angeles (STAND-LA) coalition, said she believes this is intentional on the part of the oil and gas industry.“People really don’t know,” Wong said. “Either people know about it because they’ve lived there long enough, and they can’t afford to leave. There are lots of people I also meet who have lived there for years, but had no idea [something] was a drilling site because of its immaculately manicured lawn.”As the health impacts from oil and gas drilling become clearer, the push to disclose drilling sites, set up wider buffer zones, and ultimately, shut them down has gained urgency. Los Angeles – and California at-large – is one of the epicenters of a growing movement to protect public health from the oil fields lurking in people’s backyards.
Oil and gas dealmaking peaks in Q4 as pandemic spurs consolidation – Enervus (Reuters) – Deal making among oil and gas producers was at its highest for the year in the fourth quarter of 2020 as the pandemic-driven fallout in commodity prices spurred a wave of consolidation between explorers looking to scale up and drive down costs, a report from analytics firm Enverus said. Oil and gas producers made deals worth $27.1 billion in the quarter, up from $21 billion in the third, helped by three multi-billion dollar acquisitions in the prolific Permian basin of West Texas and New Mexico. ConocoPhillips acquired Concho Resources for $13.3 billion, the biggest pure shale acquisition by any company since 2011, topping the list. It was followed by Pioneer Natural Resources’ deal to buy Parsley Energy for $7.6 billion.Diamondback Energy also took over publicly-traded QEP Resources and private equity-backed Guidon Operating for just over $3 billion. Data from Enervus also showed deal flow, or the number of deals announced, was only 140 in 2020. It was the lowest since at least 2006, as a number of buyers focused on preserving cash to pay down debt or returning capital to shareholders. According to Enervus, corporate consolidation, especially among small and mid-size companies that require scale, and non-core asset divestments could be seen in 2021. Companies that went through a Chapter 11 restructuring in 2020 could also emerge as potential merger partners now that debt loads are right-sized, Enervus added.
Exxon, under investor pressure, discloses emissions from burning its fuels (Reuters) – Exxon Mobil Corp, under increasing pressure from investors and climate change activists, reported for the first time the emissions that result when customers use its products such as gasoline and jet fuel.The largest U.S. oil producer said the emissions from its product sales in 2019 were equivalent to 730 million metric tons of carbon dioxide, higher than rival oil majors. The data comes as the company has drawn the ire of an activist investor focused on its climate performance.The so-called Scope 3 data is included in its latest Energy & Carbon Summary released Tuesday, though Exxon downplayed its significance. “Scope 3 emissions do not provide meaningful insight into the Company’s emission-reduction performance,” the report said. (Report: exxonmobil.co/3hL6Tmo) “Even to get to the point of having them disclose this has been like pulling teeth,” said Andrew Grant at think tank Carbon Tracker Initiative. “Quite a lot of the rest of the world has moved on from the disclosure to ‘What are we going to do about this?’”Most major oil companies already report Scope 3 emissions and some have reduction targets, including Occidental Petroleum, which in November set a goal to offset the impact of the use of its oil and gas by 2050.Exxon said it made the disclosure due to investor interest.
Last-minute White House decision opens more Arctic land to oil leasing (Reuters) – U.S. President Donald Trump’s administration announced on Monday that it has made final its plan to open up vast areas of once-protected Arctic Alaska territory to oil development. The U.S. Bureau of Land Management released its plan for the National Petroleum Reserve in Alaska (NPR-A), a 23 million-acre swath of land on the western North Slope. The record, signed by Interior Secretary David Bernhardt on Dec. 21, allows lease sales to proceed under relaxed standards. The decision is one of a number of pro-drilling actions taken by the Trump administration in its final days. On Wednesday, the bureau is scheduled to auction off drilling rights in the Arctic National Wildlife Refuge on the eastern North Slope. The plan allows oil development on about 80 percent of the reserve. Under Obama-era rules, about half of the reserve was available for leasing, with the other half protected for environmental and indigenous reasons. The Trump plan allows leasing in vast Teshekpuk Lake, the largest lake in Arctic Alaska and a haven for migrating birds and wildlife. Teshekpuk Lake has been off-limits to leasing since the Reagan administration. “We are expanding access to our nation’s great energy potential and providing for economic opportunities and job creation for both Alaska Natives and our nation,” said Casey Hammond, principal deputy secretary for the Department of the Interior. It is unclear whether making this acreage available will boost Alaskan oil production, which peaked more than 30 years ago at 2 million barrels per day. The state now produces roughly 500,000 bpd of crude. The NPR-A decision got a swift response from environmentalists who have already sued to overturn the plan. “On its way out the door, this administration is sticking to its blunt and destructive approach to management solely for oil development,” said David Krause, assistant Alaska director for The Wilderness Society, in a statement.
‘Biggest Threat Yet’ to Arctic Refuge as Trump Readies Last-Minute Lease Sale –“The Arctic National Wildlife Refuge faces its biggest threat yet.” That’s the warning issued by the National Audubon Society on Tuesday – a day before the Trump administration is set to sell oil and gas leasing rights in the refuge’s coastal plain, a biodiversity hotspot of critical importance to the Gwich’in people and dubbed America’s Serengeti. Bids were submitted by the end of 2020. It’s not clear, however, which oil or gas companies, if any, sought leases.The Bureau of Land Management has “received interest” in leases, the Anchorage Daily News reported. That interest may have come solely from the state-owned Alaska Industrial Development and Export Authority, which voted unanimously last month to spend as much as $20 million on the leases. “It’s a way for the state to make sure the land is set aside for oil development in case no one else bids on the leases,” as Alaska Publicput it. Wednesday’s virtual lease sale, according to NPR, represents: a major moment in a 40-year fight over whether to develop the northernmost slice of the refuge’s coastal plain, home to migrating caribou, birds, and polar bears. [President-elect Joe] Biden, as well as his pick for Interior Secretary – Rep. Deb Haaland – oppose drilling in the refuge. The hand-off of drilling rights to the highest bidders could make it more difficult to reverse course. That makes a pending decision from a federal judge in Alaska, which could come Tuesday, even more crucial to foil the lease sales and seismic activity related to fossil fuel plans. U.S. District Court Judge Sharon Gleason in Anchorage on Monday heard oral arguments in the case, brought forth by Audubon and other conservation groups, as ADN reported. According to the outlet, “Gleason said she’d try to issue a decision by ‘close of business’ on Tuesday, on the eve of the live-streamed lease sale, set for 10 a.m. Wednesday.” Andy McGlashen, associate editor of Audubon Magazine, put this week’s events in the broader context of the climate crisis. In a Monday post, he wrote: The coastal plain between the Brooks Range and the Beaufort Sea is a wild expanse of tundra that each year hosts millions of migratory birds from six continents. It’s where the Porcupine caribou herd, one of the continent’s largest, migrates each spring to birth calves. Polar bears den in the snow and ice along the coast and river edges, while muskoxen, wolves, and other wildlife roam the rolling plain. It’s also, like the rest of the Arctic, a region changing fast as the planet warms due to fossil-fuel combustion. “We shouldn’t be exploring drilling anywhere,” says Martha Raynolds, an arctic plant ecologist at the University of Alaska Fairbanks (UAF). “And the last place on Earth that the U.S. should be exploring drilling is the coastal plain of the Arctic Refuge.”
