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Showing posts with label Oil. Show all posts
Showing posts with label Oil. Show all posts

9/8/19

Iran-USA relations: What a multi-million dollar bribe for oil supertanker says about Trumps Oran pplicu

What a multi-million dollar 'bribe' for oil supertanker says about Trump’s Iran policy.


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1/30/19

Venezuela US relations: Trump phones Venezuela's Guaido as U.S. pushes for Maduro to go - but how sincere is he really?

 U.S. President Donald Trump spoke to Venezuela's self-proclaimed interim president by phone on Wednesday, reiterating support for his "fight to regain democracy," as Washington's push to force socialist President Nicolas Maduro from power picked up steam.

The White House said Trump and Juan Guaido, the opposition leader trying to replace Maduro, agreed to maintain regular communication after Venezuelan authorities opened an investigation that could lead to Guaido's arrest.

The moves against Guaido, 35, including a travel ban and assets freeze, were in retaliation for oil sanctions imposed by the United States this week. They intensified the fight to control Venezuela, an OPEC nation that has the world's largest oil reserves.

The U.S. president spoke to Guaido to "congratulate him on his historic assumption of the presidency and to reinforce President Trump’s strong support for Venezuela’s fight to regain its democracy," White House spokeswoman Sarah Sanders said.

Guaido thanked Trump for the U.S. commitment to freedom and prosperity in Venezuela and the region and noted the importance of planned protests across the country against Maduro on Wednesday and Saturday, she said in a statement.

Note EU-Digest: Let us hope Trump treats Guaido better than he treated the Kurds in Syria, who have been fighting there on behalf of the US. against ISIS. Mr. Trump does not have the reputation as someone who keeps his word or who tells the truth.

Read more: Trump phones Venezuela's Guaido as U.S. pushes for Maduro to go

12/29/17

N-Korea: China hits back at Trump tweet accusing it of selling oil to North Korea - by Jane Onyanga-Omara

China denied Friday that it was supplying oil to North Korea in violation of United Nations sanctions aimed at curbing Pyongyang's nuclear and missile program, hours after online criticism from President Trump.

"Caught RED HANDED - very disappointed that China is allowing oil to go into North Korea. There will never be a friendly solution to the North Korea problem if this continues to happen!" Trump tweeted Thursday.

Read more: China hits back at Trump tweet accusing it of selling oil to North Korea

1/27/16

USA: Trump and Palin: Is America Becoming an Oil Kleptocracy? - by Alexei Bayer

Oil-producing nations are a mess. Go down their full list – from A for Algeria, Argentina and Azerbaijan via I for Iraq and S for Saudi Arabia all the way down to V for Venezuela – and you’ll see economic and political basket cases.

Many of these oil-producing countries don’t need, or like, democracy. They are ruled by narcissistic authoritarians who distribute goodies, talk of national greatness and stuff their own pockets.

Muammar Gaddafi, Vladimir Putin and Hugo Chavez come to mind. Eccentric, quirky, self-indulgent and totally devoid of self-doubt, they like to hear themselves talk and are very entertaining. They’re performers, not policy wonks.

They are, in short, wizards of Oz, selling snake oil to their grateful populace. Eventually, they turn nasty, making mischief in the rest of the world and oppressing and robbing their own people.

Now, what does that have to do with the United States, an industrial giant and the world’s leader in technological innovation? Well, in recent years the United States did become the world’s largest producer of oil. Last year, it even started to export some of the stuff.

Of course, the United States has a huge diversified economy and its oil industry accounts only for a small portion of its GDP. It is still a major importer of oil.

Besides, oil is currently quite cheap. At least for now, you can’t live high on the hog by exporting it. All those oil kleptocracies that were rich and self-important are suddenly starting to pawn their family silver (if they have any).

And yet, the U.S. economy and U.S. society as a whole are sending forth dangerous signals. The United States has long been on a road to de-industrialization, sending manufacturing jobs to China, Mexico and other places.

The number of U.S. manufacturing jobs is down 15% from 2006 and it didn’t grow at all during 2015, which was otherwise a bumper year for jobs. Since 1985, the number of manufacturing jobs has dropped by 35%.

