Is There Still Hope For Higher Oil Prices?

Oil prices have cratered in recent weeks, dipping to their lowest levels in more than seven months and any sense of optimism has almost entirely disappeared. All signs point to a period of ‘lower for longer’ for oil prices, a refrain that is all too familiar to those in the industry.
WTI dipped below $44 per barrel on Tuesday, and the bearish indicators are starting to pile up.
Libya’s production just topped 900,000 bpd, a new multi-year high that is up sharply even from just a few weeks ago. Libyan officials are hoping that they will hit many more milestones in the coming months. Next stop is 1 million barrels per day (mb/d), which Libya hopes to breach by the end of July.
U. S. shale is arguably the biggest reason why prices are floundering again. The rig count has increased for 22 consecutive weeks, rising to 747 as of mid-June, up more than 100 percent from a year ago. Production continues to rise, with output expected to jump by 780,000 bpd this year, according to the IEA. Ultimately, the shale rebound appears to have killed off yet another oil price rally, the latest in a series of still-born price rebounds since the initial meltdown in 2014.

This post was published at Zero Hedge on Jun 22, 2017.

64 Years Later, CIA Finally Releases Details Of Iranian Coup

Declassified documents released last week shed light on the Central Intelligence Agency’s central role in the 1953 coup that brought down Iranian Prime Minister Muhammad Mossadegh, fueling a surge of nationalism which culminated in the 1979 Iranian Revolution and poisoning U. S.-Iran relations into the 21st century.
The approximately 1,000 pages of documents also reveal for the first time the details of how the CIA attempted to call off the failing coup – only to be salvaged at the last minute by an insubordinate spy on the ground.
Known as Operation Ajax, the CIA plot was ultimately about oil. Western firms had for decades controlled the region’s oil wealth, whether Arabian-American Oil Company in Saudi Arabia, or the Anglo-Iranian Oil Company in Iran. When the U. S. firm in Saudi Arabia bowed to pressure in late 1950 and agreed to share oil revenues evenly with Riyadh, the British concession in Iran came under intense pressure to follow suit. But London adamantly refused.

This post was published at Zero Hedge on Jun 21, 2017.

US Intelligence Officials Reiterate: No Votes Changed Because Of Russia

If literally not one single vote changed thanks to this horrible hacking perpetrated by Vladimir Putin and his minions, it should be dropped already. After all, with the amount of meddling the United States does in foreign countries elections, one would think they’d like to keep this quiet.
It’s as if they aren’t even trying to hide their ridiculous scheme anymore. If the government and the left wants anyone to buy this snake oil, now is the time to put up the evidence. Without evidence, the election, which didn’t sway anyway, is valid. Even with evidence, that if existed would have been shown by now, the election is valid because no votes were changed. But the media is desperately trying to spin this in favor of leftists, unsurprisingly. They title articles that declare ‘Intelligence Official: Russia Hackers Targeted 21 States During The Election,’ yet once you go to read it, it’s the same nonsense as Barack Obama and Hillary Clinton spewed in the days following Donald Trump’s win. Blame Russia because Democrats lost, oh, and there’s no new information.
Nothing has changed. There’s no new information, yet the media presents the testimony of Department of Homeland Security official Jeanette Manfra as some sort of breaking announcement. If there is any evidence that this entire situation is fake, it’s the mainstream media’s insistence on publishing the same things over and over again hoping it will somehow convince us – without any proof still, of course.

This post was published at The Daily Sheeple on June 22, 2017.

After Shocking Saudi Shakeup “Not A Question Of If But When New Escalation With Iran Starts”