Alaska court hears challenge to Arctic refuge oil leases – Attorneys for conservation groups asked a U.S. judge Monday to halt the issuance of oil and gas leases in the Arctic National Wildlife Refuge ahead of a planned sale this week. U.S. District Court Judge Sharon Gleason said she would try to issue a decision by late Tuesday, the day before the sale that would offer tracts covering much of the refuge’s coastal plain. The U.S. Bureau of Land Management has said the sale is in keeping with a 2017 law that called for at least two lease sales to be held within 10 years, a law hailed by Alaska political leaders, including the state’s Republican congressional delegation. Critics, however, say the Trump administration is trying to rush through the process in its waning days. President-elect Joe Biden has opposed drilling in the region. Gleason is weighing requests from Indigenous and other conservation groups and tribal governments that, like the case she heard Monday involving the National Audubon Society and three other groups, seek to block the issuance of leases and seismic exploration activities pending decisions on underlying lawsuits challenging the adequacy of reviews on which they are based. Kate Glover, an attorney for the plaintiffs in Monday’s case, said scars on the landscape from seismic work, impacts on research trips and overflights were among the potential harms that could be faced if an injunction were not granted. Paul Turcke, an attorney for the federal government, said any potential harms to the plaintiffs were hypothetical and speculative. Tyson Kade, an attorney for intervenors including the North Slope Borough and Native Village of Kaktovik, which support the land agency’s position, argued his clients could face economic impacts, such as loss of jobs and revenue, if lease-related activities were halted. In addition to the planned lease sale in the refuge’s coastal plain, the Trump administration also has moved to open an additional 10,937 square miles (28,326 square kilometers) for oil and gas development in the National Petroleum Reserve-Alaska. That plan, announced Monday, was criticized by conservation groups as rushed and lacking protections, including for a productive wetland area. The Bureau of Land Management countered that its plan includes safeguards for wildlife and other resources.
U.S. judge denies effort to stop drilling auction in Arctic refuge (Reuters) – A federal judge in Alaska ruled late on Tuesday that the Trump administration’s planned auction of oil drilling leases in the Arctic National Wildlife Refuge (ANWR) could proceed as planned on Wednesday morning. The order by U.S. District Judge Sharon Gleason comes after environmental groups and the indigenous people of northeastern Alaska sought a preliminary injunction to block the sale in the ecologically sensitive area. The sale is scheduled for Jan. 6, but the Bureau of Land Management (BLM) started accepting bids at the end of last month. The ruling is a victory for the President Donald Trump’s plan to deliver on an important pillar of his “energy dominance” agenda just two weeks before Democrat Joe Biden, who opposes drilling in ANWR, takes office. Four lawsuits have been filed since August challenging the plans to auction drilling rights in the potentially energy-rich coastal plain of ANWR along the Beaufort Sea. In her order, Gleason said the green and native groups had failed to establish that they would suffer irreparable harm as a result of the sale. If BLM approves “ground-disturbing activities” in ANWR before the groups’ original lawsuits are resolved, Gleason wrote, the groups could again seek a court order to block those activities. “Today’s ruling is disappointing but does nothing to change the strength of our lawsuit or our resolve,” said Bernadette Demientieff, executive director of the Gwich’in Steering Committee, a group that represents some of the indigenous people of northeastern Alaska that sued to block the auction.
Judge allows oil, gas lease sales in Alaska’s Arctic refuge (AP) – A U.S. judge on Tuesday refused to halt an oil and gas lease sale for Alaska’s Arctic National Wildlife Refuge that was pushed by the Trump administration in its final days. U.S. District Court Judge Sharon Gleason’s decision came after conservationists and Indigenous groups argued that the lease sale scheduled for Wednesday and a survey program were based on inadequate environmental reviews or outdated information. The ruling involves a region valued by conservationists for its beauty and wildlife and seen as sacred to some Indigenous people but viewed by others as a way to boost oil production and create jobs. ADVERTISEMENT The judge was asked to halt the sale until underlying lawsuits are resolved. But in her ruling, Gleason said the groups had not shown a likelihood of harm necessary for her to grant an injunction now and found the government had not taken final action on a survey proposal. She left open the possibility for the groups to seek a future injunction if the U.S. Bureau of Land Management approves “ground-disturbing activities” in the refuge’s coastal plain before she rules in the underlying cases. Organizations that sought to block the issuance of leases expressed disappointment with Gleason’s ruling but vowed to keep fighting. “This administration steamrolled through a disrespectful, harmful, illegal leasing plan, and we plan to stop it,” said Bernadette Demientieff, executive director of the Gwich’in Steering Committee, which was formed by Indigenous leaders who oppose drilling in the refuge. “While that didn’t happen today, that day will come.” Nicholas Goodwin, a spokesperson for the U.S. Interior Department, called the ruling “expected and unsurprising. The Department of the Interior looks forward to proceeding with appropriate dispatch to achieve the clear direction it received from Congress in 2017.”
Biden Is Urged to Ban ANWR Drilling After Court Approves Auction of Fossil Fuel Leases – President-elect Joe Biden is facing renewed pressure to deliver on his promise of a bold climate agenda after a federal judge ruled that the Trump administration could move forward with a Wednesday auction of fossil fuel drilling leases for federally protected lands in Alaska.After decades of national debate over oil and gas development in the coastal plain of the Arctic National Wildlife Refuge (ANWR), Republicans in Congress opened up the region to drilling with a provision in the so-called “tax scam” that President Donald Trump signed in 2017.Late Tuesday, U.S. District Court Judge Sharon Gleason in Anchorage declined to issue a preliminary injunction to block the auction. The request came from environmental groups and Indigenous people who are opposed to drilling in ANWR, which is home to over 280 species.In a statement Wednesday, Mitch Jones, policy director at the advocacy group Food & Water Watch, urged Biden to prevent fossil fuel development in the refuge – and beyond – when he takes office in two weeks. The president-elect has previously said he “totally” opposes drilling in the ecologically sensitive region.”Trump rushing through these lease sales as a final handout to his cronies in the oil and gas industry is outrageous, if not surprising,” Jones declared. “Trump’s consistent, willful ignorance of the realities of climate change has pushed our planet towards decades of increasing climate chaos.” “President-elect Biden can reverse these disastrous oil and gas industry plans by keeping his promise to ban fossil fuel extraction – including fracking – on our public lands and waters,” he added. “This is a step he can, and must, take upon taking office.” Jones’ call for Biden to intervene to protect ANWR’s coastal plain came after environmental and Indigenous leaders expressed disappointment with Gleason’s decision not to block the auction while also emphasizing that her ruling doesn’t mark the end of their fight against drilling rights in the refuge. Four lawsuits have been filed since August challenging the lease plans, according to Reuters. The National Audubon Society and other groups had argued that the auction shouldn’t go forward until the broader challenge to the drilling is resolved.The Anchorage Daily News reports that Erik Grafe, an Earthjustice attorney representing the Audubon Society, said the case “is by no means over.” “The court concluded only that for now there is no harm that justifies an injunction. It also recognized that such an action could come very soon with issuance of seismic permits,” he said. “We will continue to press our case that the agency approved the program unlawfully and that its decision should be overturned.”