 Read more: Trump and Palin: Is America Becoming an Oil Kleptocracy? - The Globalist

1/24/16

Oil: Will Cheap Oil Kill Global Stability ? "No it won't say experts-Yes it will says Wall Street PR on steroids" - by Judy Dempsey

Kris Bledowski, Director of economic studies at the Manufacturers Alliance for Productivity and Innovation notes:

"The answer depends on how “stability” is defined. In political terms, one could see some instability creep in or deepen in countries where oil plays a disproportionately large fiscal role.

Yet this impact would be felt locally rather than globally, andmostly in countries with already-weak polities. Venezuela, Nigeria, or parts of the Middle East come to mind. It’s less likely  that potential conflicts could spill over outside domestic or localtheaters.

The economic impact has already been felt the world over. In the United States, mining activity has depressed industrial output, while in Canada the entire economy plunged into recession in 2015 as a result of sharply lower oil prices.

At the same time, income losses are being at least partly offset by gains on the consumer end. Shifts in relative prices of major inputs or outputs occur all the time,and the world economy is resilient enough to absorb them. Overall, oil and its derivatives make up a small and declining share of unit energy costs.

If global investment flows are more unpredictable, currencies more volatile, and changes in income more pronounced, other factors should be taken into account as well. Among them are differences in monetary policies (in the United States and the EU), private debt levels (in Brazil and China), and economic governance (in Russia and Saudi Arabia).

Ian Bremmer, President and founder of Eurasia Group says: 
"Did Mikhail Gorbachev’s reforms kill Soviet stability? No. They hastened the melting of frozen instability. That’s the impact of cheap oil on the Middle East, in particular the Sunni Arab petrostates and the governments that rely on their largesse.

There’s already little domestic legitimacy keeping these regimes in place. The United States has little desire toact as the region’s policeman, and nobody else is going to pick up the baton.

Communication technologies allow disenchanted young men to more easily mobilize.

And there are scant few social, economic, and political reform efforts among the governments themselves; security solutions don’t address the underlying problems. Cheap oil makes those conflicts grow sharper. And faster."

Jan Cienski, Energy and security editor at POLITICO says:
"No, cheap oil won’t kill global stability—infact, it will bolster it. That doesn’t mean low oil prices aren’t terrible news for a host of countries like Russia, Saudi Arabia, Venezuela, Angola, and other emerging markets that have built their budgets on oil exports. But as their revenues shrink, their largely autocratic rulers will have to focus more on keeping their people from rebelling over budget cuts and less on causing trouble abroad.

No, cheap oil won’t kill global stability—in fact, it will bolster it. That doesn’t mean low oil prices aren’t terrible news for a host of countries like Russia, Saudi Arabia, Venezuela, Angola, and other emerging markets that have built their budgets on oil exports.

But as their revenues shrink, their largely autocratic rulers will have to focus more on keeping their people from rebelling over budget cuts and less on causing trouble abroad."

Deborah Gordon, Director of Carnegie’s Energy and Climate Program notes: "mighty global omnipotence is often attributed to oil. But it’s unclear whether low (or high) oil prices themselves can be squarely blamed for growing global instability. Increasing oil market volatility, however, could prove to be a stronger destabilizing force.

If oil prices continue to swing wildly back and forth in the years ahead, this could confound economic, technological, and geopolitical fundamentals."

Note EU-Digest: Wall Street and the financial Industry seem to be the only ones who are saying that lower oil prices will contribute to Global Economic and Political Instability , mainly because it hurts their energy investments and market portfolio's . The drop in oil prices, however, has been very beneficial  to consumers and the the economy in general.

EU-Digest

1/13/16

Wall Street: forget about market corrections - the party is over - "this is a meltdown for Wall Street folks"

The Dow implosion continues -364.81 / -2.21%today Wednesday January.

Year to end  a -7.31% drop. Wall Street might have been able to fool some people, but they can't fool investors all the time.

The party is over folks, at least for the time being, and nothing seems to be on the horizon to be a cause for optimism.

EU-Digest

9/24/15

Saudi Arabia: 10 Reasons the EU should Oppose the Saudi Monarchy - by Medea Benjamin

During the discussion on the Iran nuclear deal, it has been strange to hear US politicians fiercely condemn Iranian human rights abuses while remaining silent about worse abuses by US ally Saudi Arabia. Not only is the Saudi regime repressive at home and abroad, but US weapons and US support for the regime make Americans complicit. So let's look at the regime the US government counts as its close friend.