Two days ago, when reporting on the surprising “terrorist attempt” by Iran’s National Guard on a major Saudi offshore oilfiled (at least according to Saudi media), we said that “if the Saudi account of events is accurate, and if Iran is indeed preparing to take out Saudi oil infrastructure in retaliation or otherwise, the simmering cold war between Saudi Arabia and Iran is about to get very hot.” This in turn followed an earlier analysis on the ongoing Syrian war in which we said that “the next major regional conflict appears set to be between Saudi Arabia and Iran. All it needs is a catalyst.”
That catalyst, according to energy consultancy Petromatrix, may have been revealed overnight with the stunning Saudi royal shakeup in which the King announced he was stripping the current Crown Prince, his nephew Mohamed bin Nayef (MBF), of all titles and obligations, and replacing him with his son Mohamed bin Salman (MBS).
Summarizing the event, Petromatrix analyst Olivier Jakob wrote that “the day starts with the Saudi Crown Prince sent to retirement and replaced by the deputy Crown Prince Mohammed bin Salman (MBS). MBS was already the strong hand in Saudi Arabia, this latest development, and the purge that goes with it, confirms that he is the de-facto king of Saudi Arabia. Under his watch, Saudi Arabia has developed aggressive foreign policies (Yemen, Qatar…) and he has not been shy about making strong statements against Iran.”
The punchline: “with MBS now having greater control of Saudi Arabia and with Jared Kushner having a large control of the White House it is not really a question of if but rather of when a new escalation with Iran starts.”
Jakob wasn’t the only one to react strongly to the Saudi royal shakeup. Below, courtsy of Bloomberg, are several other notable reactions:

This post was published at Zero Hedge on Jun 21, 2017.

Oil Shrugs As Iran Hints At More OPEC Cuts, Admits Surprise At US Shale Production

If at first you don’t succeed, try again… and if that fails, start jawboning about more production cuts again.
Iranian Oil Minister Bijan Namdar Zanganeh says on state radio that “we are consulting with OPEC member states to have them prepared to make a decision to make further cuts [to production].”

This post was published at Zero Hedge on Jun 21, 2017.

Frontrunning: June 20

Central bank caution beefs up stock gains (Reuters) Pound Drops as BOE’s Carney Says Not Yet Time to Raise Rates (BBG) Oil Just Hit Its Lowest Level of the Year (BBG) Britain charges Barclays, ex-bosses over ‘unlawful’ Qatari deal (Reuters) Senate GOP Sets Ambitious Deadline on Health-Care Vote (WSJ) Both Parties Have a Lot to Lose in Georgia and S. C. Special Elections (WSJ) House speaker vows to complete tax reform in 2017 (Reuters) The New Face of Trump’s Legal Team Is the Christian Right’s Pitbull (BBG) Russia probe focuses on role of Flynn partner (Reuters) Among the iPhone’s Biggest Transformations: Apple Itself (WSJ) Democrats protest Senate Republican healthcare secrecy (Reuters) Texas Is Too Windy and Sunny for Old Energy Companies to Profit (BBG) Whole Foods CEO hints at another brand under Amazon (Reuters) Robots Are Eating Money Managers’ Lunch (BBG) Trump seen hardening line toward Pakistan after Afghan war review (Reuters) Peak Banking Globalization Hasn’t Come and Gone, BIS Says (BBG) Soros Says U. K. Is Approaching ‘Tipping Point’ as Brexit Bites (BBG) Supreme Court to hear major case on political boundaries (Reuters) Ex-BlackRock Exec’s Gas Bet Pays Off With $6.7 Billion Takeover Deal (BBG) Millennials Are Helping America Save More Money (BBG) Tesla driver in fatal ‘Autopilot’ crash got numerous warnings: U. S. government (Reuters) Boeing lifts 20-year industry demand forecast to $6 trillion (Reuters) Virginia police probe Muslim girl’s killing as ‘road rage’ incident (Reuters

This post was published at Zero Hedge on Jun 20, 2017.

Are These The Only Options The Elite Have Left, If So It Won’t End Well – Episode 1309b

The following video was published by X22Report on Jun 18, 2017
A new bill was introduced to setup a Russian response center to provoke the Russians. Congress is now looking into the failed coup attempt in Montenegro. Iraqi troops regain control of the border. Russian and Syrian forces liberating more towns and hitting the rest of the IS oil convoys. Europol warns that attacks could happen at anytime that the IS has the ability to carry out terror. The elite are running out of options and the only options left will not end well for the rest of us.