Oil company that hired Interior official won’t seek ANWR acreage –An oil and gas company that hired a top Interior Department official who oversaw the push to open the Arctic National Wildlife Refuge to drilling says it has no plans to bid on acreage there when the Trump administration holds the first-ever lease sale in the refuge on Wednesday. That company, Oil Search Ltd., which has become one of the dominant players in Alaska’s North Slope, hired DOI’s assistant secretary for land and minerals management Joe Balash in September 2019. According to documents obtained by POLITICO, Balash was discussing his potential employment with the company beginning in mid-May of 2019, more than three months before he left the department. During that time DOI was wrapping up the environmental impact statement for the refuge and finalizing a new management plan for the National Petroleum Reserve, where Oil Search has a small number of existing lease holdings. Balash was intimately involved in both projects while working for the Trump administration. On May 15, 2019, Balash notified the department that he was negotiating a job with Oil Search and he signed a statement of recusal barring him from working on “particular matters” that would have a “direct and predictable effect on the financial interest” of his future employer. But more than a month passed before he sought more specific guidance on his involvement in several North Slope development projects including the NPRA, which he said would “require some additional analysis by your office.” On the ANWR lease sale Balash said it was “unknown who will bid at the sale or whether Oil Search might be interested in participating.”
Arctic refuge lease sale goes bust, as major oil companies skip out – Alaska Public Media – One of the Trump administration’s biggest energy initiatives suffered a stunning setback Wednesday, as a decades-long push to drill for oil in Alaska’s Arctic National Wildlife Refuge ended with a lease sale that attracted just three bidders – one of which was the state of Alaska itself. Alaska’s state-owned economic development corporation was the only bidder on nine of the tracts offered for lease in the northernmost swath of the refuge, known as the coastal plain. Two small companies also each picked up a single parcel. Half of the offered leases drew no bids at all. “They held the lease in ANWR – that is history-making. That will be recorded in the history books and people will talk about it,” said Larry Persily, a longtime observer of the oil and gas industry in Alaska. “But no one showed up.” The sale generated a tiny fraction of the revenue it was projected to raise. It was a striking moment in a 40-year fight over drilling in the coastal plain, an area that’s home to migrating caribou, polar bears, birds and other wildlife. It also potentially sits atop billions of barrels of oil, according to federal estimates. But amid a global recession, low oil prices and an aggressive pressure campaign against leasing by drilling opponents, oil analysts have for months been predicting little interest in the sale, and their forecasts were confirmed Wednesday.
China’s Sinopec builds first phase of new shale gas field in Sichuan (Reuters) – China’s Sinopec Corp said on Wednesday it had completed building the first phase of a new shale gas field, Weirong, in southwestern Sichuan province with an annual production capacity of 1 billion cubic meters of natural gas. Weirong, located in Neijiang and Zigong cities, is the state energy giant’s second major shale gas development after Fuling, which is also located in the same Sichuan basin. With an average well depth of 3,750 meters (2.33 miles)beneath earth’s surface, Sinopec has tapped proven reserves of 124.7 bcm at the deep shale gas field. Under the first phase of development that started around late 2019, Sinopec said it had drilled 56 wells attached to eight drilling platforms. Sinopec, Asia’s biggest oil refiner, will proceed to Phase-II development that will lift Weirong’s annual output capacity to 3 bcm in 2022, or sufficient to cover 16 million households’ annual consumption of the fuel. Currently, Weirong is pumping 3.5 million cubic meters of gas a day. China’s national energy producers are ramping up natural gas supplies in recent weeks of both domestic productions and imports to meet a demand surge amid a colder-than-usual winter and robust post-pandemic manufacturing activity.
Hedge funds end 2020 with lopsided oil position: Kemp (Reuters) -Hedge funds ended 2020 with the most bullish position in oil for 11 months, anticipating coronavirus vaccines would allow consumption to return to normal by the end of 2021. Along with other money managers, hedge funds had amassed a net long position of 741 million barrels in the six most important petroleum futures and options contracts by Dec. 29. Positions were still down from 950 million barrels at the start of 2020, but had recovered from a low of just 280 million in March, when the first wave of the epidemic was raging and many economies were going into lockdown. Bullish long positions outnumbered bearish short ones by a ratio of 5.30:1, the highest ratio since January 2020, and up from a low of 1.92:1 as recently as the start of November. In the last six years, large concentrations of hedge fund long or short positions and extreme ratios have usually preceded a reversal in the price trend. Measured in barrels and ratios, fund positions ended the year between the 73rd and 75th percentiles for all weeks since the start of 2013 (tmsnrt.rs/3nfJmet). There is still scope for the fund community to add to its bullish positioning, but the balance of risks has started to shift, with an increased threat of long liquidation or new short selling causing a temporary decline in prices. Positions appear most stretched in U.S. gasoline (73rd-75th percentile), NYMEX and ICE WTI (65-70th) and Brent (57th-74th), but less so in U.S. diesel (56th-58th) and European gasoil (59-68th). Perhaps sensing the changing balance, portfolio managers have gradually reduced the rate of oil buying in recent weeks. Funds have purchased a total of 385 million barrels over the most recent eight weeks, but the most recent week saw purchases of just 9 million barrels, the smallest addition so far. The rate of buying has been progressively slowing for the last five weeks, according to position records published by ICE Futures Europe and the U.S. Commodity Futures Trading Commission. But the risks are concentrated on the downside, from a short-term resurgence of the virus, an unexpectedly slow deployment of vaccines, a lingering business cycle downturn, or a premature increase in OPEC+ output.