1. Saudi Arabia is governed as an absolutist monarchy by a huge clan, the Saud family, and the throne passes from one king to another.The Cabinet is appointed by the king, and its policies have to be ratified by royal decree. Political parties are forbidden and there are no national elections.

2. Criticizing the monarchy, or defending human rights, can bring down severe and cruel punishments in addition to imprisonment. Ali al-Nimr was targeted and arrested at the age of 17 for protesting government corruption, and his since been sentenced to beheading and public crucifixion. Raif Badawi was sentenced to 10 years in prison and 1,000 lashes for writing a blog the government considered critical of its rule. Waleed Abulkhair is serving a 15-year sentence for his work as a human right attorney. New legislation effectively equates criticism of the government and other peaceful activities with terrorism.

The government tightly controls the domestic press, banning journalists and editors who publish articles deemed offensive to the religious establishment or the ruling authorities. Over 400,000 websites that are considered immoral or politically sensitive are blocked. A January 2011 law requires all blogs and websites, or anyone posting news or commentary online, to have a license from the Ministry of Information or face fines and/or the closure of the website..

3. Saudi Arabia has one of the highest execution rates in the world, killing scores of people each year for a range of offenses including adultery, apostasy, drug use and sorcery. The government has conducted over 100 beheadings this year alone, often in public squares.

4. Saudi women are second-class citizens. The religious police enforce a policy of gender segregation and often harass women, using physical punishment to enforce a strict dress code. Women need the approval of a male guardian to marry, travel, enroll in a university, or obtain a passport and they're prohibited from driving. According to interpretations of Sharia law, daughters generally receive half the inheritance awarded to their brothers, and the testimony of one man is equal to that of two women.

5. There is no freedom of religious. Islam is the official religion, and all Saudis are required by law to be Muslims. The government prohibits the public practice of any religion other than Islam and restricts the religious practices of the Shiite and Sufi Muslim minority sects. Although the government recognizes the right of non-Muslims to worship in private, it does not always respect this right in practice. The building of Shiite mosques is banned.


6. The Saudis export an extremist interpretation of Islam, Wahhabism, around the globe. Over the past three decades, Saudi Arabia spent $4 billion per year on mosques, madrassas, preachers, students, and textbooks to spread Wahhabism and anti-Western sentiment. Let's not forget that 15 of the 19 fanatical hijackers who carried out the 9/11 attacks were Saudis, as well as Osama bin Laden himself.

7. The country is built and runs thanks to foreigner laborers, but the more than six million foreign workers have virtually no legal protections. Coming from poor countries, many are lured to the kingdom under false pretenses and forced to endure dangerous working and living conditions. Female migrants employed in Saudi homes as domestic workers report regular physical, sexual, and emotional abuse.

8. The Saudis are funding terrorism worldwide. A Wikileaks-revealed 2009 cable quotes then-Secretary of State Hillary Clinton saying "Donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide....More needs to be done since Saudi Arabia remains a critical financial support base for al-Qaeda, the Taliban, Lashkar e-Tayyiba and other terrorist groups." In Syria the Saudis are supporting the most extreme sectarian forces and the thousands of volunteers who rally to their call. And while the Saudi government condemns ISIS, many experts, including 9/11 Commission Report lead author Bob Graham, believe that ISIL is a product of Saudi ideals, Saudi money and Saudi organizational support.

9. The Saudis have used their massive military apparatus to invade neighboring countries and quash democratic uprisings. In 2011, the Saudi military (using US tanks) rolled into neighboring Bahrain and brutally crushed that nation's budding pro-democracy movement. In 2015, the Saudis intervened in an internal conflict in Yemen, with a horrific bombing campaign (using American-made cluster munitions and F-15 fighter jets) that has killed and injured thousands of civilians. The conflict has created a severe humanitarian crisis affecting 80 percent of the Yemeni people.

10. The Saudis backed a coup in Egypt that killed over 1,000 people and saw over 40,000 political dissidents thrown into squalid prisons. While human rights activists the world over where condemning the brutal regime of Al Sisi, the Saudi government offered $5 billion to prop up the Egyptian coup leader.

The cozy US relationship with the Saudis has to do with oil, weapons sales and joint opposition to Iran. But with extremism spreading through the globe, a reduced US need for Saudi oil, and a thawing of US relations with Iran, now is the time to start calling for the US government to sever its ties with the Saudi monarchs.