The Economic System Is Ripping Itself Apart & Will Lead To “Cataclysmic Events” – Episode 1309a

The following video was published by X22Report on Jun 18, 2017
A new bill was introduced to setup a Russian response center to provoke the Russians. Congress is now looking into the failed coup attempt in Montenegro. Iraqi troops regain control of the border. Russian and Syrian forces liberating more towns and hitting the rest of the IS oil convoys. Europol warns that attacks could happen at anytime that the IS has the ability to carry out terror. The elite are running out of options and the only options left will not end well for the rest of us.

Did This Backroom Deal Just Bust OPEC’s Control On Oil Prices?

Authored by Dave Forest via OilPrice.com,
Libya has been one of the biggest x-factors in the global crude markets the past year. With on-again, off-again production in this key nation alternately supporting and suppressing prices.
But news this week suggests things are looking up for Libya’s crude output.
And down for global oil markets.
Reuters reported that Libya’s National Oil Company has struck a backroom deal with German energy developer Wintershall, which will see that firm restart a major chunk of oil production in the east of the country.
The Wintershall assets covered by the deal have production potential of 160,000 b/d. But have been shut-in since earlier this year after a dispute broke out between the company and the Libyan government over an alleged $900 million in unpaid taxes.
The two parties however, said Tuesday they have reached an ‘interim arrangement’ to end the dispute. Opening the door for Wintershall’s significant swath of production to return to market.

This post was published at Zero Hedge on Jun 16, 2017.

Shale Efficiency Has Peaked For Now As Rig Count Surges For 22nd Straight Week

For the 22nd week in a row, the number of US oil rigs rose (up 6 to 747) to the highest since April 2015.
Given the historical relationship between lagged prices and rig counts, we suspect the resurgence in rigs may begin to stall…

Oil is headed for the longest run of weekly losses since August 2015 as OPEC member Libya restored production and the surplus in the U. S. shows little sign of abating.

This post was published at Zero Hedge on Jun 16, 2017.

“That Must Not Happen”: Germany Threatens US With Retaliation Over New Russia Sanctions

One day after the Senate almost unanimously passed a bill to impose new sanctions on Russia, an unexpected outcry against the US decision emerged from two of America’s closest allies, Germany and Austria, who yesterday slammed the new sanctions and accused the U. S. of having ulterior motives in seeking to enforce the energy blockade, which they said is trying to help American natural gas suppliers at the expense of their Russian rivals. And they warned the threat of fining European companies participating in the Nord Stream 2 project “introduces a completely new, very negative dimension into European-American relations.”
Today’s the unexpected fallout from the latest round of US sanctions has escalated, and according to Reuters, Germany has threatened to retaliate against the United States if the new US sanctions on Russia end up penalizing German firms, which they almost will as it foresees punitive measures against entities that provide material support to Russia in building energy export pipelines. Such as Germany, Austria and host of other European nations. Berlin is concerned that if passed in the House, the sanctions will pave way for fines against German and European firms involved in Nord Stream 2, a project to build a pipeline carrying Russian gas across the Baltic.
And it’s not jet the Germans who are sweating: among the European companies involved in the project are German oil and gas giant Wintershall, German energy trading firm Uniper, Royal Dutch Shell, Austria’s OMV and France’s Engie. In other words, if the Senate proposed sanctions pass, the US will have to fine virtually every energy giant in Europe.
Quoted by Reuters, Merkel’s spokesman Steffen Seibert described the Senate bill, which must be approved by the House of Representatives and signed by Trump before it becomes law, as “a peculiar move”. He said it was “strange” that sanctions intended to punish Russia for alleged interference in the U. S. elections could also trigger penalties against European companies. “That must not happen,” said Seibert.

This post was published at Zero Hedge on Jun 16, 2017.