Oil prices expected to struggle despite Saudi cuts, but Goldman is more bullish than most – Oil markets are in for more struggles this year despite a more than 5% boost to prices this week on news from OPEC+. The oil producer group, led by Saudi Arabia and Russia, announced that members would keep production largely steady rather than raising it, with Riyadh later revealing voluntary cuts of an extra 1 million barrels per day from its January’s production levels in February and March. Brent crude futures traded at $53.81 a barrel on Wednesday afternoon, following a 5% jump on Tuesday that brought the commodity to an 11-month high. Could crude return to its pre-pandemic levels of more than $60 a barrel in 2021? Not if the outlooks of several forecasters are correct, which throw cold water on bullish hopes for a full demand recovery as Covid-19 vaccines are rolled out in countries across the world. A Reuters poll of analysts in late December showed a broad expectation that Brent will average “a smidge above $50/bbl this year,” a note from PVM Oil Associates read Wednesday. “At the heart of this gloomy forecast is the key downside risk for oil prices in 2021: will the new Covid-19 strain that has triggered a flurry of fresh lockdown measures weigh on economic activity and travel demand?” In addition to pandemic-induced uncertainty, with many countries seeing increased infections and some seeing fresh lockdowns over the new and highly transmissible Covid variant, the price of crude will also depend on Saudi Arabia and Russia’s willingness to remain loyal to OPEC+ supply cut agreements – disputes over which have seen united fronts collapse in the past. Despite sending prices upward, bearish forecasters chose to view the surprise Saudi production cuts for what they were: an indicator of still weakening demand. OPEC+ in December already delayed its plan to increase production by 2 million barrels per day for January. Caution remains the overwhelming sentiment among members, with Saudi energy minister Abdulaziz bin Salman highlighting the need for “prudence.” As noted by analytics firm Kpler: “At 3,637 mb (million barrels), global oil inventories are still 220 mb higher y/y, despite having fallen 126 mb from their highs in July 2020.” Goldman Sachs also sees anemic demand in the short term. But its longer-term outlook for the rest of the year is much brighter. “Despite this bullish supply agreement (from OPEC), we believe Saudi’s decision likely reflects signs of weakening demand as lockdowns return, with our updated 1Q21 balance actually weaker than previously,” Goldman’s energy team wrote in an analysis published Wednesday. But, they added: “Saudi’s action and the prospect for a tight market in 2Q21, as the rebound in demand stresses the ability to restart production, will likely support prices in coming weeks, leading us to reiterate our bullish oil view.” The bank sees oil at a robust $65 per barrel by the end of the year, recommending a long December 2021 Brent trade. “Our own year-end Brent forecast of $65/bbl is still well above market forwards and consensus expectations,” the bank noted.
Oil Market Seen Swinging from Oversupply to Deficit in 2021 on Vaccine Rollout, Boosting WTI Price – The new year could see the global oil market swing from its current state of oversupply to some of the highest monthly supply deficits in years as the rollout of Covid-19 vaccines propels a recovery in demand, according to experts. Raymond James & Associates Inc. analysts said Monday they expect “hefty” crude oil inventory draws in both 2021 and 2022, “which, by definition, is bullish for prices.” The analyst team led by John Freeman and Pavel Polchanov said they expect West Texas Intermediate (WTI) crude to close 2021 at $65/bbl, “Which implies an average of $57 for the year (20% above the futures strip), followed by an average of $65 in 2022 (40% above the strip), with Brent at a modest premium.” They cautioned, however, that a return to pre-pandemic global oil demand above 100 million b/d will depend on widespread vaccination against Covid-19. Since vaccine distribution is in the very early stages, it remains impossible to put a precise timetable on the end of lockdowns, the Raymond James team said. “Broadly speaking, we anticipate that, after the tough wintertime period, demand recovery should resume this spring, with the second half of the year being markedly stronger than the first half,” researchers said. “While some segments of the oil market (notably aviation) are unlikely to fully recover until 2023 at the earliest, we think that overall demand will reach 100 million b/d around the middle of 2022.” The Raymond James team also noted that the Organization of the Petroleum Exporting Countries and its allies, aka OPEC-plus, can be expected to gradually unwind pandemic-induced production cuts as demand recovers.
Oil slides with U.S. stocks as OPEC+ delays output decision — Oil prices slipped from multi-month highs to end more than 1% lower on the first trading day of the year after OPEC+ failed to decide on Monday whether to increase output in February and agreed to meet again on Tuesday. Brent futures settled 71 cents, or 1.4%, lower at $51.09 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 90 cents, or 1.9%, to settle at $47.62. Earlier in the session, WTI hit its highest since February and Brent its highest since March. The premium of Brent over WTI reached its highest since May. The S&P 500 and the Dow also fell from record levels as President Donald Trump travels to Georgia in a bid to keep the U.S. Senate in the hands of his Republican Party ahead of Tuesday’s run-off election in the battleground state. The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, will resume talks on Tuesday after reaching a deadlock over February oil output levels as Saudi Arabia argued against pumping more due to new coronavirus lockdowns while Russia led calls for higher production citing recovering demand. “Anything can happen, but Russia may not want to lose face and capitulate so easily. It looks like we may be in for some lengthy negotiations,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy. In Europe, England was set for a new lockdown to try to slow a surge in COVID-19 cases that threatens to overwhelm parts of the health system, while Germany was weighing whether to allow a delay in administering a second dose of the COVID-19 vaccine to make scarce supplies go further. In the Middle East, meanwhile, the news was mixed. Oil prices gained some support earlier in the day after Iran’s Revolutionary Guards seized a South Korean-flagged tanker in Gulf waters and Iran resumed uranium enrichment at an underground nuclear facility. But later in the day Kuwait’s foreign minister said Saudi Arabia will reopen its airspace and land and sea border to Qatar as of Monday as part of a deal seeking to resolve a political dispute that led Riyadh and its allies to impose a boycott on Qatar.
Oil prices slip before OPEC+ resumes meeting on Feb output levels – Oil prices jump as OPEC meets, Iran tensions – Oil prices inched up on Tuesday as tension around Iran’s seizure of a South Korean vessel simmered and after it emerged that the OPEC+ group is studying a possible production cut in February, according to a document. Brent crude futures for March jumped $1.68, or 3.3%, to $52.81 per barrel, while U.S. West Texas Intermediate crude for February was up $1.85, or 3.88%, at $49.47 per barrel. Both contracts fell more than 1% on Monday after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, failed to agree on changes to February’s oil output. Saudi Arabia argued against pumping more because of new lockdowns while Russia led calls for higher production, citing recovering demand. According to an OPEC document dated Jan. 4, the group is studying a 500,000 barrel per day output cut for February, and three other scenarios which include stable production or an increase of 500,000 bpd. OPEC+ are due to resume talks at 1430 GMT. Tensions around OPEC member Iran seizure of a South Korean vessel continued, with Iran saying the Asian country owed it $7 billion. For a Factbox on the importance of Gulf waters on oil shipping click. Sending bearish signals, England went into a new lockdown on Monday as its COVID-19 cases surged. “Near-term demand growth is stalling due to the resurgence of COVID-19 across North America, Europe and the Middle East and is likely set for deeper declines over the next several months,” Fitch Solutions said, adding that Brent is expected to average $53 a barrel this year.
Oil prices jump 5% on OPEC+ output talks, Iran tension (Reuters) -Oil prices climbed nearly 5% on Tuesday after news that Saudi Arabia will make voluntary cuts to its oil output, while international political tension simmered over Iran’s seizure of a South Korean vessel. Brent crude futures rose $2.51, or 4.9%, to settle at $53.60 a barrel. U.S. West Texas Intermediate crude ended $2.31, or 4.9%, higher at $49.93 a barrel. Saudi Arabia will make additional, voluntary oil output cuts of 1 million barrels per day (bpd) in February and March. The cuts are part of a deal to persuade most producers from the group consisting of the Organization of the Petroleum Exporting Countries and allies to hold output steady amid concerns that new coronavirus lockdowns will hit demand.“Saudi Arabia put the cherry on the cake and if there is one way to describe what its voluntary cut means for the market, ‘happy hour’ is a pretty fitting term,” said Bjornar Tonhaugen, Rystad Energy’s head of oil markets. OPEC+ resumed talks on Tuesday after reaching a deadlock over February oil output levels this week. An internal OPEC+ document dated Monday and seen by Reuters highlighted bearish risks and stressed that “the reimplementation of COVID-19 containment measures across continents, including full lockdowns, are dampening the oil demand rebound in 2021″.