  Read more: 10 Reasonsthe EU  should Oppose the Saudi Monarchy | Medea Benjami

3/31/15

Energy Supplies: Oil - Its all about Geopolitics

The Oil and Energy Insider reports that when it comes to geopolitical events affecting oil prices, there is no shortage of possibilities. Whether it is the outbreak of a war, a terrorist attack, a massive industrial accident, or a financial crisis, these events usually take the oil markets by surprise. It is not too often that there is a major geopolitical event that will have enormous influence over oil prices yet is known ahead of time. But we are in the midst of one of those rare moments: we are arriving at the deadline for the negotiations over Iran’s nuclear program, with the clock running out at midnight on March 31. The two sides are furiously negotiating, trying to overcome their differences to make history. A comprehensive agreement between Iran and the West was always going to be extraordinarily difficult and would involve painful concessions on both sides. But there is some indication that a deal is there to be grabbed if the major world powers want it.

The Russian Foreign Minister had previously bailed on the talks, saying that he would only return if a deal looked realistic. However, he did in fact decide to fly back to Switzerland and rejoin the talks on March 31 as there were signs of progress. “The chances are high. They are probably not 100 percent but you can never be 100 percent certain of anything. The odds are quite 'doable' if none of the parties raise the stakes at the last minute,”
Russian Foreign Minister Sergei Lavrov told Russian media in Moscow.

The outcome of the negotiations will have an immediate effect on the price of oil, one way or another. If the parties come to terms – and reach a truly historic resolution to such an intractable problem – it could lead to the removal of sanctions on Iran and the return of Iranian oil to the global market. Iran could probably ramp up production by an additional several hundred thousand barrels per day over the course of a few months with the potential to ultimately add around 1 million barrels per day. Still, if a deal is sealed in Switzerland, the oil markets will react immediately, most likely falling by several dollars per barrel. If the two sides fail to come together, that would be bullish for oil, although perhaps not quite as dramatically, since it would essentially continue the status quo regarding Iran over the last three years. Another possibility that is looking increasingly likely is that Iran and the West reach a rough outline of an accord, and
push off the thorniest issues until June when the final agreement must be reached. That would leave the oil markets in a status of limbo over the next three months regarding Iranian oil.

Speaking of a flood of oil, the Energy Information Administration
released new data that showed that the growth in oil production in the U.S. in 2014 was the highest in over 100 years. The United States has long been an oil producer – dating back to the 19th century. It was even the world’s largest oil producer in the early 20th century. By the 1970’s however, its vast oil fields appeared to be tapped out, and production went into decline. We have all read about how new drilling techniques have unlocked shale oil, but for drillers to be able to ramp up production to such a degree in a very oil-mature country is impressive. Last year, the U.S. added 1.2 million barrels per day to its output, the largest production gain since record-keeping began in 1900.

But the next chapter is uncertain. Low oil prices are forcing big-time cutbacks. The question is where oil prices go next. The looming oil storage “crisis” threatens to crush oil prices much further. However, the worst may be avoided as U.S. consumers and refiners pick up the slack. In fact, refiners churned through 15.5 million barrels per day in mid-March,
a record for the time of year when many units are taken offline for maintenance. With unusually large margins right now, refiners are taking advantage and buying up oil, paying enough to keep some oil out of storage. Refining demand is now stronger than expected, and that may divert oil away from storage in Cushing Oklahoma, as refiners pull oil down to the Gulf Coast. It is not just because refining margins have improved, but also because U.S. drivers are hitting the roadways, pushed on by low gasoline prices. Gasoline demand in the U.S. jumped by 6 percent in January, the largest surge in demand in over 20 years. If that keeps up, oil markets may find an equilibrium not just through supply rebalancing – which is where market analysts have kept most of their attention – but also through a pickup in demand.


EU-Digest

3/21/15

Middle East: "Its all about oil stupid " - The Middle East Oil/Nuclear Puzzle  - by Pepe Escobar

"It's all about oil stupid"
US Secretary of State John Kerry may be starting to enjoy the brinkmanship, as he says it’s “unclear” whether the US and Iran would reach a political framework nuclear deal before the end of this month.
Loud applause may be heard in corridors ranging from Tel Aviv to Riyadh. 