Frontrunning: June 16

Russia may have killed ISIS leader Baghdadi (Reuters) About 4,000 more US troops to go to Afghanistan (AP) Insurers Look to Ramp Up Premiums in Health Law Exchanges (WSJ) U. N. envoy urges North Korea to explain why freed U. S. man is in coma (Reuters) Wal-Mart Offers a Refuge for Sellers Tired of Amazon (BBG) Trump to limit Cuba travel, restrict business deals with military: U. S. officials (Reuters) Private-Equity Firms Stand to Benefit From Court’s Curb on SEC (WSJ) The $31 Billion Hole in GE’s Balance Sheet That Keeps Growing (BBG) Facebook Boosts A. I. to Block Terrorist Propaganda (WSJ) Whole Foods CEO Calls Activist Investor ‘Greedy Bastards’ (BBG) Kroger Rattles Nerves in Grocery Section (WSJ) U. S. Exports to Mexico Fall as Uncertainty Over Nafta Lingers (WSJ) Funds pull back from Permian as U. S. shale oil firms go into overdrive (Reuters) The World’s Richest Nation Has Rarely Looked Weaker (BBG) 30 confirmed dead in London high-rise fire (AP) Big Oil Firms Are Exploring a New Frontier in Shale: Profits (WSJ) Facing criticism, British PM to visit London fire victims (Reuters) Pimco’s New Bond King Is Nothing Like Bill Gross (WSJ) U. S. accuses Chinese company of money-laundering for North Korea (Reuters) Overnight Media Digest
WSJ
– Nestl SA put its U. S. confectionery business up for sale, looking to shed its Butterfinger and Crunch candy bars as it grapples with how to cater to U. S. consumers’ increasing demand for healthy snacks. on.wsj.com/2rC2Cpy
– Pressure on U. S. grocers increased after a lower earnings forecast from Kroger Co sent shares in the nation’s biggest supermarket chain down 19 percent. on.wsj.com/2rCl7dt

This post was published at Zero Hedge on Jun 16, 2017.

The Dakota Access Pipeline Was Just Delayed Again – but Don’t Celebrate Yet

Federal Judge James Boasberg ruled in favor of the Standing Rock Sioux Tribe yesterday (June 14), handing the tribe its first legal victory in its battle against the Dakota Access pipeline.
Well, sort of…
You see, Boasberg did not order Dakota Access to cease operations, which have been underway for close to two weeks.
However, the judge did order the U. S. Army Corps of Engineers to repeat the rigorous Environment Impact Statements (EIS) study, saying that the Corps failed to perform an adequate study the first time around.
In a 91-page decision, the judge cited the Corps’ study of ‘the impacts of an oil spill on fishing rights, hunting rights, or environmental justice’ as particularly deficient.
‘Even though a spill is not certain to occur at Lake Oahe, the Corps still had to consider the impacts of such an event on the environment,’ the judge said.

This post was published at Wall Street Examiner on June 15, 2017.

Iran Sends 2 Warships To Oman, Flies Food To Qatar

If there was any confusion on which side of the Qatar crisis Iran found itself, it was swept away today after Iran’s Tasnim news, cited by Turkey’s Anadolu Agency, reported that Iran plans to send two warships to Oman on Sunday. The two ships will depart using Iran’s southern waters off the port city of Bandar Abbas for an overseas mission to the Arab Peninsula state and then on to international waters.
On Sunday, the 47th flotilla, comprised of an Alborz destroyer and Bushehr logistic warship, set sail from the southern port city of Bandar Abbas, Tasnim reported. From Oman, the ships will then head to the Gulf of Aden and international waters north of the Indian Ocean. At the same time, Iran’s 46th flotilla consisting of a Sabalan destroyer and Lavan logistic warship, is due to return to Iran on Sunday after completing a two-month mission to secure naval routes and protect merchant vessels and oil tankers in the Gulf of Aden.
Separately, Reuters reported that amid food shortages after Qatar’s biggest suppliers severed ties with the import-dependent country, Iran has dispatched four cargo planes of food to Qatar and plans to provide 100 tonnes of fruit and vegetable every day. Qatar has been holding talks with Iran and Turkey to secure food and water supplies after Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut links, accusing Doha of supporting terrorism. Qatar, which has claimed the terrorism-funding allegations are lies, on Friday hired John Ashcroft to serve as a PR crisis mediator in the US and to defend against terrorism accusations, for which he will be paid $2.5 million for 90 days of his time.

This post was published at Zero Hedge on Jun 11, 2017.