Oil jumps, breaks above $50 for the first time since February as Saudi Arabia announces voluntary cuts – U.S. benchmark West Texas Intermediate crude futures broke above $50 on Tuesday for the first time since February, boosted by a surprise announcement by Saudi Arabia of a 1 million barrel per day production cut beginning in February and extending through March. The move higher marks a steady comeback for oil prices after the coronavirus pandemic and subsequent demand loss sent futures prices tumbling, and briefly into negative territory last April. WTI settled 4.85%, or $2.31, higher at $49.93 per barrel, after earlier jumping more than 5% to trade as high as $50.20 per barrel. International benchmark Brent crude futures gained $2.51, or 4.9%, to settle at $53.60 per barrel. Oil prices also rose one day after Iran claimed it detained an oil tanker “due to repeated violations of marine environmental laws.” On Tuesday, OPEC and its oil-producing allies, known as OPEC+, agreed to hold output largely steady in February. Saudi Arabia’s surprise voluntary cut – announced in a press conference following the meeting – will more than offset production increases from Russia and Kazakhstan. The two nations will add a combined 75,000 barrels per day to the market in both February and March. It was the group’s second day of discussions, after talks ended in stalemate on Monday. “WTI oil prices have climbed above $50, for a time, today, on an increasingly likely surprise move by OPEC+ to cut production next month, rather than raising it,” noted Again Capital’s John Kilduff. “The renewed lockdowns in the U.K. Europe has spooked the group,” he added. Still, oil prices remain below pre-pandemic levels. WTI closed out 2020 around $48.50 per barrel, registering a 20.54% loss for the year. At the beginning of 2020, WTI traded above $63 per barrel. OPEC and its allies have been one of the driving forces behind price swings. At its December meeting, the group agreed to increase production by 500,000 barrels per day beginning in January after days of tense discussions. The group agreed to meet on a monthly basis going forward in order to set the next month’s output level. Beginning on Jan. 1, total production cuts stood at 7.2 million barrels per day. Rebecca Babin, senior energy trader at CIBC Private Wealth, noted that while the market views an extension of the cuts as positive, the fact that the group is failing to reach a consensus on the path forward cannot be discounted. This is especially true with Saudi Arabia exercising voluntary cuts. “I view this type of an ‘agreement’ as an indication that it is getting harder to get OPEC+ members in line and keep production constrained while demand looks threatened by ongoing lockdowns and slow vaccination roll out. WTI traded briefly above $50 following the headlines, but I suspect a more negative interpretation of today’s meeting may cause crude to fail at $50,” Babin said.
Oil Rally Unaffected By Major Product Builds – The American Petroleum Institute (API) reported on Tuesday a draw in crude oil inventories of 1.663 million barrels for the week ending January 1.Analysts had predicted an inventory draw of 1.271 million barrels for the week.In the previous week, the API reported a draw in oil inventories of 4.785-million barrels, after analysts had predicted a draw of 2.100 million barrels.Both Brent and WTI were up on Tuesday afternoon before the data release after the Ministerial Meeting for OPEC+ dished out a production decrease of nearly a million barrels for February and March, courtesy mostly of Saudi Arabia’s surprise and voluntary 1 million barrel per day cut, more than offsetting production increases that were granted to Russia and for February and March. New lockdowns – and lockdown extensions – continue to cap any gains, with the UK announced a new strict national lockdown this week that will last for six weeks. Scotland will also enter into a strict lockdown at midnight tonight. Italy announced on Tuesday that it would extend its lockdowns through January 15, while Germany announced it would extend its lockdowns until the end of the month. The lockdowns continue to take a toll on oil demand.An hour before Tuesday’s data release, WTI had risen by $2.32 (+4.87%) to $49.94, up $2 per barrel on the week. The Brent crude benchmark had risen on the day $2.53 at that time (+4.95%) to $53.62 – up roughly $2.30 per barrel on the week.U.S. oil production held steady at 11.0 million bpd for the week ending December 25, according to the Energy Information Administration – 2.1 million bpd lower than the all-time high of 13.1 million bpd reached in March.The API reported a large build in gasoline inventories of 5.473 million barrels for the week ending January 1 – compared to the previous week’s 718,000-barrel draw. Analysts had expected a 1.662-million-barrel build for the week.Distillate inventories also saw a massive increase of 7.136 million barrels for the week, compared to last week’s 1.877-million-barrel decrease, while Cushing inventories rose this week by 1.003 million barrels. At 4:32 p.m. EDT, the WTI benchmark was trading at $49.95, while Brent crudewas trading at $53.63.
WTI Holds Above $50 After Huge Product Builds Offset Big Crude Draw — Oil prices have held on to their ‘Saudi Shocker’ gains overnight despite the surprising surge in product stocks reported by API. WTI is holding the $50 Maginot Line as markets continue to digest yesterday’s big move by The Kingdom to paper over cracks in the OPEC+ coalition: “We are the guardian of this industry,” Saudi Energy Minister Prince Abdulaziz bin Salman said as he gleefully announced the cut on Tuesday. “This gesture of goodwill made by our leadership, in the name of His Royal Highness the Crown Prince Mohammad bin Salman.” For now, all eyes are back on the current inventory status. API:
- Crude -1,663mm (-1.2mm exp)
- Cushing +1.003mm
- Gasoline +5.473mm (+1.4mm exp)
- Distillates +7.136mm (+2.2mm exp)
DOE
- Crude -8.01mm (-1.2mm exp) – biggest draw since August 2020
- Cushing +792k
- Gasoline +4.519mm (+1.4mm exp) – biggest build since April 2020
- Distillates +6.39mm (+2.2mm exp) – biggest build sine May 2020
Crude stocks tumbled more than expected in the last week of 2020 but product inventories surged…
Oil hits 11-month high after Saudi Arabia pledges voluntary output cut – Oil prices rose on Wednesday to their highest since February 2020 after Saudi Arabia agreed to reduce output more than expected in a meeting with allied producers, while industry figures showed U.S. crude stockpiles were down last week. Brent crude rose as much as nearly 1% to $54.09 a barrel, the highest since Feb. 26, 2020. It was at $53.87 a barrel at 0536 GMT after jumping 4.9% on Tuesday. U.S. West Texas Intermediate (WTI) futures reached $50.24 a barrel, also the highest since Feb. 26, before slipping to $50. The contract on Tuesday closed up 4.6%. Saudi Arabia, the world’s biggest oil exporter, agreed on Tuesday to make additional, voluntary oil output cuts of 1 million barrels per day (bpd) in February and March, after a meeting with the Organization of the Petroleum Exporting Countries (OPEC) and other major producers that form the group known as OPEC+. The reductions agreed by Saudi Arabia were included in a deal to persuade other producers in the OPEC+ group to hold output steady. With coronavirus infections spreading rapidly in many parts of the world producers are trying to support prices as demand takes a hit from new lockdowns being put in place. “Despite this bullish supply agreement, we believe Saudi’s decision likely reflects signs of weakening demand as lockdowns return,” Goldman Sachs said in a note, although the investment bank maintained its year-end 2021 forecast for Brent of $65 a barrel. OPEC member Iran’s seizure of a South Korean tanker in the Gulf on Monday also continued to support prices. Tehran denied it was holding the ship and its crew hostage after seizing the tanker while pushing for Seoul to release $7 billion of funds frozen under U.S. sanctions. Meanwhile U.S. crude oil inventories dropped by 1.7 million barrels in the week to Jan. 1 to 491.3 million barrels, data from industry group the American Petroleum Institute showed late on Tuesday.