As negotiations resume in Lausanne, the fact is a potential nuclear agreement between Iran and the P5+1 (US, UK, France, BRICS members Russia and China, and Germany) is bound to open the possibility of more Iranian oil exports – thus leading oil prices to fall even further. As of early this week, Brent crude was trading at $54.26 a barrel.

Assuming the US and the EU nations that are part of P5+1 really agree to implement the suspension of UN sanctions by the summer (Russia and China already agree), not only will Iran be exporting more energy – that should take a few months - but also OPEC as a whole will be increasing its oversupply.

The EU badly wants to buy loads of Iranian energy – and invest in Iranian energy infrastructure. Beijing, a key yet discreet member of the P5+1, is also watching these developments very carefully.

Whatever happens, for China this is a win-win situation, as Beijing keeps actively building up its strategic petroleum reserves profiting from low prices. And even as oil prices also remain under pressure from the strong US dollar – which makes oil way more expensive if you are paying with a different currency – that’s certainly no problem for China, with its mammoth US dollar reserves.

The oil price war essentially unleashed by Saudi Arabia has hit Iran with a bang. The country may be down, but not out. There were no good options for Tehran except to try to keep its market share by offering the same discounts – especially to Asia - the Saudis are offering.

Note EU-Digest: ISIS, Israel, Palestine are all "side-shows" in the unfolding Global Energy reshuffle.   Republican Congressional leader Boehner's visit to Israel therefore mainly has to do with the Republican's trying to block the 5 + 1 nation Iran nuclear agreement  on behalf of their "financial backers, US based global oil corporations who will be losing a lot of money if the Iran deal gets signed and Iran starts competing on the world market again. The EU which is a part of the negotiating group with Iran is already banking on the possibility an agreement will be reached and only a few days ago approved the establishment of an EU Energy Group, 

In case a deal is reached among the 6 negotiating countries and the Republicans block approval of  the deal in the US Congress, thereby depriving the American taxpayers in paying less for their energy, it is probably very likely that the deal will then go for approved to the UN, because the agreement is one which includes 6 different countries. At that point the present US Obama Administration, which does not need a mandate from the US Congress to vote yes or no on any UN resolution, can endorse the agreement in the interest of the US economy.

As the Chinese would say: "these are interesting times  ! "

EU-Digest


3/17/15

Global Oil Production: Double Dip seems to have started as prices drop

Oil Exploration
OILPrice Intelligence reports that the double dip looks to be on. After nearly two months of moderate price gains for crude oil, by mid-March oil is swooning once again. Brent is showing a bit of resilience, but the WTI benchmark – which is the major marker for North American crude – dropped to its lowest level in six years. Producers may have thought they were nearly out of the woods, but stubborn levels of production from U.S. shale fields have prevented a rally. Even worse (for drillers) is the fact that oil storage tanks are starting to fill up. Storage at Cushing, Oklahoma is two-thirds full, and hedge funds and major investors are selling off oil contracts, betting that prices are heading south.

While the oil storage story is real – average storage levels
nationwide (USA) are up to 60%, a big jump from the 48% seen a year ago – it may have been played up too much in the media. Many refineries are taken offline in the spring for maintenance, which forces drillers to pump crude into storage for several weeks. Additionally, U.S. consumers are starting to use more gasoline because of low prices, and the extra demand may soak up some of the glut. Finally, production, stubborn as it is, may soon finally begin to dip. Fresh data from North Dakota shows that may already be happening. In other words, the weekly storage build may be unsustainably high.

Nevertheless, the selloff is underway. That is providing an interesting opportunity for the U.S. government, which is
set to purchase 5 million barrels for the strategic petroleum reserve (SPR). In March 2014, the U.S. government sold off 5 million barrels ostensibly for a “test sale,” but was no doubt at least in part motivated by the fact that oil prices surpassed $100 per barrel. However, by law, the U.S. Department of Energy is required to replenish that sale within 12 months. With the deadline approaching, the DOE has announced plans to buy up 5 million barrels to put back into the SPR. The U.S. taxpayer is about to benefit from extraordinary timing. With prices now half of what they were 12 months ago, the government will be able to bring the SPR back to up to its proper level at half the price.