Iran Vows to Avenge Islamic State Bombs, Points Finger at Saudis

Iran vowed to take revenge for Islamic State attacks in its capital on Wednesday and hinted that it may hold Saudi Arabia responsible, risking an escalation of the feud that’s divided the oil-rich Gulf region into increasingly hostile camps.
Islamic State said it carried out the suicide-bomb and gun attacks that killed at least 12 people at Iran’s parliament and the shrine of the Ayatollah Ruhollah Khomeini, a site of political and religious importance for Iran’s Shiite Muslim population. The Iranian Revolutionary Guard Corps promised retribution for the ‘innocent blood spilled’ in the first such strike by the jihadists in Iran. And, the Guards said, Iranians won’t fail to note that the violence came soon after U.S. President Donald Trump met with ‘leaders of a reactionary government in the region which supports terrorists’ — an apparent reference to the Saudis.
The contest between Iran and Saudi Arabia, the region’s main Sunni power, has helped fuel wars in Syria and Yemen. It spread to the heart of the Gulf this week as the Saudis led a drive to isolate Qatar, blaming their neighbor for ties with Iran and militant groups, and closing its land border. Trump, who endorsed the Saudi pressure while other U.S. officials appealed for calm, visited the kingdom last month and joined King Salman in calling for a united front against Iran and jihadism.
‘Today’s attack adds to cross-Gulf tensions that already had been elevated by the Trump trip — in which anti-Iranism was a principal theme — and by the Iran angle in the actions taken against Qatar,’ said Paul Pillar, a professor at Georgetown University in Washington and former CIA officer.
Saudi and Iranian leaders blame each other for sponsoring militant groups. The Saudis point to Iranian support for Hezbollah and Hamas, while Iran says Saudi preachers and financial support aided the rise of al-Qaeda and Islamic State.

This post was published at bloomberg

U.S. Begins Importing Iraqi Oil After Saudis Cut Exports

The United States has begun importing Iraqi oil at a rate of 1.1 million barrels per day to replace export cuts announced by Saudi Arabia late last month, new figures compiled by Bloomberg show.
New data from the Department of Energy suggests that during the first week of June, Iraqi oil entered the U. S. at the quickest rate in the past five years – marking the first time the nation’s exports exceeded those from Saudi Arabia over the same time period.

This post was published at Zero Hedge on Jun 8, 2017.

OPEC at the Crossroads

OPEC is currently in a difficult situation. How should it react to the oil glut that followed the emergence of shale oil technology? In our view, today’s situation is comparable to the oil glut in the 1980s. Back then OPEC unsuccessfully tried to support prices by curtailing supply with the result that core-OPEC members were sitting on vast amounts of idle capacity for nearly two decades. Thus, we view the recent production cuts as an attempt to speed up the drawdown of the global inventory overhang rather than a sign that OPEC has returned to a policy of balancing the market. If OPEC, going forward, truly allows market forces to play out without carrying a lot of spare capacity, unforeseen shortfalls could result in violent price swings.
View the Entire Research Piece as a PDF here.
Trading oil has been challenging over the past few months. To be fair, it has been challenging for a while, but those trying to predict price movements based on fundamentals have had a particularly hard time recently. Rather than moving with improving fundamentals, the oil market has hung on every word from OPEC officials, which has sent oil prices on a rollercoaster ride. In the past two weeks, fundamentals continued to improve with U. S. oil inventories showing counter-seasonal draws, yet prices collapsed on May 25 after OPEC announced it would extend production cuts by nine months. The price action indicates that market participants were hoping for an even larger cut and were disappointed that the current cuts were merely extended, but the current curtailments have already had a profound impact on inventories (we saw and continue to see large counter-seasonal draws in high frequency data), which is what we suspect OPEC had intended.
OPEC is currently in a difficult situation. How should it react to the oil glut that followed the emergence of shale oil technology? In our view, OPEC’s options and its influence on oil prices are limited. To understand this, we must go back to the 1980s, which is the last time OPEC was faced with a technological step change that led to an oil glut from non-OPEC producers.
OPEC was founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. The founding members were later joined by Qatar (1961), Indonesia (1962 – 2008; rejoined 2016), Libya (1962), United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973 – 1992; rejoined 2007), and Gabon (1975 – 1994; rejoined 2016). By 1973, OEPC had increased its production to about 30 million b/d, just over 50% of world production. Supported by Egypt and Syria, the Arab members of OPEC imposed an oil embargo against the United States and other countries that supported Israel during the Yom Kippur war in October 1973. OPEC output subsequently dropped by close to 4 million b/d, which was about 7% of global output. As a result, oil shortages occurred in the west and prices soared from USD3.29/bbl in 1973 to USD11.58/bbl in 1974, and prices remained high even after the oil embargo ended in March 1974. In 1979 oil prices moved sharply higher again to as high as USD40/bbl. In our view, the 1979 price increase must be attributed to several factors; the Iranian revolution and ensuing Iran-Iraq war certainly played their part, but general USD price inflation was rampant, reaching 20% per annum. Arguably, part of the reason why inflation was so high was because oil prices had previously risen on the back of the oil embargo, which trickled into general price inflation. But even without the tightness in oil fundamentals, USD inflation would have been high given the monetary environment of the time; however, the price inflation in oil was several magnitudes higher than broad price inflation, suggesting that the tightness in the oil market itself was the main reason for the sharp price increase in oil. Most importantly, this prolonged period of extremely high oil prices and the crippling effect the oil shortages had on western economies led to profound changes in oil and energy markets.