Oil steady after U.S. Capitol drama; tighter supplies in focus (Reuters) – Oil prices were steady on Thursday after supporters of President Donald Trump stormed the U.S. Capitol, with investors focusing on the likelihood of tighter supplies after Saudi Arabia unilaterally agreed to cut output. Brent crude was up 8 cents at $54.38 a barrel by 0125 GMT, after gaining 1.3% overnight. U.S. West Texas Intermediate (WTI) gained 11 cents to $50.74, having slipped earlier in the Asian session. The contract rose 1.4% on Wednesday. Saudi Arabia, the world’s biggest oil exporter, said it would voluntarily cut one million barrels per day (bpd) of output in February and March, after OPEC+, which groups the Organization of the Petroleum Exporting Countries and other producers, including Russia, met earlier this week. “WTI crude seems poised to rise higher as the Biden administration will clamp down on U.S. crude production, the Saudis tentatively alleviated oversupply concerns with their 1-million bpd cut present, and as the dollar’s days seem numbered,” said Edward Moya, senior market analyst at OANDA. A lower dollar makes oil cheaper because the commodity is mostly traded using the greenback. U.S. crude stocks dropped and fuel inventories rose, the Energy Information Administration said on Wednesday. Crude inventories were down by 8 million barrels in the week to Jan. 1 to 485.5 million barrels, against a Reuters poll showing analysts expected a 2.1 million-barrel decline. The drop in crude stocks is a typical year-end occurrence as energy companies take oil out of storage to avoid tax bills. Trump supporters swarmed the U.S. Capitol on Wednesday, sending it into lockdown, as Vice President Mike Pence refused a demand from the president to cancel his loss to Democrat Joe Biden before police declared the situation was secure and the certification of the election result resumed.
Oil rises as supply constraints retain focus amid U.S. Capitol drama – Oil prices rose on Thursday as Saudi Arabia, the world’s biggest exporter, unilaterally agreed to cut output over the next two months and as U.S. crude stockpiles fell. It was not immediately clear how the storming of the U.S. Capitol by supporters of President Donald Trump would impact oil markets, although some analysts believe President-elect Joe Biden’s administration will clamp down on U.S. oil production. Brent crude was up 22 cents, or 0.41%, at $54.52 per barrel, after gaining 1.3% overnight. U.S. West Texas Intermediate (WTI) gained 23 cents, or 0.45%, to trade at $50.86 per barrel. The contract rose 1.4% on Wednesday. Saudi Arabia, the world’s biggest oil exporter, said it would voluntarily cut 1 million barrels per day (bpd) of output in February and March, after OPEC+, which groups the Organization of the Petroleum Exporting Countries and other producers, including Russia, met earlier this week. “WTI crude seems poised to rise higher as the Biden administration will clamp down on U.S. crude production, the Saudis tentatively alleviated oversupply concerns with their 1-million bpd cut present, and as the dollar’s days seem numbered,” said Edward Moya, senior market analyst at OANDA. A lower dollar, which makes oil cheaper because the commodity is mostly traded using the greenback, is also supporting prices, analysts said. U.S. crude stocks dropped and fuel inventories rose, the Energy Information Administration said on Wednesday. Crude inventories were down by 8 million barrels in the week to Jan. 1 to 485.5 million barrels, against a Reuters poll showing analysts expected a 2.1 million-barrel decline. The drop in crude stocks is a typical year-end occurrence as energy companies take oil out of storage to avoid tax bills. A sustained rise in WTI prices, though, may result in a resurgence in U.S. output. “If the U.S benchmark makes a sustained break above $50/bbl and beyond, it could encourage additional U.S. supply, which may be troublesome in the long run for many OPEC+ members,” said Kevin Solomon, energy market analyst at StoneX. Trump supporters swarmed the U.S. Capitol on Wednesday, sending it into lockdown, as Vice President Mike Pence refused a demand from the president to cancel his loss to President-elect Biden. Police have declared the situation secure and the certification of the election result has resumed.
Oil hits 11-month highs on Saudi cuts, shrugs off U.S. turmoil (Reuters) -Oil prices settled higher on Thursday, hitting 11-month peaks, as markets remained focused on Saudi Arabia’s unexpected pledge to deepen its oil cuts and firmer equities, shrugging off political turmoil in the United States. Brent crude settled up 8 cents to $54.38 a barrel after touching $54.90, a high not seen since before the first COVID-19 lockdowns in the West. U.S. West Texas Intermediate (WTI) settled up 20 cents to $50.83, after hitting a session high at $51.28. On Wednesday, crude futures prices briefly dipped when President Donald Trump’s supporters stormed the U.S. Capitol after he urged them to protest Congress’s certification of his election loss. Oil prices have been supported this week by a pledge by Saudi Arabia, the world’s biggest oil exporter, to cut output by an additional 1 million barrels per day (bpd) in February and March. “By next month, this bull market could re-establish into higher levels mainly with the benefit of Saudi Arabia’s unexpected voluntary 1 million bpd production cut,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois. Seven North Sea crude cargoes were bought and sold in the trading window operated by Platts on Thursday, a record amount that trade sources say may reflect tighter supply after the surprise cut. “Saudi Arabia …intimately knows the relationship between the oil price and the global inventory levels. Lower inventories equal higher prices,” SEB chief commodity analyst Bjarne Schieldrop said. Global equities were higher as investors believe Democratic U.S. President-elect Joe Biden would be empowered to spend more freely following victories by two Democrats in Senate races in Georgia that gave the party control of both chambers of U.S. Congress. [nL1N2JI1A9] “Expected stimulus measures under a Biden administration that will likely include significant infrastructure investment represents a supportive consideration capable of boosting gasoline and diesel demand,” Ritterbusch said.