Low oil prices are good for the government, but not so good for the oil majors. Italian oil giant Eni (NYSE: ENI) became the first of the oil multinationals
to slash its dividend due to low prices and also moved to suspend its share buy-back plan. Eni announced plans to pay 0.8 euros per share rather than the 1.12 euros it paid out in 2014. The move was not taken well by investors – the company’s stock tanked by nearly 5% on the announcement. Still, CEO Claudio Descalzi put on a brave face, claiming that he was “building a more robust Eni capable of facing a period of lower oil prices.” The dividend has long been prioritized by the oil majors, needing to be protected at all costs. Many of them have opted for dramatic cuts to capital spending rather than touch their dividend policies, even if that threatens future production rates. High dividends have made major oil companies highly attractive investment vehicles, allowing companies to obtain a lower cost of capital for drilling plans. Eni has bucked the trend, arguing that it will be more resilient as a result of the dividend cut. Descalzi insists the company will “be strong” if prices remain at $60 per barrel or above. It remains to be seen how long oil prices stay depressed, and whether or not other oil majors can avoid coming to the same conclusion as Eni.

OPEC released its
monthly oil market report on March 16, in which it argued that North American shale will face a contraction later this year. However, the oil cartel also saw some production declines for the month, as Libya, Iraq, and Nigeria continue to struggle with violence and low oil prices. Libya, in particular, is facing a crisis. Spain raised the prospect of a European Union embargo on Libyan oil if the country’s two political factions did not make headway on peace. Cutting off Libya’s only economic lifeline almost certainly would not bring a swift end to political impasse in Libya, but the EU is clearly becoming impatient with the ongoing violence just across the Mediterranean.

Russian President Vladimir Putin
reemerged from a 10-day absence that fueled many-a-rumor – speculation ranged from a palace coup, to a secret birth of a child, even to some wondering whether the Russian President met an early demise. The Kremlin offered no explanation, but Putin appeared to be just fine. Despite his seemingly good health, the Russian economy continues to buckle under the weight of low oil prices. And that, according to Bloomberg, has Putin increasingly angry at a once close ally: Rosneft head Igor Sechin. Putin is reportedly blaming Sechin for rising debt at the state-owned oil firm, perhaps stemming from the purchase of TNK-BP in 2013. Also, Sechin’s role in borrowing billions of rubles that sent the currency plummeting in December 2014 has raised the ire of the Russian President. There are rumors that Sechin could be on his way out, but those reports are unconfirmed. Nevertheless, the fraying of the relationship suggests low oil prices are taking a toll on Putin’s inner circle.

EU-Digest 

1/5/15

Oil Prices: Saudi slashes monthly oil prices to Europe; trims U.S., ups Asia

Saudi Arabia made deep cuts to its monthly oil prices for European buyers on Monday, a move some analysts said reflects the kingdom's deepening defense of market share, although it also hiked prices in Asia from record lows.

State oil firm Saudi Aramco cut the official selling price (OSP) for its Arab Light crude to Northwest Europe, a region that buys only a small proportion of Saudi Arabia's crude, by $1.50 a barrel for February, putting it at a discount of US$4.65 a barrel to the Brent Weighted Average (BWAVE), the lowest since 2009.

However, Aramco also raised its February price for its Arab Light grade for customers for Asia - the largest of its major markets, accounting for more than half of its exported crude - by 60 cents a barrel versus January to a discount of $1.40 a barrel to the Oman/Dubai average.

The $2 discount to Asia in January was the largest in records going back more than a decade, but traders had been expecting Aramco to hike prices by at least 20 to 30 cents due to the narrowing spread in the Dubai market.

The Arab Light OSP to the United States, the fifth consecutive monthly cut, was set at a premium of 30 cents a barrel to the Argus Sour Crude Index (ASCI) for February, down 60 cents from the previous month.

The Kingdom's move to cut its OSPs has been perceived by many traders as a signal of its decision to abandon efforts to shore up falling crude oil prices and, instead, focus on maintaining its share of key markets.
Read more: Saudi slashes monthly oil prices to Europe; trims U.S., ups Asia - Business News | The Star Online

12/1/14

US Economy: Is the party over ? Wall Street falls in broad decline, Apple weighs - retail disappoints

US stocks fell in a broad decline on Monday, with the S&P 500 suffering its biggest one-day drop in more than a month, as economic data indicated weakness across the globe and the holiday shopping season got off to a tepid start.