This post was published at GoldMoney on JUNE 06, 2017.

Biggest Middle East Ports Shun Qatar as Saudis Tighten Isolation

The biggest Middle East oil and container ports banned all vessels sailing to and from Qatar from using their facilities amid a diplomatic crisis gripping the world’s main energy-exporting region.
Saudi Arabian and Bahraini authorities closed off all of their ports to Qatari-flagged vessels or ships traveling to or coming from the Persian Gulf state, according to a notice posted on the website of Inchcape Shipping Services Tuesday. Container and oil terminals in the United Arab Emirates also closed off traffic to any ships touching Qatar, according to separate statements from three port operators.
The three Persian Gulf countries and Egypt severed ties with Qatar Monday citing its support for regional rival Iran and for extremist groups. The dispute pits two of OPEC’s largest oil producers — Saudi Arabia and the U.A.E. — against the world’s biggest exporter of liquefied natural gas and further disrupts stability in the region. The shipping restrictions risk hurting shipments of oil and refined products from the world’s biggest energy exporting region.
Saudi Arabia’s eastern coast is home to the port of Ras Tanura, which state-owned Saudi Arabian Oil Co. says is the biggest crude terminal in the world. Jebel Ali port, the region’s biggest container terminal, will be restricted from Tuesday until further notice, its operator Dubai’s DP World Ltd. said in an emailed statement. In the U.A.E., DP World operates Jebel Ali along with Dubai’s Mina Rashid and Mina Al Hamriya ports, according to its website.
Government-owned Abu Dhabi National Oil Co. closed its crude and refined-product ports to any vessels to or from Qatar, according to a notice obtained by Bloomberg News. The port at Fujairah, a main oil transit and refined product hub, said Monday it was closed to Qatar-linked traffic.

This post was published at bloomberg

OPEC Has Survived Crises Far Worse Than the Qatar Debacle

The OPEC oil deal is not in peril, though the mainstream media would have you think otherwise…
Oil prices fell yesterday after member countries like Saudi Arabia, the United Arab Emirates, Egypt, and Bahrain cut diplomatic ties with Qatar. These nations have closed borders and ceased all travel to and from Qatar, demanding that Qatari military troops be withdrawn from the war in Yemen.
The nations initiating the separation claim that their small, uber-wealthy neighbor was, and has been, actively supporting Islamic terrorists.
And, yes, news of the severance with Qatar – a top global liquefied natural gas (LNG) and condensate shipper – immediately dented the oil market…
Brent crude prices reversed initial 1% gains after the news, trading down 1%, at $49.45 a barrel by 2:34 p.m. ET. WTI futures ended Monday’s session at $47.40 a barrel, down $0.26, or 0.6%. U. S. gasoline futures led the sector’s largest fall in the afternoon, down 2.4% to $1.54 a gallon. But mainstream media sites followed the various oil price dips with headlines speculating about imminent doom for OPEC’s recent agreement to cut production:

This post was published at Wall Street Examiner on June 6, 2017.