Oil rises to 11-month high, logs weekly gain on Saudi output cut – (Reuters) – Oil prices hit their highest level in nearly a year on Friday, gaining 8% on the week, supported by Saudi Arabia’s pledge to cut output and strong gains in major equity markets. Brent crude settled at $55.99 a barrel, climbing $1.61, or 3%, on the day and 8.1% on the week. West Texas Intermediate crude futures (WTI) closed at $52.24 a barrel, gaining $1.41, or 2.8%, also its highest since late February. WTI posted a weekly gain of 7.7%. Saudi Arabia this week pledged extra, voluntary oil output cuts of 1 million barrels per day (bpd) in February and March as part of a deal under which most OPEC+ producers will hold production steady during new lockdowns. The kingdom, the de facto leader of the Organization of the Petroleum Exporting Countries, was at odds with some other producers that wanted to boost output to head off U.S. shale companies from capturing more market share. Eventually, an agreement was reached to allow Russia and others to boost output while the Saudis restrict theirs. “This week the Saudis stepped up to try to take over the market and took ownership of getting prices stabilized,” said John Kilduff, partner at Again Capital LLC in New York. “It seems like they’re on a mission again to get prices back up.” The number of U.S. oil rigs rose for the seventh straight week, gaining eight to 275 this week to its highest since May, according to energy services firm Baker Hughes Co. Analysts said oil prices could see a correction in the coming months if fuel demand remains constrained by the pandemic. Strict restrictions on travel and other activity around the world to contain a surge in COVID-19 cases are weighing on fuel sales, weakening the prospect of an energy demand recovery in the first half of 2021. The pandemic claimed its highest U.S. death toll yet this week, killing more than 4,000 people in a single day, while China reported its biggest rise in daily cases in more than five months, while Japan may extend a state of emergency beyond the greater Tokyo region. .
Oil hits highest level since February, posts ninth positive week in 10 – Oil prices hit their highest level in nearly a year and were on track for a weekly gain on Friday, supported by Saudi Arabia’s pledge to cut output and strong gains in major equity markets. Brent crude climbed 94 cents, or 1.8%, to $55.35 a barrel, and West Texas Intermediate crude futures (WTI) settled $1.41, or 2.8%, higher at $52.24 per barrel, also its highest since late February. Both benchmarks were on track for weekly gains of more than 6%. “People are realizing the market is tighter than it has been in a while and that the commitment by Saudi Arabia to cut back production is going to keep the market balanced despite the concerns about shut-ins from COVID,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. Saudi Arabia this week pledged extra, voluntary oil output cuts of 1 million barrels per day (bpd) in February and March as part of a deal under which most OPEC+ producers will hold production steady during new lockdowns. Analysts said oil prices could see a correction in the coming months if fuel demand remains constrained by the pandemic. Strict restrictions on travel and other activity around the world to contain a surge in COVID-19 cases are weighing on fuel sales, weakening the prospect of an energy demand recovery in the first half of 2021. The pandemic claimed its highest U.S. death toll yet this week, killing more than 4,000 people in a single day, while China reported the biggest rise in daily cases in more than five months and Japan may extend a state of emergency beyond the greater Tokyo region. A global equities rally pushed Japan’s Nikkei and U.S. stock benchmarks to new records, as investors focused on further stimulus to mend the economic damage of the pandemic. The U.S. Congress may soon approve more pandemic relief, a scenario that became more likely after two Georgia Democrats won Senate seats that handed Democrats control of both houses of Congress once Biden is sworn in. “The energy complex (is) placing particular focus on the democratic victories in the Georgia elections that, in turn, boost the likelihood of larger stimulus measures,” said Jim Ritterbusch of Ritterbusch and Associates.
OPEC December oil output rises for sixth month led by Libya – survey (Reuters) – OPEC oil output rose for a sixth month in December, a Reuters survey found, buoyed by further recovery in Libyan production and smaller rises elsewhere in the group. The 13-member Organization of the Petroleum Exporting Countries pumped 25.59 million barrels per day (bpd) in December, the survey found, up 280,000 bpd from November and a further increase from a three-decade low reached in June. OPEC output is set to rise further in January after OPEC+ – which groups OPEC and other producers including Russia – agreed to ease output cuts. Under a deal on February output agreed on Tuesday, most of OPEC+ will keep production steady while Saudi Arabia has offered to make a big voluntary cut. “The additional production cut by Saudi Arabia will probably prevent the oil market from becoming oversupplied, which risked happening otherwise,” said Carsten Fritsch, analyst at Commerzbank, referring to the first quarter. In December, the biggest supply increase came from Libya, an OPEC member which is exempt from OPEC+ cuts, the survey found. Libyan output had been largely shut down for months due to unrest.The OPEC producers bound by the supply deal also boosted output in December, the survey found, which meant their compliance with agreed output cuts slipped to 99% from 102% in November and hit their lowest level since August.
Saudi Arabia restores diplomatic ties with Qatar after three-year rift – Saudi Arabia has reinstated diplomatic relations with Qatar, more than three years after Riyadh and several Arab countries severed ties with Doha. Kuwait, a mediator for both sides, announced that Saudi Arabia is reopening its airspace, sea and land borders with Qatar. Qatar’s emir, Sheikh Tamim bin Hamad al-Thani, arrived in Saudi Arabia on Tuesday for the first time since the dispute erupted in 2017. He was there to attend the annual Gulf Cooperation Council summit in the ancient city of Al-Ula. Relations among the Arab nations soured in 2017, when Saudi Arabia and its allies – the United Arab Emirates, Bahrain and Egypt – imposed a diplomatic, trade and travel blockade on Qatar. They accused the tiny Gulf nation of supporting terrorism and of being too close to Iran, allegations that Doha has always denied. The dispute plunged the region into a diplomatic crisis not seen since the 1991 war against Iraq, and exposed deep ideological differences in the region. Qatar’s emir in 2018 said the dispute was a “futile crisis,” and that Qatar preserved its sovereignty despite “aggression” from its neighbors. Saudi-owned media Al-Arabiya also reported on Tuesday that Egypt has agreed to reopen its airspace to Qatar. Ahead of the summit, the UAE’s minister of state for foreign affairs, Anwar Gargash, said in a tweet the GCC meeting will restore Gulf cohesion. “There is still work to be done and we are in the right direction,” he said. Restoring diplomatic ties between Saudi Arabia and Qatar is part of Washington’s latest effort to broker deals in the Middle East. In a diplomatic win for President Donald Trump, the UAE, Bahrain, Sudan and Morocco normalized relations with Israel in 2020.
End of Qatar blockade is ‘a win for the region,’ Saudi foreign minister says – The end of the Gulf dispute is a win for the region, Saudi Arabia’s foreign minister told CNBC after announcing that relations between Qatar and four Arab countries have been fully restored. Leaders of the Gulf Cooperation Council and Egypt on Tuesday signed an agreement that aims to strengthen unity and cohesion. The deal came more than three years after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt imposed a trade and travel blockade on Qatar. “We were able to reach the Al-Ula declaration which puts behind us a dispute … among the four countries and Qatar,” said Faisal bin Farhan al-Saud, Saudi Arabia’s minister of foreign affairs, referring to the agreement named after the ancient city of Al-Ula where leaders of the Arab nations met. The region plunged into a crisis in 2017, when Saudi Arabia and its allies cut off diplomatic and trade ties with Qatar, accusing the tiny gas-rich nation of being too close to Iran and supporting terrorism. Doha has denied these allegations. Saudi Arabia on Monday opened its airspace, land and sea borders to Qatar. Saudi Crown Prince Mohammed bin Salman welcomed Qatar’s emir, Sheikh Tamim bin Hamad al-Thani, with a hug when the latter arrived on Saudi soil. Al-Saud said he thinks the deal will be a “very, very strong basis” for regional stability going forward. Asked if it was a win for the outgoing Trump administration, al-Saud said: “I think this agreement racks up a win for the region, first of all, a win for all of us.” Still, he acknowledged support from the U.S. and Kuwait, which has been mediating between Saudi Arabia and Qatar. “Absolutely, President Trump and (White House senior advisor) Jared Kushner contributed to reaching this agreement, working very closely with Kuwait, who has been working on this for some time,” he told CNBC’s Hadley Gamble.