The day's losses were broad, with eight of the ten primary S&P 500 sectors lower on the day. Industrials were the day's biggest decliners, pressured by manufacturing data that still pointed to sluggish demand.

Apple was one of the biggest weights on the session, falling 3.2 per cent to $US115.07 in its biggest one-day decline since September. It tumbled shortly after the open in its largest one-minute volume in more than a month in what some traders deemed a "mini-flash crash."

Growth in the US manufacturing sector slowed for a third straight month in November, decelerating to its most sluggish since January, according to Markit. The ISM report also showed a slowing pace of growth, though it was stronger than expected

Read more: Wall Street falls in broad decline, Apple weighs

10/18/14

Energy: Pressure May Remain On Oil Prices

The Oil and Energy Insider reported recently that Oil prices continued to fall this week on ample supply and signals from OPEC members Saudi Arabia and Kuwait that they can deal with lower prices and are unlikely to reduce output.

On Monday, Brent crude futures dropped further to $87.74 a barrel—the lowest level since December 2010--while WTI futures were down to $84.68 a barrel. Saudi Arabia, for its part, has suggested it could handle
$80/barrel prices. On Tuesday, Brent crude prices slipped further, to $87.03.

Kuwait has also said that it will not be cutting output and predicted prices falling to as low as $76 a barrel before winter sets in and prices start to rise again.

The next OPEC meeting is scheduled for 27 November, when the organization will consider targets for 2015.

But it’s not about whether high oil prices or low oil prices are good—it’s about maintaining the proper balance (as is everything).

When oil prices fall below $100 a barrel, the OPEC countries have a hard time balancing their budgets, which are largely dependent on oil revenues.

There has also been some confusion in the ranks this week, with
Saudi Prince Alwaleed bin Talal al-Saud publishing an open letter on his website expressing disbelief at media reports that Saudi Arabia would allow oil prices to fall below $90 a barrel. The Prince--most fondly known for dwarf-tossing parties and his investments in Apple, Time-Warner, and News Corp.--warns that 90% of Saudi Arabia’s budget is reliant on oil revenues and that a continued fall in prices would be catastrophic.

In the meantime, OPEC-member
Venezuela has been on the other side of the output-cut divide, calling for an emergency meeting of the group to respond to falling prices. But Kuwait and Saudi Arabia aren’t budging.

While Kuwait and Saudi Arabia can clearly survive a couple more months of low oil prices—hence their unwillingness to cut output—Russia will find it more difficult. As the
Economist notes this week, while Russia’s economic growth is already poor, “further drops in the oil price could be very painful. After all, oil and gas make up 70% of Russia’s exports and half of the federal budget.”

The ample supply is largely due to surging production from Russia and the US, and the American shale boom has been threatening to overtake Saudi Arabia’s own output. With this in mind, Saudi Arabia has less incentive to reduce output to boost prices.

Back at the pump in the US, the falling oil prices are cause for celebration, though.

This past week, the
average retail price of gasoline fell 0.9 cents a gallon to $3.177—the lowest since February 2011--according to AAA. Overall, gas prices have fallen more than 50 cents this year.

EU-Digest

6/13/13

Global Energy Supplies: Germany's RWE buys 40 percent stake in Suriname oil block

Suriname's state oil company, Staatsolie, said on Wednesday that German energy company RWE DEA AG bought a 40 percent stake in an offshore block where Staatsolie is also partnered with Malaysia's Petronas.

Petronas is expected to invest $25 million in Block 52, which lies about 130 kms (80 miles) off the coast of the South American nation. In a statement, Staatsolie did not give further details on the German company's level of involvement.

Last year, Staatsolie signed a production sharing deal with Apache Corp of the United States to invest $230 million in the exploration of a different offshore block.

Staatsolie, founded in 1982, produces about 16,000 barrels of oil a day - mainly for local use. Global energy companies are showing growing interest in the potential of South America's northeastern shoulder. A 2011 discovery off French Guiana was described as a "game-changer" for the region's oil prospects.

Read more: Germany's RWE buys 40 percent stake in Suriname oil block | Reuters

4/16/12

Oil Exploration: : Exxon Mobil and Rosneft formalize agreement for oil projects in North America, Russia

Exxon is teaming up with Russian oil giant Rosneft to develop oil and natural gas fields in Russia and North America.

The deal is a major score for Exxon, granting the Irving, Texas company access to some of the world's richest sources of crude oil and other hydrocarbons in the Black Sea and the Russian Arctic. In turn, Rosneft subsidiaries will take ownership stakes in three Exxon projects in the U.S. and Canada.

The companies agreed in August to form a partnership. They announced new details Monday in conjunction with a signing ceremony in Russia that was held at Russian Prime Minister Vladimir Putin's suburban residence. As part of the agreement, Exxon will work with Rosneft to develop oil Russia's prized offshore reserves in the Black and Kara seas. Rosneft does not have its own technology for deep sea drilling, so it needed a partner to develop the offshore projects. Exxon already has experience drilling in the Arctic regions of Canada.

Exploration already has started in the region, and the companies said that the first test wells could be drilled in 2014. Exxon and Rosneft said initial work in the region will cost about $3.2 billion.

For more: Exxon Mobil and Rosneft formalize agreement for oil projects in North America, Russia | CanadianBusiness.com

3/26/12

Shale Boom in Europe Fades as Polish Wells Come Up Empty

Europe’s best hope for a shale-gas boom is fading as explorers in Poland confront rising taxes, a lack of rigs and rocks that are harder to drill than expected. 

While shale could help Poland lessen dependence on Russian supplies and cut its gas bill, a government proposal for a levy on production threatens to curtail investment. Failed wells by Exxon Mobil Corp. (XOM) curbed the optimism that led two dozen companies to grab licenses. The government said last week that shale-gas reserves may be lower than estimated, and drilling a well costs almost three times as much as in the U.S.

“The growth of shale in Poland will be slower than in the U.S. because it would need to build the infrastructure the U.S. already had available,” said Laura Loppacher, an oil and gas analyst at Jefferies International Ltd. in London. “We know the gas in place is there, but it’s unclear if it can be extracted at a rate that’s commercial.”

For more: Shale Boom in Europe Fades as Polish Wells Come Up Empty - Businessweek

2/23/12

Canada revs up for fight over second tar sands pipeline - by Kim Murphy

The prime minister is talking about being "held hostage" by U.S. interests. Radio ads blare, "Stand up to this foreign bully." A Twitter account tells of a "secret plan to target Canada: exposed!"

Could this be Canada? The cheerful northern neighbor, supplier of troops to unpleasant U.S.-led foreign conflicts, reliable trade partner, ally in holding terrorism back from North America's shores -- not to mention the No. 1 supplier of America's oil?

Canada's recent push for the proposed Northern Gateway pipeline to carry oil from the tar sands of Alberta to the nation's West Coast, where it would be sent to China, has been marked by uncharacteristic defiance. And it first flared in the brouhaha over the bananas.

Responding to urgings from U.S. environmentalists, Ohio-based Chiquita Brands International Inc. announced in November that it would join a growing number of companies trying to avoid fuel derived from Canada's tar sands, whose production is blamed for accelerating climate change and leveling boreal forests.

For more: Canada revs up for fight over second tar sands pipeline: Money | Alaska news at adn.com

9/5/11

China, Libya, and Oil: Update

China is positioning the country to engage with the new Libyan government, despite comments from at least one Libyan rebel that China might lose out for not being part of the forces backing the rebels. I doubt that will happen, and I predict that Chinese companies, which had signed some $18 billion in infrastructure contracts, will be actively trying to restart those projects and others. They will succeed in a lot of this. Reconstruction after all the NATO bombing will mean lots of new business.

About 75 Chinese companies operated in Libya before the war, involving about 36,000 staff and 50 projects, according to early Chinese media reports. Many of those firms were engaged in building roads, buildings and infrastructure.......China's top three state oil firms CNPC, Sinopec Group and CNOOC all had engineering projects in Libya, but no oil production yet, company officials said. China shipped in roughly 150,000 barrels per day of crude oil from Libya last year through Unipec, the trading arm of Asia's top refiner Sinopec Corp that holds the long-term supply contract. That amounted to about one tenth of Libya's crude exports.

China was unusually quick to support the [National Transitional Council] ...Relative to China's typical foreign policy response, that was quite important, but relative to what Europe and the United States did, that falls short. So I think they will struggle," said Ben Simpfendorfer, managing director of Silk Road Associates, a Hong Kong-based consultancy that specializes in business between China and the Middle East.

For more: China in Africa: The Real Story: China, Libya, and Oil: Update