UK government refuses to publish list of airstrikes in Yemen involving civilian casualties – The British government has refused to publish its database supposedly logging civilian casualties from murderous airstrikes in Yemen carried out by the Saudi-led coalition, which is armed by the UK and US. While the Ministry of Defence (MoD) has listed a staggering 516 potential International Humanitarian Law (IHL) violations by the coalition of Saudi Arabia and the United Arab Emirates (UAE), the real number is far higher. Destroyed house in South Sanaa, Yemen. (credit: Wikimedia Commons) Prime Minister Boris Johnson’s government is intent on maintaining the barbaric House of Saud’s control over the Arab Peninsula. It is suppressing any information that Riyadh or its backers are committing war crimes and avoiding accusations that the UK is violating its own rules against supplying arms likely to be used in violation of IHL. The UK is a crucial supplier of weaponry to the coalition, having licensed more than £6.5 billion worth of arms in the five years since April 26, 2015, when the bombing began. Many of the bombs, missiles, and aircraft components are licensed via the opaque and secretive Open Licence system that is “more flexible” than a standard licence and “avoids the need to apply for a new licence for every export.” The Campaign Against Arms Trade (CAAT) therefore estimates that the real value of the UK’s arms sales to Saudi Arabia since the start of the war is £18 billion, around three times the official figure. In July 2019, the Court of Appeal, in a case brought by CAAT, ruled that the government had failed to assess whether British-supplied weapons would be used in Riyadh’s murderous war in Yemen, in breach of both IHL and Britain’s own laws prohibiting the sale of weapons when there is a “clear risk they might be used in violations of international humanitarian law.” It banned further sales pending a review of the government’s vetting procedures, which had revealed that the government had simply stopped recording whether suspected violations had occurred. The Armed Conflict Location & Event Data Project (ACLED) has shown that the Saudi-led war against Yemen – waged with the full backing of Washington and London – has killed over 100,000 people, mostly civilians. The attacks have targeted food production, schools and hospitals, creating the world’s worst humanitarian crisis. Around 24 million of the country’s 28 million people need humanitarian aid, with at least half the population on the brink of starvation. Many thousands have died of starvation, including at least 75,000 children under five, while the worst cholera epidemic in modern history has infected 1.2 million.
Trump personally ordered aircraft carrier to stay in the Middle East: report – President Trump ordered Acting Secretary of Defense Christopher Miller last week to reverse bringing the aircraft carrier the USS Nimitz home and keep the vessel in the Middle East, CNN reported on Monday.The carrier had been ordered last week to return home in a show of de-escalating tensions with Iran. An unidentified defense official told CNN that Miller’s de-escalation goals had not been formally adopted. The call home took some commanders by surprise, multiple officials told the outlet, and U.S. Central Command also wanted the carrier to remain in the region.Trump reportedly reversed the decision following a White House meeting Sunday. Miller said in a Sunday statement that “Due to the recent threats issued by Iranian leaders against President Trump and other U.S. government officials, I have ordered the USS Nimitz to halt its routine redeployment.”Some U.S. officials were also concerned that Iran could stage an attack on the one-year anniversary of the assassination of Iranian Gen. Qasem Soleimani and the Iraqui Shia military leader Abu Mahdi al-Muhandis.Following the reversal of the aircraft carrier move, Iranian officials said Monday that Tehran has resumed 20 percent uranium enrichment levels that it reached prior to the Obama-era 2015 nuclear agreement that the U.S. left in 2018.Iran on Monday also seized a South Korean-flagged oil tanker near the Strait of Hormuz hours before announcing its nuclear increase, according to multiple reports. The U.S. State Department has called for the tanker’s release.CNN noted that diplomats and other officials believe that Iranian leaders are aware that the U.S.’s relationship with Iran could drastically change under the incoming Biden administration.
South Korean Warship Now Patrolling Persian Gulf After Iran Seized Tanker -A South Korean warship sailed into the Persian Gulf on Tuesday after Iran seized a South Korean-flagged tanker in the waters.South Korea’s defense ministry said the destroyer Choi Young was operating near the Strait of Hormuz. “It is carrying out missions to ensure the safety of our nationals,” South Korean Defense Ministry spokesperson Boo Seung Chan said of the destroyer. South Korea has approximately 300 members of an anti-piracy unit that have been operating in the region since last year and are reportedly on board the Choi Young destroyer. According to The Drive, among its weapons systems include the following: The primary armament on these ships are Mk 41 Vertical Launch System (VLS) arrays, with each of the destroyers having a total of 64 cells. These can be loaded with a mixture of U.S.-mad e Standard Missile 2 Block IIIA surface-to-air missiles or South Korean-designed Hyunmoo-3 land-attack cruise missiles, as well as the Korean Anti-Submarine Rocket (K-ASROC), also known as the Red Shark, an anti-submarine weapon that has a homing torpedo as its warhead. We don’t know what the Choi Young’s exact loadout is on this deployment. Officials in Seoul insist that the situation with Iran will be resolved diplomatically, despite the deployment of the warship.South Korea is sending a delegation to Iran to negotiate the release of the tanker ahead of a planned visit to Tehran next week.
Israeli Airstrikes Rock Damascus At Moment All Eyes Are On US Capitol –At a moment international media and political leaders are focused on watching the mayhem unfolding on Capitol Hill, Israel has again attacked Syria, hitting southern Damascus with a series of airstrikes Wednesday night. This is the third such Israeli attack in three weeks, during which Syrian air defenses were active and said to have intercepted some of the inbound missiles. State-run SANA said the strikes were launched from the direction Golan Heights region, and that many missiles were successfully intercepted.According to The Jerusalem Post: An alleged Israeli airstrike targeted locations in southern Syria as explosions were heard in the skies over Damascus on Wednesday night, according to Syrian state media SANA.The strikes were launched from the Golan Heights, a Syrian military source told SANA, claiming that most of the incoming missiles were intercepted by Syrian air defenses.While it’s likely that Israel already had the targets in mind – given also such attacks have become almost “routine” – it appears the Israeli Defense Forces (IDF) intentionally conducted the operation at a moment the world’s eyes are fixated on watching events unfold in Washington D.C.Casualties are as yet unknown, with the extent of damage further unconfirmed. During a prior Christmas Eve attack on the Syrian countryside there were multiple casualties reported.
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